-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, ZQM/MeQn55x+G2wU2j5ygCL3BiE61kY4bE/AHQrXbBLGq/5xQtxql9d8RuneLjPR NPfv3sfWTBohGOGmVdpEZg== 0000016095-94-000023.txt : 19941213 0000016095-94-000023.hdr.sgml : 19941213 ACCESSION NUMBER: 0000016095-94-000023 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19941031 FILED AS OF DATE: 19941212 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAESARS WORLD INC CENTRAL INDEX KEY: 0000016095 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 590773674 STATE OF INCORPORATION: FL FISCAL YEAR END: 0731 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-05976 FILM NUMBER: 94564341 BUSINESS ADDRESS: STREET 1: 1801 CENTURY PARK E STE 2600 CITY: LOS ANGELES STATE: CA ZIP: 90067 BUSINESS PHONE: 3105522711 MAIL ADDRESS: STREET 1: 1801 CENTURY PARK EAST STREET 2: SUITE 2600 CITY: LOS ANGELES STATE: CA ZIP: 90067 FORMER COMPANY: FORMER CONFORMED NAME: LUMS INC DATE OF NAME CHANGE: 19720123 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended October 31, 1994 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission file number 1-5976 CAESARS WORLD, INC. (Exact name of registrant as specified in its charter) Florida 59-0773674 (State or other jurisdiction of (I.R.S. incorporation or organization) Employer Identification No.) 1801 Century Park East, Suite 2600 Los Angeles, California 90067 (Address of principal executive offices) (Zip Code) (310) 552-2711 (Registrant's telephone number, including area code) Not applicable (Former name, former address and former fiscal year, if changed since last report.) 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 __ APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS: Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13, or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes __ No __ APPLICABLE ONLY TO CORPORATE ISSUERS: At December 8, 1994, registrant had outstanding 25,120,463 shares of its $.10 par value common stock. CAESARS WORLD, INC. AND SUBSIDIARIES October 31, 1994 INDEX Page No. Part I. Financial Information Item 1. Financial Statements: Condensed Consolidated Balance Sheets - October 31, 1994 (Unaudited) and July 31, 1994 3 Consolidated Statement of Shareholders' Equity (Unaudited) - Three months ended October 31, 1994 4 Consolidated Statements of Income (Unaudited) - Three months ended October 31, 1994 and 1993 5 Condensed Consolidated Statements of Cash Flows (Unaudited) - Three months ended October 31, 1994 and 1993 6 Notes to Condensed Consolidated Financial Statements (Unaudited) 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 9 Part II. Other Information Item 1. Legal Proceedings 13 Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 14 PART I. Financial Information Item 1. Financial Statements CAESARS WORLD, INC. AND SUBSIDIARIES Condensed Consolidated Balance Sheets (In thousands)
October 31, July 31, Assets 1994 1994 (Unaudited) (a) Current assets Cash and cash equivalent investments $155,932 $143,499 Receivables, net 69,537 71,341 Deferred income taxes 37,120 37,120 Inventories, prepaid expenses and other 28,359 24,881 Total current assets 290,948 276,841 Property and equipment, net 622,711 626,740 Excess cost of investments over net assets 52,609 52,671 acquired, net Other assets 56,932 61,769 $1,023,200 $1,018,021 Liabilities and Shareholders' Equity Current liabilities Current maturities of long-term debt $ 27,778 $ 27,778 Accounts payable and accrued expenses 113,307 132,337 Income taxes 32,572 19,186 Total current liabilities 173,657 179,301 Long-term debt, net of current maturities 198,667 212,556 Other liabilities, including deferred income taxes of $19,158 and $20,015 68,962 69,297 Shareholders' equity Common stock 2,645 2,620 Additional paid-in capital 138,165 128,028 Common stock in treasury (33,182) (32,695) Deferred compensation (26,664) (18,852) Retained earnings 500,950 477,766 Total shareholders' equity 581,914 556,867 $1,023,200 $1,018,021
(a) The balance sheet at July 31, 1994 has been condensed from the audited balance sheet at that date. See notes to condensed consolidated financial statements. CAESARS WORLD, INC. AND SUBSIDIARIES Consolidated Statement of Shareholders' Equity - (Unaudited) Three months Ended October 31, 1994 (In thousands, except shares outstanding)
Common Stock Additional Common Shares Paid-in Stock in Deferred Retained Outstanding Amount Capital Treasury Compensation Earnings Total Balance July 31, 1994 24,872,862 $2,620 $128,028 $(32,695) $(18,852) $477,766 $556,867 Stock options exercised 28,288 3 417 - - - 420 Amortization of deferred compensation, termination of restricted stock grants and other, net (9,754) - - (487) 1,930 - 1,443 Issuance of restricted stock grants 226,017 22 9,720 - (9,742) - - Net income - - - - - 23,184 23,184 Balance October 31, 1994 25,117,413 $2,645 $138,165 $(33,182) $(26,664) $500,950 $581,914
See notes to condensed consolidated financial statements. CAESARS WORLD, INC. AND SUBSIDIARIES Consolidated Statements of Income - (Unaudited) (In thousands, except net income per share)
Three Months Ended October 31, 1994 1993 Revenue Casino $192,329 $208,660 Rooms 18,508 19,934 Food and beverage 21,008 22,313 Earnings of unconsolidated affiliate 1,479 - Other income 19,187 18,176 252,511 269,083 Costs and expenses Casino 109,797 105,175 Rooms 4,706 5,938 Food and beverage 15,541 16,461 Other operating expenses 11,130 11,043 Selling, general and administrative 50,596 47,876 Depreciation and amortization 14,031 13,752 Provision for doubtful accounts 5,851 18,236 211,652 218,481 Operating income 40,859 50,602 Interest and dividend income 1,396 928 Interest expense, net (4,861) (5,110) Income before income taxes 37,394 46,420 Income taxes 14,210 18,572 Net income $23,184 $27,848 Net income per share $ .94 $ 1.14 Average number of common and common equivalent shares outstanding 24,609 24,513
See notes to condensed consolidated financial statements. CAESARS WORLD, INC. AND SUBSIDIARIES Condensed Consolidated Statements of Cash Flows - (Unaudited) (In thousands)
Three Months Ended October 31, 1994 1993 Cash flows from (used for) operating activities: Net income $23,184 $27,848 Non-cash charges to income, net 15,689 15,250 Changes in assets and liabilities due to operating activities: Accounts payable and accrued expenses (18,520) (1,288) Income taxes payable 13,386 18,840 Other assets and liabilities, net 4,018 (6,222) Net cash provided from operating activities 37,757 54,428 Cash flows used for investing activities: Purchases of property and equipment (9,892) (16,190) Other investing activities, net (978) (1,035) Net cash used for investing activities (10,870) (17,225) Cash flows from (used for) financing activities: Reductions in debt and obligations under capital leases (14,388) (15,752) Other (67) 300 Net cash used for financing activities (14,455) (15,452) Net increase in cash and cash equivalent investments 12,432 21,751 Cash and cash equivalent investments at the beginning of the period 143,499 108,616 Cash and cash equivalent investments at the end of the period $155,931 $130,367 Supplemental cash flow information Cash used for: Payment of interest $ 8,223 $ 7,955 Payment of Federal and state income taxes, net $ 157 $ 58
See notes to condensed consolidated financial statements. Note 1. Condensed Consolidated Financial Statements -- The Condensed Consolidated Balance Sheet as of October 31, 1994, the Consolidated Statement of Shareholders' Equity for the three months ended October 31, 1994, the Consolidated Statements of Income for the three months ended October 31, 1994 and 1993, and the Condensed Consolidated Statements of Cash Flows for the three months ended October 31, 1994 and 1993, have been prepared by the Company and have not been audited. In the opinion of management, all material adjustments (which include only normal recurring adjustments) necessary to present fairly the financial position, results of operations and cash flows for all periods presented have been made. All significant intercompany balances and transactions have been eliminated. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These condensed consolidated financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's July 31, 1994 Annual Report to Shareholders. The results of operations for the three month period ended October 31, 1994 are not necessarily indicative of the operating results for the full year. The Company's independent public accountants have made an unaudited interim review of the condensed consolidated financial statements for the three months ended October 31, 1994 and 1993, in accordance with professional standards and procedures established by the American Institute of Certified Public Accountants. A report from the independent public accountants regarding the unaudited review of the interim financial statements is included herein in Part II, Item 6 (a), Exhibit 15. Note 2. Net Income Per Share -- Net income per share is based upon the weighted average number of common and common equivalent shares outstanding for each period presented. Note 3. Regulatory Environment -- The gaming industry in which the Company operates is subject to extensive regulatory supervision and, accordingly, operating results could be affected by legislative and regulatory changes or changes in the policies of, or application of the laws by governmental entities. See also the discussion under the caption "Regulatory and Tax Environment" set forth on page 25 of the Form 10-K of the Company for the fiscal year ended July 31, 1994. Note 4. Contingent Receivable -- In 1993, the Company announced it had entered into a management operating agreement with one of the bidders for a casino development in New Orleans. In August 1993, the bid was awarded to another operator and the initial bidder's participation in the project ended. Subsequently, the Company's former principal joined with others and they were awarded the contract to operate the New Orleans casino development project. Pursuant to settlement of a dispute arising with the initial bidder, the Company is to receive $5,000,000 for expenses and pre-development services from the initial bidder. Previously, this receivable, in part, had been contingent (at least as to timing) on the operator completing its financing. The financing was completed in November 1994 and the receivable is due at the end of December 1994. While the Company has received an acknowledgement from a representative of the obligors that these amounts are due and the obligor is seeking financing, in view of unavailability of enough information at this time for the Company to fully evaluate this item and the uncertainity as to when collection will occur, the Company is currently planning to record realization only upon collection of this receivable. The Company will reflect collections of this item as a reduction of expenses. Note 5. Labor Contracts -- In November 1994, the Company agreed to a new three year contract with the Culinary Workers Union and Bartenders Union covering approximately 2,500 employees in Las Vegas. Another contract covering approximately 20 theatrical stage employees has expired at Caesars Palace in Las Vegas and a tentative agreement has been reached but not yet been ratified by these employees. A work slow-down or stoppage is not expected in the Las Vegas showroom as a result of this expired contract. Note 6. Exercise of Lease Purchase Option -- Two of the Company's resorts in the Pocono mountains of Pennsylvania are operated under leases the initial 20-year-lease terms of which expire on January 31, 1995. The leases include purchase options at the fair market value of the lease properties excluding personal property, goodwill, certain structures and other intangibles. In November 1994, the Company gave notice to the landlord that the Company will exercise its purchase options to acquire the two resort properties in fiscal 1995. The fair market value purchase price will be determined by independent appraisals. The Company has engaged an independent appraiser and the lessor has notified the Company it has engaged a separate independent appraiser. The Company is uncertain as to the amount or when the purchase option payments will be made. Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Cash flow from operations together with available debt capacity are the primary components providing the Company financial flexibility to explore expansion opportunities and provide adequate liquidity. Net cash provided from operating activities was $37.8 million in the first three months of fiscal 1995, compared with $54.4 million in the same period of fiscal 1994. The decrease in fiscal 1995 is primarily attributable to lower net income and a decrease in accounts payable and accrued expenses which reduced the cash generated by operating activities. At October 31, 1994, the Company's cash and cash equivalent investments were $155.9 million compared with $143.5 million at July 31, 1994. Cash used for investing activities in the three months ended October 31, 1994 was primarily for capital expenditure projects at Caesars Palace in Las Vegas, Caesars Atlantic City and the Caesars Pocono Resorts in Pennsylvania. Room and suite remodeling as well as ongoing construction of the Magical Empire were the major capital expenditures in Las Vegas. The Magical Empire is expected to combine dining and intimate magical experiences in a new structure adjacent to the casino and is scheduled to open in calendar 1995. At Caesars Atlantic City building modifications are under construction to lease approximately 22,500 square feet to "Planet Hollywood" for a restaurant and entertainment facility scheduled to be opened in the spring of 1995. Twenty new Roman Tower Suites are nearly completed at Caesars Pocono Palace in Pennsylvania and are expected to be opened in stages by January 1, 1995. See Note 6 to Condensed Consolidated Financial Statements for a discussion of the payment to be made for the exercise of the lease purchase option for two of the Pocono resorts. The Company expects to be able to meet its future debt obligations, finance operations and capital expenditures, as well as provide for a substantial expansion of operations through internally generated cash flow, liquidation of cash equivalent investments, future borrowings (including amounts available under the bank credit facilities), capital lease transactions and/or sales of equity and debt securities. RESULTS OF OPERATIONS Comparison of net income for the three month periods ended October 31, 1994 and October 31, 1993 Contribution to revenue and operating income by location, interest and income taxes for the periods, were as follows (in thousands):
Three Months Ended October 31, 1994 1993 Revenue Nevada $125,614 $155,224 New Jersey 103,776 94,036 Earnings of unconsolidated affiliate 1,479 - Casino/hotel operations 230,869 249,260 Pocono Resorts 14,597 14,492 Other (A) 7,045 5,331 Total revenue $252,511 $269,083 Contributions to operating income Nevada $ 13,376 $ 27,484 New Jersey 24,757 22,642 Earnings of unconsolidated affiliate 1,479 - Casino/hotel operations 39,612 50,126 Pocono Resorts 4,760 5,077 Other expenses (B) (3,513) (4,601) Operating income 40,859 50,602 Interest income 1,396 928 Interest expense, net (4,861) (5,110) Income before income taxes 37,394 46,420 Income taxes 14,210 18,572 Net income $ 23,184 $ 27,848
(A) Other revenue is primarily from merchandising operations. (B) Other expenses include the contribution from merchandising operations and corporate expenses. Intercompany transactions have been eliminated. Nevada Operations Revenue decreased 19 percent and contribution to operating income decreased 51 percent at the Nevada properties in the three months ended October 31, 1994 compared with the same prior year period. The lower casino revenue and operating income during the quarter resulted from a significantly lower table game win percentage compared with the year- earlier quarter. Casino losses to a small number of high- wagering table game customers in Las Vegas resulted in a table game win percentage that was 7.9 percentage points lower than last year's first-quarter table game win percentage. This lower win percentage combined with reduced table game activity more than offset the record quarterly slot results. The Nevada operations realized all-time quarterly slot machine records in both volume and win in the quarter ended October 31, 1994, primarily attributable to enhanced marketing programs. The provision for doubtful accounts at the Nevada operations decreased by $12.2 million due to a 13 percent reduction in credit issued and lower use of the provision as a marketing tool to high-wagering customers. There was also a reduction in operating expenses resulting from the decline in table game win and activity when comparing the respective fiscal quarters. Caesars New Jersey Revenue from Caesars Atlantic City for the first quarter ended October 31, 1994 increased 10 percent and contribution to operating income increased 9 percent from the same prior year quarter. Record results for any previous quarter in both casino activity and win were realized at Caesars Atlantic City with record results from slot machines being the primary contributor to the first quarter improvement. Another positive impact on the quarterly comparisons came from Caesars Atlantic City's Simulcast Casino which opened with horse race betting and poker in October 1993 and subsequently the introduction of other games. Increased casino costs and higher marketing expenses, primarily related to more extensive casino busing programs, partially offset the casino revenue increase in New Jersey. Unconsolidated Affiliate During the fiscal 1995 first quarter, the Company had a positive contribution to revenue and operating income from an unconsolidated affiliate in Windsor, Ontario, Canada. Caesars World has a one-third ownership of the company operating the casino on behalf of the Ontario government. The casino in Windsor opened in May 1994. Other Expenses The reduction in other expenses of $1.1 million in the first quarter of fiscal 1995 compared with the year earlier quarter was primarily attributable to reimbursement of pre- opening expenses incurred in prior periods for the operation in Windsor, Canada and improved contribution from the Company's merchandising operations. Income Taxes The higher income tax rate in the first fiscal quarter of last year was primarily due to the adoption of FASB 109 and a retroactive tax rate adjustment during the first quarter of fiscal 1994. PART II. Other Information Item 1. Legal Proceedings See Item 3 of the Form 10-K of the Company for the fiscal year ended July 31, 1994 which is hereby incorporated herein. Item 2. Changes in Securities On December 8, 1994, the Board of Directors of the Company approved an amendment (the "Amendment") to the Rights Agreement, dated as of January 10, 1989, between the Company and Morgan Shareholder Services Trust Company (the "Rights Agreement"), which affects the Rights previously issued to shareholders of the Company pursuant to the Rights Agreement. The amendment requires the Board of Directors to determine whether it is in the best interests of the Company to decide that a person or entity which would otherwise meet the criteria of an "Unqualified Gaming Person" (as defined in the Rights Agreement) should be so deemed by the Board. No other provisions of the Rights Agreement were affected. Item 5. Other Information With reference to the Company's 25 percent participation in the limited partnership selected as the preferred bidder to negotiate a lease to operate a gaming facility in downtown St. Louis, Missouri, a referendum was approved by the voters in November 1994 to allow slot machines and other games of chance. Negotiations are currently in process with respect to this lease opportunity, however, the ultimate composition and size of the project is now under discussion and the outcome of these negotiations and the obtaining of the ultimate approvals are uncertain. See the "Expansion and Growth Opportunities" section of Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations in the Form 10-K for the fiscal year ended July 31, 1994 for a further discussion of this and other expansion activities. Item 6. Exhibits and Reports on Form 8-K (a)Exhibits filed herewith (the * denotes documents included in this filing): *10(a)Amendment No. 1 dated December 9, 1994 to Rights Agreement dated January 10, 1989 between Caesars World, Inc. and First Chicago Trust Company of New York. *10(b)First Amendment dated August 1, 1992 to Empliyment Agreement of Henry Gluck dated August 1, 1991. *10(c)First Amendment dated August 1, 1992 to Employment Agreement of J. Terrence Lanni dated August 1, 1991. *10(d)Second Amendment dated October 4, 1994 to Employment Agreement of Henry Gluck dated August 1, 1991. *10(e)Second Amendment dated October 4, 1994 to Employment Agreement of J. Terrence Lanni dated August 1, 1991. *15 Review Report of Independent Public Accountants *27 Financial Data Schedule (b) During the quarter ended October 31, 1994 a Form 8-K dated August 25, 1994 was filed and included the Company's press release of the same date announcing the earnings for the fiscal year ended July 31, 1994. SIGNATURES Pursuant to the requirements 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. CAESARS WORLD, INC. (Registrant) Principal Financial Officer: Date: December 12, 1994 /s/ Roger Lee Roger Lee Senior Vice President- Finance and Administration Principal Accounting Officer: Date: December 12, 1994 /s/ Bruce C. Hinckley Bruce C. Hinckley Vice President and Corporate Controller EX-10.A 2 AMENDMENT NO. 1 TO RIGHTS AGREEMENT AMENDMENT NO. 1, dated as of December 9, 1994, to the Rights Agreement dated as of January 10, 1989 (the "Rights Agreement"), between Caesars World, Inc., a Florida corporation (the "Company"), and Morgan Shareholder Services Trust Company, a New York corporation, as Rights Agent. WHEREAS, First Chicago Trust Company of New York, a New York corporation, is the successor corporation to Morgan Shareholder Services Trust Company and is now the Rights Agent under the above-described Rights Agreement (the "Rights Agent"); WHEREAS, the Company and the Rights Agent entered into the Rights Agreement specifying the terms of the Rights (as defined therein); WHEREAS, the Company and the Rights Agent desire to amend the Rights Agreement in accordance with Section 26 of the Rights Agreement; NOW, THEREFORE, in consideration of the premises and mutual agreements set forth in the Rights Agreement and this Amendment, the parties hereby agree as follows: 1. Section 11(a)(ii)(C) of the Rights Agreement is amended in its entirety, as follows: "(C) any Person, alone or together with its Affiliates and Associates, shall, at any time after the date of this Agreement and at a time when the Company or a Subsidiary of the Company holds one or more licenses from the Nevada Gaming Commission, becomes the Beneficial Owner of (i) 10% or more of the shares of Common Stock then outstanding without being found suitable by the Nevada Gaming Commission and without being found qualified by the New Jersey Casino Control Commission or (ii) 10% or more of the shares of Common Stock then outstanding (or such higher percentage as the Nevada Gaming Commission shall have previously determined that such Person may beneficially own without such beneficial ownership constituting, or being presumed to constitute, control of the Company), unless such Person has received prior approval to acquire control of the Company by final order of the Commission, and, in the case of both clauses (i) and (ii), the Board of Directors has determined (with the concurrence of a majority of the members of the Board who are not employees of the Company), after reasonable inquiry and investigation, including consultation with such persons as such directors shall deem appropriate, that such Beneficial Ownership is not in the best interests of the Company (any such Person referred to in clauses (i) or (ii) and with respect to which the determination of the Board of Directors specified in this paragraph (C) has been rendered, an "Unqualified Gaming Person")." 2. The foregoing amendment shall be effective as of the date hereof and, except as set forth herein, the Rights Agreement shall remain in full force and effect and shall be otherwise unaffected hereby. 3. This Amendment may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute on and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed and their respective corporate seals to be hereunto affixed, all as of the day and year first above written. CAESARS WORLD, INC. (SEAL) By: /s/Philip L. Ball Name: Philip L. Ball Title: Senior Vice President FIRST CHICAGO TRUST COMPANY OF NEW YORK, as Rights Agent (SEAL) By: /s/Ralph Persico Name: Ralph Persico Title: Customer Service Officer EX-10.B 3 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT OF HENRY GLUCK DATED AUGUST 1, 1991 This Agreement, made as of this 1st day of August, 1992 by and between Caesars World, inc. (the "Company"), a Florida corporation and Henry Gluck (the "Employee"). FACT RECITAL The Audit and Compensation Committee of the Company has approved a modification with respect to the salary in the Employment Agreement between Employee and the Company dated August 1, 1991 (the "Employment Agreement") and Employee is willing to agree to such amendments. AGREEMENT NOW THEREFORE, the Company and Employee agree that the Employment Agreement is hereby amended as follows: 1. Paragraph 6.a. (i) is amended by adding the following at the end thereof: "As of August 1, 1992, the annual rate of Employee's salary shall be $848,000." 2. Paragraph 6.a. (ii) is amended by changing the wording in the first line thereof "...beginning August 1, 1992...." to "...beginning August 1, 1993...." 3. Except as modified above, the Employment Agreement shall remain in full force and effect. IN WITNESS WHEREOF, this Agreement has been executed as of August 1, 1992. CAESARS WORLD, INC. By: /s/Roger Lee EMPLOYEE /s/ Henry Gluck HENRY GLUCK 10 (b) EX-10.C 4 FIRST AMENDMENT TO EMPLOYMENT AGREEMENT OF J. TERRENCE LANNI DATED AUGUST 1, 1991 This Agreement, made as of this 1st day of August, 1992 by and between Caesars World, inc. (the "Company"), a Florida corporation and J. Terrence Lanni (the "Employee"). FACT RECITAL The Audit and Compensation Committee of the Company has approved a modification with respect to the salary in the Employment Agreement between Employee and the Company dated August 1, 1991 (the "Employment Agreement") and Employee is willing to agree to such amendments. AGREEMENT NOW THEREFORE, the Company and Employee agree that the Employment Agreement is hereby amended as follows: 1. Paragraph 6.a. (i) is amended by adding the following at the end thereof: "As of August 1, 1992, the annual rate of Employee's salary shall be $636,000." 2. Paragraph 6.a. (ii) is amended by changing the wording in the first line thereof "...beginning August 1, 1992...." to "...beginning August 1, 1993...." 3. Except as modified above, the Employment Agreement shall remain in full force and effect. IN WITNESS WHEREOF, this Agreement has been executed as of August 1, 1992. CAESARS WORLD, INC. By: /s/Roger Lee EMPLOYEE /s/ J. Terrence Lanni J. TERRENCE LANNI 10 (c) EX-10.D 5 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment is made as of this 4th day of October, 1994, to the Employment Agreement by and between Caesars World, Inc. (the "Company") and Henry Gluck (the "Employee"), made as of August 1, 1991 (the "Agreement"). The Employee and the Company hereby agree that, effective August 1, 1997, Paragraph 6.b. of the Agreement shall be deleted in its entirety. With respect to the Company's fiscal years beginning on or after August 1, 1997, references in other provisions of the Agreement to "Incentive Compensation" or "amounts payable pursuant to Paragraph 6.b." for a given fiscal year (or variants of such references) shall be deemed to refer to the annual incentive compensation (if any) which may become payable or have been paid to the Employee pursuant to the Company's Senior Corporate Officers Combined Incentive Plan (or any successor or substitute plan thereto) for such fiscal year and discretionary bonuses (if any) which are payable or have been paid for such fiscal year. Notwithstanding the foregoing, if Proposal 3 in the Company's proxy statement for the December 8, 1994 meeting is approved by the shareholders, the immediately preceding paragraph of this Second Amendment shall not become effective, however, whether or not Proposal 3 is so approved, Paragraph 6.b.(vii) of the Agreement shall be deleted in its entirety, effective as of the date of this Second Amendment. IN WITNESS WHEREOF, this Second Amendment the Agreement has been executed at Los Angeles, California. EMPLOYEE CAESARS WORLD, INC. /s/Henry Gluck By /s/Philip L. Ball Henry Gluck Title Senior Vice President EX-10.E 6 SECOND AMENDMENT TO EMPLOYMENT AGREEMENT This Amendment is made as of this 4th day of October, 1994, to the Employment Agreement by and between Caesars World, Inc. (the "Company") and J. Terrence Lanni (the "Employee"), made as of August 1, 1991 (the "Agreement"). The Employee and the Company hereby agree that, effective August 1, 1995, Paragraph 6.b. of the Agreement shall be deleted in its entirety. With respect to the Company's fiscal years beginning on or after August 1, 1995, references in other provisions of the Agreement to "Incentive Compensation" or "amounts payable pursuant to Paragraph 6.b." for a given fiscal year (or variants of such references) shall be deemed to refer to the annual incentive compensation (if any) which may become payable or have been paid to the Employee pursuant to the Company's Senior Corporate Officers Combined Incentive Plan (or any successor or substitute plan thereto) for such fiscal year and discretionary bonuses (if any) which are payable or have been paid for such fiscal year. Notwithstanding the foregoing, if Proposal 3 in the Company's proxy statement for the December 8, 1994 meeting is approved by the shareholders, the immediately preceding paragraph of this Second Amendment shall not become effective, however, whether or not Proposal 3 is so approved, Paragraph 6.b.(vii) of the Agreement shall be deleted in its entirety, effective as of the date of this Second Amendment. IN WITNESS WHEREOF, this Second Amendment to the Agreement has been executed at Los Angeles, California. EMPLOYEE CAESARS WORLD, INC. /s/J. Terrence Lanni By /s/Philip L. Ball J. Terrence Lanni Title Senior Vice President EX-15 7 REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS To the Shareholders and Directors of Caesars World, Inc.: We have reviewed the accompanying condensed consolidated balance sheet of Caesars World, Inc. (a Florida corporation) and subsidiaries as of October 31, 1994, and the related consolidated statements of income for the three-month periods ended October 31, 1994 and 1993, the consolidated statement of shareholders' equity for the three-month period ended October 31, 1994, and the condensed consolidated statements of cash flows for the three- month periods ended October 31, 1994 and 1993. These financial statements are the responsibility of the Company's management. We conducted our review in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical review procedures to financial data and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements referred to above for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the consolidated balance sheet of Caesars World, Inc. and subsidiaries as of July 31, 1994 (not presented herein), and, in our report dated August 23, 1994, we expressed an unqualified opinion on that statement. In our opinion, the information set forth in the accompanying condensed consolidated balance sheet as of July 31, 1994, is fairly stated in all material respects, in relation to the consolidated balance sheet from which it has been derived. ARTHUR ANDERSEN LLP Los Angeles, California December 5, 1994 EXHIBIT 15 EX-27 8
5 1000 QTR-1 JUL-31-1995 OCT-31-1994 43647 112285 107546 38009 12893 290948 1058340 435629 1023200 173657 208085 2645 0 0 579269 1023200 28049 252511 18060 130044 11130 5851 4861 37394 14210 23184 0 0 0 23184 .94 .94
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