SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15 (d)
of the Securities Exchange Act of 1934
for the year ended December 31, 2001
TRUMP CAPITAL ACCUMULATION PLAN
(Full title of the Plan)
TRUMP HOTELS AND CASINO RESORTS, INC.
(Name of Issuer of the securities held pursuant to the Plan)
1000 Boardwalk
Atlantic City, New Jersey 08401
(Address of principal executive office)
================================================================================
TRUMP CAPITAL ACCUMULATION PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001 AND 2000
TOGETHER WITH AUDITORS' REPORT
INDEX
Page
----
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS 1
FINANCIAL STATEMENTS
Statements of Net Assets Available for Plan Benefits as of
December 31, 2001 and 2000 2
Statement of Changes in Net Assets Available for Plan
Benefits for the Year Ended December 31, 2001 3
NOTES TO FINANCIAL STATEMENTS 4-7
SUPPLEMENTAL SCHEDULE:
I -- Schedule of Assets (Held at End of Year) 8-9
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Benefits Committee of the
Trump Capital Accumulation Plan:
We have audited the accompanying statements of net assets available for Plan
benefits of the Trump Capital Accumulation Plan (the "Plan") as of December 31,
2001 and 2000, and the related statement of changes in net assets available for
Plan benefits for the year ended December 31, 2001. These financial statements
and the schedule referred to below are the responsibility of the Plan's
management. Our responsibility is to express an opinion on these financial
statements and schedule based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for Plan benefits as of December
31, 2001 and 2000, and the changes in its net assets available for Plan benefits
for the year ended December 31, 2001, in conformity with accounting principles
generally accepted in the United States.
Our audit was made for the purpose of forming an opinion on the basic financial
statements taken as a whole. The supplemental schedule of assets (held at end of
year) is presented for the purpose of additional analysis and is not a required
part of the basic financial statements but is supplementary information required
by the Department of Labor's Rules and Regulations for Reporting and Disclosure
under the Employee Retirement Income Security Act of 1974. The supplemental
schedule has been subjected to the auditing procedures applied in the audits of
the basic financial statements and, in our opinion, is fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
May 1, 2002
TRUMP CAPITAL ACCUMULATION PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
AS OF DECEMBER 31, 2001 AND 2000
2001 2000
------------ ------------
ASSETS:
Investments, at market value $117,869,540 $113,985,298
------------ ------------
RECEIVABLES:
Participant contributions 336,557 454,751
Employer contributions 80,608 -
------------ ------------
Total receivables 417,165 454,751
------------ ------------
OTHER
Net assets available for 121,058 15,463
------------ ------------
Plan benefits $118,407,763 $114,455,512
============ ============
The accompanying notes to financial statements are an integral part of these
statements.
2
TRUMP CAPITAL ACCUMULATION PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
ADDITIONS:
Additions to net assets attributed to-
Investment income-
Interest income $ 1,035,367
Dividend income 4,149,226
------------
5,184,593
------------
Contributions-
Participant 11,292,351
Employer, net of forfeitures 3,314,680
Rollover 97,479
Transfers from related plans 7,725,439
------------
22,429,949
------------
Total additions 27,614,542
------------
Deductions-
Deductions from net assets attributed to-
Net depreciation in fair value of investments 15,471,851
Benefits paid to participants 8,189,644
Administrative expenses 796
------------
Total deductions 23,662,291
------------
Net increase 3,952,251
NET ASSETS AVAILABLE FOR PLAN BENEFITS:
Beginning of year 114,455,512
------------
End of year $118,407,763
============
The accompanying notes to financial statements are an integral part of this
statement.
3
TRUMP CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
1. SUMMARY OF SIGNIFICANT
ACCOUNTING POLICIES
-----------------------
Basis of Accounting
-------------------
The accompanying financial statements of the Trump Capital Accumulation Plan
(the "Plan") have been prepared on the accrual basis of accounting.
Plan Expenses
-------------
Expenses related to the administration of the Plan have been paid by Trump Taj
Mahal Associates (the "Plan Sponsor") and Trump Castle Associates (collectively
the "Companies"). The Companies pay all administrative expenses of the Plan,
except for the administrative costs of mutual funds and loan processing fees.
The Companies costs represent trustee fees and professional services and
amounted to approximately $25,000 in 2001.
Investments
-----------
The investments included in the statements of net assets available for Plan
benefits are stated at market value. Market value is the unit valuation of the
security at the Plan year-end as determined by Merrill Lynch Trust Company
("Merrill Lynch"), the trustee of the Plan (the "Trustee"). Accounting records
are maintained on the accrual basis, investment transactions are recorded on the
trade date basis and gains and losses are calculated based upon an aggregate
participant cost that is maintained on an average unit cost basis.
Use of Estimates
----------------
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amount of net assets and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
Risks and Uncertainties
-----------------------
The Plan provides for various investment options in investment securities.
Investment securities are exposed to various risks, such as interest rate,
market and credit. Due to the level of risk associated with certain investment
securities and the level of uncertainty related to changes in the value of
investment securities, it is at least reasonably possible that changes in risks
in the near term could materially affect participant's account balances and the
amounts reported in the statements of net assets available for Plan benefits and
the statement of changes in net assets available for Plan benefits.
2. PLAN DESCRIPTION
----------------
The following description of the Plan provides only general information.
Participants should refer to the Plan document for a more complete description
of the Plan's provisions.
4
TRUMP CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
General
-------
The Plan is a 401(k) Savings Plan, which was established by the Plan Sponsor and
became effective on January 1, 1989. All full or part-time non-union employees
become eligible for participation in the Plan on the enrollment date immediately
following the completion of 12 months of service and the attainment of age 18.
In addition, union employees covered by a collective bargaining agreement that
provides for participation in the Plan may enroll upon meeting the same
requirements as non-union employees.
The Plan is administered by a committee appointed by the Plan Sponsor (the "Plan
Administrator"). Merrill Lynch Trust Company was appointed as the trustee of the
Plan by the Plan Administrator.
Contributions
-------------
Participants
------------
Non-highly compensated participants, as defined, are eligible to voluntarily
contribute to the Plan up to 20% of their annual compensation, as defined.
Highly compensated participants, as defined, are eligible to voluntarily
contribute to the Plan up to 7% of their annual compensation, as defined. Tax
deferred contributions are subject to a limit by the Internal Revenue Code. The
2001 limit was $10,500 per participant. Contributions to the Plan are invested
by the Trustee, as designated by the participant, in increments of 5%.
Companies
---------
The Companies contribute to the Plan 50% of each participant's contributions,
not to exceed 3% of the participant's annual compensation, as defined. Company
contributions are allocated between funds as determined by the employee.
Participant Rollovers
---------------------
The Plan permits eligible participants, as defined, to rollover cash or other
property acceptable to the Plan Administrator from another qualified plan in
addition to qualified voluntary participant contributions.
Distributions to Participants
-----------------------------
Each participant has a fully vested interest in the amount of his or her
contributions together with the allocable Plan earnings. Contributions from the
Companies vest based on the vesting schedule described below. The full value of
the participant's vested interest in his or her account in the Plan will be
distributed upon termination of the participant's employment. The normal form of
payment is by lump sum; however, if a participant's vested benefit from all
contributions exceeds $5,000, a participant has the right to receive payment in
equal periodic monthly, quarterly, semi-annual or annual installments over a
period not to exceed ten years.
A participant may also withdraw all or part of his or her account upon
attainment of age 59-1/2 or financial hardship, as defined in the Plan.
Upon termination of employment prior to eligibility for retirement, a
participant is eligible to receive the vested balance in his or her account.
There were no payments due to participants who have requested to withdraw their
funds prior to December 31, 2001 or 2000.
5
TRUMP CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
Vesting
-------
Voluntary contributions are fully vested at all times and are not subject to
forfeiture.
The Companies contributions vest based upon the participant's years of
continuous service as follows-
Years of Continuous Service Percentage Vested
------------------------------- ----------------------
Less than two years 0%
Two years 25%
Three years 50%
Four years 75%
Five years or more 100%
Forfeitures
-----------
The portion of a former participant's account which is not distributed because
of the vesting provision will reduce the amount of the Companies future
contributions. During 2001, $120,418 was used to reduce Company contributions.
As of December 31, 2001 and 2000, $14,324 and $928 were available to reduce
future Company contributions, respectively.
Loans
-----
The Plan permits participants to borrow from their accounts at terms established
by the Plan Administrator. Participants may borrow up to the lesser of $50,000
or 50% of their vested account balance for specific reasons, as defined by the
Plan. Each loan is secured by the borrower's vested interest in the Plan and is
subject to other requirements, as defined. Interest on loans is charged at a
rate that is comparable to similar loans made by commercial lenders. Loans
outstanding as of December 31, 2001 had interest rates ranging from 6.00% to
10.50%. Loan repayment terms range up to five years (fifteen years if the loan
was used to purchase a primary residence). A small administrative fee is
required to process all loans.
3. INVESTMENTS
-----------
The fair value of individual investments that represent 5% or more of the Plan's
net assets are as follows-
December 31,
-------------------------
2001 2000
----------- -----------
Merrill Lynch Pacific Fund $ 5,623,680* $ 6,870,649
Merrill Lynch U.S. Government Mortgage Fund 5,849,816 5,051,534**
Merrill Lynch Balanced Capital Fund 10,732,646 11,534,368
Merrill Lynch Basic Value Fund 16,015,221 16,641,993
Davis New York Venture Fund 9,591,007 8,214,433
Merrill Lynch Ready Assets Trust Fund 11,728,217 10,581,412
* Fund does not represent 5% or more of Plan net assets as of December 31,
2001.
** Fund does not represent 5% or more of Plan net assets as of December 31,
2000.
6
TRUMP CAPITAL ACCUMULATION PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001 AND 2000
During 2001, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) depreciated in value by
$15,471,851 as follows-
Mutual Funds $(14,542,515)
Common Stock (929,336)
------------
$(15,471,851)
============
4. TAX STATUS
----------
The Plan obtained its latest determination letter on February 18, 2000, which
covered all amendments through December 31, 1999, in which the Internal Revenue
Service stated that the Plan, as then designed, was in compliance with the
applicable requirements of the Internal Revenue Code.
5. PLAN TERMINATION
----------------
While the Plan Sponsor has not expressed any intent to terminate the Plan, the
Plan Sponsor may do so at any time subject to the provisions of the Employee
Retirement Income Security Act of 1974. In the event of termination, each
participant is entitled to the value in his or her separate account.
6. RELATED PARTY
TRANSACTIONS
------------
Certain Plan investments are shares of mutual funds managed by Merrill Lynch.
Merrill Lynch is the Trustee as defined by the Plan and, therefore, these
transactions qualify as party-in-interest.
Certain Plan investments include shares of Trump Hotels and Casino Resorts, Inc.
common stock ("Common Stock") and, therefore, these transactions qualify as
party-in-interest. As of December 31, 2001 and 2000, the Plan holds Common Stock
with a market value of $1,352,254 and $1,618,656, respectively. During the year
ended December 31, 2001, Common Stock was acquired at a cost of $1,390,107; and
Common Stock was sold with an original cost basis of $1,042,240.
The Plan Sponsor has sister companies that also sponsor a similar Savings Plan.
During 2001, net transfers from related plans amounted to $7,725,439.
7. SUBSEQUENT EVENTS
-----------------
On January 1, 2002, the Plan received all of the assets of the Trump Savings
Plan, a Plan Sponsored by a sister company of the Plan Sponsor.
7
TRUMP CAPITAL ACCUMULATION PLAN SCHEDULE I
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001
EMPLOYER IDENTIFICATION #22-3136368, PLAN NUMBER 001
(b) Identity of issue, c) Description of investment including maturity
borrower, lessor or date, rate of interest, collateral, (d) Market
(a) similar party par or maturity value Value
--- ----------------------- -------------------------------------------------------------------- -------------
* Merrill Lynch Pacific Fund, Overseas Equity Securities, 337,353 units of
participation $ 5,623,680
* Merrill Lynch U.S. Government Mortgage Fund, U. S. Government Agencies, 589,696
units of participation 5,849,816
* Merrill Lynch Balanced Capital Fund, Equity Securities, 401,521 units of
participation 10,732,646
* Merrill Lynch Basic Value Fund, Equity and Debt Securities, 546,968 units of
participation 16,015,221
* Merrill Lynch Fundamental Growth Fund, Equity Securities, 215,398 units of
participation 3,900,856
* Merrill Lynch Global Allocation Fund, U. S. and Foreign Equity and Debt
Securities, 178,830 units of participation 2,297,967
Templeton Funds, Inc. Templeton Foreign Fund, Foreign Equity and Debt Securities,
143,940 units of participation 1,331,445
MFS Funds MFS Emerging Growth Fund, Equity Securities, 109,522 units of
participation 3,638,336
Davis Funds, Inc. Davis New York Venture Fund, Foreign Equity Securities, 377,153
units of participation 9,591,007
Delaware Group Delaware Trend Fund, Equity Securities, 270,585 units of
participation 4,973,358
Pimco Total Return Fund, Equity and Debt Securities, 132,719 units of
participation 1,388,238
* Merrill Lynch Equity Index Trust Fund, Equity Securities,
32,311 units of participation 2,604,302
Federated High Income Bond Fund, Equity and Debt Securities, 16,314 units of
participation 124,968
MFS Funds Utilities Fund, Equity and Debt Securities,
57,966 units of participation 505,459
Massachusetts Investors Growth Fund, Equity and Debt Securities, 155,239 units of
participation 2,001,026
Massachusetts Investors Trust Fund, Equity Securities, 73,113 units of participation 1,212,221
* Merrill Lynch Healthcare Fund, Equity Securities, 252,714 units of participation 1,738,670
Alliance Premier Growth Fund, Equity Securities,
74,753 units of participation 1,518,973
Seligman Communications Fund, Equity Securities,
169,326 units of participation 4,327,979
Davis Funds, Inc. Davis Series Financial Fund, Equity Securities,
15,910 units of participation 524,698
8
TRUMP CAPITAL ACCUMULATION PLAN SCHEDULE I
(Continued)
SCHEDULE OF ASSETS (HELD AT END OF YEAR)
AS OF DECEMBER 31, 2001
EMPLOYER IDENTIFICATION #22-3136368, PLAN NUMBER 001
(b) Identity of issue, c) Description of investment including maturity
borrower, lessor or date, rate of interest, collateral, (d) Market
(a) similar party par or maturity value Value
--- ----------------------- ----------------------------------------------------------------- ---------------
Pioneer Growth Shares Fund, Equity Securities,
45,432 units of participation $ 631,510
* Merrill Lynch Eurofund Fund, Equity Securities, 17,179 units of participation 215,772
Pimco Innovation Fund, Equity Securities, 86,619 units of participation 1,958,464
Munder Net Net Fund, Equity Securities, 67,222 units of participation 1,208,656
Van Kampen Emerging Growth Fund, Equity Securities,
51,382 units of participation 2,174,498
ING Pilgrim Small Cap Opportunities Fund, Equity Securities,
19,103 units of participation 579,191
Oppenheimer International Growth Fund, Equity Securities,
11,639 units of participation 175,171
Oppenheimer Global Growth & Income Fund, Equity and Debt Securities,
20,503 units of participation
463,156
--------------
Total investment in mutual funds 87,307,284
--------------
* Trump Hotels & Casino Trump Hotels & Casino Resorts, Inc. Common Stock,
Resorts, Inc. 1,175,873 shares 1,352,254
--------------
* Merrill Lynch Retirement Preservation Trust Fund, Money Market Funds, 5,170,001
units of participation 5,170,001
* Merrill Lynch Ready Assets Trust Fund, Money Market Funds,
11,728,217 units of participation
11,728,217
--------------
Total investment in money market funds 16,898,218
--------------
Participants' Loans Interest rates ranging from 6.00% to 10.50% and maturities ranging
from 2002 through 2016
12,311,784
--------------
$ 117,869,540
==============
*Denotes party-in-interest
The accompanying notes to financial statements are an integral part of this
schedule.
9
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation of our
report included in this Form 11-K into the Trump Hotels & Casino Resorts, Inc.
previously filed Form S-8 Registration Statement No.333-2201.
ARTHUR ANDERSEN LLP
Roseland, New Jersey
May 15, 2002
10