Exhibit (c)(4)
CONFIDENTIAL
VALUATION ESTIMATE
FOR
GB HOLDINGS, INC.
November 7, 2003
The information contained herein is of a confidential nature and is intended for
the exclusive use of the persons or firms to whom it is furnished by us.
Reproduction, publication, or dissemination of all or any portion hereof may not
be made without prior approval of Libra Securities, LLC.
[LIBRA SECURITIES LOGO OMITTED]
LIBRA SECURITIES
LIBRA SECURITIES, LLC
126 East 56th Street, Fifth Floor, New York, NY 10022
T (212) 308-4060 F (212) 308-8925
GB HOLDINGS, INC.
TABLE OF CONTENTS
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Page
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1. Summary of Engagement.....................................................1
2. GB Holdings Overview......................................................3
3. Summary of Proposed Exchange Offer .......................................5
4. Value of New Notes........................................................7
5. Value of Warrants ........................................................13
6. Statement of Contingent and Limiting Conditions...........................14
Appendices:
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A. Selected Historical Financial Statements
B. Borgata Impact Analysis
C. Selected Gaming Bond Comparables
1. GB HOLDINGS, INC.
SUMMARY OF ENGAGEMENT
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PURPOSE OF ENGAGEMENT
o Libra Securities, LLC ("Libra") has been retained by the Independent
Committee of the Board of Directors of GB Holdings, Inc. ("GB Holdings" or
the "Parent").
o The Parent, through its Greate Bay Hotel and Casino, Inc. subsidiary
("Operating"), owns and operates the Sands Casino and Hotel (the "Sands")
located in Atlantic City, New Jersey.
o The Parent, through its GB Property Funding Corp. subsidiary ("Finance"),
issued $110.0 million of 11% notes due September 29, 2005 (the "Existing
Notes"). (Parent, Operating and Finance, taken together, are referred to
herein as the "Company".)
o Libra has been engaged to provide (i) an opinion to the Committee as to the
fairness from a financial point of view of the consideration to be received
by the common stockholders of the Parent (the "Fairness Opinion") in the
transaction (the "Transaction") described in Section 3 hereto, (ii) a TIA
Opinion (the "TIA Opinion", and with the Fairness Opinions, the
"Opinions")) to be delivered to the Trustee of the Existing Notes if
required pursuant to Section 314(d)(1) of the Trust Indenture Act of 1939,
as amended, and (iii) an estimate of valuation of the New Notes and
Warrants described in Section 3 hereto (the "Valuation Estimate", and with
the Opinions, the "Services").
o The following presentation is a summary of Libra's analysis in connection
with the Valuation Estimate.
DUE DILIGENCE
o Due diligence activities carried out as part of our analysis in connection
with one or more of the Services:
1. Met with representatives and attorneys for the Independent
Committee and certain members of the senior management of the
Parent to discuss the operations, financial condition, future
prospects, projected operations and performance of the Company and
the pending Transaction;
2. Reviewed the Parent's Form 10-K for the fiscal year ended December
31, 2002 and the Parent's Form 10-Q for the period ended March 31,
2003 and June 30, 2003, which the Company's management has
identified as the most current financial statements available;
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1. GB HOLDINGS, INC.
SUMMARY OF ENGAGEMENT
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3. Reviewed and discussed with the Parent's management the
projections of the Company's financial performance for the fiscal
year ended December 31, 2003 prepared by the Company's management
and discussed with the Parent's management the preliminary
operating results for the quarter ending September 30, 2003;
4. Discussed with the Company's management the New Jersey tax
environment, the likely impact of the Borgata casino, and various
other potential new competitive threats in other states;
5. Visited certain facilities and business offices of the Company;
6. Reviewed the historical market prices and trading volume for the
Company's publicly traded securities and other publicly available
information regarding the Company;
7. Reviewed certain publicly available financial data for certain
companies that we deemed comparable to the Company;
8. Reviewed the Existing Indenture and related security documents;
9. Reviewed a memorandum describing the Transaction from the Company
dated July 11, 2003 (the "Transaction Summary"); and
10. Conducted such other studies, analyses and inquiries as we have
deemed appropriate.
Libra has not independently verified the accuracy and completeness of the
information supplied with respect to the Parent and does not assume any
responsibility with respect to it.
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2. GB HOLDINGS, INC.
GB HOLDINGS OVERVIEW
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GB HOLDINGS OVERVIEW
Based on the Company's public filings and other information provided to us by
Company management:
o GB Holdings is the parent of Operating, the owner and operator of
the Sands.
o The Sands is located in Atlantic City, New Jersey on
approximately 6.1 acres of land one-half block from the Boardwalk
at Brighton Park between Indiana Avenue and Dr. Martin Luther
King, Jr. Boulevard. The facility currently consists of a casino
and simulcasting facility with approximately 79,000 square feet
of gaming space containing approximately 2,300 slot machines and
approximately 60 table games; a hotel with 637 rooms (including
57 suites); six restaurants; one cocktail lounge; two private
lounges for invited guests; an 800-seat cabaret theater; retail
space; an adjacent nine-story office building with approximately
77,000 square feet of office space for its executive, financial
and administrative personnel; the "People Mover", an elevated,
enclosed, one-way moving sidewalk connecting the Boardwalk to the
Sands using air rights granted by an easement from the City of
Atlantic City and a garage and surface parking for approximately
1,750 vehicles.
o Atlantic City presently has twelve casinos that in aggregate
offer approximately 1.3 million square feet of gaming space. The
Sands is the smallest of the twelve facilities with approximately
6.1% of the market's available gaming space.
o GB Holdings presently owns cash well in excess of what is
currently needed to run the business. As of June 30, 2003, GB
Holdings had approximately $46.5 million in total cash and cash
equivalents.
o According to management, GB Holdings owns CRDA investments with a
net present value of approximately $10.6 million as of June 30,
2003.
o Atlantic City casinos are faced with the prospect of several
forms of impending additional competition, including:
o The Borgata which opened in July 2003. This facility, with
135,000 square feet of gaming space and 2,010-room hotel
will be the first new facility in Atlantic City in 12 years.
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2. GB HOLDINGS, INC.
GB HOLDINGS OVERVIEW
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o Catskills casinos. New York State has passed legislation
authorizing the creation of three full-service casinos in
the Catskills.
o Significant numbers of video lottery machines are expected
to be installed at New York racetracks in the next 12
months.
o Possible legalization of racinos in Pennsylvania.
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3. GB HOLDINGS, INC.
SUMMARY OF PROPOSED EXCHANGE OFFER
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Libra understands the following regarding the transactions contemplated by
Parent, Finance and Operating (together, the "Company"):
o Parent holds all of the outstanding capital stock of Operating and Finance
and Finance is the issuer of the Existing Notes.
o The Existing Notes are guaranteed by each of Operating and Parent and are
secured by liens on certain of the assets of the Company (the
"Collateral").
o The Company intends to solicit the consent of holders of the Existing Notes
to amend the Amended and Restated Indenture, dated as of October 12, 2001,
governing the Existing Notes (the "Existing Indenture") and related
security documents to eliminate substantially all of the covenants set
forth in the Existing Indenture, release all liens on the Collateral (the
"Release") and offer to exchange all of the Existing Notes for new notes
(the "New Notes") to be issued by a newly formed wholly-owned subsidiary of
Operating ("Newco") in the same principal amount as its Existing Notes.
o The New Notes will be secured by all existing and future assets of Newco,
accrue interest at a rate of 3% per annum payable at maturity, mature on
September 29, 2008, be convertible into 72.5% of the equity of Newco on a
fully diluted basis (or such lesser prorated amount if less than all of all
holders of Existing Notes elect to receive New Notes) and have other terms
similar to those currently included in the Existing Indenture (except that
the New Notes will be assumable in connection with an acquisition of the
Sands and will not contain any "change of control put" or other similar
provisions).
o In connection with the offer to exchange the Existing Notes for the New
Notes, the Company intends to pay to the holders of the Existing Notes who
accept the exchange offer $100 per $1,000 in principal amount of Existing
Notes exchanged, plus any accrued but unpaid interest then due on the
Existing Notes being exchanged (we assume for the purposes hereof that the
Company has paid all interest that is currently due and payable on the
Existing Notes.)
o In connection with the issuance of the New Notes, the Company will transfer
substantially all of its assets and obligations (other than any Existing
Notes that remain outstanding, intercompany notes and the stock of
Operating and Finance) to Newco in exchange for (a) warrants to acquire,
for nominal consideration, 27.5% of the common stock of Newco on a fully
diluted basis (the "Warrants") and (b) if all of the holders of the
Existing Notes do not elect to exchange, the pro rata portion of the 72.5%
of common stock of Newco reserved for issuance upon the conversion of the
New Notes that would have been issued to such holders
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3. GB HOLDINGS, INC.
SUMMARY OF PROPOSED EXCHANGE OFFER
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of the Existing Notes had they exchanged. (We have been advised that, since
the date of the Transaction Summary, the Parent now plans to structure this
Transaction so that Newco in turn will transfer the assets it receives to a
new wholly-owned subsidiary of Newco ("Licensee"), and Licensee will
guarantee the Notes and will pledge its assets to secure such guaranty.)
o Parent will then dividend to its stockholders all of the Warrants, which,
upon conversion of the New Notes would be convertible into 27.5% of the
capital stock of Newco on a fully diluted basis (if 100% of the Existing
Notes are exchanged for New Notes, common stock representing 27.5% of the
Newco stock on a fully diluted basis will be issued in place of the
Warrants and distributed to Parent's common stockholders pro rata.)
o The Warrants, any shares of common stock of Newco issued to Parent, and any
shares of common stock of Newco issuable upon exercise thereof or upon
conversion of the New Notes will be registered with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as amended, and
will be free from restrictions on trading thereunder or under applicable
state securities laws.
o Each of Operating and Finance will also be merged into Parent with Parent
as the surviving corporation.
o The amendments to the Existing Indenture and related security documents,
the Release, the offer to exchange the Existing Notes for the New Notes,
the cash payment to the holders of the Existing Notes, the transfer of
substantially all of the operating assets of the Company to Newco and the
dividend by Parent of the Warrants, issued by Newco, to Parent's
stockholders are referred to collectively herein as the "Transaction."
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
SUMMARY
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VALUE OF STRAIGHT RATE FEATURE
+
VALUE OF CONVERSION FEATURE
=
VALUE OF NEW NOTES
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
A. STRAIGHT RATE VALUE OF NEW NOTES
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($ in millions)
Discount Rate 12.10%(1)
Face Value of Notes $ 110.0
Coupon 3.00%
Annual Coupon Payment $ 3.3
Life (Years) 5
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Total Coupon Payments $ 16.5
Coupon Principal
Payments Repayment
------------ ------------
At End of Year
--------------------------------------------
5 5 Total
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Future Value $ 16.5 (2) $ 110.0
Discount Factor 1.77 1.77
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NET PRESENT VALUE (3) $ 9.3 $ 62.2 $ 71.5
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(1) Equivalent one year compound based on 11.75% yield to worst of most
comparable bond--Resorts International.
(2) Coupons for New Notes are paid at maturity.
(3) We have assumed for the purposes of this calculation that 100% of the
Existing Notes are exchanged into New Notes. The value of the New Notes'
conversion feature may change if less than 100% of the Existing Notes are
exchanged but we do not believe the amount of such change would be
material.
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
B. VALUE OF NEW NOTES' CONVERSION FEATURE -- DISCOUNTED FUTURE THEORETICAL VALUE
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($ in millions)
WE ATTRIBUTE A 14% PROBABILITY TO EBITDA RISING TO THE $26-$31 MILLION LEVEL BY 2008.
WE ATTRIBUTE NO MEANINGFUL PROBABILITY TO EBITDA EXCEEDING THAT RANGE.
ADD: LESS:
PROJECTED 2008 VALUE 2008 2008 TOTAL X 72.5% STRAIGHT
2008 EBITDA OF OPERATING EXCESS ENTERPRISE (OWNERSHIP % RATE VALUE OF
EBITDA (1) MULTIPLE BUSINESS CASH (2) VALUE FOR NEW NOTES NEW NOTES (3)
- ------------ ------------ ------------- ------------- ------------- ---------------- -----------------
$28.5 5.25 x $149.6 $39.0 $188.6 $136.8 $126.5
INCREMENTAL PROBABILITY
VALUE FROM WEIGHT FOR PROBABILITY
CONVERSION EBITDA LEVEL WEIGHTED
FEATURE BEING ACHIEVED (1) VALUE
- ------------ ------------------------- ----------------
$10.3 14.0% $1.4
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TOTAL FUTURE VALUE $1.4
DISCOUNT FACTOR: 5 YEARS @ 12.10% 1.8
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NET PRESENT VALUE (4) $0.8
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(1) Based on conversations with management and attached analysis of historical
performance and outlook for additional competition.
(2) Net of $11.0 million Consent Fee.
(3) Amount holders of New Notes receive at end of five years if they don't
convert. Equals $110 million principal repayment plus $16.5 million ($110 x
3% x 5yrs) in accrued coupon payments.
(4) We have assumed for the purposes of this calculation that 100% of the
Existing Notes are exchanged into New Notes. The value of the New Notes'
conversion feature may change if less than 100% of the Existing Notes are
exchanged.
NOTE: Using the theoretical value of the conversion feature derived above, the
"theoretical" value of the New Notes is estimated as follows:
Straight Rate Value (from previous page) $71.5 Million
Value of Conversion Feature +$0.8 million
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Total Value $72.3 Million
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
C. VALUE OF NEW NOTES' CONVERSION FEATURE - INTRINSIC VALUE
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We also have estimated the "intrinsic value" of the conversion feature of the
New Notes by comparing the estimated value of the Notes if they are converted
into equity of Newco to the value of the New Notes using the discounted future
theoretical value of the conversion feature estimated in Section 4B above. Where
the estimated intrinsic value is greater than the discounted future theoretical
value, the estimated intrinsic value also will be used in determining the
estimated value of the Warrants in Section 5.
Estimated intrinsic value, as described above, is calculated by estimating
Newco's total enterprise value, and then determining the share of such value
represented by the percentage of total equity held by the New Notes after
conversion into equity. We have calculated these amounts under three scenarios:
(1) 58% of the Existing Notes are exchanged into New Notes, (and subsequently
converted into equity), (2) 80% of the Existing Notes are exchanged into New
Notes (and subsequently converted into equity) and (3) 100% of the Existing
Notes are exchanged into New Notes (and subsequently converted into equity). Our
estimates are made assuming the New Notes are converted into equity at the
present time (as opposed to some point in the future).
(dollars in millions)
58.0 % Exchange Scenario
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Estimated Total Enterprise Value:
(5.25 x Normalized EBITDA) + Excess Cash - Consent Fee
5.25 x $15.0 + $50.0 - $6.4 = $122.4
Intrinsic Total Value of New Notes:
$122.4 x (72.5% x 58.0%) = $51.5
Straight Rate Discounted Future Theoretical Value of New Notes:
($110.0 x 58.0%) x ($71.5/$110.0) = $41.5
Value of Conversion Feature:
$51.5 - $41.5 = $10.0
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
C. VALUE OF NEW NOTES' CONVERSION FEATURE - INTRINSIC VALUE
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80.0% Exchange Scenario
- -------------------------------
Estimated Total Enterprise Value:
(5.25 x Normalized EBITDA) + Excess Cash - Consent Fee
5.25 x $15.0 + $50.0 - $8.8 = $120.0
Intrinsic Total Value of New Notes:
$120.0 x (72.5% x 80.0%) = $69.6
Straight Rate Discounted Future Theoretical Value of New Notes:
($110.0 x 80.0%) x ($71.5/$110.0) = $57.2
Value of Conversion Feature:
$69.6 - $57.2 = $12.4
100.0% Exchange Scenario
- ---------------------------------
Estimated Total Enterprise Value:
(5.25 x Normalized EBITDA) + Excess Cash - Consent Fee
5.25 x $15.0 + $50.0 - $11.0 = $117.8
Intrinsic Total Value of New Notes:
$117.8 x (72.5% x 100.0%) = $85.4
Straight Rate Discounted Future Theoretical Value of New Notes:
($110.0 x 100.0%) x ($71.5/$110.0) = $71.5
Value of Conversion Feature:
$85.4 - $71.5 = $13.9
In all three scenarios, the estimated intrinsic value (determined currently, as
opposed to a date in the future) is greater than the discounted future
theoretical value. We therefore believe that the intrinsic value of the New
Notes as calculated above represent their current fair value (As used herein,
the term "current fair value" means the amount at which an asset could be bought
or sold in a transaction between willing parties, that is, other than in a
forced or liquidation sale, and when both parties have reasonable knowledge of
all relevant facts.). Further, for the purpose of calculating the value of the
Warrants in the next Section, we are assuming that the New Notes
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4. GB HOLDINGS, INC.
VALUE OF NEW NOTES:
C. VALUE OF NEW NOTES' CONVERSION FEATURE - INTRINSIC VALUE
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issued upon exchange of the Existing Notes are immediately converted into equity
under all three scenarios (58% Exchange; 80% Exchange; and 100% Exchange).
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5. GB HOLDINGS, INC.
VALUE OF WARRANTS
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As noted in the previous Section, the holders of the New Notes are assumed to
have immediately exchanged their Notes into equity. Accordingly, we have
estimated the value of the Warrants to be the estimated total enterprise value
of Newco multiplied by the percentage of Newco's total equity represented by the
Warrants, which we believe represents the current fair value of the Warrants.
This estimated value is calculated below assuming three different scenarios: (1)
58% of the Existing Notes are exchanged for New Notes (and immediately converted
into equity), (2) 80% of the Existing Notes are exchanged for New Notes (and
immediately converted into equity), and (3) 100% of the Existing Notes are
exchanged for New Notes (and immediately converted into equity).
OWNERSHIP OF NEWCO/ESTIMATED VALUE OF WARRANTS
(dollars in millions)
Exchange Scenario 58.0% 80.0% 100.0%
------------- --------------- --------------
Total Enterprise Value (1) $122.4 $120.0 $117.8
Warrants (Old Equity) 27.5% 27.5% 27.5%
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Estimated $ Value $33.7 $33.0 $32.4
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(1) See Section 4C for calculation of Total Enterprise Value.
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6. GB HOLDINGS, INC.
STATEMENT OF CONTINGENT AND LIMITING CONDITIONS
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This presentation is made subject to the following contingent and limiting
conditions, as well as the other conditions or assumptions set forth elsewhere
herein:
1. This Valuation Estimate and presentation assumes that the Transaction was
consummated on the date of this presentation. Our statements as to value and
fair value of any security or instrument set forth herein only represent our
estimate of such value as of the date hereof and are subject to all of the
conditions, assumptions and limitations set forth herein. We have not
analyzed and are expressing no view on the value of what the New Notes,
Existing Notes, common stock of Parent or Newco or the warrants of Newco
actually will be when the Transaction is consummated or the price at which
such securities or instruments will trade subsequent thereto. No assurance
is given and no reliance should be made that the actual trading price of any
security or instrument will in fact be the same as any estimate set forth
herein.
2. We have not independently verified the accuracy and completeness of the
information supplied to us with respect to the Company and do not assume any
responsibility with respect to it.
3. We have relied upon and assumed without independent investigation, with your
permission, that all information reviewed by us with respect to the Company,
whether supplied by the Company or its advisors or obtained by us from
publicly available sources, is true, correct and complete in all material
respects and does not contain any untrue statement of material fact or omit
to state a material fact necessary to make the information supplied to us
not misleading.
4. We have further relied upon and assumed, without independent verification,
that the financial forecasts and projections provided to us have been
reasonably prepared and reflect the best currently available estimates of
the future financial results and condition of the Company, and that there
has been no material change in the assets, financial condition, business or
prospects of the Company since the date of the most recent financial
statements made available to us.
5. We have assumed, without independent verification, that the Transaction will
be consummated in all material respects in accordance with applicable laws,
the Existing Indenture and related security documents and the Transaction
Summary.
6. At your direction, we have prepared our Valuation Estimate using the
following three different assumptions as to the amount of Existing Notes
that are elected to be exchanged into New Notes.
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6. GB HOLDINGS, INC.
STATEMENT OF CONTINGENT AND LIMITING CONDITIONS
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Assumption 1 (58% Exchange) - holders of 58% of the Existing Notes, or
$63.8 million principal amount, exchange their Notes into an equal
principal amount of New Notes, and holders of 42% of the Existing Notes,
or $42.6 million principal amount, retain their existing Notes.
Assumption 2 (80% Exchange) - holders of 80% of the Existing Notes, or
$88.0 million principal amount, exchange their Notes into an equal
principal amount of New Notes, and holders of 20% of the Existing Notes,
or $22.0 million principal amount, retain their Existing Notes.
Assumption 3 (100% Exchange) - holders of 100% of the Existing Notes, or
$110.0 million principal amount, exchange their Notes into an equal
principal amount of New Notes, and no Existing Notes remain outstanding.
We have not analyzed and are expressing no view as to the likelihood of
any of the above-described scenarios and as to what portion, if any, of
the Existing Notes will be elected to be exchanged into New Notes.
7. This Valuation Estimate is necessarily based on business, economic, market
and other conditions as they exist and can be evaluated by us at the date of
this presentation.
8. Events occurring after the date of this Valuation Estimate presentation
could materially affect the assumptions used in preparing such Valuation
Estimate.
9. For purposes of this Valuation Estimate, with your permission, we have not
undertaken any inquiry as to, or taken into consideration, the possible tax
consequences of the Transaction (including whether common stockholders of
Parent will recognize taxable income as a result of the Transaction). Such
tax consequences could be material and could affect the analysis underlying
the conclusions reached in this Valuation Estimate.
10. This Valuation Estimate and this presentation are provided to the Company at
the direction of the Independent Committee solely for the information of the
Company in its determination of the appropriate accounting treatment for the
Transaction and are given to you solely for that purpose. This Valuation
Estimate and presentation and are not intended to confer rights or remedies
upon, or be relied upon by, the Independent Committee or the Board in their
consideration of the Transaction, by any securityholder of the Company or
Newco or any other person or entity.
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6. GB HOLDINGS, INC.
STATEMENT OF CONTINGENT AND LIMITING CONDITIONS
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11. We will receive a fee for our services in connection with this Valuation
Estimate, and we will be indemnified by the Parent for certain liabilities
arising from the delivery of this Valuation Estimate.
12. No opinion, counsel or interpretation is intended in matters that require
legal or other appropriate professional advice. It is assumed that such
opinions, counsel or interpretations have been or will be obtained from the
appropriate professional sources.
13. The conclusions reached in this Valuation Estimate and this presentation
represent our considered opinion based upon information furnished to us by
the Company and other sources. The extent to which the conclusions arrived
at in this Valuation Estimate and herein should be relied upon should be
governed and weighted accordingly.
14. This Valuation Estimate is valid only for the stated purpose set forth
therein and the date of such Valuation Estimate.
15. We assume no responsibility for the legal description or other matters
including legal or title considerations of the business interest being
valued. Title to the subject business interest is assumed to be good and
marketable unless otherwise stated. We assume that the subject business
interest is free and clear of any or all liens or encumbrances unless
otherwise stated. We assume no hidden or unapparent conditions regarding the
subject business interest.
16. Neither Libra nor any individual associated with this Valuation Estimate
shall be required by reason thereof to furnish additional analyses, or to
give testimony, or to be in attendance in court with reference to the
business interest in question unless specific arrangements therefor have
been made.
17. Unless otherwise stated in this presentation, we assume that all required
licenses, certificates of occupancy, consents, or other legislative or
administrative authority from any local, state, or national government or
private entity or organization have been or can readily be obtained or
renewed for any use on which this Valuation Estimate is based. We assume
that there is full compliance with all applicable federal, state and local
laws and regulations, unless the lack of compliance is otherwise stated.
18. We assume responsible ownership and competent management with respect to the
subject business interest.
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6. GB HOLDINGS, INC.
STATEMENT OF CONTINGENT AND LIMITING CONDITIONS
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19. Industry information and data on comparable companies used as background for
our analysis were obtained from regularly published sources and we have not
independently verified the accuracy and completeness of such information.
20. Libra has not retained separate legal counsel to review the legal agreements
that set forth the rights, preferences, privileges and obligations of the
noteholders or stockholders of GB Holdings, Inc. or Newco, and is relying on
management and its counsel for its understandings thereof.
21. Libra is not acting as a financial, tax or other advisor to any person in
connection with this presentation or this Valuation Estimate, and none of
the recipients of this presentation or this Valuation Estimate shall rely on
Libra in any manner in determining whether to approve or enter into the
Transaction or in assessing the legal or tax treatment of the Transaction.
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APPENDIX A.
GB HOLDINGS, INC.
SELECTED HISTORICAL FINANCIAL STATEMENTS
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Pre-Reorganization
--------------------
1/1/00 - 9/30/00
Post-Reorganization
--------------------
Pre-Reorganization 10/1/00 - 12/31/00 Post-Reorganization
---------------------------------------------------------------------------------------------
FYE FYE Combined FYE FYE
12/31/98 12/31/99 12/31/00 12/31/01
------------------- ------------------- ------------------------- ------------------------
Revenues:
Casino $ 219,368,000 $ 227,475,000 $ 229,757,000 $ 232,369,000
Rooms 9,200,000 9,273,000 9,480,000 11,570,000
Food and beverage 25,381,000 27,870,000 28,323,000 29,408,000
Other 3,767,000 5,960,000 4,500,000 4,683,000
--------------- ------------- ------------- -------------
257,716,000 270,578,000 272,060,000 278,030,000
Less: Promotional allowances (20,372,000) (23,683,000) (41,225,000) (42,128,000)
--------------- ------------- ------------- -------------
Net revenues 237,344,000 246,895,000 230,835,000 235,902,000
Expenses:
Casino 186,761,000 197,906,000 183,585,000 188,409,000
Rooms 3,174,000 2,858,000 2,770,000 4,362,000
Food and beverage 9,998,000 10,274,000 8,977,000 9,814,000
Other 2,599,000 4,234,000 3,741,000 3,374,000
General and administrative 12,497,000 10,586,000 9,838,000 10,961,000
--------------- ------------- ------------- -------------
Total expenses 215,029,000 225,858,000 208,911,000 216,920,000
--------------- ------------- ------------- -------------
EBITDA $ 22,315,000 $ 21,037,000 $ 21,924,000 $ 18,982,000
=============== ============ ============= =============
Post-Reorganization Post-Reorganization
------------------------ --------------------
FYE LTM
12/31/02 6/30/03
------------------------ --------------------
Revenues:
Casino $ 206,417,000 $ 192,179,000
Rooms 11,140,000 10,760,000
Food and beverage 23,305,000 21,263,000
Other 3,739,000 3,724,000
------------ --------------
244,601,000 227,926,000
Less: Promotional allowances (51,128,000) (51,448,000)
------------ --------------
Net revenues 193,473,000 176,478,000
Expenses:
Casino 143,189,000 136,024,000
Rooms 2,985,000 1,895,000
Food and beverage 10,915,000 10,084,000
Other 2,625,000 2,605,000
General and administrative 12,799,000 11,116,000
------------ --------------
Total expenses 172,513,000 161,724,000
------------ --------------
EBITDA $ 20,960,000 $ 14,754,000
============ ==============
- -----------------------------------
Source: Company Public Filings.
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APPENDIX B.
GB HOLDINGS, INC.
BORGATA IMPACT:
Sands Revenue Versus Prior Year
- --------------------------------------------------------------------------------
2003 2002 Difference
----------------- ----------------- --------------------------------
July $ 16,305,172 $ 17,904,924 $ (1,599,752) -8.9%
August 18,970,275 19,597,504 (627,229) -3.2%
September 14,335,930 17,294,490 (2,958,560) -17.1%
----------------- ----------------- --------------------------------
Total $ 49,611,377 $ 54,796,918 $ (5,185,541) -9.5%
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APPENDIX C.
GB HOLDINGS, INC.
SELECTED GAMING BOND COMPARABLES
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[INTENTIONALLY OMITTED]
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