Edgar Filing: TRUMP ENTERTAINMENT RESORTS, INC.

Form 10-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

x	ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2009

¨	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

TRUMP ENTERTAINMENT RESORTS, INC.

TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

TRUMP ENTERTAINMENT RESORTS FUNDING, INC.

(Exact name of registrants as specified in their charters)


Delaware	1-13794	13-3818402
Delaware	33-90786	13-3818407
Delaware	33-90786-01	13-3818405
(State or other jurisdiction of incorporation or organization)	(Commission File Numbers)	(I.R.S. Employer Identification No.)

15 South Pennsylvania Avenue

Atlantic City, New Jersey 08401

(609) 449-5866

(Address, including zip code, and telephone number, including area code, of principal executive offices)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:


Registrant	Title of Each Class	Name of Each Exchange on Which Registered
Trump Entertainment Resorts, Inc.	Common Stock, par value $0.001 per share	None
Trump Entertainment Resorts Holdings, L.P.	None	None
Trump Entertainment Resorts Funding, Inc.	None	None

Indicate by check mark if each registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No x

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.


Trump Entertainment Resorts, Inc.		Yes ¨ No x
Trump Entertainment Resorts Holdings, L.P.		Yes x No ¨
Trump Entertainment Resorts Funding, Inc.		Yes x No ¨

Indicate by check mark whether each 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 whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ¨ 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 registrants’ 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. x

Indicate by check mark whether each registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of large accelerated filer, accelerated filer, and smaller reporting company in Rule 12b-2 of the Exchange Act.


Trump Entertainment Resorts, Inc.
Large Accelerated Filer ¨	Accelerated Filer ¨	Non-Accelerated Filer ¨	Smaller Reporting Company x
Trump Entertainment Resorts Holdings, L.P.
Large Accelerated Filer ¨	Accelerated Filer ¨	Non-Accelerated Filer x	Smaller Reporting Company ¨
Trump Entertainment Resorts Funding, Inc.
Large Accelerated Filer ¨	Accelerated Filer ¨	Non-Accelerated Filer x	Smaller Reporting Company ¨

Indicate by check mark whether each registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ¨ No x

The aggregate market value of the voting and non-voting common equity of Trump Entertainment Resorts, Inc. held by non-affiliates as of June 30, 2009 was approximately $5,051,878, based upon the closing price of $0.17 for the common stock on the OTC Bulletin Board on that date. The aggregate market value of the voting and non-voting common equity of Trump Entertainment Resorts Funding, Inc. held by non-affiliates as of June 30, 2009 was $0. The common stock of Trump Entertainment Resorts, Inc. traded on the Nasdaq Global Market (formerly, the Nasdaq National Market System) from September 20, 2005 through February 26, 2009 under the ticker symbol “TRMP.”

Indicate by check mark whether the registrants have filed all documents and reports required to be filed by Section 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 x No ¨

As of March 18, 2010, there were 31,270,345 shares of common stock and 900 shares of class B common stock of Trump Entertainment Resorts, Inc. outstanding. As of March 18, 2010, there were 100 shares of common stock of Trump Entertainment Resorts Funding, Inc. outstanding.

DOCUMENTS INCORPORATED BY REFERENCE: None.

TABLE OF CONTENTS


		Page
PART I

Item 1.	Business	1

Item 1A.	Risk Factors	11

Item 1B.	Unresolved Staff Comments	16

Item 2.	Properties	17

Item 3.	Legal Proceedings	18

Item 4.	Removed and Reserved	20

PART II

Item 5.	Market for Registrant’s Common Equity and Related Stockholder Matters	21

Item 6.	Selected Financial Data	23

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	36

Item 8.	Financial Statements and Supplementary Data	37

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	78

Item 9A.	Controls and Procedures	78

Item 9B.	Other Information	79

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	80

Item 11.	Executive Compensation	83

Item 12.	Security Ownership of Certain Beneficial Owners and Management	94

Item 13.	Certain Relationships and Related Transactions	96

Item 14.	Principal Accountant Fees and Services	98

PART IV

Item 15.	Exhibits and Financial Statement Schedules	99

PART I

Item 1.

Business

In this Report, “TER” means Trump Entertainment Resorts, Inc., a Delaware corporation. The words “Company,” “we,” “us,” “our” and similar terms collectively refer to TER and its subsidiaries, including, but not limited to, Trump Entertainment Resorts Holdings, L.P., a Delaware limited partnership of which TER is the sole general partner and an indirect limited partner (“TER Holdings”), and Trump Entertainment Resorts Funding, Inc., a Delaware corporation wholly-owned by TER Holdings (“TER Funding”).

We are the successors to Trump Hotels & Casino Resorts, Inc., a Delaware corporation formed in 1995 (“THCR”), and its subsidiaries.

Recent Events

Chapter 11 Proceedings. On February 17, 2009 (the “Petition Date”), TER and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions in the United States Bankruptcy Court for the District of New Jersey in Camden, New Jersey (the “Bankruptcy Court”) seeking relief under the provisions of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). These chapter 11 cases are being jointly administered under the caption In re: TCI 2 Holdings, LLC, et al Debtors, Chapter 11 Case Nos.: 09-13654 through 09-13656 and 09-13658 through 09-13664 (JHW) (the “Chapter 11 Case”).

The Debtors continue to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

As debtors-in-possession, the Debtors are authorized to continue to operate as ongoing businesses, and may pay all debts and honor all obligations arising in the ordinary course of their businesses after the Petition Date. However, the Debtors may not pay creditors on account of obligations arising before the Petition Date or engage in transactions outside the ordinary course of business without approval of the Bankruptcy Court, after notice and an opportunity for a hearing.

Under the Bankruptcy Code, actions to collect pre-petition indebtedness, as well as most litigation pending against the Debtors, are stayed. Other pre-petition contractual obligations against the Debtors generally may not be enforced. Absent an order of the Bankruptcy Court providing otherwise, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization to be voted upon by creditors and other stakeholders, and approved by the Bankruptcy Court.

The Debtors have received approval from the Bankruptcy Court of their “first day” motions, which were filed as part of the Chapter 11 Case. Among other “first day” relief, the Debtors received approval to continue wage and salary payments and other benefits to employees as well as certain related pre-petition obligations; to continue to honor customer programs as well as certain related pre-petition customer obligations; and to pay certain pre-petition trade claims held by critical vendors. The Debtors intend to continue to pay vendors and suppliers in the ordinary course of business for goods and services delivered post-petition.

Under the priority scheme established by the Bankruptcy Code, certain post-petition and secured or “priority” pre-petition liabilities need to be satisfied before general unsecured creditors and holders of the Debtors’ equity are entitled to receive any distribution. No assurance can be given as to what values, if any, will be ascribed in the bankruptcy proceedings to the claims and interests of each of these constituencies. Additionally, no assurance can be given as to whether, when or in what form, unsecured creditors and holders of the Debtors’ equity may receive a distribution on such claims or interests.

Under the Bankruptcy Code, we may assume, assume and assign, or reject certain executory contracts and unexpired leases, including, without limitation, leases of real property and equipment, subject to the approval of the Bankruptcy Court and certain other conditions. Any description of an executory contract or unexpired lease in this Report, including where applicable our express termination rights or a quantification of our obligations, must be read in conjunction with, and is qualified by, any overriding rejection rights we have under the Bankruptcy Code.

For the duration of the Chapter 11 Case, our business is subject to the risks and uncertainties of bankruptcy. For example, the Chapter 11 Case could adversely affect our relationships with customers, suppliers and employees which, in turn, could adversely affect the going concern value of our business and of our assets. At this time, it is not possible to predict with certainty the effect of the Chapter 11 Case on our business or various creditors, or when we will emerge from bankruptcy. Our future results depend upon our confirming and successfully implementing, on a timely basis, a plan of reorganization. See “Item 1A. Risk Factors.”

The filing of the Chapter 11 Case constituted an event of default or otherwise triggered repayment obligations under the indenture governing the $1.25 billion 8.5% Senior Secured Notes due 2015 (the “Senior Notes”) issued by TER Holdings and TER Funding and the Company’s $493 million senior secured term loan agreement (the “2007 Credit Agreement”). As a result, all indebtedness outstanding under the Senior Notes and the 2007 Credit Agreement became automatically due and payable, subject to an automatic stay of any action to collect, assert or recover a claim against the Debtors and the application of applicable bankruptcy law.

On August 3, 2009, the Debtors filed their joint chapter 11 plan of reorganization with the Bankruptcy Court (as thereafter amended, the “Original Debtors’ Plan”) and the Disclosure Statement relating thereto (the “Original Debtors’ Disclosure Statement”). Following the termination of the Purchase Agreement, dated August 3, 2009 (as thereafter amended as of October 5, 2009), among TER, TER Holdings, BNAC, Inc. and Donald J. Trump (“Mr. Trump”) by Mr. Trump on November 16, 2009, and subsequent negotiations with their principal creditor constituencies, the Debtors decided to withdraw the Original Debtors’ Plan. Further, the Debtors decided to endorse and become co-proponents of the plan of reorganization proposed by the ad hoc committee (the “Ad Hoc Committee”) of the holders of the Senior Notes filed on August 11, 2009, and thereafter amended (the “AHC Plan”) and the Disclosure Statement relating thereto (the “AHC Disclosure Statement”). On December 24, 2009, the Debtors and the Ad Hoc Committee filed with the Bankruptcy Court a revised AHC Plan and revised AHC Disclosure Statement (as thereafter amended on January 5, 2010, the “Debtors/AHC Plan” and “Debtors/AHC Disclosure Statement”, respectively), reflecting the Debtors’ support of and co-proponent role with respect to such plan. On January 5, 2010, Beal Bank (formerly, Beal Bank S.S.B.) and Beal Bank of Nevada (together, “Beal Bank”) and Icahn Partners, L.P. and certain of its affiliates (“Icahn Partners”) filed a fourth amended joint plan of reorganization with the Bankruptcy Court (as thereafter amended on February 23, 2010, the “Beal/Icahn Plan”) and the Disclosure Statement relating thereto (the “Beal/Icahn Disclosure Statement”).

The following is a summary of the matters to occur pursuant to the Debtors/AHC Plan. This summary only highlights certain of the substantive provisions of the Debtors/AHC Plan and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Debtors/AHC Plan. This summary is qualified in its entirety by reference to the full text of the Debtors/AHC Plan.

The key terms of the Debtors/AHC Plan are as follows:

•

a capital contribution of $225 million in new equity capital (in exchange for 70% of the new common stock in the reorganized Company) in the form of a rights offering to holders of the Senior Notes and general unsecured claims backstopped by members of the Ad Hoc Committee of the holders of the Senior Notes (the “Backstop Parties”) (who will receive 20% of the new common stock in the reorganized Company as a backstop fee in consideration for their agreement to provide such backstop);

•

$125 million repayment of the 2007 Credit Agreement and reinstatement of the balance of the loan on modified terms;

•

5% of the new common stock in the reorganized Company and warrants to purchase up to an additional 5% of such new common stock will be issued to Mr. Trump or his affiliates, which warrants will be exercisable for five years commencing on the effective date of the Debtors/AHC Plan at a price per share equivalent to the $1.25 billion principal amount of the Senior Notes plus all interest accrued thereon as of the petition date divided by the total number of shares of new common stock to be outstanding on the effective date;

•

a pro rata distribution of 5% of the new common stock in the reorganized Company to holders of Senior Notes and general unsecured claims; and

•

no recovery for old equity.

The following is a summary of the matters to occur pursuant to the Beal/Icahn Plan. This summary only highlights certain of the substantive provisions of the Beal/Icahn Plan and is not intended to be a complete description of, or a substitute for a full and complete reading of, the Beal/Icahn Plan. This summary is qualified in its entirety by reference to the full text of the Beal/Icahn Plan.

On February 18, 2010, Beal Bank and Icahn Partners filed a notice that the conditions to the rights offering under the Beal/Icahn Plan were not met, and therefore, it would not be consummated.

The key terms of the Beal/Icahn Plan are as follows:

•

because the conditions were not met and the rights offering is not being consummated, Beal Bank and Icahn Partners will receive new equity in satisfaction of their claims under the 2007 Credit Agreement;

•

a new $45 million debtor in possession facility is being offered to the Debtors by Icahn Partners to be entered into following the confirmation date, on terms and conditions reasonably acceptable to the Debtors and Icahn Partners, which will be converted into new equity in the reorganized Debtors;

•

a capital contribution of $80 million will be made by Icahn Partners on the effective date for new equity in the reorganized Debtors; and

•

no recovery for holders of the Senior Notes, general unsecured claims or old equity.

Both the Debtors/AHC Plan and the Beal/Icahn Plan provide that administrative expense claims and priority claims will be paid in full.

On February 23, 2010, a hearing before the Bankruptcy Court began for the confirmation of a plan of reorganization for the Chapter 11 Case. Both the Debtors/AHC Plan and the Beal/Icahn Plan are subject to confirmation by the Bankruptcy Court and customary closing conditions, including approval of the New Jersey Casino Control Commission.

On March 2, 2010, the Debtors and certain holders of the Senior Notes entered into a commitment letter providing for a $45 million senior secured debtor in possession notes facility (the “DIP Facility”). The borrowings under the DIP Facility would be conditioned upon confirmation of the Debtors/AHC Plan and would accrue interest on the outstanding principal amount thereof at a rate per annum equal to 10% payable on the earlier of the termination date or the date on which an event of default occurs. The maturity date of the DIP Facility would be the earliest of (a) six months from the closing date (or five months after the closing date if that certain Amended and Restated Backstop Agreement, dated December 11, 2009, among the Company and the Backstop Parties is not amended to extend the termination provisions thereunder), (b) the effective date of the Debtors/AHC Plan, (c) the date of confirmation of a plan of reorganization other than the Debtors/AHC Plan and (d) the acceleration of the loans and termination of the commitments. The borrowers would be subject to certain affirmative covenants as well as negative covenants. There are no financing or commitment fees required under the DIP Facility. This financing will help enable the Debtors to meet their anticipated expenses during their non-peak winter season.

On March 2, 2010, the Debtors filed a motion for entry of an order authorizing the incurrence of post-petition indebtedness with priority over administrative expenses and secured by liens on property of the estates pursuant to the DIP Facility, and approving the DIP Facility.

On March 10, 2010, the hearing before the Bankruptcy Court concluded and the outcome is pending the decision of the Bankruptcy Court. On March 24, 2010, the Bankruptcy Court will hear oral arguments regarding certain motions regarding the recharacterization of certain payments previously made to Beal Bank, certain amendments to the current cash collateral order and the Company entering into the DIP Facility.

Nasdaq Delisting. On February 17, 2009, TER received a notification from the Nasdaq Stock Market (“Nasdaq”) indicating that the Nasdaq staff had determined, in accordance with Nasdaq Marketplace Rules 4300, 4450(f) and IM-4300, that TER’s common stock, par value $0.001 per share (“TER Common Stock”) would be delisted from Nasdaq in light of the filing of the Chapter 11 Case, concerns about the residual equity interest of the existing listed security holders and concerns about TER’s ability to sustain compliance with all of Nasdaq’s listing requirements. Nasdaq trading in TER Common Stock was suspended on February 26, 2009. On March 13, 2009, Nasdaq filed a Form 25 with the SEC to complete the delisting. The delisting became effective at the opening of the trading session on March 23, 2009.

Donald J. Trump’s Abandonment of Limited Partnership Interests in TER Holdings. By letter dated February 13, 2009, Mr. Trump notified TER that he had abandoned any and all of his 23.5% direct limited partnership interest in TER Holdings and relinquished any and all rights under the Fourth Amended and Restated Agreement of Limited Partnership of TER Holdings (the “Partnership Agreement”) or otherwise with respect to TER Holdings and Mr. Trump’s limited partnership interest.

Resignation of Mr. Trump and Ivanka M. Trump. Pursuant to written letters of resignation dated February 13, 2009, Donald J. Trump and Ivanka M. Trump resigned as members of the Board of Directors of TER (the “Board”). Mr. Trump served as Chairman of the Board.

The Company

General. We own and operate three casino hotel properties in Atlantic City, New Jersey: Trump Taj Mahal Casino Resort (“Trump Taj Mahal”); Trump Plaza Hotel and Casino (“Trump Plaza”); and Trump Marina Hotel Casino (“Trump Marina”).

The following is a summary of our casino properties at December 31, 2009:


Casino Property	2009 Net Revenues (000s)		Number of Rooms/ Suites	Approximate Number of Gaming Tables	Approximate Number of Slot Machines
Trump Taj Mahal	$	439,635	2,010	204	2,996
Trump Plaza		196,727	906	71	1,808
Trump Marina		155,787	728	71	1,815

Total	$	792,149	3,644	346	6,619

Investor Information

We are a public company and are subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Accordingly, we file periodic reports and other information with the Securities and Exchange Commission (the “SEC”). Such reports and other information may be obtained by visiting the Public Reference Room of the SEC at 100 F Street, NE, Room 1580, Washington, D.C. 20549 or by calling the SEC at 1-800-SEC-0330. In addition, the SEC maintains a website (http://www.sec.gov) that contains reports, proxy and information statements and other information regarding us and other issuers that file electronically.

Our website address is http://www.trumpcasinos.com. We make available, without charge, through our website, copies of our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as soon as reasonably practicable after such reports are filed with or furnished to the SEC. References in this document to our website are not and should not be considered part of this Report, and the information on our website is not incorporated by reference in this Report.

Our Corporate Governance Guidelines, Code of Business Conduct, Code of Ethics for Principal Officers and Directors, and the charters of our Audit Committee, Compensation Committee, Corporate Governance and Nominating Committee and Executive Committee, are available free of charge on our website under the “Corporate Governance” section in the “Investor Relations” section.

In addition, we intend to use our website as a means of disclosing material non-public information and for complying with its disclosure obligations under Regulation FD. Such disclosures will be included on our website in the “Investor Relations” sections. Accordingly, investors should monitor such portions of our website, in addition to following our press releases, SEC filings and public conference calls and webcasts.

The certifications of our Chief Executive Officer and Chief Financial Officer pursuant to Section 302 of the Sarbanes- Oxley Act of 2002 about the disclosures contained in this Report are attached hereto and available on our website.

Business and Marketing Strategy

The Atlantic City destination gaming market has been substantially impacted by the national economic downturn. We have implemented the following initiatives to cope with this difficult economic period marked by record-low consumer confidence and the current competitive environment, while simultaneously making strategic investments in our business to improve our market position in the long-term.

We have targeted several initiatives that we believe will enhance our ongoing efforts to retain existing customers, increase trip frequency and acquire new customers. They are:

•

Revenue and yield management: We have placed significant emphasis on increasing cash revenue at our properties and managing our mix of cash and complimentary customers to yield the most profit from our overnight guests. Our efforts have focused on increasing hotel occupancy and revenue per available room, launching a new interactive marketing campaign and websites to appeal to the growing number of customers utilizing the internet to plan and reserve travel arrangements.

•

Cost containment: We have taken aggressive steps to streamline our operational expenses while building a corporate structure that reflects the size and structure of our business. Additionally, we have strategically realigned our operating structure to appropriately function within current business volumes during the economic downturn. These initiatives have resulted in significant cost savings at the property and corporate levels.

•

Marketing: Our overall marketing plan to unite our properties in order to be able to attract and retain customers based on increased offerings in our loyalty rewards program and available amenities included the successful launch of our cornerstone marketing program, TrumpONE. TrumpONE allows guests to earn and redeem complimentaries at each of our properties and, therefore, has substantially increased the range of options available to guests while also consolidating our databases for more effective consumer marketing efforts. We have completed the consolidation of our direct marketing, advertising and public relations functions in order to more effectively market our properties as a unified enterprise.

•

Customer service: As a result of our belief that providing a memorable, positive experience for our customers is a fundamental necessity of our business, we launched several customer service and satisfaction programs over the past three years designed to train and measure employees on simple service behaviors that can create a superior hospitality experience.

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Capitalizing on facility innovation: Over the past several years, we engaged in a retheming and expansion capital program to make various improvements at our facilities, including the construction of the Chairman Tower at Trump Taj Mahal, the renovation of all hotel rooms at each of our properties and the retheming of our gaming floors at Trump Taj Mahal and Trump Plaza. We continue to utilize these enhancements as a basis for our marketing and advertising efforts. For more information on facility enhancements, see “Casino Properties” below.

Additionally, we have developable land at each of our casino properties, including:

•

11.4 acres at Trump Taj Mahal, including 3.5 unique acres on the Steel Pier;

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3.5 acres at Trump Plaza; and

•

2 acres at Trump Marina, in addition to the capacity to build atop portions of the existing facility.

Casino Properties

Trump Taj Mahal Casino Resort. Trump Taj Mahal, located on the northern end of Atlantic City’s boardwalk (the “Boardwalk”), is located on 39.4 acres and features the new, 782-room Chairman Tower which includes 66 suites and 8 penthouse suites and the original 1,228-room hotel tower, which includes 243 suites and 7 penthouse suites. Trump Taj Mahal also features 16 dining locations, including Il Mulino New York, 5 cocktail lounges, and approximately 143,000 square feet of ballroom, meeting room and pre-function area space. The property also features approximately 162,000 square feet of recently renovated gaming space that includes approximately 204 table games (including poker tables), approximately 2,996 slot machines, a high-end gaming salon, an approximately 12,500 square-foot Poker, Keno and Race Simulcasting room and an Asian-themed table game area offering popular Asian table games. Trump Taj Mahal also features the following: an approximately 20,000 square foot multi-purpose entertainment complex known as the “Xanadu Theater,” with seating capacity for up to approximately 1,200 people, which can be used as a theater, concert hall, boxing arena or exhibition hall; the Casbah nightclub; the Mark G. Etess Arena, featuring approximately 63,000 square feet of exhibition and entertainment space which can accommodate over 5,000 people; and a health club, spa and fitness center with an indoor pool. Trump Taj Mahal also has a parking garage for approximately 6,750 cars, a 6 bay bus terminal and a roof-top helipad.

Trump Plaza Hotel and Casino. Trump Plaza is located at the center of the Boardwalk at the end of the Atlantic City Expressway (the main highway into the city) covering 10.9 acres with direct access to Boardwalk Hall (an entertainment and sporting venue owned and operated by the New Jersey Sports and Exposition Authority that can accommodate up to approximately 13,000 people). Trump Plaza features approximately 906 hotel rooms, including 140 suites, approximately 87,000 square feet of casino space with approximately 1,808 slot machines and approximately 71 table games. Amenities include approximately 18,000 square feet of conference space, an approximately 750-seat cabaret theater, two cocktail lounges, eleven dining locations, a players’ club, health spa, an indoor pool, a seasonal beach bar and restaurant and retail outlets. Trump Plaza’s parking garage can accommodate 13 buses and approximately 2,700 cars.

Trump Marina Hotel Casino. Trump Marina covers approximately 14 acres in Atlantic City’s marina district, overlooks the Senator Frank S. Farley State Marina and features a 27-story hotel with 728 guest rooms, including 157 suites, 97 of which are luxury suites. The casino offers approximately 79,000 square feet of gaming space, approximately 1,815 slot machines, approximately 71 table games and approximately 30,500 square feet of convention, ballroom and meeting space. Trump Marina also features an approximately 500-seat cabaret-style theater, a nightclub, a seasonal deck featuring dining and entertainment, four retail outlets, 8 dining locations, a cocktail lounge, players, club and a recreation deck with a health spa, outdoor pool, tennis courts, basketball courts, jogging track and a pool side snack bar. To facilitate access to the property, Trump Marina has a nine-story parking garage capable of accommodating approximately 3,000 cars. Trump Marina also has an 11 bay bus terminal and a roof-top helipad.

Competition

Atlantic City Market. The Atlantic City market primarily serves the New York-Philadelphia-Baltimore-Washington, D.C. corridor with nearly 30 million adults living within a three-hour driving radius. The Atlantic City market is the second largest gaming market in the United States, after Las Vegas. In 2009, the casinos in the Atlantic City market generated $3.9 billion in casino revenue. Our three casinos combined represent approximately 21% of the gaming positions and hotel rooms in the Atlantic City market and generate approximately 21% of the market gaming revenue.

Competition in Atlantic City is intense and continues to increase. Currently, the 11 casino hotels located in Atlantic City, including our three properties, compete with each other on the basis of customer service, quality and extent of amenities and promotional offers. For this reason, we and our competitors require substantial capital expenditures to compete effectively. Certain of our existing competitors in Atlantic City have recently completed significant room expansion projects and added other new amenities to their facilities. During early 2009, we completed the construction of the Chairman Tower, a 782-room hotel tower at the Taj Mahal, to remain competitive with these facilities.

Revel Entertainment Group (“Revel”) continues development on its approximate $2 billion mega resort located on a 20-acre, oceanfront site next to the Showboat Casino Hotel. During 2009, Revel announced that it would slow construction on the project until it secured long-term financing. Revel continues to seek financing for completion of the project and estimates that it could take up to 20 months to complete the project once it secures such financing. At this time we cannot ascertain when and if Revel’s project will be completed.

We believe that there are several other sites on the Boardwalk, in the marina district and possibly at Bader Field, a former airport located in Atlantic City, if that area is zoned for gaming, where casino hotels could be built in the future. Additionally, various applications for casino licenses have been filed and announcements with respect thereto have been made from time to time in these areas. Future developments and expansions could have a material adverse effect on our business and operations.

We cannot ascertain at this time the effects that any new projects could have on the Atlantic City gaming market. However, the added strength of these competitors and resulting economies-of-scale could diminish our market share in the market in which we compete.

Pennsylvania. In July 2004, the Pennsylvania legislature enacted the Race Horse Development and Gaming Act which authorizes the Control Board to permit a total of up to 61,000 slot machines in up to fourteen different licensed locations in Pennsylvania, seven at racetracks (each with up to 5,000 slot machines), five at slot parlors (two in Philadelphia, one in Pittsburgh and two elsewhere, each with up to 5,000 slot machines) and two at established resorts (each with up to 500 slot machines). Three of the racetrack sites, Pocono Downs, Parx Casino and Chester Downs and three slot parlors, two in Philadelphia and one in Bethlehem, are located in our market area. Slot machine operations commenced in late 2006 at the racetracks and in May 2009 at the slot parlor in Bethlehem. As of early 2010, approximately 12,000 slot machines were operating at these locations. One of the Philadelphia slot parlors commenced construction in October 2009 and is expected to open in mid-2010 with approximately 1,700 slot machines. In February 2010, Wynn Resorts announced that it had entered into a letter of intent to develop and operate the other Philadelphia facility. The transaction is contingent on approval from Pennsylvania gaming regulators.

In January 2010, table game legislation was signed into Pennsylvania law which allows up to 250 table games at each of the twelve larger authorized casinos and up to 50 table games at each of the remaining two smaller authorized casinos. Pennsylvania gaming regulators expect that table games will become operational by mid-2010.

When fully operational, the Philadelphia area locations could operate up to 15,000 slot machines and 750 table games. Competition from the Pennsylvania area casinos that are currently operational has adversely

impacted Atlantic City casinos, including our casinos. We believe that the recently enacted table game legislation and the potential opening of additional casinos could further adversely impact Atlantic City casinos, including our casinos.

New York. Pursuant to legislation enacted in 2001, the Division of the Lottery of the State of New York is authorized to permit the installation of video lottery terminals (“VLTs”) at various horse racing facilities in New York. During 2004, VLT operations commenced at four upstate and western New York racetracks and at a racetrack in Sullivan County, which operates 1,500 VLTs and is considerably closer (approximately 95 miles) to Manhattan. The VLT facility at Yonkers Raceway opened in late 2006 and now operates 5,300 VLTs. The State of New York continues to seek bids for a license to operate a new casino at the Aqueduct Racetrack in Queens, New York. Additionally, at various times there have been discussions about allowing VLTs at the Belmont racetrack. These locations are less than fifteen miles from Manhattan.

The 2001 legislation also authorized the Governor of New York to negotiate compacts authorizing the operation of up to six Native American casino facilities including slot machine gaming. A compact negotiated in 2002 authorized three such facilities located in the western part of New York and outside of our primary market area. The remaining three Native American casinos, if developed, are required by law to be located in either Sullivan County or Ulster County, adjoining counties approximately 100 miles northwest of Manhattan. Competition from the VLT facilities at Aqueduct Racetrack and Yonkers Raceway and from potential Native American casinos as may be authorized and operated in Sullivan or Ulster County could adversely impact Atlantic City casinos, including our casinos.

Meadowlands Racino. In April 2004, the Atlantic City casinos executed an agreement with the New Jersey Sports and Exposition Authority (“NJSEA”) which owns and operates two of the four New Jersey horse race tracks, including the Meadowlands race track. The agreement provides that annual payments made by the casinos to the NJSEA in each of 2004 through 2008 in order to subsidize horse racing would serve as consideration for a moratorium on the conduct of casino gaming, including VLTs at any New Jersey race track until January 2009.

In August 2008, the Atlantic City casinos executed a new agreement with the NJSEA (the “2008 NJSEA Subsidy Agreement”). The 2008 NJSEA Subsidy Agreement provides that substantial annual payments made by the casinos to the NJSEA in 2008 through 2011 in order to subsidize horse racing would establish a moratorium on the conduct of casino gaming, including VLTs at any New Jersey race track until December 31, 2011.

Maryland. In November 2008, Maryland voters passed a referendum to allow 15,000 slot machines at five locations across that state. As of early 2010, the State of Maryland has awarded licenses for three of the five locations. The three operators which were awarded the licenses plan to operate a total of approximately 7,050 slot machines. The State of Maryland has indicated it is targeting to have the first slot parlors open by 2011. In January 2010, a bill was introduced for a November referendum to legalize table games. Customers from the Baltimore-Washington D.C. area are not a significant contributor to our revenues currently; however, we believe additional competition in the Northeastern United States could have an adverse effect on our business.

Delaware. We compete with Delaware primarily for gaming customers from the Southern New Jersey, Southern Pennsylvania and Delaware regions. During August 2009, the U.S. Court of Appeals for The Third Circuit declared that a plan to allow sports betting by the State of Delaware violated federal law and that any sports betting at Delaware’s three casinos must be limited to three-game or more parlay bets on professional football games. During January 2010, a bill was signed into law that allows table games at each of the three casinos. It is expected that table games will become operational by mid-2010. While Atlantic City’s casinos currently offer table games, we currently are not permitted to offer sports betting. We believe the introduction of table games and sports betting in Delaware could have an adverse effect on our business.

Native American Tribes. Our properties also face considerable competition from casino facilities operated by federally recognized Native American tribes, such as Foxwoods Resort Casino in Ledyard, Connecticut and Mohegan Sun Casino Resort in Uncasville, Connecticut. Both of these properties recently completed expansion

projects. Pursuant to the Indian Gaming Regulatory Act (the “IGRA”), which was passed by Congress in 1988, any state that permits casino-style gaming, even if only for limited charity purposes, is required to negotiate gaming compacts with federally recognized Native American tribes. Under the IGRA, Native American tribes enjoy comparative freedom from regulation and taxation of gaming operations, which provides them with an advantage over their competitors, including our properties.

In addition, Native American nations have sought or are seeking federal recognition, land and gaming compacts in New York, Pennsylvania, Connecticut and other states near Atlantic City. If successful, additional casinos built in or near this portion of the United States could have a material adverse effect on the business and operations of our properties.

There could be further competition in our markets as a result of the upgrading or expansion of facilities by existing market participants, the entrance of new gaming participants into a market or legislative changes. We expect each market in which we participate, both current and prospective, to be highly competitive.

Regulatory and Licensing

Gaming Regulation. The gaming industry is highly regulated, and we must maintain our casino licenses and pay gaming taxes to continue our gaming operations. Each of our casinos is subject to extensive regulation under the statutes and regulations of the State of New Jersey. During June 2007, the New Jersey Casino Control Commission (the “CCC”) renewed our licenses to operate Trump Taj Mahal, Trump Plaza and Trump Marina until June 2012. Also, since February 2004, we have been a registered publicly traded corporation with the Nevada Gaming Control Board (the “NGCB”) under the Nevada Gaming Control Act and are subject to the licensing and regulatory control of the Nevada Gaming Commission, the NGCB and the Clark County Liquor and Gaming Licensing Board. These statutes and regulations generally concern the financial stability of the casino licensee, the good character of the owners, managers and employees and of other persons with financial interests in the gaming operations (including those with certain ownership levels of a casino licensee’s securities) and the procedures and controls which govern those gaming operations. A more detailed description of New Jersey and Nevada laws and regulations to which we are subject is contained in Exhibit 99.1 to this Report and is incorporated by reference herein. Gaming operations that we may undertake in the future in other jurisdictions will also subject us and such operations to regulations by such other jurisdictions.

Other Regulation. In addition to gaming regulations, our business is subject to various other federal, state and local laws and regulations, including but not limited to, restrictions and conditions concerning taxation, treasury regulations, building code and land use requirements, environmental matters and local licenses and permits.

United States Department of Treasury (“DOT”) regulations require casinos to report currency transactions involving more than $10,000 per patron per gaming day. Treasury Financial Crimes Enforcement Network regulations further require casinos to report certain gaming patron transactions involving suspicious activity. We have established internal control procedures to comply with these DOT regulations, including: (i) computer exception reporting; (ii) review of currency and suspicious activity transactions and reporting by committees comprised of casino operations, marketing and administration executives; (iii) internal audit testing of DOT regulation compliance; (iv) training employees to comply with DOT regulations; and (v) a disciplinary program for employee violations.

Pursuant to the provisions of the New Jersey Casino Control Act, we must either obtain investment tax credits in an amount equivalent to 1.25% of our gross casino revenues, as defined in the New Jersey Casino Control Act, or pay an alternative tax of 2.5% of our gross casino revenues. Investment tax credits may be obtained by making qualified investments, or by depositing funds which may be converted to bonds by the Casino Reinvestment Development Authority (“CRDA”). Certain of our subsidiaries are required to make quarterly deposits with the CRDA to satisfy their investment obligations.

We believe that all required licenses, permits and other approvals necessary to conduct our business have been obtained for our operations in the State of New Jersey and elsewhere. Material changes in these laws or regulations or in the interpretation of the same by courts or administrative agencies could adversely affect our company, including its operating results.

Smoking Ban. On January 9, 2006, the New Jersey Legislature adopted the New Jersey Smoke-Free Air Act, which was effective on April 15, 2006. The law prohibits the smoking of tobacco in structurally enclosed indoor public places and workplaces in New Jersey, including licensed casino hotels. The law permits smoking within the perimeter of casino and casino simulcasting areas, and permits 20% of hotel guest rooms to be designated as smoking rooms.

On April 15, 2007, an ordinance in Atlantic City became effective which extended smoking restrictions under the New Jersey Smoke-Free Air Act. This ordinance mandated that casinos restrict smoking to designated areas of up to 25% of the casino floor. During April 2008, Atlantic City’s City Council unanimously approved an amendment to the ordinance, banning smoking entirely on all casino gaming floors and casino simulcasting areas, but allowing smoking in separately exhausted, non-gaming, smoking lounges. The amendment to the ordinance became effective on October 15, 2008, however, on October 27, 2008, Atlantic City’s City Council voted to postpone the full smoking ban for at least one year due to, among other things, the weakened economy and increased competition in adjoining states. The postponement of the full smoking ban became effective on November 16, 2008. In December 2009, Atlantic City’s City Council announced that it would not consider a full smoking ban in casinos until at least the end of 2011.

We believe that these bans on smoking within indoor public places and for casino and casino simulcasting areas have adversely affected the Atlantic City casinos, including our casinos.

In addition, bills are pending in the New Jersey Senate and Assembly which, if enacted, would repeal the gaming area exemption from the smoking ban provided for in the New Jersey Smoke-Free Air Act. This proposed ban on smoking in the casino and casino simulcasting areas could adversely affect the Atlantic City casinos, including our casinos.

CAFRA Agreement. Trump Taj Mahal received a permit under the Coastal Area Facilities Review Act (“CAFRA”) (which is included as a condition of the Trump Taj Mahal’s casino license) that initially required Trump Taj Mahal to begin construction of certain improvements on the Steel Pier by October 1992, which improvements were to be completed within 18 months of the commencement of construction. Trump Taj Mahal initially proposed a concept to improve the Steel Pier, the estimated cost of which was $30 million. Such concept was approved by the New Jersey Department of Environmental Protection, the agency which administers CAFRA. In March 1993, Taj Associates obtained a modification of its CAFRA permit providing for an extension of the required commencement and completion dates of the improvements to the Steel Pier for one year, which has been renewed annually, based upon an interim use of the Steel Pier as an amusement park. The pier sublease, pursuant to which Trump Taj Mahal leases the Steel Pier to an amusement park operator, terminates on December 31, 2010. The conditions of the CAFRA permit renewal thereafter are under discussion with the New Jersey Department of Environmental Protection.

Employees and Labor Relations

Number of Employees. The table below sets forth the approximate number of our full-time equivalent employees working at our properties as of December 31, 2009:


Property		Number of Full-Time Equivalent Employees
Trump Taj Mahal		2,800
Trump Plaza		1,500
Trump Marina		1,200

Total		5,500

Collective Bargaining Agreements. Certain of our casino hotel employees are subject to collective bargaining agreements. Approximately 2,893 of our employees are covered by a collective bargaining agreement with Local 54, UNITE-HEREIU (Hotel Employees and Restaurant Employees International Union) which is effective September 15, 2009 and expires on September 15, 2011. Approximately 185 of our employees are covered by a collective bargaining agreement with the International Union of Operating Engineers, Local 68 which was effective May 1, 2006 and expires on April 30, 2011. Approximately 70 of our employees are covered by a collective bargaining agreement with the United Brotherhood of Carpenters and Joiners of America, Local 623 which was effective May 1, 2006 and expires on April 30, 2011. Approximately 18 of our employees are covered by a collective bargaining agreement with the International Union of Painters & Allied Trades, District Council 711 which was effective May 1, 2006 and expires on April 30, 2011. Approximately 30 of our employees are covered by a collective bargaining agreement with the International Alliance of Theatrical Stage Employees, Local 917 which was effective July 1, 2006 and expires on June 30, 2011. Approximately 8 of our employees are covered by a collective bargaining agreement with the International Brotherhood of Teamsters, Local 331 which was effective March 1, 2008 and expires on March 31, 2011. A certification election requesting representation by the United Auto Workers for dealers at Trump Plaza occurred on March 31, 2007. The majority of dealers elected to be represented by the United Auto Workers. Objections were filed by the Company contesting the outcome of the election. The objections are currently being considered by the U.S. Court of Appeals for The District of Columbia Circuit and the election results have yet to be certified. A certification election requesting representation by the United Auto Workers for dealers at Trump Marina was held on May 11, 2007. The majority of dealers elected not to be represented by the United Auto Workers. United Auto Workers filed objections to the election. On February 17, 2009, the National Labor Relations Board in Washington, D.C. ruled that another election should be held. On March 6, 2009, the Company filed a petition with the U.S. Court of Appeals for The District of Columbia Circuit for further review of the unfair labor practices. The election is being held in abeyance until the unfair labor practices petition is remedied. We believe that we have established productive and professional relationships with all of our collective bargaining partners as well as our represented and unrepresented employees.

Licensing Requirements. Certain of our employees are required to be licensed by, or registered with, the CCC, depending upon the nature of their employment. Casino employees are subject to more stringent licensing requirements than non-casino employees, and are required to meet applicable standards pertaining to such matters as financial responsibility, good character, ability, casino training, experience and in-state residency. These regulations have resulted in significant competition for eligible employees.

Seasonality

Our cash flows from operating activities are seasonal in nature. Spring and summer are traditionally the peak seasons for our properties, with autumn and winter being non-peak seasons. Consequently, our operating results for the quarters ending in March and December are not historically as profitable as the quarters ending in June and September. Any excess cash flow achieved from operations during peak seasons is used to subsidize non-peak seasons. Performance in non-peak seasons is usually dependent on favorable weather and a long-weekend holiday calendar. In the event that we are unable to generate excess cash flows in one or more peak seasons, we may not be able to subsidize non-peak seasons, if necessary.

Item 1A.

Risk Factors

Our business is subject to a number of risks. You should carefully consider the following risk factors, together with all of the other information included or incorporated by reference in this annual report. The risks set out below are not the only risks we face. If any of the following risks occur, our business, financial condition and results of operations could be materially adversely affected.

Chapter 11 Case.

On February 17, 2009, TER and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed for protection under the Bankruptcy Code and commenced the Chapter 11 Case. During the Chapter 11 Case, our operations are subject to the risks and uncertainties associated with bankruptcy, including, but not limited to, the following:

•

Difficulties of operating our properties while attempting to reorganize our business in bankruptcy may make it more difficult to maintain and promote our facilities and attract customers to our facilities.

•

Our vendors and service providers may require stricter terms and conditions.

•

Substantial costs for professional fees and other expenses.

•

Adverse affect on our ability to maintain our gaming licenses.

•

Inability to continue to grow our business through acquisitions and restrictions on our ability to pursue other business strategies. Among other things, the Bankruptcy Code limits our ability to incur additional indebtedness, make investments, sell assets, consolidate, merge or sell or otherwise dispose of all or substantially all of our assets or grant liens. These restrictions may place us at a competitive disadvantage.

•

Adverse affect on our ability to maintain, expand, develop and remodel our properties.

•

Transactions by the Debtors outside the ordinary course of business are subject to the prior approval of the Bankruptcy Court, which may limit our ability to respond timely to certain events or take advantage of certain opportunities.

•

We may not be able to obtain Bankruptcy Court approval or such approval may be delayed with respect to actions we may seek to undertake in the Chapter 11 Case.

•

We may be unable to retain and motivate key executives and employees through the process of reorganization, and we may have difficulty attracting new employees. In addition, so long as the Chapter 11 Case continues, our senior management will be required to spend a significant amount of time and effort dealing with the reorganization instead of focusing exclusively on business operations.

•

We may need to obtain additional financing to fund our operations and capital expenditures. There can be no assurance as to our ability to obtain sufficient financing. We are currently financing our operations during our reorganization using cash on hand. We have signed a commitment letter with certain of the holders of Senior Notes to provide a $45 million DIP Facility. Borrowings under the DIP Facility will be conditioned upon confirmation of the Debtors/AHC Plan and Bankruptcy Court approval. If the Debtors/AHC Plan is confirmed by the Bankruptcy Court, we will receive $100 million in available funds upon emergence to fund our operations and capital expenditures, as well as to repay any borrowings under the DIP Facility. Under the Beal/Icahn Plan, upon a final confirmation order, Icahn Partners would provide us with a $45 million debtor in possession loan. Such debtor in possession loan would, on the effective date, convert to new equity in the reorganized Debtors. In addition, Icahn Partners has agreed to make an equity contribution of $80 million on the effective date in exchange for new equity in the reorganized Debtors. The challenges of obtaining financing are exacerbated by adverse conditions in the general economy and the tightening in the credit markets, making it more difficult for us to obtain financing.

•

There can be no assurance that we will be able to successfully execute, confirm and consummate one or more plans of reorganization with respect to the Chapter 11 Case that are acceptable to the Bankruptcy Court and the Debtors’ creditors and other parties in interest.

•

Even assuming a successful emergence from chapter 11, there can be no assurance as to the overall long-term viability of our business.

Under the priority scheme established by the Bankruptcy Code, unless creditors agree otherwise in accordance with the Bankruptcy Code, pre-petition liabilities and post-petition liabilities must be satisfied in full before shareholders are entitled to receive any distribution or retain any property under a plan of reorganization. The ultimate recovery to creditors and/or stockholders, if any, will not be determined until confirmation of a plan of reorganization. It should be noted that under either the Debtors/AHC Plan or the Beal/Icahn Plan, there will be no distribution to stockholders. No assurance can be given as to what values, if any, will be ascribed in the Chapter 11 Case to each of these constituencies or what types or amounts of distributions, if any, they would receive. If certain requirements of the Bankruptcy Code are met, a plan of reorganization can be confirmed notwithstanding its rejection by equity holders and notwithstanding the fact that equity holders do not receive or retain any property on account of their equity interests under the plan of reorganization. Presently, we do not believe that there will be any meaningful recovery, or any recovery at all, for holders of TER Common Stock.

Our audited consolidated financial statements have been prepared assuming that we will continue as a going concern. However, the report of our independent registered public accounting firm on the financial statements of the Company as of and for the year ended December 31, 2009 includes an explanatory paragraph describing the existence of substantial doubt about the ability of our Company to continue as a going concern.

Our ability to continue as a going concern is contingent upon, among other things: (1) our ability to generate cash from operations and to maintain adequate cash on hand; (2) the resolution of the uncertainty as to the amount of claims that will be allowed; (3) our ability to confirm a plan of reorganization under the Bankruptcy Code and obtain any debt and equity financing which may be required to emerge from bankruptcy protection; and (4) our ability to achieve profitability.

Nasdaq Deslisting.

Effective February 26, 2009, Nasdaq delisted TER Common Stock from trading. Negative implications may be associated with the delisting, including potential loss in confidence in our Company by suppliers, customers and employees and the loss of institutional investor interest in TER Common Stock as a result of the delisting.

Current conditions in the global markets and general economic pressures may adversely affect consumer spending and our business and results of operations.

Our performance depends on the impact of economic conditions on levels of consumer spending. As a result of the present weak economic conditions in the United States, Europe and much of the rest of the world, the uncertainty over the duration of such weakness and the prospects for recovery, consumers are continuing to curb discretionary spending, which is having an effect on our business. An extended duration or deterioration in current economic conditions could have a further material adverse impact on our financial condition and results of operations.

To operate our business and ultimately to restructure our capital structure, we will require a significant amount of cash.

Our ability to satisfy our obligations and fund capital expenditures will depend on our ability to generate cash in the future, which is, in part, subject to general economic, financial, competitive, legislative, regulatory and other factors beyond our control. The risk is heightened by the fact that our current operations are in a single market. While additional cash for operations and capital expenditures will be provided under either plan of reorganization, we cannot assure you that our business will generate sufficient cash flow from operations or that future financing will be available to us in an amount sufficient to enable us to operate our business and restructure our business. These challenges are exacerbated by adverse conditions in the general economy and the tightening in the credit market. Our Chapter 11 Case makes it more difficult for us to obtain financing or generate cash.

Our industry is intensely competitive.

The gaming industry is highly competitive and is expected to become more competitive in the future. New entrants to the Atlantic City market have announced plans to develop casinos in the future. We also face competition from other forms of legalized gaming, such as state sponsored lotteries, racetracks, off-track wagering and video lottery and video poker terminals. In addition, online gaming, despite its illegality in the United States, is a growing sector in the gaming industry. We are unable to assess the impact that online gaming will have on our operations in the future and there is no assurance that the impact will not be materially adverse.

The filing of the Chapter 11 Case may have an adverse impact on our ability to compete.

Our success could depend upon the success of our strategic capital expenditure plan.

Many of our existing competitors in Atlantic City have recently completed significant development projects. We have completed a strategic capital expenditure plan at each of our properties, which included the construction of the Chairman Tower at Trump Taj Mahal. From time to time, capital expenditures, such as room refurbishments, amenity upgrades and new gaming equipment, are necessary to enhance the competitiveness of our properties. Our ability to successfully compete will also be dependent upon our ability to develop and implement effective marketing campaigns. To the extent we are unable to successfully develop and implement these types of marketing initiatives, we may not be successful in competing in our markets.

Gaming is a regulated industry and changes in the law could have a material adverse effect on our operations. See “Business—Regulatory and Licensing.”

Gaming in New Jersey is regulated extensively by federal and state regulatory bodies, including the New Jersey Casino Control Commission (the “CCC”) and state and federal taxing, law enforcement and liquor control agencies. We and several of our officers and other qualifiers have received the licenses, permits and authorizations required to operate our properties. Failure to maintain or obtain the requisite casino licenses would have a material adverse effect on our business.

During June 2007, the CCC renewed our licenses to operate Trump Taj Mahal, Trump Plaza and Trump Marina until June 2012.

If new gaming regulations are adopted in the jurisdictions in which we operate, such regulations could impose restrictions or costs that could have a significant adverse effect on us. From time to time, various proposals have been introduced by the legislature of New Jersey that, if enacted, could adversely affect the tax, regulatory, operations or other aspects of the gaming industry and our financial performance. Legislation of this type may be enacted in the future.

Pennsylvania, New York and other nearby states have enacted gaming legislation that may harm us, and other states may do so in the future.

In July 2004, the Pennsylvania legislature enacted the Race Horse Development and Gaming Act which authorizes the Control Board to permit a total of up to 61,000 slot machines in up to fourteen different licensed locations in Pennsylvania, seven at racetracks (each with up to 5,000 slot machines), five at slot parlors (two in Philadelphia, one in Pittsburgh and two elsewhere, each with up to 5,000 slot machines) and two at established resorts (each with up to 500 slot machines). Three of the racetrack sites, Pocono Downs, Parx Casino and Chester Downs and three slot parlors, two in Philadelphia and one in Bethlehem, are located in our market area. Slot machine operations commenced in late 2006 at the racetracks and in May 2009 at the slot parlor in Bethlehem. As of early 2010, approximately 12,000 slot machines were operating at these locations. One of the Philadelphia slot parlors commenced construction in October 2009 and is expected to open in mid-2010 with approximately 1,700 slot machines. In February 2010, Wynn Resorts announced that it had entered into a letter of intent to develop and operate the other Philadelphia facility. The transaction is contingent on approval from Pennsylvania gaming regulators.

In 2001, the New York Legislature authorized the installation of VLTs at various horse racing facilities in New York. The VLT facility at Yonkers Raceway opened in late 2006 and now operates 5,300 VLTs. The State of New York continues to seek bids for a license to operate a new casino at the Aqueduct Racetrack in Queens, New York. Additionally, at various times there have been discussions about allowing VLTs at the Belmont racetrack. These locations are less than fifteen miles from Manhattan. The 2001 legislation also authorized the Governor of New York to negotiate compacts authorizing the operation of up to six Native American casino facilities, including slot machines. Three have now been located in the western part of New York and outside of our primary market area but the remaining three, if approved and developed, are required by law to be located in either Sullivan or Ulster County, adjoining counties, which are approximately 100 miles northwest of Manhattan. Competition from the VLT facilities at Aqueduct Racetrack and Yonkers Raceway and from potential Native American casinos as may be authorized and operated in Sullivan or Ulster County could adversely impact Atlantic City casinos, including our casinos.

In addition, other states near New Jersey, including Maryland, either have or are currently contemplating gaming legislation. The net effect of gaming facilities in such other states, when operational, on the Atlantic City gaming market, including our properties, cannot be predicted. Since our market is primarily a drive-in market, legalized gaming in one or more states neighboring or within close proximity to New Jersey could have a material adverse effect on the Atlantic City gaming market overall, including our properties.

Other enacted legislation, including local anti-smoking regulations, may have an adverse impact on our operations.

On January 9, 2006, the New Jersey Legislature adopted the New Jersey Smoke-Free Air Act, which was effective on April 15, 2006. The law prohibits the smoking of tobacco in structurally enclosed indoor public places and workplaces in New Jersey, including licensed casino hotels. The law permits smoking within the perimeter of casino and casino simulcasting areas, and permits 20% of hotel guest rooms to be designated as smoking rooms.

We might not be successful in pursuing additional gaming ventures in existing or emerging gaming markets.

We are continuously looking to grow our business and diversify our cash flow by actively pursuing opportunities to capitalize on the Trump brand and expand our asset base in additional gaming markets.

Competition for gaming opportunities that are or are expected to become available in additional jurisdictions is expected to be intense, and many of our known or anticipated competitors for available gaming licenses have greater resources and economies of scale than we do. We can not assure you that we will be successful in pursuing additional gaming ventures or developing additional gaming facilities.

Our business is subject to a variety of other risks and uncertainties.

In addition to the risk factors described above, our financial condition and results of operations could be affected by many events that are beyond our control, such as:

•

capital market conditions that could (i) affect our ability to raise capital and access capital markets and (ii) raise our financing costs in connection with refinancing debt or pursuing other alternatives;

•

war, future acts of terrorism and their impact on capital markets, the economy, consumer behavior and operating expenses;

•

competition from existing and potential new competitors in Atlantic City and other markets (including online gaming), which is likely to increase over the next several years;

•

regulatory changes;

•

state tax law changes that increase our tax liability; and

•

other risks described from time to time in periodic reports filed by us with the SEC.

Occurrence of any of these risks could materially adversely affect our operations and financial condition.

Changes in the cost of electricity and other energy could affect our business.

We are a large consumer of electricity and other energy. Accordingly, increases in energy costs, may have a negative impact on our operating results. Additionally, higher energy and gasoline prices which affect our customers may result in reduced visitation to our resorts and may have an adverse effect on our business.

Our cash flows from operating activities are seasonal in nature.

Spring and summer are traditionally the peak seasons for our properties, while autumn and winter are non-peak seasons. Consequently, in the past, our operating results for the quarters ending in March and December have not been as strong as for the quarters ending in June and September. Excess cash from operations during peak seasons is used, in part, to subsidize operations during non-peak seasons. Performance in non-peak seasons is usually dependent on favorable weather and the long-weekend holiday calendar. In the event that we are unable to generate excess cash in one or more peak seasons, we may not be able to subsidize operations during non-peak seasons, if necessary, which would have an adverse effect on our business.

Item 1B.

Unresolved Staff Comments

Not applicable.

Item 2.

Properties

See “Item 1. Business—Casino Properties” for a brief description of the location and general character of each of our properties.

General. Substantially all of the real and personal property (other than cash) of each of our properties, including their respective hotel and casino facilities and the parcels of land on which they are situated, secure our indebtedness under the 2007 Credit Agreement and Senior Notes on a first and second priority basis, respectively. Each of our properties has financed or leased and, from time to time, may finance or lease its acquisition of furniture, fixtures and equipment, including slot machines. The lien in favor of any such lender or lessor may be superior to the liens securing the indebtedness owing under the 2007 Credit Agreement and the Senior Notes.

Each of our properties leases space to various retailers and food and beverage outlets in their respective facilities.

The following table lists our significant land holdings:


Property	Total Approximate Acreage
Property	Owned	Leased	Utilized	Available for Development
Trump Taj Mahal (including Steel Pier)	39.4	—	28.0	11.4
Trump Plaza	9.4	1.5	7.4	3.5
Trump Marina	14.0	—	12.0	2.0

Trump Taj Mahal. We currently own approximately 39.4 acres of land that comprise the Trump Taj Mahal site, including the 24.5 acres on which the facility is situated and 11.4 acres of land suitable for development. The Trump Taj Mahal site includes the Steel Pier comprised of approximately 3.5 acres and related property located on the opposite side of the Boardwalk from Trump Taj Mahal. We currently lease the Steel Pier to an amusement park operator pursuant to a lease agreement which we and the operator have mutually agreed to extend until December 2010. Excluded from the table is an off-site warehouse location located on 18.0 acres.

Trump Plaza. We own and lease approximately 10.9 acres of land, including several parcels of land in and around Atlantic City. We lease one of four parcels of land on which Trump Plaza is situated from Plaza Hotel Management Company (“PHMC”) pursuant to a non-renewable ground lease expiring in December 2078 (the “PHMC Lease”). We are responsible for the payment of fixed rent, as well as all other costs and expenses with respect to the use, operation and ownership of the leased tract and the improvements thereon, or which may in the future be located thereon, including, but not limited to, all maintenance and repair costs, insurance premiums, real estate taxes, assessments and utility charges. The improvements located on the leased tract are owned by us through the duration of the term of the PHMC Lease, and upon the expiration of the term of the PHMC Lease (for any reason), ownership of such improvements will then shift to PHMC. We have the option to purchase the leased parcel at certain times during the term of such PHMC Lease under certain circumstances.

We also lease, pursuant to the PHMC Lease, an approximately 11,800 square foot parcel of land located near the intersection of Mississippi and Pacific Avenues and own a 5,750 square foot parcel of land adjacent to it.

We also own five parcels of land, aggregating approximately 43,300 square feet, and lease one parcel consisting of approximately 3,125 square feet. All of such parcels are contiguous and are located along Atlantic Avenue, on the same block as Trump Plaza’s garage. These parcels of land are used for signage and surface parking.

Trump Marina. We own Trump Marina’s hotel and casino facility and the approximate 14.0-acre, triangular-shaped parcel of land on which it is situated, including 2.0 acres suitable for development. We also

own an employee parking lot located on Route 30, approximately two miles from Trump Marina, which can accommodate approximately 1,000 cars. In addition, pursuant to a long-term lease between Trump Marina and the State of New Jersey, Trump Marina leases the Senator Frank S. Farley State Marina. The marina features approximately 640 boat slips.

Trump Tower, New York. We lease office space in Trump Tower located in New York, New York for general, executive and administrative purposes pursuant to a lease, dated November 1, 1996, as amended, with Trump Tower Commercial, LLC, an entity owned by Donald J. Trump. The Trump Tower lease expires on August 31, 2010.

Item 3.

Legal Proceedings

As discussed in Item 1 above, on February 17, 2009, the Debtors filed voluntary petitions seeking relief under chapter 11 of the Bankruptcy Code in the Bankruptcy Court. The cases are being jointly administered under the caption In re: TCI 2 Holdings, LLC, et al Debtors, Chapter 11 Case Nos.: 09-13654 through 09-12656 and 09-13658 through 09-13664 (JWH) (the “Chapter 11 Case”). The Debtors continue to operate their business as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with the applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court. As of the date of the filing of the Chapter 11 Case, virtually all pending litigation against the Debtors (including the actions described below) is stayed as to the Debtors, and absent further order of the Bankruptcy Court, no party, subject to certain exceptions, may take any action, also subject to certain exceptions, to recover on pre-petition claims against the Debtors. At this time it is not possible to predict the outcome of the Chapter 11 Case or its effect on our business or the actions described below.

Pequot Tribe Litigation—On May 28, 2003, one of our indirect subsidiaries, Trump Entertainment Resorts Development Company, LLC (“TER Development”), filed a complaint against, among others, the Paucatuck Eastern Pequot Indian Tribal Nation (the “Pequot Tribe”) and Eastern Capital Development, Inc. (“ECD”) in the Superior Court of New London, Connecticut. In that complaint, TER Development alleged fraud, breach of contract, conspiracy, violation of the Connecticut Unfair Trade Practices Act and intentional interference with contractual relations by ECD in connection with certain contractual arrangements between TER Development and the Pequot Tribe. Pursuant to such arrangements, TER Development had agreed, among other things, to support the efforts of the Pequot Tribe to obtain federal recognition, and together they had agreed to exercise commercially reasonable efforts to pursue the operation of a tribal gaming facility to be managed by TER Development. In the complaint, TER Development seeks, among other things, compensatory and punitive damages, attorney fees and a finding by the court that ECD has interfered with TER Development’s business relationship with the tribe and that certain members of the Pequot Tribe Tribal Counsel are in default under the aforementioned contractual arrangements in the sum of approximately $10 million. On October 12, 2005, the Bureau of Indian Affairs, U.S. Department of Interior (BIA) denied the application of the Pequot Tribe for federal recognition, a prerequisite for developing a gaming facility. In October 2007, the parties entered into a settlement of the litigation pursuant to which TER Development would receive certain payments upon the opening of any casino by the Pequot Tribe. At this time, the Pequot Tribe is not federally recognized and there can be no assurance that it will ever be recognized or open a casino.

Power Plant Litigation—On December 30, 2004, TER Development filed a complaint (the “Power Plant Litigation”) against Richard T. Fields, Coastal Development, LLC, Power Plant Entertainment, LLC, Native American Development, LLC, Joseph S. Weinberg and The Cordish Company (collectively, the “Power Plant Group”) in the Circuit Court of the 17th Judicial District for Broward County, Florida (the State Court”), in which TER Development alleged that Power Plant Entertainment, LLC improperly obtained certain agreements with the Seminole Tribe of Florida for development of gaming facilities in Hollywood and Tampa, Florida. TER Development has asserted claims for fraud, breach of fiduciary duty, conspiracy, violation of the Florida Deceptive and Unfair Trade Practices Act and interference with prospective business relationship as a result of the Power Plant Group’s actions. On April 17, 2008, the trial court ruled on the defendants’ numerous motions

for summary judgment. The court denied the defendants’ motions as to TER Development’s claims against all defendants for fraud and conspiracy. The trial court granted the defendants’ motions for summary judgment as to TER Development’s claims for breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, interference with prospective business relationship and the claims under the Florida Deceptive and Unfair Trade Practices Act. The defendants seek no relief against TER Development other than claims for attorney’s fees and costs in the event that they prevail at trial.

On June 25, 2009, the Power Plant Group filed a motion with the Bankruptcy Court seeking to lift the automatic stay to recommence the Power Plant Litigation. On August 21, 2009, the Bankruptcy Court entered an order authorizing the parties to file a report as to the status of the proceedings. The Bankruptcy Court also ruled that the Power Plant Group’s attorney fee claims and abuse of process claims were prepetition claims (although any unaccrued malicious prosecution claims are not). Several defendants, who admit making a decision not to file proof of claims in Bankruptcy Court, have appealed the Bankruptcy Court’s ruling. In addition, as discussed below under “Trump Marina”, one of the defendants, Coastal Development, LLC and its affiliate, Coastal Marina, LLC, have filed an adversary complaint against the Debtors alleging claims arising from a failed prepetition settlement of the Power Plant Litigation. At the request of the Power Plant Defendants, on October 5, 2009, the State Court lifted the stay on the Power Plant Litigation and has scheduled the case to be tried during the three month trial period commencing September 27, 2010.

Trump Marina—As described in Note 3 to our consolidated financial statements, on May 28, 2008, Trump Marina Associates, LLC (“Seller”) entered into the Marina Agreement to sell Trump Marina (the “Property”) to Coastal Marina, LLC (“Buyer”), an affiliate of Coastal Development, LLC (“Coastal”). Upon entering into the Marina Agreement, Buyer placed into escrow a $15.0 million deposit toward the purchase price (the “Original Marina Deposit”). On October 28, 2008, the parties entered into an amendment to the Marina Agreement (the “Marina Amendment”) to modify certain terms and conditions of the Marina Agreement, including, but not limited to providing that Seller could terminate the Marina Agreement if the transaction did not close by May 28, 2009 and that the Original Marina Deposit held in escrow, together with any interest earned thereon, was released to Seller immediately and an additional $2.0 million deposit was placed in escrow (the “Additional Marina Deposit”) for a total deposit towards the purchase price of $17.0 million. Coastal failed to consummate the transaction within the time provided under the Marina Amendment. On June 1, 2009, Seller delivered notice to Coastal that the Marina Agreement, as amended by the Marina Amendment, was terminated. Seller also delivered notice to the escrow agent requesting release of the Additional Marina Deposit to Seller. On July 28, 2009, Buyer and Coastal filed an Adversary Complaint with the Bankruptcy Court, claiming they were fraudulently induced to enter the Marina Agreement, that the agreement was breached, and that these and other related claims gave rise to a right to the return of the Initial Marina Deposit, the Additional Marina Deposit, damages and other relief. On October 21, 2009, Buyer and Coastal filed an Amended Complaint adding Donald J. Trump and other parties as defendants, and adding additional allegations to the existing claims. We believe these claims are without merit.

2005 Chapter 11 Cases—We previously emerged from reorganization proceedings under the Bankruptcy Code (the “2005 Chapter 11 Case”) on May 20, 2005 (the “2005 Effective Date”). The 2005 Chapter 11 Case was voluntarily commenced by our predecessor company, Trump Hotels & Casino Resorts, Inc. (“THCR”). Effective as of March 17, 2009, the Bankruptcy Court ordered that all of the remaining open cases pertaining to the 2005 Chapter 11 Case be closed.

On July 18, 2005, the Bankruptcy Court considered a motion brought by a certain group of persons alleging that they had held shares of common stock of THCR on the record date for distributions under the Plan of Reorganization related to the 2005 Chapter 11 Case (the “2005 Plan”) (and who subsequently sold their shares prior to the distribution date) but did not receive any distributions under the 2005 Plan, which they believe were wrongly made to the beneficial holders of our stock on the distribution date. The movants had sought an order compelling us to make distributions to them under the 2005 Plan. After additional briefing and a court hearing with respect to the issue on October 8, 2005, the Bankruptcy Court denied the movants’ motion on February 17, 2006. The movants filed an appeal from the judgment entered in the Bankruptcy Court in favor of THCR. The

movants appealed this motion to the United States District Court for the district of New Jersey. During April 2007, the United States District Court reversed the Bankruptcy Court’s denial and remanded the case back to the Bankruptcy Court for further consideration. In May 2007, we filed a notice of appeal to the United States Court of Appeals for the Third Circuit. By order dated November 5, 2008, the Court of Appeals affirmed the District Court’s order. While on remand in the Bankruptcy Court for further consideration in light of the District Court’s order, we filed a voluntary petition in the Bankruptcy Court on February 17, 2009, seeking relief under the provisions of chapter 11 of the Bankruptcy Code. As a result, the matter has been stayed pending the resolution of our bankruptcy proceedings. The Bankruptcy Court has ordered the movants act accordingly in the Chapter 11 Case with regard to their alleged claims.

New Jersey State Income Taxes—From 2002 through 2006, state income taxes for our New Jersey operations were computed under the alternative minimum assessment method. We believe our New Jersey partnerships are exempt from these taxes and, as such, have not remitted payments of the amounts provided. The New Jersey Division of Taxation has issued an assessment to collect the unpaid taxes for the tax years 2002 and 2003. At December 31, 2009, we have accrued $30.9 million for taxes and interest relating to this alternative minimum tax assessment for 2002 and 2003, as well as the open years 2004 through 2006. We are currently in discussions with the New Jersey Division of Taxation regarding settlement of these assessments.

Other Litigation—In addition to the foregoing, we and certain of our employees are involved from time to time in other legal proceedings arising in the ordinary course of our business. While any proceeding or litigation contains an element of uncertainty, we believe that the final outcomes of these other matters are not likely to have a material adverse effect on our results of operations or financial condition. In general, we have agreed to indemnify certain of our key executives and directors against any and all losses, claims, damages, expenses (including reasonable costs, disbursements and counsel fees) and liabilities (including amounts paid or incurred in satisfaction of settlements, judgments, fines and penalties) incurred by them in any legal proceedings absent a showing of such persons’ gross negligence or malfeasance.

Item 4.

Removed and Reserved

PART II

Item 5.

Market for Registrant’s Common Equity and Related Stockholder Matters

TER Common Stock. From September 20, 2005 to February 26, 2009, TER Common Stock traded on the Nasdaq Global Market (formerly, the Nasdaq National Market System) under the ticker symbol “TRMP.” On February 26, 2009, TER Common Stock was delisted from the Nasdaq Stock Market in light of, among other things, the filing of the Chapter 11 Case. The Company’s common stock currently trades on the OTC Bulletin Board under the symbol “TRMPQ.”

The following table reflects the high and low sales prices, rounded to the nearest penny, of TER Common Stock as reported by the Nasdaq Global Market and the OTC Bulletin Board, as applicable, for each quarterly period in 2008 and 2009 and the subsequent interim quarterly period (through March 18, 2010).


	High		Low
2008:
First Quarter	$	4.80	$	2.90
Second Quarter	$	3.89	$	1.76
Third Quarter	$	2.20	$	1.04
Fourth Quarter	$	1.25	$	0.17

2009:
First Quarter	$	0.57	$	0.02
Second Quarter	$	0.28	$	0.07
Third Quarter	$	0.28	$	0.10
Fourth Quarter	$	0.18	$	0.07

2010:
First Quarter (through March 18, 2010)	$	0.20	$	0.05

Holders. As of March 18, 2010, there were approximately 2,646 holders of record of TER Common Stock.

Nine hundred shares of TER class B common stock are also issued and outstanding. No established trading market exists for our class B common stock and the class B common stock is not permitted to receive any dividends or distributions (other than certain distributions upon liquidation) with respect to our equity. All of the 900 shares of TER class B common stock were owned by Mr. Trump. The 900 shares of class B common stock had the voting equivalency of 9,377,484 shares of TER Common Stock and represented the shares of TER Common Stock issuable upon exchange of Mr. Trump and his affiliate’s limited partnership interest in TER Holdings pursuant to the Third Amended and Restated Exchange and Registration Rights Agreement among TER, TER Holdings, Mr. Trump and Trump Casinos, Inc. By letter dated February 13, 2009, Mr. Trump notified TER that he had abandoned any and all of his (but not his affiliate’s) 23.5% direct limited partnership interest in TER Holdings and relinquished any and all rights under the Fourth Amended and Restated Agreement of Limited Partnership of TER Holdings (the “Partnership Agreement”) or otherwise with respect to TER Holdings and Mr. Trump’s limited partnership interest. Accordingly, after giving effect to such abandonment, the 900 shares of class B common stock would now have the voting equivalency of 1,407 shares of TER Common Stock.

Dividends. We have never paid a dividend on TER Common Stock and do not anticipate paying one in the foreseeable future.

Equity Compensation Plan Information

The following table summarizes information regarding our equity compensation plans as of December 31, 2009. All outstanding awards relate to TER Common Stock.


Plan Category	Equity Compensation Plan Information
Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights		Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans
Equity compensation plans approved by security holders	300,000	(1)	$	17.75	2,910,661	(2)
Equity compensation plans not approved by security holders	—			—	—

Total	300,000		$	17.75	2,910,661

(1)	Options granted under our 2005 Incentive Award Plan.

(2)	Excludes 300,000 securities to be issued upon the exercise of outstanding options.

Item 6.

Selected Financial Data

The following table sets forth certain of our historical financial information for the years ended December 31, 2009, 2008, 2007 and 2006 and the period from May 20, 2005 through December 31, 2005 (TER) and for the period from January 1, 2005 through May 19, 2005 (Predecessor Company). All financial information should be read in conjunction with “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and the consolidated financial statements and notes thereto referenced elsewhere in this Form 10-K.


(In thousands, except share and per share data)	TER															Predecessor Company
	Year Ended December 31,												May 20, 2005 through December 31, 2005			January 1, 2005 through May 19, 2005
	2009			2008			2007			2006			May 20, 2005 through December 31, 2005			January 1, 2005 through May 19, 2005
Revenues:
Gaming	$	801,397		$	936,761		$	1,021,625		$	1,079,245		$	663,140		$	398,409
Rooms		93,299			87,336			83,733			77,836			48,257			26,360
Food and beverage		99,364			111,857			118,959			122,611			77,806			44,198
Other		42,893			44,251			46,019			43,370			26,833			12,809

		1,036,953			1,180,205			1,270,336			1,323,062			816,036			481,776
Less promotional allowances		(244,804	)		(272,197	)		(282,101	)		(296,783	)		(188,254	)		(117,337	)

Net revenues		792,149			908,008			988,235			1,026,279			627,782			364,439
Costs and expenses:
Operating costs, excluding items detailed below		738,767			813,664			845,727			856,578			538,383			303,849
Goodwill and other asset impairment charges		556,733			207,687			277,880			—			—			—
Depreciation and amortization		52,137			63,024			65,632			68,091			37,434			35,753
Reorganization expense (income) and related costs		37,518			1,443			—			—			9,058			(25,967	)
Income from settlement of property tax appeals		—			—			(30,705	)		—			—			—

		1,385,155			1,085,818			1,158,534			924,669			584,875			313,635

(Loss) income from operations		(593,006	)		(177,810	)		(170,299	)		101,610			42,907			50,804
Non-operating income (expense):
Interest income		1,558			4,565			7,553			10,299			2,151			836
Interest expense		(131,900	)		(132,516	)		(131,034	)		(130,144	)		(79,602	)		(85,678	)
Income related to termination of Marina Agreement		15,196			—			—			—			—			—
Loss on early extinguishment of debt		—			—			(4,127	)		—			—			—
Interest expense—related party		—			—			—			—			—			(1,184	)

		(115,146	)		(127,951	)		(127,608	)		(119,845	)		(77,451	)		(86,026	)

Loss before income taxes, discontinued operations and extraordinary item		(708,152	)		(305,761	)		(297,907	)		(18,235	)		(34,544	)		(35,222	)
Income tax benefit (provision)		8,324			12,510			48,975			(6,451	)		(11,421	)		(2,074	)

Loss from continuing operations		(699,828	)		(293,251	)		(248,932	)		(24,686	)		(45,965	)		(37,296	)

Income from discontinued operations:
Trump Indiana, net of income taxes		—			2,070			—			734			12,819			118,748

Income from discontinued operations		—			2,070			—			734			12,819			118,748

(Loss) income before extraordinary item		(699,828	)		(291,181	)		(248,932	)		(23,952	)		(33,146	)		81,452
Extraordinary gain on extinguishment of debt		—			—			—			—			—			196,932

Net (loss) income		(699,828	)		(291,181	)		(248,932	)		(23,952	)		(33,146	)		278,384
Less: Net loss attributable to the noncontrolling interest		165,890			58,978			60,251			5,445			6,618			—

Net (loss) income attributable to Trump Entertainment Resorts, Inc.	$	(533,938	)	$	(232,203	)	$	(188,681	)	$	(18,507	)	$	(26,528	)	$	278,384

Earnings per share:
Net (loss) income per share attributable to Trump Entertainment Resorts, Inc. common shareholders—basic and diluted:
Continuing operations	$	(16.85	)	$	(7.37	)	$	(6.07	)	$	(0.62	)	$	(1.19	)	$	(1.25	)
Discontinued operations		—			0.04			—			0.02			0.32			3.97
Extraordinary gain on extinguishment of debt		—			—			—			—			—			6.59

Basic and diluted net (loss) income per share	$	(16.85	)	$	(7.33	)	$	(6.07	)	$	(0.60	)	$	(0.87	)	$	9.31

Weighted Average Shares Outstanding:
Basic and diluted		31,691,463			31,674,980			31,086,918			30,920,616			30,533,041			29,904,764
Balance Sheet Data (at end of period):
Cash and cash equivalents	$	66,084		$	86,183		$	121,309		$	100,007		$	228,554
Property and equipment		1,134,027			1,707,403			1,630,453			1,535,057			1,463,142
Total assets		1,396,769			2,047,379			2,228,880			2,260,496			2,329,763
Total debt, including current maturities		1,740,033			1,743,850			1,643,774			1,407,433			1,437,959
Noncontrolling interests		(159,639	)		6,925			64,892			125,395			129,708
Total (deficit) equity		(691,678	)		7,704			291,260			538,163			556,866

Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations

Forward-Looking Statements

This Report contains statements that we believe are, or may be considered to be, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical fact included in this Report regarding the prospects of our industry or our prospects, plans, financial position or business strategy, may constitute forward-looking statements. In addition, forward-looking statements generally can be identified by the use of forward-looking words such as “may,” “will,” “expect,” “intend,” “estimate,” “foresee,” “project,” “anticipate,” “believe,” “plans,” “forecasts,” “continue” or “could” or the negatives of these terms or variations of them or similar terms. Furthermore, such forward-looking statements may be included in various filings that we make with the SEC, or press releases or oral statements made by or with the approval of one of our authorized executive officers. Although we believe that the expectations reflected in these forward-looking statements are reasonable, we cannot assure you that these expectations will prove to be correct and there can be no assurance that the forward-looking statements contained in this Report, including with respect to the ultimate impact of the events occurring during the reorganization process, will be realized. These forward-looking statements are subject to certain known and unknown risks and uncertainties, as well as assumptions, that could cause actual results to differ materially from those reflected in these forward-looking statements. Factors that might cause actual results to differ include, but are not limited to, those discussed in the section entitled “Risk Factors” of this Report. Readers are cautioned not to place undue reliance on any forward-looking statements contained herein, which reflect management’s opinions only as of the date hereof. Except as required by law, we undertake no obligation to revise or publicly release the results of any revision to any forward-looking statements. You are advised, however, to consult any additional disclosures we make in our reports to the SEC. All subsequent written and oral forward-looking statements attributable to us or persons acting on our behalf are expressly qualified in their entirety by the cautionary statements contained in this Report.

Overview

We own and operate the Trump Taj Mahal Casino Resort, Trump Plaza Hotel and Casino and the Trump Marina Hotel Casino in Atlantic City, New Jersey.

Financial Condition

Liquidity and Capital Resources

Chapter 11 Case. On February 17, 2009, TER and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions in the United States Bankruptcy Court for the District of New Jersey in Camden, New Jersey (the “Bankruptcy Court”) seeking relief under the provisions of chapter 11 of the United States Code (the “Bankruptcy Code”). These chapter 11 cases are being jointly administered under the caption In re: TCI 2 Holdings, LLC, et al Debtors, Chapter 11 Case Nos.: 09-13654 through 09-13656 and 09-13658 through 09-13664 (JHW) (the “Chapter 11 Case”).

We intend to maintain business operations through the reorganization process. On February 20, 2009, the Company obtained Bankruptcy Court approval to pay its vendors in the ordinary course of business. Our liquidity and capital resources, however, are significantly affected by the Chapter 11 Case. Our bankruptcy proceedings have resulted in various restrictions on our activities, limitations on financing and a need to obtain Bankruptcy Court approval for various matters. As a result of the filing of the Chapter 11 Case, the Debtors are not permitted to make any payments on pre-petition liabilities without prior Bankruptcy Court approval. However, the Debtors have been granted relief in order to continue wage and salary payments and other benefits to employees as well as other related pre-petition obligations; to continue to honor customer programs as well as certain related pre-petition customer obligations; and to pay certain pre-petition trade claims held by critical vendors. Under the priority schedule established by the Bankruptcy Code, certain post-petition and pre-petition liabilities need to be satisfied before general unsecured creditors and equity holders are entitled to receive any distribution. At this time, it is not possible to predict with certainty the effect of the Chapter 11 Case on our business or various

creditors, or when we will emerge from these proceedings. Our future results depend upon our confirming and successfully implementing, on a timely basis, a plan of reorganization. The continuation of the Chapter 11 Case, particularly if a plan of reorganization is not timely consummated, could further adversely affect our operations. See “Item 1. Business—Chapter 11 Proceedings” and “Item 1A.—Risk Factors”.

The filing of the Chapter 11 Case constituted an event of default and therefore triggered repayment obligations under the $493.3 million senior secured facility entered into by the Company on December 21, 2007 (the “2007 Credit Agreement”) and the $1,250.0 million of Senior Secured Notes issued by TER Holdings and its wholly owned finance subsidiary, Trump Entertainment Resorts Funding, Inc. (“TER Funding”) on May 20, 2005 (the “Senior Notes”). As a result, all indebtedness outstanding under the Senior Notes and the 2007 Credit Agreement became automatically due and payable. Under the Bankruptcy Code, actions to collect pre-petition indebtedness, as well as most pending litigation, are stayed and other contractual obligations against the Debtors generally may not be enforced. Absent an order of the Bankruptcy Court, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization to be approved by the Bankruptcy Court. Consequently, the Company has classified the indebtedness under the Senior Notes and the 2007 Credit Agreement within current liabilities in its Consolidated Balance Sheets.

On February 23 2009, the Bankruptcy Court entered an order approving on an interim basis the terms pursuant to which the Debtors are permitted to use the cash collateral under the 2007 Credit Agreement. Such use was permitted in exchange for certain protections afforded to the lenders under the 2007 Credit Agreement.

As described in Note 1 to our Consolidated Financial Statements, on December 24, 2009 as amended on January 5, 2010, the Debtors and the Ad Hoc Committee filed with the Bankruptcy Court the Debtors/AHC Plan and the disclosure statement relating thereto (the “Debtors/AHC Disclosure Statement”). On January 5, 2010, Beal Bank and Icahn Partners filed with the Bankruptcy Court the Beal/Icahn Plan and the disclosure statement relating thereto (the “Beal/Icahn Disclosure Statement”). See Item 1 for more information on the Debtors/AHC Plan and the Beal/Icahn Plan.

As also described in Item 1, on March 2, 2010, the Debtors and certain holders of the Senior Notes entered into a commitment letter providing for a $45 million senior secured debtor in possession notes facility (the “DIP Facility”). In addition, pursuant to the terms of the Beal/Icahn Plan, Icahn Partners would provide a $45 million debtor in possession facility upon receiving a final confirmation order of the Beal/Icahn Plan. See Item 1 for more information on the DIP Facility and the terms of the facility offered pursuant to the Beal/Icahn Plan.

General. Cash flows from the operating activities of our casino properties constitute our primary source of liquidity. We may need to obtain additional financing to meet all of our liquidity requirements and other obligations. Currently, our liquidity and cash flow is affected by a variety of factors, many of which are outside of our control, including the current economic conditions, the tightened credit markets, as well as the downturn in the Atlantic City gaming market, regulatory issues, competition, and other general business conditions. We cannot assure you that we will possess sufficient income and liquidity to fund our operations and capital expenditures. There can be no assurance as to our ability to obtain sufficient financing and meet our obligations. We are currently financing our operations during our reorganization using our cash on hand. We have signed a commitment letter with certain of the holders of Senior Notes to provide a $45 million DIP Facility. Borrowings under the DIP Facility will be conditioned upon confirmation of the Debtors/AHC Plan and Bankruptcy Court approval. If the Debtors/AHC Plan is confirmed by the Bankruptcy Court, we will receive $100 million in available funds upon emergence to fund our operations and capital expenditures, as well as to repay any borrowings under the DIP Facility. Under the Beal/Icahn Plan, upon confirmation, Icahn Partners would provide us with a $45 million debtor in possession loan. Such debtor in possession loan would, on the effective date, convert to new equity in the reorganized Debtors. In addition, Icahn Partners has agreed to make an equity contribution of $80 million on the effective date in exchange for new equity in the reorganized Debtors. The challenges of obtaining financing are exacerbated by adverse conditions in the general economy and the current credit market. These conditions and our Chapter 11 Case make it more difficult for us to obtain financing.

We are operating in an extremely challenging business environment. Cash flows provided by operating activities were $11.7 million during 2009 compared to $0.3 million during 2008. A significant decrease in gaming revenues due to increased competition and the weakened economy along with the substantial reorganization fees paid in connection with our reorganization were more than offset by lower cash paid for interest and changes in working capital requirements.

Cash flows used in investing activities were $26.4 million during 2009 compared to $128.0 million during 2008. Investing activities during 2009 include (i) capital expenditures of $26.8 million, of which approximately $17.5 million related to the completion of the Chairman Tower at the Taj Mahal and (ii) the receipt of proceeds from the Casino Reinvestment Development Authority (“CRDA”) totaling $8.2 million for qualifying expenditures to construct the Chairman Tower and certain other CRDA investments. Investing activities during 2008 include (i) capital expenditures of $179.0 million, of which approximately $133.0 million related to the construction of the Chairman Tower, (ii) a decrease in restricted cash reflecting the use of proceeds from borrowings which were restricted for expenditures associated with the construction of the Chairman Tower, (iii) capitalized interest of $8.5 million, (iv) the receipt of proceeds from the CRDA totaling $11.9 million for qualifying expenditures to construct the Chairman Tower and (v) a $15.2 million cash deposit received in connection with the October 28, 2008 amendment to the Asset Purchase Agreement for the sale of Trump Marina.

Our 2009 cash flows used in financing activities included the repayment of $4.9 million of our outstanding term loan and $0.4 million of payments related to capital lease obligations. During 2008, our cash flows provided by financing activities were $92.5 million. We borrowed the remaining $100.0 million available under our 2007 Credit Agreement, repaid $4.5 million of our outstanding term loan and $1.7 million of our capital lease obligations. We also made partnership distributions to Mr. Trump totaling $1.3 million.

At December 31, 2009, we had $66.1 million in cash and cash equivalents. There was a $483.8 million term loan outstanding under our 2007 Credit Agreement. We also had $1,249.0 million of Senior Notes outstanding. The filing of the Chapter 11 Case constituted an event of default or otherwise triggered repayment obligations under the Senior Notes and the 2007 Credit Agreement. As a result, all indebtedness outstanding under the Senior Notes and the 2007 Credit Agreement became automatically due and payable, subject to an automatic stay of any action to collect, assert, or recover a claim against the Debtors and the application of applicable bankruptcy law.

Our ability to meet our operating and debt service obligations depends on a number of factors, including our existing cash on hand and cash flows generated by our operating subsidiaries. There can be no assurance that other sources of funds will be available to us, or if available, at terms favorable to us.

TER has minimal operations, except for its ownership of TER Holdings and its subsidiaries. TER depends on the receipt of sufficient funds from its subsidiaries to meet its financial obligations. The ability of our subsidiaries to make payments to TER Holdings may also be restricted by the New Jersey Casino Control Commission.

Contractual obligations, as of December 31, 2009, mature as follows (in millions):


	One year and less		2-3 years		3-5 years		After 5 years		Total
Long-term debt	$	1,732.8	$	—	$	—	$	—	$	1,732.8
Interest on long-term debt (1)		149.5		—		—		—		149.5
Services Agreement (2)		2.0		4.0		—		—		6.0
Capital leases		1.5		2.4		1.6		10.3		15.8
Operating leases		12.1		10.7		7.1		87.0		116.9
2008 NJSEA Subsidy Agreement (3)		6.2		1.5		—		—		7.7

Total	$	1,904.1	$	18.6	$	8.7	$	97.3	$	2,028.7

In addition to the contractual obligations disclosed in this table, we have unrecognized tax benefits that, based on uncertainties associated with the items, we are unable to make reasonably reliable estimates of the period of potential cash settlements, if any, with taxing authorities. See Note 8 to our Consolidated Financial Statements.

(1)

We were in default under the terms of the indenture governing the Senior Notes and the 2007 Credit Agreement as of December 31, 2009 (see Note 7 to the Consolidated Financial Statements). As a result, all indebtedness outstanding under the Senior Notes and the 2007 Credit Agreement was automatically due and payable. Interest on long-term debt reflects amounts accrued as of December 31, 2009.

(2)	Represents obligations under a services agreement with Mr. Trump.

(3)	Represents estimated amounts due under the 2008 NJSEA Subsidy Agreement as discussed in Note 18 to the Consolidated Financial Statements.

Off Balance Sheet Arrangements

We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained interest, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities or any other obligation under a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us.

Results of Operations

The following analyses compare our results of operations for: (1) the year ended December 31, 2009 with our results of operations for the year ended December 31, 2008 and (2) the year ended December 31, 2008 with our results of operations for the year ended December 31, 2007. Our primary business activities are conducted by Trump Taj Mahal, Trump Plaza and Trump Marina.

Basis of Presentation. The consolidated financial statements have been prepared in accordance with Topic 852—“Reorganizations” of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) (“ASC 852”) and on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. The ability of the Company, both during and after the Chapter 11 Case, to continue as a going concern is contingent upon, among other things, (i) the ability of the Company to generate cash from operations and to maintain adequate cash on hand; (ii) the resolution of the uncertainty as to the amount of claims that will be allowed; (iii) the ability of the Company to confirm a plan of reorganization under the Bankruptcy Code and obtain any debt and equity financing which may be required to emerge from bankruptcy protection; and (iv) the Company’s ability to achieve profitability. There can be no assurance that the Company will be able to successfully achieve these objectives in order to continue as a going concern. The consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Results of Operations for the Years Ended December 31, 2009 and 2008

The following table includes selected data of our casino properties and should be read with the following discussion of our results of operations.


	Year Ended December 31,
	2009			2008
	(in millions)
Gaming revenues
Trump Taj Mahal	$	441.1		$	476.7
Trump Plaza		199.8			258.8
Trump Marina		160.5			201.3

Total	$	801.4		$	936.8

Net revenues
Trump Taj Mahal	$	439.6		$	460.7
Trump Plaza		196.7			252.8
Trump Marina		155.8			194.5

Total	$	792.1		$	908.0

Income (loss) from operations
Trump Taj Mahal	$	22.2		$	(42.7	)
Trump Plaza		(357.6	)		4.4
Trump Marina		(208.1	)		(62.0	)
Corporate and other		(49.5	)		(77.5	)

Total	$	(593.0	)	$	(177.8	)

Depreciation and amortization
Trump Taj Mahal	$	40.7		$	36.7
Trump Plaza		9.6			18.9
Trump Marina		1.7			6.8
Corporate and other		0.1			0.7

Total	$	52.1		$	63.1

Intangible and other asset impairment charges
Trump Taj Mahal	$	3.7		$	90.3
Trump Plaza		347.8			5.4
Trump Marina		205.2			63.6
Corporate and other		—			48.4

Total	$	556.7		$	207.7

Reorganization expense
Trump Taj Mahal	$	4.6		$	—
Trump Plaza		2.3			—
Corporate and other		30.6			1.4

Total	$	37.5		$	1.4

Our operating results during 2009 were affected by various factors including the continuing effects of gaming competition in Pennsylvania and New York and continued weakness in the economy.

Gross Gaming Revenues—During 2009, the Atlantic City market experienced a decrease in gross gaming revenues for the third consecutive year. For the year ended December 31, 2009, gross gaming revenues in the Atlantic City market (as reported to the CCC) decreased 13.2% due to a 13.1% decrease in slot revenues and a

13.5% decrease in table game revenues compared to the year ended December 31, 2008. For the year ended December 31, 2009, we experienced a 14.5% decrease in overall gross gaming revenues comprised of a 14.0% decrease in slot revenues and a 15.5% decrease in table game revenues compared to the prior year.

Impairment Charges—We review our indefinite-lived intangible assets for impairment annually as of October 1, or more frequently if events or circumstances indicate that the value of intangible assets might be impaired. As a result of the negative effects of the aforementioned factors on our operating results, we recognized intangible asset impairment charges totaling $20.5 million and $162.7 million during the years ended December 31, 2009 and 2008, respectively.

We review our long-lived assets for impairment when events or circumstances indicate that the carrying value of such assets might not be recoverable. Based upon the results of our testing, we recorded impairment charges totaling $536.2 million related to Trump Plaza’s and Trump Marina’s long-lived assets during the year ended December 31, 2009. During the year ended December 31, 2008, we recognized a $45.0 million estimated loss on disposal to record Trump Marina’s long-lived assets at their estimated fair value less costs to sell in connection with entering into the Marina Amendment.

A discussion of each of our properties’ operating results for the year ended December 31, 2009 compared to December 31, 2008 follows:

Trump Taj Mahal—Net revenues decreased $21.1 million principally due to a $35.6 million decrease in gaming revenues partially offset by a $5.5 million decrease in gaming promotional offers and a $9.0 million increase in cash rooms, food and beverage and other revenue. The decrease in gaming revenues was due to a $21.3 million decrease in slot revenue and a $14.3 million decrease in table games and other gaming revenue. The decrease in slot revenue resulted from an 8.6% decrease in slot handle. Table games revenue decreased due to both a decrease in table game play and hold percentage.

Before consideration of $4.6 million of non-cash reorganization expense during 2009 and intangible asset impairment charges during 2009 and 2008, income from operations decreased $17.1 million due to the decrease in net revenues partially offset by a $4.0 million decrease in operating costs and expenses. Total operating costs and expenses decreased principally due to: a $5.5 million decrease in electricity and thermal energy costs; a $4.7 million decrease in gaming taxes; a $3.5 million decrease in promotional expenses; a $3.5 million decrease in advertising costs; and a $2.4 million decrease in marketing and entertainment costs. These decreases were partially offset by: a $4.9 million increase in property taxes, resulting from the assessment of the Chairman Tower; a $4.0 million increase in depreciation expense, principally due to depreciation expense associated with the Chairman Tower; a $2.7 million increase in expense recognized in association with the New Jersey Sports and Exposition Authority subsidy agreement; a $2.1 million increase in benefit costs and a $1.5 million increase in insurance costs.

Trump Plaza—Net revenues decreased $56.1 million principally due to a $59.0 million decrease in gaming revenues and a $3.9 million decrease in cash rooms, food and beverage and other revenue partially offset by a $6.8 million decrease in gaming promotional offers. The decrease in gaming revenues was due to a $35.0 million decrease in slot revenue and a $24.0 million decrease in table games revenue. The decrease in slot revenue was principally due to a 20.4% decrease in slot handle. Table games revenue decreased due to a 20.0% decrease in table game play and a significant decrease in hold percentage.

Before consideration of non-cash impairment charges and $2.3 million of non-cash reorganization expense, income from operations decreased $17.3 million as the $56.1 million decrease in net revenues was partially offset by a $38.8 million decrease in operating costs and expenses. The decline in operating expenses was primarily attributable to: a $9.3 million decrease in depreciation expense due to the long-lived asset impairment charges recorded during the second quarter of 2009; an $8.1 million decrease in payroll and related costs; a $5.8 million decrease in gaming taxes due to lower gaming revenues; a $4.8 million decrease in marketing and entertainment

expenses; a $4.0 million decrease in general and administrative expenses; a $3.4 million decrease in utility costs; and a $2.9 million decrease in costs of food, beverage and other sales.

Trump Marina—Net revenues decreased $38.7 million principally due to a $40.8 million decrease in gaming revenues and a $4.4 million decrease in cash rooms, food and beverage and other revenue partially offset by a $6.5 million decrease in gaming promotional offers. Gaming revenues decreased due to a $29.4 million decrease in slot revenue and an $11.4 million decrease in table games revenue. The decrease in slot revenue was principally due to a 20.7% decrease in slot handle. Table games revenue decreased due to a 26.5% decrease in table game play partially offset by an increase in hold percentage.

Before consideration of non-cash impairment charges, income from operations decreased $4.5 million due to the decrease in net revenues partially offset by a $34.2 million decrease in operating costs and expenses. The decrease in operating expenses was principally due to: a $7.3 million decrease in promotional expenses; a $6.9 million decrease in payroll and related costs; a $5.1 million decrease in depreciation expense principally due to the long-lived asset impairment charges recorded during the second quarter of 2009; a $4.0 million decrease in gaming taxes; a $3.4 million decrease in marketing and entertainment costs; a $3.1 million decrease in utility costs; a $2.9 million decrease in cost of goods sold; and a $1.8 million decrease in general and administrative expenses.

Corporate and Other—Corporate and other expenses excluding reorganization expenses in 2009 and 2008 and transaction costs and intangible asset impairment charges associated with the Marina Agreement in 2008, decreased $3.5 million principally due to decreases in legal fees, stock-based compensation expense and payroll and related costs partially offset by an increase in insurance costs.

Interest Income—Interest income was $1.6 million during 2009 compared to $4.6 million during 2008 due to lower average invested cash and cash equivalents and interest rates.

Interest Expense—Interest expense was $131.9 million during 2009 compared to $132.5 million during 2008. Given the unlikelihood of any recovery of interest expense related to the Senior Notes in connection with our reorganization, we ceased recording contractual interest expense on the Senior Notes on October 7, 2009, the date on which the Bankruptcy Court approved both the Original Debtors’ Disclosure Statement and the AHC Disclosure Statement. The lower interest expense recognized on the outstanding principal amount of Senior Notes of approximately $24.8 million was partially offset by (i) higher average borrowings outstanding under the 2007 Credit Agreement, (ii) a 2% increase in the interest rate on amounts outstanding under the 2007 Credit Agreement due to the event of default, (iii) an $8.5 million decrease in capitalized interest as a result of the completion of the Chairman Tower and (iv) the accrual of default interest related to the past due interest payments on the Senior Notes through October 7, 2009.

Provision for Income Taxes—We recorded an income tax benefit related to our continuing operations of $8.3 million and $12.5 million during 2009 and 2008, respectively, reflecting the impact of a reduction in our net deferred tax liabilities as a result of intangible asset impairment charges and the portion of the long-lived asset impairment charges relating to land.

Results of Operations for the Years Ended December 31, 2008 and 2007

The following table includes selected data of our casino properties and should be read with the following discussion of our results of operations.


	Year Ended December 31,
	2008			2007
	(in millions)
Gaming revenues
Trump Taj Mahal	$	476.7		$	504.1
Trump Plaza		258.8			277.8
Trump Marina		201.3			239.7

Total	$	936.8		$	1,021.6

Net revenues
Trump Taj Mahal	$	460.7		$	489.5
Trump Plaza		252.8			267.7
Trump Marina		194.5			231.0

Total	$	908.0		$	988.2

Income (loss) from operations
Trump Taj Mahal	$	(42.7	)	$	50.6
Trump Plaza		4.4			(15.6	)
Trump Marina		(62.0	)		(146.9	)
Corporate and other		(77.5	)		(58.4	)

Total	$	(177.8	)	$	(170.3	)

Depreciation and amortization
Trump Taj Mahal	$	36.7		$	29.3
Trump Plaza		18.9			19.3
Trump Marina		6.8			16.6
Corporate and other		0.7			0.5

Total	$	63.1		$	65.7

Intangible and other asset impairment charges
Trump Taj Mahal	$	90.3		$	30.5
Trump Plaza		5.4			56.7
Trump Marina		63.6			162.1
Corporate and other		48.4			28.6

Total	$	207.7		$	277.9

Income from property tax settlement, net of legal fees
Trump Taj Mahal	$	—		$	3.6
Trump Plaza		—			22.6
Trump Marina		—			2.6

Total	$	—		$	28.8

Our operating results during 2008 compared to 2007 were affected by various factors including the continuing effects of gaming competition in Pennsylvania and New York, a further weakening of the economy, higher fuel costs for a portion of 2008 and smoking restrictions under state and local legislation.

Gross Gaming Revenues—During 2008, the Atlantic City market experienced a decrease in gross gaming revenues for the second consecutive year. Gross gaming revenues as reported to the CCC decreased 7.6% overall,

while slot revenues decreased 9.6% compared to the year ended December 31, 2007. During the year ended December 31, 2008, we experienced an 8.0% decrease in overall gross gaming revenue and a 10.0% decrease in slot revenue at our three properties compared to the prior year.

Smoking Restrictions—On April 15, 2007, an ordinance in Atlantic City became effective which extended smoking restrictions under the New Jersey Smoke-Free Air Act. This ordinance mandated that casinos restrict smoking to designated areas of up to 25% of the casino floor. During April 2008, Atlantic City’s City Council unanimously approved an amendment to the ordinance, banning smoking entirely on all casino gaming floors and casino simulcasting areas, but allowing smoking in separately exhausted, non-gaming, smoking lounges. The amendment to the ordinance became effective on October 15, 2008, however, on October 27, 2008, Atlantic City’s City Council voted to postpone the full smoking ban for at least one year due to, among other things, the weakened economy and increased competition in adjoining states. The postponement of the full smoking ban became effective on November 16, 2008.

While we are unable to quantify the impact of the smoking restrictions, we believe these smoking restrictions have negatively impacted our gaming revenues and income from operations as our competition in adjacent states continues to permit smoking. Although we constructed a smoking lounge on the casino floor at each of our properties as permitted by the ordinance, we believe our gaming revenues and income from operations were negatively affected by the smoking ban that was in effect and that a future complete ban on smoking in casino and casino simulcasting areas could further adversely affect our results.

Impairment Charges—As a result of the negative effects of the aforementioned factors on our operating results, we recognized goodwill and other intangible asset impairment charges totaling $162.7 million and $186.6 million during the years ended December 31, 2008 and 2007, respectively.

During the year ended December 31, 2008, we recognized a $45.0 million estimated loss on disposal to record Trump Marina’s long-lived assets at their estimated fair value less costs to sell in connection with entering into the Marina Amendment. During the year ended December 31, 2007, we recorded an asset impairment charge of $91.3 million to reflect Trump Marina’s long-lived assets at their estimated fair value.

Real Property Revaluation—During the year ended December 31, 2008, as a result of Atlantic City’s first overall real property revaluation since 1978, real estate tax expense decreased $4.1 million due to an overall decline in the tax rate applied to the assessed value of each of our properties.

A discussion of each of our properties’ operating results for the year ended December 31, 2008 compared to December 31, 2007 follows:

Trump Taj Mahal—Net revenues decreased $28.8 million due to a $27.4 million decrease in gaming revenues and a $4.1 million increase in gaming promotional allowances partially offset by a $2.7 million increase in cash rooms, food and beverage and other revenue. The decrease in gaming revenues was primarily due to (i) a $23.8 million decrease in slot revenue resulting from an 11% decline in volume and (ii) a $3.6 million decrease in table games and other gaming revenue.

Income from operations before non-cash intangible asset impairment charges decreased $33.5 million due to the decrease in net revenues and a $4.7 million increase in operating costs and expenses. Increases in operating costs and expenses were principally due to: a $7.4 million increase in depreciation expense, principally due to the significant projects completed during 2007, the opening of the Chairman Tower during 2008 and new slot machine inventory on the casino floor; a $6.7 million increase in provisions for doubtful accounts; the absence of $3.6 million of income recognized in connection with the 2007 settlement of property tax appeals with the City of Atlantic City (the “City”); a $1.8 million increase in utility costs, due to higher rates and the Chairman Tower; and a $1.8 million increase in advertising costs. These increases were partially offset by: a $3.8 million decrease in gaming taxes and other regulatory fees; a $3.6 million decrease in payroll and related costs; a $1.9 million

decrease in promotional expenses, primarily due to the absence of TrumpONE implementation costs incurred during 2007; a $1.8 million decrease in insurance costs; a $1.7 million decrease in food and beverage costs; a $1.4 million decrease in marketing and entertainment costs; a $1.2 million reversal of provisions related to CRDA investments upon the receipt of grant proceeds from the Atlantic City Expansion Fund (“ACEF”), which were funded by certain of our CRDA deposits; and a $1.0 million decrease in property tax expense resulting from Atlantic City’s 2008 real estate revaluation.

Trump Plaza—Net revenues decreased $14.9 million primarily due to a $19.0 million decrease in gaming revenues partially offset by a $5.1 million decrease in promotional allowances. The decrease in gaming revenues reflects an $18.9 million or 9.7% decrease in slot revenues. The lower promotional allowances reflect a decrease in promotional coin offers corresponding to the lower gaming revenues.

Before consideration of non-cash intangible asset impairment charges and $22.6 million of income, net of legal fees, from the settlement of property tax appeals with the City, income from operations decreased $8.7 million as the lower net revenues were partially offset by a $6.2 million decrease in operating expenses. The decrease in operating expenses was primarily attributable to: a $2.7 million decrease in gaming taxes and fees; a $2.4 million decrease in property taxes resulting from Atlantic City’s real estate revaluation; a $2.4 million decrease in provisions related to CRDA investments, primarily due to the receipt of grant proceeds from the ACEF, which were funded by certain of our CRDA deposits; and a $1.2 million decrease in insurance costs. These decreases were partially offset by a $1.8 million increase in payroll and related costs due to annual merit increases and higher medical and union benefits and a $1.1 million increase in utility costs.

Trump Marina—Net revenues during the year ended December 31, 2008 decreased $36.5 million principally due to a $38.4 million decline in gaming revenues. The decrease in gaming revenues was primarily due to a $29.4 million decrease in slot revenue resulting from an 18.1% decline in volume and a $9.0 million decrease in table games and other gaming revenue due to a 13.8% decrease in table play.

Income from operations before intangible asset impairment charges and $2.6 million of income, net of legal fees, from the settlement of property tax appeals with the City, decreased $11.0 million due to the decrease in net revenues partially offset by a $25.5 million decrease in operating costs and expenses. Operating costs and expenses decreased due to: a $9.8 million decrease in depreciation and amortization expense as Trump Marina’s long-lived assets which were classified as held for sale were no longer depreciated in accordance with Accounting Standards Codification Topic 360—“Property, Plant and Equipment” (“ASC 360”); a $4.5 million decrease in gaming taxes and regulatory fees; a $3.9 million decrease in promotional expenses; a $2.4 million decrease in payroll and related costs; a $1.5 million decrease in food costs; a $1.2 million decrease in advertising costs; and a $1.1 million decrease in provisions related to CRDA investments, primarily due to the receipt of grant proceeds from the ACEF, which were funded by certain of our CRDA deposits.

Corporate and Other—Corporate and other expenses, before consideration of intangible asset impairment charges and $5.3 million in transaction costs incurred in connection with the Marina Agreement, decreased $6.0 million to $23.8 million principally due to a $2.7 million decrease in payroll and related costs, a $1.0 million decrease in professional fees, primarily due to expenses incurred during 2007 in connection with our strategic review, and a $1.5 million reduction in severance costs.

Interest Income—Interest income was $4.6 million during the year ended December 31, 2008 compared to $7.6 million during the year ended December 31, 2007 principally due to lower balances of average invested cash and cash equivalents on hand during the period.

Interest Expense—Interest expense during the year ended December 31, 2008 increased $1.5 million due to higher outstanding borrowings under the 2007 Credit Facility partially offset by a $4.3 million increase in capitalized interest principally associated with the construction of the Chairman Tower at the Taj Mahal. Capitalized interest was $8.5 million and $4.2 million during the years ended December 31, 2008 and 2007, respectively.

Provision for Income Taxes—Our provision for income taxes related to our continuing operations in 2008 includes a deferred tax benefit of $12.5 million. Our provision for income taxes related to our continuing operations in 2007 includes a deferred tax benefit of $49.3 million, a non-cash charge in lieu of taxes of $0.2 million and a current tax provision of $0.1 million.

Critical Accounting Estimates

General—Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States, which require our management to make estimates and assumptions about the effects of matters that are inherently uncertain. Of our accounting estimates, we believe the following may involve a higher degree of judgment and complexity.

Intangible Assets—We have approximately $35.1 million of intangible assets recorded on our balance sheet at December 31, 2009. We regularly evaluate our businesses for potential impairment indicators. Additionally, we perform impairment testing at least annually or more frequently if indicators of impairment exist. Our judgments regarding the existence of impairment indicators are based on, among other things, pending sales of assets, the regulatory and competitive status, operational performance of each of our businesses and financial market valuations of conditions surrounding our business entities and the gaming industry. Future events, such as the failure to meet or exceed our operating plans, increased competition, the enactment of increased gaming or tax rates or changes in market valuations could significantly impact our judgments and any resulting impairment loss could have a material adverse impact on our financial condition and results of operations.

Over the past three years, our results have been negatively impacted by, among other things, increasing regional competition, a weakening economy and a partial smoking ban in Atlantic City.

During 2009, based upon the results of our impairment testing, we determined that trademarks relating to Trump Plaza and Trump Taj Mahal were impaired. As a result, we recognized intangible asset impairment charges totaling $20.5 million, of which $3.7 million related to Trump Taj Mahal trademarks and $16.8 million related to Trump Plaza trademarks.

During 2008, in connection with our goodwill and other intangible asset impairment testing, we determined that goodwill relating to Trump Taj Mahal and TER and trademarks relating to Trump Taj Mahal, Trump Plaza and Trump Marina were impaired. As a result, we recognized non-cash goodwill and other intangible asset impairment charges totaling $162.7 million, of which $90.3 million related to Trump Taj Mahal, $48.4 million related to TER, $18.6 million related to Trump Marina and $5.4 million related to Trump Plaza.

During 2007, we determined that goodwill associated with TER, Trump Marina and Trump Plaza was impaired. We recorded a non-cash goodwill impairment charge of $80.6 million, of which $28.6 million related to TER, $35.1 million related to Trump Marina and $16.9 million related to Trump Plaza. In addition, we determined that certain of our other intangible assets were impaired. We recorded non-cash other intangible asset impairment charges, principally relating to our trademarks, totaling $106.0 million, of which $30.5 million, $35.7 million and $39.8 million related to Trump Taj Mahal, Trump Marina and Trump Plaza, respectively.

The impairment test procedures performed require us to make comprehensive estimates of the future cash flows of our reporting units and intangible assets. Due to uncertainties associated with such estimates, actual results could differ from such estimates. A continuation of the previously mentioned conditions may result in the determination that some or all of our remaining intangible assets have become impaired, which could result in additional impairment charges in the future.

Property and Equipment—Our operations are capital intensive and we make capital investments at each of our properties in the form of maintenance capital and, from time to time, expansion and product enhancement capital. At December 31, 2009, we have approximately $1,134.0 million of net property and equipment recorded

on our balance sheet. We depreciate our assets on a straight-line basis over their estimated useful lives. The estimates of the useful lives are based on the nature of the assets as well as our current operating strategy. Future events such as property expansions, new competition and new regulations, could result in a change in the manner in which we use certain assets requiring a change in the estimated useful lives of such assets.

During 2008, in connection with the Marina Amendment, an estimated loss on disposal of $45.0 million was recognized to reflect Trump Marina’s assets held for sale at their estimated fair value less costs to sell.

During 2007, we recorded an asset impairment charge totaling $91.3 million related to Trump Marina’s long-lived assets. Additionally, we reduced the remaining estimated useful life of Trump Marina’s building to 20 years in connection with our impairment test.

In assessing the recoverability of the carrying value of property and equipment, we must make assumptions regarding estimated future cash flows and other factors. If these estimates or the related assumptions change in the future, we may be required to record additional impairment charges for these assets.

Trump ONE Liability—Our unified player’s program, Trump ONE, allows customers to accumulate certain point-based rewards based on the volume of their gaming activity. Trump ONE customers may earn “comp dollars” redeemable for complimentary food, beverage and retail items and “cash-back points” which are redeemable in cash. Comp dollars and cash-back points accumulate over time and may be redeemed at the customer’s discretion under the terms of the program. Comp dollars and cash-back points are forfeited if a customer does not redeem earned rewards over a specified period of time. As a result of the ability of the customer to accumulate comp dollars and cash-back points, we accrue the associated expense, after giving effect to estimated forfeitures, as they are earned. At December 31, 2009, $2.3 million was accrued related to comp dollars and $1.0 million was accrued related to cash-back points earned under this program. Our accruals could be significantly affected if estimated forfeitures vary from historical levels or changes occur in the cost of providing complimentary food, beverage and retail items under the Trump ONE program. Management reviews our accruals for adequacy at the end of each reporting period.

Insurance Accruals—Our insurance policies for employee health, workers’ compensation and general patron liabilities have significant deductible levels on an individual claim basis. We accrue a liability for known workers’ compensation and general patron liabilities based upon a review of individual claims. Additionally, we accrue an amount for incurred but not reported claims based on our historical experience and other factors. Our employee health insurance benefit accrual is based on our historical claims experience rate including an estimated lag factor. These accruals involve complex estimates and could be significantly affected should current claims vary from historical levels. Management reviews our insurance accruals for adequacy at the end of each reporting period.

Income Taxes—We are subject to income taxes in the United States and in several states. We account for income taxes, including our current, deferred and non-cash charge in lieu of tax provisions in accordance with ASC 740—“Income Taxes.” The calculation of our income tax provision is complex and requires the use of

estimates. Management reviews our provision for income taxes at the end of each reporting period. Additionally, our income tax returns are subject to examination by various taxing authorities. We regularly assess the potential outcomes of these examinations in determining the adequacy of our provision for income taxes and our income tax liabilities. Inherent in our determination of any necessary reserves are assumptions based on past experiences and judgments about potential actions by taxing authorities. Our estimate of the potential outcome for any uncertain tax issue is highly judgmental. We believe we have adequately provided for any reasonable and foreseeable outcome related to uncertain tax matters. When actual results of tax examinations differ from our estimates, we adjust the income tax provision in the period in which the examination issues are settled.

Inflation

There was no significant impact on operations as a result of inflation during 2009, 2008 or 2007.

Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Market risk is the risk of loss arising from adverse changes in market rates and prices, including interest rates, foreign currency exchange rates and commodity rates. Our primary exposure to market risk is interest rate risk associated with our long-term debt. We attempt to manage our interest rate risk by managing the mix of our long-term fixed rate and variable rate borrowings.

The following table provides information about our debt obligations that are sensitive to changes in interest rates. The following table also presents principal cash flows and related weighted average interest rates by expected maturity date of our debt obligations, except capitalized lease obligations.


(Dollars in millions)	2010			2011		2012		2013		2014		Therafter		Total
Fixed rate debt maturities	$	1,249.0		$	—	$	—	$	—	$	—	$	—	$	1,249.0
Average interest rate		8.50	%
Variable rate debt maturities	$	483.8		$	—	$	—	$	—	$	—	$	—	$	483.8
Average interest rate		8.20	%

As previously discussed, on February 17, 2009, the Company and certain of its subsidiaries filed the Chapter 11 Case. The filing of the Chapter 11 Case constituted an event of default and therefore triggered repayment obligations under the Senior Notes and 2007 Credit Agreement. As a result, all indebtedness outstanding under the Senior Notes and the 2007 Credit Agreement (which has a cross-default provision with the Senior Notes) became automatically due and payable. Under the Bankruptcy Code, actions to collect pre-petition indebtedness, as well as most pending litigation, are stayed and other contractual obligations against the Debtors generally may not be enforced. Absent an order of the Bankruptcy Court, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization to be approved by the Bankruptcy Court. Consequently, the Company has classified the indebtedness under the Senior Notes and the 2007 Credit Agreement within current liabilities in its Consolidated Balance Sheet as of December 31, 2009.

In addition, until such time as no event of default exists, (i) the interest rate on the Senior Notes increases by an additional 1% per annum in excess of the 8.5% interest rate on any overdue principal or interest relating to the Senior Notes (as of December 31, 2009, we were past due on our December 1, 2008, June 1, 2009 and December 1, 2009 interest payments) and (ii) the interest rate under the 2007 Credit Agreement increases by an additional 2% in excess of the otherwise applicable interest rate on amounts outstanding under the 2007 Credit Agreement.

We currently have no outstanding interest rate swaps. From time to time, we enter into interest rate swap agreements to change the proportion of fixed to variable rate debt within parameters established by management. In accordance with these parameters, the agreements are used to manage interest rate risks and cost inherent in our debt portfolio.

Item 8.

Financial Statements and Supplementary Data

The following consolidated financial statements are included in this Report:

Reports of Independent Registered Public Accounting Firm

Consolidated Balance Sheets of Trump Entertainment Resorts, Inc. as of December 31, 2009 and 2008

Consolidated Statements of Operations of Trump Entertainment Resorts, Inc. for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Equity (Deficit) of Trump Entertainment Resorts, Inc. for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows of Trump Entertainment Resorts, Inc. for the years ended December 31, 2009, 2008 and 2007

Consolidated Balance Sheets of Trump Entertainment Resorts Holdings, L.P. as of December 31, 2009 and 2008

Consolidated Statements of Operations of Trump Entertainment Resorts Holdings, L.P. for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Partners’ Capital (Deficit) of Trump Entertainment Resorts Holdings, L.P. for the years ended December 31, 2009, 2008 and 2007

Consolidated Statements of Cash Flows of Trump Entertainment Resorts Holdings, L.P for the years ended December 31, 2009, 2008 and 2007

Notes to Consolidated Financial Statements

Financial Statement Schedules

Schedule II—Trump Entertainment Resorts, Inc. and Trump Entertainment Resorts Holdings, L.P. Valuation and Qualifying Accounts for the years ended December 31, 2009, 2008 and 2007

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Trump Entertainment Resorts, Inc.

We have audited the accompanying consolidated balance sheets of Trump Entertainment Resorts, Inc. as of December 31, 2009 and 2008, and the related consolidated statements of operations, stockholders’ equity (deficit) and cash flows for each of the years ended December 31, 2009, 2008 and 2007. Our audits also included the financial statement schedule listed in the index at Item 15. These financial statements and schedule are the responsibility of the Company’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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. 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 consolidated financial position of Trump Entertainment Resorts, Inc. as of December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for each of the years ended December 31, 2009, 2008 and 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Notes 1 and 2, the Company has experienced increased competition, incurred significant recurring losses from operations, has defaulted on loan obligations, and has filed a voluntary petition seeking to reorganize under chapter 11 of the federal bankruptcy laws. These conditions raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 19, 2010

Report of Independent Registered Public Accounting Firm

The Board of Directors and Shareholders of

Trump Entertainment Resorts Holdings, L.P.

We have audited the accompanying consolidated balance sheets of Trump Entertainment Resorts Holdings, L.P. (“Holdings”) as of December 31, 2009 and 2008, and the related consolidated statements of operations, partners’ capital (deficit) and cash flows for each of the years ended December 31, 2009, 2008 and 2007. Our audits also included the financial statement schedule listed in the index at Item 15. These financial statements and schedule are the responsibility of Holdings’ 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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of Holdings’ internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purposes of expressing an opinion on the effectiveness of Holdings’ internal control over financial reporting. Accordingly, we express no such opinion. 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 consolidated financial position of Trump Entertainment Resorts Holdings, L.P. as of December 31, 2009 and 2008, and the consolidated results of its operations and its cash flows for the years ended December 31, 2009, 2008 and 2007, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

The accompanying consolidated financial statements have been prepared assuming that Holdings will continue as a going concern. As more fully described in Notes 1 and 2, Holdings has experienced increased competition, incurred significant recurring losses from operations, has defaulted on loan obligations, and has filed a voluntary petition seeking to reorganize under chapter 11 of the federal bankruptcy laws. These conditions raise substantial doubt about Holdings’ ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

/s/ Ernst & Young LLP

Philadelphia, Pennsylvania

March 19, 2010

TRUMP ENTERTAINMENT RESORTS, INC.

DEBTOR IN POSSESSION

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)


	December 31,
	2009			2008
Current assets:
Cash and cash equivalents	$	66,084		$	86,183
Accounts receivable, net of allowance for doubtful accounts of $39,791 and $25,695, respectively		31,890			38,579
Accounts receivable, other		5,136			5,162
Property taxes receivable		3,981			3,983
Inventories		5,033			5,938
Deferred income taxes		2,293			13,809
Other current assets		17,431			16,863

Total current assets		131,848			170,517

Net property and equipment		1,134,027			1,707,403

Other assets:
Restricted cash		—			2,807
Deferred financing costs, net of accumulated amortization of $0 and $6,854, respectively		—			14,902
Trademarks		32,712			53,212
Intangible assets, net of accumulated amortization of $5,116 and $4,109 , respectively		2,401			3,408
Property taxes receivable		12,585			15,760
Other assets, net of reserve of $33,092 and $32,479, respectively		83,196			79,370

Total other assets		130,894			169,459

Total assets	$	1,396,769		$	2,047,379

Current liabilities:
Current maturities of long-term debt	$	661		$	1,737,926
Accounts payable		28,887			36,714
Accrued payroll and related expenses		22,358			22,856
Income taxes payable		8,348			8,248
Accrued interest payable		11,310			71,450
Self-insurance reserves		17,290			14,234
Other current liabilities		30,903			47,877

Total current liabilities		119,757			1,939,305

Liabilities subject to compromise		1,890,608			—

Long-term debt, net of current maturities		6,570			5,924
Deferred income taxes		47,523			67,363
Other long-term liabilities		23,989			27,083

(Deficit) equity:
Preferred stock, $1 par value; 1,000,000 shares authorized, no shares issued and outstanding		—			—
Common stock, $.001 par value; 75,000,000 shares authorized, 31,270,345 and 31,718,376 shares issued and outstanding, respectively		31			32
Class B Common stock, $0.001 par value; 1,000 shares authorized, 900 shares issued and outstanding		—			—
Additional paid-in capital		467,787			466,666
Accumulated deficit		(999,857	)		(465,919	)
Noncontrolling interest in subsidiaries		(159,639	)		6,925

Total (deficit) equity		(691,678	)		7,704

Total liabilities and (deficit) equity	$	1,396,769		$	2,047,379

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS, INC.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except share and per share data)


	Year Ended December 31,
	2009			2008			2007
Revenues:
Gaming	$	801,397		$	936,761		$	1,021,625
Rooms		93,299			87,336			83,733
Food and beverage		99,364			111,857			118,959
Other		42,893			44,251			46,019

		1,036,953			1,180,205			1,270,336
Less promotional allowances		(244,804	)		(272,197	)		(282,101	)

Net revenues		792,149			908,008			988,235
Costs and expenses:
Gaming		406,179			454,027			472,167
Rooms		20,287			18,789			16,945
Food and beverage		51,650			53,851			52,407
General and administrative		241,957			260,021			274,817
Corporate and development		16,488			24,358			26,839
Corporate—related party		2,206			2,618			2,552
Depreciation and amortization		52,137			63,024			65,632
Intangible and other asset impairment charges		556,733			207,687			277,880
Reorganization expenses		37,518			1,443			—
Income from settlement of property tax appeals		—			—			(30,705	)

		1,385,155			1,085,818			1,158,534

Loss from operations		(593,006	)		(177,810	)		(170,299	)
Non-operating income (expense):
Interest income		1,558			4,565			7,553
Interest expense		(131,900	)		(132,516	)		(131,034	)
Income related to termination of Marina Agreement		15,196			—			—
Loss on early extinguishment of debt		—			—			(4,127	)

		(115,146	)		(127,951	)		(127,608	)

Loss before income taxes and discontinued operations		(708,152	)		(305,761	)		(297,907	)
Income tax benefit		8,324			12,510			48,975

Loss from continuing operations		(699,828	)		(293,251	)		(248,932	)

Income from discontinued operations:
Trump Indiana, net of income taxes		—			2,070			—

Income from discontinued operations		—			2,070			—

Net loss		(699,828	)		(291,181	)		(248,932	)
Less: Net loss attributable to the noncontrolling interest		165,890			58,978			60,251

Net loss attributable to Trump Entertainment Resorts, Inc.	$	(533,938	)	$	(232,203	)	$	(188,681	)

Net loss per share attributable to Trump Entertainment Resorts, Inc. common shareholders—basic and diluted:
Continuing operations	$	(16.85	)	$	(7.37	)	$	(6.07	)
Discontinued operations		—			0.04			—

Basic and diluted net loss per share	$	(16.85	)	$	(7.33	)	$	(6.07	)

Weighted average shares outstanding—basic and diluted		31,691,463			31,674,980			31,086,918

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS, INC.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF EQUITY (DEFICIT)

(In thousands, except share data)


	Trump Entertainment Resorts, Inc. Shareholders														Noncontrolling Interest			Total Equity (Deficit)
	Shares		Common Stock			Shares	Class B Common Stock		Additional Paid-in Capital			Accumulated Deficit			Noncontrolling Interest			Total Equity (Deficit)
Balance at December 31, 2006	30,990,902		$	31		900	$	—	$	457,772		$	(45,035	)	$	125,395		$	538,163
Stock-based compensation expense	—			—		—		—		2,501			—			768			3,269
Partnership distributions	—			—		—		—		—			—			(1,020	)		(1,020	)
Issuance of restricted stock, net of forfeitures and repurchases	80,052			—		—		—		(220	)		—			—			(220	)
Other	67			—		—		—		—			—			—			—
Net loss	—			—		—		—		—			(188,681	)		(60,251	)		(248,932	)

Balance at December 31, 2007	31,071,021			31		900		—		460,053			(233,716	)		64,892			291,260
Stock-based compensation expense	—			—		—		—		2,209			—			678			2,887
Partnership distributions																(1,020	)		(1,020	)
Issuance of restricted stock, net of forfeitures	647,355			1		—		—		—			—			—			1
Reduction in valuation allowance relating to pre-reorganization deferred tax assets	—			—		—		—		4,404			—			1,353			5,757
Net loss	—			—		—		—		—			(232,203	)		(58,978	)		(291,181	)

Balance at December 31, 2008	31,718,376			32		900		—		466,666			(465,919	)		6,925			7,704
Stock-based compensation expense	—			—		—		—		1,121			—			346			1,467
Partnership distributions	—			—		—		—		—			—			(1,020	)		(1,020	)
Forfeitures and cancellations of restricted stock	(448,031	)		(1	)	—		—		—			—			—			(1	)
Net loss	—			—		—		—		—			(533,938	)		(165,890	)		(699,828	)

Balance at December 31, 2009	31,270,345		$	31		900	$	—	$	467,787		$	(999,857	)	$	(159,639	)	$	(691,678	)

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS, INC.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Year Ended December 31,
	2009			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(699,828	)	$	(291,181	)	$	(248,932	)
Adjustments to reconcile net loss to net cash flows provided by operating activities:
Deferred income taxes		(8,324	)		(11,373	)		(49,125	)
Depreciation and amortization		52,137			63,024			65,632
Intangible and other asset impairment charges		556,733			207,687			277,880
Accretion of interest income related to property tax settlement		(823	)		(961	)		(78	)
Amortization of deferred financing costs		470			2,823			2,694
Provisions for losses on receivables		16,355			14,787			7,742
Stock-based compensation expense		1,467			2,887			3,269
Valuation allowance—CRDA investments		394			(344	)		4,346
Loss (gain) on sale of assets		35			(123	)		(1,000	)
Non-cash reorganization expense		14,432			—			—
Income related to termination of Marina Agreement		(15,196	)		—			—
Loss on early extinguishment of debt		—			—			4,127
Changes in operating assets and liabilities:
Increase in receivables		(9,640	)		(9,178	)		(4,436	)
Decrease (increase) in inventories		905			(299	)		804
Decrease (increase) in other current assets		3,432			(3,480	)		(628	)
Increase in other assets		(1,556	)		(2,580	)		(14,404	)
Increase (decrease) in accounts payable, accrued expenses and other current liabilities		14,440			(19,945	)		16,223
Increase in accrued interest payable		89,341			53,348			4,457
Decrease in other long-term liabilities		(3,094	)		(4,770	)		(1,180	)

Net cash flows provided by operating activities		11,680			322			67,391

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net		(26,805	)		(178,964	)		(232,188	)
Decrease (increase) in restricted cash		2,807			44,395			(25,327	)
Purchases of CRDA investments		(10,595	)		(11,978	)		(13,065	)
Proceeds from CRDA investments		8,178			11,902			—
Capitalized interest on construction in progress		—			(8,517	)		(4,202	)
Cash deposit received in connection with Marina Amendment		—			15,196			—

Net cash flows used in investing activities		(26,415	)		(127,966	)		(274,782	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from term loans		—			100,000			540,625
Repayment of term loans		(4,924	)		(4,493	)		(295,125	)
Borrowings under revolving credit facility		—			—			76,000
Repayment of revolving credit facility		—			—			(76,000	)
Repayment of other long-term debt		(440	)		(1,719	)		(8,994	)
Partnership distributions		—			(1,270	)		(1,030	)
Payment of deferred financing costs		—			—			(6,563	)
Other		—			—			(220	)

Net cash flows (used in) provided by financing activities		(5,364	)		92,518			228,693

Net (decrease) increase in cash and cash equivalents		(20,099	)		(35,126	)		21,302
Cash and cash equivalents at beginning of year		86,183			121,309			100,007

Cash and cash equivalents at end of year	$	66,084		$	86,183		$	121,309

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	42,089		$	85,024		$	129,544
Cash paid for income taxes		—			—			—
Equipment purchased under capital leases		1,547			6,116			—
Debt of Reorganized Company issued in exchange for debt and accrued interest of Predecessor Company		—			—			7
(Decrease) increase in accounts payable for accrued purchases of property and equipment		(14,083	)		(8,632	)		13,826

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

DEBTOR IN POSSESSION

CONSOLIDATED BALANCE SHEETS

(In thousands)


	December 31,
	2009			2008
Current assets:
Cash and cash equivalents	$	66,084		$	85,206
Accounts receivable, net of allowance for doubtful accounts of $39,791 and $25,695, respectively		31,890			38,579
Accounts receivable, other		5,136			5,162
Property taxes receivable		3,981			3,983
Inventories		5,033			5,938
Deferred income taxes		1,337			2,867
Prepaid and other current assets		17,431			16,863

Total current assets		130,892			158,598

Net property and equipment		1,134,027			1,707,403
Other assets:
Restricted cash		—			2,807
Deferred financing costs, net of accumulated amortization of $0 and $6,854, respectively		—			14,902
Trademarks		32,712			53,212
Intangible assets, net of accumulated amortization of $5,116 and $4,109, respectively		2,401			3,408
Property taxes receivable		12,585			15,760
Other assets, net of reserve of $33,092 and $32,479, respectively		83,196			79,370

Total other assets		130,894			169,459

Total assets	$	1,395,813		$	2,035,460

Current liabilities:
Current maturities of long-term debt	$	661		$	1,737,926
Accounts payable		28,887			36,714
Accrued payroll and related expenses		22,358			22,856
Income taxes payable		8,348			8,248
Accrued interest payable		11,310			71,450
Self-insurance reserves		17,290			14,234
Other current liabilities		30,903			47,877

Total current liabilities		119,757			1,939,305

Liabilities subject to compromise		1,890,608			—
Long-term debt, net of current maturities		6,570			5,924
Deferred income taxes		13,538			17,313
Other long-term liabilities		23,989			27,083
Partners’ capital:
Partners’ capital		605,314			603,883
Accumulated deficit		(1,263,963	)		(558,048	)

Total partners’ (deficit) capital		(658,649	)		45,835

Total liabilities and partners’ (deficit) capital	$	1,395,813		$	2,035,460

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands)


	Year Ended December 31,
	2009			2008			2007
Revenues:
Gaming	$	801,397		$	936,761		$	1,021,625
Rooms		93,299			87,336			83,733
Food and beverage		99,364			111,857			118,959
Other		42,893			44,251			46,019

		1,036,953			1,180,205			1,270,336
Less promotional allowances		(244,804	)		(272,197	)		(282,101	)

Net revenues		792,149			908,008			988,235
Costs and expenses:
Gaming		406,179			454,027			472,167
Rooms		20,287			18,789			16,945
Food and beverage		51,650			53,851			52,407
General and administrative		241,957			260,021			274,817
Corporate and development		16,488			24,358			26,839
Corporate—related party		2,206			2,618			2,552
Depreciation and amortization		52,137			63,024			65,632
Goodwill and other intangible asset impairment charges		556,733			159,289			249,278
Reorganization expense		37,518			1,443			—
Income from settlement of property tax appeals		—			—			(30,705	)

		1,385,155			1,037,420			1,129,932

Loss from operations		(593,006	)		(129,412	)		(141,697	)
Non-operating income (expense):
Interest income		1,550			4,536			7,514
Interest expense		(131,900	)		(132,516	)		(131,034	)
Income related to termination of Marina Agreement		15,196			—			—
Loss on early extinguishment of debt		—			—			(4,127	)

		(115,154	)		(127,980	)		(127,647	)

Loss before income taxes and discontinued operations		(708,160	)		(257,392	)		(269,344	)
Income tax benefit		2,245			3,215			12,955

Loss from continuing operations		(705,915	)		(254,177	)		(256,389	)

Income from discontinued operations:
Trump Indiana, net of income taxes		—			3,207			—

Income from discontinued operations		—			3,207			—

Net loss	$	(705,915	)	$	(250,970	)	$	(256,389	)

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF PARTNERS’ CAPITAL (DEFICIT)

(In thousands)


	Partners’ Capital			Accumulated Deficit			Total Partners’ Capital (Deficit)
Balance at December 31, 2006	$	594,230		$	(50,689	)	$	543,541
Stock-based compensation expense, net of forfeitures and repurchases		3,049			—			3,049
Partnership distributions		(1,020	)		—			(1,020	)
Net loss		—			(256,389	)		(256,389	)

Balance at December 31, 2007		596,259			(307,078	)		289,181
Stock-based compensation expense, net of forfeitures and repurchases		2,887			—			2,887
Partnership distributions		(1,020	)		—			(1,020	)
Reduction in valuation allowance relating to pre-reorganization deferred tax assets		5,757			—			5,757
Net loss		—			(250,970	)		(250,970	)

Balance at December 31, 2008		603,883			(558,048	)		45,835
Stock-based compensation expense, net of forfeitures		1,467			—			1,467
Contributions from TER		984			—			984
Partnership distributions		(1,020	)		—			(1,020	)
Net loss		—			(705,915	)		(705,915	)

Balance at December 31, 2009	$	605,314		$	(1,263,963	)	$	(658,649	)

See accompanying notes to consolidated financial statements.

TRUMP ENTERTAINMENT RESORTS HOLDINGS, L.P.

DEBTOR IN POSSESSION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)


	Year Ended December 31,
	2009			2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(705,915	)	$	(250,970	)	$	(256,389	)
Adjustments to reconcile net loss to net cash flows provided by operating activities:
Deferred income taxes		(2,245	)		(3,215	)		(13,105	)
Depreciation and amortization		52,137			63,024			65,632
Intangible and other asset impairment charges		556,733			159,289			249,278
Accretion of interest income related to property tax settlement		(823	)		(961	)		(78	)
Amortization of deferred financing costs		470			2,823			2,694
Provisions for losses on receivables		16,355			14,787			7,742
Stock-based compensation expense		1,467			2,887			3,269
Valuation allowance—CRDA investments		394			(344	)		4,346
Loss (gain) on sale of assets		35			(123	)		(1,000	)
Non-cash reorganization expense		14,432			—			—
Income related to termination of Marina Agreement		(15,196	)		—			—
Loss on early extinguishment of debt		—			—			4,127
Changes in operating assets and liabilities:
Increase in receivables		(9,640	)		(9,178	)		(4,436	)
Decrease (increase) in inventories		905			(299	)		804
Decrease (increase) in other current assets		3,432			(3,480	)		(628	)
Increase in other assets		(1,556	)		(2,580	)		(14,404	)
Increase (decrease) in accounts payable, accrued expenses and other current liabilities		14,441			(19,945	)		16,223
Increase in accrued interest payable		89,341			53,348			4,457
Decrease in other long-term liabilities		(3,094	)		(4,766	)		(1,180	)

Net cash flows provided by operating activities		11,673			297			67,352

CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net		(26,805	)		(178,964	)		(232,188	)
Decrease (increase) in restricted cash		2,807			44,395			(25,327	)
Purchases of CRDA investments		(10,595	)		(11,978	)		(13,065	)
Proceeds from CRDA investments		8,178			11,902			—
Capitalized interest on construction in progress		—			(8,517	)		(4,202	)
Cash deposit received in connection with the Marina Amendment		—			15,196			—

Net cash flows used in investing activities		(26,415	)		(127,966	)		(274,782	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings from term loans		—			100,000			540,625
Repayments of term loans		(4,924	)		(4,493	)		(295,125	)
Borrowings under revolving credit facility		—			—			76,000
Repayments of revolving credit facility		—			—			(76,000	)
Repayments of other long-term debt		(440	)		(1,719	)		(8,994	)
Contributions from TER		984			—			—
Partnership distributions		—			(1,270	)		(1,030	)
Payment of deferred financing costs		—			—			(6,563	)
Other		—			—			(220	)

Net cash flows (used in) provided by financing activities		(4,380	)		92,518			228,693

Net (decrease) increase in cash and cash equivalents		(19,122	)		(35,151	)		21,263
Cash and cash equivalents at beginning of year		85,206			120,357			99,094

Cash and cash equivalents at end of year	$	66,084		$	85,206		$	120,357

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for interest	$	42,089		$	85,024		$	129,544
Cash paid for income taxes		—			—			—
Equipment purchased under capital leases		1,547			6,116			—
Debt of Reorganized Company issued in exchange for debt and accrued interest of Predecessor Company		—			—			7
(Decrease) increase in accounts payable for accrued purchases of property and equipment		(14,083	)		(8,632	)		13,826

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(in thousands, except share and per share data)

(1)

General

Organization

The accompanying consolidated financial statements include those of Trump Entertainment Resorts, Inc. (“TER”), a Delaware corporation, its majority-owned subsidiary, Trump Entertainment Resorts Holdings, L.P. (“TER Holdings”), a Delaware limited partnership, and their respective subsidiaries. Except where otherwise noted, the words “we,” “us,” “our” and similar terms, as well as “Company,” refer to TER and all of its subsidiaries. Through TER Holdings and its wholly owned subsidiaries we own and operate the Trump Taj Mahal Casino Resort (“Trump Taj Mahal”), Trump Plaza Hotel and Casino (“Trump Plaza”) and Trump Marina Hotel Casino (“Trump Marina”) each in Atlantic City, New Jersey.

Prior to the December 2005 sale of our former subsidiary Trump Indiana, Inc. (“Trump Indiana”), we also owned and operated a riverboat casino in Gary, Indiana. See Note 16 for additional information regarding this discontinued operation.

Chapter 11 Filing

On February 17, 2009 (the “Petition Date”), TER and certain of its direct and indirect subsidiaries (collectively, the “Debtors”) filed voluntary petitions in the United States Bankruptcy Court for the District of New Jersey in Camden, New Jersey (the “Bankruptcy Court”) seeking relief under the provisions of chapter 11 of title 11 of the United States Code (the “Bankruptcy Code”). These chapter 11 cases are being jointly administered under the caption In re: TCI 2 Holdings, LLC, et al Debtors, Chapter 11 Case Nos.: 09-13654 through 09-13656 and 09-13658 through 09-13664 (JHW) (the “Chapter 11 Case”).

On February 20, 2009, the Company obtained court approval to continue to pay its vendors in the ordinary course of business. The Debtors continue to operate their businesses as debtors-in-possession under the jurisdiction of the Bankruptcy Court and in accordance with applicable provisions of the Bankruptcy Code and the orders of the Bankruptcy Court.

On August 3, 2009, the Debtors filed their joint chapter 11 plan of reorganization with the Bankruptcy Court (as thereafter amended, the “Original Debtors’ Plan”) and the Disclosure Statement relating thereto (the “Original Debtors’ Disclosure Statement”). Following the termination of the Purchase Agreement, dated August 3, 2009 (as thereafter amended as of October 5, 2009), among TER, TER Holdings, BNAC, Inc. and Donald J. Trump (“Mr. Trump”) by Mr. Trump on November 16, 2009, and subsequent negotiations with their principal creditor constituencies, the Debtors decided to withdraw the Original Debtors’ Plan. Further, the Debtors decided to endorse and become co-proponents of the plan of reorganization proposed by the ad hoc committee (the “Ad Hoc Committee”) of the holders of the Debtors’ 8.5% Senior Secured Notes due 2015 (the “Senior Notes”) filed on August 11, 2009, and thereafter amended (the “AHC Plan”) and the Disclosure Statement relating thereto (the “AHC Disclosure Statement”). On December 24, 2009, the Debtors and the Ad Hoc Committee filed with the Bankruptcy Court a revised AHC Plan and revised AHC Disclosure Statement (as thereafter amended on January 5, 2010, the “Debtors/AHC Plan” and “Debtors/AHC Disclosure Statement”, respectively), reflecting the Debtors’ support of and co-proponent role with respect to such plan. On January 5, 2010, Beal Bank (formerly, Beal Bank S.S.B.) and Beal Bank of Nevada (together, “Beal Bank”) and Icahn Partners, L.P. and certain of its affiliates (“Icahn Partners”) filed a fourth amended joint plan of reorganization with the Bankruptcy Court (as thereafter amended on February 23, 2010, the “Beal/Icahn Plan”) and the Disclosure Statement relating thereto (the “Beal/Icahn Disclosure Statement”).

description of, or a substitute for a full and complete reading of, the Debtors/AHC Plan. This summary is qualified in its entirety by reference to the full text of the Debtors/AHC Plan.

The key terms of the Debtors/AHC Plan are as follows:

•

a capital contribution of $225,000 in new equity capital (in exchange for 70% of the new common stock in the reorganized Company) in the form of a rights offering to holders of the Senior Notes and general unsecured claims backstopped by members of the Ad Hoc Committee of the holders of the Senior Notes (the “Backstop Parties”) (who will receive 20% of the new common stock in the reorganized Company as a backstop fee in consideration for their agreement to provide such backstop);

•

$125,000 repayment of Beal Bank’s first lien loan and reinstatement of the balance of the loan on modified terms;

•

5% of the new common stock in the reorganized Company and warrants to purchase up to an additional 5% of such new common stock will be issued to Mr. Trump or his affiliates, which warrants will be exercisable for five years commencing on the effective date of the Debtors/AHC Plan at a price per share equivalent to the $1,250,000 principal amount of the Senior Notes plus all interest accrued thereon as of the petition date divided by the total number of shares of new common stock to be outstanding on the effective date;

•

a pro rata distribution of 5% of the new common stock in the reorganized Company to holders of Senior Notes and general unsecured claims; and

•

no recovery for old equity.

On February 18, 2010, Beal Bank and Icahn Partners filed a notice that the conditions to the rights offering under the Beal/Icahn Plan were not met, and therefore, it would not be consummated.

The key terms of the Beal/Icahn Plan are as follows:

•

because the conditions were not met and the rights offering is not being consummated, Beal Bank and Icahn Partners will receive new equity in satisfaction of their claims under the first lien loan;

•

a new $45,000 debtor in possession facility is being offered to the Debtors by Icahn Partners to be entered into following the confirmation date, on terms and conditions reasonably acceptable to the Debtors and Icahn Partners, which will be converted into new equity in the reorganized Debtors;

•

a capital contribution of $80,000 will be made by Icahn Partners on the effective date for new equity in the reorganized Debtors; and

•

no recovery for holders of Senior Notes, general unsecured claims or old equity.

Both the Debtors/AHC Plan and the Beal/Icahn Plan provide that administrative expense claims and priority claims will be paid in full.

On February 23, 2010, a hearing before the Bankruptcy Court began for the confirmation of the Chapter 11 Case. Both the Debtors/AHC Plan and the Beal/Icahn Plan are subject to confirmation by the Bankruptcy Court and customary closing conditions, including approval of the New Jersey Casino Control Commission.

On March 2, 2010, the Debtors and certain holders of the Senior Notes entered into a commitment letter providing for a $45,000 senior secured debtor in possession notes facility (the “DIP Facility”). The borrowings

under the DIP Facility would be conditioned upon confirmation of the Debtors/AHC Plan and would accrue interest on the outstanding principal amount thereof at a rate per annum equal to 10% payable on the earlier of the termination date or the date on which an event of default occurs. The maturity date of the DIP Facility would be the earliest of (a) six months from the closing date (or five months after the closing date if that certain Amended and Restated Backstop Agreement, dated December 11, 2009, among the Company and the Backstop Parties is not amended to extend the termination provisions thereunder), (b) the effective date of the Debtors/AHC Plan, (c) the date of confirmation of a plan of reorganization other than the Debtors/AHC Plan and (d) the acceleration of the loans and termination of the commitments. The borrowers would be subject to certain affirmative covenants as well as negative covenants. There are no financing or commitment fees required under the DIP Facility.

We intend to maintain business operations through the reorganization process. Our liquidity and capital resources, however, are significantly affected by the Chapter 11 Case. Our bankruptcy proceedings have resulted in various restrictions on our activities, limitations on financing and a need to obtain Bankruptcy Court approval for various matters. As a result of the filing of the Chapter 11 Case, the Debtors are not permitted to make any payments on pre-petition liabilities without prior Bankruptcy Court approval. However, the Debtors have been granted relief in order to continue wage and salary payments and other benefits to employees as well as other related pre-petition obligations; to continue to honor customer programs as well as certain related pre-petition customer obligations; and to pay certain pre-petition trade claims held by critical vendors. At this time, it is not possible to predict with certainty the effect of the Chapter 11 Case on our business or various creditors, or when we will emerge from these proceedings. Our future results depend upon our confirming and successfully implementing, on a timely basis, the Debtors/AHC Plan or the Beal/Icahn Plan. The continuation of the Chapter 11 Case, particularly if the Debtors/AHC Plan or the Beal/Icahn Plan is not timely consummated, could further adversely affect our operations.

Donald J. Trump’s Abandonment of Limited Partnership Interests in TER Holdings

By letter dated February 13, 2009, Mr. Trump notified TER that he had abandoned any and all of his 23.5% direct limited partnership interest in TER Holdings and relinquished any and all rights under the Fourth Amended and Restated Agreement of Limited Partnership of TER Holdings (the “Partnership Agreement”) or otherwise with respect to TER Holdings and Mr. Trump’s limited partnership interest. TER’s consolidated financial statements reflect the allocation of income (loss) to the noncontrolling interest pursuant to the terms of the Partnership Agreement for all periods presented. The Company expects that the reorganized Company will no longer present noncontrolling interests upon effectiveness of either the Debtors/AHC Plan or the Beal/Icahn Plan.

(2)

Summary of Significant Accounting Policies

Basis of Presentation—The consolidated financial statements include our accounts and those of our controlled subsidiaries and partnerships. We have eliminated all intercompany transactions. We view each casino property as an operating segment and all such operating segments have been aggregated into one reporting segment.

In preparing the accompanying consolidated financial statements, the Company has reviewed, as determined necessary by the Company’s management, events that have occurred after December 31, 2009.

Accounting Impact of Chapter 11 Case—The accompanying consolidated financial statements have been prepared in accordance with Topic 852—“Reorganizations” of the Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) (“ASC 852”) and on a going concern basis, which contemplates continuity of operations, realization of assets and liquidation of liabilities in the ordinary course of business. The Company has experienced increased competition and has incurred significant recurring losses from operations. Further, the filing of the Chapter 11 Case constituted an event of default or otherwise triggered repayment obligations under the indenture governing the Senior Notes issued by TER Holdings and TER Funding and the Company’s senior secured term loan agreement. The ability of the Company, both during and after the Chapter 11 Case, to continue as a going concern is contingent upon, among other things; (i) the ability of the Company to generate cash from operations and to maintain adequate cash on hand; (ii) the resolution of the uncertainty as to the amount of claims that will be allowed; (iii) the ability of the Company to confirm the Debtors/AHC Plan or the Beal/Icahn Plan under the Bankruptcy Code and obtain any debt and equity financing which may be required to emerge from bankruptcy protection; and (iv) the Company’s ability to achieve profitability. There can be no assurance that the Company will be able to successfully achieve these objectives in order to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments that might result should the Company be unable to continue as a going concern.

Liabilities subject to compromise in the Consolidated Balance Sheets relate to certain of the liabilities of the Debtors incurred prior to the Petition Date. In accordance with ASC 852, liabilities subject to compromise are recorded at the estimated amount that is expected to be allowed as pre-petition claims in the Chapter 11 Case, even if they may be settled for lesser amounts in the future. Adjustments may result from negotiations, actions of the Bankruptcy Court, further developments with respect to disputed claims, rejection of executory contracts and unexpired leases, proofs of claim, implementation of a plan of reorganization or other events.

Liabilities subject to compromise consisted of the following:


	December 31, 2009
Senior Notes	$	1,248,969
2007 Credit Agreement		483,833
Accrued interest payable related to Senior Notes and 2007 Credit Agreement		149,481
Accrued professional fees		5,305
Amounts due under services agreement with Mr. Trump		2,000
Partnership distributions payable		1,020

	$	1,890,608

All other liabilities are expected to be satisfied in the ordinary course of business. Accordingly, the Company has not reflected any of these liabilities as subject to compromise in the accompanying Consolidated Balance Sheets. The Company believes this classification provides an appropriate presentation of liabilities that are subject to compromise and not subject to compromise.

The Company wrote off as reorganization expense its deferred financing costs related to its Senior Notes and 2007 Credit Agreement in order to record its debt instruments at the amount of the claim expected to be allowed by the Bankruptcy Court in accordance with ASC 852. In addition, reorganization expense for the periods presented includes professional fees and other expenses incurred which are directly associated with the bankruptcy process.

The following table summarizes reorganization expense and related costs for the years ended December 31, 2009, 2008 and 2007:


	Year Ended December 31,
	2009		2008		2007
Deferred financing costs	$	14,432	$	—	$	—
Professional fees and other expenses		23,086		1,443		—

	$	37,518	$	1,443	$	—

The Company is required to accrue interest expense during the Chapter 11 Case only to the extent that it is probable that such interest will be paid pursuant to the proceedings. Given that neither the Original Debtors’ Plan nor the AHC Plan provided for any recovery of interest expense related to the Senior Notes, the Company ceased recording contractual interest expense on the Senior Notes on October 7, 2009, the date on which the Bankruptcy Court approved both the Original Debtors’ Disclosure Statement and the AHC Disclosure Statement. The Company continues to record interest expense under the contractual terms of its 2007 Credit Agreement. Total consolidated interest expense during the year ended December 31, 2009 would have been $159,445 had the Company recorded interest expense under the terms of its contractual agreements. For the years ended December 31, 2008 and 2007, the Company recognized interest expense in accordance with the terms of its debt and capitalized lease obligations.

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 amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Cash and Cash Equivalents—We consider cash and all highly liquid investments with an original maturity of three months or less to be cash equivalents.

Restricted Cash—Restricted cash at December 31, 2008 included $2,807 of interest bearing cash collateral for outstanding letters of credit.

Revenue Recognition and Allowance for Doubtful Accounts—The majority of our revenue is derived from gaming activities. As our gaming revenues are primarily generated from cash transactions, our revenues do not typically require the use of estimates. Gaming revenues represent the difference between amounts of gaming wins and losses. Revenues from hotel and other services are recognized at the time the related services are performed. We extend credit on a discretionary basis to certain qualified patrons. Our casino properties establish credit limits for approved casino customers following investigations of creditworthiness. We maintain an allowance for doubtful accounts based on a specific review of customer accounts as well as a review of the history of write-offs of returned markers. Accounts are written off when it is determined that an account is uncollectible. Recoveries of accounts previously written off are recorded when received. Management believes that the reserve recorded is reasonable; however, these estimates could change based on the actual collection experience with each returned marker.

Inventories—Inventories of provisions and supplies are carried at the lower of cost (weighted average) or market value.

Property and Equipment—The carrying value of property and equipment is initially stated at cost. We review our property and equipment for impairment whenever events or changes in circumstances indicate that the recorded carrying value cannot be recovered from the estimated undiscounted future cash flows. When the carrying value of an asset exceeds the associated undiscounted estimated future cash flows, the asset is considered to be impaired and is written down to fair value.

Property and equipment is depreciated on the straight-line method using rates based on the estimated useful lives as follows:


Buildings and building improvements		20 – 40 years
Furniture, fixtures and equipment		3 – 10 years

Depreciation expense includes amortization of assets under capital lease obligations.

Capitalized Interest—We capitalize interest for associated borrowing costs of construction projects. Capitalization of interest ceases when the asset is substantially complete and ready for its intended use. There was no interest capitalized during the year ended December 31, 2009. Interest capitalized during the years ended December 31, 2008 and 2007 was $8,517 and $4,202, respectively.

Long-lived Assets and Assets Held for Sale—In accordance with ASC Topic 360—“Property, Plant and Equipment” (“ASC 360”), when events or circumstances indicate that the carrying amount of long-lived assets to be held and used might not be recoverable, the expected future undiscounted cash flows from the assets are estimated and compared with the carrying amount of the assets. If the sum of the estimated undiscounted cash flows is less than the carrying amount of the assets, an impairment loss would be recorded. The impairment loss would be measured by comparing the fair value of the long-lived asset group with its carrying amount.

Long-lived assets are considered held for sale when certain criteria are met, including whether management (having the authority to approve the action) has committed to a plan to sell the asset, whether the asset is available for sale in its present condition and whether a sale of the asset is probable within one year of the reporting date. Long-lived assets that are classified as held for sale are reported at the lower of the assets’ carrying amount or fair value less costs related to the assets’ disposition and are no longer depreciated. See Note 4 regarding long-lived asset impairment charges recorded during 2009, 2008 and 2007 resulting from our impairment testing.

Goodwill and Other Intangible Assets—In accordance with ASC Topic 350—“Intangibles—Goodwill and Other” (“ASC 350”), we amortize intangible assets over their estimated useful lives unless we determined their lives to be indefinite. Goodwill and other intangible assets with indefinite lives are not amortized but are subject to tests for impairment at least annually. ASC 350 requires that we perform impairment tests more frequently than annually if events or circumstances indicate that the value of goodwill or intangible assets with indefinite lives might be impaired. See Note 5 regarding goodwill and other intangible asset impairment charges recorded during 2009, 2008 and 2007 resulting from our impairment testing.

Deferred Financing Costs—Financing costs, including underwriters’ discounts and direct transactional fees associated with the issuance of debt, are capitalized as deferred financing costs and are amortized to interest expense over the terms of the related debt. During 2009, the Company wrote off as reorganization expense its deferred financing costs related to its Senior Notes and 2007 Credit Agreement in order to record its debt instruments at the amount of the claim expected to be allowed by the Bankruptcy Court in accordance with ASC 852.

Self-insurance Reserves—Self-insurance reserves represent the estimated amounts of uninsured claims related to employee health medical costs, workers’ compensation and personal injury claims that have occurred in the normal course of business. These reserves are established by management based upon specific review of open claims, with consideration of incurred but not reported claims as of the balance sheet date. The costs of the ultimate disposition of these claims may differ from these reserve amounts.

Promotional Allowances—The retail value of accommodations, food, beverage and other services provided to patrons without charge is included in revenues and deducted as promotional allowances. The estimated costs of providing such promotional allowances are included in gaming costs and expenses in the accompanying consolidated statements of operations and consist of the following:


	Year Ended December 31,
	2009		2008		2007
Rooms	$	28,196	$	25,404	$	24,018
Food and beverage		58,795		66,211		73,054
Other		8,614		11,215		10,422

	$	95,605	$	102,830	$	107,494

Cash discounts based upon a negotiated amount with each affected patron are recognized as promotional allowances on the date the related revenue is recorded. Cash-back program awards that are given to patrons based upon earning points for future awards are accrued as the patron earns the points. The amounts are recorded as promotional allowances in the statements of operations.

Advertising Expense—We expense advertising costs as they are incurred. Advertising expense was $9,129, $15,290 and $14,539 for the years ended December 31, 2009, 2008 and 2007, respectively.

Derivative Instruments and Hedging Activities—We account for derivative instruments and hedging activities under ASC Topic 815—“Derivatives and Hedging” (“ASC 815”). We recognize derivatives on the balance sheet at fair value.

Income Taxes—We account for income taxes, including our current, deferred and non-cash charge in lieu of tax provisions in accordance with ASC Topic 740—“Income Taxes” (“ASC 740”). The provision for income taxes included in the respective statements of operations of TER and TER Holdings differs because of the tax status of these entities. TER Holdings’ provision for income taxes includes only state income tax provisions and balances because of its status as a partnership for federal tax purposes.

Noncontrolling Interest in Subsidiaries—On January 1, 2009, we adopted ASC Topic 810-10-65—“Transition Related to FASB Statement No. 160, Noncontrolling Interests in Consolidated Financial Statements—An amendment of ARB No. 51” (“ASC 810-10-65”). ASC 810-10-65 amends ARB No. 51 to establish accounting and reporting standards for the noncontrolling interest in a subsidiary and for the deconsolidation of a subsidiary. It clarifies that a noncontrolling interest in a subsidiary, which is sometimes referred to as minority interest, is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements. Among other requirements, ASC 810-10-65 requires consolidated net income to be reported including the amounts attributable to both the parent and the noncontrolling interest. It also requires disclosure, on the face of the consolidated income statement, of the amounts of consolidated net income attributable to the parent and to the noncontrolling interest. We have retrospectively applied the presentation and disclosure provisions of ASC 810-10-65 and have adopted its other provisions prospectively. We present Mr. Trump’s limited partnership interest in TER Holdings as a noncontrolling interest. See “Donald J. Trump’s Abandonment of Limited Partnership Interest in TER Holdings” in Note 1. If we had not been required to adopt ASC 810-10-65, pro forma net loss and net loss per basic and diluted share attributable to TER would have been $692,903 and $21.86, respectively, for the year ended December 31, 2009.

Stock-based Compensation—We recognize stock-based compensation in accordance with ASC Topic 718—“Compensation—Stock Compensation” (“ASC 718”). ASC 718 requires the fair value of equity awards to be recognized in the financial statements. Compensation expense is recognized on a straight-line basis over the vesting period of the award.

Reclassifications—Certain reclassifications have been made to the prior years’ financial statements to conform to the current year presentation.

Recently Issued Accounting Pronouncements—In June 2009, the FASB issued Statement of Financial Accounting Standards (“SFAS”) No. 168, “The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles—a replacement of FASB Statement No. 162” (“SFAS 168”). The FASB Accounting Standards Codification (“ASC”) will be the single source of authoritative nongovernmental U.S. generally accepted accounting principles. Rules and interpretive releases of the SEC under authority of federal securities laws are also sources of authoritative GAAP for SEC registrants. SFAS 168 became effective for interim and annual periods ending after September 15, 2009. All existing accounting standards are superseded as described in SFAS 168. All other accounting literature not included in the ASC is nonauthoritative. The Company has included references to authoritative accounting literature in accordance with the ASC. There are no other changes to the content of the Company’s financial statements or disclosures as a result of implementing the ASC.

In May 2009, the FASB issued SFAS No. 165, “Subsequent Events” (“SFAS 165” or “ASC 855-10”). ASC 855-10 establishes general standards of accounting for and disclosure of events that occur after the balance sheet date but before financial statements are issued or are available to be issued. ASC 855-10 sets forth (1) the period after the balance sheet date during which management of a reporting entity should evaluate events or transactions that may occur for potential recognition or disclosure in the financial statements, (2) the circumstances under which an entity should recognize events or transactions occurring after the balance sheet date in its financial statements and (3) the disclosures that an entity should make about events or transactions that occurred after the balance sheet date. ASC 855-10 became effective for the Company’s quarter ending June 30, 2009.

In April 2008, the FASB issued FASB Staff Position FAS 142-3, “Determination of the Useful Life of Intangible Assets” (“FSP 142-3” or “ASC 350-30”). ASC 350-30 amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under ASC 350. The intent of ASC 350-30 is to improve the consistency between the useful life of a recognized intangible asset under ASC 350 and the period of expected cash flows used to measure the fair value of the asset under ASC 805 and other GAAP. ASC 350-30 is effective for financial statements issued for fiscal years and interim periods beginning after December 15, 2008. Early adoption of the standard is prohibited. ASC 350-30 became effective for our fiscal year beginning January 1, 2009. The adoption of the standard did not have an effect on our consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB Statement No. 133” (“SFAS 161” or “ASC 810-10”). ASC 810-10 requires enhanced disclosure related to derivatives and hedging activities and thereby seeks to improve the transparency of financial reporting. Under ASC 810-10, entities are required to provide enhanced disclosures relating to: (i) how and why an entity uses derivative instruments; (ii) how derivative instruments and related hedge items are accounted for under SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities” (“SFAS 133” or “ASC 815”), and its related interpretations; and (iii) how derivative instruments and related hedged items affect an entity’s financial position, financial performance, and cash flows. ASC 810-10 must be applied prospectively to all derivative instruments and non-derivative instruments that are designated and qualify as hedging instruments and related hedged items accounted for under ASC 815 for all financial statements issued for fiscal years and interim periods beginning after November 15, 2008, with early application encouraged. ASC 810-10 became effective for our fiscal year beginning January 1, 2009. The adoption of ASC 810-10 did not have an effect on our consolidated financial statements.

In December 2007, the FASB issued SFAS No. 141 (Revised 2007), “Business Combinations” (“SFAS 141(R)” or “ASC 805”). ASC 805 retained the fundamental requirements in SFAS 141 that the acquisition method of accounting (which SFAS 141 called the purchase method) be used for all business combinations and for an acquirer to be identified for each business combination. ASC 805, which is broader in scope than that of SFAS 141, which applied only to business combinations in which control was obtained by transferring consideration, applies the same method of accounting (the purchase method) to all transactions and other events in which one entity obtains control over one or more other businesses. ASC 805 also makes certain other modifications to SFAS 141. We are required to apply the provisions of ASC 805 to business combinations for which the acquisition date is on or after January 1, 2009. The adoption of ASC 805 will have an effect on our consolidated financial statements if we were to acquire any companies in the future.

In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements” (“SFAS 157” or “ASC 820”) which defines fair value, establishes a framework for measuring fair value in GAAP, and expands disclosures about fair value measurements. ASC 820 applies under other accounting pronouncements that require or permit fair value measurements and, accordingly, does not require any new fair value measurements. On February 12, 2008, the FASB issued FASB Staff Position No. FAS 157-2, Effective Date of FASB Statement No. 157 (“FSP 157-2” or “ASC 820-10”), which delayed the effective date of ASC 820 to our fiscal year beginning January 1, 2009 for non-financial assets and non-financial liabilities, except for items that are recognized or disclosed at fair value in the financial statements on a recurring basis. Non-financial assets and non-financial liabilities for which we are required to apply the provisions of ASC 820 include our intangible assets and long-lived assets measured at fair value under ASC 350 and ASC 360, respectively. We adopted ASC 820 effective January 1, 2008 for financial assets and liabilities and effective January 1, 2009 for non-financial assets and non-financial liabilities. The adoption of ASC 820 did not have an effect our consolidated financial statements.

(3)

Termination of Trump Marina Asset Purchase Agreement

On May 28, 2008, Trump Marina Associates, LLC (“Seller”) entered into an Asset Purchase Agreement (the “Marina Agreement”) to sell Trump Marina (the “Property”) to Coastal Marina, LLC (“Buyer”), an affiliate of Coastal Development, LLC (“Coastal”). Pursuant to the Marina Agreement, (1) Buyer was to acquire substantially all of the assets of, and assume certain liabilities related to, the business conducted at the Property and (2) unrelated existing litigation between the Company and Coastal (see Note 19) was to be settled. Upon entering into the Marina Agreement, Buyer placed into escrow a $15,000 deposit toward the purchase price (the “Original Marina Deposit”).

On October 28, 2008, the parties entered into an amendment to the Marina Agreement (the “Marina Amendment”) to modify certain terms and conditions of the Marina Agreement. Pursuant to the Marina Amendment the parties waived the October 28, 2008 deadline for Buyer to provide commitment letters to Seller for the financing of the acquisition of the Property. In addition, the parties agreed to amend certain provisions of the Marina Agreement, including, but not limited to the following: (1) the aggregate purchase price payable for the Property was decreased from $316,000 to $270,000; (2) any potential reduction to the purchase price based on the EBITDA of the business conducted at the Property was eliminated; (3) Seller could terminate the Marina Agreement if the transaction did not close by May 28, 2009; and (4) the Original Marina Deposit held in escrow, together with any interest earned thereon, was released to Seller immediately and an additional $2,000 deposit was placed in escrow (the “Additional Marina Deposit”), for a total deposit towards the purchase price of $17,000.

Coastal failed to consummate the transaction within the time provided under the Marina Amendment. On June 1, 2009, Seller delivered notice to Coastal that the Marina Agreement, as amended by the Marina Amendment, was terminated. Seller also delivered notice to the escrow agent requesting release of the Additional Marina Deposit to Seller. Pursuant to the Marina Amendment, Coastal unconditionally and irrevocably (i) agreed that the Original Marina Deposit, including interest, had been fully earned by Seller and under no circumstance

would the Original Marina Deposit be returned and (ii) waived any claim or right related to the Original Marina Deposit or for return of such. Accordingly, the Company recognized income of $15,196 during the second quarter of 2009. The Company did not recognize income related to the Additional Marina Deposit remaining in escrow since the funds have not been released by the escrow agent.

On July 28, 2009, Buyer and Coastal filed an Adversary Complaint with the Bankruptcy Court, claiming they were fraudulently induced to enter the Marina Agreement, that the agreement was breached, and that these and other related claims gave rise to a right to the return of the Initial Marina Deposit, the Additional Marina Deposit, damages and other relief. On October 21, 2009, Buyer and Coastal filed an Amended Complaint adding Mr. Trump and other parties as defendants, and adding additional allegations to the existing claims. We believe these claims are without merit.

The accompanying financial statements do not present certain long-lived assets of Trump Marina as assets held for sale and Trump Marina’s results of operations as a discontinued operation as all of the criteria required under ASC 360-10-45-9 were not met as of the reporting date. Prior period amounts have been reclassified to conform to the current period presentation.

(4)

Property and Equipment

Property and equipment consists of the following:


	December 31,
	2009			2008
Land and land improvements	$	213,442		$	398,290
Building and building improvements		932,282			1,256,470
Furniture, fixtures and equipment		146,830			221,380
Construction in progress		1,502			13,686

		1,294,056			1,889,826
Less accumulated depreciation and amortization		(160,029	)		(182,423	)

Net property and equipment	$	1,134,027		$	1,707,403

Due to certain events and circumstances, including the continuing negative effects of regional competition on our results and the termination of the Marina Agreement, we performed impairment testing related to our long-lived assets in accordance with ASC 360-10-35-21 during the second quarter of 2009. Based upon our review, the sum of the estimated undiscounted future cash flows expected to be generated by the long-lived asset groups of Trump Marina and Trump Plaza were less than the carrying values of those assets. We estimated the fair value of the asset groups based upon consideration of the cost, income and market approaches to value, as appropriate, and sought the assistance of an independent valuation firm. We recorded asset impairment charges related to Trump Marina and Trump Plaza totaling $536,233. These non-cash impairment charges are included within Intangible and other asset impairment charges in the 2009 statement of operations. In addition, in connection with our impairment testing, we reduced the estimated remaining useful life of Trump Plaza’s building to 20 years. A long-lived asset impairment charge was not recognized with respect to Trump Taj Mahal as the estimated undiscounted future cash flows expected to be generated by its long-lived asset group were greater than the carrying value of its assets. However, based upon current market conditions and management’s estimates, the carrying value of Trump Taj Mahal’s long-lived assets may exceed their fair value.

During early January 2010, table game legislation was signed into Pennsylvania law which allows for table games at each of the authorized casino locations in Pennsylvania. We viewed this as an indicator of potential impairment of our long-lived assets. We performed an interim impairment test as of December 31, 2009 and concluded that our long-lived assets were not impaired.

During 2008, in connection with the Marina Amendment, an estimated loss on disposal of $45,000 was recognized to reflect Trump Marina’s assets held for sale at their estimated fair value less costs to sell. This estimated loss on disposal is included within Intangible and other asset impairment charges in the 2008 statement of operations.

During 2007, we recorded an asset impairment charge totaling $91,271 related to Trump Marina’s long-lived assets. The non-cash impairment charge is included within Intangible and other asset impairment charges in the 2007 statement of operations. Additionally, we reduced the remaining estimated useful life of Trump Marina’s building to 20 years in connection with our impairment test.

The impairment charges recognized in connection with our long-lived assets were allocated to the respective asset groups on a pro-rata basis based upon the carrying value of the assets in accordance with ASC 360.

(5)

Intangible Assets

In accordance with ASC 350, we perform our goodwill and other intangible asset impairment testing annually as of October 1, or more frequently than annually if events or circumstances indicate that the value of goodwill or indefinite-lived intangible assets might be impaired. With the assistance of an independent valuation firm, we use discounted cash flow, market capitalization and market multiple methodologies in our determination of the estimated fair value of our reporting units with goodwill. Our estimated future cash flows assumed under the discounted cash flow approach have been negatively impacted by the weakened economic conditions, the continuing effects of regional competition, the partial smoking ban in Atlantic City, rising fuel costs and other factors.

Due to the circumstances described above, we also performed interim impairment testing related to our intangible assets during the second quarter of 2009. Based upon the results of our impairment testing, we determined that trademarks relating to Trump Plaza and Trump Taj Mahal were impaired. As a result, we recognized intangible asset impairment charges totaling $20,500, of which $3,720 related to Trump Taj Mahal trademarks and $16,780 related to Trump Plaza trademarks. These non-cash impairment charges are included within Intangible and other asset impairment charges in the 2009 statement of operations.

Due to the abovementioned passage of table game legislation into Pennsylvania law which allows for table games at each of the authorized casino locations in Pennsylvania, we performed an interim impairment test as of December 31, 2009 and concluded that our long-lived assets were not impaired.

During 2008, based upon the results of our impairment testing, we determined that goodwill relating to Trump Taj Mahal and TER was impaired. As a result, we recognized goodwill impairment charges totaling $124,542, of which $76,144 related to Trump Taj Mahal and $48,398 related to TER. In addition, we recognized other intangible asset impairment charges of $38,145, of which $18,647 related to Trump Marina trademarks, $14,121 related to Trump Taj Mahal trademarks and $5,377 related to Trump Plaza trademarks. Of the charges recognized, $20,943 was recorded in connection with impairment testing performed as a result of entering into the Marina Agreement, $129,773 was recorded in connection with an interim impairment test performed as of September 30, 2008 due to the effects of adverse market conditions on our operating results, the decline in the market price of TER Common Stock and other factors and $11,971 was recorded during the fourth quarter of 2008, due to the negative effects of further deterioration in the Atlantic City gaming market and the overall weakness of the economy on our operating performance. These non-cash impairment charges are included within Intangible and other asset impairment charges in the 2008 statement of operations.

During 2007, based upon the results of our impairment testing, we determined that our trademarks relating to Trump Taj Mahal, Trump Marina and Trump Plaza and goodwill relating to TER, Trump Marina and Trump Plaza were impaired. As a result, we recognized goodwill and other intangible asset impairment charges totaling $186,609, of which $28,602 related to TER, $30,447 related to Trump Taj Mahal, $70,858 related to Trump Marina and $56,702 related to Trump Plaza. These non-cash impairment charges are included within Intangible and other asset impairment charges in the 2007 statement of operations.

The impairment test procedures performed in accordance with ASC 350 require management to make comprehensive estimates of the future cash flows of our reporting units. Due to uncertainties associated with such estimates, actual results could differ from such estimates. A continuation of the previously mentioned conditions may result in the determination that some or all of our remaining intangible assets have become impaired, which could result in additional impairment charges.

A rollforward of goodwill for the period from December 31, 2006 to December 31, 2009 is as follows:


	TER			TER Holdings
Balance, December 31, 2006	$	226,480		$	129,024
Goodwill impairment charges		(80,590	)		(51,988	)
Charge in lieu of income taxes		(200	)		(200	)
Reduction in Trump Indiana income tax accrual		(481	)		(481	)
Other		7			7

Balance, December 31, 2007		145,216			76,362
Reduction in valuation allowance relating to pre-reorganization deferred tax assets		(20,674	)		(218	)
Goodwill impairment charges		(124,542	)		(76,144	)

Balance December 31, 2008	$	—		$	—

The difference in goodwill between TER Holdings and TER was primarily related to the recognition of an additional federal deferred tax liability due to TER’s status as a corporation.

Our other intangible assets consist of the following:


	As of December 31, 2009							As of December 31, 2008
	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Indefinite-lived intangible assets:
Trademarks	$	32,712				$	32,712	$	53,212				$	53,212
Other intangible assets:
Leasehold interests (weighted average useful life—1.6 years)	$	517	$	(500	)	$	17	$	517	$	(493	)	$	24
Customer relationships (useful life—7 years)		7,000		(4,616	)		2,384		7,000		(3,616	)		3,384

Total other intangible assets	$	7,517	$	(5,116	)	$	2,401	$	7,517	$	(4,109	)	$	3,408

We recorded amortization expense of $1,007, $1,131, and $1,436 during the years ended December 31, 2009, 2008 and 2007, respectively.

Future amortization expense of our amortizable intangible assets for each of the years ended December 31, is as follows: 2010—$1,007; 2011—$1,007; and 2012—$387.

(6)

Fair Value Measurements

ASC Topic 820—“Fair Value Measurements and Disclosures” (“ASC 820”) establishes a hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques (market approach, income approach and cost approach). The levels of the hierarchy are described below:

•

Level 1: Observable inputs such as quoted prices in active markets for identical assets or liabilities.

•

Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; these include quoted prices for similar assets or liabilities in active markets and quoted prices for identical or similar assets or liabilities in markets that are not active.

•

Level 3: Unobservable inputs that reflect the reporting entity’s own assumptions.

The fair value measurements relating to the long-lived assets of Trump Plaza and Trump Marina were determined using inputs within Level 2 of ASC 820’s hierarchy. The fair value measurements relating to the trademarks of Trump Plaza and Trump Taj Mahal were determined using inputs within Level 3 of ASC 820’s hierarchy. For level 3 fair value measurements, the Company used a relief from royalty method to estimate the fair value of the assets. The Company’s assessment of the significance of a particular input to the fair value measurement requires judgment, and may affect the valuation of assets and liabilities and their placement within the fair value hierarchy. The amounts recorded related to the long-lived assets and trademarks are classified within net property and equipment and trademarks on the consolidated balance sheet as of December 31, 2009.

(7)

Debt

Our debt consists of the following:


	December 31,
	2009			2008
Senior Secured Credit Facility:
Term Loan—subject to compromise, matures December 21, 2012, interest and principal payments due quarterly at LIBOR plus 5.2%, which includes 2% default interest at December 31, 2009 (8.2% at December 31, 2009)	$	483,833		$	488,757
Senior Secured Notes—subject to compromise, due June 1, 2015, interest payable semi-annually at 8.5%, interest payments due June 1 and December 1		1,248,969			1,248,969
Other:
Capitalized lease obligations, payments due at various dates through 2028, secured by slot and other equipment, interest at 8.5% to 12%		7,231			6,124

Total long-term debt		1,740,033			1,743,850
Less: current maturities		(1,733,463	)		(1,737,926	)

Long-term debt, net of current maturities	$	6,570		$	5,924

Debtor-in-Possession Facility—On March 2, 2010, the Debtors and certain holders of the Senior Notes entered into a commitment letter providing for a $45,000 senior secured debtor in possession notes facility (the “DIP Facility”). The borrowings under the DIP Facility would be conditioned upon confirmation of the Debtors/AHC Plan and would accrue interest on the outstanding principal amount thereof at a rate per annum equal to 10% payable on the earlier of the termination date or the date on which an event of default occurs. The maturity date of the DIP Facility would be the earliest of (a) six months from the closing date (or five months after the closing date if that certain Amended and Restated Backstop Agreement, dated December 11, 2009, among the Company and the Backstop Parties is not amended to extend the termination provisions thereunder), (b) the effective date of the Debtors/AHC Plan, (c) the date of confirmation of a plan of reorganization other than the Debtors/AHC Plan and (d) the acceleration of the loans and termination of the commitments. The borrowers would be subject to certain affirmative covenants as well as negative covenants. There are no financing or commitment fees required under the DIP Facility.

Event of Default—As discussed in Note 1, on February 17, 2009, the Debtors filed voluntary petitions in the Bankruptcy Court seeking relief under the provisions of chapter 11 of the Bankruptcy Code. The filing of the Chapter 11 Case constituted an event of default and therefore triggered repayment obligations under the $493,250 senior secured facility entered into by the Company on December 21, 2007 (the “2007 Credit Agreement”) and the Senior Notes. As a result, all indebtedness outstanding under the Senior Notes and the 2007

Credit Agreement (which has a cross-default provision with the Senior Notes) became automatically due and payable. Under the Bankruptcy Code, actions to collect pre-petition indebtedness, as well as most pending litigation, are stayed and other contractual obligations against the Debtors generally may not be enforced. Absent an order of the Bankruptcy Court, substantially all pre-petition liabilities are subject to settlement under a plan of reorganization to be approved by the Bankruptcy Court. Consequently, the Company has classified the indebtedness under the Senior Notes and the 2007 Credit Agreement within current liabilities in its Consolidated Balance Sheets.

In addition, until such time as no event of default exists, (i) the interest rate on any overdue principal or interest relating to the Senior Notes increases by an additional 1% per annum in excess of the 8.5% interest rate (as of December 31, 2009, we are past due on our December 1, 2008, June 1, 2009 and December 1, 2009 interest payments) and (ii) the interest rate under the 2007 Credit Agreement increases by an additional 2% in excess of the otherwise applicable interest rate on amounts outstanding under the 2007 Credit Agreement.

2007 Credit Agreement—On December 21, 2007, TER and TER Holdings entered into the 2007 Credit Agreement. Under the 2007 Credit Agreement, TER Holdings borrowed $393,250 which was to be used to (i) refinance all amounts outstanding under its Credit Agreement dated May 20, 2005 (the “2005 Credit Facility”), (ii) pay fees and expenses incurred in connection with the 2007 Credit Agreement and the refinancing of the 2005 Credit Facility, (iii) fund construction of the Chairman Tower at Trump Taj Mahal, and (iv) provide financing for working capital, capital expenditures and other general corporate purposes.

TER Holdings incurred $6,563 of costs associated with entering into the 2007 Credit Agreement. TER Holdings recorded a $4,127 non-cash loss on early extinguishment of debt during the year ended December 31, 2007 relating to the write-off of unamortized debt issuance costs associated with the 2005 Credit Facility.

In connection with the Marina Agreement, TER Holdings entered into an amendment, dated as of May 29, 2008, to the 2007 Credit Agreement (the “Amendment”). Pursuant to the Amendment, (i) the 2007 Credit Agreement lenders consented to the sale of Trump Marina, subject to the satisfaction of certain conditions, (ii) the applicable interest rate margins payable on amounts outstanding under the 2007 Credit Agreement would have increased had the transactions contemplated by the Marina Agreement closed, and (iii) TER Holdings agreed to pay amendment fees equal to one percent of the amount of the 2007 Credit Agreement.

During 2008, TER Holdings borrowed the remaining $100,000 available under the 2007 Credit Agreement which was used principally to fund capital expenditures associated with construction of the Chairman Tower.

Borrowings under the 2007 Credit Agreement are secured by a first priority security interest in substantially all of the assets of TER Holdings and it subsidiaries. TER Holdings’ obligations under the 2007 Credit Agreement are guaranteed by TER and certain of its direct and indirect subsidiaries. We and our subsidiaries are subject to a number of affirmative and negative covenants. The 2007 Credit Agreement restricts our ability to make certain distributions or pay dividends.

Senior Notes—On May 20, 2005, TER Holdings and TER Funding issued the Senior Notes. These Senior Notes were used to pay distributions under the Second Amended and Restated Joint Plan of Reorganization, dated as of March 30, 2005, as amended (the “2005 Plan”) of Trump Hotels & Casino Resorts, Inc. (“THCR”), our predecessor company. The Senior Notes due June 1, 2015, bear interest at 8.5% per annum, subject to the increase by an additional 1% per annum as discussed above. $1,038 of the Senior Notes were returned to us under the terms of the 2005 Plan and retired during 2006. During June 2007, we were notified by our bond trustee of the issuance of $7 in additional Senior Notes as a result of a clerical adjustment in the original issuance. As such, we recorded additional outstanding Senior Notes and increased our goodwill by $7 as these notes were issued as part of our reorganization.

$730,000 of the aggregate principal amount of the Senior Notes is nonrecourse to the issuers and to the partners of TER Holdings (the “Qualified Portion”). $520,000 of the aggregate principal amount of the Senior Notes is recourse to the issuers and to TER, in its capacity as general partner of TER Holdings (the “Non-Qualified Portion”).

The Non-Qualified Portion and Qualified Portion are recalculated on a periodic basis no less frequently than annually based on certain tax considerations, provided that in no event will the Qualified Portion exceed $730,000 in aggregate principal amount of Senior Notes.

TER Funding has no assets, operations, revenues or cash flows other than those related to the issuance, administration and repayment of our Senior Notes. All other subsidiaries of TER Holdings, except a minor non-guarantor subsidiary (the “Guarantors”), are guarantors of the Senior Notes on a joint and several basis. TER Holdings and TER Funding have no independent assets or operations from the Guarantors. Therefore, condensed consolidating financial statements are not presented.

The Senior Notes are senior obligations of the issuers and are guaranteed on a senior basis by the Guarantors and rank senior in right of payment to the issuers’ and Guarantors’ future subordinated indebtedness. The Senior Notes are secured by substantially all of our real property and incidental personal property, subject to liens securing amounts borrowed under the 2007 Credit Agreement and certain permitted prior liens. Because amounts borrowed under the 2007 Credit Agreement are secured by substantially all the assets of the issuers and the Guarantors on a priority basis, the Senior Notes are effectively subordinated to amounts borrowed under the 2007 Credit Agreement.

In addition, the ability of Trump Taj Mahal, Trump Plaza or Trump Marina to make payments to TER may be restricted by the New Jersey Casino Control Commission (the “CCC”).

Long-term debt and capital lease obligations mature as follows:


Year Ended December 31,	Long-term debt		Captial lease obligations		Total
2010	$	1,732,802	$	1,457	$	1,734,259
2011		—		1,348		1,348
2012		—		1,121		1,121