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FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended January 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission File Number 1-8570
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0121916
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109-1120
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 734-0410
Securities registered pursuant to Section 12(b) of the Act:
Name of Exchanges
Title of Class on which Registered
Common Stock, $.01-2/3 Par Value New York Stock Exchange and
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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 by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of Registrant's knowledge, in
definitive proxy or information statements incorporated by reference
in Part III of this Form 10-K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock of the registrant
held by persons other than the registrant's directors and executive
officers as of April 25, 1994 (based upon the last reported sale price
on the New York Stock Exchange on such date) was $2,185,976,064.
The number of shares of Common Stock, $.01-2/3 par value,
outstanding at April 25, 1994: 85,686,829.
DOCUMENTS INCORPORATED BY REFERENCE
PART II - Portions of the Registrant's Annual Report to
Stockholders for the year ended January 31, 1994 are incorporated by
reference into Items 7 and 8, inclusive.
PART III - Portions of the Registrant's definitive proxy
statement in connection with the annual meeting of stockholders to be
held on June 21, 1994, are incorporated by reference into Items 10
through 13, inclusive.
PART I
Item 1. Business.
General
Circus Circus Enterprises, Inc. (the "Company"), which was
incorporated in 1974, owns and operates, through wholly-owned
subsidiaries, six hotel-casino properties in the State of Nevada,
including three properties in Las Vegas (Circus Circus-Las Vegas,
Luxor and Excalibur), the Circus Circus Hotel and Casino in Reno
and the Colorado Belle Hotel and Casino and the Edgewater Hotel
and Casino which are located on the Colorado River in Laughlin.
The Company also operates two smaller casinos on the Las Vegas
Strip, Slots-A-Fun (which the Company also owns) and the Silver
City Casino (which the Company operates under a long-term lease).
With the addition of Luxor, which opened on October 15, 1993, the
Company increased both its rooms base and casino space by over
22% to approximately 13,700 rooms and approximately 536,000
square feet of casino space.
The Company is currently engaged in the development of a 24-
acre dockside casino site in Tunica County, Mississippi which the
Company purchased in January 1994. Subject to receipt of the
requisite regulatory approvals, the Tunica County project, which
will be wholly-owned and operated by the Company, is expected to
open in the fall of 1994. The Company is also currently a 50%
participant in two joint ventures which are developing and/or
seeking the requisite regulatory approvals for casino projects in
Reno, Nevada; and Chalmette, Louisiana; and is a one-third
participant in a joint venture which is developing a hotel-casino
project in Windsor, Ontario, Canada. The Company also is a 50%
participant in a joint venture which is one of two finalists that
have submitted bid proposals for the right to develop a casino in
Sydney, Australia, which includes a 12-year exclusive right to
operate table games, and has joined with two other companies in a
bid proposal for a license to operate a riverboat facility in
Michigan City, Indiana. For additional information concerning
the Tunica County project and the additional projects with which
the Company is involved through the aforementioned joint
ventures, see "Current Expansion Project and Joint Venture
Participations", below.
Unless the context otherwise indicates, all references to
the Company are to Circus Circus Enterprises, Inc. and its
subsidiaries.
Description of the Company's Operating Hotels and Casinos
Circus Circus-Las Vegas. Circus Circus-Las Vegas, the
Company's original property, is a circus-themed hotel and casino
complex situated on approximately 69 acres on the north end of
the Las Vegas Strip. The property, which has a total of 2,793
hotel rooms, includes approximately 110,000 square feet of casino
space where, as of January 31, 1994, 2,369 licensed slot machines
and other coin-operated devices, 69 blackjack ("21") tables, four
craps tables, seven roulette tables and two wheels of fortune as
well as poker, keno and a race and sports book were available to
the casino's patrons. From a "Big Top" above the casino, Circus
Circus-Las Vegas offers its guests a variety of circus acts
performed free of charge to the public from 11 a.m. to midnight
daily. A mezzanine area overlooking the casino has a circus
midway with carnival-style games and an arcade that offers a
variety of amusements and electronic games. Two specialty
restaurants, a buffet with a seating capacity of approximately
1,160, two coffee shops, several fast food snack bars, five
cocktail bars and two cocktail service bars, and a variety of
gift shops and specialty shops are also available to the guests
at Circus Circus-Las Vegas. On-site parking is available for
approximately 5,100 vehicles, including three garages that will
accommodate approximately 3,200 vehicles and covered parking for
approximately 320 vehicles beneath the recently completed Grand
Slam Canyon, described below. Circus Circus-Las Vegas also
offers accommodations for approximately 375 recreational vehicles
at the property's Circusland RV Park. In August 1993, the
Company completed its latest addition to Circus Circus-Las Vegas
with the opening of Grand Slam Canyon, an "adventuredome"
covering approximately five acres and modeled after the Grand
Canyon. The new facility offers theme park entertainment that
includes a high-speed, double-loop, double-corkscrew roller
coaster, a coursing river flume ride on white-water rapids, a 65-
foot waterfall, fully animated life-size dinosaurs in their
primeval habitat, a southwestern-themed restaurant with a
cantina, food kiosks, souvenir shops and an arcade, all in a
climate-controlled setting under a giant pink space-frame dome.
A phased expansion program is currently underway which will
increase the number of attractions at Grand Slam Canyon. The
first phase of this expansion should be completed by the summer
of 1994 and will cost approximately $10 million.
Luxor. The most recently completed of the Company's
properties is the Egyptian-themed hotel and casino complex,
Luxor, a 30-story pyramid sheathed in reflective glass. Situated
at the south end of the Las Vegas Strip on a 64-acre site
adjacent to Excalibur, Luxor was opened to the public on October
15, 1993 and offers its guests more than 400,000 square feet of
public entertainment area on three different levels beneath a
soaring hotel atrium enclosed by 2,526 hotel rooms, including 287
suites. The rooms can be reached from the four corners of the
pyramid by state-of-the-art "inclinators" which travel at a 39-
degree angle. Luxor includes approximately 100,000 square feet
of casino space where, as of January 31, 1994, 2,517 licensed
slot machines and other coin-operated devices, 69 blackjack
("21") tables, eight craps tables, eight roulette tables and two
wheels of fortune as well as poker, keno and a race and sports
book were available to the casino's patrons. On the casino
level, guests may view a chronological tableau of Egyptian
archaeological wonders dating from 4000 B.C. to 300 B.C. from
boats operated on a waterway that flows along the interior
perimeter of the building, separating the hotel rooms from the
casino. Above the casino, a series of high-tech "participatory"
adventures arrayed in striking scenery are designed to seemingly
transport visitors to extraordinary places of times past, present
and future. Below the casino is a 1,100-seat oval showroom which
features nightly costume drama. Also on the showroom level is a
museum of the Tomb of King Tutankhamun featuring authentic
replicas of Egyptian artifacts as they were found in the Tomb.
Luxor's other public areas contain a buffet with a seating
capacity of approximately 800, six themed restaurants including
two gourmet restaurants, as well as a snack bar, five cocktail
lounges and a variety of specialty shops. Surface parking is
available for nearly 3,000 vehicles. A 1,600 space parking
garage is under construction and is expected to be completed by
the summer of 1994.
Excalibur. Excalibur is a castle-themed hotel and casino
complex situated on the south end of the Las Vegas Strip on a 53-
acre site adjacent to Luxor. Excalibur, which has a total of
4,032 hotel rooms, offers its guests more than 400,000 square
feet of public entertainment area, including approximately
110,000 square feet of casino space where, as of January 31,
1994, 2,555 licensed slot machines and other coin-operated
devices, 65 blackjack ("21") tables, six craps tables, six
roulette tables and two wheels of fortune as well as poker, keno
and a race and sports book were available to the casino's
patrons. Excalibur's other public areas include a Renaissance
faire, a medieval village, an amphitheater with seating capacity
of nearly 1,000 where nightly mock jousting tournaments are held
and costume drama are presented, two dynamic motion theaters,
various artisans' booths and medieval games of skill. In
addition, the property has a buffet with seating capacity of
approximately 1,450, six themed restaurants, as well as three
snack bars, several cocktail lounges and a variety of specialty
shops. Surface parking is available for approximately 2,500
vehicles. A 1,400 space parking garage is under construction and
is expected to be completed by the summer of 1994.
Circus Circus-Reno. Circus Circus-Reno is a circus-themed
hotel and casino complex situated in the downtown district of
Reno, Nevada. The property, which has a total of 1,625 hotel
rooms, includes approximately 60,000 square feet of casino space
where, as of January 31, 1994, 1,675 licensed slot machines and
other coin-operated devices, 66 blackjack ("21") tables, three
craps tables, six roulette tables and a wheel of fortune as well
as poker, keno and a race and sports book were available to the
casino's patrons. From a "Big Top" above the casino, Circus
Circus-Reno also offers its guests a variety of circus acts
performed free of charge to the public from 11 a.m. to midnight
daily. A mezzanine area overlooking the casino has a circus
midway with carnival-style games and an arcade that offers a
variety of amusement and electronic games. The facilities at
Circus Circus-Reno also include a specialty restaurant, a buffet
with a seating capacity of approximately 700, a coffee shop,
three fast food snack bars, four cocktail lounges, a gift shop
and specialty shops. Covered parking is available for over 1,800
vehicles. For information concerning the Company's participation
in a joint venture which is developing a new project adjacent to
Circus Circus-Reno, see "Current Expansion Project and Joint
Venture Participations -- Reno Joint Venture", below.
Colorado Belle. The Colorado Belle Hotel and Casino is
situated on a 22-acre site on the bank of the Colorado River
(with 1,080 feet of river frontage) in Laughlin, Nevada,
approximately 90 miles south of Las Vegas. The Colorado Belle
features a 600-foot replica of a Mississippi riverboat with 200
hotel rooms, two towers containing an additional 1,034 hotel
rooms and a 64,000 square foot casino where, as of January 31,
1994, 1,594 licensed slot machines and other coin-operated
devices, 34 blackjack ("21") tables, three craps tables and four
roulette tables as well as poker, keno and a sports book were
available to the casino's patrons. The Colorado Belle's
facilities also include a 350-seat buffet, a coffee shop, three
specialty restaurants, two fast food snack bars, four cocktail
lounges and a cocktail service bar as well as a gift shop and
other specialty shops. There is surface parking available for an
estimated 1,700 vehicles.
Edgewater. The Edgewater Hotel and Casino is situated on a
16-acre site adjacent to the Colorado Belle in Laughlin, Nevada
with approximately 1,640 feet of frontage on the Colorado River.
The property, which has 1,450 hotel rooms, includes approximately
57,000 square feet of casino space where, as of January 31, 1994,
1,542 licensed slot machines and other coin-operated devices, 30
blackjack ("21") tables, three craps tables, three roulette
tables and a wheel of fortune as well as poker, keno and a race
and sports book were available to the casino's patrons. The
Edgewater's facilities also include a specialty restaurant, a
coffee shop, a buffet with a seating capacity of approximately
735, a snack bar and three cocktail lounges. There is surface
parking available for approximately 1,350 vehicles and a parking
garage which can accommodate approximately 934 additional
vehicles.
Other Properties. The Silver City Casino and Slots-A-Fun
have 18,200 and 16,700 square feet of casino space, respectively.
Both casinos depend on foot traffic along the Las Vegas Strip for
their business. As of January 31, 1994, the Silver City Casino
had 515 licensed slot machines and other coin-operated devices,
and Slots-A-Fun had 601 such licensed machines and devices.
Marketing
Generally, the Company follows a marketing and operating
philosophy which emphasizes high-volume business by providing
moderately priced hotel rooms, food and beverage and alternative
entertainment in combination with the gaming activity. The
Company also maintains stringent cost controls which are
exemplified by a general policy of offering minimal credit for
gaming customers at the Company's properties. Management
believes that this philosophy sets the Company apart from its
principal competitors.
The Company's current operations are conducted 24 hours a
day, every day of the year. The Company does not consider its
business to be highly seasonal, although typically its operating
income is somewhat lower in the fourth quarter. Management
emphasizes courtesy and prompt service to its customers and
aspires to a high standard of excellence in all of its
operations.
The Company believes it has been able to maintain high
occupancy rates at its hotels, in part, due to the modest prices
charged for its rooms and its advertised policy of assisting any
customer who cannot be accommodated at its properties in finding
similarly priced rooms in nearby hotels and motels. The combined
occupancy rate (excluding complimentaries but including
nonrefunded prepaid cancellations) of the Company was
approximately 97.8%, 98.3% and 96.4% for the years ended January
31, 1994, 1993 and 1992, respectively.
Circus Circus-Las Vegas and Circus Circus-Reno, which
together contributed 36% of the Company's revenues in the year
ended January 31, 1994 (and 39% and 40%, respectively, in the
years ended January 31, 1993 and 1992), have popular buffets,
attractive because of their variety, quality and low price. From
a "Big Top" above the casino, both properties offer a variety of
circus acts performed free of charge to the public from 11 a.m.
to midnight daily. A mezzanine area overlooking each casino has
a circus midway with carnival-style games and an arcade that
offers a variety of amusement and electronic games. In August
1993, the Grand Slam Canyon adventuredome was opened as an
additional attraction at Circus Circus-Las Vegas.
Excalibur, which contributed 30% of the Company's revenues
in the year ended January 31, 1994 (and 33% in the years ended
January 31, and 1993 and 1992), attracts customers in the same
manner as the two circus-themed properties by offering quality
rooms, food and entertainment at moderate prices. By way of
entertainment, the medieval castle-themed Excalibur offers a
medieval village, an amphitheater where mock tournaments and
costume drama are presented, dynamic motion theaters, various
artisans' booths and medieval games of skill.
Luxor, which generated $27.6 million of operating cash flow
(earnings before depreciation, interest and taxes) and
contributed $89.3 million to the Company's revenues during the
first three and one-half months it was open and 27% of the
Company's revenues in the fourth quarter of fiscal 1994, is
designed to attract the higher income segment of the middle-
income strata of gaming customers by offering a new level of
entertainment and hotel accommodations. Designed with an
Egyptian theme, the pyramid-shaped Luxor offers its guests a tri-
level entertainment area which includes a water journey from
which guests discover replicas of artifacts and treasures of
ancient Egypt. The upper level includes a series of high-tech
"participatory" adventures arrayed in striking scenery designed
to seemingly transport visitors to extraordinary places of times
past, present and future. Also included as entertainment
attractions are an oval showroom featuring nightly costume drama
and a museum replicating King Tut's Tomb and its contents.
The Colorado Belle and Edgewater together contributed 21% of
the Company's revenues in the year ended January 31, 1994 (and
23% in the years ended January 31, 1993 and 1992). Forming the
heart of the Laughlin "Strip", the Colorado Belle and the
Edgewater combine to offer 2,700 rooms and over 120,000 square
feet of casino space. The Colorado Belle offers a classic
Mississippi riverboat theme, complete with a 60-foot paddlewheel.
The Edgewater's southwestern motif provides a relaxing atmosphere
to enjoy the property's casino and other facilities. Connected
by a scenic walkway, the two resorts form an inviting shoreline
along the Colorado River.
The Company maintains an active media advertising program
through radio, television, billboards and printed publications
primarily in Nevada, California and Arizona. During the year
ended January 31, 1994, the Company incurred total expenses
relating to advertising (including the media advertising
described above) of $40.4 million compared with $35.0 million and
$34.0 million during the years ended January 31, 1993 and 1992,
respectively. While the Company offers complimentary hotel
accommodations, meals and drinks to its customers on an
individual basis, no group complimentary arrangements are
offered.
Operations
The primary source of revenues and income to the Company is
its casinos, although the hotels, restaurants, bars, shops,
midway games and other entertainment attractions and other
services are an important adjunct to the casinos.
The following table sets forth the contribution to net
revenues on a dollar and percentage basis of the Company's major
activities for each of the three most recent fiscal years.
Year Ended January 31,
1992 1993 1994
(Dollars in thousands)
Revenues:
Casino(1) . . . . . . . . $471,823 58.5% $495,012 58.7% $538,813 56.4%
Food and
beverage(2) . . . . . . 129,951 16.1% 135,786 16.1% 152,469 16.0%
Rooms(2). . . . . . . . . 141,716 17.6% 147,115 17.4% 176,001 18.4%
Other(2). . . . . . . . . 89,652 11.2% 92,500 11.0% 117,501 12.3%
833,142 103.4% 870,413 103.2% 984,784 103.1%
Less:
Complimentary
allowances(2) . . . . . 27,119 3.4% 27,388 3.2% 29,861 3.1%
Net revenues. . . . . . . . $806,023 100.0% $843,025 100.0% $954,923 100.0%
(1) Casino revenues are the net difference between the sums
received as winnings and the sums paid as losses.
(2) Food and beverage, Rooms and Other include revenues from
services which are provided to casino customers and others
on a complimentary basis. Such amounts are then deducted as
complimentary allowances to arrive at net revenue.
In connection with its gaming activities, the Company
follows a policy of stringent controls and crosschecks on the
recording of all receipts and disbursements. The audit and cash
controls developed and utilized by the Company include the
following: locked cash boxes, independent counters, checkers and
observers to perform the daily cash and coin counts, floor
observation of the gaming areas, closed-circuit television
observation of certain areas, computer tabulation of receipts and
disbursements for each of the Company's slot machines, tables and
other games, and the rapid analysis and resolution of
discrepancies or deviations from normal performance.
The Company's credit policies are stringent and credit play
historically has accounted for an insignificant portion of its
gaming activities. Because of the Company's policies, its casino
receivables have been significantly less than 1% of its total
assets and its annual bad debt expense has been approximately
1/10 of 1% of casino revenues.
Current Expansion Project and Joint Venture Participations
Consistent with past practice and the longstanding policy of
making substantial investments in its gaming business at regular
intervals, the Company continues to actively pursue new projects,
either by development or acquisition, although with a bias toward
development. New projects may be undertaken in Nevada, where all
of the Company's operating properties are currently located, or
in other jurisdictions within the United States or abroad where
gaming has been legalized. Such projects may, like all of the
Company's currently operating properties (other than Silver City
Casino), be wholly-owned and operated by the Company, or may be
developed, owned and/or operated through joint ventures involving
the Company and one or more other parties, such as the joint
venture projects described below.
The Company is currently engaged in the development of a
dockside casino in Tunica County, Mississippi, which, subject to
receipt of the requisite regulatory approvals, is expected to
open in the fall of 1994 and will be wholly-owned and operated by
the Company. The Company is also participating in joint ventures
which are engaged in the development, subject to the requisite
regulatory approvals, of casino projects in Reno, Nevada and
Chalmette, Louisiana (where the Company is a 50% participant) and
Windsor, Ontario, Canada (where the Company is a one-third
participant).
The following is a description of the various casino
projects with which the Company is involved either directly or as
a joint venture participant:
Tunica County, Mississippi
The Company, through a wholly-owned subsidiary, is currently
engaged in the development of a dockside casino ("Circus-Tunica")
on a 24-acre site owned by the Company and situated along the
Mississippi River in Tunica County, Mississippi, approximately
three miles west of Mississippi State Highway 61 (a major
north/south highway connecting Memphis, Tennessee with Tunica
County) and approximately 20 miles south of Memphis. As
presently planned, Circus-Tunica will include a permanently
moored riverboat which will operate 24 hours a day and will have
approximately 50,000 square feet of casino space in addition to
restaurants, retail shops and entertainment areas. Construction
of Circus-Tunica, which commenced in January 1994, involves the
fabrication of a barge on which the 127,000 square-foot multi-
level facility will be built. The total cost of this project is
estimated at $80 million, including land, capitalized interest
and preopening expenses.
The Circus-Tunica site forms a part of a three casino
development situated on 72-acres. The Company also has an
undivided one-half interest in an additional 388 acres of land
contiguous to or near the three casino sites which may be used
for future development. The Company has received site approval
for the Circus-Tunica project from the Mississippi Gaming
Commission but has not yet obtained a gaming license for the
facility. It is anticipated that, subject to the Company's
receipt of the requisite gaming license, Circus-Tunica will
commence operating in the fall of 1994.
The State of Mississippi legalized casino gaming on the
water along the Mississippi River and the Mississippi Gulf Coast
in June 1990. Under Mississippi law, 14 counties adjacent to
the Mississippi River and the Gulf Coast have been granted the
option to authorize gaming, and as of March 31, 1994, nine
counties, including Tunica County, had authorized gaming. As of
March 31, 1994, approximately 27 Mississippi gaming licenses had
been granted, including licenses for nine dockside casinos in
Tunica County, and applications for approximately 45 additional
licenses were pending. Of the applications pending on March 31,
1994, approximately 17 (including the Circus-Tunica application)
were for proposed Tunica County casinos. There is no limit on
the number of licenses that may be granted within Mississippi or
within any county in Mississippi.
It is anticipated that Circus-Tunica's principal market will
be the area within 100 miles of Tunica County. This area
includes Memphis, Tennessee (with a population of approximately
1,000,000), Little Rock, Arkansas (with a population of
approximately 175,000) and northern Mississippi with a population
base of over 250,000. Tunica County is currently the closest
legalized gaming jurisdiction to Memphis. Because Circus-Tunica
is expected to be heavily dependent upon the patronage of Memphis
residents and upon tourists and other out-of-state gaming
customers arriving from Memphis, the opening of gaming casinos at
locations closer to Memphis could have a material adverse effect
on Circus-Tunica's operations. In this regard, De Soto County,
the northwesternmost Mississippi county and the nearest to
Memphis, by local referendum in November 1992 voted against
authorizing gaming activities in the county, but could at any
time after October 1996 vote to allow gaming activities. In
addition, the authorization of gaming activities in Arkansas or
Tennessee, which currently has constitutional restrictions upon
gaming activities, could have a material adverse effect on the
Company's proposed Tunica County operations.
For information concerning regulatory requirements
applicable to the ownership and operation of casino gaming
facilities in Mississippi, see "Regulation and Licensing
- -- Mississippi" in this Item 1.
Reno, Nevada Joint Venture (50% Participation)
The Company, through a wholly-owned subsidiary, is a 50%
participant with Eldorado Limited Liability Company ("Eldorado
Limited") in a joint venture (the "Reno Joint Venture") which is
engaged in the development of a themed hotel and casino complex
on a site composed of two city blocks in downtown Reno, Nevada
that adjoin both Circus Circus-Reno and the Eldorado Hotel/
Casino, which is privately owned by the owners of Eldorado
Limited and their affiliates. Currently designated as "Project
C" pending the selection of a name, the complex is presently
anticipated to include approximately 1,700 hotel rooms, 76,000
square feet of space devoted to gaming, a variety of
entertainment, five themed restaurants and a parking structure
with space for approximately 2,000 vehicles.
Initial work on the site, all of which will be either owned,
or leased with an option to purchase, by the venture, commenced
in December 1993. Construction is expected to be completed in
the summer of 1995 at a cost of approximately $300 million,
including land, capitalized interest and preopening costs.
Pursuant to the joint venture agreement relating to the Reno
Joint Venture (the "Reno Venture Agreement"), each participant is
required to contribute to the Reno Joint Venture cash or property
with an agreed to value equal to 15% of the total budgeted cost
for developing Project C. In addition, the Company is obligated
to provide, or arrange for, construction financing for the
balance of the cost of developing Project C. If the Company
elects to arrange for funding of the construction by a third
party, rather than by providing the financing itself, and the
Company (and not Eldorado Limited) guarantees the construction
loan, the Company will be entitled to receive a fee equal to two
percent per anum of the average outstanding principal amount
guaranteed. In addition, the Company is obligated to provide a
$10 million revolving line of credit to provide working capital
for Project C. Under certain circumstances, the Company could be
required to commit additional capital in the form of capital
contributions or loans to the Reno Joint Venture. Each
venturer's ability to participate in cash flows generated by
Project C is limited by the terms of the Reno Venture
Agreement. The foregoing summary of the Reno Venture Agreement
is qualified in its entirety by reference to the full text of
such agreement which is included as Exhibit 10(cc) to this
Report.
Windsor, Ontario, Canada Joint Venture (33-1/3%
Participation)
The Company is a participant with Hilton Hotels Corporation
and Caesars World, Inc., through its ownership of a one-third
interest in Windsor Casino Limited, an Ontario corporation
("WCL") which has been awarded the exclusive right to negotiate
an agreement to develop and operate, under a management
agreement, a casino in Windsor, Ontario, Canada, approximately
1.5 miles from Detroit, Michigan across the Detroit River. WCL
plans, subject to reaching such agreement, to develop and operate
a hotel-casino which will include approximately 2,400 gaming
devices and 125 table games, entertainment, meeting facilities
and other public areas. WCL anticipates opening a temporary
casino in May 1994 with the permanent facility scheduled to open
in 1996. It is currently estimated that the total cost of the
project will be approximately $250-$275 million, of which the
Company and its joint venture partners each will be required to
contribute an estimated $20-$30 million to the venture. It is
anticipated that the remaining project costs will be provided by
third-party financing. The Company and its joint venture
partners will each be required to fund approximately $15-$20
million for the completion of the temporary casino. For
information concerning additional regulatory requirements
applicable to the ownership and operation of casino gaming
facilities in Windsor, see "Regulation and Licensing -- Windsor,
Ontario, Canada" in this Item 1.
Chalmette, Louisiana (50% Participation)
The Company, through a wholly-owned subsidiary, is a 50%
participant with American Entertainment Corp. ("AEC") in
American Entertainment, L.L.C. (the "Louisiana Joint Venture"),
a Louisiana limited liability company, which is engaged in the
development of a riverboat gaming facility on a 26-acre parcel in
Chalmette, Louisiana (the "Louisiana Project"). As presently
planned, the Louisiana Project will initially consist of a 290-
foot riverboat casino designed to replicate a nineteenth century
paddlewheel-driven riverboat with approximately 30,000 square
feet of gaming space, additional dockside facilities and parking
accommodations. The site has additional space available for
future expansion as warranted. Subject to receipt of gaming and
other approvals, it is currently anticipated that the first phase
of the Louisiana Project will commence operations in late 1994.
The final design and phasing of this project have not yet been
determined. The Company has received a certificate of
preliminary approval from the Louisiana Riverboat Gaming
Commission to begin construction of the Louisiana Project but has
not received a gaming license for the facility.
The operation of the Louisiana Project's riverboat casino
will be subject to certain restrictions and conditions imposed by
Louisiana gaming law, which cause this riverboat gaming operation
to differ from the Company's other gaming operations. For
example, gaming at the Louisiana Project will not be permitted
while the riverboat is docked, other than during the 45 minutes
between excursions and times when dangerous weather or water
conditions exist. Also, each round-trip riverboat cruise
generally may not be less than three nor more than eight hours in
duration. For information concerning additional regulatory
requirements applicable to the ownership and operation of casino
gaming facilities in Louisiana, see "Regulation and Licensing
- -- Louisiana" in this Item 1.
The Louisiana Project's riverboat casino, which will be
docked in Chalmette, Louisiana, approximately 20 minutes from New
Orleans, will cruise Bayou Bienvenue. It is anticipated that the
Louisiana projects principal market will be the area within 50
miles of Chalmette, which includes New Orleans (with a population
of approximately 1,500,000). The Enforcement Division of the
Louisiana State Police (the "Louisiana Division") is empowered to
issue up to 15 licenses to conduct riverboat gaming activities,
and no more than six licenses may be granted to riverboat casinos
operating from any one parish. As of March 31, 1994, the
Louisiana Division had issued 11 licenses for riverboat casinos,
all to entities that had previously obtained certificates of
preliminary approval (see "Regulation and Licensing --Louisiana"
in this Item 1). The Louisiana Joint Venture has not yet
received a license. Of the licenses that have been granted to
date, five are for riverboat casinos in the City of New Orleans,
one is for a riverboat casino in Harvey (approximately eight
miles from the Louisiana Joint Venture site) and one is for a
riverboat casino in Luling/St. Rose (approximately 30 miles from
the Louisiana Joint Venture site). Of the four licenses
remaining to be issued, there are four entities (including the
Louisiana Joint Venture) who have certificates of preliminary
approval and 10 other applications who do not. In addition,
Harrah's Jazz Company has announced plans to develop a major
land-based casino in downtown New Orleans, which is planning to
open its temporary facility in August 1994. As of March 31,
1994, 12 gaming licenses had been granted, and 20 applications
for gaming licenses were pending, for the operation of dockside
casinos on the Mississippi Gulf Coast, which is approximately 60
miles from Chalmette and may draw customers from the same markets
as the Louisiana Project. There is no limit on the number of
licenses that can be granted to operate casinos in Mississippi.
Pursuant to the terms of the Operating Agreement between
AEC and a wholly-owned subsidiary of the Company (the "Louisiana
Agreement"), each of the Company and AEC is obligated to make a
$20 million capital contribution to the Louisiana Joint Venture.
AEC will contribute to American Limited the site for the
Louisiana Project and certain other property with an agreed to
aggregate value of $20 million. The Company will make its
capital contribution to American Limited in cash. AEC will not
be required to make any additional capital contributions to the
Louisiana Joint Venture. Pursuant to the Louisiana Agreement,
the Company is obligated to use commercially reasonable efforts
to arrange for the provision of (but is not obligated to provide)
all additional funds necessary to finance the development,
construction and operation of the Louisiana Project. Such funds
may be provided by the Company either as loans or capital
contributions to the Louisiana Joint Venture. Subject to certain
conditions, the Company will be entitled to a return on any
amounts so loaned or contributed at the rate of 1% above its cost
for such funds, as determined in accordance with the Louisiana
Agreement.
In accordance with the Louisiana Agreement, American Limited
will enter into a management agreement pursuant to which the
Company, through a wholly-owned subsidiary, will manage and
operate the Louisiana Project. Under the terms of the management
agreement, as presently proposed, the Company will be paid a
management fee for its services equal to 3-1/2% of the first $100
million in annual gross revenues of the Louisiana Project plus
1-1/2% of any such annual gross revenues in excess of $100
million. The management agreement will also provide for
reimbursement of certain expenses incurred by the Company in
connection with its management of the Louisiana Project. The
Louisiana Agreement also provides that American Limited will
enter into a consulting agreement with AEC under which AEC will
be paid a fee equal to 1% of the first $100 million in annual
gross revenues of the Louisiana Project plus 1/2% of any such
annual gross revenues in excess of $100 million. The foregoing
summaries of the Louisiana Agreement and the related management
and consulting agreements are qualified in their entirety by
references to the full text of the Louisiana Agreement and forms
of such other agreements which are included as Exhibit 10(dd) to
this Report.
Bid Proposals
The Company has participated in the submission of bid
proposals to develop, subject to receipt of requisite regulatory
approvals, casino projects in Sydney, Australia (where the
Company is a 50% participant) and Michigan City, Indiana (where
the Company has joined with two other casino operators in a bid
proposal).
Other Expansion Plans
The Company believes that its financial resources are
adequate to permit it to successfully meet its commitments with
respect to its current expansion projects and joint venture
participations. However, depending on their timing, and the size
and the nature of the Company's commitments with respect thereto,
future expansion projects or joint venture participations may
require the Company to seek additional debt or equity funding.
Competition
Recognizing that middle class vacationers enjoy gambling,
but also vacation with their families, the Company seeks to
appeal to this value-oriented market and satisfy the group's
diverse entertainment demands by offering exciting entertainment
opportunities at reasonable prices. The Company seeks to achieve
this objective through its entertainment "megastores", such as
the Circus properties in Las Vegas and Reno, Luxor, Excalibur and
Colorado Belle, by offering gaming combined with dramatic
entertainment concepts and reasonably priced rooms, reasonably
priced food and beverage and prompt, courteous service. As of
January 31, 1994, the Company was the largest hotel-casino
operator in the Las Vegas and Laughlin markets in terms of total
square footage of casino space and number of hotel rooms.
The Company's Las Vegas casino and hotel operations, which
are conducted from facilities located along the Las Vegas Strip,
currently compete with over 20 major hotel-casinos and a number
of smaller casinos located on the Las Vegas Strip. Such
operations also compete with casinos located in downtown Las
Vegas, approximately 12 of which offer hotel, food and beverage
and entertainment facilities, and several major hotel-casinos
located elsewhere in the Las Vegas area. The Company's Las Vegas
properties also compete, to a lesser extent, with casino and
hotel facilities in other parts of Nevada, principally Laughlin
and Reno.
During the fourth calendar quarter of 1993, three major new
hotel-casinos, including Luxor, opened along the Las Vegas Strip,
adding significant casino capacity and over 10,500 hotel rooms to
the existing Las Vegas market. The Company cannot yet determine
what impact the opening of these properties will have on
operations at the Company's facilities.
The Company designed Luxor to compete on the basis of the
entertainment value offered at the resort and the affordability
of its hotel rooms. Luxor's primary competition comes from other
large hotel-casinos located on or near the Strip which offer
amenities and marketing programs that appeal to the value-
conscious and middle-income strata of the gaming populace.
Excalibur and Luxor each benefit from walk-in business
attributable to the registered guests and casino customers at the
other property. Also, Luxor's registered guests and casino
customers may include persons who otherwise would have patronized
Excalibur or Circus Circus-Las Vegas. While it cannot yet be
determined what impact Luxor will have, over the long term, on
operations at the Company's other properties, management believes
that the Company's Las Vegas operations, on a consolidated basis,
will benefit significantly as a result of the addition of Luxor.
Circus Circus-Reno competes with approximately 12 major
casinos (the majority of which offer hotel rooms) as well as
numerous other smaller casinos in the greater Reno area. This
property competes to a lesser extent with casino and hotel
facilities in other parts of Nevada.
In Laughlin, the Colorado Belle and the Edgewater, which
together account for over 25% of the rooms in Laughlin, compete
with eight other casinos. While the Colorado Belle and the
Edgewater also compete with each other, both properties have
consistently maintained occupancy levels of approximately 95% at
their hotels and, because the two properties are situated on
adjoining sites, the Company believes that each property benefits
from walk-in business attributable to the registered guests and
casino customers at the other property. Although Laughlin has
experienced significant expansion of its hotel and casino
capacities, including an over 100% increase in the number of
available hotel rooms since January 1, 1990, the extent of future
expansion in Laughlin may be impacted by the limited supply of
water and sewage facilities currently available to the Laughlin
area and by other constraints associated with the area's limited
infrastructure.
The Company believes that it receives the major portion of
its Las Vegas business from Southern California and to a lesser
degree from the remainder of the southwestern United States. The
major portion of its Reno business is derived from Northern
California and to a lesser degree from the northwestern United
States. Laughlin's business is derived principally from Arizona
and Southern California.
Gaming has expanded dramatically in the United States in
recent years. This growth has been reflected in various forms
including riverboats, dockside gaming facilities, Native American
gaming ventures, land-based casinos, state-sponsored lotteries,
off-track wagering and card parlors. Since 1990, when there were
casinos in only three states (excluding casinos on Native
American lands), gaming has spread to a number of additional
states and still other states are currently considering the
legalization of casino gaming in specific geographic areas within
their jurisdictions. It is estimated that casino gaming is
currently conducted by over 60 Native American tribes at over 100
locations in the United States and other Native American tribes
are either in the process of establishing or are considering the
establishment of gaming at additional locations, including sites
in California and Arizona. The Company does not believe that
gaming, as presently conducted in other states, has had a
material adverse impact on its operations. The competitive
impact on Nevada gaming establishments, in general, and the
Company's operations, in particular, from the continued growth of
gaming in jurisdictions outside of Nevada cannot be determined at
this time. The Company believes that the introduction of casino
gaming in areas close to Nevada, such as California and Arizona,
could have an adverse impact on the Company's operations and,
depending on the nature, location and extent of such operations,
such impact could be material.
Regulation and Licensing
Nevada
The ownership and operation of casino gaming facilities in
Nevada are subject to: (i) the Nevada Gaming Control Act and the
regulations promulgated thereunder (collectively, the "Nevada
Act"); and (ii) various local ordinances and regulations. The
Company's gaming operations are subject to the licensing and
regulatory control of the Nevada Gaming Commission (the "Nevada
Commission"), the Nevada State Gaming Control Board (the "Nevada
Board"), and various local licensing and regulatory authorities,
including the Clark County Liquor and Gaming Licensing Board and
the City of Reno (collectively, the "Local Authorities"). The
Nevada Commission, the Nevada Board and the Local Authorities are
collectively referred to as the "Nevada Gaming Authorities".
The laws, regulations and supervisory procedures of the
Nevada Gaming Authorities are based upon declarations of public
policy which are concerned with, among other things: (i) the
prevention of unsavory or unsuitable persons from having a direct
or indirect involvement with gaming at any time or in any
capacity; (ii) the establishment and maintenance of responsible
accounting practices and procedures; (iii) the maintenance of
effective controls over the financial practices of licensees,
including the establishment of minimum procedures for internal
fiscal affairs and the safeguarding of assets and revenues,
providing reliable record keeping and requiring the filing of
periodic reports with the Nevada Gaming Authorities; (iv) the
prevention of cheating and fraudulent practices; and (v)
providing a source of state and local revenues through taxation
and licensing fees. Change in such laws, regulations and
procedures could have an adverse effect on the Company's gaming
operations.
The Company is registered by the Nevada Commission as a
publicly traded corporation (a "Registered Corporation") and has
been found suitable to own the stock of Circus Circus Casinos,
Inc., Slots-A-Fun, Inc., Edgewater Hotel Corporation, Colorado
Belle Corp., New Castle Corp. and Ramparts, Inc., each of which
is a corporate gaming licensee under the terms of the Nevada Act
(each individually, a "Corporate Licensee" and collectively, the
"Corporate Licensees"). The Corporate Licensees are required to
be licensed by the Nevada Gaming Authorities. The gaming licenses
held by the Corporate Licensees require the payment of fees and
taxes and are not transferable. As a Registered Corporation, the
Company is required periodically to submit detailed financial and
operating reports to the Nevada Commission and furnish any other
information which the Nevada Commission may require. No person
may become a stockholder of, or receive any percentage of profits
from the Corporate Licensees without first obtaining licenses and
approvals from the Nevada Gaming Authorities. The Company and the
Corporate Licensees have obtained from the Nevada Gaming
Authorities the various registrations, approvals, permits and
licenses required in order to engage in gaming activities in
Nevada.
The Nevada Gaming Authorities may investigate any individual
who has a material relationship to, or material involvement with,
the Company or the Corporate Licensees in order to determine
whether such individual is suitable or should be licensed as a
business associate of a gaming licensee. Officers, directors and
certain key employees of the Corporate Licensees must file
applications with the Nevada Gaming Authorities and may be
required to be licensed or found suitable by the Nevada Gaming
Authorities. Officers, directors and key employees of the
Company who are actively and directly involved in gaming
activities of the Corporate Licensees may be required to be
licensed or found suitable by the Nevada Gaming Authorities. The
Nevada Gaming Authorities may deny an application for licensing
for any cause which they deem reasonable. A finding of
suitability is comparable to licensing, and both require
submission of detailed personal and financial information
followed by a thorough investigation. The applicant for licensing
or a finding of suitability must pay all the costs of the
investigation. Changes in licensed positions must be reported to
the Nevada Gaming Authorities and in addition to their authority
to deny an application for a finding of suitability or licensure,
the Nevada Gaming Authorities have jurisdiction to disapprove a
change in a corporate position.
If the Nevada Gaming Authorities were to find an officer,
director or key employee unsuitable for licensing or unsuitable
to continue having a relationship with the Company or the
Corporate Licensees, the companies involved would have to sever
all relationships with such person. In addition, the Nevada
Commission may require the Company or the Corporate Licensees to
terminate the employment of any person who refuses to file
appropriate applications. Determinations of suitability or of
questions pertaining to licensing are not subject to judicial
review in Nevada.
The Company and the Corporate Licensees are required to
submit detailed financial and operating reports to the Nevada
Commission. Substantially all material loans, leases, sales of
securities and similar financing transactions by the Corporate
Licensees must be reported to or approved by the Nevada
Commission.
If it were determined that the Nevada Act was violated by a
Corporate Licensee, the gaming licenses it holds could be
limited, conditioned, suspended or revoked, subject to compliance
with certain statutory and regulatory procedures. In addition,
the Corporate Licensees, the Company and the persons involved
could be subject to substantial fines for each separate violation
of the Nevada Act at the discretion of the Nevada Commission.
Further, a supervisor could be appointed by the Nevada Commission
to operate the Company's gaming properties and, under certain
circumstances, earnings generated during the supervisor's
appointment (except for reasonable rental value of the casino)
could be forfeited to the State of Nevada. Limitation,
conditioning or suspension of any gaming license or the
appointment of a supervisor could (and revocation of any gaming
license would) materially adversely affect the Company's gaming
operations.
Any beneficial holder of the Company's voting securities,
regardless of the number of shares owned, may be required to file
an application, be investigated, and have his suitability as a
beneficial holder of the Company's voting securities determined
if the Nevada Commission has reason to believe that such
ownership would otherwise be inconsistent with the declared
policies of the state of Nevada. The applicant must pay all
costs of investigation incurred by the Nevada Gaming Authorities
in conducting any such investigation.
The Nevada Act requires any person who acquires more than
five percent of a Registered Corporation's voting securities to
report the acquisition to the Nevada Commission. The Nevada Act
requires that beneficial owners of more than 10% of a Registered
Corporation's voting securities apply to the Nevada Commission
for a finding of suitability within thirty days after the
Chairman of the Nevada Board mails the written notice requiring
such filing. Under certain circumstances, an "institutional
investor", as defined in the Nevada Act, which acquires more than
10%, but not more than 15%, of the Registered Corporation's
voting securities may apply to the Nevada Commission for a waiver
of such finding of suitability if such institutional investor
holds the voting securities for investment purposes only. An
institutional investor shall not be deemed to hold voting
securities for investment purposes unless the voting securities
were acquired and are held in the ordinary course of business as
an institutional investor and not for the purpose of causing,
directly or indirectly, the election of a majority of the members
of the board of directors of the Company, any change in the
Company's corporate charter, bylaws, management, policies or
operations of the Registered Corporation, or any of its gaming
affiliates, or any other action which the Nevada Commission finds
to be inconsistent with holding the Registered Corporation's
voting securities for investment purposes only. Activities which
are not deemed to be inconsistent with holding voting securities
for investment purposes only include: (i) voting on all matters
voted on by stockholders; (ii) making financial and other
inquiries of management of the type normally made by securities
analysts for informational purposes and not to cause a change in
its management, policies or operations; and (iii) such other
activities as the Nevada Commission may determine to be
consistent with such investment intent. If the beneficial holder
of voting securities who must be found suitable is a corporation,
partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners. The
applicant is required to pay all costs of investigation.
Any person who fails or refuses to apply for a finding of
suitability or a license within 30 days after being ordered to do
so by the Nevada Commission or the Chairman of the Nevada Board,
may be found unsuitable. The same restrictions apply to a record
owner if the record owner, after request, fails to identify the
beneficial owner. Any stockholder found unsuitable and who
holds, directly or indirectly, any beneficial ownership of the
Company's voting securities beyond such period of time as may be
prescribed by the Nevada Commission may be guilty of a criminal
offense. The Company is subject to disciplinary action if, after
it receives notice that a person is unsuitable to be a
stockholder or to have any other relationship with the Company or
the Corporate Licensees, the Company (i) pays that person any
dividend or interest upon voting securities of the Company,
(ii) allows that person to exercise, directly or indirectly, any
voting right conferred through securities held by that person,
(iii) pays remuneration in any form to that person for services
rendered or otherwise, or (iv) fails to pursue all lawful efforts
to require such unsuitable person to relinquish his voting
securities including, if necessary, the immediate purchase of
said voting securities for cash at fair market value.
Additionally, the Clark County Liquor and Gaming Licensing Board
has taken the position that it has the authority to approve all
persons owning or controlling the stock of any corporation
controlling a gaming licensee.
The Nevada Commission may, in its discretion, require the
holder of any debt security of a Registered Corporation to file
applications, be investigated and be found suitable to own the
debt security of a Registered Corporation. If the Nevada
Commission determines that a person is unsuitable to own such
security, then pursuant to the Nevada Act, the Registered
Corporation can be sanctioned, including the loss of its
approvals, if without the prior approval of the Nevada
Commission, it: (i) pays to the unsuitable person any dividend,
interest, or any distribution whatsoever; (ii) recognizes any
voting right by such unsuitable person in connection with such
securities; (iii) pays the unsuitable person remuneration in any
form; or (iv) makes any payment to the unsuitable person by way
of principal, redemption, conversion, exchange, liquidation, or
similar transaction.
The Company is required to maintain a current stock ledger
in Nevada which may be examined by the Nevada Gaming Authorities
at any time. If any securities are held in trust by an agent or
by a nominee, the record holder may be required to disclose the
identity of the beneficial owner to the Nevada Gaming
Authorities. A failure to make such disclosure may be grounds
for finding the record holder unsuitable. The Company is also
required to render maximum assistance in determining the identity
of the beneficial owner. The Nevada Commission has the power to
require the Company's stock certificates to bear a legend
indicating that the securities are subject to the Nevada Act.
However, to date, the Nevada Commission has not imposed such a
requirement on the Company.
The Company may not make a public offering of its securities
without the prior approval of the Nevada Commission if the
securities or proceeds therefrom are intended to be used to
construct, acquire or finance gaming facilities in Nevada, or to
retire or extend obligations incurred for such purposes. On
September 23, 1993, the Nevada Commission granted the Company
prior approval to make public offerings for a period of one year,
subject to certain conditions (the "Shelf Approval"). However,
the Shelf Approval may be rescinded for good cause without prior
notice upon the issuance of an interlocutory stop order by the
Chairman of the Nevada Board and must be renewed annually. The
Shelf Approval does not constitute a finding, recommendation or
approval by the Nevada Commission or the Nevada Board as to the
accuracy or adequacy of the prospectus or the investment merits
of the securities offered. Any representation to the contrary is
unlawful.
Changes in control of the Company through merger,
consolidation, stock or asset acquisitions, management or
consulting agreements, or any act or conduct by a person whereby
he obtains control, may not occur without the prior approval of
the Nevada Commission. Entities seeking to acquire control of a
Registered Corporation must satisfy the Nevada Board and Nevada
Commission in a variety of stringent standards prior to assuming
control of such Registered Corporation. The Nevada Commission
may also require controlling stockholders, officers, directors
and other persons having a material relationship or involvement
with the entity proposing to acquire control, to be investigated
and licensed as part of the approval process relating to the
transaction.
The Nevada legislature has declared that some corporate
acquisitions opposed by management, repurchases of voting
securities and corporate defense tactics affecting Nevada gaming
corporate licensees, and Registered Corporations that are
affiliated with those operations, may be injurious to stable and
productive corporate gaming. The Nevada Commission has
established a regulatory scheme to ameliorate the potentially
adverse effects of these business practices upon Nevada's gaming
industry and to further Nevada's policy to: (i) assure the
financial stability of corporate gaming operators and their
affiliates; (ii) preserve the beneficial aspects of conducting
business in the corporate form; and (iii) promote a neutral
environment for the orderly governance of corporate affairs.
Approvals are, in certain circumstances, required from the Nevada
Commission before the Company can make exceptional repurchases of
voting securities above the current market price thereof and
before a corporate acquisition opposed by management can be
consummated. The Nevada Act also requires prior approval of a
plan of recapitalization proposed by the Company's Board of
Directors in response to a tender offer made directly to the
Registered Corporation's stockholders for the purposes of
acquiring control of the Registered Corporation.
License fees and taxes, computed in various ways depending
on the type of gaming or activity involved, are payable to the
State of Nevada and to the counties and cities in which the
Corporate Licensees' respective operations are conducted.
Depending upon the particular fee or tax involved, these fees and
taxes are payable either monthly, quarterly or annually and are
based upon either: (i) a percentage of the gross revenues
received; (ii) the number of gaming devices operated; or
(iii) the number of table games operated. A casino entertainment
tax is also paid by casino operations where entertainment is
furnished in connection with the selling of food or refreshments.
Nevada licensees that hold a license as an operator of a slot
route, or a manufacturer's or distributor's license, also pay
certain fees and taxes to the State of Nevada.
Any person who is licensed, required to be licensed,
registered, required to be registered, or is under common control
with such persons (collectively, the "Licensees"), and who
proposes to become involved in a gaming venture outside of
Nevada, is required to deposit with the Nevada Board, and
thereafter maintain, a revolving fund in the amount of $10,000 to
pay the expenses of investigation by the Nevada Board of their
participation in such foreign gaming. The revolving fund is
subject to increase or decrease in the discretion of the Nevada
Commission. Thereafter, Licensees are required to comply with
certain reporting requirements imposed by the Nevada Act.
Licensees are also subject to disciplinary action by the Nevada
Commission if they knowingly violate any laws of the foreign
jurisdiction pertaining to the foreign gaming operation, fail to
conduct the foreign gaming operation in accordance with the
standards of honesty and integrity required of Nevada gaming
operations, engage in activities that are harmful to the state of
Nevada or its ability to collect gaming taxes and fees, or employ
a person in the foreign operation who has been denied a license
or finding of suitability in Nevada on the ground of personal
unsuitability.
The sale of alcoholic beverages by the Company at its Nevada
establishments is subject to supervision, control and regulation
by the Clark County Board or the City of Reno, each of which
issues licenses deemed to be nontransferable, revocable
privileges, and have full power to limit, condition, suspend or
revoke such licenses. The Company is currently licensed to sell
alcoholic beverages at each of its establishments. Any adverse
regulatory act with respect to these licenses could have an
adverse effect upon operations at the affected properties and,
depending on the property or properties affected, the operation
of the Company.
Mississippi
The ownership and operation of casino gaming facilities in
Mississippi are subject to extensive state and local regulation.
In order to open and operate Circus-Tunica, the Company must
register under the Mississippi Gaming Control Act (the
"Mississippi Act") and its Mississippi gaming operations will be
subject to the licensing and regulatory control of the
Mississippi Gaming Commission (the "Mississippi Commission") and
various local, city and county regulatory agencies. Effective
October 29, 1991, the Mississippi Commission adopted regulations
in furtherance of the Mississippi Act. On October 1, 1993, a new
Mississippi Commission and a new Executive Director of the
Mississippi Commission were appointed. There can be no assurance
that the new members of the Mississippi Commission and the new
Executive Director will adopt interpretations of the Mississippi
Act and the regulations thereunder that are in all cases
consistent with the interpretations adopted by the prior
Mississippi Commission or the former Executive Director. Changes
in such laws, regulations and/or interpretations could have a
material adverse effect on gaming operations to be conducted by
the Company in Mississippi.
The Company will be required to submit detailed financial,
operating and other reports to the Mississippi Commission.
Substantially all loans, leases, sales of securities and similar
financing transactions entered into by the Company must be
reported to or approved by the Mississippi Commission. The
Company also will be required to periodically submit detailed
financial and operating reports to the Mississippi Commission and
to furnish any other information required thereby.
Each of the directors, officers and key employees of the
Company who are actively and directly engaged in the
administration or supervision of gaming in Mississippi, or who
have any other significant direct or indirect involvement with
the gaming activities of the Company in Mississippi, must be
found suitable therefor, and may be required to be licensed, by
the Mississippi Commission. The finding of suitability is
comparable to licensing, and both require submission of detailed
personal financial information followed by a thorough
investigation. In addition, any individual who is found to have
a material relationship to, or material involvement with, the
Company may be required to be investigated in order to be found
suitable or to be licensed as a business associate of the
Company. Key employees, controlling persons or others who
exercise significant influence upon the management or affairs of
the Company may also be deemed to have such a relationship or
involvement. There can be no assurance that such persons will be
found suitable by the Mississippi Commission. An application for
licensing may be denied for any cause deemed reasonable by the
Mississippi Commission. Changes in licensed positions must be
reported to the Mississippi Commission. In addition to its
authority to deny an application for a license, the Mississippi
Commission has jurisdiction to disapprove a change in corporate
position. If the Mississippi Commission were to find a director,
officer or key employee unsuitable for licensing or unsuitable to
continue having a relationship with the Company, the Company
would have to suspend, dismiss and sever all relationships with
such person in order to continue to have any involvement in
gaming in Mississippi. The Company would have similar
obligations with regard to any person who refuses to file
appropriate applications. Each gaming employee at a Mississippi
gaming facility must obtain from the Mississippi Commission a
work permit which may be revoked upon the occurrence of certain
specified events.
Mississippi statutes and regulations give the Mississippi
Commission the discretion to require a suitability finding with
respect to anyone who acquires any security of the Company,
regardless of the percentage of ownership. The current policy of
the Mississippi Commission is to require anyone acquiring five
percent or more of any voting securities of a public or private
company to be found suitable. If the owner of voting securities
who is required to be found suitable is a corporation,
partnership or trust, it must submit detailed business and
financial information including a list of beneficial owners. The
applicant is required to pay all costs of investigation.
Any owner of voting securities found unsuitable and who
holds, directly or indirectly, any beneficial ownership of equity
interests in the Company beyond such period of time as may be
prescribed by the Mississippi Commission may be guilty of a
misdemeanor. Any person who fails or refuses to apply for a
finding of suitability or a license within 30 days after being
ordered to do so by the Mississippi Commission may be found
unsuitable. The Company will be subject to disciplinary action
if, after it receives notice that a person is unsuitable to be an
owner of or to have any other relationship with it, the Company
(i) pays the unsuitable person any dividends or interest upon any
securities of the gaming subsidiary or any payments or
distribution of any kind whatsoever, (ii) recognizes the
exercise, directly or indirectly, of any voting rights in its
securities by the unsuitable person, or (iii) pays the unsuitable
person any remuneration in any form for services rendered or
otherwise, except in certain limited and specific circumstances.
In addition, if the Mississippi Commission finds any owner of
voting securities unsuitable, such owner must immediately
surrender all securities to the Company, and the Company must
refund any money or other thing of value that may have been
invested in the Company or made use of by the Company.
The Company will be required to maintain current equity
ownership ledgers in the State of Mississippi which may be
examined by the Mississippi Commission at any time. If any
securities are held in trust by an agent or by a nominee, the
record holder may be required to disclose the identity of the
beneficial owner to the Mississippi Commission. A failure to
make such disclosure may be grounds for finding the record holder
unsuitable. The Company also is required to render maximum
assistance in determine the identity of such a beneficial owner.
The Mississippi Act requires that certificates representing
equity securities of the Company bear a legend to the general
effect that the securities are subject to the Mississippi Act and
regulations of the Mississippi Commission. The Mississippi
Commission, through the power to regulate licenses, has the power
to impose additional restrictions on the holders of the Company's
securities at any time.
The regulations provide that a change in control of the
Company may not occur without the prior approval of the
Mississippi Commission. Mississippi law prohibits the Company
from making a public offering of its securities without the
approval of the Mississippi Commission if any part of the
proceeds of the offering is to be used to finance the
construction, acquisition or operation of gaming facilities in
Mississippi, or to retire or extend obligations incurred for one
or more of such purposes.
Once the Company is licensed to conduct gaming in
Mississippi, the Company may not engage in gaming activities in
Mississippi while also conducting gaming operations outside of
Mississippi without approval of the Mississippi Commission.
Any Mississippi gaming license obtained by the Company will
not be transferable and will need to be renewed periodically. If
a license is obtained, there can be no assurance that any renewal
application will be approved. Each issuing agency may at any
time dissolve, suspend, condition, limit or restrict a license or
approval to own equity interests in the Company for any cause
deemed reasonable by such agency. Substantial fines for each
violation of gaming laws or regulations may be levied against the
Company in Mississippi. A violation under any gaming license
held by the Company may be deemed a violation of all the other
licenses held by the Company. Suspension or revocation of any of
the foregoing licenses or of the approval of the Company would
have a material adverse effect upon any business conducted by the
Company in Mississippi.
License fees and taxes, computed in various ways depending
on the type of gaming involved, will be payable to the State of
Mississippi and to the counties and cities in which the Company
conducts any operations in Mississippi. Depending upon the
particular fee or tax involved, these fees and taxes will be
payable either monthly, quarterly or annually and will be based
upon (i) the percentage of the gross gaming revenues received by
the casino operation, (ii) the number of slot machines operated
by the casino, (iii) the number of table games operated by the
casino, or (iv) the number of casino patrons. An amusement tax
is also paid by the licensee where a price is charged for
admissions to entertainment events. The legal age for gaming in
Mississippi is 21.
Windsor, Ontario, Canada
The Company is a shareholder, along with two venture
partners, of WCL, which is incorporated under the laws of the
Province of Ontario, Canada. Pursuant to a contract with the
Ontario Casino Corporation (the "OCC"), a governmental authority
established under the Ontario Casino Corporation Act, WCL intends
to develop, own and operate a casino in Windsor, Ontario on
behalf of the OCC.
The operation of casino gaming facilities by WCL in Windsor,
Ontario, will be subject to extensive regulation. The gaming
operations of WCL in Ontario will be subject to the licensing and
regulatory control of the Ontario Gaming Control Commission (the
"Ontario Commission"), the Registrar of Gaming Control (the
"Ontario Registrar") and the Director of Gaming Control (the
"Ontario Director") established or appointed under the Ontario
Gaming Control Act (the "Ontario Act"). WCL must be registered
as a casino operator under the Ontario Act.
As an applicant for registration or renewal of registration,
WCL's application will be denied if there are reasonable grounds
to believe that WCL will not be financially responsible in the
conduct of its business or if there are reasonable grounds to
believe that WCL will not act in accordance with the law or with
integrity, honesty, or in the public interest. In determining
whether registration should be granted or renewed, the Ontario
Registrar may have regard to the financial history and past
conduct of WCL, its officers and directors and "interested
persons" who have a beneficial interest in, control of, or who
have financed WCL's business or any of its officers' or
directors' businesses. The Ontario Registrar is empowered to
investigate the character, financial history and competence of
WCL or any person who has a beneficial interest in, control of,
or who has financed WCL's business, including WCL's shareholders.
The Ontario Registrar may also investigate officers or directors
of WCL. The applicant for registration or renewal must pay the
reasonable costs of such investigations. Each gaming employee at
an Ontario gaming facility must be registered as a gaming
assistant which registration may be revoked upon the occurrence
of certain events.
The Ontario Registrar may, subject to a registrant's right
to a hearing under the Ontario Act, suspend or revoke a
registration for any reason that would disentitle such registrant
to registration or renewal. A change in control of WCL could
result in revocation of registration if the new person or entity
in control is determined to be unsuitable by the Ontario
Registrar. The registration of WCL shall be deemed to expire
immediately upon any change in the composition of the officers
and directors of WCL, unless the Ontario Registrar has consented
in writing to such change. Moreover, there can be no assurance
that any renewal application will be approved.
Investigators appointed by the Ontario Commission are
empowered, subject to certain limitations, to conduct warrantless
searches for the purpose of determining compliance with the
Ontario Act, the regulations or the terms of a registration. The
Ontario Director may issue an order freezing the assets of a
person if it is alleged that a person has contravened the Ontario
Act or the regulations thereunder, is subject to criminal
proceeding, or is the subject of an investigation under the
Ontario Act and the Ontario Director finds reasonable grounds to
believe that the interests of the person on whose behalf the
assets are to be held require protection.
Substantial fines for each violation of the gaming laws or
regulations may be levied against WCL. Suspension or revocation
of registration could lead to a termination of any contract with
OCC and could have a material adverse effect upon any business
conducted by WCL in Ontario. The legal age for gaming in Ontario
is 19.
WCL will be required to submit audited financial statements
to the Ontario Commission and to keep records prescribed by
regulation. WCL must also make available to the OCC all reports,
accounts, records and other documents related to the operation of
the casino.
The government can make further regulations under the
Ontario Act. Any additions to or changes in the Ontario Act or
the regulations thereunder could have a material adverse effect
on WCL's gaming operations, and thus the Company's interest
therein.
The sale of alcoholic beverages by WCL at its Ontario
establishments is subject to the supervision, control and
regulation of the Liquor License Board of Ontario, an Ontario
provincial government agency. The failure to obtain or the
revocation of a license to sell alcoholic beverages for the
casino gaming facilities to be operated by WCL in Windsor could
have a material adverse effect on the operation of such
facilities.
Louisiana
In July 1991, the Louisiana legislature adopted legislation
permitting riverboat casino activity on certain rivers and
waterways in Louisiana. The legislation granted authority to
supervise riverboat gaming activities to the Louisiana Division
and to the Louisiana Gaming Commission (the "Louisiana
Commission"). The Louisiana Division is authorized to
investigate applicants and issue licenses, investigate violations
of the gaming statutes and conduct continuing reviews of gaming
activities generally. The Louisiana Commission is authorized to
hear and determine all appeals relative to the granting,
suspension, revocation, condition or renewal of licenses, permits
and applications; in addition, the Louisiana Commission must
establish regulations concerning authorized routes and duration
of excursions, minimum levels of insurance and the construction
and periodic inspections of riverboat casinos. There is a
dispute between the Louisiana Division and the Louisiana
Commission over the correct interpretation of the statutory
authority described above. The outcome of this dispute could
have an effect on the licensing process, and therefore, the
gaming operations proposed to be conducted by the Louisiana Joint
Venture.
The Louisiana Division is empowered to issue up to 15
licenses to conduct riverboat gaming activities, and no more than
six licenses may be granted to riverboat casinos operating from
any one parish. As of March 31, 1994, the Louisiana Division had
issued 11 licenses for riverboat casinos, all to entities that
had previously obtained certificates of preliminary approval, as
discussed below. The Louisiana Joint Venture has not yet
received a license. Of the licenses that have been granted to
date, five are for riverboat casinos in the City of New Orleans,
one is for a riverboat casino in Harvey (approximately eight
miles from the Louisiana Joint Venture site) and one is for a
riverboat casino in Luling/St. Rose (approximately 30 miles from
the Louisiana Joint Venture site). Of the four licenses
remaining to be issued, there are four entities (including the
Louisiana Joint Venture) who have certificates of preliminary
approval and 10 other applications who do not.
The Louisiana statute does not specifically contemplate the
process that the Louisiana Commission has adopted of granting
certificates of preliminary approval to applicants for gaming
licenses. As of March 31, 1994, the Louisiana Commission had
granted 15 certificates of preliminary approval including a
certificate of preliminary approval for the development by the
Louisiana Joint Venture of a riverboat casino based in the
Chalmette area of Louisiana, approximately eight miles to the
southeast of downtown New Orleans. As noted above, 11 of the
riverboat casinos receiving certificates of preliminary approval
have received licenses.
In general terms, a Louisiana Commission certificate of
preliminary approval purports to authorize commencement of
construction of a riverboat casino and initiation of other start-
up activities, and sets forth a specific plan to be followed in
the development of its casino complex. The issuance of a
certificate of preliminary approval by the Louisiana Commission
does not assure the grant of a license by the Louisiana Division.
It is uncertain whether the Louisiana Division is legally
permitted to issue a license to an applicant who has not first
received a certificate of preliminary approval, and if it is
permitted to issue a license to an applicant who has not first
received a certificate of preliminary approval, whether it will
choose to do so.
In issuing a license, the Louisiana Division must find that
the applicant is of good character, honesty and integrity and
that the applicant's prior activities, criminal record, if any,
reputation, habits, and associations do not pose a threat to the
public interest of the State of Louisiana or to the effective
regulation and control of gaming, or create or enhance the
dangers of unsuitable, unfair or illegal practices, methods and
activities in the conduct of gaming or the carrying on of
business and financial arrangements in connection therewith. The
applicant's officers, directors, managers and principal
shareholders may be subject to strict scrutiny and approval by
the Louisiana Division. The Louisiana Division will not grant a
license unless it finds that: (i) the applicant is capable of
conducting gaming operations, which means that the applicant can
demonstrate the capability, either through training, education,
business experience, or a combination of the above, to operate a
gaming casino; (ii) the proposed financing of the riverboat and
the gaming operations is adequate for the nature of the proposed
operation and from a source suitable and acceptable to the
Louisiana Division; (iii) the applicant demonstrates a proven
ability to operate a vessel of comparable size, capacity and
complexity to a riverboat so as to ensure the safety of its
passengers; (iv) the applicant submits a detailed plan of design
of the riverboat in its application for a license; (v) the
applicant designates the docking facilities to be used by the
riverboat; (vi) the applicant shows adequate financial ability to
construct and maintain a riverboat; and (vii) the applicant has a
good faith plan to recruit, train and upgrade minorities in all
employment classifications.
Once a license is granted by the Louisiana Division, the
Louisiana gaming law specifies certain restrictions and
conditions relating to the operation of a riverboat casino,
including the following: (i) gaming is not permitted while a
riverboat casino is docked, other than during excursions and
during times when dangerous weather or water conditions exist,
and an excursion would be unsafe; (ii) each excursion (defined as
scheduled cruising time and 45 minutes before and after the
scheduled cruising time) may not be less than three hours nor
more than eight hours in duration, subject to specified
exceptions; (iii) gaming devices, equipment and supplies may only
be purchased or leased from permitted suppliers; (iv) gaming may
only take place in the designated gaming area while the riverboat
casino is upon a designated river or waterway; (v) gaming
equipment may not be possessed, maintained or exhibited by any
person on a riverboat except in the specifically designated
gaming area, or a secure area used for inspection, repair or
storage of such equipment; (vi) wagers may be received only from
a person present on a licensed riverboat casino; (vii) persons
under 21 are not permitted in designated gaming areas; (viii)
except for slot machine play, wagers may be made only with
tokens, chips or electronic cards purchased from the licensee
aboard a riverboat; (ix) licensees may only use docking
facilities and routes for which they are licensed and may only
board and discharge passengers at the riverboat casino's licensed
berth; (x) licenses must have adequate protection and indemnity
insurance; (xi) licensees must have all necessary federal and
state licenses, certificates and other regulatory approvals prior
to operating a riverboat casino; and (xii) gaming may only be
conducted in accordance with the terms of the license and the
rules and regulations adopted by the Louisiana Division and the
Louisiana Commission.
A license is for a fixed term of five years and is subject
to annual review by the Louisiana Division thereafter. The
transfer of a license or the transfer of an interest in a license
is prohibited. The sale, assignment, transfer, pledge or
disposition by any person of securities which represent five
percent or more of the total outstanding shares of a license
holder is subject to Louisiana Division approval. A security
issued by a corporation that holds a license must generally
disclose these restrictions.
Fees for conducting gaming activities on a Louisiana
riverboat casino include (i) $50,000 for the first year of
operation and $100,000 per year thereafter plus (ii) 18-1/2% of
net gaming proceeds. In addition, the local governing authority
may levy a per excursion admission fee of up to $2.50 per
passenger boarding or embarking on a gaming riverboat.
In July 1991, Louisiana also authorized operation of video
poker machines at various types of facilities in the state,
including bars, truckstops and racetracks.
Other Jurisdictions
As a result of the Company's efforts to expand its
operations into new jurisdictions, the Company is likely to
become subject to comprehensive gaming and other regulations in
each such jurisdiction. Such regulations may be similar to, and
could be more restrictive than, those currently applicable to the
Company, its officers, directors or employees or persons
associated with the Company.
Employees and Labor Relations
At January 31, 1994, the Company employed approximately
18,000 persons. Approximately 43% of the Company's employees at
January 31, 1994 were employed pursuant to the terms of
collective bargaining agreements. Although unions have been very
active in the Las Vegas area, and to a lesser extent in the Reno
area, management considers its labor relations to be
satisfactory. The contract with one of its largest unions
expires in June 1994. The Company does not anticipate any
difficulties in renewing such agreement. The Company has not
experienced a work stoppage since an industry-wide strike in
1975.
Certain states in which gaming recently has been legalized
have established community commitment and similar laws which
require that a specified percentage of employees of gaming
ventures be residents of the state in which the gaming venture is
located. These laws could affect the ability of the Company to
attract and retain qualified employees for its ventures located
outside Nevada.
Item 2. Properties.
Circus Circus-Las Vegas. The Company owns approximately 69
acres of land with 375 feet of frontage on the Las Vegas Strip
(the "Circus Circus-Las Vegas Site") and the related
improvements. As of January 31, 1994, neither the Circus Circus-
Las Vegas Site nor any of the improvements situated thereon was
subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning Circus
Circus-Las Vegas, see "Description of the Company's Operating
Hotels and Casinos -- Circus Circus-Las Vegas" in Item 1 of this
Report.
Luxor and Excalibur. The Company owns a 117-acre parcel on
the southwest corner of the intersection of the Las Vegas Strip
and Tropicana Avenue, with approximately 2,400 feet of frontage
on the Las Vegas Strip (the "Luxor-Excalibur Site") and the
related improvements. Luxor is situated on the southern portion
of the Luxor-Excalibur Site, and Excalibur is situated on the
northern portion of such site. As of January 31, 1994, neither
the Luxor-Excalibur Site nor any of the improvements situated
thereon was subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning Luxor and
Excalibur, see "Description of the Company's Operating Hotels and
Casinos -- Luxor" and "-- Excalibur" in Item 1 of this Report.
Circus Circus-Reno. Circus Circus-Reno is situated on a
two-block area in downtown Reno (the "Circus Circus-Reno Site"),
of which approximately 80% is owned by the Company and the
remainder is held under three separate leases, two of which
expire in 2032 and 2033. The Company owns the remainder interest
in the parcel subject to the third lease pursuant to which the
Company is obligated to pay rent for the lifetime of the
landlord. As of January 31, 1994, neither the portion of the
Circus Circus-Reno Site owned by the Company nor any of the
improvements situated thereon was subject to any encumbrance
securing the repayment of indebtedness. For additional
information concerning Circus Circus-Reno, see "Description of
the Company's Operating Hotels and Casinos -- Circus Circus-Reno"
in Item 1 of this Report.
Colorado Belle. The Company owns approximately 22 acres on
the bank of the Colorado River in Laughlin, Nevada (the "Colorado
Belle Site"), and the related improvements. As of January 31,
1994, neither the Colorado Belle Site nor any of the improvements
situated thereon was subject to any encumbrance securing the
repayment of indebtedness. For additional information concerning
the Colorado Belle Hotel and Casino, see "Description of the
Company's Operating Hotels and Casinos -- The Colorado Belle" in
Item 1 of this Report.
Edgewater Hotel and Casino. Adjacent to the Colorado Belle
Site, the Company owns approximately 16 acres on the bank of the
Colorado River in Laughlin, Nevada (the "Edgewater Site"), and
the related improvements. As of January 31, 1994, neither the
Edgewater Site nor any of the improvements situated thereon was
subject to any encumbrance securing the repayment of
indebtedness. For additional information concerning the
Edgewater Hotel and Casino, see "Description of the Company's
Operating Hotels and Casinos -- The Edgewater" in Item 1 of this
Report.
Circus-Tunica. In January 1994, the Company purchased an
unimproved 24-acre parcel in Tunica County, Mississippi on which
the Company intends to develop the Circus-Tunica Project (the
"Tunica Site") and an undivided 50% interest in an additional 388
acres jointly owned by the Company and another gaming company
adjacent to the Tunica Site (the "Tunica Common Area"). As of
January 31, 1994, neither the Tunica Site nor the Company's
interest in the Tunica Common Area was subject to any encumbrance
securing the repayment of indebtedness. For additional
information concerning the Circus-Tunica Project, see "Current
Expansion Project and Joint Venture Participations -- Tunica
County, Mississippi" in Item 1 of this Report.
Other Properties
Slots-A-Fun is situated on a 30,000 square foot parcel owned
by the Company and has approximately 100 feet of frontage on the
Las Vegas Strip. The land, building and other improvements were
not subject to any encumbrance securing indebtedness at January
31, 1994.
The Company operates the Silver City Casino in Las Vegas
under a lease which expires in October 1999. The Company
currently pays a base rent of $129,982 per month. The base rent
is subject to annual increases, calculated by using a specified
index with a cap based on a specified percentage of annual
revenues. Under the terms of the lease, the landlord or the
landlord's assignee is entitled to participate in the profits to
the extent of 50% of defined income from the operation of the
Silver City Casino commencing in February 1988. There was no
participation rent due for the years ended January 31, 1992, 1993
or 1994.
The Company owns approximately 15 acres of land across the
Las Vegas Strip from Luxor. The land, which was not subject to
any encumbrance securing indebtedness as of January 31, 1994, is
utilized as parking for employees at Luxor and Excalibur.
The Company also owns or leases, or has options and/or
agreements to purchase or lease, certain other improved and
unimproved properties which are not deemed to be material to the
Company.
Item 3. Legal Proceedings.
The Company is a defendant in various pending litigation. In
management's opinion, the ultimate outcome of such litigation
will not have a material adverse effect on the results of
operations or the financial position of the Company.
Item 4. Submission of Matters to a Vote of Security
Holders.
No matter was submitted to a vote of the Company's security
holders during the fourth quarter of the fiscal year ended
January 31, 1994.
PART II
Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.
Price Range of Common Stock. The Company's Common Stock is
listed on the New York Stock Exchange and on the Pacific Stock
Exchange. The following table sets forth for the fiscal quarter
periods shown the low and high sale prices for the Common Stock
on the New York Stock Exchange, as adjusted to give retroactive
effect to a three-for-two stock split effective July 9, 1993.
Fiscal 1993 Low High
First Quarter......................$24.67 $31.50
Second Quarter..................... 25.50 30.25
Third Quarter...................... 28.33 36.58
Fourth Quarter..................... 34.75 39.92
Fiscal 1994 Low High
First Quarter......................$27.58 $37.33
Second Quarter..................... 33.75 41.50
Third Quarter...................... 35.38 49.75
Fourth Quarter..................... 31.25 40.75
On April 13, 1994 there were 4,405 holders of record of the
Common Stock of the Company.
Dividend Policy. The Company does not currently pay a cash
dividend, nor is one contemplated in the foreseeable future. The
Company believes that currently its stockholders are best served
by a policy of reinvestment in new projects. The Company has a
policy of periodic share repurchase, as cash flows, borrowing
capacity and market conditions warrant.
Item 6. Selected Financial Data.
(In thousands, except per
share amounts)
Year ended January 31,
1994 1993 1992 1991 1990
Operating Results(1):
Revenues(2) $954,923 $843,025 $806,023 $692,052 $522,376
Operating profit before
corporate expense(3) 234,311 220,435 213,097 180,697 149,869
Pretax income 182,608 183,313 157,004 115,858 113,202
Net income before
non-recurring items(3) 130,633 120,983 103,348 83,669 75,064
Net income 116,189 117,322 103,348 76,292 75,064
Earnings per share before
non-recurring items (3)(4) $1.50 $1.41 $1.23 $1.01 $0.87
Earnings per share(4) $1.34 $1.37 $1.23 $0.93 $0.87
Balance Sheet Data:
Total assets $1,297,924 $950,458 $783,071 $792,479 $675,038
Long-term debt 567,345 308,092 337,680 496,750 408,314
Stockholders' equity 559,950 490,009 326,196 184,843 160,724
Stockholders' equity
per share $6.50 $5.62 $3.84 $2.24 $1.88
(1) Luxor opened in October 1993 and Excalibur opened in June 1990.
(2) Revenues are net of complimentary allowances.
(3) These amounts are before extraordinary items and one-time charges in
fiscal 1994 for Luxor and Grand Slam Canyon preopening expenses of
$16,506 and in fiscal 1991 for Excalibur preopening expenses of
$11,177. Earnings per share for fiscal 1994 also excludes additional
income taxes of $3,715 as a result of the increased corporate tax rate
mandated by the Revenue Reconciliation Act of 1993. In fiscal 1993,
the Company experienced an extraordinary loss of $3,661, net of income
tax benefit of $1,885, on the early retirement of $100,000 principal
amount of the Company's 10-1/8% Senior Subordinated Notes due April
1997.
(4) Earnings per share are based on shares outstanding adjusted for a two-
for-one stock split effective July 12, 1991 and a three-for-two stock
split effective July 9, 1993.
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
Incorporated herein by reference are pages 26 through 30 of
the Company's Annual Report to Stockholders for the fiscal year
ended January 31, 1994 (the "1994 Annual Report"), which pages
are included as part of Exhibit 13 to this Report.
Item 8. Financial Statements and Supplementary Data.
Incorporated herein by reference are pages 31 through 42 of
the 1994 Annual Report which pages are included as part of
Exhibit 13 to this Report.
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.
Not applicable.
PART III
Item 10. Directors and Executive Officers of the
Registrant.
The information beginning immediately following the caption
"Election of Directors" to, but not including, the caption
"Management Remuneration" in the Company's Proxy Statement, to be
filed with the Securities and Exchange Commission within 120 days
after the close of the Company's fiscal year ended January 31,
1994 and forwarded to stockholders prior to the Company's 1994
Annual Meeting of stockholders (the "1994 Proxy Statement"), is
incorporated herein by reference.
During the fiscal year ended January 31, 1994, Fred W. Smith
failed to timely file one report on Form 4 relating to a purchase
of shares of the Company's Common Stock which was subsequently
reported on a timely filed Form 5.
Item 11. Executive Compensation.
The information in the 1994 Proxy Statement beginning
immediately following the caption "Management Remuneration" to,
but not including, the caption "Report of the Compensation and
Stock Option Committees on Executive Compensation", is
incorporated herein by reference.
Item 12. Security Ownership of Certain Beneficial Owners
and Management.
The information in the 1994 Proxy Statement beginning
immediately following the caption "Security Ownership of Certain
Beneficial Owners and Management" to, but not including, the
caption "Election of Directors", is incorporated herein by
reference.
Item 13. Certain Relationships and Related Transactions.
The information in the 1994 Proxy Statement beginning
immediately following the caption "Certain Transactions" to, but
not including, the caption "Information Concerning Committees of
the Board of Directors" and the additional information in the
1994 Proxy Statement beginning immediately following the caption
"Compensation Committee Interlocks and Insider Participation" to,
but not including, the caption "Comparative Stock Price
Performance Graph", is incorporated herein by reference.
PART IV
Item 14. Exhibits, Financial Statement Schedules, and Reports
on Form 8-K.
(a)(1) Consolidated Financial Statements:
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
Page
Consolidated Balance Sheets as of January 31,
1994 and 1993.................................... 31*
Consolidated Statements of Income for the three
years ended January 31, 1994..................... 32*
Consolidated Statements of Cash Flows
for the three years ended January 31, 1994....... 33*
Consolidated Statements of Stockholders' Equity
for the three years ended January 31, 1994....... 34*
Notes to Consolidated Financial Statements....... 35*
Report of Independent Public Accountants......... 42*
(a)(2) Supplemental Financial Statement Schedules
Report of Independent Public Accountants on
Supplemental Schedules........................... 48
SCHEDULE V - Property, Equipment and Leasehold
Interests.......................... 49
SCHEDULE VI- Accumulated Depreciation and
Amortization of Property, Equipment
and Leasehold Interests............ 50
SCHEDULE IX- Short-Term Borrowings.............. 51
SCHEDULE X - Supplementary Income Statement
Information........................ 52
* Refers to page of the Annual Report to Stockholders for the year ended
January 31, 1994, a copy of the incorporated portions of which are included as
Exhibit 13 to this Report.
(a)(3) Exhibits
The following exhibits are filed as a part of this
Report or incorporated herein by reference:
3(i)(a). Restated Articles of Incorporation of the Company as of
July 15, 1988 and Certificate of Amendment thereto, dated
June 29, 1989 (Incorporated by reference to Exhibit 3(a)
to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1991).
3(i)(b). Certificate of Division of Shares into Smaller
Denominations, dated June 20, 1991 (Incorporated by
reference to Exhibit 3(b) to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1992).
3(i)(c). Certificate of Division of Shares into Smaller
Denominations, dated June 22, 1993 (Incorporated by
reference to Exhibit 3(i) to the Company's Current Report
on Form 8-K dated July 21, 1993).
3(ii). Restated Bylaws of the Company dated February 24, 1994.
4(a). $250 Million Revolving Loan Agreement, dated as of
September 30, 1993, by and among the Company, the Banks
named therein and Bank of America National Trust and
Savings Association, as managing agent for the Banks, and
related forms of unsecured Promissory Notes (Incorporated
by reference to Exhibit 4(a) to the Company's Current
Report on Form 8-K dated September 30, 1993).
4(b). Subsidiary Guaranty, dated as of September 30, 1993, by
Circus Circus Casinos, Inc., New Castle Corp., Ramparts,
Inc., Edgewater Hotel Corporation, Colorado Belle Corp.,
and Slots-A-Fun, Inc., with respect to the $250 Million
Revolving Loan Agreement, in favor of Bank of America
National Trust and Savings Association, as managing agent
for the Banks (Incorporated by reference to Exhibit 4(b)
to the Company's Current Report on Form 8-K dated
September 30, 1993).
4(c). $500 Million Reducing Revolving Loan Agreement, dated as
of September 30, 1993, by and among the Company, the
Banks named therein and Bank of America National Trust
and Savings Association, as managing agent for the Banks,
and related forms of unsecured Promissory Notes
(Incorporated by reference to Exhibit 4(c) to the
Company's Current Report on Form 8-K dated September 30,
1993).
4(d). Subsidiary Guaranty, dated as of September 30, 1993, by
Circus Circus Casinos, Inc., New Castle Corp., Ramparts,
Inc., Edgewater Hotel Corporation, Colorado Belle Corp.,
and Slots-A-Fun, Inc., with respect to the $500 Million
Reducing Revolving Loan Agreement, in favor of Bank of
America National Trust and Savings Association, as
managing agent for the Banks (Incorporated by reference
to Exhibit 4(d) to the Company's Current Report on Form
8-K dated September 30, 1993).
4(e). Rate Swap Master Agreement, dated as of October 24, 1986,
and Rate Swap Supplements One through Four (Incorporated
by reference to Exhibit 4(j) to the Company' s Current
Report on Form 8-K dated December 29, 1986).
4(f). Interest Rate Swap Agreement, dated as of October 20,
1989, by and between the Company and Salomon Brothers
Holding Company Inc. (Incorporated by reference to
Exhibit 4(q) to the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1990).
4(g). Interest Rate Swap Agreement, dated as of June 20, 1989,
by and between the Company and First Interstate Bank of
California (Incorporated by reference to Exhibit 4(r) to
the Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1990).
4(h). Interest Rate Swap Agreement, dated as of April 6, 1992,
by and between the Company and Canadian Imperial Bank of
Commerce (Incorporated by reference to Exhibit 4(y) to
the Company's Annual Report on Form 10-K for the fiscal
year ended January 31, 1992).
4(i). Indenture by and between the Company and First Interstate
Bank of Nevada, N.A., as Trustee with respect to the
Company's 10-5/8% Senior Subordinated Notes due 1997
(Incorporated by reference to Exhibit 4(a) to the
Company's Registration Statement (No. 33-34439) on Form
S-3).
4(j). Indenture by and between the Company and First Interstate
Bank of Nevada, N.A., as Trustee with respect to the
Company's 6-3/4% Senior Subordinated Notes due 2003 and
its 7-5/8% Senior Subordinated Debentures due 2013
(Incorporated by reference to Exhibit 4(a) to the
Company's Current Report on Form 8-K dated July 21,
1993).
10(a).* Agreement, dated February 19, 1993, between the Company
and Glenn W. Schaeffer (Incorporated by reference to
Exhibit 10(a) to the Company's Annual Report on Form 10-K
for the fiscal year ended January 31, 1993).
10(b).* Agreement, dated March 22, 1993, between the Company and
James W. Muir (Incorporated by reference to Exhibit 10(b)
to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1993).
10(c).* 1983 Nonqualified Stock Option Plan of the Company
(Incorporated by reference to Exhibit 10(d) to the
Company's Registration Statement (No. 2-85794) on
Form S-1).
10(d).* 1983 Incentive Stock Option Plan of the Company
(Incorporated by reference to Exhibit 10(e) to the
Company's Registration Statement (No. 2-85794) on
Form S-1).
10(e).* Amendment to Circus Circus Enterprises, Inc. 1983
Incentive Stock Option Plan (Incorporated by reference to
Exhibit 4(a) to the Company's Registration Statement (No.
2-91950) on Form S-8).
10(f).* 1989 Stock Option Plan of the Company (Incorporated by
reference to Exhibit 4 to the Company's Registration
Statement (No. 33-39215) on Form S-8).
10(g).* Stock Purchase Warrant Plan (Incorporated by reference to
Exhibit 4(a) to the Company's Registration Statement (No.
33-29014) on Form S-8).
10(h).* Amended and Restated 1991 Stock Incentive Plan of the
Company (Incorporated by reference to Exhibit 4 to the
Company's Registration Statement (No. 33-56420) on Form
S-8).
10(i).* 1993 Stock Option Plan of the Company (Incorporated by
reference to Exhibit 10(a) to the Company's Quarterly
Report on Form 10-Q for the quarterly period ended July
31, 1993).
10(j).* Circus Circus Enterprises, Inc. Executive Compensation
Insurance Plan (Incorporated by reference to Exhibit
10(i) to the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1992).
10(k). Lease, dated November 1, 1957, by and between Bethel
Palma and others, as lessor, and the Company's
predecessor in interest, as lessee; Amendment of Lease,
dated May 6, 1983 (Incorporated by reference to Exhibit
10(g) to the Company's Registration Statement (No.
2-85794) on Form S-1).
10(l). Grant, Bargain and Sale Deed to the Company pursuant to
the Lease dated November 1, 1957 (Incorporated by
reference to Exhibit 10(h) to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1984).
10(m). Lease, dated August 3, 1977, by and between B&D
Properties, Inc., as lessor, and the Company, as lessee;
Amendment of Lease, dated May 6, 1983 (Incorporated by
reference to Exhibit 10(h) to the Company's Registration
Statement (No. 2-85794) on Form S-1).
10(n). Ground Lease, dated December 12, 1977, between James T.
Slayback, Sr., as lessor, and John S. Gottlieb, as
lessee, and related Assignment, Assumption and Lessor's
Consent Agreement, dated February 10, 1984, by and
between John S. Gottlieb, as assignor, the Company, as
assignee, and James T. Slayback, Sr. (Incorporated by
reference to Exhibit 10(j) to the Company's Annual Report
on Form 10-K for the fiscal year ended January 31, 1984).
10(o). Third Amendment and Restatement of the Circus Circus
Employees' Profit Sharing, Investment and Employee Stock
Ownership Plan (Incorporated by reference to Exhibit 4(f)
to the Company's Registration Statement (No. 33-18278) on
Form S-8).
10(p). Fourth Amendment to Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan
(Incorporated by reference to Exhibit 4(f) to Post
Effective Amendment No. 3 to the Company's Registration
Statement (No. 33-18278) on Form S-8).
10(q). Fifth Amendment to Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan
(Incorporated by reference to Exhibit 4(g) to Post
Effective Amendment No. 3 to the Company's Registration
Statement (No. 33-18278) on Form S-8).
10(r). Sixth Amendment to the Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Plan
(Incorporated by reference to Exhibit 4(h) to Post
Effective Amendment No. 4 to the Company's Registration
Statement (No. 33-18278) on Form S-8).
10(s). Form of Agreement of Trust between the Company and Valley
Bank of Nevada (Incorporated by reference to Exhibit 4(g)
to the Company's Registration Statement (No. 33-18278) on
Form S-8).
10(t). First Amendment to Circus Circus Employees' Profit
Sharing, Investment and Employee Stock Ownership Trust
(Incorporated by reference to Exhibit 4(i) to Post
Effective Amendment No. 3 to the Company's Registration
Statement (No. 33-18278) on Form S-8).
10(u). Second Amendment to Agreement of Trust between Circus
Circus Enterprises, Inc. and Bank of America, Nevada
(formerly Valley Bank of Nevada) (Incorporated by
reference to Exhibit 4(k) to Post Effective Amendment No.
4 to the Company's Registration Statement (No. 33-18278)
on Form S-8).
10(v). Group Annuity Contract No. GA70867 between Philadelphia
Life (formerly Bankers Life Company) and Trustees of
Circus Circus Employees' Profit Sharing and Investment
Plan (Incorporated by reference to Exhibit 4(c) to the
Company's Registration Statement (No. 33-1459) on
Form S-8).
10(w). Lease, dated as of November 1, 1981, between Novus
Property Company, as landlord, and the Company, as tenant
(Incorporated by reference to Exhibit 4(h) to the
Company's Registration Statement (No. 2-85794) on
Form S-1).
10(x). First Addendum and First Amendment, each dated as of June
15, 1983, to Lease dated as of November 1, 1981
(Incorporated by reference to Exhibit 4(i) to the
Company's Annual Report on Form 10-K for the year ended
January 31, 1984).
10(y). Second Amendment, dated as of April 1, 1984, to Lease
dated as of November l, 1981 (Incorporated by reference
to Exhibit 10(o) to the Company's Registration Statement
(No. 33-4475) on Form S-1).
10(z). Lease by and between Robert Lewis Uccelli, guardian, as
lessor, and Nevada Greens, a limited partnership, William
N. Pennington, as trustee, and William G. Bennett, as
trustee, and related Assignment of Lease (Incorporated by
reference to Exhibit 10(p) to the Company's Registration
Statement (No. 33-4475) on Form S-1).
10(aa). Agreement of Purchase, dated March 15, 1985, by and
between Denio Brothers Trucking Company, as seller, and
the Company, as buyer, and related lease by and between
Denio Brothers Trucking Co., as lessor, and Nevada
Greens, a limited partnership, William N. Pennington, as
trustee, and William G. Bennett, as trustee, and related
Assignment of Lease (Incorporated by reference to Exhibit
10(q) to the Company's Registration Statement (No. 33-
4475) on Form S-1).
10(bb). Building Contract, dated March 14, 1992, by and between
the Company and Perini Building Company (Incorporated by
reference to Exhibit 10(aa) to the Company's Annual
Report on Form 10-K for the year ended January 31, 1993).
10(cc). Agreement of Joint Venture, dated as of March 1, 1994, by
and among Eldorado Limited Liability Company, Galleon,
Inc., and the Company.
10(dd). Operating Agreement of American Entertainment, L.L.C.,
dated as of January 14, 1994, by and between Circus
Circus Louisiana, Inc., and American Entertainment
Corporation; Amendment of Operating Agreement, dated as
of February 8, 1994, including the forms of the Riverboat
Casino Management Agreement and the Consulting Agreement
included as exhibits thereto.
13. Portions of the Annual Report to Stockholders for the
Year Ended January 31, 1994 specifically incorporated by
reference as part of this Report.
21. Subsidiaries of the Company.
23. Consent of Arthur Andersen & Co. (See page 47).
_____________
* This exhibit is a management contract or compensatory plan or
arrangement required to be filed as an exhibit to this Report.
Certain instruments with respect to long-term debt have not
been filed hereunder or incorporated by reference herein where the
total amount of such debt thereunder does not exceed 10% of the
consolidated total assets of the Company. Copies of such
instruments will be furnished to the Securities and Exchange
Commission upon request.
(b) During the fourth quarter of the fiscal year ended
January 31, 1994, the Company filed no Current Report on Form 8-K.
(c) The exhibits required by Item 601 of Regulation S-K filed
as part of this Report or incorporated herein by reference are
listed in Item 14(a)(3) above, and the exhibits filed herewith are
listed on the Index to Exhibits which accompanies this Report.
(d) See Item 14(a)(2) of this Report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.
CIRCUS CIRCUS ENTERPRISES, INC.
Dated: April 26, 1994 By :WILLIAM G. BENNETT
William G. Bennett, Chairman
of the Board
Pursuant to the requirements of the Securities Exchange
Act of 1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and on
the dates indicated.
Signature Title Date
WILLIAM G. BENNETT Chairman of the Board April 26, 1994
William G. Bennett
CLYDE T. TURNER Chief Executive Officer, April 26, 1994
Clyde T. Turner President and Director
(Principal Executive
Officer)
DANIEL N. COPP Chief Financial Officer April 26, 1994
Daniel N. Copp and Executive Vice
President
(Principal Financial
Officer)
WILLIAM N. PENNINGTON Director April 21, 1994
William N. Pennington
TERRY L. CAUDILL Vice President April 26, 1994
Terry L. Caudill (Principal Accounting
Officer)
JAMES CASHMAN III Director April 26, 1994
James Cashman III
SIGNATURES (cont.)
Signature Title Date
Director April , 1994
Tony Coehlo
Director April , 1994
Carl F. Dodge
ARTHUR M. SMITH, JR. Director April 21, 1994
Arthur M. Smith, Jr.
Director April , 1994
Fred W. Smith
KURT SULLIVAN Director April 25, 1994
Kurt Sullivan
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our reports dated February 23, 1994 included (or
incorporated by reference) in Circus Circus Enterprises, Inc.'s
Annual Report on Form 10-K for the year ended January 31, 1994
into the Company's previously filed Form S-8 Registration
Statements File Nos. 2-91950, 2-93578, 33-18278, 33-29014, 33-
39215, 33-56420 and 33-53303.
ARTHUR ANDERSEN & CO.
Las Vegas, Nevada
April 28, 1994
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
ON SUPPLEMENTAL SCHEDULES
TO CIRCUS CIRCUS ENTERPRISES, INC.:
We have audited in accordance with generally accepted
auditing standards, the consolidated financial statements
included in the Circus Circus Enterprises, Inc. and subsidiaries
January 31, 1994 Annual Report to Shareholders incorporated by
reference in this Form 10-K, and have issued our report thereon
dated February 23, 1994. Our audit was made for the purpose of
forming an opinion on those consolidated statements taken as a
whole. The supplemental financial statement schedules listed on
page 37 are presented for purposes of complying with the
Securities and Exchange Commission's rules and are not part of
the basic consolidated financial statements. These schedules
have been subjected to the auditing procedures applied in the
audit of the basic consolidated financial statements and, in our
opinion, fairly state in all material respects the financial data
required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.
ARTHUR ANDERSEN & CO.
Las Vegas, Nevada
February 23, 1994
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE V - PROPERTY, EQUIPMENT AND LEASEHOLD INTERESTS
(In thousands)
Balance at Other Balance
Beginning Additions Retire- Changes- at End
Description of Period at Cost(*) ments Add (Deduct) of Period
For the Year Ended January 31, 1992
Land and land leases . . . .$ 81,776 $ - $ (70) $ - $ 81,706
Buildings and improvements . 546,493 38,740 (245) - 584,988
Leasehold improvements . . . 2,841 645 (17) - 3,469
Equipment, furniture
and fixtures . . . . . . . 239,869 25,491 (6,672) - 258,688
Leasehold interests. . . . . 6,908 - - - 6,908
877,887 64,876 (7,004) - 935,759
Construction in progress . . 43,488 (38,307) (2) - 5,179
$921,375 $ 26,569 $ (7,006) $ - $940,938
======= ======= ======= ======= =======
For the Year Ended January 31, 1993
Land and land leases . . . .$ 81,706 $ 4,857 $ - $ - $ 86,563
Buildings and improvements . 584,988 4,259 (36) - 589,211
Leasehold improvements . . . 3,469 91 - - 3,560
Equipment, furniture
and fixtures . . . . . . . 258,688 24,801 (11,470) - 272,019
Leasehold interests. . . . . 6,908 - - - 6,908
935,759 34,008 (11,506) - 958,261
Construction in progress . . 5,179 174,578 - - 179,757
$940,938 $208,586 $(11,506) $ - $1,138,018
======= ======= ======= ======= =========
For the Year Ended January 31, 1994
Land and land leases . . . $ 86,563 $ 15,018 $ (42) $ - $ 101,539
Buildings and improvements . 589,211 373,869 (2,081) - 960,999
Leasehold improvements . . . 3,560 - - - 3,560
Equipment, furniture
and fixtures . . . . . . . 272,019 163,003 (8,432) - 426,590
Leasehold interests. . . . . 6,908 - - - 6,908
958,261 551,890 (10,555) - 1,499,596
Construction in progress . . 179,757 (159,902) - - 19,855
$1,138,018 $391,988 $(10,555) $ - $1,519,451
========= ======= ======= ======= =========
(*) Principally refurbishments and additions or expansions of casino
properties including transfers from construction in progress. The
additions to construction in progress are net of transfers out of
construction in progress.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE VI - ACCUMULATED DEPRECIATION AND AMORTIZATION
OF PROPERTY, EQUIPMENT AND LEASEHOLD INTERESTS
(In thousands)
Additions
Balance at Charged to Other Balance at
Beginning Costs and Retire- Changes- End
Description of Period Expenses ments Add(Deduct) of Period
For the Year Ended January 31, 1992
Buildings and improvements.$ 75,947 $15,775 $ (33) $ - $ 91,689
Leasehold improvements. . . 1,274 178 (5) - 1,447
Equipment, furniture
and fixtures. . . . . . . 122,569 32,078 (6,522) - 148,125
Leasehold interests . . . . 4,119 404 - - 4,523
$203,909 $48,435 $(6,560) $ - $245,784
======= ====== ====== ====== =======
For the Year Ended January 31, 1993
Buildings and improvements.$ 91,689 $15,933 $ (31) $ - $107,591
Leasehold improvements. . . 1,447 206 - - 1,653
Equipment, furniture
and fixtures. . . . . . . 148,125 31,287 (7,006) - 172,406
Leasehold interests . . . . 4,523 382 - - 4,905
$245,784 $47,808 $(7,037) $ - $286,555
======= ====== ====== ====== =======
For the Year Ended January 31, 1994
Buildings and improvements.$107,591 $20,864 $ (814) $ - $127,641
Leasehold improvements. . . 1,653 211 - - 1,864
Equipment, furniture
and fixtures. . . . . . . 172,406 37,144 (8,054) - 201,496
Leasehold interests . . . . 4,905 381 - - 5,286
$286,555 $58,600 $(8,868) $ - $336,287
======= ====== ====== ====== =======
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE IX - SHORT-TERM BORROWINGS
(In thousands)
Average Weighted
Weighted Amount Average
Category of Balance Average Maximum Amount Outstanding Interest Rate
Aggregate at End Interest Outstanding During During
Borrowings of Period Rate During Period Period(a) Period(b)
For the Year Ended January 31, 1992
Corporate
Debt Program (c) $137,938 4.9% $291,251 $209,975 6.7%
For the Year Ended January 31, 1993
Corporate
Debt Program (c) $207,896 3.7% $207,918 $176,616 4.3%
For the Year Ended January 31, 1994
Corporate
Debt Program (c) $167,450 3.4% $300,576 $176,616 3.6%
(a) Average amount outstanding during the period is computed by averaging
the average monthly principal balances.
(b) The weighted average interest rate during the period is computed
by dividing the actual interest incurred by the average borrowings
outstanding as calculated in (a).
(c) The corporate debt program is essentially revolving credit and term
loan agreements with banks or commercial paper issued by the Company
and backed by revolving credit and term loan agreements with banks.
See Note 3 of Notes to Consolidated Financial Statements included in
Item 8 of this report for further discussion.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
SCHEDULE X - SUPPLEMENTARY INCOME STATEMENT INFORMATION
(In thousands)
Charged to Costs and Expenses
For the Year Ended January 31,
1992 1993 1994
Engineering, repairs and maintenance $52,743 $55,939 $64,246
====== ====== ======
Gaming taxes and licenses $38,200 $39,827 $43,057
====== ====== ======
Advertising costs $34,005 $35,018 $40,353
====== ====== ======
All other applicable expense categories have been omitted since
individually they represent less than 1% of the total consolidated
revenue.
SELECTED QUARTERLY FINANCIAL INFORMATION (UNAUDITED)
Year Ended January 31, 1994
(In thousands, except per share amounts)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Revenue $209,786 $228,488 $244,547 $272,102 $954,923
Income from operations 51,772 58,287 39,736 51,266 201,061
Income before income tax 49,665 56,610 35,318 41,015 182,608
Net income 32,779 37,363 20,522 25,525 116,189
Earnings per share* $0.37 $0.43 $0.24 $0.30 $1.34
Year Ended January 31, 1993
(In thousands, except per share amounts)
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Total
Revenue $205,914 $222,127 $223,890 $191,094 $843,025
Income from operations 53,446 59,232 59,245 33,559 205,482
Income before income tax
and extraordinary loss 44,668 53,532 54,810 30,303 183,313
Income before extraordinary 29,481 35,332 36,174 19,996 120,983
loss
Net income 25,820 35,332 36,174 19,996 117,322
Earnings per share before
extraordinary loss* $0.35 $0.41 $0.42 $0.23 $1.41
Earnings per share* $0.31 $0.41 $0.42 $0.23 $1.37
* Earnings per share information has been adjusted to reflect a 3-for-2
stock split effective July 1993.
INDEX TO EXHIBITS
FORM 10-K
Fiscal Year Ended
January 31, 1994
Exhibit
Number
3(ii). Restated Bylaws of the Company dated February 24, 1994
10(cc). Agreement of Joint Venture, dated as of March 1, 1994,
by and among Eldorado Limited Liability Company,
Galleon, Inc., and the Company
10(dd). Operating Agreement of American Entertainment, L.L.C.,
dated as of January 14, 1994, by and between Circus
Circus Louisiana, Inc., and American Entertainment
Corporation; Amendment of Operating Agreement, dated as
of February 8, 1994, including the forms of the
Riverboat Casino Management Agreement and the
Consulting Agreement included as exhibits thereto.
13. Portions of the Annual Report to Stockholders for
the Year Ended January 31, 1994 specifically
incorporated by reference as part of this Report.
21. Subsidiaries of the Company.
23. Consent of Arthur Andersen & Co.