SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the quarterly period ended June 30, 2003 |
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
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For the transition period from to |
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Commission file number 333-88679
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HOLLYWOOD CASINO SHREVEPORT |
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(Exact name of each Registrant as specified in its charter) |
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Louisiana |
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72-1225563 |
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(States
or other jurisdictions of |
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(I.R.S.
Employer |
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Two Galleria Tower, Suite 2200 |
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75240 |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrants’ telephone number, including area code) (972) 392-7777
451 Clyde Fant Parkway, Shreveport, Louisiana 71101
(Former name, former address and former fiscal year, if changed since last report.)
Indicate by check mark whether each of the Registrants (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 each of the Registrants was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes ý Noo
Indicate by check mark whether each of the Registrants is an accelerated filer (as defined in Rule 12-b-2 of the Exchange Act). Yeso No ý
Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.
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Registrant |
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Class |
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Outstanding at August 8 ,2003 |
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Hollywood Casino Shreveport |
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None |
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None |
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Shreveport Capital Corporation |
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Common Stock, $.01 par value |
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1,000 Shares |
HOLLYWOOD CASINO SHREVEPORT AND SUBSIDIARIES
PART I: FINANCIAL INFORMATION Item 1. Financial Statements
Introductory Notes to Condensed Consolidated Financial Statements
Hollywood Casino Shreveport (“HCS”) is a general partnership registered in the state of Louisiana. HCS developed, owns and operates a riverboat gaming complex located in Shreveport, Louisiana, approximately 180 miles east of Dallas, Texas (the “Shreveport Casino”). The Shreveport Casino was completed and opened on December 20, 2000. Prior to opening, HCS had no operating activities other than development, financing and construction activities with respect to the Shreveport Casino. The Shreveport Casino consists of a three-level riverboat casino with approximately 1,423 slot machines, 64 table games and seven poker stations and a 403-room, all suite, art deco style hotel. The project also includes approximately 45,000 square feet of restaurant and entertainment facilities developed by a third party.
The partners in HCS consist of the following companies: HCS I, Inc. and HCS II, Inc., both Louisiana corporations and wholly owned subsidiaries of HWCC-Louisiana, Inc. (“HCL”) and Shreveport Paddlewheels, L.L.C. (“Paddlewheels”), a Louisiana limited liability company. HCS I, Inc. has an effective 99% interest in HCS and is its managing general partner. HCS II, Inc. has an effective 1% interest in HCS. Paddlewheels has a residual interest in the event that the project is ever sold amounting to 10% plus any capital contributions made by Paddlewheels to HCS or otherwise credited to their account and also receives an amount equal to 1% of “complex net revenues”, as defined, of the Shreveport Casino. HCL is a Louisiana corporation which is ultimately wholly owned by Penn National Gaming, Inc. (“Penn National”).
In July 1999, HCS formed a new, wholly owned subsidiary, Shreveport Capital Corporation (“Shreveport Capital”), a Louisiana corporation. HCS contributed $1,000 of capital to Shreveport Capital. Shreveport Capital was formed for the purpose of being a co-issuer with respect to $150,000,000 of 13% First Mortgage Notes with contingent interest (the “First Mortgage Notes”) due 2006 and the 13% Senior Secured Notes issued in June 2001. Shreveport Capital has not and is not expected to have any operating activities, acquire any assets or incur any other liabilities.
Equity contributions from HCL and Paddlewheels provided the initial $50,000,000 of construction financing for the Shreveport Casino. During August 1999, HCS successfully completed the issuance of $150,000,000 of 13% First Mortgage Notes with contingent interest due 2006. These sources of funds, together with $30,000,000 of furniture, fixture and equipment financing, provided the initial funding for the project.
The principal executive offices of HCS, Shreveport Capital and HCL are located at Two Galleria Tower, Suite 2200, 13455 Noel Road, Dallas, Texas 75240, telephone (972) 392-7777. The website for the Shreveport Casino is www.hollywoodcasinoshreveport.com.
The condensed consolidated financial statements as of June 30, 2003 and for the three and six month periods ended June 30, 2003 and 2002 have been prepared by HCS and HCL without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. In the opinion of management, these condensed consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the consolidated financial positions of HCS and HCL as of June 30, 2003 and the results of their operations and cash flows for the three and six month periods ended June 30, 2003 and 2002.
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The statements and related notes have been prepared pursuant to the rules and regulations of the securities and exchange commission. Accordingly, certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. pursuant to such rules and regulations. These financial statements should be read in conjunction with the financial statements and notes thereto included in HCS and Shreveport Capital’s 2002 Annual Report on Form 10-K. The Form 10-K and other filings with the Securities and Exchange Commission will be provided upon request without charge from the offices of HCL. Such filings are not presently available at the Shreveport Casino’s website as HCS is a partnership and has no public shareholders.
Management believes that activity at the Shreveport Casino is modestly seasonal, with stronger results expected during the first and third quarters. Consequently, the results of operations for the three and six month periods ended June 30, 2003 are not necessarily indicative of the operating results to be reported for the full year.
As more fully explained in Note 2 of the Notes to Condensed Consolidated Financial Statements, Hollywood Casino Corporation (“HCC”), the ultimate parent of HCS, HCL and Shreveport Capital prior to March 3, 2003, Penn National, and P Acquisition Corp., a Delaware corporation and a wholly-owned subsidiary of Penn National, entered into an Agreement and Plan of Merger (the “Merger Agreement”), dated as of August 7, 2002, pursuant to which HCC became a wholly owned subsidiary of Penn National through the merger of P Acquisition Corp. with and into HCC on March 3, 2003.
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HOLLYWOOD CASINO SHREVEPORT
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HOLLYWOOD CASINO SHREVEPORT AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS (Note 2)
(In thousands)
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(Successor |
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(Predecessor |
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June 30, |
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December 31, |
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(Unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
19,929 |
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$ |
21,625 |
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Accounts receivable, net allowance of $897 and $881, respectively |
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2,004 |
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2,301 |
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Inventories |
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1,781 |
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1,950 |
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Prepaid expenses and other current assets |
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1,768 |
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1,086 |
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Total current assets |
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25,482 |
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26,962 |
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Property and Equipment: |
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Land improvements |
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10,000 |
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1,665 |
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Building and improvements |
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75,057 |
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97,465 |
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Riverboat |
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15,251 |
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45,042 |
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Furniture and Equipment |
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18,235 |
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48,098 |
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118,543 |
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192,270 |
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Less-accumulated depreciation |
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(3,191 |
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(32,507 |
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115,352 |
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159,763 |
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Other Assets: |
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Deferred financing costs, net |
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4,111 |
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4,770 |
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Other |
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373 |
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373 |
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Total other assets |
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4,484 |
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5,143 |
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$ |
145,318 |
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$ |
191,868 |
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The accompanying introductory notes and notes to condensed consolidated
financial statements are an integral part
of these condensed consolidated balance sheets.
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(Successor |
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(Predecessor |
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June 30, |
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December 31, |
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(Unaudited) |
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Liabilities and Partners’ Deficiency |
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Current Liabilities: |
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Current maturities of long-term debt |
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$ |
7 |
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6 |
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Accounts payable |
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6,417 |
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7,074 |
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Accrued liabilities |
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Salaries and wages |
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2,616 |
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2,911 |
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Interest |
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12,261 |
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11,757 |
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Gaming and other taxes |
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3,291 |
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1,113 |
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Insurance |
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2,243 |
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1,591 |
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Other |
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3,085 |
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3,238 |
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Due to affiliates, net of valuation allowance of $6,420 at June 30, 2003 |
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1,158 |
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6,187 |
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Other current liabilities |
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1,134 |
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1,370 |
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Total current liabilities |
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32,212 |
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35,247 |
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Long-Term Debt, net of valuation allowance of $69,544 at June 30, 2003 |
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120,255 |
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189,905 |
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Other Noncurrent Liabilities |
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351 |
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288 |
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Commitments and Contingencies Partners’ Deficiency |
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(7,500 |
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(33,572 |
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$ |
145,318 |
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$ |
191,868 |
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The accompanying introductory notes and notes to condensed consolidated financial statements
are an integral part of these condensed consolidated balance sheets.
6
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Note 2)
(In thousands)
(Unaudited)
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(Successor |
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(Predecessor Basis) |
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Period from |
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Period from |
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Six Months |
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Revenues: |
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