SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: March 31, 1999
-------------------------------------
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: to
-------------------- -----------------------
Commission file number: 333-49717 and 333-49717-01
-----------------------------------------------------
ALADDIN GAMING HOLDINGS, LLC
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0379607
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
831 Pilot Road, Las Vegas, Nevada 89119
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(702) 736-7114
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
ALADDIN CAPITAL CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 88-0379606
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
831 Pilot Road, Las Vegas, Nevada 89119
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(702) 736-7114
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has 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) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- -----
Indicate the number of shares outstanding of the issuer's classes of common
stock, as of the latest practicable date.
ALADDIN GAMING HOLDINGS, LLC
Not applicable
ALADDIN CAPITAL CORPORATION
2,500 shares of common stock, no par value as of March 31, 1999.
EXPLANATION OF THE AMENDMENT:
Due to a typographical error in the "Consolidated Statements of Members'
Equity" and "Consolidated Statements of Cash Flows," it is necessary to amend,
in its entirety, Item 1 "Financial Statements" of Part I of this report to read
as follows:
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED BALANCE SHEETS
AS OF MARCH 31, 1999 AND DECEMBER 31, 1998
(IN THOUSANDS)
March 31, December 31,
1999 1998
--------------- ---------------
(unaudited)
ASSETS
Current assets:
Cash $ 26 $ 1,248
Restricted land 6,842 6,842
Other current assets 972 1,021
--------------- ---------------
Total current assets 7,840 9,111
--------------- ---------------
Property and equipment:
Land 33,407 33,407
Furniture and equipment 304 272
Construction in progress 123,808 86,557
Capitalized interest 12,977 8,213
--------------- ---------------
170,496 128,449
Less accumulated depreciation 37 17
--------------- ---------------
170,459 128,432
--------------- ---------------
Other assets
Restricted cash 198,037 227,983
Other assets 3,270 2,920
Debt issuance costs, net of
accumulated amortization of $3,701
and $2,831 33,441 34,315
--------------- ---------------
Total other assets 234,748 265,218
--------------- ---------------
$ 413,047 $ 402,761
--------------- ---------------
--------------- ---------------
LIABILITIES AND MEMBERS' EQUITY
Current liabilities:
Accounts payable 3,636 3,394
Construction payable 23,244 12,063
Obligation to transfer land 6,842 6,842
Accrued expenses 2,987 1,847
--------------- ---------------
Total current liabilities 36,709 24,146
--------------- ---------------
Long-term debt, net of discount 392,972 388,353
Related party payables and other liabilities 5,102 4,122
Members' equity:
Common membership interest 28,608 28,608
Deficit accumulated during the (50,344) (42,468)
development stage --------------- ---------------
Total members' equity (21,736) (13,860)
--------------- ---------------
$ 413,047 $ 402,761
--------------- ---------------
--------------- ---------------
The accompanying notes are an integral part of these financial statements.
1
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999
(IN THOUSANDS)
For the period
December 1,
For the three For the three 1997 (inception)
months ended months ended through
March 31, 1999 March 31, 1998 March 31, 1999
(unaudited) (unaudited) (unaudited)
---------------- ----------------- -----------------
Pre-opening costs $ 2,297 $ 11,463 $ 27,034
Other (income) expense:
Interest income (2,548) (1,585) (15,020)
Interest expense 12,891 4,388 51,307
Less: Interest capitalized (4,764) (544) (12,977)
---------------- ----------------- -----------------
Total other (income) expense 5,579 2,259 23,310
---------------- ----------------- -----------------
Net loss accumulated during the development stage $ 7,876 $ 13,722 $ 50,344
---------------- ----------------- -----------------
---------------- ----------------- -----------------
The accompanying notes are an integral part of these financial statements.
2
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF MEMBERS' EQUITY
FOR THE PERIOD FROM INCEPTION (DECEMBER 1, 1997)
THROUGH MARCH 31, 1999
(IN THOUSANDS)
(UNAUDITED)
Aladdin London
Sommer Gaming Clubs
Enterprises, Enterprises, Nevada,
LLC LLC Inc. GAI, LLC Total
------------ ------------ ------------ ----------- -----------
BALANCE, DECEMBER 1, 1997 $ - $ - $ - $ - $ -
Members' contribution 1 - - 2 3
------------ ------------ ------------ ----------- -----------
BALANCE, DECEMBER 31, 1997 1 - - 2 3
Net loss for the period (19,960) (10,617) (10,617) (1,274) (42,468)
Members' contributions (47,317) 28,247 50,000 - 30,930
Members' equity costs (1,093) (581) (581) (70) (2,325)
------------ ------------ ------------ ----------- -----------
BALANCE, DECEMBER 31, 1998 (68,369) 17,049 38,802 (1,342) (13,860)
Net loss for the period (3,702) (1,969) (1,969) (236) (7,876)
------------ ------------ ------------ ----------- -----------
BALANCE, MARCH 31, 1999 $ (72,071) $ 15,080 $36,833 $ (1,578) $ (21,736)
------------ ------------ ------------ ----------- -----------
------------ ------------ ------------ ----------- -----------
The accompanying notes are an integral part of these financial statements.
3
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999
(IN THOUSANDS)
For the period
December 1, 1997
For the three For the three (inception)
months ended months ended through March 31,
March 31, 1999 March 31, 1998 1999
(unaudited) (unaudited) (unaudited)
------------------- ---------------------- --------------------
Cash used in operating activities $ (303) $ (9,300) $ (20,962)
------------------- ---------------------- --------------------
Cash flows from investing activities:
Payments for construction in
progress, furniture, equipment and
capitalized interest (30,865) (7,037) (105,534)
Decrease (increase) in restricted cash 29,947 (308,293) (198,036)
------------------- ---------------------- --------------------
Net cash used in investing activities (918) (315,330) (303,570)
------------------- ---------------------- --------------------
Cash flows from financing activities:
Proceeds from issuance of notes - 100,047 100,047
Proceeds from long-term debt - 274,000 274,000
Repayment of long-term debt - (45) (547)
Debt issuance costs - (37,170) (37,146)
Members' contributions - 65,000 65,003
Payment of debt on contributed land - (74,477) (74,477)
Members' equity costs - (2,325) (2,325)
Payable to related parties (1) - -
Advances to purchase membership
interests - - 3
------------------- ---------------------- --------------------
Net cash provided by financing activities (1) 325,030 324,558
------------------- ---------------------- --------------------
Net (decrease)/increase in cash (1,222) 400 26
Cash and cash equivalents at the beginning
of the period 1,248 7 -
------------------- ---------------------- --------------------
Cash and cash equivalents at the end of the
period $ 26 $ 407 $ 26
------------------- ---------------------- --------------------
------------------- ---------------------- --------------------
The accompanying notes are an integral part of these financial statements.
4
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998 AND FOR THE PERIOD
FROM INCEPTION (DECEMBER 1, 1997) THROUGH MARCH 31, 1999
(continued)
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid for interest, net of amount
capitalized $832 $ 365 $12,164
Non-cash investing and financing activities:
Members' contributions - book value
Land - 33,407 33,407
Construction in progress - 7,000 7,000
Equipment acquired equal to assumption
of debt - 547 547
Increase in construction payables 11,182 - 11,182
The accompanying notes are an integral part of these financial statements.
5
ALADDIN GAMING HOLDINGS, LLC
AND SUBSIDIARIES
(A DEVELOPMENT STAGE COMPANY)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1999
1. BUSINESS DESCRIPTION AND BASIS OF PRESENTATION
Aladdin Gaming Holdings, LLC, a Nevada limited liability company
("Gaming Holdings"), through its wholly-owned subsidiary Aladdin Gaming, LLC
("Gaming"), is developing, constructing and will operate a new hotel and casino,
the Aladdin Hotel and Casino ("Aladdin"), as the centerpiece of an approximately
35-acre resort, casino and entertainment complex in Las Vegas, Nevada. The
resort will be located at the center of Las Vegas Boulevard. Gaming Holdings,
through its subsidiaries, also owns 100% of Aladdin Music, LLC ("Aladdin
Music"). Aladdin Music plans to construct a second hotel and casino with a music
and entertainment theme ("Aladdin Music Project") on the southeast corner of the
35-acre parcel. Aladdin Music is currently seeking a joint venture partner and
financing for the Aladdin Music Project.
The consolidated financial statements include the accounts of Gaming
Holdings and all of its subsidiaries. This information should be read in
conjunction with the financial statements set forth in Gaming Holdings' Annual
Report on Form 10-K for the year ended December 31, 1998 and the Form 8-K, dated
April 27, 1999.
Accounting policies utilized in the preparation of the financial
information herein presented are the same as set forth in Gaming Holdings'
annual financial statements except as modified for interim accounting policies.
The interim consolidated financial information is unaudited. In the opinion of
management, all adjustments, consisting only of normal recurring adjustments
necessary for a fair presentation of the results for the interim periods have
been included. Interim results of operations are not necessarily indicative of
the results of operations for the full year.
Certain prior period amounts have been reclassified to conform with the
current period's presentation.
2. AMENDMENTS TO THE CREDIT AGREEMENT
On April 2, 1999, pursuant to the Bank Completion Guaranty, London
Clubs International, plc ("London Clubs") funded approximately $18.5 million in
order to bring the Main Project Budget "In Balance" (as defined in the Credit
Agreement) and the Lenders funded Gaming's March 1999 funding draw ("March
Draw") under the Credit Agreement. Upon receipt of the March Draw on April 2,
1999, Gaming immediately paid the outstanding March 1999 payment to the
Design/Builder.
On April 16, 1999, the Lenders under the Credit Agreement approved,
effective as of March 10, 1999, the Second Amendment to the Credit Agreement,
which cured or waived the events of default discussed in Gaming Holdings' Form
10-K for the year ended December 31, 1998. Specifically, the Second Amendment to
the Credit Agreement provides: (i) the indebtedness incurred in connection with
the Aladdin Music Project has been paid by or on behalf of Aladdin Music and
this event of default has now been waived by the Lenders; (ii) a capital
contribution in the amount of approximately $18.5 million has been made to bring
the Main Project Budget "In Balance;" (iii) the approximately $6.5 million of
letters of credit, which had been previously posted by London Clubs and the
Trust Under Article Sixth
6
u/w/o Sigmund Sommer ("Sommer Trust") to fund a prior increase in the Main
Project Budget (and resulting imbalance), have been drawn and the proceeds
deposited in Gaming's guaranty deposit account; (iv) amending certain
definitions of the Credit Agreement, including, "Available Funds,"
"Indebtedness," and "Realized Savings;" (v) any costs in excess of $36 million
for completing the carpark associated with the project will be funded by the
Sommer Trust and London Clubs; (vi) requiring that Gaming maintain a minimum
"Net Worth" at the close of each calendar month, until the end of the fiscal
quarter during which the project opens (and then reverting to the Credit
Agreement's requirement to maintain the minimum Net Worth on a fiscal quarterly
basis thereafter), of not less than $100 million plus 85% of positive Net Income
(as defined in the Credit Agreement); and (vii) other technical amendments to
the Credit Agreement.
3. INCOME TAXES
Gaming Holdings will file federal information tax returns only. Each
member reports taxable income or loss on their respective tax returns.
4. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for
Derivative Instruments and Hedging Activities." SFAS No. 133, which becomes
effective in the Year 2000, but may be adopted earlier, requires that entities
record all derivatives as assets or liabilities measured at fair value, with the
change in fair value recognized in earnings or in other comprehensive income,
depending on the use of the derivative and whether it qualifies for hedge
accounting. SFAS 133 amends or supercedes several current accounting statements.
Gaming Holdings is in the process of analyzing SFAS No. 133 and the impact on
its consolidated financial position and results of operations.
7
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrants have duly caused this report to be signed on their behalf by the
undersigned thereunto duly authorized.
ALADDIN GAMING HOLDINGS, LLC
May 18, 1999 By: /s/ Cornelius T. Klerk
-----------------------------------------
Cornelius T. Klerk, Senior Vice President
and Chief Financial Officer
ALADDIN CAPITAL CORP.
May 18, 1999 By: /s/ Cornelius T. Klerk
-----------------------------------------
Cornelius T. Klerk, Senior Vice President
and Chief Financial Officer
8