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 June 30, 2004
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 No.: 333-00643
TRUMP ATLANTIC CITY ASSOCIATES
(Exact Name of Registrant as specified in its charter)
| New Jersey | 22-3213714 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
(609) 449-6515
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
TRUMP ATLANTIC CITY FUNDING, INC.
(Exact Name of Registrant as specified in its charter)
Commission File No.: 333-00643-02
| Delaware | 22-3418939 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
(609) 449-6515
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
TRUMP ATLANTIC CITY FUNDING II, INC.
(Exact Name of Registrant as specified in its charter)
Commission File No.: 333-43979-03
| Delaware | 22-3550202 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
(609) 449-6515
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
TRUMP ATLANTIC CITY FUNDING III, INC.
(Exact Name of Registrant as specified in its charter)
Commission File No.: 333-43975-03
| Delaware | 22-3550203 | |
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) |
1000 Boardwalk at Virginia Avenue
Atlantic City, New Jersey 08401
(609) 449-6515
(Address, Including Zip Code and Telephone Number, Including Area Code, of Registrant’s Principal Executive Offices)
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 Registrants were 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 any of the Registrants is an accelerated filer (as defined in Exchange Rule 12b-2). Yes ¨ No x
As of August 16, 2004, there were 100 shares of Trump Atlantic City Funding, Inc.’s common stock outstanding.
As of August 16, 2004, there were 100 shares of Trump Atlantic City Funding II, Inc.’s common stock outstanding.
As of August 16, 2004, there were 100 shares of Trump Atlantic City Funding III, Inc.’s common stock outstanding.
Each of Trump Atlantic City Associates, Trump Atlantic City Funding, Inc., Trump Atlantic City Funding II, Inc. and Trump Atlantic City Funding III, Inc. meets the conditions set forth in General Instruction (H)(1)(a) and (b) of Form 10-Q and is therefore filing this form with the reduced disclosure format.
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
FORM 10-Q
| Page | ||
| PART I — FINANCIAL INFORMATION |
||
| ITEM 1 — Financial Statements |
||
| Condensed Consolidated Balance Sheets as of December 31, 2003 and June 30, 2004 (unaudited) |
1 | |
| 2 | ||
| 3 | ||
| 4 | ||
| Notes to Condensed Consolidated Financial Statements (unaudited) |
5 | |
| ITEM 2 — Management’s Discussion and Analysis of Financial Condition and Results of Operations |
11 | |
| ITEM 3 — Quantitative and Qualitative Disclosures About Market Risk |
26 | |
| ITEM 4 — Controls and Procedures |
27 | |
| PART II — OTHER INFORMATION |
||
| ITEM 1 — Legal Proceedings |
28 | |
| ITEM 2 — Changes in Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
28 | |
| ITEM 3 — Defaults Upon Senior Securities |
28 | |
| ITEM 4 — Submission of Matters to a Vote of Security Holders |
28 | |
| ITEM 5 — Other Information |
28 | |
| ITEM 6 — Exhibits and Reports on Form 8-K |
28 | |
| 29 | ||
| 30 | ||
i
PART I – FINANCIAL INFORMATION
ITEM 1 – FINANCIAL STATEMENTS
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
| December 31, 2003 |
June 30, 2004 |
|||||||
| (unaudited) | ||||||||
| ASSETS | ||||||||
| CURRENT ASSETS: |
||||||||
| Cash and cash equivalents |
$ | 59,727 | $ | 44,017 | ||||
| Receivables, net |
25,200 | 26,059 | ||||||
| Inventories |
8,427 | 8,845 | ||||||
| Other current assets |
8,187 | 12,213 | ||||||
| Total current assets |
101,541 | 91,134 | ||||||
| PROPERTY AND EQUIPMENT, NET |
1,247,472 | 1,237,592 | ||||||
| DEFERRED LOAN COSTS, NET |
6,966 | 5,265 | ||||||
| OTHER ASSETS |
40,528 | 45,059 | ||||||
| Total assets |
$ | 1,396,507 | $ | 1,379,050 | ||||
| LIABILITIES AND CAPITAL | ||||||||
| CURRENT LIABILITIES: |
||||||||
| Current maturities of long-term debt |
$ | 19,127 | $ | 22,775 | ||||
| Accounts payable and accrued expenses |
91,279 | 100,803 | ||||||
| Accrued interest payable |
24,375 | 24,375 | ||||||
| Due to affiliates, net |
7,799 | 7,947 | ||||||
| Total current liabilities |
142,580 | 155,900 | ||||||
| LONG-TERM DEBT, net of current maturities |
1,317,243 | 1,322,592 | ||||||
| OTHER LONG-TERM LIABILITIES |
23,078 | 22,599 | ||||||
| Total liabilities |
1,482,901 | 1,501,091 | ||||||
| CAPITAL/(DEFICIT): |
||||||||
| Partners’ capital |
220,408 | 219,274 | ||||||
| Accumulated deficit |
(306,802 | ) | (341,315 | ) | ||||
| Total capital/(deficit) |
(86,394 | ) | (122,041 | ) | ||||
| Total liabilities and capital/(deficit) |
$ | 1,396,507 | $ | 1,379,050 | ||||
See accompanying notes.
1
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2003 AND 2004
(unaudited)
(in thousands)
| Three Months Ended June 30, |
Six Months Ended June 30, |
|||||||||||||||
| 2003 |
2004 |
2003 |
2004 |
|||||||||||||
| REVENUES: |
||||||||||||||||
| Gaming |
$ | 218,565 | $ | 205,007 | $ | 417,228 | $ | 395,161 | ||||||||
| Rooms |
14,849 | 14,661 | 27,922 | 27,165 | ||||||||||||
| Food and beverage |
23,545 | 24,176 | 44,583 | 45,199 | ||||||||||||
| Other |
5,937 | 7,044 | 11,516 | 13,619 | ||||||||||||
| Gross revenues |
262,896 | 250,888 | 501,249 | 481,144 | ||||||||||||
| Less-Promotional allowances |
56,196 | 57,115 | 106,048 | 109,056 | ||||||||||||
| Net revenues |
206,700 | 193,773 | 395,201 | 372,088 | ||||||||||||
| COSTS AND EXPENSES: |
||||||||||||||||
| Gaming |
96,530 | 93,143 | 190,419 | 182,758 | ||||||||||||
| Rooms |
6,411 | 5,913 | 12,417 | 11,295 | ||||||||||||
| Food and beverage |
8,289 | 9,027 | 15,504 | 15,810 | ||||||||||||
| General and administrative |
44,328 | 41,214 | 86,722 | 82,494 | ||||||||||||
| General and administrative - related party |
576 | 684 | 882 | 1,128 | ||||||||||||
| Depreciation and amortization |
15,626 | 17,296 | 31,073 | 35,513 | ||||||||||||
| Debt renegotiation costs |
300 | — | 300 | — | ||||||||||||
| 172,060 | 167,277 | 337,317 | 328,998 | |||||||||||||
| Income from operations |
34,640 | 26,496 | 57,884 | 43,090 | ||||||||||||
| NON-OPERATING INCOME AND (EXPENSE): |
||||||||||||||||
| Interest and other non-operating income |
218 | 2,335 | 434 | 2,456 | ||||||||||||
| Interest expense |
(38,751 | ) | (39,372 | ) | (77,393 | ) | (77,988 | ) | ||||||||
| Non-operating expense, net |
(38,533 | ) | (37,037 | ) | (76,959 | ) | (75,532 | ) | ||||||||
| Loss before income tax provision |
(3,893 | ) | (10,541 | ) | (19,075 | ) | (32,442 | ) | ||||||||
| Income tax provision |
(950 | ) | (1,068 | ) | (1,809 | ) | (2,071 | ) | ||||||||
| NET LOSS |
$ | (4,843 | ) | $ | (11,609 | ) | $ | (20,884 | ) | $ | (34,513 | ) | ||||
See accompanying notes.
2
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CAPITAL/(DEFICIT)
FOR THE SIX MONTHS ENDED JUNE 30, 2004
(unaudited)
(in thousands)
| Partners’ Capital |
Accumulated Deficit |
Total Capital/(Deficit) |
||||||||||
| Balance, December 31, 2003 |
$ | 220,408 | $ | (306,802 | ) | $ | (86,394 | ) | ||||
| Partnership distribution |
(1,134 | ) | — | (1,134 | ) | |||||||
| Net loss |
— | (34,513 | ) | (34,513 | ) | |||||||
| Balance, June 30, 2004 |
$ | 219,274 | $ | (341,315 | ) | $ | (122,041 | ) | ||||
See accompanying notes.
3
TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2003 AND 2004
(unaudited)
(in thousands)
| Six Months Ended June 30, |
||||||||
| 2003 |
2004 |
|||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: |
||||||||
| Net loss |
$ | (20,884 | ) | $ | (34,513 | ) | ||
| Adjustments to reconcile net loss to net cash flows from operating activities – Non-cash charges — |
||||||||
| Depreciation and amortization |
31,073 | 35,513 | ||||||
| Accretion of discount on indebtedness |
221 | 196 | ||||||
| Amortization of deferred loan offering costs |
1,908 | 1,701 | ||||||
| Provisions for losses on receivables |
2,781 | 1,817 | ||||||
| Valuation allowance - CRDA investments |
2,543 | 1,734 | ||||||
| Increase in receivables |
(4,971 | ) | (2,676 | ) | ||||
| Decrease/(increase) in inventories |
537 | (418 | ) | |||||
| Increase in other current assets |
(4,612 | ) | (4,076 | ) | ||||
| Decrease/(increase) in other assets |
29 | (4,538 | ) | |||||
| (Decrease)/increase in amounts due to affiliates |
(1,151 | ) | 150 | |||||
| Increase in accounts payable, accrued expenses and other liabilities |
8,897 | 12,466 | ||||||
| Net cash provided by operating activities |
16,371 | 7,356 | ||||||
| CASH FLOWS FROM INVESTING ACTIVITIES: |
||||||||
| Purchase of property and equipment |
(11,877 | ) | (7,675 | ) | ||||
| Purchases of CRDA investments, net |
(4,255 | ) | (4,784 | ) | ||||