================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 11-K
ANNUAL REPORT
----------
Pursuant to Section 15 (d)
of the Securities Exchange Act of 1934
for the year ended December 31, 1997
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(Full title of the Plan)
TRUMP HOTELS AND CASINO RESORTS, INC.
(Name of Issuer of the securities held pursuant to the Plan)
2500 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive office)
================================================================================
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(FORMERLY TRUMP CASTLE CASINO RESORT BY THE BAY RETIREMENT SAVINGS PLAN)
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1997 AND 1996
TOGETHER WITH
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Resort By The Bay Retirement Savings Plan)
DECEMBER 31, 1997 AND 1996
INDEX
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
FINANCIAL STATEMENTS:
Statements of Net Assets Applicable to Participants' Equity as of December
31, 1997 and 1996
Statement of Changes in Net Assets Applicable to Participants' Equity for
the Year Ended December 31, 1997
Notes to Financial Statements
SUPPLEMENTAL SCHEDULES:
I -- Item 27a - Schedule of Assets Held for Investment Purposes as of December
31, 1997
II -- Item 27d - Schedule of Reportable Transactions for the Year Ended December
31, 1997
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefits Committee of the
Trump Castle Hotel & Casino Savings Plan:
We have audited the accompanying statements of net assets applicable to
participants' equity of the Trump Castle Hotel & Casino Savings Plan (formerly
Trump Castle Casino Resort By The Bay Retirement Savings Plan) (the "Plan") as
of December 31, 1997 and 1996, and the related statement of changes in net
assets applicable to participants' equity for the year ended December 31, 1997.
These financial statements and the schedules referred to below are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements and schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets applicable to participants' equity as of
December 31, 1997 and 1996, and the changes in net assets applicable to
participants' equity for the year ended December 31, 1997, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes and reportable transactions are presented for the
purpose of additional analysis and are not a required part of the basic
financial statements but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974. The fund information in the
statements of net assets applicable to participants' equity and the statement of
changes in net assets applicable to participants' equity is presented for
purposes of additional analysis rather than to present the net assets applicable
to participants' equity and the changes in net assets applicable to
participants' equity of each fund. The supplemental schedules and fund
information have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
June 29, 1998
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Resort By The Bay Retirement Savings Plan)
STATEMENTS OF NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY
AS OF DECEMBER 31, 1997 AND 1996
1997 1996
---------- ----------
ASSETS:
Cash $9,594 $14,283
Investments at market value (Notes 1 and 3)-
Pacific Fund 2,114,825 2,855,797
Federal Securities Fund 2,434,240 2,578,044
Capital Fund 6,598,997 5,851,624
Basic Value Fund 9,743,550 7,168,959
Growth Fund 5,657,165 4,203,149
Global Allocation Fund 1,520,865 1,378,559
Templeton Foreign Fund 210,316 0
MFS Emerging Growth Fund 344,258 0
Davis New York Venture Fund 865,109 0
Delaware Trend Fund 31,474 0
Trump Hotels And Casino Resorts, Inc. Common Stock 315,949 0
Retirement Preservation Trust Fund 146,143 0
Ready Assets Trust Fund 4,196,054 4,753,197
Participants' Loans Receivable 4,424,600 3,013,072
Receivables-
Contributions Receivable from Plan Sponsor 0 238,215
Contributions Receivable from Participants 245,022 273,138
---------- -----------
NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY $38,858,161 $32,328,037
=========== ===========
The accompanying notes to financial statements are
an integral part of these statements.
Pacific
Fund
----------
NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY,
beginning of year $2,855,797
----------
Contributions-
Participants 358,703
Plan Sponsor (net of forfeitures) 118,135
Participants Rollovers 1,271
----------
Total contributions 478,109
Dividend income 332,173
Interest income 33,145
Realized/unrealized appreciation (depreciation) of
investments (454,755)
Distributions to participants (161,324)
Loans issued to participants (236,993)
Loans principal repayments 124,797
Transfers from (to) related plans (7,083)
Interfund transfers (net) (849,041)
Administrative expenses 0
----------
Increase (decrease) in net assets (740,972)
----------
NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY, end of year $2,114,825
==========
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Resort By The Bay Retirement Savings Plan)
STATEMENT OF CHANGES IN NET ASSETS APPLICABLE TO PARTICIPANTS' EQUITY
FOR THE YEAR ENDED DECEMBER 31, 1997
Trump Hotels
MFS Davis and Casino
Federal Global Templeton Emerging New York Delaware Resorts, Inc.
Securities Capital Basic Growth Allocation Foreign Growth Venture Trend Common
Fund Fund Value Fund Fund Fund Fund Fund Fund Fund Stock
- ----------- ---------- ---------- ---------- ---------- --------- -------- --------- --------- -------------
$2,578,044 $5,851,624 $7,168,959 $4,203,149 $1,378,559 $0 $0 $0 $0 $0
- ---------- ---------- ---------- ---------- ---------- -------- -------- -------- ------- --------
334,617 564,883 714,319 686,303 225,683 26,732 28,753 57,193 5,479 18,591
128,422 189,706 231,727 218,879 73,802 8,752 10,502 20,842 2,420 5,766
543 51,121 90,967 3,248 220 892 1,667 16,250 0 0
- ---------- ---------- ---------- ---------- ---------- -------- -------- -------- ------- --------
463,582 805,710 1,037,013 908,430 299,705 36,376 40,922 94,285 7,899 24,357
162,473 562,169 728,782 440,382 199,028 20,682 3,295 34,893 2,531 0
30,390 55,263 73,259 49,958 17,563 1,772 1,822 4,739 101 2,358
42,831 612,092 1,341,517 346,543 (40,757) (32,726) (7,943) (3,668) (661) (125,634)
(183,939) (617,048) (633,842) (260,038) (130,008) (1,637) (209) (836) (479) (7,703)
(298,970) (447,891) (611,756) (425,394) (111,199) (6,392) (13,290) (19,701) 0 (21,043)
114,374 196,725 258,525 161,036 74,264 5,452 19,557 15,053 284 8,387
(7,567) 437 (68,596) (86,204) (12,840) 0 (5,032) 4,016 0 0
(466,978) (420,084) 449,689 319,303 (153,450) 186,789 305,136 736,328 21,799 435,227
0 0 0 0 0 0 0 0 0 0
- ---------- ---------- ---------- ---------- ---------- -------- -------- -------- ------- --------
(143,804) 747,373 2,574,591 1,454,016 142,306 210,316 344,258 865,109 31,474 315,949
- ---------- ---------- ---------- ---------- ---------- -------- -------- -------- ------- --------
$2,434,240 $6,598,997 $9,743,550 $5,657,165 $1,520,865 $210,316 $344,258 $865,109 $31,474 $315,949
========== ========== ========== ========== ========== ======== ======== ======== ======= ========
Retirement Ready Participants'
Preservation Assets Loans Cash and
Trust Fund Trust Fund Receivable Other Total
- ------------ ---------- ------------ ---------- -----------
$0 $4,753,197 $3,013,072 $525,636 $32,328,037
-------- ---------- ---------- -------- -----------
5,930 563,045 0 (20,255) 3,569,976
2,529 151,969 0 (238,215) 925,236
0 2,147 0 0 168,326
-------- ---------- ---------- -------- -----------
8,459 717,161 0 (258,470) 4,663,538
1,322 221,823 0 0 2,709,553
62 53,741 19 0 324,192
0 0 0 1,470 1,678,309
(333) (414,305) (194,824) (12,020) (2,618,545)
(52) (572,631) 2,765,312 0 0
233 182,244 (1,160,931) 0 0
2,247 (26,941) 1,952 (2,000) (207,611)
134,205 (698,923) 0 0 0
0 (19,312) 0 0 (19,312)
-------- ---------- ---------- -------- -----------
146,143 (557,143) 1,411,528 (271,020) 6,530,124
------- ---------- ---------- -------- -----------
$146,143 $4,196,054 $4,424,600 $254,616 $38,858,161
======== ========== ========== ======== ===========
The accompanying notes to financial statements are an integral part of this
statement.
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Resort By The Bay Retirement Savings Plan)
NOTES TO FINANCIAL STATEMENTS
(1) SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES:
Basis of Accounting-
The accompanying financial statements of the Trump Castle Hotel & Casino
Savings Plan (formerly Trump Castle Resort By The Bay Retirement Savings
Plan) (the "Plan") have been prepared on the accrual basis of
accounting.
Plan Expenses-
Expenses related to the administration of the Plan have been paid by
Trump Castle Associates, L.P. (the "Plan Sponsor"). These costs
represent trustee fees and professional services and amounted to
approximately $31,000 in 1997.
Investments-
The investments included in the statement of net assets applicable to
participants' equity are stated at market value. Market value, which
is equivalent to current value, is the unit valuation of the security
at the plan year-end as determined by Merrill Lynch Trust Company, the
trustee of the Plan (the "Trustee"). Accounting records are maintained
on the accrual basis, investment transactions are recorded on the
trade date basis and gains and losses are calculated based upon an
aggregate participant cost that is maintained on an average unit cost
basis.
Use of Estimates-
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amount of net assets and disclosure
of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
(2) PLAN DESCRIPTION:
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete
description of the Plan's provisions.
General-
The Plan is a 401(k) Savings Plan, which was established by the Plan
Sponsor and became effective on September 1, 1986. All full or part-time
nonunion employees, become eligible for participation in the Plan on the
enrollment date immediately following the completion of 6 months of
service (effective January 1, 1998, 12 months of service) and the
attainment of age 18.
-2-
The Plan is administered by a committee appointed by the Plan Sponsor
(the "Plan Administrator"). Merrill Lynch Trust Company was appointed as
the trustee of the Plan by the Plan Administrator.
Contributions-
Participants-
Non-highly compensated participants, as defined, are eligible to
voluntarily contribute to the Plan up to 15% of their annual
compensation, as defined. Highly compensated employees, as defined, are
eligible to voluntarily contribute to the Plan up to 7% of their annual
compensation, as defined. Tax deferred contributions are subject to a
limit by the Internal Revenue Code. The 1997 limit was $9,500 per
participant. Contributions to the Plan are invested by the Trustee,
as designated by the participant, in increments of 5%.
Plan Sponsor-
The Plan Sponsor contributes to the Plan 50% of each participant's
contributions, not to exceed 2.5% of the participant's annual
compensation, as defined (effective January 1, 1998, 3%).
Participant Rollovers-
The Plan permits eligible participants, as defined, to rollover cash or
other property acceptable to the Plan Administrator from another
qualified plan in addition to qualified voluntary participant
contributions.
Distributions to Participants-
Each participant has a fully vested interest in the amount of his or her
contributions together with the allocable Plan earnings. Contributions
from the Plan Sponsor vest based on the vesting schedule described
below. The full value of the participant's vested interest in his or her
account in the Plan will be distributed upon termination of the
participant's employment. The normal form of payment is by lump sum;
however, if a participant's vested benefit from all contributions
exceeds $3,500, a participant has the right to receive payment in equal
periodic monthly, quarterly, semi-annual or annual installments over a
period not to exceed ten years.
A participant may also withdraw all or part of his or her account upon
attainment of age 59-1/2 or financial hardship, as defined in the Plan.
Upon termination of employment prior to eligibility for retirement, a
participant is eligible to receive the vested balance in his or her
account. There were no payments due to participants who have requested
to withdraw their funds prior to December 31, 1997.
-3-
Vesting-
Voluntary contributions are fully vested at all times and are not
subject to forfeiture.
The Plan Sponsor's contributions vest based upon the participant's years
of continuous service as follows-
Years of Continuous Service Percentage Vested
--------------------------- -----------------
Less than two years 0%
Two years 25
Three years 50
Four years 75
Five years or more 100
Forfeitures-
The portion of a former participant's account which is not distributed
because of the vesting provision will reduce the amount of the Plan
Sponsor's future contributions. During 1997, $55,837 was used to reduce
Plan Sponsor contributions. As of December 31, 1997 and 1996, $47 and
$11,421 were available to reduce future Plan Sponsor contributions,
respectively.
Loans-
The Plan permits participants to borrow from their accounts at terms
established by the Plan Administrator. Participants may borrow up to the
lesser of $50,000 or 50% of their vested account balance for specific
reasons, as defined by the Plan. Each loan is secured by the borrower's
vested interest in the Plan and is subject to other requirements, as
defined. Interest on loans is charged at a rate that is comparable to
similar loans made by commercial lenders. Loans outstanding as of
December 31, 1997 had interest rates ranging from 8.0% to 12.0%. Loan
repayment terms range up to five years (fifteen years if the loan was
used to purchase a primary residence). A small administrative fee is
required to process all loans.
(3) INVESTMENTS:
Participants can invest their funds in thirteen available investment
vehicles as described below-
Mutual Funds-
Pacific Fund - An overseas fund investing in equities of corporations
based in the Far East and Western Pacific. This fund provides a
long-term objective of capital appreciation.
Federal Securities Fund - A securities fund investing in United States
Government agencies seeking a high current return.
Capital Fund - Mutual Fund investing in equity securities of undervalued
companies with the objective of seeking the highest total investment
return consistent with prudent risk.
Basic Value Fund - Mutual Fund investing in equity and debt securities
of financially strong companies. This fund's objective is to seek
capital appreciation.
-4-
Growth Fund - Mutual fund investing in equity securities with the
objective of capital appreciation.
Global Allocation Fund - Mutual fund investing in United States and
foreign equity, debt and money market securities with the objective of
capital appreciation.
Templeton Foreign Fund - Mutual fund investing in virtually any type of
security in any country outside of the United States in developed or
emerging markets. The fund's objective is long-term capital growth.
MFS Emerging Growth Fund - Mutual fund investing in small and medium
sized companies with growth rates expected to be well above the growth
rate of the overall economy and rate of inflation.
Davis New York Venture Fund - Mutual fund investing primarily in equity
securities of United Sates and foreign companies with the objective of
capital appreciation.
Delaware Trend Fund - Mutual fund investing in securities of financially
strong companies with the objective of achieving a moderate return with
limited risk.
Common Stock-
Trump Hotel & Casino Resorts, Inc. ("THCR") Common Stock - This is the
common stock of the holding company that owns Trump Plaza Hotel &
Casino, Trump Taj Mahal Hotel & Casino, Trump Marina Hotel & Casino and
Trump Indiana Inc.
Money Market Funds-
Retirement Preservation Trust Fund - Fund investing in money market
funds that seek the highest current income consistent with liquidity
and stability of principal, but investing in short-term money market
instruments.
Ready Assets Trust Fund - Fund investing in money market funds.
(4) TAX STATUS:
The Plan obtained its latest determination letter on August 18, 1994, which
covered all amendments through January 1, 1993, in which the Internal
Revenue Service stated that the Plan, as then designed, was in compliance
with the applicable requirements of the Internal Revenue Code. The Plan has
been amended since receiving the determination letter. However, the Plan
Administrator believe that the Plan is currently designed and being
operated in compliance with the applicable requirements of the
International Revenue Code. Therefore, they believe that the Plan was
qualified and the related trust was tax exempt as of the financial
statement date.
(5) PLAN TERMINATION:
While the Plan Sponsor has not expressed any intent to terminate the Plan,
the Plan Sponsor may do so at any time subject to the provisions of the
Employee Retirement Income Security Act of 1974. In the event of
termination, each participant is entitled to the value of his or her
separate account.
-5-
(6) RELATED PARTY
TRANSACTIONS:
Certain Plan investments include shares of mutual funds managed by Merrill
Lynch Trust Company. Merrill Lynch Trust Company is the Trustee as defined
by the Plan and, therefore, these transactions qualify as
party-in-interest.
Certain Plan investments include shares of THCR common stock and, therefore,
these transactions qualify as party-in-interest.
The Plan Sponsor has sister companies that also sponsor similar Savings
Plans. Transactions between the Plan and plans sponsored by the sister
companies are as follows-
Transfers out of the Trump Castle Hotel & Casino Savings
Plan, net ($207,611)
Transfers out of the Trump Taj Mahal Hotel & Casino
Savings, net (410,240)
Transfers out of Trump Plaza Hotel & Casino Savings Plan, net (4,142,742)
Transfers to the Trump Casino Services Savings Plan 4,760,593
---------
Net Related Plan Transfers $0
=========
SCHEDULE I
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Casino Resort By The Bay Retirement Savings Plan)
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
EMPLOYER IDENTIFICATION #22-2608426, PLAN NUMBER 001
(b) Identity of
issuer, (c) Description of investment
borrower, lessor including maturity date, rate of
or interest, collateral, par or (e) Market
(a) similar party maturity value (d) Cost Value
- --- ------------------- ---------------------------------- ----------- ----------
* Merrill Lynch Pacific Fund, Overseas Equity
Securities, 124,621 units of
participation $2,578,326 $2,114,825
* Merrill Lynch Federal Securities Fund, U. S.
Government Agencies, 249,665
units of participation 2,394,586 2,434,240
* Merrill Lynch Capital Fund, Equity Securities,
191,220 units of participation 5,648,919 6,598,997
* Merrill Lynch Basic Value Fund, Equity and
Debt Securities, 262,771 units
of participation 7,280,100 9,743,550
* Merrill Lynch Growth Fund, Equity Securities,
197,458 units of participation 5,018,485 5,657,165
* Merrill Lynch Global Allocation Fund, U. S. and
Foreign Equity and Debt
Securities, 107,558 units of
participation 1,547,099 1,520,865
Templeton Funds Templeton Foreign Fund, Foreign
Equity and Debt Securities,
21,137 units of participation 241,283 210,316
MFS Fund MFS Emerging Growth Fund, Equity
Securities, 9,515 units of
participation 350,235 344,258
Davis Funds, Inc. Davis New York Venture Fund,
Foreign Equity Securities,
38,742 units of participation 870,390 865,109
Delaware Group Delaware Trend Fund, Equity
Securities, 1,832 units of 31,773 31,474
participation
---------- ----------
Total investment in Mutual Funds 25,961,196 29,520,799
---------- ----------
-2-
SCHEDULE I
(continued)
(b) Identity of
issuer, (c) Description of investment
borrower, lessor including maturity date, rate of
or interest, collateral, par or (e) Market
(a) similar party maturity value (d) Cost Value
- --- ------------------- ---------------------------------- ----------- ----------
* Merrill Lynch Retirement Preservation Trust
Fund, Money Market Funds,
146,143 units of participation $ 146,143 $ 146,143
* Merrill Lynch Ready Assets Trust Fund, Money
Market Funds, 4,196,054 units of
participation 4,196,054 4,196,054
----------- -----------
Total investment in Money Market Funds 4,342,197 4,342,197
----------- -----------
** Trump Hotels & Trump Hotels & Casino Resorts,
Casino Resorts, Inc., Common Stock, Equity
Inc. Security, 47,241 units of
participation 450,020 315,949
----------- -----------
Participants' Interest rates ranging from 8.0%
loans to 12.0% and maturities ranging
from 1998 through 2011 4,424,600 4,424,600
----------- -----------
$35,178,013 $38,603,545
=========== ===========
* Denotes party-in-interest
** Denotes related party
The accompanying notes to financial statements are an integral part of this schedule.
SCHEDULE II
TRUMP CASTLE HOTEL & CASINO SAVINGS PLAN
(formerly Trump Castle Casino Resort By The Bay Retirement Savings Plan)
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997 (A)
EMPLOYER IDENTIFICATION #22-2608426, PLAN NUMBER 001
(a) Identity of Party (c) Purchase
Involved (b) Description of Asset Price (d) Selling Price (g) Cost of Asset
- ---------------------------- ----------------------------------------- ----------------- ----------------- -------------------
Merrill Lynch Pacific Fund-
483 Purchases $2,092,351 N/A $2,092,351
561 Sales N/A $2,371,248 2,303,218
Merrill Lynch Capital Fund-
472 Purchases 1,986,329 N/A 1,986,329
602 Sales N/A 1,767,668 1,556,082
Merrill Lynch Federal Securities Fund-
393 Purchases 862,968 N/A 862,968
581 Sales N/A 1,030,999 1,028,112
Merrill Lynch Basic Value Fund-
562 Purchases 3,936,068 N/A 3,936,068
623 Sales N/A 2,544,247 2,122,917
Merrill Lynch Growth Fund-
554 Purchases 3,737,552 N/A 3,737,552
576 Sales N/A 2,577,142 2,264,738
Merrill Lynch Ready Assets Trust Fund-
748 Purchases 3,680,277 N/A 3,680,277
591 Sales N/A 4,212,089 4,212,089
Merrill Lynch Loan Fund-
219 Purchases 2,820,563 N/A 2,820,563
123 Sales N/A 1,405,116 1,405,116
(h) Current Value of
(a) Identity of Party Asset (i) Net Gain
Involved on Transaction Date (Loss)
- ---------------------------- -------------------------- -----------------
Merrill Lynch
$2,092,351 N/A
2,371,248 $68,030
Merrill Lynch
1,986,329 N/A
1,767,668 211,586
Merrill Lynch
862,968 N/A
1,030,999 2,887
Merrill Lynch
3,936,068 N/A
2,544,247 421,330
Merrill Lynch
3,737,552 N/A
2,577,142 312,404
Merrill Lynch
3,680,277 N/A
4,212,089 0
Merrill Lynch
2,820,563 N/A
1,405,116 0
(A) Reportable transactions are those purchases and sales of the same security
which, individually or in the aggregate, exceed 5% of Plan assets at
January 1, 1997.
The accompanying notes to financial statements are an integral part of this
schedule.