FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
Commission file number: 0-24206
Penn National Gaming, Inc.
State or other jurisdiction of(I.R.S. Employer incorporation or
organization Identification No.)
Pennsylvania 23-2234473
Penn National Gaming, Inc.
825 Berkshire Blvd.
Wyomissing, PA 19610
610-373-2400
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ____
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
Title Outstanding as of August 12, 1996
Common Stock par value .01 per share 6,665,145
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
INDEX
PART I - FINANCIAL INFORMATION Page
Item 1. - Financial Statements
Consolidated Balance Sheets -
June 30, 1996 (unaudited) and December 31, 1995 3 - 4
Consolidated Statements of Income -
Six Months Ended June 30, 1996
and 1995 (unaudited) 5
Consolidated Statements of Income -
Three Months ended June 30, 1996
and 1995 (unaudited) 6
Consolidated Statement of Shareholders' Equity -
Three months ended June 30, 1996 (unaudited) 7
Consolidated Statements of Cash Flow -
Six Months Ended June 30, 1996
and 1995 (unaudited) 8
Notes to Consolidated Financial Statements 9 - 11
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations 12 - 14
PART II - OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 15
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
June 30, December 31,
1996 1995
(unaudited)
----------- -----------
Assets
Current
Cash $ 9,310 $ 7,514
Accounts and notes receivable 2,792 1,618
Prepaid expenses and other current assets 1,304 600
Deferred income taxes 62 104
-------- --------
Total current assets 13,468 9,836
-------- --------
Property, plant and equipment, at cost
Land and improvements 3,359 3,336
Building and improvements 8,700 8,651
Furniture, fixtures and equipment 4,870 4,696
Transportation equipment 309 309
Leasehold improvements 4,396 4,363
Leased equipment under capitalized lease 824 824
Construction in progress 2,020 255
-------- --------
24,478 22,434
Less accumulated depreciation and amortization 7,286 6,728
-------- --------
Net property and equipment 17,192 15,706
-------- --------
Other assets
Excess of cost over fair market value of net assets
acquired (net of accumulated amortization) 1,864 1,898
Miscellaneous 344 92
Total other assets 2,208 1,990
-------- --------
$ 32,868 $ 27,532
======== ========
See accompanying notes to consolidated financial statements
3
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
June 30, December 31,
1996 1995
(unaudited)
----------- -----------
Liabilities and Shareholders Equity
Current
Maturities of long-term debt
and capital lease obligations $ 246 $ 250
Accounts payable 2,521 1,395
Purses due horseman 1,421 1,293
Uncashed pari-mutuel tickets 418 704
Accrued expenses 710 702
Customer deposits 525 315
Taxes, other than income taxes 192 246
Income taxes 532 797
-------- --------
Total current liabilities 6,565 5,702
-------- --------
Long-term liabilities
Long-term debt and capital lease obligations,
net of current maturities 103 140
Deferred income taxes 948 888
-------- --------
Total long-term liabilities 1,051 1,028
-------- --------
Commitments and contingencies
Shareholders' equity
Preferred stock, $.01 par value, 1,000,000 shares
authorized; none issued - -
Common stock, $.01 par value, 10,000,000 shares
authorized; 6,665,145 and 6,472,500 issued and
outstanding 46 43
Additional paid in capital 14,304 12,821
Retained earnings 10,902 7,938
-------- --------
Total shareholders' equity 25,252 20,802
-------- --------
$ 32,868 $ 27,532
======== ========
See accompanying notes to consolidated financial statements
4
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Six Months Ended
June 30,
1996 1995
---- ----
Revenues
Pari-mutuel revenues
Penn National races $ 9,672 $ 10,967
Import simulcasting 15,509 13,143
Export simulcasting 1,776 1,002
Admissions, programs and other racing revenues 2,048 1,791
Concession revenues 1,601 1,560
-------- --------
Total revenues 30,606 28,463
Operating expenses
Purses, stakes and trophies 6,448 6,120
Direct salaries, payroll taxes and employee benefits 3,967 3,786
Simulcast expenses 4,680 4,541
Pari-mutuel taxes 2,630 2,438
Other direct meeting expenses 4,478 4,144
Off-track wagering concessions expenses 1,045 1,059
Other operating expenses 2,485 2,321
-------- --------
Total operating expenses 25,733 24,409
-------- --------
Income from operations 4,873 4,054
-------- --------
Other income (expenses)
Interest (expense) (38) (34)
Interest income 153 139
Other - 4
-------- --------
Total other income 115 109
-------- --------
Income before income taxes 4,988 4,163
Taxes on income 2,024 1,717
-------- --------
Net Income $ 2,964 $ 2,446
-------- --------
Earnings per share $ 0.44 $ 0.38
-------- --------
Weighted average number of common shares outstanding 6,798 6,450
======== ========
See accompanying notes to consolidated financial statements
5
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
Three Months Ended
June 30,
1996 1995
---- ----
Revenues
Pari-mutuel revenues
Penn National races $ 5,191 $ 5,772
Import simulcasting 7,915 7,229
Export simulcasting 926 530
Admissions, programs and other racing revenues 1,171 1,123
Concession revenues 840 978
Total revenues 16,043 15,632
-------- --------
Operating expenses
Purses, stakes and trophies 3,522 3,244
Direct salaries, payroll taxes and employee benefits 2,058 2,053
Simulcast expenses 2,391 2,351
Pari-mutuel taxes 1,363 1,308
Other direct meeting expenses 2,252 2,301
Off-track wagering concessions expenses 536 651
Other operating expenses 1,087 1,230
-------- --------
Total operating expenses 13,209 13,138
-------- --------
Income from operations 2,834 2,494
-------- --------
Other income (expenses)
Interest (expense) (24) (16)
Interest income 85 72
Other - 8
-------- --------
Total other income 61 64
-------- --------
Income before income taxes 2,895 2,558
Taxes on income 1,170 1,039
-------- --------
Net Income $ 1,725 $ 1,519
-------- --------
Earnings per share $ 0.25 $ 0.23
-------- --------
Weighted average number of common shares outstanding 6,938 6,450
======== ========
See accompanying notes to consolidated financial statements
6
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE DATA)
(UNAUDITED)
Additional
Common Stock Paid-In Retained
Shares Amounts Capital Earnings Total
Balance, at January 1, 1996 6,472,500 $ 43 $ 12,821 $ 7,938 $ 20,802
Issuance of common stock 192,645 3 1,483 - 1,486
Net income for the six months
ended June 30, 1996 - - - 2,964 2,964
(unaudited) --------- ----- -------- -------- --------
Balance at June 30, 1996 6,665,145 $ 46 $ 14,304 $ 10,902 $ 25,252
(unaudited) ========= ===== ======== ======== ========
See accompanying notes to consolidated financial statements
7
PENN NATIONAL GAMING, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOW
(IN THOUSANDS)
(UNAUDITED)
Six months ended
June 30,
1996 1995
---- ----
Cash flows from operating activities
Net income $ 2,964 $ 2,446
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 592 430
Deferred income taxes 102 13
Decrease (Increase) in
Accounts and notes receivable (1,174) 10
Prepaid expenses (704) (119)
Miscellaneous other assets (252) (169)
Increase (decrease) in
Accounts payable 1,126 (251)
Purses due horsemen 128 1,120
Uncashed pari-mutuel tickets (286) (147)
Accrued expenses 8 (688)
Customers deposits 210 170
Taxes other than income payable (54) 152
Income taxes payable (265) 95
-------- --------
Net cash provided by operating activities 2,395 3,062
-------- --------
Cash flows from investing activities
expenditures for property and equipment (2,044) (2,219)
-------- --------
Net cash (used) by investing activities (2,044) (2,219)
-------- --------
Cash flows from financing activities
Proceeds of sale common stock 1,486 -
Principal payments on long-term debt and
Capital lease obligations (41) (61)
-------- --------
Net cash provided by (used) in financing activities 1,445 (61)
-------- --------
Net increase in cash 1,796 782
Cash, at beginning of period 7,514 5,502
-------- --------
Cash, at end of period $ 9,310 $ 6,284
======== ========
See accompanying notes to consolidated financial statements
8
PENN NATIONAL GAMING , INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The consolidated financial statements include the accounts of Penn
National Gaming, Inc. and its wholly-owned subsidiaries, Mountainview
Thoroughbred Racing Association, Pennsylvania National Turf Club, Inc., Penn
National Speedway, Inc., Sterling Aviation, Inc., Penn National Holding Company,
Penn National Gaming of West Virginia, Inc., and PNGI Charles Town Limited
Liability Company (collectively, the "Company").
The financial information has been prepared in accordance with the
Company's customary accounting practices and has not been audited. All
significant intercompany balances and transactions have been eliminated. In the
opinion of management, the information presented reflects all adjustments
necessary for a fair statement of interim results. All such adjustments are of a
normal and recurring nature. The foregoing interim results are not necessarily
indicative of the results of operations for the full year ending December 31,
1996.
2. Wagering Information (In Thousands):
Three months ended Six months ended
June 30, June 30,
1996 1995 1996 1995
---- ---- ---- ----
Pari-mutuel wagering in Pennsylvania
on Penn National races $ 24,798 $ 27,620 $ 46,105 $ 52,372
-------- -------- -------- --------
Pari-mutuel wagering on simulcasting
Import simulcasting from other
Pennsylvania racetracks 6,074 8,436 11,449 15,158
Import simulcasting from out of
Pennsylvania racetracks 34,546 29,302 70,002 53,648
Export simulcasting to out of
Pennsylvania wagering facilities 31,450 17,666 59,788 33,414
-------- -------- -------- --------
72,070 55,404 141,239 102,220
-------- -------- -------- --------
Total pari-mutuel wagering $ 96,868 $ 83,024 $187,344 $154,592
======== ======== ======== ========
9
PENN NATIONAL GAMING , INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
3. Commitments
The Company has a $4,200,000 credit facility with a commercial bank. The
facility provides for a working capital line of credit in the amount of
$2,500,000 at optional interest rates and a letter of credit facility for
$1,700,000. The credit facility is unsecured and contains various covenants
which include tangible net worth, debt to tangible net worth and debt coverage
ratios. At June 30, 1996, the Company was contingently obligated under the
letter of credit facility with face amounts aggregating $1,436,000. The
$1,436,000 consists of $1,336,000 relating to the horsemen's account balances
and $100,000 for Pennsylvania pari-mutuel taxes. All letters of credit expire
December 31, 1996.
In February 1996, the Company entered into an agreement to purchase land
for its proposed Williamsport OTW facility. The agreement provides for a
purchase price of $555,000 and is subject to numerous contingencies including
approval from the Pennsylvania State Horse Racing Commission. On May 22, 1996
the Company received Phase I approval from the Pennsylvania State Horse Racing
Commission for the Williamsport OTW facility.
On February 26, 1996, the Company entered into a joint venture agreement
with Bryant Development Company, the holder of an option to purchase the Charles
Town Race Track in Jefferson County, West Virginia. The Company will hold an 80%
interest in the joint venture with Bryant Development holding the remainder. The
joint venture intends to purchase the track from its current owners, subject to
approval of a referendum permitting installation of video lottery terminals at
the track, for a purchase price which is currently being renegotiated. On March
29, 1996, the Company paid $250,000 to extend the purchase option until December
31, 1996.
In March 1996, the Company entered into an agreement to purchase land for
its proposed Downingtown OTW facility. The agreement provides for a purchase
price of $1,696,000 and is subject to numerous contingencies including approval
from the Pennsylvania State Horse Racing Commission. On March 26, 1996, the
Company submitted an application to the Pennsylvania State Horse Racing
Commission for approval of the Downingtown OTW facility.
4. Supplemental Disclosures of Cash Flow Information
Cash paid during the six months ended June 30, 1996 and 1995 for interest
was $37,000 and $30,000 respectively.
Cash paid during the six months ended June 30, 1996 and 1995 for income
taxes was $2,186,000 and $1,616,000 respectively.
10
PENN NATIONAL GAMING , INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Cash received during the six months ended June 30, 1996 for the issuance
of 192,645 shares of stock from the exercise of options and warrants was
$1,486,000.
5. Subsequent Items
On August 7, 1996 the Company entered into an agreement with a contractor
to begin construction of the Williamsport OTW facility. The agreement provides
for a construction price of $1,648,000.
6. Earnings Per Share
On April 17, 1996, the Board of Directors declared a three for two stock
split in the form of a dividend payable May 23, 1996, to shareholders of record
on May 3, 1996. Accordingly, all shares and per share data has been restated to
reflect the split.
11
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Three months ended June 30, 1996 compared to three months ended June 30, 1995
Total revenue increased by approximately $411,000 or 2.6% from $15.6
million to $16.0 million for the three months ended June 30, 1996. The increase
was attributable to an increase in import and export simulcasting revenues
offset by a decrease in pari-mutuel revenues on Penn National races. The
increase in export simulcasting revenues of $397,000 or 75% from $530,000 to
$926,000 resulted from the Company's races being broadcast to additional
out-of-state locations. The decrease in pari-mutuel revenues on Penn National
races was due to increased import simulcasting revenue from wagering on other
race tracks at Penn National facilities. For the quarter, Penn National
scheduled and ran 52 live race days.
Total operating expenses increased by approximately $71,000 from $13.1
million to $13.2 million for the three months ended June 30, 1996. The increase
in operating expenses resulted from an increase in purses, stakes and trophies,
pari-mutuel taxes, and simulcast expenses resulting from an increase in revenue
from import simulcasting.
Income from operations increased by approximately $340,000 or 13.6% from
$2.5 million to $2.8 million due to the factors described above.
Net income increased by approximately $206,000 or 13.6% from $1,519,000 to
$1,725,000 for the three months ended June 30, 1996. Income tax expense
increased from $1,039,000 to $1,170,000 due to the increase in income for the
period.
Six months ended June 30, 1996 compared to six months ended June 30, 1995
Total revenue increased by approximately $2.1 million or 7.5% from $28.5
million to $30.6 million for the six months ended June 30, 1996. The increase
was attributable to an increase in import and export simulcasting revenues
offset by a decrease in pari-mutuel revenues on Penn National races. The
increase in export simulcasting revenues of $774,000 or 77% from $1.0 million to
$1.8 million resulted from the Company's races being broadcast to additional
out-of-state locations. The decrease in pari-mutuel revenues on Penn National
races was due to increased import simulcasting revenue from wagering on other
race tracks at Penn National facilities. For the six month period, Penn National
was scheduled to run 113 live race days but canceled 11 days in the first
quarter due to inclement weather.
Total operating expenses increased by approximately $1.3 million from
$24.4 million to $25.7 million for the six months ended June 30, 1996. The
increase in operating expenses resulted from an increase in purses, stakes and
trophies, pari-mutuel taxes, and simulcast expenses resulting from an increase
in revenue from import simulcasting and from six months of operating expenses
for the York OTW facility in 1996 compared to three months of expenses in 1995.
12
Income from operations increased by approximately $817,000 or 20.1% from
$4.1 million to $4.9 million due to the factors described above.
Net income increased by approximately $518,000 or 21.2% from $2.4 million
to $2.9 million for the six months ended June 30, 1996. Income tax expense
increased from $1.7 million to $2.0 million due to the increase in income for
the period.
Liquidity and Capital Resources
Historically, the Company's primary sources of liquidity and capital
resources have been cash flow from operations and borrowing from banks and
related parties. During the six months ended June 30, 1996, the Company's cash
position increased by approximately $1.8 million from $7.5 million at December
31, 1995 to $9.3 million as a result of increased cash flow from operations.
Net cash provided from operating activities totaled approximately $2.4
million for the six months ended June 30, 1996 of which $3.6 million came from
net income and non-cash expenses.
Cash flows used in investing activities totaled approximately $2.0 million
for capital expenditures. Capital expenditures were primarily for improvements
and equipment at the race track and the construction of the Lancaster OTW
facility.
Cash flows from financing activities totaled approximately $1,486,000 from
the exercise of stock options and warrants and the issuance of 192,645 shares of
common stock.
The Company has a $4,200,000 credit facility with a commercial bank. The
facility provides for a working capital line of credit in the amount of
$2,500,000 at optional interest rates and a letter of credit facility for
$1,700,000. The credit facility is unsecured and contains various covenants
which include tangible net worth, debt to tangible net worth and debt coverage
ratio. At June 30, 1996, the Company was contingently obligated under the letter
of credit facility with face amounts aggregating $1,436,000. The $1,436,000
consists of $1,336,000 relating to the horsemen's account balances and $100,000
for Pennsylvania pari-mutuel taxes. All letters of credit expire December 31,
1996.
On February 26, 1996, construction began on the Lancaster OTW facility.
The construction costs totaling approximately $2.4 million were funded from the
Company's cash reserves. The Lancaster OTW facility opened July 11,1996.
On February 26, 1996, the Company entered into a joint venture agreement
with Bryant Development Company, the holder of an option to purchase the Charles
Town Race Track in Jefferson County, West Virginia. The Company will hold an 80%
interest in the joint venture with Bryant Development holding the remainder. The
joint venture intends to purchase the track from its current owners, subject to
approval of a referendum permitting installation of video lottery terminals at
the track, for a purchase price which is currently being renegotiated. On March
29, 1996, the Company paid
13
$250,000 to extend the purchase option until December 31, 1996. The Company
intends to fund, if successful, the joint venture operations through additional
borrowing and the Company's working capital.
On May 13, 1996, the Company entered into a Mortgage Note Receivable with
the company it has entered into an agreement for the purchase of land for the
Downingtown OTW facility. The note has a principal sum of $400,000 with interest
due on the unpaid balance at a rate of 10% per annum. The note matures on the
later of the first anniversary date of the note or six months after the
termination of the land purchase agreement for the Downingtown OTW facility.
On June 4, 1996, the Company entered into a Loan and Security Agreement
with Charles Town Races, Inc. The Agreement provides for a working capital line
of credit in the amount of $1,250,000. As of June 30, 1996, Charles Town Races,
Inc. has borrowed $860,000 of the available credit.
The Company believes that the cash on hand, cash generated from
operations, and the above credit facility will be sufficient to fund its
anticipated future cash requirements.
14
Part II. Other Information
6. Exhibits and Reports on Form 8-K
(a) Exhibits
10.52 General contractor agreement dated August 7, 1996, between
Pennsylvania National Turf Club, Inc. and Warfel Construction
Company.
(b) Reports on Form 8-K
On June 17, 1996, the Company filed Form 8-K which reflected an
agreement entered into on June 4, 1996, between the Company and
Charles Town Races Limited Partnership and Charles Town Races, Inc.
The Company agreed to lend Charles Town Races $1,250,000.
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
PENN NATIONAL GAMING, INC.
By: /s/ Robert S. Ippolito
Robert S. Ippolito
Chief Financial Officer
Secretary/Treasurer
Date: August 14, 1996
16
EXHIBIT INDEX
Exhibit Nos. Description of Exhibits Page No.
10.52 General contractor agreement dated August 7, 18-28
1996, between Pennsylvania National Turf
Club, Inc. And Warfel Construction Company.
17
T H E A M E R I C A N I N S T I T U T E O F A R C H I T E C T S
AIA Document A101
Standard Form of Agreement Between
Owner and Contractor
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION
WITH AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR
MODIFICATION.
The 1987 Edition of AIA Document A201, General Conditions of the Contract for
Construction, is adopted in this document by reference. Do not use with other
general conditions unless this document is modified. This document has been
approved and endorsed by The Associated General Contractors of America.
AGREEMENT
made as of the Seventh day of August in the year of Nineteen Hundred and
Ninety-Six
BETWEEN the Owner: Pennsylvania National Turf Club, Inc.
(Name and address) P. O. Box 32
Grantville, PA 17028
and the Contractor: Warfel Construction Company
(Name and address) 812 North Prince Street, P. O. Box 4488
Lancaster, PA 17604
The Project is: Off-Track Wagering Facility
(Name and Location) Lycoming Mall
Williamsport, PA
The Architect is: Architectural Concepts
(Name and address) 967 East Swedesford Road
Suite 200
Exton, PA 19341
The Owner and Contractor agree as set forth below.
18
ARTICLE 1
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of the Contract
(General, Supplementary and other Conditions), Drawings, Specifications, addenda
issued prior to execution of this Agreement other documents listed in this
Agreement and Modifications issued after execution of this Agreement; these form
the Contract, and are as fully a part of the Contract as if attached to this
Agreement or repeated herein. The Contract represents the entire and integrated
agreement between the parties hereto and supersedes prior negotiations,
representations or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article 9.
ARTICLE 2
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the Contract
Documents, except to the extent specifically indicated in the Contract Documents
to be the responsibility of others, or as follows:
ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract Time of
Paragraph 3.2 is measured, and shall be the date of this Agreement, as first
written above, unless a different date is stated below or provision is made for
the date to be fixed in a notice to proceed issued by the Owner.
(Insert the date of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice to proceed)
Date of commencement shall be 5 days after receipt of Notice to Proceed
Unless the date of commencement is established by a notice to proceed issued by
the Owner, the Contractor shall notify the Owner in writing not less than five
days before commencing the Work to permit the timely filing of mortgages,
mechanic's liens and other security interests,
3.2 The Contractor shall achieve Substantial Completion of the entire Work not
later than 171 calendar days after receipt of Notice to Proceed
(Insert the calendar date or number of calendar days after the date of
commencement. Also insert any requirements for earlier Substantial Completion of
certain portions of the Work, if not stated elsewhere in the Contract Documents)
* Tote Room needs to be substantially complete 6 weeks prior to overall
substantial completion date.
* Kitchen needs to be substantially complete 2 weeks prior to overall
substantial completion
subject to adjustments of this Contract Time as provided in the Contract
Documents.
(Insert provisions, if any,for liquidated damages relating to failure to
complete on time)
19
ARTICLE 4
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the Contractor's
performance of the Contract the Contract Sum of ONE MILLION SIX HUNDRED FORTY
EIGHT THOUSAND Dollars ($ 1,648,000.00 ), subject to additions and deductions as
provided in the Contract Documents.
4.2 The Contract Sum is based upon the following alternates, if any, which are
described in the Contract Documents and are hereby accepted by the Owner:
(State the numbers or other identification of accepted alternates. If
decisions on other alternates are to be made by the Owner subsequent to the
execution of this Agreement, attach a schedule of such other alternates showing
the amount for each and the date until which that amount is valid.)
4.3 Unit prices, if any, are as follows:
20
ARTICLE 5
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the Architect by the
Contractor and Certificates for Payment issued by the Architect, the Owner shall
make progress payments on account of the Contract Sum to the Contractor as
provided below and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be one calendar
month ending on the last day of the month,
5.3 Provided an Application for Payment is received by the Architect not later
than the 31st day of a month, the Owner shall make payment to the Contractor not
later than the 25th day of the following month. If an Application for Payment is
received by the Architect after the application date fixed above, payment shall
be made by the Owner not later than ____days after the Architect receives
the Application for Payment.
5.4 Each Application for Payment shall be based upon the schedule of values
submitted by the Contractor in accordance with the Contract Documents. The
schedule of values shall allocate the entire Contract Sum among the various
portions of the Work and be prepared in such form and supported by such data to
substantiate its accuracy as the Architect may require. This schedule, unless
objected to by the Architect, shall be used as a basis for reviewing the
Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of completion of each
portion of the Work as of the end of the period covered by the Application for
Payment.
5.6 Subject to the provisions of the Contract Documents, the amount of each
progress payment shall be computed as follows:
5.6.1. Take that portion of the Contract Sum properly allocable to completed
Work as determined by multiplying the percentage completion of each portion of
the Work by the share of the total Contract Sum allocated to that portion of the
Work in the schedule of values, less retainage of ten percent ( 10 %). Pending
final determination of cost to the Owner of changes in the Work, amounts not in
the dispute may be included as provided in Subparagraph 7.3.7 of the General
Conditions even though the Contract Sum has not yet been adjusted by Change
Order;
5.6.2 Add that portion of the Contract Sum properly allocable to materials and
equipment delivered and suitably stored at the site for subsequent incorporation
in the completed construction (or, if approved in advance by the Owner, suitably
stored off the site at a location agreed upon in writing), less retainage of ten
percent ( 10 %);
5.6.3 Subtract the aggregate of previous payments made by the Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has withheld or
nullified a Certificate for
21
Payment as provided in Paragraph 9.5 of the General Conditions.
5.7 The progress payment amount determined in accordance with Paragraph 5.6
shall be further modified under the following circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum sufficient to increase
the total payments to ninety-nine percent ( 99 %) of the Contract Sum, less such
amounts as the Architect shall determine for incomplete Work and unsettled
claims; and
5.7.2 Add, if final completion of the Work is thereafter materially delayed
through no fault of the Contractor, any additional amounts payable in accordance
with Subparagraph 9.10.3 of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as follows:
(If it is intended, prior to Substantial Completion of the entire Work, to
reduce or limit the retainage resulting from the percentages inserted in
Subparagraphs 5.6.1 and 5.6.2 above, and this is not explained elsewhere in the
Contract Documents, insert here provisions for such reduction or limitation.)
Reduce to 5% when 50% complete with work.
Reduce to 0% when contract work complete.
ARTICLE 6
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the Contract Sum, shall
be made by the Owner to the Contractor when (l) the Contract has been fully
performed by the Contractor except for the Contractor's responsibility to
correct nonconforming Work as provided in Subparagraph 12.2.2 of the General
Conditions and to satisfy other requirements, if any, which necessarily survive
final payment; and (2) a final Certificate for Payment has been issued by the
Architect; such final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for Payment, or as
follows:
22
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of the General
Conditions or another Contract Document, the reference refers to that provision
as amended or supplemented by other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear interest from the
date payment is due at the rate stated below, or in the absence thereof, at the
legal rate prevailing from time to time at the place where the Project is
located. (Insert rate of interest agreed upon, if any)
12% per annum
(Usury laws and requirements under the Federal Truth in Lending Act, similar
state and local consumer credit laws and other regulations at the Owner's and
Contractor's principal places of business, the location of the Project and
elsewhere may affect the validity of this provision. Legal advice should be
obtained with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
1. Rock excavation is excluded
2. Concrete testing (only) is included.
3. No utility fees are included
4. We have included no SAMS counters (detail 8/A4.l) in our proposal.
5. No Performance & Payment Bond costs are included.
7.3.1 is attached.*
ARTICLE 8
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor as provided in
Article 14 of the General Conditions.
8.2 The Work may be suspended by the Owner as provided in Article 14 of the
General Conditions.
23
* 7.3.1 ROCK EXTRA CHARGES: Should we encounter rock on your job, the
following charges will apply: Trench Rock $_______ per C.Y.;
Bulk Rock $ ________ per C.Y; Rippable Rock $ ______per C.Y.; Unblastable Rock
$ _____ per C.Y.; Rock less than 15 C.Y. per day or which needs to be hand
drilled will be billed on a time and material basis.
* See attached Warfel 7.3.1
24
7.3.1: ROCK EXTRA CHARGES:
Should we encounter rock on this project, the following charges will
apply:
Unit Prices: $/cy
Trench Rock (blasted): $73
Trench Rock (machine) (unblastable): $75
Bulk Rock (blasted): $25
Bulk Rock (machine) (unblastable): $75
Rippable Rock (machine): $75
Bulk Earth: $ 3
Trench Earth: $12
Borrow Fill (load, haul, place and compact): $ 7
Unsuitable material(s) removal (remove and disp $ 5
Foundation excavation (trench): $12
Foundation excavation (bulk): $ 7
8/7/l996 WCC
25
ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after execution of
this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement Between Owner
and Contractor, AIA Document AIOI, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the Contract for
Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are those
contained in the Project Manual dated and are as follows:
Document Title Pages
00800 Supplementary Conditions 2
9.1.4 The Specifications are those contained in the Project Manual dated as in
Subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an exhibit attached to this
Agreement.)
Section Title Pages
See attached Table of Contents
26
9.1.5 The Drawings are as follows and are dated unless a
different date is shown below:
(Either list the Drawings here or refer to an exhibit attached to this
Agreement.)
Number Title Date
See attached listing
9.1.6 The addenda, if any, are as follows:
Number Date Pages
1 5/24/96 4
2 6/05/96 5 + duct size
schedule
3 6/13/96 2 + fixture
spec.
Portions of addenda relating to bidding requirements are not part of the
Contract Documents unless the bidding requirements are also enumerated in this
Article 9.
27
9.1.7 Other documents, if any, forming part of the Contract Documents are as
follows:
(List here any additional documents which are intended to form part of the
Contract Documents. The General Conditions provide that bidding requirements
such as advertisement or invitation to bid, Instructions to Bidders, sample
forms and the Contractor's bid are not part of the Contract Documents unless
enumerated in this Agreement. They should be listed here only if intended to be
part of the Contract Documents.)
None
This Agreement is entered into as of the day and year first written above and is
executed in at least three original copies of which one is to be delivered to
the Contractor, one to the Architect for use in the administration of the
Contract, and the remainder to the Owner.
OWNER Pennsylvania National Turf CONTRACTOR Warfel Construction Company
Club, Inc.
/s/Philip T. O'Hara, Jr. /s/ T. W. Peters
- ------------------------ ----------------
Philip T. O'Hara, Jr., V.P. Gen.Mgr. T. W. Peters, President
(Printed name and title) (Printed name and title)
CAUTION: You should sign an original AlA document which has this caution
printed in red. An original assures that changes will not be obscured as may
occur when documents are reproduced.
28
5
1,000
6-MOS
DEC-31-1996
JAN-01-1996
JUN-30-1996
9,310
0
2,792
0
0
13,468
24,478
7,286
32,868
6,565
0
0
0
46
25,206
32,868
30,606
30,606
23,248
23,248
2,485
0
38
4,988
2,024
2,964
0
0
0
2,964
.44
.44
