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, 1995
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period _______________ to ______________.
Commission file number: 000-20219
TRUMP PLAZA FUNDING, INC.
-------------------------
(Exact name of Registrant as specified in its charter)
NEW JERSEY 13-3339198
- ------------------------------------ --------------------
(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 (Zip Code)
offices)
(609) 441-6526
--------------
(Registrant's telephone number, including area code)
Commission file number: 033-58608
TRUMP PLAZA HOLDING 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 (Zip Code)
offices)
(609) 441-6526
--------------
(Registrant's telephone number, including area code)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q, CONTINUED
Commission file number: 033-04604-01
TRUMP PLAZA ASSOCIATES
----------------------
(Exact name of Registrant as specified in its charter)
NEW JERSEY 22-3241643
- -------------------------------------- -------------------
(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 (Zip Code)
offices)
(609) 441-6526
--------------
(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 x No ___
---
Indicate by check mark whether the Registrants have filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes x No ___
---
The number of outstanding shares of Trump Plaza Funding, Inc.'s, common stock as
of May 11, 1995, was 100.
Total number of pages in this Report including Exhibits: 121
TRUMP PLAZA FUNDING, INC.
TRUMP PLAZA HOLDING ASSOCIATES
TRUMP PLAZA ASSOCIATES
INDEX TO FORM 10-Q
Pages
-----
Number
- ------
PART I -- FINANCIAL INFORMATION
ITEM 1 -- Financial Statements
Condensed Balance Sheets of Trump Plaza Funding,Inc.
as of March 31, 1995 (unaudited) and December 31, 1994. 1
Condensed Statements of Income of Trump Plaza Funding, Inc.
for the Three Months Ended March 31, 1995 and 1994 (unaudited). 3
Condensed Statement of Capital of Trump Plaza Funding, Inc.
for the Three Months Ended March 31, 1995 (unaudited). 5
Condensed Statements of Cash Flows of Trump Plaza
Funding, Inc. for the Three Months Ended March 31, 1995
and 1994 (unaudited). 7
Condensed Consolidated Balance Sheets of Trump Plaza Holding
Associates and Trump Plaza Associates as of March 31, 1995
(unaudited) and December 31, 1994. 9
Condensed Consolidated Statements of Operations of Trump Plaza
Holding Associates and Trump Plaza Associates for the Three Months
Ended March 31, 1995 and 1994 (unaudited). 11
Condensed Consolidated Statement of Capital (Deficit) of Trump Plaza
Holding Associates and Trump Plaza Associates for the Three Months Ended
March 31, 1995 (unaudited). 13
Condensed Consolidated Statements of Cash Flows of Trump Plaza
Holding Associates and Trump Plaza Associates for the Three Months Ended
March 31, 1995 and 1994 (unaudited). 15
Notes to Condensed Financial Statements of Trump Plaza Funding, Inc.,
Trump Plaza Holding Associates and Trump Plaza Associates. 17
ITEM 2 -- Management's Discussion and Analysis of Financial
Condition and Results of Operations 31
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 34
ITEM 2 -- Changes in Securities 35
ITEM 3 -- Defaults upon Senior Securities 36
ITEM 4 -- Submission of Matters to a Vote of Security Holders 36
ITEM 5 -- Other Information 36
ITEM 6 -- Exhibits and Reports on Form 8-K 36
Signatures - Trump Plaza Funding, Inc. 38
Signatures - Trump Plaza Holding Associates 39
Signatures - Trump Plaza Associates 40
INDEX TO EXHIBITS 41
PART I - FINANCIAL INFORMATION
ITEM 1- FINANCIAL STATEMENTS
--------------------
TRUMP PLAZA FUNDING, INC.
-------------------------
CONDENSED BALANCE SHEETS
------------------------
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
------------------------------------
March 31, December 31,
1995 1994
----------- -----------
(unaudited)
ASSETS
------
CURRENT ASSETS:
Cash $ 2 $ 2
Mortgage Interest Receivable 10,467 1,495
------- -------
Total Current Assets 10,469 1,497
Mortgage Note Receivable 326,334 326,234
Receivable From Partnership 3,822 3,822
------- -------
Total Assets $340,625 $331,553
======= =======
LIABILITIES AND CAPITAL
-----------------------
CURRENT LIABILITIES:
Accrued Interest Payable $ 10,467 $ 1,495
------- -------
Total current liabilities 10,467 1,495
10 7/8% Mortgage Bonds, net of
discount due 2001 326,334 326,234
Deferred Income Taxes Payable 3,822 3,822
------- -------
Total Liabilities 340,623 331,551
------- -------
Common Stock, $.01 par value, 1,000
shares authorized, 100 shares issued
and outstanding - -
Additional Paid in Capital 2 2
Retained Earnings - -
------- -------
Total Liabilities and Capital $340,625 $331,553
======= =======
-1-
The accompanying notes are an integral part of
these condensed balance sheets.
-2-
TRUMP PLAZA FUNDING, INC.
-------------------------
CONDENSED STATEMENTS OF INCOME
------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
--------------------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS)
--------------
1995 1994
------ ------
Interest Income From Partnership $ 9,072 $ 9,062
Interest Expense (9,072) (9,062)
------ ------
Income Before Provision for Taxes - -
Provision for Income Taxes - -
------ ------
Net Income $ - $ -
====== ======
-3-
The accompanying notes are an integral part
of these condensed financial statements.
-4-
TRUMP PLAZA FUNDING, INC.
-------------------------
CONDENSED STATEMENT OF CAPITAL
------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995
-----------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS EXCEPT SHARE AMOUNTS)
-----------------------------------
Common Stock
---------------------
Additional
Number of Paid In Retained
Shares Amount Capital Earnings Total
--------- -------- --------- -------- -------
Balance,
December 31, 1994 100 - $ 2 - $ 2
Net Income - - - - -
------ ------ ----- ------- -----
Balance,
March 31, 1995 100 - $ 2 - $ 2
====== ====== ===== ======= =====
-5-
The accompanying notes are an integral part of
these condensed financial statements.
-6-
TRUMP PLAZA FUNDING, INC.
-------------------------
CONDENSED STATEMENTS OF CASH FLOWS
----------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
--------------------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS)
--------------
1995 1994
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ - $ -
Adjustments to Reconcile Net Income
To Net Cash Flows Provided by
(Used In) Operating Activities:
Accretion of discount on indebtedness 100 90
------ ------
100 90
Increase in interest receivable (8,972) (8,972)
Increase in interest payable 8,972 8,972
------ ------
Net Cash Flows Provided By Operating Activities 100 90
--------- ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in Mortgage Note Receivable (100) (90)
------ ------
Net Cash Flows Used In
Financing Activities (100) (90)
------ -----
Net Change in Cash - -
Cash at Beginning of Year 2 2
------ ------
Cash at March 31, $ 2 $ 2
====== ======
-7-
The accompanying notes are an integral part of
these condensed financial statements.
-8-
TRUMP PLAZA HOLDING ASSOCIATES AND
----------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
CONDENSED CONSOLIDATED BALANCE SHEETS
-------------------------------------
(IN THOUSANDS)
--------------
ASSETS
------
March 31, December 31,
1995 1994
------------- --------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 19,125 $ 11,144
Receivables, net 6,920 6,797
Inventories 3,535 3,657
Other current assets 3,584 4,280
------- -------
Total current assets 33,164 25,878
PROPERTY AND EQUIPMENT, net 301,710 298,354
LAND RIGHTS 29,597 29,688
OTHER ASSETS 22,241 21,723
------- -------
Total Assets $386,712 $375,643
======= =======
LIABILITIES AND CAPITAL
-----------------------
CURRENT LIABILITIES:
Current maturities of long-term debt $ 4,142 $ 2,969
Accounts payable and accrued expenses 25,811 26,782
Accrued interest payable 13,086 1,871
Due to affiliate, net 35 206
-------- --------
Total Current Liabilities 43,074 31,828
LONG-TERM DEBT, net of discount and current
maturities 405,786 403,214
DISTRIBUTION PAYABLE TO
TRUMP PLAZA FUNDING, INC. 3,822 3,822
DEFERRED STATE INCOME TAXES 153 359
-------- --------
Total Liabilities 452,835 439,223
-------- --------
CAPITAL:
Partners' Deficit (78,772) (78,772)
Retained Earnings 12,649 15,192
-------- --------
-9-
Total Deficit (66,123) (63,580)
-------- --------
Total Liabilities and Capital $386,712 $375,643
======= =======
The accompanying notes are an integral part of
these condensed consolidated balance sheets.
-10-
TRUMP PLAZA HOLDING ASSOCIATES AND
----------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
-----------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
--------------------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS)
--------------
For the Three
Months Ended
March 31,
---------------
1995 1994
-------- --------
REVENUES:
Gaming $ 65,722 $ 54,157
Rooms 3,898 3,631
Food and Beverage 10,259 8,383
Other 1,781 1,820
-------- --------
Gross Revenues 81,660 67,991
Less- Promotional allowances 7,557 6,988
-------- --------
Net Revenues 74,103 61,003
-------- --------
COSTS AND EXPENSES:
Gaming 36,785 31,112
Rooms 680 682
Food and Beverage 4,449 3,531
General and Administrative 16,750 18,503
Depreciation and Amortization 4,092 3,922
Other 833 840
-------- --------
63,589 58,590
-------- --------
Income from operations 10,514 2,413
-------- --------
NON-OPERATING INCOME AND
(EXPENSES):
Interest income 173 102
Interest expense (12,527) (12,129)
Other non-operating expense (909) (1,288)
-------- --------
(13,263) (13,315)
-------- --------
Loss before benefit
for state income
taxes (2,749) (10,902)
BENEFIT FOR STATE
INCOME TAXES (206) (1,014)
-------- --------
Net Loss $ (2,543) $ (9,888)
======== ========
-11-
The accompanying notes are an integral part of these
condensed consolidated financial statements.
-12-
TRUMP PLAZA HOLDING ASSOCIATES AND
----------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL (DEFICIT)
-----------------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995
-----------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS)
--------------
Partners' Retained
Capital Earnings Total
-------- --------- ------------
Balance,
December 31, 1994 $(78,772) $15,192 $(63,580)
Net Loss - (2,543) (2,543)
--------- ------- --------
Balance,
March 31, 1995 $(78,772) $12,649 $(66,123)
========= ====== =======
-13-
The accompanying notes are an integral part
of these condensed consolidated financial statements.
-14
- -
TRUMP PLAZA HOLDING ASSOCIATES AND
----------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
-----------------------------------------------
FOR THE THREE MONTHS ENDED MARCH 31, 1995 AND 1994
--------------------------------------------------
(UNAUDITED)
-----------
(IN THOUSANDS)
--------------
1995 1994
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,543) $ (9,888)
Adjustments to reconcile net loss to
net cash flows from operating activities-
Noncash charges-
Depreciation and amortization 4,092 3,922
Accretion of discounts on indebtedness 522 455
Provisions for losses on receivables 330 246
Deferred state income taxes ( 206) (1,014)
Utilization of CRDA credits and donations 125 192
Valuation allowance of CRDA investments 98 85
------ ------
2,418 (6,002)
(Increase) decrease in receivables (453) 945
Decrease in inventories 122 160
Increase in advances to affiliates (171) (659)
Decrease in other current assets 696 1,006
(Increase) decrease in other assets (744) 602
(Decrease) increase in accounts payable and
accrued expenses (971) 1,368
Increase in accrued interest payable 11,215 10,957
------ ------
Net cash flows provided by operating
activities 12,112 8,377
------ ------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (7,354) (6,165)
------ ------
CASH FLOWS FROM FINANCING ACTIVITIES:
Additional Borrowings 3,918 158
Payments and current maturities of
long-term debt (695) (387)
------ ------
Net cash flows used in financing activities 3,223 (229)
------ ------
Net increase in cash and
cash equivalents 7,981 1,983
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 11,144 14,393
------ ------
CASH AND CASH EQUIVALENTS AT MARCH 31, $19,125 $16,376
-15-
======= =======
CASH INTEREST PAID $ 54 $ 172
======= =======
The accompanying notes are an integral part of
these condensed consolidated financial statements.
-16-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
1. CONDENSED FINANCIAL STATEMENTS:
- -----------------------------------
The accompanying condensed financial statements include those of Trump Plaza
Funding, Inc. (the "Company"), a New Jersey General Corporation as well as those
of Trump Plaza Holding Associates, ("Holding") a New Jersey General Partnership,
and its 99% owned subsidiary, Trump Plaza Associates, (the "Partnership") a New
Jersey General Partnership, which owns and operates Trump Plaza Hotel and Casino
located in Atlantic City, New Jersey. The Company owns the remaining 1%
interest in the Partnership. Holding's sole source of liquidity is
distributions in respect of its interest in the Partnership.
All significant intercompany balances and transactions have been eliminated in
the condensed consolidated financial statements of Holding. The minority
interest in the Partnership has not been separately reflected in the
consolidated financial statements of Holding since it is not material.
The accompanying condensed financial statements have been prepared by the
Company, Holding and the Partnership without audit. In the opinion of the
Company, Holding and the Partnership, 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.
Certain prior year amounts have been reclassified to conform with the current
period presentation.
The accompanying condensed financial statements have been prepared by the
Company, Holding and the Partnership pursuant to the rules and regulations of
the Securities and Exchange 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 the Company's,
Holding's and the Partnership's Annual Report on Form 10-K for the year ended
December 31, 1994 filed with the Securities and Exchange Commission.
The casino industry in Atlantic City is seasonal in nature; therefore, results
of operations for the three months ended March 31, 1995 are not necessarily
indicative of the operating results for a full year.
-17-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
2. LONG-TERM DEBT :
- --------------------
Long-term debt consists of the following:
March 31, December 31,
1995 1994
------------ ------------
Company:
10 7/8% Mortgage Notes, due 2001 net
of unamortized discount of $3,666,000
and $3,766,000, respectively (A) $326,334,000 $326,234,000
=========== ===========
Holding and the Partnership:
Partnership
Partnership Note (10 7/8% Mortgage Notes,
due 2001 net of unamortized discount of
$3,666,000 and $3,766,000,
respectively (A) $326,334,000 $326,234,000
Mortgage notes payable (C) 5,396,000 5,494,000
Other notes payable 3,789,000 468,000
----------- -----------
335,519,000 332,196,000
Less - Current maturities 4,142,000 2,969,000
----------- -----------
331,377,000 329,227,000
Holding
PIK Notes (12 1/2% Notes due 2003 net
of discount of $9,347,000 and
$9,769,000, respectively (B) 74,409,000 73,987,000
----------- -----------
$405,786,000 $403,214,000
=========== ===========
(A) On June 25, 1993 the Company issued $330,000,000 principal amount of 10
7/8% Mortgage Notes, due 2001 (the "Mortgage Notes"), net of discount of
$4,313,000. The Mortgage Notes mature on June 15, 2001 and are redeemable
at any time on or after June 15, 1998, at the option of the Company or the
Partnership, in whole or in part, at the principal amount plus a premium
which declines ratably each year to zero in the year of maturity. The
Mortgage Notes bear interest at the stated rate of 10 7/8% per annum from
the date of issuance, payable semi-annually on each June 15 and December
15, commencing December 15, 1993 and are secured by substantially all of
the Partnership's assets. The accompanying consolidated financial
statements reflect interest expense at the effective interest rate of
11.12% per annum.
-18-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
2. LONG-TERM DEBT CONT.:
- -------------------------
The Mortgage Note Indenture contains certain covenants limiting the ability
of the Partnership to incur indebtedness, including indebtedness secured by
liens on Trump Plaza. In addition, the Partnership may, under certain
circumstances, incur up to $25.0 million of indebtedness to finance the
expansion of its facilities, which indebtedness may be secured by a lien on
Trump Plaza East (See Note 6 Trump Plaza East) senior to the liens of the
Note Mortgage and Guarantee Mortgage thereon. The Mortgage Notes represent
the senior indebtedness of the Company. The Partnership Note and the
Guarantee rank pari passu in right of payment with all existing and future
senior indebtedness of the Partnership.
The Mortgage Notes, the Partnership Note, the Note Mortgage, the Guarantee
and the Guarantee Mortgage are non-recourse to the partners of the
Partnership, to the shareholders of the Company and to all other persons
and entities (other than the Company and the Partnership), including Donald
J. Trump ("Trump"). Upon an event of default, holders of the Mortgage
Notes would have recourse only to the assets of the Company and the
Partnership.
(B) On June 25, 1993 Holding 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 are exercisable following the earlier of certain
triggering events or June 15, 1996.
The PIK Notes mature on June 15, 2003 and bear interest at the rate of 12
1/2 % per annum from the date of issuance, payable semi-annually on each
June 15 and December 15, commencing December 15, 1993. At the option of
Holding, interest is payable in whole or in part, in cash or, in lieu of
cash, through the issuance of additional PIK Notes valued at 100% of their
principal amount. The ability of Holding to pay interest in cash on the
PIK Notes is entirely dependent on the ability of the Partnership to
distribute available cash, as defined, to Holding for such purpose.
As of March 31, 1995, the Partnership has elected to issue in lieu of cash
a total of $11,756,000 in PIK Notes to satisfy its semi-annual PIK Note
interest obligation.
The PIK Notes are subordinate to the Company's Mortgage Notes and any other
indebtedness of the Partnership and are secured by a pledge of Holding's
99% equity interest in the Partnership. The indenture to
-19-
which the PIK Notes were issued (the "PIK Note Indenture") contains
covenants prohibiting Holding from incurring additional indebtedness and
engaging in other activities, and other covenants restricting the
activities of the Partnership substantially similar to those set forth in
the Mortgage Note Indenture. The PIK Notes and the Warrants are non-
recourse to the Partners of Holding, including Trump, and to all other
persons and entities (other than Holding). Upon an event of default,
holders of PIK Notes or Warrants will have recourse only to the assets of
Holding which consist solely of its equity interest in the Partnership.
-20-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
2. LONG-TERM DEBT CONT.:
- -------------------------
(C) Interest on these notes are payable with interest rates ranging from 10.0%
to 11.0%. The notes are due at various dates between 1995 and 1998 and are
secured by real property.
3. INCOME TAXES:
- -----------------
The Company, Holding and the Partnership adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109"),
effective January 1, 1993. Adoption of this new standard did not have a
significant impact on the respective statements of financial condition or
results of operations. SFAS No. 109 requires recognition of deferred tax
liabilities and assets for the expected future tax consequences of events that
have been included in the financial statements or tax returns. Under this
method deferred tax liabilities and assets are determined based on the
difference between the financial statement and the tax basis of assets and
liabilities using enacted tax rates in effect for the year in which the
differences are expected to reverse.
The accompanying condensed financial statements of the Company include a
provision for Federal income taxes, based on distributions from the Partnership
relating to the Company's Preferred Stock which was redeemed on June 25, 1993.
The Company will be reimbursed for such income taxes by the Partnership. The
accompanying condensed consolidated financial statements of Holding and the
Partnership do not include a provision for Federal income taxes since any income
or losses allocated to its partners are reportable for Federal income tax
purposes by the partners.
Under the New Jersey Casino Control Commission regulations, the Partnership is
required to file a New Jersey corporation business tax return. Accordingly, a
benefit for state income taxes has been reflected in the accompanying condensed
consolidated financial statements of Holding and the Partnership.
The Partnership's deferred state income taxes result primarily from differences
in the timing of reporting of depreciation for tax and financial statement
purposes.
4. CASINO LICENSE RENEWAL:
- ---------------------------
The operation of an Atlantic City hotel and casino is subject to significant
regulatory controls which affect virtually all of its operations. Under the
-21-
New Jersey Casino Control Act (the "Act") the Partnership is required to
maintain certain licenses.
In April, 1993, the New Jersey Casino Control Commission ("CCC") renewed the
Partnership's license to operate Trump Plaza. This license must be renewed in
June, 1995, is not transferable and will include a review of the financial
stability of the Partnership. Upon revocation, suspension for more than 120
days, or failure to renew the casino license, the Act allows
-22-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
4. CASINO LICENSE RENEWAL CONT.:
- ---------------------------------
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. LEGAL PROCEEDINGS:
- ----------------------
The Partnership, its Partners, certain members of its former Executive
Committee, and certain of its employees, have been involved in various legal
proceedings. In general, the Partnership 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, judgements, 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 other legal proceedings are now pending against the Partnership. The
Partnership considers all such other proceedings to be ordinary litigation
incident to the character of its business and not material to its business or
financial condition. The Partnership believes that the resolution of these
claims will not, individually or in the aggregate, have a material adverse
effect on its financial condition or results of operations.
The Partnership is also a party to various administrative proceedings involving
allegations that it has violated certain provisions of the Act. The Partnership
believes that the final outcome of these proceedings will not, either
individually or in the aggregate, have a material adverse effect on its
financial condition, results of operations or on the ability of the Partnership
to otherwise retain or renew any casino or other licenses required under the Act
for the operation of Trump Plaza.
6. TRUMP PLAZA EAST:
- ---------------------
In 1993, the Partnership received the approval of the CCC, subject to certain
conditions, for the expansion of its hotel facilities ("Trump Plaza East"). On
June 24, 1993, Trump transferred title of Trump Plaza East to a lender in an
amount for a reduction in indebtedness to such lender in an amount equal to the
sum of fair market value of Trump Plaza East and all rent payments made to such
lender by Trump under the Trump Plaza East Lease (defined below). At that time,
the lender leased Trump Plaza East to Trump (the "Trump Plaza East Lease") for a
term of five years, which expires on June 30, 1998,
-23-
during which time Trump is obligated to pay the lender $260,000 per month in
lease payments. In October 1993, the Partnership assumed Trump Plaza East Lease
and related expenses.
-24-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
6. TRUMP PLAZA EAST CONT'D
- ---------------------------
On June 24, 1993, the Partnership acquired a five-year option to purchase Trump
Plaza East (the "Trump Plaza East Purchase Option"). In addition, the
Partnership has the right of first refusal upon any proposed sale of all or any
portion of Trump Plaza East during the term of the Trump Plaza East Purchase
Option. Until such time as the Trump Plaza East Option is exercised or expires,
the Partnership will be obligated, from and after the date it entered into the
Trump Plaza East Purchase Option, to pay the net expenses associated with Trump
Plaza East. During the three months ended March 31, 1995, the Partnership
incurred $0.9 million of such expenses. The CCC has required that the
Partnership exercise the Trump Plaza East Purchase Option or its right of first
refusal no later than July 1, 1995. The Partnership has petitioned the CCC to
extend such date to July 1, 1996; however, no assurance can be given that such
waiver will be granted or that any condition imposed by the CCC would be
acceptable to the Partnership. If the Partnership defaults in making payments
due under the Trump Plaza East Purchase Option, the Partnership would be liable
to the lender for the sum of (a) the present value of all remaining payments to
be made by the Partnership pursuant to the Trump Plaza East Purchase Option
during the terms thereof and (b) the cost of demolition of all improvements then
located on the Trump Plaza East site. In order for the Partnership to exercise
the option it would be required to pay $27.0 million through June 30, 1995,
increasing by $1.0 million annually thereafter until expiration on June 30,
1998. If the Partnership is unable to exercise the option, it would be required
to expense any capitalized costs associated with Trump Plaza East.
As of March 31, 1995, the Partnership had capitalized approximately $13.3
million in construction costs related to Trump Plaza East including a $1 million
consulting fee paid to Trump (Note 8). The Partnership's ability to acquire
Trump Plaza East pursuant to Trump Plaza East Purchase Option is dependent upon
its ability to obtain financing to acquire the property. The ability to incur
such indebtedness is restricted by the Mortgage Note Indenture and the PIK Note
Indenture and requires the consent of certain of Trump's personal creditors. The
Partnership's ability to develop Trump Plaza East is dependent upon its ability
to use existing cash on hand and generate cash flow from operations sufficient
to fund development costs. No assurance can be given that such cash on hand will
be available to the Partnership for such purposes or that it will be able to
generate sufficient cash flow from operations. In addition, exercise of Trump
Plaza East Purchase Option or the right of first refusal requires the consent of
certain of Trump's personal creditors, and there can be no assurance that such
consent will be obtained at the time the Partnership desires to exercise Trump
Plaza East Purchase Option or such right.
-25-
The accompanying financial statements do not include any adjustments that may be
necessary should the Partnership be unable to exercise Trump Plaza East Purchase
Option.
-26-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES AND
-------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
7. TRUMP PLAZA WEST OPTION:
- ----------------------------
In December 1993, Trump entered into an option agreement (the "Original Chemical
Option Agreement") with Chemical Bank ("Chemical") and ACFH Inc. ("ACFH") a
wholly-owned subsidiary of Chemical. The Original Chemical Option Agreement
granted to Trump an option to purchase (i) the Trump Regency Hotel (including
the land, improvements and personal property used in the operation of the hotel)
("Trump Plaza West") and (ii) certain promissory notes made by Trump and/or
certain of his affiliates and payable to Chemical (the "Chemical Notes") which
are secured by certain real estate assets located in New York, unrelated to the
Partnership.
The aggregate purchase price payable for the assets subject to the Original
Chemical Option Agreement was $60 million. Under the terms of the Original
Chemical Option Agreement, $1 million was required to be paid for the option by
January 5, 1994. In addition, the Original Chemical Option Agreement provided
for an expiration of the option on May 8, 1994, subject to an extension until
June 30, 1994 upon payment of an additional $250,000 on or prior to May 8, 1994.
The Original Chemical Option Agreement did not allocate the purchase price among
the assets subject to the option or permit the option to be exercised for some,
but not all of such assets.
In connection with the execution of the Original Chemical Option Agreement,
Trump agreed with the Partnership that, if Trump is able to acquire Trump Plaza
West pursuant to the exercise of the option, he would make Trump Plaza West
available for the sole benefit of the Partnership on a basis consistent with the
Partnership's contractual obligations and requirements. Trump further agreed
that the Partnership would not be required to pay any additional consideration
to Trump in connection with any assignment of the option to purchase Trump Plaza
West. On January 5, 1994, the Partnership obtained the approval of the CCC to
make the $1 million payment, which was made on that date.
On June 16, 1994, Trump, Chemical and ACFH entered into, amended and restated
the Original Chemical Option Agreement, (the "First Amended Chemical Option
Agreement"). The First Amended Chemical Option Agreement provided for an
extension of the expiration of the Option through September 30, 1994, upon
payment of $250,000. Such payment was made on June 27, 1994. The First Amended
Chemical Option Agreement also provided for a $60 million option price for Trump
Plaza West and one of the Chemical Notes. On August 30, 1994, Trump, Chemical
and ACFH entered into an amendment to the First Amended Chemical Option
Agreement (the "Second Amended Chemical Option Agreement"). The Second Amended
Chemical Option Agreement provides for an extension of the expiration of the
option through March 31, 1995 upon the
-27-
payment of $50,000 a month for the period October through December 1994, and
$150,000 a month for the period January through March 1995. The Partnership
received the approval of the CCC and has made such payments. On March 6, 1995,
Trump, Chemical and ACFH entered into an amendment to the Second Amended
Chemical Option Agreement (the "Third Amended Chemical Option Agreement"). The
Third Amended Chemical Option Agreement provides for an extension of the
expiration of the option through August 31, 1995 upon the payment of $100,000
per month for the period April through August 1995.
-28-
TRUMP PLAZA FUNDING, INC., TRUMP PLAZA HOLDING ASSOCIATES, AND
--------------------------------------------------------------
TRUMP PLAZA ASSOCIATES
----------------------
NOTES TO CONDENSED FINANCIAL STATEMENTS
---------------------------------------
(UNAUDITED)
-----------
7. TRUMP PLAZA WEST OPTION CONT'D
- ----------------------------------
The Partnership received the approval of the CCC on March 22, 1995 to make such
payment. As a condition to the Third Amended Chemical Option Agreement, Trump
must (i) obtain the approval of the CCC by July 1, 1995 for the transactions
contemplated by the exercise of the option and for the financing to be used in
connection with the acquisition of Trump Plaza West and other assets in
connection with the exercise of the option; and (ii) file the Stock Offering's
Registration Statement with the SEC by April 1, 1995. Under the terms of the
Original Chemical Option Agreement, if the Partnership defaults in making
payment due under the Original Chemical Option Agreement, the Partnership would
be liable to the grantor of the Original Chemical Option Agreement for the sum
of (i) the present value of all remaining payments to be made by the Partnership
pursuant to the Original Chemical Option Agreement during the term thereof and
(ii) the cost of demolition of all improvements then located on Trump Plaza
East.
As of March 31, 1995, $1,950,000, representing option payments, is included in
other assets in the accompanying condensed consolidated balance sheet. If the
option is exercised, $1,850,000 will be available to offset the $60 million
option price.
8. OTHER PAYMENTS TO DONALD J. TRUMP:
- --------------------------------------
During 1994, the Partnership paid to Trump $1,000,000 under a Construction
Management Service Agreement. The payment was made for construction management
services rendered by Trump with respect to Trump Plaza East. This payment was
approved prior to disbursement by the CCC and has been classified in
construction in process in the accompanying condensed consolidated balance
sheets as of March 31, 1995 and December 31, 1994.
During 1994, the Partnership also paid to Trump a commission of approximately
$572,000 for securing a retail lease at Trump Plaza. The commission has been
capitalized and is being amortized to expense over the 10-year term of the
lease.
9. PROPOSED PUBLIC OFFERINGS:
- ------------------------------
Three newly formed entities owned by Trump, Trump Hotels & Casino Resorts, Inc.
("THCR"), Trump Hotels & Casino Resorts Holdings, L.P. ("Trump Holdings") and
Trump Hotels & Casino Resorts Funding, Inc. ("Trump Funding"), filed
registration statements on March 30, 1995, and pre-effective amendments to such
registration statements, for the offering and sale of $150
million in new equity funding and $140 million of Senior Secured Notes (the
"Offerings").
-29-
In connection with the Offerings, Trump will cause all of his beneficial
interest in the Partnership (consisting of all of the outstanding capital stock
of the Company, a 99% equity interest in Holdings and all of the outstanding
capital stock of Trump Plaza Holding, Inc.) to be contributed to Trump Holdings.
Trump will also cause all of his existing interest and rights to new gaming
activities in both emerging and established gaming jurisdictions to be
contributed to Trump Holdings.
The net proceeds of the Offerings are intended to be used to repurchase or
redeem the PIK Notes and Warrants, finance the expansion of Trump Plaza as well
as to fund casino development costs in certain jurisdictions outside of Atlantic
City.
-30-
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
RESULTS OF OPERATIONS
---------------------
CAPITAL RESOURCES AND LIQUIDITY
- -------------------------------
The Company was incorporated on March 14, 1986 as a New Jersey corporation, and
was originally formed solely to raise funds through the issuance and sale of its
debt securities for the benefit of the Partnership. On June 25, 1993 the
Company issued and the Partnership guaranteed $330,000,000 of Mortgage Notes
(for net proceeds of $325,687,000) and Holding issued an aggregate of
$60,000,000 of PIK Notes, together with Warrants to acquire an additional
$12,000,000 of PIK Notes at no additional cost. Holding has no other assets or
business other than its 99% equity interest in the Partnership. The Company
owns the remaining 1% interest in the Partnership. In July 1993, the
Partnership received approval from the CCC, subject to certain conditions, for
the expansion of its hotel facilities on Trump Plaza East. The expansion will
enable the Partnership to increase Trump Plaza's casino floor space by 30,000
square feet. Management anticipates that cash from operations, including the
additional revenues anticipated to be provided by the expansion of the casino
floor together with Atlantic City Casino Reinvestment Development Authority
credits, will provide the working capital needed to renovate Trump Plaza East,
although no assurances can be given that cashflow from operations will be
sufficient for such purpose. See "Note 6 to the Condensed Financial Statements
- -- Trump Plaza East."
Cash flow from operating activities is the Partnership's principal source of
liquidity. For the three months ended March 31, 1995, net cash from operating
activities was $12,112,000. The increase of $3,735,000 in net cash provided by
operating activities as compared to the comparable period in 1994 reflects
improved operating results. For the three months ended March 31, 1995, cash and
cash equivalents of $19,125,000 reflects an overall increase of $7,981,000 from
$11,144,000 at December 31, 1994 which is primarily the result of improvements
in cash flows from operating activities.
Capital expenditures of $7,354,000 for the three months ended March 31, 1995
increased approximately $1,189,000, from the comparable period in 1994 and was
primarily attributable to the refurbishing costs associated with Trump Plaza
East. These expenditures were financed from funds generated from operations.
Trump Plaza East, described in Note 6 to the Condensed Financial Statements, may
require additional borrowings.
At March 31, 1995, the Partnership had a combined working capital deficit
totalling approximately $9,910,000, compared to a combined working capital
deficit of $5,950,000 at December 31, 1994.
-31-
Pursuant to the terms of a Services Agreement (the "Services Agreement") with
Trump Plaza Management Corp. ("TPM"), a corporation beneficially owned by Trump,
in consideration for services provided, the Partnership pays TPM each year an
annual fee of $1,000,000 in equal monthly installments and reimburses TPM on a
monthly basis for all reasonable out-of-pocket expenses incurred by TPM in
performing its obligations under the Services Agreement, up to certain amounts.
Under this Agreement, $285,000 and $268,000 were charged to expense for the
three-month periods ended March 31, 1995 and 1994, respectively. Payments
received under the Services Agreement are currently pledged by TPM to secure
lease payments for a helicopter that TPM makes available to the Partnership.
Pending approval by the lessor of the helicopter, it is currently contemplated
that the stock of TPM will be transferred by Trump to Trump Holdings, which will
in turn assume the lease and related obligations, as well as become entitled to
all amounts payable under the Services Agreement.
The Mortgage Note Indenture and the PIK Note Indenture restrict the ability of
the Partnership to make distributions to its partners, including restrictions
relating to the achievement of certain financial ratios. Subject to the
satisfaction of these restrictions, the Partnership may make distributions to
its partners with respect to their Partnership interests.
The financial information presented below reflects the results of operations of
the Partnership. Since the Company and Holding have no business operations
other than its interest in the Partnership, their results of operations are not
discussed below.
COMPARISON OF THREE-MONTH PERIODS ENDED MARCH 31, 1995 AND 1994
- ---------------------------------------------------------------
OPERATING REVENUES AND EXPENSES
- -------------------------------
Gaming revenues were $65,722,000 for three months ended March 31, 1995, an
increase of $11,565,000 or 21.4% from gaming revenues of $54,157,000 for the
comparable period in 1994. This increase in gaming revenues consisted of an
increase in both table games and slot revenues. While the first quarter of 1994
was adversely affected by unfavorable winter weather, management believes that
the increase in gaming revenues in 1995 is due principally to an increased level
of demand evident in the Atlantic City market generally, as well as to
management's marketing and other initiatives, the introduction of new slot
machines and table games, and the addition of bill acceptors on slot machines.
Slot revenues were $43,304,000 for the three months ended March 31, 1995, an
increase of $9,954,000 or 29.8% from $33,350,000 in 1994.
Table games revenues were $22,418,000 for the three months ended March 31, 1995,
an increase of $1,611,000 or 7.7%, from $20,807,000 in the comparable period
1994. This increase was primarily due to an increase in table games drop (i.e.,
the dollar value of chips purchased) by 2.3% for the three months ended March
31, 1995, from 1994, as well as an increase in the table games hold percentage
to 16.7% (the percentage of table drop retained by the Partnership) for the
three months ended March 31, 1995 from 15.9% in the comparable period in 1994.
-32-
Other revenues were $15,938,000 for the three months ended March 31, 1995, an
increase of $2,104,000 or 15.2%, from other revenues of $13,834,000 in the
comparable period in 1994. Other revenues include revenues from rooms, food and
beverage and miscellaneous items. The increase primarily reflects increases in
food and beverage revenues attendant to increased levels of gaming activity due
in part to increased promotional activities.
Promotional allowances were $7,557,000 for the three months ended March 31,
1995, an increase of $569,000 or 8.1% from promotional allowances of $6,988,000
in 1994. This increase is primarily attributable to an increase in gaming
activity during the three months ended March 31, 1995.
Gaming costs and expenses were $36,785,000 for the three months ended March 31,
1995, an increase of $5,673,000 or 18.2% from gaming costs and expenses of
$31,112,000 for the comparable period in 1994. This increase is primarily due
to increased promotional and operating expense and taxes associated with
increased levels of gaming revenues from the comparable period in 1994.
General and administrative expenses were $16,750,000 for the three months ended
March 31, 1995, a decrease of $1,753,000 or 9.5% from general and administrative
expenses of $18,503,000 for the comparable period in 1994. This decrease is
primarily the result of cost containment measures.
Income from operations was $10,514,000 for the three months ended March 31,
1995, an increase of $8,101,000 or 335.7% from income from operations of
$2,413,000 for the comparable period in 1994.
Other non-operating expense was $909,000 for the three months ended March 31,
1995, a decrease of $571,000 from non-operating expense of $1,480,000 for the
comparable period in 1994. This decrease is directly attributable to a net
reduction in costs associated with Trump Plaza East. See Note 6 to Condensed
Financial Statements -- Trump Plaza East.
-33-
PART II - OTHER INFORMATION
ITEM 1 -- LEGAL PROCEEDINGS
-----------------
Reference is made to the description of the legal proceedings contained in the
Annual Report on Form 10-K of the Company, Holding and the Partnership for the
year ended December 31, 1994, filed with the Securities and Exchange Commission,
which is hereby incorporated by reference.
The Partnership, its partners, certain members of its former Executive Committee
and certain of its employees are involved in various legal proceedings, some of
which are described below. The Partnership 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.
From monies made available to it, the New Jersey Casino Reinvestment Development
Authority (the "CRDA") is required to set aside $100 million 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 by
December 31, 1996. These investments are to fund up to 35% of the cost to casino
licensees of such projects. The Partnership made application for such funding to
the CRDA with respect to its proposed construction and rehabilitation of the
Trump Plaza East hotel rooms and related Boardwalk and second level facilities,
proposed demolition of an existing hotel expansion structure attached thereto
and development of an appurtenant park, roadway and parking area on the site
thereof and proposed acquisition of the entire project site.
The CRDA, in rulings through January 10, 1995, approved the hotel development
project and, with respect to same, reserved to the Partnership the right to take
annual investment tax credits in an amount equal to 27% ($14.1 million) of $52.4
million of eligible estimated project development costs. In October 1994,
following a September 1994 CCC ruling authorizing same, the Partnership advised
the CRDA of its intention to, without affecting either the project development
costs or the tax credits, locate approximately 15,000 square feet of casino
space on the second floor of Trump Plaza East and was advised by the CRDA that
its proposed use of such space would not affect the approval of the hotel
development project.
As part of its approval and on the basis of its powers of eminent domain, the
CRDA, during 1994, initiated five condemnation proceedings in the Superior Court
of New Jersey, Atlantic County, to acquire for the benefit of the Partnership
certain small parcels of land within the project site. The defendants in three
of those matters, with respect to parcels which impact only the park and parking
areas, Casino Reinvestment Development Authority v. Banin, et al., Docket No.
ATL-L-2676-94, Casino Reinvestment Development Authority v. Sabatini, et al.,
Docket No. ATL-L-2976-94, and Casino Reinvestment Development Authority v.
Coking, et al., Docket No. ATL-L-2974-94, asserted numerous defenses to the
condemnation complaints and filed counterclaims against the CRDA and third-party
complaints against the Partnership alleging, inter alia, an improper exercise of
the CRDA power for private purposes and conspiracy between the CRDA and the
Partnership. After the filing of briefs and a hearing, a New Jersey Superior
Court Judge issued an opinion that the Trump Plaza East acquisition and
renovation was not eligible for CRDA funding and, as a result, the CRDA could
-34-
not exercise its power of eminent domain because the project included casino
floor space. The court, by order dated April 18, 1995, dismissed the
condemnation complaints with prejudice. On April 17, the same Judge dismissed
the counterclaims and third-party complaints without prejudice. Notices of
appeal were filed with the New Jersey Superior Court, Appellate Division on
April 21, 1995 by the CRDA and on April 24, 1995 by the Partnership. On May 1,
1995, the Casino Association of New Jersey on behalf of its members, 11 of the
12 Atlantic City casino hotels, filed a motion to intervene or, in the
alternative, for leave to appear as an amicus curiae.
The completion of the planned renovations of Trump Plaza East is not dependent
upon the utilization of such CRDA funding or upon the CRDA's acquisition of the
real estate subject to the condemnation proceedings. The Partnership intends to
pursue this appeal vigorously and believes it will be successful, based in part
on the March 29, 1995 opinion of the New Jersey Office of Legislative Services
("OLS"), which serves as legal counsel to the New Jersey State Legislature, that
N.J.S.A. 5:12-173.8 empowered the CRDA to approve and fund projects such as
Trump Plaza East and, in part, on the fact that Section 173.8 expressly exempts
hotel development projects from the statutory limitation with respect to any
CRDA investment or project which directly and exclusively benefits the casino
hotel or related facility.
In a related matter, Vera Coking et al. v. Atlantic City Planning Board and
Trump Plaza Associates, Docket No. ATL-L-339-94, the Atlantic City Planning
Board's approval of the Trump Plaza East renovation was challenged on various
grounds. In July 1994, a New Jersey Superior Court Judge upheld the Atlantic
City Planning Board approvals with respect to the hotel renovation component of
Trump Plaza East and the new roadway but invalidated the approval of the valet
parking lot and the public park because the Partnership lacked site control with
respect to the small parcel of land the CRDA sought to condemn. Plaintiff
appealed the court's decision upholding the approval of the hotel renovation and
new roadway and the Partnership cross-appealed the court's decision invalidating
the approval of the public park and valet parking area. The appeals are pending
in the Superior Court of New Jersey, Appellate Division, Docket No. A-1511-94-
T1. The Partnership believes that the public park and valet parking area can
receive land-use approval by deletion of the small parcel .
ITEM 2 -- CHANGES IN SECURITIES
---------------------
In connection with the initial public offering (the "Stock Offering") of the
Common Stock of THCR, written notice (the "PIK Note Redemption Notice") was
given on April 26, 1995, to the First Bank National Association, as trustee (the
"PIK Note Trustee") of the PIK Note Indenture indicating that, subject to
certain conditions, the PIK Notes have been called for redemption on June 9,
1995 or such later date on or prior to June 15, 1995 that such conditions have
been met (the "Redemption Date"). The redemption of the PIK Notes is expressly
conditioned on the consummation of the Stock Offering, 35% of the net proceeds
of which will be used to redeem all or such lesser portion of then outstanding
PIK Notes. In the event that the Stock Offering is not consummated, Holding is
under no obligation to redeem the PIK Notes and all PIK notes theretofore
surrendered to the Paying Agent (as defined in the PIK Note Indenture) will
promptly be returned to the holders thereof.
-35-
As a result of the triggering event caused by the proposed redemption of PIK
Notes, each Warrant became exercisable as of April 26, 1995 and any Warrant not
exercised prior to 5:00 p.m., New York City time, on June 8, 1995, shall
automatically become null and void and all rights in respect thereof shall
cease as of such time. Notice of the triggering event, together with the PIK
Note Redemption Notice, was mailed to each registered holder of Warrants on
April 26, 1995.
Holding has also been granted a right by a group of related holders of PIK Notes
(the "Grantors") to purchase up to $40 million in an aggregate principal amount
of their PIK Notes (the "Subject PIK Notes") at a cash purchase price (the
"Purchase Price") of 95% of (i) the principal amount thereof and (ii) any
accrued and unpaid interest thereon through the purchase date. The repurchase
right is exercisable by Holding or its designee at any time from and after April
13, 1995 and until June 14, 1995 (the "Right Termination Date"). In the event
that the repurchase right is not exercised on or prior to the Right Termination
Date, it shall terminate and be of no further force and effect and Holding shall
pay or cause an affiliate to pay to the Grantors a fee in the amount of 1% of
the aggregate principal amount of the Subject PIK Notes (the "Fee") not later
than the fifth business day following the Right Termination Date. The Fee is
also payable in the event that Holding timely exercises the repurchase right and
subsequently revokes such exercise or otherwise fails to pay the Purchase Price
to the Grantors. It is anticipated that, upon repurchase of the Subject PIK
Notes and redemption of the remaining PIK Notes called for redemption pursuant
to the PIK Note Redemption Notice, no PIK Notes or Warrants will remain
outstanding.
ITEM 3 -- DEFAULTS UPON SENIOR SECURITIES
-------------------------------
None
ITEM 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
None
ITEM 5 -- OTHER INFORMATION
-----------------
Trump Oceanview, Inc., a corporation wholly owned by Trump ("Oceanview"), has
entered into an agreement (the "Acquisition Agreement") with The New Jersey
Sports and Exposition Authority ("NJSEA") to acquire, subject to the
satisfaction of certain conditions, certain easement rights relating to portions
of the East Hall of the Atlantic City Convention Center to be used as the
pedestrian walkway connecting the casino in the existing facility of Trump Plaza
and Trump Plaza West. Oceanview has assigned all of its rights and obligations
under the Acquisition Agreement to the Partnership. The easement agreement to be
executed at the closing of the acquisition rights will grant the Partnership an
exclusive easement over, in and through the portions of the Convention Center to
be used as the pedestrian walkway. The easement is for a 25-year term and may be
renewed at the option of the Partnership for one additional 25-year period. In
consideration of the granting of the easement, the Partnership must pay to NJSEA
the sum of $2,000,000 annually, such annual payment to be adjusted every five
years to reflect changes in the consumer price index. The Partnership will have
the right to terminate the easement agreement at any time upon six months'
notice to NJSEA in consideration of a termination payment of $1,000,000. In the
event that the closing does not occur on or before August 27, 1995, NJSEA may
terminate the Acquisition Agreement; provided, however, that the Partnership may
extend the date of closing for up to six consecutive months by paying to NJSEA a
payment of approximately $170,000 for each monthly extension.
ITEM 6 -- EXHIBITS AND REPORTS ON FORM 8-K.
---------------------------------
a. Exhibits:
-----------
Exhibit No. Description of Exhibit
----------- ----------------------
4.20 Form of Notice to Holders of PIK Notes.
4.21 Form of Notice to Holders of PIK Notes
Warrants (with exhibit).
4.22 Form of PIK Note repurchase agreement.
10.50 Acquisition Agreement, dated April 27, 1995,
between Oceanview and NJSEA
27.1 Financial Data Schedule ("FDS") for the
Company for the three month period ended
March 31, 1995
27.2 FDS for Holding for the three month period
ended March 31, 1995
27.3 FDS for the Partnership for the three month
period ended March 31, 1995
-36-
b. Current Reports on Form 8-K:
------------------------------
On April 6, 1995, the Company, Holding and the Partnership filed a Current
Report on Form 8-K describing in Item 5 thereto the filing, on March 30, 1995,
of a Registration Statement on Form S-1 by THCR in connection with the Stock
Offering and a Registration Statement on Form S-1 by Trump Holdings and Trump
Funding in connection with the offering of Senior Secured Notes of Trump
Holdings and Trump Funding. No financial statements were filed with the
Form 8-K.
-37-
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 PLAZA FUNDING, INC.
(Registrant)
Dated: May 11, 1995 By: /s/ Francis X. McCarthy, Jr.
----------------------------
Francis X. McCarthy, Jr.
Vice President, Chief Financial
Officer and Principal Accounting
Officer
(Duly Authorized Officer and
Chief Accounting Officer)
-38-
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 PLAZA HOLDING ASSOCIATES
(Registrant)
Dated: May 11, 1995 By: /s/ Francis X. McCarthy, Jr.
----------------------------
Francis X. McCarthy, Jr.
Chief Financial and Accounting
Officer
(Duly Authorized Officer and
Chief Accounting Officer)
-39-
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 PLAZA ASSOCIATES
(Registrant)
Dated: May 11, 1995 By: /s/ Francis X. McCarthy, Jr.
----------------------------
Francis X. McCarthy, Jr.
Chief Financial and Accounting
Officer
(Duly Authorized Officer and
Chief Accounting Officer)
-40-
INDEX TO EXHIBITS
Sequentially
Numbered
Exhibit No. Description of Exhibit Page
- ----------- ---------------------- ----
4.20 Form of Notice to Holders of PIK Notes. 42
4.21 Form of Notice to Holders of PIK Notes 44
Warrants (with exhibit).
4.22 Form of PIK Note repurchase agreement. 49
10.50 Acquisition Agreement between Oceanview 55
and NJSEA.
27.1 Financial Data Schedule ("FDS") for the 119
Company for the three month period ended
March 31, 1995.
27.2 FDS for Holding for the three month period ended 120
March 31, 1995.
27.3 FDS for the Partnership for the three month period 121
ended March 31, 1995.
-41-