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8-K - CURRENT REPORT - TRUMP ENTERTAINMENT RESORTS, INC.trump-8k_053111.htm
Exhibit 99.1
 
TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL INFORMATION
 
On May 24, 2011, Trump Entertainment Resorts, Inc. (the “Company”) and its subsidiary, Trump Marina Associates, LLC, consummated the previously announced sale of the Trump Marina Hotel and Casino (the "Property") pursuant to the Asset Purchase Agreement dated as of February 11, 2011 (the “Asset Purchase Agreement”) with Golden Nugget Atlantic City, LLC (“Golden Nugget AC”) and its affiliate Landry’s Restaurants, Inc. (“Landry’s”).  The cash proceeds of the sale were $37.3 million, after giving effect to certain adjustments as of the closing date as set forth in the Asset Purchase Agreement and before transaction expenses.  The proceeds are subject to certain post–closing adjustments, including adjustments based on working capital balances as of the closing of the sale, as set forth in the Asset Purchase Agreement. 
 
The following historical financial information of the Company has been derived from the historical audited and unaudited consolidated financial statements of the Company included in its Annual Report on Form 10–K for the fiscal year ended December 31, 2010 and its Quarterly Report on Form 10–Q for the quarterly period ended March 31, 2011. The unaudited pro forma condensed consolidated balance sheet was prepared as if the disposition of the Property occurred on March 31, 2011. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2011, the period from July 16, 2010 through December 31, 2010, the period from January 1, 2010 through July 15, 2010 and the fiscal years ended December 31, 2009 and 2008 were prepared as if the disposition of the Property occurred at the beginning of each respective period.  The unaudited pro forma condensed consolidated financial statements are based upon available information and assumptions that the Company believes are reasonable.
 
The unaudited pro forma condensed consolidated financial information presented does not purport to represent what the financial position or results of operations of the Company would have been had the transaction occurred on the dates noted above, or to project the results of operations or financial position of the Company for any future periods.  In the opinion of management, all necessary adjustments to the unaudited pro forma financial information have been made.
 
The unaudited pro forma consolidated financial information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and related notes thereto of the Company included in its Annual Report on Form 10–K for the fiscal year ended December 31, 2010 and its Quarterly Report on Form 10–Q for the quarterly period ended March 31, 2011.
 
 
 
TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED BALANCE SHEET
(dollars in thousands, except share and per share data)
 
   
   
Reorganized Company
 
   
Historical
March 31, 2011
   
Pro Forma
Adjustments
     
Pro Forma
March 31,2011
 
ASSETS
                   
Current assets
                   
Cash and cash equivalents
  $ 57,489     $ 6,594  
(a)
  $ 64,083  
Accounts receivable, net
    21,299               21,299  
Prepaid expenses and other current assets
    21,733               21,733  
Assets held for sale
    39,607       (39,607 )
(b)
     
Total current assets
    140,128       (33,013 )       107,115  
                           
Net property and equipment
    426,148               426,148  
                           
Other assets
                         
Restricted cash
    22,301       28,000  
(c )
    50,301  
Casino Reinvestment Development Authority investments, net
    39,651               39,651  
Other assets, net
    33,453       (1,105 )
(b)
    32,348  
Total other assets
    95,405       26,895         122,300  
Total assets
  $ 661,681     $ (6,118 )     $ 655,563  
                           
LIABILITIES AND STOCKHOLDERS' EQUITY
                         
Current liabilities
                         
Current maturities of long–term debt
  $ 4,157     $       $ 4,157  
Accounts payable
    30,123               30,123  
Accrued payroll and related expenses
    20,585               20,585  
Income taxes payable
    8,348               8,348  
Accrued interest payable
    14,394               14,394  
Self–insurance reserves
    16,305               16,305  
Other current liabilities
    24,057       (487 )
(b)
    23,570  
Liabilities related to assets held for sale
    4,012       (4,012 )
(b)
     
Total current liabilities
    121,981       (4,499 )       117,482  
                           
Long–term debt, net of current maturities
    336,320               336,320  
Other long–term liabilities
    19,713               19,713  
                           
Stockholders' equity
                         
Preferred stock
                   
Common stock
    11               11  
Additional paid–in capital
    225,075               225,075  
Accumulated deficit
    (41,419 )     (1,619 )
(d)
    (43,038 )
Total stockholders' equity
    183,667       (1,619 )       182,048  
Total liabilities and stockholders' equity
  $ 661,681     $ (6,118 )     $ 655,563  
 
 

See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 

TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except share and per share data)
 
   
   
Reorganized Company
 
   
Historical
Three Months
Ended
March 31,2011
   
Pro Forma
Adjustments (a)
   
Pro Forma
Three Months
Ended
March 31,2011
 
Revenues:
                 
Gaming
  $ 116,796     $     $ 116,796  
Rooms
    15,429             15,429  
Food and beverage
    14,439             14,439  
Other
    6,551             6,551  
      153,215             153,215  
Less promotional allowances
    (39,490 )           (39,490 )
Net revenues
    113,725             113,725  
                         
Costs and expenses:
                       
Gaming
    55,736             55,736  
Rooms
    3,577             3,577  
Food and beverage
    7,722             7,722  
General and administrative
    41,842             41,842  
Corporate and other
    2,545             2,545  
Corporate – related party
    98             98  
Depreciation and amortization
    8,239             8,239  
      119,759             119,759  
Loss from operations
    (6,034 )           (6,034 )
                         
Non–operating income (expense):
                       
Interest income
    471             471  
Interest expense
    (11,297 )           (11,297 )
Income related to deed amendment
    5,465             5,465  
      (5,361 )           (5,361 )
                         
Loss before income taxes
    (11,395 )           (11,395 )
Income tax benefit
                 
Loss from continuing operations
  $ (11,395 )   $     $ (11,395 )
                         
                         
Loss per share – basic and diluted:
                       
Loss from continuing operations
  $ (1.06 )   $     $ (1.06 )
                         
                         
Weighted average shares outstanding - basic and diluted:
    10,767,858               10,767,858  


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements



TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share and per share data)
 
   
   
Reorganized Company
 
   
Historical
July 16, 2010
Through
December 31,2010
   
Pro Forma
Adjustments (a)
   
Pro Forma
July 16, 2010
Through
December 31,
2010
 
Revenues:
                 
Gaming
  $ 324,772     $ (66,496 )   $ 258,276  
Rooms
    45,378       (7,527 )     37,851  
Food and beverage
    46,775       (9,294 )     37,481  
Other
    21,401       (4,379 )     17,022  
      438,326       (87,696 )     350,630  
Less promotional allowances
    (118,123 )     23,864       (94,259 )
Net revenues
    320,203       (63,832 )     256,371  
                         
Costs and expenses:
                       
Gaming
    172,758       (38,883 )     133,875  
Rooms
    10,535       (2,012 )     8,523  
Food and beverage
    24,057       (4,874 )     19,183  
General and administrative
    117,955       (26,044 )     91,911  
Corporate and development
    10,888             10,888  
Corporate – related party
    37             37  
Depreciation and amortization
    16,954       (2,287 )     14,667  
      353,184       (74,100 )     279,084  
Loss from operations
    (32,981 )     10,268       (22,713 )
                         
Non–operating income (expense):
                       
Interest income
    791       (74 )     717  
Interest expense
    (21,078 )           (21,078 )
Income related to termination of Original Marina Agreement
    2,020             2,020  
Income related to non–competition agreement
    25,000             25,000  
      6,733       (74 )     6,659  
Loss before income taxes
    (26,248 )     10,194       (16,054 )
Income tax provision
                 
Loss from continuing operations
  $ (26,248 )   $ 10,194     $ (16,054 )
                         
Loss per share – basic and diluted:
                       
Loss from continuing operations
  $ (2.45 )   $ 0.95     $ (1.50 )
                         
Weighted average shares outstanding – basic and diluted:
    10,728,636       10,728,636       10,728,636  
                         


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
 

TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share and per share data)
 
   
   
Predecessor Company
 
   
Historical
January 1, 2010
Through
July 15, 2010
   
Pro Forma
Adjustments (a)
   
Pro Forma
January 1, 2010
Through
July 15, 2010
 
Revenues:
                 
Gaming
  $ 393,206     $ (79,480 )   $ 313,726  
Rooms
    49,382       (8,115 )     41,267  
Food and beverage
    50,583       (9,791 )     40,792  
Other
    20,520       (4,127 )     16,393  
      513,691       (101,513 )     412,178  
Less promotional allowances
    (123,324 )     25,216       (98,108 )
Net revenues
    390,367       (76,297 )     314,070  
                         
Costs and expenses:
                       
Gaming
    203,450       (45,790 )     157,660  
Rooms
    11,243       (2,248 )     8,995  
Food and beverage
    27,117       (5,117 )     22,000  
General and administrative
    142,398       (31,465 )     110,933  
Corporate and development
    8,291             8,291  
Corporate – related party
    1,128             1,128  
Depreciation and amortization
    24,563       (1,449 )     23,114  
      418,190       (86,069 )     332,121  
Loss from operations
    (27,823 )     9,772       (18,051 )
                         
Net gain on reorganization related items and fresh start adjustments
    741,552       (1,411 )     740,141  
                         
Non–operating income (expense):
                       
Interest income
    594       (82 )     512  
Interest expense
    (23,784 )           (23,784 )
      (23,190 )     (82 )     (23,272 )
Income before income taxes
    690,539       8,279       698,818  
Income tax provision
                 
Income from continuing operations
    690,539       8,279       698,818  
Less: Loss from continuing operations attributable to the noncontrolling interest
    (23,489 )     332       (23,157 )
Income from continuing operations attributable to Trump Entertainment Resorts, Inc.
  $ 714,028     $ 7,947     $ 721,975  
    common shareholders                        
                         
Earnings per share:
                       
Income from continuing operations – basic
  $ 22.83     $ 0.25     $ 23.09  
Income from continuing operations – diluted
  $ 16.99     $ 0.20     $ 17.19  
                         
Weighted average shares outstanding – basic:
    31,270,345       31,270,345       31,270,345  
Weighted average shares outstanding – diluted:
    40,647,829       40,647,829       40,647,829  


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
 

TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share and per share data)
 
   
   
Predecessor Company
 
   
Historical
Year
Ended
December 31,
2009
   
Pro Forma
Adjustments (a)
   
Pro Forma
Year
Ended
December 31,
2009
 
Revenues:
                 
Gaming
  $ 801,397     $ (160,535 )   $ 640,862  
Rooms
    93,299       (16,699 )     76,600  
Food and beverage
    99,364       (19,336 )     80,028  
Other
    42,893       (8,786 )     34,107  
      1,036,953       (205,356 )     831,597  
Less promotional allowances
    (244,804 )     49,569       (195,235 )
Net revenues
    792,149       (155,787 )     636,362  
                         
Costs and expenses:
                       
Gaming
    406,179       (87,579 )     318,600  
Rooms
    20,287       (4,090 )     16,197  
Food and beverage
    51,650       (10,755 )     40,895  
General and administrative
    241,957       (54,641 )     187,316  
Corporate and development
    16,488             16,488  
Corporate – related party
    2,206             2,206  
Depreciation and amortization
    52,137       (1,674 )     50,463  
Intangible and other asset impairment charges
    556,733       (205,174 )     351,559  
      1,347,637       (363,913 )     983,724  
Loss from operations
    (555,488 )     208,126       (347,362 )
                         
Net loss on reorganization related items
    (37,518 )           (37,518 )
                         
Non–operating income (expense):
                       
Interest income
    1,558       (232 )     1,326  
Interest expense
    (131,900 )           (131,900 )
Income related to termination of Original Marina Agreement
    15,196       (15,196 )      
      (115,146 )     (15,428 )     (130,574 )
Loss before income taxes
    (708,152 )     192,698       (515,454 )
Income tax provision
    8,324             8,324  
Loss from continuing operations
    (699,828 )     192,698       (507,130 )
Less: Loss from continuing operations attributable to the noncontrolling interest
    (165,890 )     45,284       (120,606 )
Loss from continuing operations attributable to Trump Entertainment Resorts, Inc. common shareholders
  $ (533,938 )   $ 147,414     $ (386,524 )
                         
Loss per share – basic and diluted:
                       
Loss from continuing operations
  $ (16.85 )   $ 4.65     $ (12.20 )
                         
Weighted average shares outstanding – basic and diluted:
    31,691,463       31,691,463       31,691,463  


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
 
 

TRUMP ENTERTAINMENT RESORTS, INC.
UNAUDITED PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(dollars in thousands, except share and per share data)
 
   
   
Predecessor Company
 
   
Historical
Year
Ended
December 31,
2008
   
Pro Forma
Adjustments (a)
   
Pro Forma
Year
Ended
December 31,
2008
 
Revenues:
                 
Gaming
  $ 936,761     $ (201,292 )   $ 735,469  
Rooms
    87,336       (19,203 )     68,133  
Food and beverage
    111,857       (24,643 )     87,214  
Other
    44,251       (12,292 )     31,959  
      1,180,205       (257,430 )     922,775  
Less promotional allowances
    (272,197 )     62,875       (209,322 )
Net revenues
    908,008       (194,555 )     713,453  
                         
Costs and expenses:
                       
Gaming
    454,027       (107,428 )     346,599  
Rooms
    18,789       (4,253 )     14,536  
Food and beverage
    53,851       (12,269 )     41,582  
General and administrative
    260,021       (62,231 )     197,790  
Corporate and development
    24,358       (5,276 )     19,082  
Corporate – related party
    2,618             2,618  
Depreciation and amortization
    63,024       (6,734 )     56,290  
Intangible and other asset impairment charges
    207,687       (65,943 )     141,744  
      1,084,375       (264,134 )     820,241  
Loss from operations
    (176,367 )     69,579       (106,788 )
                         
Net loss on reorganization related items
    (1,443 )           (1,443 )
                         
Non–operating income (expense):
                       
Interest income
    4,565       (543 )     4,022  
Interest expense
    (132,516 )           (132,516 )
      (127,951 )     (543 )     (128,494 )
Loss before income taxes
    (305,761 )     69,036       (236,725 )
Income tax provision
    12,510       (6,221 )     6,289  
Loss from continuing operations
    (293,251 )     62,815       (230,436 )
Less: Loss from continuing operations attributable to the noncontrolling interest
    (59,732 )     15,290       (44,442 )
Loss from continuing operations attributable to Trump Entertainment Resorts, Inc. common shareholders
  $ (233,519 )   $ 47,525     $ (185,994 )
                         
Loss per share – basic and diluted:
  $ (7.37 )   $ 1.50     $ (5.87 )
Loss from continuing operations
                       
                         
Weighted average shares outstanding – basic and diluted:
    31,674,980       31,674,980       31,674,980  


See accompanying Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements
 
 
 
TRUMP ENTERTAINMENT RESORTS, INC.
NOTES TO UNAUDITED PRO FORMA CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(dollars in thousands)


1.
Basis of Presentation
 
The unaudited pro forma condensed consolidated financial statements of the Company include adjustments to the Company’s historical financial statements to reflect the consummation of the previously announced sale of the Trump Marina Hotel and Casino (the "Property") pursuant to the Asset Purchase Agreement dated as of February 11, 2011 (the “Asset Purchase Agreement”) with Golden Nugget Atlantic City, LLC (“Golden Nugget AC”) and its affiliate Landry’s Restaurants, Inc. (“Landry’s”).
 
The historical financial information of the Company has been derived from the historical audited and unaudited consolidated financial statements of the Company included in its Annual Report on Form10–K for the fiscal year ended December 31, 2010 and its Quarterly Report on Form10–Q for the quarterly period ended March 31, 2011. The unaudited pro forma condensed consolidated balance sheet was prepared as if the disposition of the Property occurred on March 31, 2011. The unaudited pro forma condensed consolidated statements of operations for the three months ended March 31, 2011, the period from July 16, 2010 through December 31, 2010, the period from January 1, 2010 through July 15, 2010 and the fiscal years ended December 31, 2009 and 2008 were prepared as if the disposition of the Property occurred at the beginning of each respective period.  The unaudited pro forma condensed consolidated financial statements are based upon available information and assumptions that the Company believes are reasonable.
 
The unaudited pro forma condensed consolidated financial information presented does not purport to represent what the financial position or results of operations of the Company would have been had the transaction occurred on the dates noted above, or to project the results of operations or financial position of the Company for any future periods.  In the opinion of management, all necessary adjustments to the unaudited pro forma financial information have been made.
 
The unaudited pro forma consolidated financial information should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the historical financial statements and related notes thereto of the Company included in its Annual Report on Form10–K for the fiscal year ended December 31, 2010 and its Quarterly Report on Form10–Q for the quarterly period ended March 31, 2011.
 
2.
Adjustments to Unaudited Pro Forma Condensed Consolidated Balance Sheet
 
(a)
Represents the estimated cash proceeds from the transaction less amounts required to be used to repay indebtedness under the Company’s Amended and Restated Credit Agreement, as if the transaction had occurred on March 31, 2011.
 
(b)
Represents the assets acquired and liabilities assumed under the terms of the Asset Purchase Agreement, as if the transaction had occurred on March 31, 2011.
 
(c)
The addition to restricted cash represents the portion of the estimated cash proceeds required to be used to pay down indebtedness under the Amended and Restated Credit Agreement, as if the transaction had occurred on March 31, 2011.
 
(d)
This amount represents the estimated loss on the sale of the Property under the Asset Purchase Agreement had the transaction occurred on March 31, 2011.
 
3.
Adjustments to Unaudited Pro Forma Condensed Consolidated Statements of Operations
 
(a)
As a result of the execution of the Asset Purchase Agreement on February 11, 2011, the operations of Trump Marina were presented as a discontinued operation in the Company’s historical statement of operations for the three months ended March 31, 2011.  Therefore, no pro forma adjustments for that period have been presented.  Pro forma adjustments to the condensed consolidated statements of operations for the period from July 16, 2010 through December 31, 2010, the period from January 1, 2010 through July 15, 2010 and the years ended December 31, 2009 and 2008 represent the results of operations of Trump Marina for the periods presented.