<PAGE>

================================================================================
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

(Mark One)

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

                   For the Fiscal Year Ended December 31, 2001

                                       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 No.: 333-643

                         Trump Atlantic City Associates
             (Exact Name of Registrant as Specified in its Charter)

             New Jersey                                         22-3213714
   (State or other jurisdiction of                           (I.R.S. Employer
   incorporation or organization)                         Identification Number)
  1000 Boardwalk at Virginia Avenue                               08401
      Atlantic City, New Jersey                                 (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (609) 449-6515

                        Trump Atlantic City Funding, Inc.
             (Exact Name of Registrant as Specified in its Charter)

                Delaware                                        22-3418939
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization )                      Identification Number)
    1000 Boardwalk at Virginia Avenue                             08401
        Atlantic City, New Jersey                              (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (609) 449-6515

                      Trump Atlantic City Funding II, Inc.
             (Exact Name of Registrant as Specified in its Charter)

                Delaware                                        22-3550202
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                       Identification Number)
    1000 Boardwalk at Virginia Avenue                             08401
        Atlantic City, New Jersey                               (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (609) 449-6515

                      Trump Atlantic City Funding III, Inc.
             (Exact Name of Registrant as Specified in its Charter)

                Delaware                                        22-3550203
     (State or other jurisdiction of                         (I.R.S. Employer
     incorporation or organization)                       Identification Number)
    1000 Boardwalk at Virginia Avenue                             08401
        Atlantic City, New Jersey                               (Zip Code)
(Address of principal executive offices)

       Registrant's telephone number, including area code: (609) 449-6515
        Securities registered pursuant to Section 12(b) of the Act: None
        Securities registered pursuant to Section 12(g) of the Act: None

      Indicate by check mark whether the Registrants (1) have 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
Registrants were required to file such reports), and (2) have been subject to
such filing requirements for the past 90 days. Yes [X] 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 the 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]

      The aggregate market value of the voting stock of Trump Atlantic City
Funding, Inc. held by non-affiliates as of March 29, 2002 was $0.

      The aggregate market value of the voting stock of Trump Atlantic City
Funding II, Inc. held by non-affiliates as of March 29, 2002 was $0.

      The aggregate market value of the voting stock of Trump Atlantic City
Funding III, Inc. held by non-affiliates as of March 29, 2002 was $0.

      As of March 29, 2002, there were 100 shares of Trump Atlantic City
Funding, Inc.'s Common Stock outstanding.

      As of March 29, 2002, there were 100 shares of Trump Atlantic City Funding
II, Inc.'s Common Stock outstanding.

      As of March 29, 2002, there were 100 shares of Trump Atlantic City Funding
III, Inc.'s Common Stock outstanding.

                    Documents Incorporated by Reference-None.
================================================================================

<PAGE>

                 TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES

                                    FORM 10K
                                TABLE OF CONTENTS

                                                                            Page
                                                                            ----

PART I
IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS .................     1

     ITEM 1.    BUSINESS .................................................     1
                Recent Events ............................................     1
                General ..................................................     3
                Trump Plaza ..............................................     3
                Taj Mahal ................................................     5
                Trademark/Licensing ......................................     8
                Certain Indebtedness .....................................     8
                The Atlantic City Market .................................     9
                Competition ..............................................    10
                Seasonality ..............................................    13
                Gaming and Other Laws and Regulations ....................    13
     ITEM 2.    PROPERTIES ...............................................    18
                Trump Plaza ..............................................    18
                Taj Mahal ................................................    19
     ITEM 3.    LEGAL PROCEEDINGS ........................................    20
     ITEM 4.    SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ......    21

PART II

     ITEM 5.    MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED
                STOCKHOLDER MATTERS ......................................    22
     ITEM 6.    SELECTED FINANCIAL DATA ..................................    22
     ITEM 7.    MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL
                CONDITION AND RESULTS OF OPERATIONS ......................    23
     ITEM 7A.   QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET
                RISK .....................................................    32
     ITEM 8.    FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ..............    32
     ITEM 9.    CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE ......................    32
PART III

     ITEM 10.   DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS ......    33
     ITEM 11.   EXECUTIVE COMPENSATION ...................................    36
     ITEM 12.   SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
                MANAGEMENT ...............................................    38
     ITEM 13.   CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS ...........    38

PART IV

     ITEM 14.   EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
                ON FORM 8-K ..............................................    39

SIGNATURES ...............................................................    45
     Trump Atlantic City Associates ......................................    46
     Trump Atlantic City Funding, Inc. ...................................    47
     Trump Atlantic City Funding II, Inc. ................................    48
     Trump Atlantic City Funding III, Inc. ...............................    49
INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENTS SCHEDULES .........   F-1


<PAGE>

                                     PART I

            IMPORTANT FACTORS RELATING TO FORWARD-LOOKING STATEMENTS

      This report includes "forward-looking statements" within the meaning of
Section 21E of the Securities Exchange Act of 1934. All statements other than
statements of historical facts 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,"
"anticipate," "believe," "plans," "forecasts" or "continue" or the negatives of
these terms or variations of them or similar terms. 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. Important
factors that could cause actual results to differ materially from our
expectations include business, competition, regulatory and other uncertainties
and contingencies discussed in this report that are difficult or impossible to
predict and which are beyond our control, including particularly the factors and
forward-looking statements included in this report under the captions "Business;
Recent Events"; "Business; Competition"; "Business; Legal Proceedings" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." 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 included in this document. These
forward-looking statements speak only as of the date of this report. We do not
intend to update these statements unless the securities laws require us to do
so.

ITEM 1. BUSINESS.

Recent Events

     As previously announced, Trump Hotels & Casino Resorts, Inc. ("THCR") is
seeking to refinance or modify the terms of THCR's and its subsidiaries' public
debt issues. The subsidiaries whose public debt may be affected include, among
others: (i) Trump Atlantic City Associates ("Trump AC"), (ii) Trump Atlantic
City Funding, Inc., a wholly-owned subsidiary of Trump AC ("Trump AC Funding"),
(iii) Trump Atlantic City Funding II, Inc., a wholly-owned subsidiary of Trump
AC ("Funding II"), and (iv) Trump Atlantic City Funding III, Inc., a
wholly-owned subsidiary of Trump AC ("Funding III," and together with Trump AC,
Trump AC Funding, Funding II and Funding III, the "Registrants"). Management
believes that, based on Trump AC's cash flow forecasts for 2002, Trump AC will
have sufficient cash flow to meet its debt service and operating expense
requirements throughout 2002. See "--Certain Indebtedness" and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."

     The primary reason to refinance or modify the Registrants' public debt is
to reduce the high levels of interest expense associated with such indebtedness
in order to devote more resources to capital expenditures at the Trump Plaza
Hotel and Casino ("Trump Plaza") and the Trump Taj Mahal Casino Resort (the "Taj
Mahal," and together with Trump Plaza, the "Trump AC Properties"). The Atlantic
City market is very competitive. Management believes that it is preferable to
address the Trump AC Properties' anticipated capital resource needs before
liquidity problems become acute. If refinancing or modifying the Registrants'
public debt issues cannot be accomplished, the Registrants will consider other
options. There can be no assurances, however, that any such alternatives could
be successfully completed. See "-Competition"; "-Certain Indebtedness" and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

     The following debt issues of the Registrants may be affected: (i) Trump
AC's and Trump AC Funding's 11-1/4% Mortgage Notes due 2006 (the "TAC I Notes"),
(ii) Trump AC's and Funding II's 11-1/4% Mortgage Notes due 2006 (the "TAC II
Notes") and (iii) Trump AC's and Funding III's 11-1/4% Mortgage Notes due 2006
(the "TAC III Notes," and together with the TAC I Notes and the TAC II Notes,
the "TAC Notes"). It is anticipated that refinancing or modifying the public
debt issues of THCR and its subsidiaries, other than the Registrants, will be
pursued in one or more separate transactions.

     The Registrants have retained financial advisors to provide financial
advisory services in connection with these matters, which may proceed
independently from discussions regarding THCR's and its other subsidiaries' debt
issues. We have had discussions with a committee comprised of certain holders of
the TAC Notes (the "TAC Notes Committee"). During such discussions, we apprised
the TAC Notes Committee of our desire to reduce our interest expense and
increase capital expenditures in order to compete effectively in an increasingly
competitive market place. In particular, we suggested modifying the TAC Notes by
lowering the interest rate thereon and extending the maturity date thereof.
Modification of certain covenant restrictions was also suggested. This type of
transaction would reduce interest expense and hopefully allow THCR to finance a
capital improvements program, including the possible construction of additional
hotel rooms at certain of its Atlantic City properties. Discussions to date with
the TAC Notes Committee have not resulted in a transaction. If a proposal for
the TAC Notes is ultimately agreed upon with the TAC Notes Committee, it would
likely require various consents and approvals, including the consent of the
holders of TAC Notes.

     In connection with discussions with the TAC Notes Committee, certain
members thereof were provided with confidential information concerning THCR and
certain of its subsidiaries, which is summarized in the preceding paragraph.

     There are no assurances as to any of the following:



                                       1

<PAGE>


      .     That any proposal will be agreed upon with the TAC Notes Committee
            or any other bondholder constituencies;

      .     That any proposal that is agreed upon with the TAC Notes Committee
            will be approved by other holders of the TAC Notes or that it will
            be consummated as proposed;

      .     That any transaction that is consummated will not adversely affect
            the holders of THCR's and its subsidiaries' various debt securities
            or THCR's Common Stock;

      .     That a transaction, if agreed to, will be completed by a specific
            date and time, if at all; or

      .     That a transaction, if agreed to, will be approved by the New Jersey
            Casino Control Commission (the "CCC").

      The ability of the Registrants to pay interest on and the principal of the
TAC Notes depends primarily on the ability of the Trump AC Properties to
generate cash from operations sufficient for such purposes. In the case of
principal payments at maturity, the ability to refinance such indebtedness is
also of primary importance. The Trump AC Properties have substantial
indebtedness and debt service requirements. The future operating performance of
the Trump AC Properties is subject to general economic conditions, industry
conditions, including competition and regulatory matters, and numerous other
factors, many of which are unforeseeable or are beyond the control of Taj
Associates (as defined herein) and Plaza Associates (as defined herein). There
can be no assurance that the future operating performance of the Trump AC
Properties will be sufficient to generate the cash flows required to meet the
debt service obligations of the Registrants. The ability of the Registrants to
pay the principal amount of TAC Notes at maturity (whether scheduled or by
acceleration thereof) is primarily dependent upon their ability to obtain
refinancing. There is also no assurance that the general state of the economy,
the status of the capital markets generally, or the receptiveness of the capital
markets to the gaming industry or to the Registrants will be conducive to
refinancing debt at any given time. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

      Pursuant to the indentures governing the TAC Notes, a default in the
payment of interest when due and payable and which continues for 30 calendar
days (the "Grace Period") constitutes an "Event of Default" under which the
trustee or the holders of 25.0% of the aggregate principal amount of the
respective debt issue then outstanding, by notice in writing to the respective
issuers, may, and the trustee at the request of such holders shall, declare all
principal and accrued interest of such debt issue to be due and payable
immediately.

      The Registrants made the semi-annual interest payments due in November on
the TAC Notes within the applicable Grace Period provided for by the relevant
Indentures. Consequently, no Event of Default thereunder occurred. See "-Certain
Indebtedness; Delayed Interest Payments."

            Arthur Andersen, LLP. Arthur Andersen, LLP ("Andersen") has been the
independent auditors of THCR and its subsidiaries since THCR's initial public
offering in June 1995, and has audited the financial statements included in this
Annual Report on Form 10-K. On March 14, 2002, a federal indictment of Andersen
was unsealed and made public in connection with matters unrelated to Andersen's
past and current services to THCR and its subsidiaries. On the Motion of the New
Jersey Division of Gaming Enforcement based upon the pendency of the indictment,
the CCC, at a public meeting on March 27, 2002: (a) rescinded Andersen's
exemption from licensure and required it to file a completed application for
casino service industry licensure by April 27, 2002; and (b) entered a temporary
prohibitory order prohibiting all New Jersey casino licensees and their holding,
intermediary and subsidiary companies from conducting any direct or indirect
business with Andersen and requiring that they terminate any ongoing business
with Andersen by May 15, 2002. In its ruling, the CCC expressly stated that its
objective was to allow a reasonable time to conclude pending business
transactions and to provide New Jersey casino licensees with an opportunity to
seek an extension of the deadline for terminating Andersen's services to prevent
undue economic hardship. THCR's Board of Directors and the Audit Committee of
THCR's Board of Directors, will undertake to change the appointment of Andersen
as the independent auditors of THCR and its subsidiaries within the timeframe
required by the CCC.

      SEC Investigation; Offer of Settlement Accepted by SEC. As previously
reported, the Enforcement Staff (the "Staff") of the Northeast Regional Office
of the Securities and Exchange Commission (the "Commission") had informed THCR
that it was considering recommending that the Commission authorize the
commencement of proceedings against THCR and its former Chief Executive Officer,
charging that they violated the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), by issuing a earnings press release on October 25, 1999 (the
"Earnings Release") that was materially false and misleading because it failed
to disclose that $17.0 million of THCR's operating income in the third quarter
of 1999 came from a one-time gain in connection with Taj Associates' September
1999 acquisition of the All Star Cafe restaurant from Planet Hollywood
International, Inc.

      Without admitting or denying the allegations, THCR entered into an offer
of settlement, dated January 10, 2001 (the "Offer"), with the Commission.
Pursuant to the Offer, THCR covenanted to cease and desist from committing or
causing any violations, and any future violations, of Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder. On January 16, 2002, the Commission
accepted the Offer and issued an Order Instituting Cease-and-Desist Proceedings
Pursuant to Section 21C of the Exchange Act, Making Findings, and Issuing
Cease-and-Desist Order. No fines were imposed by the Commission.


                                       2


<PAGE>

General

      Trump AC was originally formed under the name of Trump Plaza Holding
Associates on February 17, 1993. Trump AC Funding was formed on January 30,
1996. Funding II and Funding III were formed on November 18, 1997. Trump Hotels
& Casino Resorts Holdings, L.P., ("THCR Holdings"), is a general partner of
Trump AC, and through its wholly-owned subsidiary, Trump Atlantic City Holding,
Inc., the managing general partner of Trump AC ("Trump AC Holding"),
beneficially owns 100.0% of Trump AC. THCR is the sole general partner of THCR
Holdings. The common stock, par value $.01 per share (the "Common Stock"), of
THCR is listed on the New York Stock Exchange under the symbol "DJT." Trump AC
owns and operates the (i) Trump Plaza through Trump Plaza Associates, of which
Trump AC owns 99.0% and Trump Atlantic City Corporation, a wholly-owned
subsidiary of Trump AC ("TACC"), owns the remaining 1.0% ("Plaza Associates"),
and (ii) the Taj Mahal through Trump Taj Mahal Associates, of which Trump AC
owns 99.0% and TACC owns the remaining 1.0% ("Taj Associates"). Trump Plaza and
Taj Mahal (together, the "Trump AC Properties") are located on the boardwalk in
Atlantic City, New Jersey (the "Boardwalk"). THCR is the exclusive vehicle
through which Donald J. Trump ("Mr. Trump" or "Trump") engages in new gaming
activities in both emerging and established gaming jurisdictions.

      The Registrants operate in only one industry segment. See "Financial
Statements and Supplementary Data." For ease of discussion, Trump Plaza and Taj
Mahal are discussed individually. Unless otherwise indicated, references to
"Trump Plaza" include Trump Plaza's main tower (the "Trump Plaza Main Tower")
and east tower (the "Trump Plaza East Tower"). Also, unless otherwise indicated,
references to "management" or "Management" include the officers and managers of
the Registrants as well as the officers and managers of the Trump AC Property
being discussed at the time.

      The following table profiles Trump AC's current casino and hotel capacity
as of December 31, 2001:

                                         Trump Plaza
                                   ----------------------
                                   Main Tower  East Tower   Taj Mahal      Total
                                   ----------  ----------   ---------    -------
Gaming square footage ..........       73,975      13,933     158,680    246,588
Slot machines ..................        2,274         597       4,825      7,696
Table games ....................           88          --         207        295
Hotel rooms ....................          555         349       1,250      2,154

      Casino Services Agreement; Trump Administration. In December 2000, Trump
Administration, a division of Taj Associates ("Trump Administration"), assumed
the rights and responsibilities of Trump Casino Services, LLC, ("TCS") as a
result of the merger of TCS with and into Taj Associates. TCS was formed in June
1996 to provide managerial, financial, accounting, purchasing, legal and other
services (the "Casino Services") necessary and incidental to the operations of
each of the THCR's casino properties, including the Taj Mahal and Trump Plaza,
pursuant to a Second Amended and Restated Casino Services Agreement, dated
January 1, 1998 (the "Casino Services Agreement"), by and among TCS, Plaza
Associates, Taj Associates, Trump Castle Associates, L.P. ("Castle Associates"),
the operator of the Trump Marina Hotel Casino ("Trump Marina"), and Trump
Indiana, Inc. ("Trump Indiana"), the operator of the Trump Indiana Riverboat
(the "Indiana Riverboat"). The Casino Services Agreement requires Plaza
Associates, Taj Associates, Castle Associates and/or Trump Indiana, as the case
may be, to pay Trump Administration all of the costs and expenses incurred by
Trump Administration in providing the Casino Services, including without
limitation, all payroll and employee benefits and related costs associated with
the employees utilized by Trump Administration in providing the Casino Services
as well as all overhead and other expenses incurred in the ordinary course of
providing the Casino Services. The term of the Casino Services Agreement is ten
years unless terminated earlier by any of the parties upon 90 days prior written
notice to each of the other parties.

Trump Plaza

      General. Management believes that Trump Plaza's International Five Star
Diamond Award from the American Academy of Hospitality Sciences reflects the
high quality amenities and services that Trump Plaza seeks to provide to its
casino patrons and hotel guests. Trump Plaza is conveniently located in the
center of the Boardwalk at the end of the Atlantic City Expressway, the main
highway into Atlantic City. Trump Plaza's central location appeals to patrons
who drive to Atlantic City (commonly referred to as "drive-in" patrons) as well
as those who take buses and other modes of transportation to Atlantic City and
stroll the Boardwalk ("walk-in" or "bus" patrons). Management also believes that
the public's association of Trump Plaza with Donald J. Trump and the "Trump"
name significantly contributes to Trump Plaza's high-quality image. Trump
Plaza's proximity to Atlantic City's Boardwalk Hall (the "Boardwalk Hall"),
which was recently renovated into a modern, special events venue, is also
believed to benefit the property.

      Facilities and Amenities

     Trump Plaza competes with other casinos on the basis of service and quality
and extent of amenities. For this reason, substantial capital expenditures are
required from time to time to compete effectively. See "--Recent Events";
"--Competition" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations."


                                       3

<PAGE>


      The Trump Plaza property is comprised of two buildings, the Trump Plaza
Main Tower which has 555 hotel rooms, including 73 suites, and the Trump Plaza
East Tower which has 349 hotel rooms, including 67 suites. The property has
87,908 square feet of casino space, with 2,871 slot machines and 88 table games.
Amenities and services include 18,157 square feet of convention space, an
800-seat cabaret theater, three cocktail lounges, eight restaurants, a player
club, a health spa, an indoor pool, arcade, tennis courts and four retail
outlets.

      The entry level of Trump Plaza's Main Tower includes a cocktail lounge,
deli, coffee shop, pastry stop, buffet and three gift shops. The casino level
houses the casino with an exclusive high-end slot area offering an ocean view.
An enclosed walkway connects the Trump Plaza Main Tower at the casino level with
the Boardwalk Hall. The Trump Plaza East Tower offers patrons an alternative
smoke-free casino, also with windows overlooking the Boardwalk and ocean.

      Most of Trump Plaza's guest rooms have a view of the ocean. While rooms
are of varying size, a typical guest room consists of approximately 400 square
feet. The Trump Plaza's Main Tower also features 16 one-bedroom suites, 28 two
bedroom suites and 18 "Super Suites." The Super Suites are located on the top
two floors of the Trump Plaza Main Tower and offer luxurious accommodations and
24-hour butler and maid service.

      Trump Plaza's Main Tower is connected by an enclosed pedestrian walkway to
a ten-story parking garage, which contains 14 bus bays and can accommodate up to
2,778 cars. The parking garage also provides patrons with safe and immediate
access to the casino, and is located directly off the Atlantic City Expressway,
the main highway into Atlantic City (the "Trump Plaza Transportation Facility").

      In 2001, Trump Plaza opened a new table gaming area adjacent to the
Baccarat Pit to attract and cater specifically to Asian gaming customers. This
area features an aggregate of 15 Asian-style games (e.g., Pai Gow Poker, etc.)
in a separate gaming area themed with various elements of Asian decor. Trump
Plaza also offers a noodle bar which offers special amenities targeted to
attract and appeal to Asian customers.

      Trump World's Fair. In October 1999, Plaza Associates closed the Trump
World's Fair (the "Trump World's Fair"). The demolition of the facility was
completed in December 2001. The estimated cost of closing and dismantling the
Trump World's Fair was approximately $124.8 million, including approximately
$97.2 million for the writedown of the net book value of the assets and
approximately $27.6 million of costs incurred in connection with the closing and
demolition of the building.

      Business and Marketing Strategy

      A primary element of Trump Plaza's business strategy is to attract patrons
who tend to wager more frequently and in larger denominations than the typical
Atlantic City gaming customer. Trump Plaza's management team has launched a
variety of initiatives to this end. These initiatives include targeted marketing
and advertising campaigns directed to select groups of customers in the
Boston-New York-Philadelphia-Washington, D.C. corridor and the introduction of
new updated gaming products.

      In 2000 and 2001, management added a wide variety of new slot machines to
both the Trump Plaza Main Tower and the Trump Plaza East Tower. Additionally,
increased focus has been placed on providing excellent customer service to
patrons while playing the slot machines.

      "Comping" Strategy. In order to compete effectively with other Atlantic
City casino hotels, Trump Plaza offers complimentary drinks, meals, room
accommodations and/or travel arrangements (commonly referred to as
"complimentaries" or "comps") to select patrons. Management strives to monitor
and update Trump Plaza's policy so as to provide complimentaries primarily to
patrons who have a demonstrated propensity to wager at Trump Plaza by
systematically reviewing patrons' prior gaming history at Trump Plaza. Each
patron's gaming history is carefully analyzed to determine whether such patron's
gaming activity at the Trump Plaza, less the value of any comps, is potentially
profitable to Trump Plaza. Additionally, as a result of increased regulatory
flexibility, Trump Plaza has implemented a cash comping policy to high-end
players in order to compete with similar practices in Las Vegas and to attract
international business.

      Entertainment. Trump Plaza offers headline entertainment as part of its
strategy to attract high-end and cash patrons. Trump Plaza offers a variety of
headline entertainment throughout the year. During the fiscal year ended
December 31, 2001, there were 17 headline entertainment acts featured at Trump
Plaza, including performances by Tom Jones, David Brenner, Jeffrey Osborne,
Smokey Robinson, Natalie Cole, Penn & Teller, Carrot Top and America.

      Player Development. Plaza Associates currently employs gaming
representatives (commonly called "Casino Hosts" or "Player Development
Executives") to promote Trump Plaza and its amenities to existing and
prospective Trump Plaza patrons. These gaming representatives promote special
events, incentive giveaways and slot or table games tournaments by directly
contacting patrons by telephone or in person. Trump Plaza's Casino Hosts also
assist patrons on the casino floor, arrange room and dinner reservations and
provide general assistance. To increase Trump Plaza's marketing base, Casino
Hosts also solicit patrons to enroll in Trum2p Plaza's frequent player card
program to receive their own individual Trump card (the "Trump Card").


                                       4

<PAGE>


      Promotional Activities. The Trump Card program constitutes a key element
in Trump Plaza's direct marketing program. Both table and slot machine players
are encouraged to register for, and utilize, their personalized Trump Card to
earn various complimentaries and incentives based upon their level of play.
Before the commencement of play, the cardholder inserts his or her Trump Card
into a card reader attached to the slot machine or, in the case of a table game,
gives his or her Trump Card to the floor person. Cardholders can switch machines
or tables as often as they like without losing any credit. Computer systems
record data about the cardholder, including playing preferences, frequency and
denomination of play and the actual or projected amount of gaming revenues
produced or to be produced. Player Development Executives and management
personnel are then able to identify and monitor the location of the cardholder
and the frequency and denomination of such cardholder's play. They can also use
this information to provide attentive service to the cardholder while the patron
is visiting the property.

      Trump Plaza also designs promotional offers, through the deployment of
direct mailing and telemarketing strategies, to attract and retain gaming
patrons who are reasonably expected to provide revenues based upon their
historical gaming patterns. Such information is gathered on slot wagering by the
Trump Card and on table game wagering by the casino game supervisors.
Historically, promotional activities have included selective mailings of coin
vouchers, special event parties, sweepstakes and gaming tournaments. Management
continuously reviews its promotional programs to attract and retain Trump Plaza
patrons.

      Credit Policy. Historically, Trump Plaza has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1999, 2000 and 2001, credit play as a percentage of total dollars wagered
was approximately 22.8%, 23.2% and 19.0%, respectively. Trump Plaza establishes
credit limits based upon the particular patron's creditworthiness, as determined
by an examination of the following criteria: (i) checking the patron's personal
checking account balance, (ii) performing a credit check on each domestic patron
and (iii) checking the patron's credit limits and indebtedness at all casinos in
the United States, as well as many island casinos. The determination of a
patron's creditworthiness is performed for continuing patrons on a yearly basis
or more frequently if Plaza Associates deems a re-determination of
creditworthiness is warranted. In addition, depositing of markers is regulated
by the state of New Jersey. Markers in increments of amounts up to and including
$1,000 are deposited in a maximum of seven days; markers in increments of $1,001
to $5,000 are deposited in a maximum of 14 days; and markers in increments of
$5,001 and over are deposited in a maximum of 45 days. Markers may be deposited
sooner at the request of patrons or at Trump Plaza's discretion.

      Bus Program. Trump Plaza also has a bus program which transports an
average of 1,300 gaming patrons per day during the weekdays and an average of
2,500 gaming patrons per day on the weekends. Trump Plaza's bus program offers
incentives and discounts to certain scheduled and chartered bus customers. The
Trump Plaza Transportation Facility is connected to Trump Plaza by an enclosed
pedestrian walkway, and provides patrons with immediate and secure access to the
casino hotel from the bus and a comfortable lounge area to wait for return
buses.

      Employees and Labor Relations

      As of December 31, 2001, Plaza Associates had approximately 2,600
full-time equivalent employees, of whom approximately 700 were covered by
collective bargaining agreements. The collective bargaining agreement with Local
No. 54, which covers most of those employees, expires on September 15, 2004.
Management believes that its relationships with its employees are satisfactory.

     Certain employees of Plaza Associates must be licensed by or registered
with the CCC under the New Jersey Casino Control Act (the "Casino Control Act"),
depending on the nature of the position held. Casino employees are subject to
more stringent licensing requirements than non-casino employees, and must meet
applicable standards pertaining to such matters as financial responsibility,
good character, ability, casino training, experience and New Jersey residency.
Such regulations have resulted in significant competition for employees who meet
these requirements.

Taj Mahal

      The Taj Mahal continues to rank first among all Atlantic City casinos in
terms of total gaming revenues for the year ended December 31, 2001, as well as
in each previous year since opening in 1990. Located on the northern end of the
Boardwalk, the Taj Mahal, the largest Atlantic City casino hotel in terms of
gaming positions, capitalizes on the widespread recognition and marquee status
of the "Trump" name and its association with high quality amenities and
first-class service as evidenced by its International Five Star Diamond Award
from the American Academy of Hospitality Sciences. Management believes that the
breadth and diversity of the Taj Mahal's casino, entertainment and convention
facilities and its status as a "must see" attraction enable the Taj Mahal to
attract a large portion of the gaming public who come to Atlantic City.

      The Taj Mahal opened the Casbah entertainment complex in June 2000, which
management believes has become one of Atlantic City's most unique entertainment
venues. The Casbah entertainment complex is adjacent to the Xanadu Theater on
the Boardwalk. The complex features a Boardwalk level bar, a seasonal outdoor
dining area with live entertainment and a centerpiece high-energy nightclub.


                                       5

<PAGE>


      Facilities and Amenities

      The Taj Mahal competes with other casinos on the basis of service and
quality and extent of amenities. For this reason, substantial capital
expenditures are required from time to time to compete effectively. See
"--Recent Events"; "--Competition" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

      The Taj Mahal consists of a 42-story hotel tower and contiguous low-rise
structure sited on approximately 30.0 acres of land. The Taj Mahal offers 1,250
guest rooms, including 242 suites, 19 dining and 12 beverage locations, parking
for approximately 6,950 cars, a 14-bay bus terminal and approximately 65,000
square feet of ballroom, meeting room and pre-function area space. The Taj Mahal
features approximately 158,680 square feet of gaming space, which includes 207
table games, 4,825 slot machines and approximately 12,000 square-foot poker,
keno and race simulcasting room with 67 poker tables. The casino offers
Blackjack, Craps, Roulette, Baccarat, Caribbean Stud Poker, Big Six, Spanish 21,
Let It Ride Poker and Three Card Poker. In addition, the Taj Mahal offers an
Asian-themed table game area which offers 17 popular Asian table games,
including Sic-Bo and Pai Gow Poker, targeted to attract and retain Taj Mahal's
growing Asian clientele. As a special bonus to high-end players, the Taj Mahal
offers three clubs for the exclusive use of selected customers: (i) the
Maharajah Club, for high-end table game players, (ii) the President's Club, for
high-end slot players, and (iii) the Bengal Club, for other preferred slot
players. In addition, the Taj Mahal features a 20,000 square-foot multi-purpose
entertainment complex known as the "Xanadu Theater," with seating capacity for
up to approximately 1,200 persons which can be used as a theater, concert hall,
boxing arena or exhibition hall (the "Taj Entertainment Complex"), and the Mark
G. Etess Arena, which comprises an approximately 63,000 square-foot exhibition
hall and entertainment facility, which can accommodate seating for up to 5,200
persons.

      In 1999, Taj Associates expanded Taj Mahal's casino floor frontage on the
Boardwalk by approximately 4,600 square feet, accommodating the addition of
approximately 200 slot machines. In 2000, Taj Associates expanded the Taj
Mahal's casino floor by approximately 2,500 square feet, accommodating the
addition of approximately 160 slot machines in the former Princess Lounge area
whose entertainment program was moved to the bar located in Taj Mahal's hotel
lobby. In 2001, Taj Associates expanded the Taj Mahal's casino floor by
approximately 3,800 square feet accommodating the addition of approximately 215
slot machines.

      To increase dining opportunities for customers, the Hard Rock Cafe, the
All Star Cafe and the Stage Deli of New York were opened at the Taj Mahal in
November 1996, April 1997 and September 1997, respectively. In September 1999,
Taj Associates assumed operations of the All Star Cafe, which Taj Mahal
continued to operate, and eventually remodeled and incorporated into the Casbah
entertainment complex, which opened in June 2000. Management believes that the
Casbah entertainment complex has since become one of Atlantic City's most unique
entertainment venues. The Casbah entertainment complex features a centerpiece
high-energy nightclub, seasonal outdoor dining with live entertainment and a
Boardwalk lobby bar, all adjacent to the Xanadu Theater on the Boardwalk. See
"Properties; Taj Mahal."

      Business and Marketing Strategy

      In 2001, the Taj Mahal expanded its casino floor by approximately 3,800
square feet, accommodating the addition of approximately 215 slot machines. The
Taj Mahal intends to reconfigure its casino floor, subject to approval by the
CCC, on an ongoing basis, to accommodate perceived changes in patron demand.
Management systematically monitors the configuration of the casino floor and the
types of games offered to patrons with a focus towards appealing to patrons'
tastes and correcting inefficiencies. As new games are approved by the CCC,
management determines whether to integrate them into the casino floor. In
January 2001, "Three Card Poker" was added.

      "Comping" Strategy. In order to compete effectively with other Atlantic
City casino hotels, the Taj Mahal offers complimentaries to select patrons.
Management strives to monitor and update the Taj Mahal's policy so as to provide
complimentaries primarily to patrons who have a demonstrated propensity to wager
at the Taj Mahal by systematically reviewing patrons' prior gaming history at
the Taj Mahal. Each patron's gaming history is carefully analyzed to determine
whether such patron's gaming activity at the Taj Mahal, less the value of any
comps, is potentially profitable to the Taj Mahal. Additionally, as a result of
increased regulatory flexibility, the Taj Mahal has implemented a cash comping
policy to high-end players in order to compete with similar practices in Las
Vegas and to attract international business.

      Entertainment. Management believes headline entertainment, as well as
other sporting and entertainment events, is an effective means of attracting and
retaining gaming patrons. The Xanadu Theater, together with the Mark Etess Arena
(an approximately 63,000 square-foot exhibition hall facility), afford the Taj
Mahal more flexibility in the use of its larger entertainment arena for sporting
and other headline attractions. The Taj Mahal regularly engages popular
musicians and entertainment personalities, and will continue to emphasize
weekend marquee events, such as high visibility sporting events, festivals and
contemporary concerts to maintain the highest level of glamour and excitement at
the Taj Mahal. Mid-week uses for the facilities have included convention events
and casino marketing sweepstakes. In 2001, Taj Mahal was the site of many major
entertainment events, including performances by Luciano Pavarotti, Brooks and
Dunn, Alan Jackson and Russell Watson.


                                       6

<PAGE>


      Player Development. Taj Associates employs marketing representatives as a
means of attracting high-end slot and table gaming patrons to the property and
to host special events, offer incentives and maintain and expand the property's
player base. Casino hosts assist patrons on the casino floor, arrange room and
dinner reservations and provide general assistance. To increase Taj Mahal's
marketing base, casino hosts also solicit patrons to enroll in Taj Mahal's
frequent player card program to receive their own individual Taj card (the "Taj
Card"). See "Promotional Activities."

      The Taj Mahal also plans to continue the development of its slot and coin
programs through direct mail and targeted marketing campaigns focusing on the
high-end and mid-level player. The Taj Mahal's customer bus-in program, has been
an important component of player development, and will continue to focus on
tailoring its player base and maintaining a low-cost package.

      Promotional Activities. The Taj Card program constitutes a key element in
the Taj Mahal's direct marketing program. Both table and slot machine players
are encouraged to register for, and utilize, their personalized Taj Card to earn
various complimentaries and incentives based upon their level of play. Before
the commencement of play, the cardholder inserts his or her Taj Card into a card
reader attached to the slot machine or, in the case of a table game, gives his
or her Taj Card to the floor person. Cardholders can switch machines or tables
as often as they like without losing any credit. Computer systems record data
about the cardholder, including playing preferences, frequency and denomination
of play and the amount of gaming revenues produced. Marketing and management
personnel are then able to identify and monitor the location of the cardholder
and the frequency and denomination of such cardholder's play. They can also use
this information to provide attentive service to the cardholder while the patron
is visiting the property.

      The Taj Mahal also designs promotional offers, through the deployment of
direct mailing and telemarketing strategies, to attract and retain gaming
patrons who are reasonably expected to provide revenues based upon their
historical gaming patterns. Such information is gathered on slot wagering by the
Taj Card and on table game wagering by the casino game supervisors.
Historically, promotional activities have included selective mailings of
vouchers for complimentary slot machine play and special events programs, gift
giveaways, sweepstakes and special competitions. Management continuously reviews
its promotional programs to attract and retain Taj Mahal patrons.

      The Taj Mahal also routinely hosts slot machine and table game tournaments
in which cash prizes are offered to a select group of players invited to
participate in the tournament based upon their tendency to play. Special events
such as "Slot Sweepstakes" and "bingo" are designed to increase mid-week
business. Players at these tournaments also tend to play on the casino floor at
their own expense during "off-hours" of the tournament. At times, tournament
players are also offered special dining and entertainment privileges that
encourage them to remain at the Taj Mahal. Tiered gift programs tailored to
various levels of players are utilized to enhance volumes on certain days of the
month. During 2001, the Taj Mahal hosted a variety of special table game
tournaments, including Baccarat, Blackjack and Craps, among others, as well as
hosted the U.S. Poker Championship.

      Credit Policy. Historically, the Taj Mahal has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1999, 2000 and 2001, the Taj Mahal's credit play as a percentage of total
dollars wagered was approximately 23.7%, 22.6% and 20.5%, respectively. The Taj
Mahal establishes credit limits based upon the particular patron's
creditworthiness, as determined by an examination of the following criteria: (i)
checking the patron's personal checking account balance, (ii) performing a
credit check on each domestic patron and (iii) checking the patron's credit
limits and indebtedness at all casinos in the United States, as well as many
island casinos. The determination of a patron's creditworthiness is performed
for continuing patrons on a yearly basis or more frequently if Taj Associates
deems a re-determination of creditworthiness is warranted. In addition,
depositing of markers is regulated by the state of New Jersey. Markers in
increments of amounts up to and including $1,000 are deposited in a maximum of
seven days; markers in increments of $1,001 to $5,000 are deposited in a maximum
of 14 days; and markers in increments of $5,001 and over are deposited in a
maximum of 45 days. Markers may be deposited sooner at the request of patrons or
at the Taj Mahal's discretion.

      Employees and Labor Relations

      As of December 31, 2001, Taj Associates had approximately 4,400 full-time
equivalent employees for the operation of the Taj Mahal, approximately 1,360 of
whom were covered by collective bargaining agreements. The collective bargaining
agreement with Local No. 54, which covers most of those employees, expires on
September 15, 2004. Management believes that its relationship with its employees
is satisfactory.

      Certain employees of Taj Associates must be licensed by or registered with
the CCC under the Casino Control Act, depending on the nature of the position
held. Casino employees are subject to more stringent licensing requirements than
non-casino employees, and must meet applicable standards pertaining to such
matters as financial responsibility, good character, ability, casino training,
experience and New Jersey residency. Such regulations have resulted in
significant competition for employees who meet these requirements.


                                       7

<PAGE>

Trademark/Licensing

      Subject to certain restrictions, THCR has the exclusive world-wide right
to use the "Trump" name and Mr. Trump's likeness in connection with gaming and
related activities pursuant to a trademark license agreement, dated June 12,
1995, and the amendments thereto (the "Trump License Agreement"), between Mr.
Trump, as licensor, and THCR, as licensee. Pursuant to the Trump License
Agreement, THCR is permitted to use the names "Trump," "Donald Trump," "Donald
J. Trump" and variations thereof (collectively referred to as the "Trump
Names"), and related intellectual property rights (together with the Trump
Names, the "Marks") in connection with casino and gaming activities and related
services and products. The Trump License Agreement, however, does not restrict
or restrain Mr. Trump's right to use or further license the Trump Names in
connection with services and products other than casino services and related
products.

      The term of the Trump License Agreement is until the later of: (i) June
2015, (ii) such time as Mr. Trump and his affiliates no longer own at least a
15.0% voting interest in THCR or (iii) such time as Mr. Trump ceases to be
employed or retained by THCR pursuant to an employment, management, consulting
or similar services agreement. Upon expiration of the Trump License Agreement,
Mr. Trump is required to grant to THCR a non-exclusive license to use the Marks
for a reasonable period of transition on terms to be mutually agreed upon
between Mr. Trump and THCR. Mr. Trump's obligations to THCR under the Trump
License Agreement are secured by a security agreement, pursuant to which Mr.
Trump has granted to THCR a first priority, security interest in the Marks for
use in connection with casino services, as well as related hotel, bar and
restaurant services.

Certain Indebtedness

      TAC I Notes. In connection with THCR's acquisition of the Taj Mahal in
April 1996 (the "Taj Acquisition"), Trump AC and Trump AC Funding issued, in an
underwritten public offering, mortgage notes in the principal amount of $1.2
billion, bearing interest at the rate of 11-1/4% per annum, payable in cash
semiannually in arrears on May 1st and November 1st of each year, and maturing
on May 1, 2006 (the "TAC I Notes"). The obligations evidenced by the TAC I Notes
are jointly and severally guaranteed by Taj Associates, Plaza Associates and
Trump AC and all future subsidiaries of Trump AC (other than Trump AC Funding).
The TAC I Notes were issued pursuant to an indenture agreement, dated as of
April 17, 1996 (the "TAC I Note Indenture"), by and among Trump AC and Trump AC
Funding, as issuers, Plaza Associates, Taj Associates and The Trump Taj Mahal
Corporation, , as guarantors, and the Trustee. The TAC I Notes include
restrictive covenants prohibiting or limiting, among other things, the sale of
assets, the making of acquisitions and other investments, certain capital
expenditures, the incurrence of additional debt and liens and the payment of
dividends and distributions. Non-compliance could result in the acceleration of
such indebtedness. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations; Financial Condition-Liquidity and Capital
Resources; Summary of Certain Debt; TAC Notes."

      TAC II Notes. In December 1997, Trump AC and Funding II issued, in an
underwritten public offering, mortgage notes in an aggregate principal amount of
$75.0 million, bearing interest at the rate of 11-1/4% per annum, payable in
cash semiannually in arrears on May 1st and November 1st of each year, and
maturing on May 1, 2006 (the "TAC II Notes"). The TAC II Notes were issued
pursuant to an indenture agreement, dated as of December 10, 1997 (the "TAC II
Note Indenture"), by and among Trump AC and Funding II, as issuers, TACC, Plaza
Associates and Taj Associates, as guarantors, and the Trustee. The TAC II Notes
include restrictive covenants prohibiting or limiting, among other things, the
sale of assets, the making of acquisitions and other investments, certain
capital expenditures, the incurrence of additional debt and liens and the
payment of dividends and distributions. Non-compliance could result in the
acceleration of such indebtedness. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations; Financial Condition-Liquidity and
Capital Resources; Summary of Certain Debt; TAC Notes."

      TAC III Notes. In December 1997, Trump AC and Funding III issued, in an
underwritten public offering, mortgage notes in an aggregate principal amount of
$25.0 million, bearing interest at the rate of 11-1/4% per annum, payable in
cash semiannually in arrears on May 1st and November 1st of each year, and
maturing on May 1, 2006 (the "TAC III Notes," and together with the TAC I Notes
and TAC II Notes, the "TAC Notes"). The TAC III Notes were issued pursuant to an
indenture agreement, dated as of December 10, 1997 (the "TAC III Note
Indenture"), by and among Trump AC and Funding III, as issuers, TACC, Plaza
Associates and Taj Associates, as guarantors, and the Trustee. The TAC III Notes
include restrictive covenants prohibiting or limiting, among other things, the
sale of assets, the making of acquisitions and other investments, certain
capital expenditures, the incurrence of additional debt and liens and the
payment of dividends and distributions. Non-compliance could result in the
acceleration of such indebtedness. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations; Financial Condition-Liquidity and
Capital Resources; Summary of Certain Debt; TAC Notes."

      Other Indebtedness. In addition to the foregoing, Trump AC's long-term
indebtedness includes approximately $16.6 million of indebtedness, including, as
of December 31, 2001, approximately $1.2 million due under outstanding mortgage
notes.

      Delayed Interest Payments. On October 31, 2001, THCR issued a press
release and filed a Current Report on Form 8-K with the Commission, therein
announcing that THCR and the Registrants were seeking to negotiate the terms of
its public debt, including the TAC Notes, and was withholding interest payments
thereon until such time as discussions between THCR and the bondholders had
commenced.


                                       8

<PAGE>

      On November 28, 2001, THCR and the Registrants issued a press release and
filed a Current Report on Form 8-K with the Commission, therein announcing that
THCR and the Registrants were making interest payments on the overdue debt
issues within the applicable grace periods. On November 29, 2001 aggregate
amounts of $68.1 million, $4.3 million and $1.4 million were paid with respect
to the interest payments on the TAC I Notes, TAC II Notes and TAC III Notes,
respectively, which had been due on November 1, 2001. See "-Recent Events";
"-Competition; New York State Legislation"; "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Exhibits,
Financial Statement Schedules and Reports on Form 8-K."

The Atlantic City Market

      Atlantic City is located along the New York-Philadelphia-Baltimore-
Washington, D.C. corridor, with nearly 30.0 million people living within a
three-hour driving distance of Atlantic City. Management believes that the
foregoing statistic, coupled with the many community improvements either
recently completed, currently underway or anticipated in Atlantic City, bode
well for Atlantic City's potential as a destination town since gambling was
legalized in Atlantic City by voter referendum in 1976. Construction projects
recently completed or currently in progress in Atlantic City include the
following: (i) the $330.0 million Atlantic City - Brigantine Connector which was
completed in July 2001, which connects the Atlantic City Expressway to the
Marina District and H-Tract and the nearby residential city of Brigantine (the
"Atlantic City - Brigantine Connector") and (ii) the $90.0 million refurbishment
of the Boardwalk Hall into a 10,000 to 14,000-seat special events venue, which
was completed in the summer of 2001 and has the potential to attract major
entertainers and strong regional boxing matches. Construction projects recently
announced include the development of a $76 million retail and entertainment
complex adjoining the Grand Boulevard entrance to the City of Atlantic City.
Ground breaking on approximately 300,000 square feet of space, accommodating 60
to 70 stores, is expected to take place by the summer of 2002 with completion
expected by the fall of 2003.

      The Atlantic City market has demonstrated continued, though modest, growth
despite the recent proliferation of new gaming venues across the country. Gaming
revenues in the 12 casino hotels located in Atlantic City increased slightly in
2001 as compared to 2000, generating approximately $4.3 billion each year. From
1997 to 2001, total gaming revenues in Atlantic City have increased
approximately 10.1%, while hotel rooms increased by 3.2% during the same period.
Although total visitor volume to Atlantic City remained relatively constant in
2001, the volume of bus customers decreased to 8.0 million in 2001 from 9.1
million in 2000, also representing a decline from 9.9 million in 1997. The
volume of customers traveling by other means to Atlantic City has grown from
24.0 million in 1997 to 26.0 million in 2001.

      During the last five years, however, overall casino revenue growth in
Atlantic City has lagged behind that of other traditional gaming markets,
principally Las Vegas, Nevada. Management believes that this relatively slower
growth is primarily attributable to three key factors, Atlantic City's (i)
shortage of hotel rooms, (ii) more stringent regulatory environment and (iii)
infrastructure problems. First, there are currently only 12 casinos in Atlantic
City, as compared to approximately 43 casinos located on the Las Vegas Strip.
Until 1996, there had been no significant additions to hotel capacity in
Atlantic City, and the last totally new property constructed in Atlantic City
was the Taj Mahal in 1990, whereas Las Vegas has experienced a boom in recent
hotel constructions, including the Bellagio in 1998, the Venetian, Paris and
Mandalay Bay in 1999 and the Aladdin in August 2000, and the addition of rooms
to existing hotels. Both markets have exhibited a strong correlation between
hotel room inventory and total casino revenues. Second, the regulatory
environment and infrastructure problems in Atlantic City have made it more
difficult and costly to operate a casino in Atlantic City as compared to Las
Vegas. Overall regulatory costs and tax levies in New Jersey have exceeded those
in Nevada since gambling was legalized in Atlantic City in 1976, and there is
generally a higher level of regulatory oversight in New Jersey than in Nevada.
Third, management believes that the infrastructure problems of Atlantic City,
manifested by impaired accessibility to the casinos, downtown Atlantic City
congestion and the structural decay of the areas immediately surrounding the
casinos, have impacted the public's perception of Atlantic City as a desirable
recreational location. Management believes, however, that the development
projects recently completed or currently underway in Atlantic City, particularly
the construction of the new $268.0 million Atlantic City Convention Center
completed in May 1997 and the Atlantic City - Brigantine Connector, completed in
July 2001, will enhance Atlantic City's public perception as a favorable
convention and destination location, although no assurances can be given.
Moreover, no assurances can be given that the Atlantic City - Brigantine
Connector will alleviate the traffic congestion as originally proposed. See
"-Gaming and Other Laws and Regulations."

      Total Atlantic City slot revenues increased 1.7% in 2001 from 2000,
continuing a trend of increases over the past nine years. From 1997 through
2001, slot revenue growth in Atlantic City has averaged 3.7% per year. Total
table game revenue decreased by 4.1% in 2001 from 2000, while table game revenue
from 1997 to 2001 has decreased on average approximately 0.3% per year.
Management believes the slight decrease in table game revenue is primarily
attributable to two factors. First, the slot product has been significantly
improved in recent years. Bill and coupon acceptors, new slot machines, video
poker, themed slot machines and other improvements have been effective in
increasing the popularity in slot play to guests who tend to gamble more for
entertainment value, as compared to guests who are more interested in playing
table games. During the past couple of years, casino operators in Atlantic City
have opted to increase their number of slot machines in favor of table games due
to increased popularity of slot play to the Atlantic City patron and to slot
machines' comparatively higher profitability margin resulting from lower labor
and support costs. Since 1997, the number of slot machines in Atlantic City have
increased by 6.9%, while the number of table games has decreased by 14.0%. Slot
revenues increased from 69.4% of total casino revenues in 1997 to 72.8% in 2001.
The second possible reason for the historical slight decrease in table game
revenue is that table game players tend to typically be higher-end players who
are more likely to be interested in overnight stays and other amenities. During
the peak spring and summer seasons and weekends, room availability


                                       9

<PAGE>

in Atlantic City has typically proven to be inadequate in meeting demand,
indirectly making it difficult for casino operators and hosts to aggressively
promote table play to potential higher-end table game customers.

      Atlantic City's new $268.0 million Convention Center, completed in May
1997, with approximately 500,000 square feet of exhibition and pre-function
space, 45 meeting rooms, food-service facilities and an underground parking
garage accommodating up to 1,600 cars, is located at the base of the Atlantic
City Expressway, and is currently the second largest convention center in the
Northeast. Atlantic City's original convention center is located on the
Boardwalk, physically connected to the Trump Plaza, and is owned by the New
Jersey Sports and Exposition Authority (the "NJSEA"). Its East Hall, which was
constructed in 1929 and is listed on the National Register of Historic Places,
completed a $90.0 million renovation which was completed in the summer of 2001
with funding approved by the CRDA in February 1999. These improvements, while
preserving the historic features of this landmark, converted the East Hall into
a modern special events venue which includes new seating for 10,000 to 14,000
people in its main auditorium, new lighting, sound and television-ready wiring
systems. Management believes that the East Hall will have the potential to
attract major entertainers and showcase popular boxing events, although no
assurances can be given.

      In the fall of 1998, the South Jersey Transportation Authority (the
"SJTA") commenced the Atlantic City - Brigantine Connector consisting of the
construction of an approximate 2.2 mile roadway and tunnel system in Atlantic
City which, connects the Atlantic City Expressway to (i) the Marina District,
where the Trump Marina is located, (ii) the H-Tract, which has been Atlantic
City's focal point for new casino construction and (iii) the nearby residential
city of Brigantine. The Atlantic City - Brigantine Connector was completed in
the summer of 2001 at an estimated cost of $330.0 million.

      Several major infrastructure improvements have been completed in Atlantic
City in the past several years. In 1998, an $88.0 million "Grand Boulevard"
corridor linking the new Atlantic City Convention Center with the Boardwalk was
completed. Also in 1998, the CRDA undertook a $20.8 million beautification
project for the five-block Virginia and Maryland Avenue corridor which connects
the 30-acre Boardwalk site of the Taj Mahal to Absecon Boulevard (Route 30), one
of Atlantic City's principal access roadways. This comprehensive project
included the repair, resurfacing and resignalizing of these roads and the
installation of new roadside lighting, the acquisition and demolition of
deteriorated structures on Virginia Avenue and, to a lesser extent, Maryland
Avenue, and the installation and maintenance of roadside landscaping on those
sites, the construction of a 26-unit subdivision of two-story, single unit and
duplex residences which will front on opposing sides of Virginia Avenue, and the
improvement of the exterior facades of selected Virginia Avenue and other
structures, with consents of the owners, to achieve a harmony and continuity of
design among closely proximate properties. Construction of the roadway and
housing elements of this project was completed in the summer of 2000. See
"-Competition."

Competition

      Atlantic City. Competition in the Atlantic City market remains intense.
The Trump AC Properties compete with other casino hotels located in Atlantic
City as well as with each other. At the present time, there are 12 casino hotels
located in Atlantic City, including the Trump AC Properties, all of which
compete for patrons. The Trump AC Properties compete with other casinos on the
basis of service and quality and extent of amenities. For this reason,
substantial capital expenditures are required from time to time to compete
effectively. Substantial new expansion and development activity has recently
been completed, is under construction, or has been announced in Atlantic City,
including the expansion at Harrah's, Hilton, Caesar's, Resorts, Sands, Showboat,
Tropicana and Bally's Wild West Casino, which intensifies competitive pressures
in the Atlantic City market.

      In September 2000, Boyd Gaming and MGM Mirage Inc. ("MGM Mirage")
commenced their joint development of a 25-acre site located in the Marina
District for the construction of a Tuscan-style casino resort to be named the
"Borgata." The Borgata will feature a 40-story tower with 2,010 rooms and
suites, as well as a 135,000 square-foot casino, restaurants, retail shops, a
spa and pool, and entertainment venues. Construction of the Borgata is scheduled
to be completed by mid-2003 and is estimated to cost approximately $1.0 billion.
MGM Mirage also owns the 55-acre lot adjacent to the site committed to the
Borgata, and in the first quarter of 2001, announced its intention to build an
additional casino hotel on such site with a tentative completion date in 2005.

      In 1999, Park Place Entertainment, Inc. ("Park Place") completed the
acquisition of Caesar's Casino Hotels from Starwoods Hotel & Resorts Worldwide,
Inc. This acquisition included the Caesar's Atlantic City property, which is
adjacent to Bally's Park Place and Wild West Casino hotel ("Bally's") owned by
Park Place. In 2000, Park Place connected the Caesar's and Bally's properties
with a $24.0 million connector, which included additional gaming space. In 2001,
Park Place completed the acquisition of the Claridge Casino Hotel which is
adjacent to Bally's. Park Place also commenced construction to connect Bally's
and the Claridge with a $25.0 million connector to include additional retail and
meeting space to be completed in the summer of 2002.

      During the first quarter of 2001, Aztar Corp. announced its plan to build
a $225.0 million expansion of its Atlantic City Tropicana, including an
additional 502 hotel rooms and a 200,000 square-foot retail, dining and
entertainment complex with an expected completion date in the spring of 2004.


                                       10

<PAGE>


      Harrah's Entertainment, Inc. commenced building a $193.0 million hotel and
casino expansion at its Harrah's Atlantic City property. The expansion includes
a 452 hotel room tower expected to be completed in April 2002, a 50,000 square
foot expansion to include 28,000 square feet of casino space accommodating 950
slot machines opening in phases starting in June, 2002 and a Grand Lobby/Porte
Cochere also to be completed in June 2002.

      Resorts Atlantic City announced plans to proceed with construction of a
$125 million 459 room hotel tower expansion with ground breaking scheduled in
May, 2002 and an expected completion in the first quarter of 2004.

      The Showboat Casino Hotel broke ground in March 2002 for a $90 million 544
room hotel tower addition with an expected completion in June 2003.

      In addition, management also believes that there are several other sites
on the Boardwalk and in the Marina District on which casino hotels could be
built in the future, and various applications for casino licenses have been
filed and announcements with respect thereto have been made from time to time.
There can be no assurances that the proposed and future expansions would not
have a material adverse effect on the business and operations of the Trump AC
Properties. In particular, the Borgata could adversely affect the Trump AC
Properties. There also can be no assurances that the Atlantic City development
projects which are planned or are in process will be completed.

      During 1997, a total of approximately 51,870 square feet of casino floor
space was added. Slot machines increased by approximately 2,153 units, and table
games increased by approximately 82 units. During 1998, a total of approximately
38,350 square feet of casino floor space was added. Slot machines increased by
approximately 822 units and table games decreased by approximately 71 units.
During 1999, casino floor space decreased by approximately 41,071 square feet,
of which approximately 49,211 was due to the closing of Trump World's Fair in
October 1999. Slot machines decreased by approximately 1,191 units, 1,636 of
which were attributable to the closing of Trump World's Fair in October 1999,
and table games decreased by approximately 47 units during 1999. During 2000, a
total of approximately 27,430 square feet of casino floor space was added, the
number of slot machines increased by approximately 1,590 units and table games
decreased by approximately 15 units. During 2001, a total of approximately
31,983 square feet of casino floor space was added. The number of slot machines
increased by approximately 1,205 units and table games decreased by
approximately 54 units.

      The Trump AC Properties also compete, or will compete, with facilities in
the northeastern and mid-Atlantic regions of the United States at which casino
gaming or other forms of wagering are currently, or in the future may be,
authorized. To some extent, the Trump AC Properties, the Trump Marina and/or the
Indiana Riverboat face competition from gaming facilities nationwide, including
land-based, cruise line, riverboat and dockside casinos located in Colorado,
Connecticut, Delaware, Illinois, Indiana, Iowa, Louisiana, Michigan,
Mississippi, Missouri, Nevada, New York, South Dakota, Ontario (Windsor and
Niagara Falls), the Bahamas, Puerto Rico and other locations inside and outside
the United States, and from other forms of legalized gaming in New Jersey and in
its surrounding states such as lotteries, horse racing (including off-track
betting), jai alai, bingo and dog racing, and from illegal wagering of various
types. New or expanded operations by other persons can be expected to increase
competition and could result in the saturation of certain gaming markets. For
example, at the end of 2001, there were a total of approximately 5,172 slot
machines installed and operational in Delaware. West Virginia also permits slot
machines at racetracks, and track owners in several other states, including
Maryland, New York and Pennsylvania, are seeking to do the same. In December
1996, the Casino Niagara opened in Niagara Falls, Ontario. In February 1998, the
Ontario Casino Commission designated a consortium whose principal investor is
Hyatt Hotels Corporation as the preferred developer of the permanent Casino
Niagara. Moreover, the Trump AC Properties may also face competition from
various forms of internet gambling.

      Recent legislation in New York is also likely to result in increased
competition in Atlantic City. See "-New York Legislation".

      In addition to competing with other casino hotels in Atlantic City and
elsewhere, by virtue of their proximity to each other and the common aspects of
certain of their respective marketing efforts, including the common use of the
"Trump" name, the Trump AC Properties compete directly with each other for
gaming patrons.

      Native American Casinos. In addition, the Trump AC Properties also face
considerable competition from casino facilities in a number of states operated
by federally recognized Native American tribes. Pursuant to the Indian Gaming
Regulatory Act (the "IGRA"), which was passed by Congress in 1988, any state
which 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 the Trump AC Properties.

      In February 1992, the Mashantucket Pequot Nation opened Foxwoods Resorts
Casino ("Foxwoods"), a casino hotel facility in Ledyard, Connecticut (located in
the far eastern portion of such state), an approximately three-hour drive from
New York City and an approximately two and one-half hour drive from Boston,
Massachusetts, which currently offers 24-hour gaming and contains approximately
6,412 slot machines, 350 table games and over 1,400 rooms and suites, 24
restaurants, 17 retails stores, entertainment and a year-round golf course.
Also, a high-speed ferry operates seasonally between New York City and Foxwoods.
The Mashantucket Pequot Nation has also announced plans for a high-speed train
linking Foxwoods to the interstate highway and an airport outside Providence,
Rhode Island.


                                       11

<PAGE>

      In October 1996, the Mohegan Nation opened the Mohegan Sun Resort in
Uncasville, Connecticut, located 10 miles from Foxwoods. Developed by Sun
International Hotels, Ltd., the Mohegan Sun Resort has approximately 6,100 slot
machines, 282 table games, off-track horse betting, bingo, 32 food and beverage
outlets, and retail stores. The Mohegan Sun recently completed the first phase
of a $1.0 billion expansion project which included a 115,000 square foot casino,
a 10,000 seat arena, 40 retail shops and dining venues, and two additional
parking garages accommodating up to 5,000 cars which were opened in September
2001. The second phase includes a 1,200 hotel guest room 34 story tower with
convention facilities and spa expected to be completed in the spring 2002. The
foregoing expansion of the Mohegan Sun could have a material adverse impact on
the revenue growth of the Trump AC Properties.

      The Eastern Pequot Tribe, along with the Paucatuck Eastern Pequot Tribe,
are seeking federal recognition as Tribal Nations. Both tribes received findings
of preliminary recognition in 2000. There can be no assurance that any continued
expansion of gaming operations of the Mashantucket Pequot Nation, the gaming
operations of the Mohegan Nation or the commencement of gaming operations by the
Eastern Pequots or Paucatuck Eastern Pequots would not have a materially adverse
impact on the operations of the Trump AC Properties and Indiana Riverboat. A
subsidiary of THCR has agreed to support the efforts of the Paucatuck Eastern
Pequot Tribal Nation for federal recognition as a tribal nation. In
consideration of this agreement, the Paucatuck Eastern Pequot Tribal Nation has
agreed to negotiate exclusively with THCR during the term of the agreement for
the development and management of a Native American casino to be located on
Paucatuck Eastern Pequot Tribal Nation land.

      In July 1993, the Oneida Nation opened "Turning Stone," a casino featuring
24-hour table gaming and electronic gaming machines now with approximately
90,000 square feet of gaming space near Syracuse, New York. In October 1997, the
Oneida Nation opened a hotel which included expanded gaming facilities, and
constructed a golf course and convention center. There are also plans for a
further expansion consisting of 50,000 square feet of gaming space, 300
additional hotel rooms and a water park.

      In April 1999, the St. Regis Mohawk Nation opened the Akwesasne Casino,
featuring electronic gaming machines, in the northern portion of New York State,
close to the Canadian border. In April 1999, the St. Regis Mohawks also
announced their intentions of opening a casino with Catskill Development Company
at the Monticello Race Track in the Catskill Mountains region of New York, which
was approved by the Assistant Secretary-Indian Affairs (Interior) but is also
subject to the approval of the Governor of New York pursuant to IGRA. In April
2000, the St. Regis Mohawks terminated their contract with Catskill Development
Company and announced that Park Place would build and manage a $500 million
tribal casino and resort in the Catskill Mountains. In May 2000, Park Place
agreed to purchase Kutshers Resort for the new St. Regis Mohawks' casino site.
There is ongoing litigation between Park Place and the Catskill Development
Company.

      In central New York a tribe, the Stockbridge Munsee Band of Mohicans,
claiming 6 million acres of ancestral lands is seeking to build its own
Catskills casino approximately 85 miles from New York City. Their partners,
Trading Cove Associates, developers of the hugely successful Mohegan Sun resort
in Connecticut, have purchased an option on approximately 330 acres to build a
$600 million casino hotel.

      The Seneca Nation plans to negotiate with New York State to open a casino
in Western New York. Approval of the proposed casino would be contingent upon
the purchase of additional property that is declared reservation property by the
federal government. However, a recent ruling by the federal Interior Department
may allow the Seneca Nation to transform its bingo halls into casino-type
operations without having to negotiate with New York State.

      The Narragansett Nation of Rhode Island, which has federal recognition, is
seeking to open a casino in Rhode Island State.

      The Aquinnah Wampanoag Tribe is seeking to open a casino in the state of
Massachusetts. Other Native American nations are seeking federal recognition,
land and negotiation of gaming compacts in New York, Pennsylvania, Connecticut
and other states near Atlantic City. If successful, there can be no assurance
that additional casinos built in or near the portion of the United States would
not have a material adverse effect on the business and operations of the Trump
AC Properties.

      New York State Legislation. In September, 2001 New York State, citing a
statewide economic crisis precipitated by the September 11, 2001 terrorist
attacks on New York City, passed legislation permitting video lottery terminals
at five harness racetracks and further allows the governor to negotiate Class
III gaming compacts with tribes for up to six resort-scale casinos. The
legislation allows three tribal resort scale casinos in the Catskills, within 90
miles of New York City, and the other three in the Buffalo-Niagra Falls area.
The three Buffalo-Niagra Falls resort scale casinos would join two existing
Indian casinos the Turning Stone, operated by the Oneida Nation near Syracuse
and one owned by the St. Regis Mohawks, near the Canadian Border. A lawsuit was
filed in New York's Supreme Court in Albany in January 2002, claiming, among
other things, that the legislation violated provisions of New York State's
constitution. Competition from these properties, when opened, could have a
material adverse effect on the Trump AC Properties. See "Management's Discussion
and Analysis of Financial Condition and Results of Operations."

      State Legislation. Legislation permitting other forms of casino gaming has
been proposed, from time to time, in various states, including those bordering
the state of New Jersey. Six states have presently legalized riverboat gambling
while others are considering its approval, including New York State and the
Commonwealth of Pennsylvania. Several states are considering or have approved
large scale land-based casinos. The business and operations of the Trump AC
Properties could be materially adversely affected by


                                       12

<PAGE>

such competition, particularly if casino gaming were permitted in jurisdictions
near or elsewhere in New Jersey or in other states in the Northeast. Currently,
casino gaming, other than Native American gaming, is not allowed in other areas
of New Jersey or in Connecticut, New York or Pennsylvania. To the extent that
legalized gaming becomes more prevalent in New Jersey or other jurisdictions
near Atlantic City, competition would intensify. In particular, proposals have
been introduced to legalize gaming in other locations, including Philadelphia,
Pennsylvania. In addition, legislation has from time to time been introduced in
the New Jersey State Legislature relating to types of statewide legalized
gaming, such as video games with small wagers. To date, no such legislation,
which may require a state constitutional amendment, has been enacted. Management
is unable to predict whether any such legislation, in New Jersey or elsewhere,
will be enacted or whether, if passed, it would have a material adverse impact
on the Trump AC Properties, the Trump Marina and/or the Indiana Riverboat.

Seasonality

      The gaming industry in Atlantic City is seasonal, with the heaviest
activity occurring during the period from May through September. Consequently,
Trump AC's operating results during the two quarters ending in March and
December would not likely be as profitable as the two quarters ending in June
and September.

Gaming and Other Laws and Regulations

      The following is only a summary of the applicable provisions of the Casino
Control Act and certain other laws and regulations. It does not purport to be a
full description thereof, and is qualified in its entirety by reference to the
Casino Control Act and such other laws and regulations.

      New Jersey Gaming Regulations

      In general, the Casino Control Act and the regulations promulgated
thereunder contain detailed provisions concerning, among other things: the
granting and renewal of casino licenses; the suitability of the approved hotel
facility, and the amount of authorized casino space and gaming units permitted
therein; the qualification of natural persons and entities related to the casino
licensee; the licensing of certain employees and vendors of casino licensees;
the rules of the games; the selling and redeeming of gaming chips; the granting
and duration of credit and the enforceability of gaming debts; management
control procedures, accounting and cash control methods and reports to gaming
agencies; the security standards; the manufacture and distribution of gaming
equipment; the simulcasting of horse races by casino licensees, advertising,
entertainment and alcoholic beverages.

      Casino Control Commission. The ownership and operation of casino/hotel
facilities in Atlantic City are the subject of strict state regulation under the
Casino Control Act. The CCC is empowered to regulate a wide spectrum of gaming
and non-gaming related activities and to approve the form of ownership and
financial structure of not only a casino licensee, but also its entity
qualifiers and intermediary and holding companies and any other related entity
required to be qualified ("CCC Regulations").

      Operating Licenses. In June 1999, the CCC renewed Taj Associates' license
to operate the Taj Mahal through June 2003 and renewed Plaza Associates' license
to operate Trump Plaza through June 2003.

      Casino License. No casino hotel facility may operate unless the
appropriate license and approvals are obtained from the CCC, which has broad
discretion with regard to the issuance, renewal, revocation and suspension of
such licenses and approvals, which are non-transferable. The qualification
criteria with respect to the holder of a casino license include its financial
stability, integrity and responsibility; the integrity and adequacy of its
financial resources which bear any relation to the casino project; its good
character, honesty and integrity; and the sufficiency of its business ability
and casino experience to establish the likelihood of a successful, efficient
casino operation. The casino licenses currently held by Plaza Associates and Taj
Associates are renewable for periods of up to four years. The CCC may reopen
licensing hearings at any time, and must reopen a licensing hearing at the
request of the Division of Gaming Enforcement (the "Division").

      To be considered financially stable, a licensee must demonstrate the
following abilities: to pay winning wagers when due; to achieve an annual gross
operating profit; to pay all local, state and federal taxes when due; to make
necessary capital and maintenance expenditures to insure that it has a superior
first-class facility; and to pay, exchange, refinance or extend debts which will
mature or become due and payable during the license term.

      In the event a licensee fails to demonstrate financial stability, the CCC
may take such action as it deems necessary to fulfill the purposes of the Casino
Control Act and protect the public interest, including: issuing conditional
licenses, approvals or determinations; establishing an appropriate cure period;
imposing reporting requirements; placing restrictions on the transfer of cash or
the assumption of liabilities; requiring reasonable reserves or trust accounts;
denying licensure; or appointing a conservator. See "-Conservatorship."

      Management believes that it has adequate financial resources to meet the
financial stability requirements of the Casino Control Act for the foreseeable
future.


                                       13

<PAGE>

      Pursuant to the Casino Control Act, CCC Regulations and precedent, no
entity may hold a casino license unless each officer, director, principal
employee, person who directly or indirectly holds any beneficial interest or
ownership in the licensee, each person who in the opinion of the CCC has the
ability to control or elect a majority of the board of directors of the licensee
(other than a banking or other licensed lending institution which makes a loan
or holds a mortgage or other lien acquired in the ordinary course of business)
and any lender, underwriter, agent or employee of the licensee or other person
whom the CCC may consider appropriate, obtains and maintains qualification
approval from the CCC. Qualification approval means that such person must, but
for residence, individually meet the qualification requirements as a casino key
employee. Pursuant to a condition of its casino license, payments by Plaza
Associates or Taj Associates to, or for the benefit of, any related entity or
partner, with certain exceptions, are subject to prior CCC approval; and, if
Plaza Associates' or Taj Associates' cash position falls below $5.0 million for
three consecutive business days, such entity must present to the CCC and the
Division evidence as to why it should not obtain a working capital facility in
an appropriate amount.

      Control Persons. An entity qualifier or intermediary or holding company,
such as Trump AC, Trump AC Holding, TACC, THCR Holdings, Trump Hotels & Casino
Resorts Funding, Inc., a wholly-owned subsidiary of THCR Holdings ("THCR
Funding"), or THCR, is required to register with the CCC and meet the same basic
standards for approval as a casino licensee; provided, however, that the CCC,
with the concurrence of the Director of the Division, may waive compliance by a
publicly-traded corporate holding company with the requirement that an officer,
director, lender, underwriter, agent or employee thereof, or person directly or
indirectly holding a beneficial interest or ownership of the securities thereof,
individually qualify for approval under casino key employee standards so long as
the CCC and the Director of the Division are, and remain, satisfied that such
officer, director, lender, underwriter, agent or employee is not significantly
involved in the activities of the casino licensee, or that such security holder
does not have the ability to control the publicly-traded corporate holding
company or elect one or more of its directors. Persons holding five percent
(5.0%) or more of the equity securities of such holding company are presumed to
have the ability to control the company or elect one or more of its directors
and will, unless this presumption is rebutted, be required to individually
qualify. Equity securities are defined as any voting stock or any security
similar to or convertible into or carrying a right to acquire any security
having a direct or indirect participation in the profits of the issuer.

      Financial Sources. The CCC may require all financial backers, investors,
mortgagees, bond holders and holders of notes or other evidence of indebtedness,
either in effect or proposed, which bear any relation to any casino project,
including holders of publicly-traded securities of an entity which holds a
casino license or is an entity qualifier, subsidiary or holding company of a
casino licensee (a "Regulated Company"), to qualify as financial sources. In the
past, the CCC has waived the qualification requirement for holders of less than
fifteen percent (15.0%) of a series of publicly-traded mortgage bonds so long as
the bonds remained widely distributed and freely traded in the public market and
the holder had no ability to control the casino licensee. The CCC may require
holders of less than fifteen percent (15.0%) of a series of debt to qualify as
financial sources even if not active in the management of the issuer or casino
licensee.

      Institutional Investors. An institutional investor ("Institutional
Investor") is defined by the Casino Control Act as any retirement fund
administered by a public agency for the exclusive benefit of federal, state or
local public employees; any investment company registered under the Investment
Company Act of 1940, as amended; any collective investment trust organized by
banks under Part Nine of the Rules of the Comptroller of the Currency; any
closed end investment trust; any chartered or licensed life insurance company or
property and casualty insurance company; any banking and other chartered or
licensed lending institution; any investment advisor registered under the
Investment Advisers Act of 1940, as amended; and such other persons as the CCC
may determine for reasons consistent with the policies of the Casino Control
Act.

      An Institutional Investor may be granted a waiver by the CCC from
financial source or other qualification requirements applicable to a holder of
publicly-traded securities, in the absence of a prima facie showing by the
Division that there is any cause to believe that the holder may be found
unqualified, on the basis of CCC findings that: (i) its holdings were purchased
for investment purposes only and, upon request by the CCC, it files a certified
statement to the effect that it has no intention of influencing or affecting the
affairs of the issuer, the casino licensee or its holding or intermediary
companies; provided, however, that the Institutional Investor will be permitted
to vote on matters put to the vote of the outstanding security holders; and (ii)
if (x) the securities are debt securities of a casino licensee's holding or
intermediary companies or another subsidiary company of the casino licensee's
holding or intermediary companies which is related in any way to the financing
of the casino licensee and represent either (A) 20.0% or less of the total
outstanding debt of the company or (B) 50.0% or less of any issue of outstanding
debt of the company, (y) the securities are equity securities and represent less
than 10.0% of the equity securities of a casino licensee's holding or
intermediary companies or (z) the securities so held exceed such percentages,
upon a showing of good cause. There can be no assurance, however, that the CCC
will make such findings or grant such waiver and, in any event, an Institutional
Investor may be required to produce for the CCC or the Antitrust Division of the
Department of Justice upon request, any document or information which bears any
relation to such debt or equity securities.

      Generally, the CCC requires each institutional holder seeking waiver of
qualification to execute a certification to the effect that (i) the holder has
reviewed the definition of Institutional Investor under the Casino Control Act
and believes that it meets the definition of Institutional Investor; (ii) the
holder purchased the securities for investment purposes only and holds them in
the ordinary course of business; (iii) the holder has no involvement in the
business activities of and no intention of influencing or affecting, the affairs
of the issuer, the casino licensee or any affiliate; and (iv) if the holder
subsequently determines to influence or affect the affairs


                                       14

<PAGE>

of the issuer, the casino licensee or any affiliate, it shall provide not less
than 30 days' prior notice of such intent and shall file with the CCC an
application for qualification before taking any such action. If an Institutional
Investor changes its investment intent, or if the CCC finds reasonable cause to
believe that it may be found unqualified, the Institutional Investor may take no
action with respect to the security holdings, other than to divest itself of
such holdings, until it has applied for interim casino authorization and has
executed a trust agreement pursuant to such an application. See "-Interim Casino
Authorization."

      Ownership and Transfer of Securities. The Casino Control Act imposes
certain restrictions upon the issuance, ownership and transfer of securities of
a Regulated Company and defines the term "security" to include instruments which
evidence a direct or indirect beneficial ownership or creditor interest in a
Regulated Company including, but not limited to, mortgages, debentures, security
agreements, notes and warrants. Currently, each of Trump AC, Trump AC Holding,
Plaza Associates, Taj Associates, THCR Holdings, THCR Funding and THCR is deemed
to be a Regulated Company, and instruments evidencing a beneficial ownership or
creditor interest therein, including a partnership interest, are deemed to be
the securities of a Regulated Company.

      If the CCC finds that a holder of such securities is not qualified under
the Casino Control Act, it has the right to take any remedial action it may deem
appropriate, including the right to force divestiture by such disqualified
holder of such securities. In the event that certain disqualified holders fail
to divest themselves of such securities, the CCC has the power to revoke or
suspend the casino license affiliated with the Regulated Company which issued
the securities. If a holder is found unqualified, it is unlawful for the holder
(i) to exercise, directly or through any trustee or nominee, any right conferred
by such securities or (ii) to receive any dividends or interest upon such
securities or any remuneration, in any form, from its affiliated casino licensee
for services rendered or otherwise.

      With respect to non-publicly-traded securities, the Casino Control Act and
CCC Regulations require that the corporate charter or partnership agreement of a
Regulated Company establish a right in the CCC of prior approval with regard to
transfers of securities, shares and other interests and an absolute right in the
Regulated Company to repurchase at the market price or the purchase price,
whichever is the lesser, any such security, share or other interest in the event
that the CCC disapproves a transfer. With respect to publicly-traded securities,
such corporate charter or partnership agreement is required to establish that
any such securities of the entity are held subject to the condition that, if a
holder thereof is found to be disqualified by the CCC, such holder shall dispose
of such securities.

      Under the terms of the TAC I Note Indenture, TAC II Note Indenture, TAC
III Note Indenture and other certain indentures pursuant to which certain
promissory notes of THCR and it subsidiaries have been issued as well as a $5.0
million working capital loan of THCR, if a holder of securities of THCR or its
subsidiaries, including the Registrants, does not qualify under the Casino
Control Act when required to do so, such holder must dispose of its interest in
such securities, and the respective issuer or issuers of such securities may
redeem the securities at the lesser of the outstanding amount or fair market
value. Similar provisions are set forth in THCR's Certificate of Incorporation,
as amended, with respect to the Common Stock of THCR.

      Interim Casino Authorization. Interim casino authorization is a process
which permits a person who enters into a contract to obtain property relating to
a casino operation or who obtains publicly-traded securities relating to a
casino licensee to close on the contract or own the securities until plenary
licensure or qualification. During the period of interim casino authorization,
the property relating to the casino operation or the securities is held in
trust.

      Whenever any person enters into a contract to transfer any property which
relates to an ongoing casino operation, including a security of the casino
licensee or a holding or intermediary company or entity qualifier, under
circumstances which would require that the transferee obtain licensure or be
qualified under the Casino Control Act, and that person is not already licensed
or qualified, the transferee is required to apply for interim casino
authorization. Furthermore, except as set forth below with respect to
publicly-traded securities, the closing or settlement date in the contract at
issue may not be earlier than the 121st day after the submission of a complete
application for licensure or qualification together with a fully executed trust
agreement in a form approved by the CCC. If, after the report of the Division
and a hearing by the CCC, the CCC grants interim authorization, the property
will be subject to a trust. If the CCC denies interim authorization, the
contract may not close or settle until the CCC makes a determination on the
qualifications of the applicant. If the CCC denies qualification, the contract
will be terminated for all purposes and there will be no liability on the part
of the transferor.

      If, as the result of a transfer of publicly-traded securities of a
licensee, a holding or intermediary company or entity qualifier of a licensee,
or a financing entity of a licensee, any person is required to qualify under the
Casino Control Act, that person is required to file an application for licensure
or qualification within 30 days after the CCC determines that qualification is
required or declines to waive qualification. The application must include a
fully executed trust agreement in a form approved by the CCC or, in the
alternative, within 120 days after the CCC determines that qualification is
required, the person whose qualification is required must divest such securities
as the CCC may require in order to remove the need to qualify.

      The CCC may grant interim casino authorization where it finds by clear and
convincing evidence that: (i) statements of compliance have been issued pursuant
to the Casino Control Act; (ii) the casino hotel is an approved hotel in
accordance with the Casino Control Act; (iii) the trustee satisfies
qualification criteria applicable to key casino employees, except for residency;
and (iv) interim operation will best serve the interests of the public.


                                       15

<PAGE>

      When the CCC finds the applicant qualified, the trust will terminate. If
the CCC denies qualification to a person who has received interim casino
authorization, the trustee is required to endeavor, and is authorized, to sell,
assign, convey or otherwise dispose of the property subject to the trust to such
persons who are licensed or qualified or shall themselves obtain interim casino
authorization.

      Where a holder of publicly-traded securities is required, in applying for
qualification as a financial source or qualifier, to transfer such securities to
a trust in application for interim casino authorization and the CCC thereafter
orders that the trust become operative: (i) during the time the trust is
operative, the holder may not participate in the earnings of the casino hotel or
receive any return on its investment or debt security holdings; and (ii) after
disposition, if any, of the securities by the trustee, proceeds distributed to
the unqualified holder may not exceed the lower of their actual cost to the
unqualified holder or their value calculated as if the investment had been made
on the date the trust became operative.

      Approved Hotel Facilities. The CCC may permit an existing licensee, such
as one of the Trump AC Properties, to increase its casino space if the licensee
agrees to add a prescribed number of qualifying sleeping units within two years
after the commencement of gaming operations in the additional casino space.
However, if the casino licensee does not fulfill such agreement due to
conditions within its control, the licensee will be required to close the
additional casino space, or any portion thereof that the CCC determines should
be closed.

      Persons who are parties to the lease for an approved hotel building or who
have an agreement to lease a building which may in the judgment of the CCC
become an approved hotel building are required to hold a casino license unless
the CCC, with the concurrence of the Attorney General of the state of New
Jersey, determines that such persons do not have the ability to exercise
significant control over the building or the operation of the casino therein.

      Unless otherwise determined by the CCC, agreements to lease an approved
hotel building or the land under the building must be for a term exceeding 30
years, must concern 100.0% of the entire approved hotel building or the land
upon which it is located and must include a buy-out provision conferring upon
the lessee the absolute right to purchase the lessor's entire interest for a
fixed sum in the event that the lessor is found by the CCC to be unsuitable.

      Agreement for Management of Casino. Each party to an agreement for the
management of a casino is required to hold a casino license, and the party who
is to manage the casino must own at least 10.0% of all the outstanding equity
securities of the casino licensee. Such an agreement shall: (i) provide for the
complete management of the casino; (ii) provide for the unrestricted power to
direct the casino operations; and (iii) provide for a term long enough to ensure
the reasonable continuity, stability and independence and management of the
casino.

      License Fees. The CCC is authorized to establish annual fees for the
renewal of casino licenses. The renewal fee is based upon the cost of
maintaining control and regulatory activities prescribed by the Casino Control
Act, and may not be less than $200,000 for a four-year casino license.
Additionally, casino licensees are subject to potential assessments to fund any
annual operating deficits incurred by the CCC or the Division. There is also an
annual license fee of $500 for each slot machine maintained for use or in use in
any casino.

      Gross Revenue Tax. Each casino licensee is also required to pay an annual
tax of 8.0% on its gross casino revenues. For the years ended December 31, 1999,
2000 and 2001, Plaza Associates' gross revenue tax was approximately $28.6
million, $25.8 million and $26.4 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $4.1 million,
$5.1 million and $4.8 million, respectively. For the years ended December 31,
1999, 2000 and 2001, Taj Associates' gross revenue tax was approximately $40.3
million, $43.8 million and $42.6 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $5.3 million,
$5.1 million and $5.5 million, respectively.

      Investment Alternative Tax Obligations. An investment alternative tax
imposed on the gross casino revenues of each licensee in the amount of 2.5% is
due and payable on the last day of April following the end of the calendar year.
A licensee is obligated to pay the investment alternative tax for a period of 30
years. Estimated payments of the investment alternative tax obligation must be
made quarterly in an amount equal to 1.25% of estimated gross revenues for the
preceding three-month period. Investment tax credits may be obtained by making
qualified investments or by the purchase of bonds issued by the CRDA ("CRDA
Bonds"). CRDA Bonds may have terms as long as 50 years and bear interest at
below market rates, resulting in a value lower than the face value of such CRDA
Bonds.

      For the first 10 years of its tax obligation, the licensee is entitled to
an investment tax credit against the investment alternative tax in an amount
equal to twice the purchase price of the CRDA Bonds issued to the licensee.
Thereafter, the licensee (i) is entitled to an investment tax credit in an
amount equal to twice the purchase price of such CRDA Bonds or twice the amount
of its investments authorized in lieu of such bond investments or made in
projects designated as eligible by the CRDA and (ii) has the option of entering
into a contract with the CRDA to have its tax credit comprised of direct
investments in approved eligible projects which may not comprise more than 50.0%
of its eligible tax credit in any one year.


                                       16

<PAGE>

      From the monies made available to the CRDA, the CRDA is required to set
aside $175.0 million for investment in hotel development projects in Atlantic
City undertaken by a licensee which result in the construction or rehabilitation
of at least 200 hotel rooms. These monies will be held to fund up to 27.0% of
the cost to casino licensees of expanding their hotel facilities to provide
additional hotel rooms, a portion of which has been required to be available
with respect to the new Atlantic City Convention Center.

      Minimum Casino Parking Charges. As of July 1, 1993, each casino licensee
is required to pay the New Jersey State Treasurer a $1.50 charge for every use
of a parking space for the purpose of parking motor vehicles in a parking
facility owned or leased by a casino licensee or by any person on behalf of a
casino licensee. This amount is paid into a special fund established and held by
the New Jersey State Treasurer for the exclusive use of the CRDA. Plaza
Associates and Taj Associates currently charge their parking patrons $2.00 in
order to make their required payments to the New Jersey State Treasurer and
cover related expenses. Amounts in the special fund will be expended by the CRDA
for eligible projects in the corridor region of Atlantic City related to
improving the highways, roads, infrastructure, traffic regulation and public
safety of Atlantic City or otherwise necessary or useful to the economic
development and redevelopment of Atlantic City in this regard.

      Atlantic City Fund. On each October 31 during the years 1996 through 2003,
each casino licensee shall pay into an account established in the CRDA and known
as the Atlantic City Fund, its proportional share of an amount related to the
amount by which annual operating expenses of the CCC and the Division are less
than a certain fixed sum. Additionally, a portion of the investment alternative
tax obligation of each casino licensee for the years 1994 through 1998 allocated
for projects in northern New Jersey shall be paid into and credited to the
Atlantic City Fund. Amounts in the Atlantic City Fund will be expended by the
CRDA for economic development projects of a revenue-producing nature that foster
the redevelopment of Atlantic City other than the construction and renovation of
casino hotels.

      Conservatorship. If, at any time, it is determined that Plaza Associates,
Trump AC Holding, Trump AC, Trump AC Funding, Funding II, Funding III, Taj
Associates, THCR, THCR Holdings, THCR Funding or any other entity qualifier has
violated the Casino Control Act or that any of such entities cannot meet the
qualification requirements of the Casino Control Act, such entity could be
subject to fines or the suspension or revocation of its license or
qualification. If a casino license is suspended for a period in excess of 120
days or is revoked, or if the CCC fails or refuses to renew such casino license,
the CCC could appoint a conservator to operate and dispose of such licensee's
casino hotel facilities. A conservator would be vested with title to all
property of such licensee relating to the casino and the approved hotel subject
to valid liens and/or encumbrances. The conservator would be required to act
under the direct supervision of the CCC and would be charged with the duty of
conserving, preserving and, if permitted, continuing the operation of the casino
hotel. During the period of the conservatorship, a former or suspended casino
licensee is entitled to a fair rate of return out of net earnings, if any, on
the property retained by the conservator. The CCC may also discontinue any
conservatorship action and direct the conservator to take such steps as are
necessary to effect an orderly transfer of the property of a former or suspended
casino licensee. Such events could result in an event of default under the terms
of the TAC I Note Indenture, TAC II Note Indenture and TAC III Note Indenture.

      Qualification of Employees. Certain employees of Plaza Associates and Taj
Associates must be licensed by or registered with the CCC, depending on the
nature of the position held. Casino employees are subject to more stringent
requirements than non-casino employees and must meet applicable standards
pertaining to financial stability, integrity and responsibility, good character,
honesty and integrity, business ability and casino experience and New Jersey
residency. These requirements have resulted in significant competition among
Atlantic City casino operators for the services of qualified employees.

      Gaming Credit. The casino games at the Trump AC Properties are conducted
on a credit as well as cash basis. Gaming debts arising in Atlantic City in
accordance with applicable regulations are enforceable in the courts of the
state of New Jersey. The extension of gaming credit is subject to regulations
that detail procedures which casinos must follow when granting gaming credit and
recording counter checks which have been exchanged, redeemed or consolidated.
Gaming credit may not be collectible in foreign countries.

      Control Procedures. Gaming at the Trump AC Properties is conducted by
trained and supervised personnel. Plaza Associates and Taj Associates employ
extensive security and internal controls. Security checks are made to determine,
among other matters, that job applicants for key positions have had no criminal
history or associations. Security controls utilized by the surveillance
department include closed circuit video cameras to monitor the casino floor and
money counting areas. The count of moneys from gaming also is observed daily by
representatives of the CCC.

Other Laws and Regulations

      The United States Department of the Treasury (the "Treasury") has adopted
regulations pursuant to which a casino is required to file a report of each
deposit, withdrawal, exchange of currency, gambling tokens or chips, or other
payments or transfers by, through or to such casino which involves a transaction
in currency of more than $10,000 per patron, per gaming day (a "Currency
Transaction Report"). Such reports are required to be made on forms prescribed
by the Secretary of the Treasury and are filed with the Commissioner of the
Internal Revenue Service (the "Service"). In addition, THCR is required to
maintain detailed records (including the names, addresses, social security
numbers and other information with respect to its gaming customers) dealing
with, among other items, the deposit and withdrawal of funds and the maintenance
of a line of credit.


                                       17

<PAGE>

      In the past, the Service had taken the position that gaming winnings from
table games by nonresident aliens were subject to a 30.0% withholding tax. The
Service, however, subsequently adopted a practice of not collecting such tax.
Recently enacted legislation exempts from withholding tax table game winnings by
nonresident aliens, unless the Secretary of the Treasury determines by
regulation that such collections have become administratively feasible.

      Plaza Associates and Taj Associates have adopted the following internal
control procedures to increase compliance with these Treasury regulations: (i)
computer exception reporting; (ii) establishment of a committee to review
Currency Transaction Report transactions and reporting which consists of
executives from the Casino Operations, Marketing and Administration Departments;
(iii) internal audit testing of compliance with the Treasury regulations; (iv)
training for all new and existing employees in compliance with the Treasury
regulations; and (v) a disciplinary program for employee violations of the
policy.

      THCR is subject to other federal, state and local regulations and, on a
periodic basis, must obtain various licenses and permits, including those
required to sell alcoholic beverages in the state of New Jersey as well as in
other jurisdictions. Management believes all required licenses and permits
necessary to conduct the business of THCR have been obtained.

      THCR expects to be subject to similar rigorous regulatory standards in
each other jurisdiction in which it seeks to conduct gaming operations. There
can be no assurance that regulations adopted, permits required or taxes imposed
by other jurisdictions will permit profitable operations by THCR in those
jurisdictions.

ITEM 2. PROPERTIES.

Trump Plaza

      Plaza Associates owns and leases several parcels of land in and around
Atlantic City, New Jersey, each of which is used in connection with the
operation of Trump Plaza and each of which is subject to the liens of the
mortgages associated with the TAC I Notes, the TAC II Notes and the TAC III
Notes (collectively, the "Plaza Mortgages") and certain other liens.

      Plaza Casino Parcel. The Trump Plaza Main Tower is located on the
Boardwalk in Atlantic City, New Jersey, next to the Boardwalk Hall. It occupies
the entire city block (approximately 2.38 acres) bounded by the Boardwalk,
Mississippi Avenue, Pacific Avenue and Columbia Place (the "Plaza Casino
Parcel").

      The Plaza Casino Parcel consists of four tracts of land, three of which
are currently owned by Plaza Associates and one of which is leased by Plaza
Hotel Management Company ("PHMC") to Plaza Associates pursuant to a
non-renewable ground lease, which expires on December 31, 2078 (the "PHMC
Lease"). The land which is subject to the PHMC Lease is referred to as the
"Plaza Leasehold Tract." Seashore Four Associates ("Seashore Four") and Trump
Seashore Associates ("Trump Seashore") had leased to Plaza Associates two of the
tracts which are now owned by Plaza Associates. Trump Seashore and Seashore Four
are 100.0% beneficially owned by Trump and are, therefore, affiliates of THCR.
Plaza Associates purchased the tract from Seashore Four in January 1997 and the
tract from Trump Seashore in September 1996 for $10.1 million and $14.5 million,
respectively.

      The PHMC Lease is a "net lease" pursuant to which Plaza Associates, in
addition to the payment of fixed rent, is responsible for all costs and expenses
with respect to the use, operation and ownership of the Plaza Leasehold Tract
and the improvements now, 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 Plaza Leasehold Tract are owned by Plaza Associates during 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 vest in PHMC. The PHMC
Lease also contains an option pursuant to which Plaza Associates may purchase
the Plaza Leasehold Tract at certain times during the term of such PHMC Lease
under certain circumstances.

      Trump Plaza East. In connection with the Taj Acquisition in April 1996,
Plaza Associates exercised its option to purchase certain of the fee and
leasehold interests comprising the Trump Plaza East Tower for an aggregate
purchase price of $28.0 million. Plaza Associates currently leases a portion of
the land adjacent to the Trump Plaza East Tower from an unrelated third party.

      In October 2001, Time Warner Entertainment Company, L.P. ("Time Warner")
terminated its lease with Trump Plaza (the "Time Warner Plaza Lease") of 17,000
square feet of retail space with Boardwalk frontage in the Trump Plaza East
Tower it had used for a Warner Brothers store. The Time Warner Plaza Lease,
entered into by the parties in September 1993, had been for an initial term of
ten years, and required Time Warner to pay Trump Plaza an amount equal to (i)
7.5 percent (7.5%) of gross annual sales up to $15.0 million and (ii) 10 percent
(10.0%) of gross sales in excess of $15.0 million. The Time Warner Plaza Lease
also permitted Time Warner to terminate the Time Warner Plaza Lease before the
expiration of the initial ten-year term in the event that annual gross sales
were less than $5.0 million, as adjusted by the Consumer Price Index for the
Philadelphia-New Jersey area ("CPI"), for any lease year during the third
through ninth years of the initial ten-year term (the "Early Termination
Clause"). In connection with Time Warner's merger with America Online, Inc. in
January 2001 (the "AOL-Time Warner Merger"), Time Warner closed its national
chain of Warner Brothers stores, including the Warner Brothers store in Trump
Plaza, and terminated the Time Warner Plaza Lease in the third


                                       18

<PAGE>

quarter of 2001 pursuant to the Early Termination Clause. Management currently
intends to lease the space previously occupied by Time Warner to a comparable
retailer or restaurant franchise.

      Parking Parcels. Plaza Associates owns a parcel of land (the "Plaza Garage
Parcel") located across the street from the Plaza Casino Parcel and along
Pacific Avenue in a portion of the block bound by Pacific Avenue, Mississippi
Avenue, Atlantic Avenue and Missouri Avenue. Plaza Associates has constructed
the Trump Plaza Transportation Facility on the Plaza Garage Parcel. An enclosed
pedestrian walkway from the parking garage provide access to the Trump Plaza at
the casino level. Parking at the parking garage is available to Trump Plaza's
guests, as well as to the general public.

      Plaza Associates leases, pursuant to the PHMC Lease, a parcel of land
located on the northwest corner of the intersection of Mississippi and Pacific
Avenues consisting of approximately 11,800 square feet (the "Additional Parcel")
and owns another parcel on Mississippi Avenue adjacent to the Additional Parcel
consisting of approximately 5,750 square feet.

      Plaza Associates also owns five parcels of land, aggregating approximately
43,300 square feet, and subleases one parcel consisting of approximately 3,125
square feet. All of such parcels are contiguous and are located along Atlantic
Avenue, in the same block as the Plaza Garage Parcel. They are used for signage
and surface parking and are not encumbered by any mortgage liens other than that
of the Plaza Mortgages.

      Warehouse Parcel. Plaza Associates owns a warehouse and office facility
located in Egg Harbor Township, New Jersey, containing approximately 64,000
square feet of space (the "Egg Harbor Parcel"). The Egg Harbor Parcel is
encumbered by a first mortgage having an outstanding principal balance, as of
December 31, 2001, of approximately $1.2 million and is encumbered by the Plaza
Mortgages. This lien is senior to the liens of the Plaza Mortgages. This
facility is currently being utilized by Taj Administration.

      Plaza Associates has financed or leased and from time to time will finance
or lease its acquisition of furniture, fixtures and equipment. The lien in favor
of any such lender or lessor may be superior to the liens of the Plaza
Mortgages.

Taj Mahal

      Taj Associates currently owns the parcels of land which are used in
connection with the operation of the Taj Mahal. Each of these parcels is
encumbered by the mortgages securing the TAC I Notes, TAC II Notes and TAC III
Notes. See "Business; Recent Events;" "Certain Indebtedness;" "-Delayed Interest
Payments;" "- Competition;" "Management's Discussion and Analysis of Financial
Condition and Results of Operations."

      The Casino Parcel. The land comprising the Taj Mahal site consists of
approximately 30.0 acres, bounded by the Boardwalk to the south, vacated former
States Avenue to the east, Pennsylvania Avenue to the west and Pacific Avenue to
the north. The Taj Mahal was opened to the public on April 2, 1990.

      Taj Entertainment Complex. In connection with the Taj Acquisition, Taj
Associates purchased the Taj Entertainment Complex from Realty Corp. The Taj
Entertainment Complex is a 20,000-square-foot multipurpose entertainment complex
known as the Xanadu Theater with seating capacity for approximately 1,200
people, which can be used as a theater, concert hall, boxing arena or exhibition
hall.

      Steel Pier. In April 1996, Taj Associates purchased the approximately 3.6
acre pier and related property located across the Boardwalk from the Taj Mahal
(the "Steel Pier") from Taj Mahal Realty Corp., an affiliate of Trump ("Realty
Corp."), Taj Associates initially proposed a concept to improve the Steel Pier,
the estimated cost of which improvements was $30.0 million. Such concept was
approved by the New Jersey Department of Environment Protection ("NJDEP"), the
agency which administers the Coastal Area Facilities Review Act ("CAFRA"). A
condition imposed on Taj Associates' CAFRA permit initially required that Taj
Associates begin construction of certain improvements on the Steel Pier by
October 1992, which improvements were to be completed within 18 months of
commencement. In March 1993, Taj Associates obtained a modification of its CAFRA
permit providing for the extensions of the required commencement and completion
dates of the improvements to the Steel Pier for one year based upon an interim
use of the Steel Pier for an amusement park. Taj Associates received additional
one-year extensions of the required commencement and completion dates of the
improvements of the Steel Pier based upon the same interim use of the Steel Pier
as an amusement park pursuant to a sublease ("Pier Sublease") with an amusement
park operator. The Pier Sublease terminates on December 31, 2003, unless
extended.

      Office and Warehouse Space. Taj Associates owns an office building located
on South Pennsylvania Avenue adjacent to the Taj Mahal. In addition, Taj
Associates, in April 1991, purchased for approximately $1.7 million certain
facilities of Castle Associates which are presently leased to commercial tenants
and used for office space and vehicle maintenance facilities.

      Parking. The Taj Mahal provides parking spaces for approximately 6,950
cars, of which 6,725 parking spaces are located indoors and 225 are parking
spaces located on land purchased from Realty Corp. in connection with the Taj
Acquisition.


                                       19

<PAGE>

      Themed Restaurants and Retail Shopping. In February 1996, Hard Rock Cafe
International (N.J.), Inc. ("Hard Rock") entered into a 15-year lease agreement
(the "Hard Rock Cafe Lease") with Taj Associates pursuant to which Hard Rock
leases an approximately 11,500 square-foot space at the Taj Mahal for a Hard
Rock Cafe. The Hard Rock Cafe opened in November 1996. The basic rent under the
Hard Rock Cafe Lease is $750,000 per year, payable in equal monthly
installments, for the first 10 years of the lease term, and will be $825,000 per
year, payable in equal monthly installments, for the remaining five years of the
lease term. In addition, Hard Rock will pay percentage rent in an amount equal
to 10.0% of Hard Rock's annual gross sales in excess of $10.0 million. Hard Rock
has the right to terminate the Hard Rock Cafe Lease on the tenth anniversary
thereof, and also has the option to extend the term of the Hard Rock Cafe Lease
for an additional five-year period at an annual basic rent of $907,500 during
such renewal term.

      In June 1997, Stage Deli of Atlantic City, Inc. ("Stage Deli") entered
into a ten-year, five-month lease, commencing on July 7, 1997 (the "Stage Deli
Lease"), with Taj Associates for the lease of space at the Taj Mahal for a Stage
Deli of New York Restaurant. Stage Deli has an option to renew the Stage Deli
Lease for an additional five-year term. Commencing September 1, 1998, the Stage
Deli Lease was amended to eliminate the basic rent provisions and provide for
monthly percentage rents of 8.0% or 10.0% of gross monthly sales based on actual
average sales volumes as defined in the Stage Deli Lease.

      In February 1997, Time Warner entered into a ten-year lease (the "Time
Warner Taj Lease") with Taj Associates for the lease of space at the Taj Mahal
for a Warner Brothers Studio Store ("Taj Warner Brothers Store"). Time Warner
had an option to renew the Time Warner Taj Lease for two additional five-year
terms. Pursuant to the Time Warner Taj Lease, Time Warner was obligated to pay
to Taj Mahal monthly rent in an amount equal to (i) 7.5% of gross annual sales
up to and including $5.0 million and (ii) 10.0% sales of gross annual sales in
excess of $5.0 million. No minimum or "base" rent was payable under the Time
Warner Taj Lease. Also, pursuant to the Time Warner Taj Lease, Time Warner had
the right to terminate the Time Warner Taj Lease if (i) gross annual sales were
less than $2.5 million for the second year of the lease or less than $2.5
million, as adjusted by CPI, for the third through ninth years of the lease; and
(ii) the Taj Mahal ceased to operate as a first class hotel. The Taj Warner
Brothers Studio Store opened in May 1997. Following the merger of Time Warner
with AOL in January 2001, AOL Time Warner closed its national chain of Warner
Brothers Studio Stores, including the Taj Warner Brothers Store and terminated
the Time Warner Taj Lease in September 2001 pursuant to the early termination
clause. Management currently intends to locate a new retail tenant for this
space.

      In October 1999, Taj Mahal completed its expansion of the retail shopping
area along the length of its parking garage promenade walkway which immediately
adjoins the Taj Mahal's main retail shopping area. The first tenant, Starbucks,
operated by Host International, Inc., opened in September 1996. Sbarro's, an
Italian eatery, operated by Sbarro America Properties, Inc., opened in October
1998. Boardwalk Treats, Beka's Pastries and a Harley Davidson retail merchandise
outlet opened at various times during 1999. The Taj Mahal's retail shopping
outlets also include an upscale collection of women's and men's clothing and
shoe shops, jewelry stores and a variety of gift and specialty shops.

      Taj Associates has financed or leased and from time to time will finance
or lease its acquisition of furniture, fixtures and equipment. The lien in favor
of any such lender or lessor may be superior to the liens of Taj's mortgages.

ITEM 3. LEGAL PROCEEDINGS.

      General. From time to time, Trump AC, its partners, certain members of its
former executive committee, and certain of its employees, have been involved in
various legal proceedings. Such persons and entities are vigorously defending
the allegations against them and intend to contest vigorously any future
proceedings. In general, Trump AC has agreed to indemnify such persons 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 said legal proceedings, provided, however, such person acted
in good faith and in a manner he or she reasonably believed to be in or not
opposed to the best interests of Trump AC, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe his or her conduct was
unlawful.

      Castle Acquisition; Settlement Agreement Approved by the Court. As
previously reported, on October 16, 1996, stockholders of THCR filed derivative
actions in the United State District Court, Southern District of New York (96
Civ. 7820), which were subsequently consolidated, against each member of the
Board of Directors of THCR, THCR Holdings, Castle Associates, Trump's Castle
Hotel & Casino, Inc., a wholly-owned subsidiary of THCR Holdings ("TCHI"), TCI,
TCI-II and Salomon Brothers, Inc. ("Salomon"). As set forth more fully in the
plaintiffs' Fourth Amended Shareholders' Derivative Complaint, the plaintiffs
claimed that certain of the defendants breached their fiduciary duties (or aided
or abetted such breaches) and engaged in wasteful and ultra vires acts in
connection with THCR's and THCR Holdings' acquisition of Castle Associates in
October 1996 (the "Castle Acquisition"), and that Salomon was negligent in the
issuance of its fairness opinion with respect to the Castle Acquisition. The
plaintiffs also alleged that various parties committed violations of the federal
securities laws for alleged omissions and misrepresentations in THCR's proxies,
and that Trump, TCI-II and TCHI breached the acquisition agreement by supplying
THCR with untrue information for inclusion in the proxy statement delivered to
THCR's stockholders in connection with the Castle Acquisition.


                                       20

<PAGE>

      On December 10, 2001, the Court approved a settlement agreement (the
"Castle Settlement Agreement") between the parties, as no stockholders objected
to the terms of the proposed offer the Castle Settlement Agreement became
effective in January 2002. Pursuant to the Castle Settlement Agreement, without
admitting or denying any wrongdoing, Trump contributed to THCR Holdings one half
of each of his (i) one percent (1.0%) general partnership interest and (ii)
49.0% limited partnership interests in Miss Universe, L.P., LLLP ("Miss
Universe"). Also pursuant to the Castle Settlement Agreement, THCR increased the
number of directors on its Board of Directors from four to five persons, and
appointed Robert J. McGuire to fill the newly created vacancy, and covenanted to
nominate Mr. McGuire for election to the Board at the next annual meeting of
stockholders relating to the election of directors. In addition, THCR covenanted
that all future proposed transactions involving THCR or THCR Holdings in which
Trump has a personal interest valued over $200,000 or any transaction between
THCR and any officer or director having a value of at least $200,000 (other than
transactions relating to salary or other compensation paid in the ordinary
course of business), shall be reviewed by a Special Committee comprised of Mr.
McGuire, so long as Mr. McGuire shall sit on the Board, or Mr. McGuire's
successor who shall be an independent outside director, and one or more
non-employee directors (other than Trump) of THCR, which shall make findings and
recommendations to the Board with respect to such proposed transactions. At all
times, the Special Committee is required to be comprised of at least two
non-employee directors and no employee directors. In addition, plaintiffs'
counsel has applied to the Court for up to $3.0 million in legal fees and
$150,000 in expenses. Such fees are expected to be paid by THCR's director's and
officer's liability insurance carriers.

      Various other legal proceedings are now pending against THCR. Management
considers all such proceedings to be ordinary litigation incident to the
character of its business. Management believes that the resolution of these
claims will not, individually or in the aggregate, have a material adverse
effect on its financial condition or results of operations.

      From time to time, Plaza Associates and Taj Associates may be involved in
routine administrative proceedings involving alleged violations of certain
provisions of the Casino Control Act. However, management believes that the
final outcome of these proceedings will not, either individually or in the
aggregate, have a material adverse effect on THCR or on the ability of Plaza
Associates or Taj Associates to otherwise retain or renew any casino or other
licenses required under the Casino Control Act for the operation of Trump Plaza
or the Taj Mahal, although no assurances can be given.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

      No matters were submitted by the Registrants to their respective security
holders for a vote during the fourth quarter of 2001.


                                       21

<PAGE>

                                     PART II

ITEM 5. MARKET FOR REGISTRANTS' COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

      Trump AC. THCR Holdings has beneficially owned 100.0% of the partnership
interests in Trump AC since June 12, 1995. There is no established trading
market for the equity interests of Trump AC.

      Trump AC Funding. Trump AC has owned 100.0% of the common stock of Trump
AC Funding since its formation on January 30, 1996. There is no established
trading market for Trump AC Funding's common stock.

      Funding II. Trump AC has owned 100.0% of the common stock of Funding II
since its formation on November 18, 1997. There is no established trading market
for Funding II's common stock.

      Funding III. Trump AC has owned 100.0% of the common stock of Funding III
since its formation on November 18, 1997. There is no established trading market
for Funding III's common stock.

ITEM 6. SELECTED FINANCIAL DATA.

      The following table sets forth certain historical consolidated financial
information of Trump AC for each of the five years ended December 31, 1997
through 2001.

      All financial information should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of Operations," and
the consolidated and condensed financial statements and the related notes
thereto included elsewhere in this Form 10-K.

<TABLE>
<CAPTION>
                                                                                Years Ended December 31,
                                                         -----------------------------------------------------------------------
                                                             1997           1998           1999           2000           2001
                                                         -----------    -----------    -----------    -----------    -----------
                                                                                  (dollars in thousands)
<S>                                                      <C>            <C>            <C>            <C>            <C>
Statement of Operations Data:
Revenues:
     Gaming ..........................................   $   889,116    $   888,518    $   867,556    $   858,473    $   849,426
     Other (a) .......................................       231,235        220,725        230,606        188,412        181,182
                                                         -----------    -----------    -----------    -----------    -----------
Gross revenues .......................................     1,120,351      1,109,243      1,098,162      1,046,885      1,030,608
Less-Promotional allowances (b) ......................       275,919        213,579        209,945        205,686        203,866
                                                         -----------    -----------    -----------    -----------    -----------
Net revenues .........................................       844,432        895,664        888,217        841,199        826,742
                                                         -----------    -----------    -----------    -----------    -----------
Cost and expenses:
     Gaming (b) ......................................       417,623        461,776        465,231        437,382        423,306
     Other ...........................................        65,462         66,180         66,231         56,613         54,913
     General and administrative ......................       168,143        168,183        173,578        174,125        161,457
     Depreciation and amortization ...................        66,018         61,536         58,615         51,924         49,448
     Trump World's Fair closing costs (c) ............            --             --        123,959            814             --
                                                         -----------    -----------    -----------    -----------    -----------
          Total costs and expenses ...................       717,246        757,675        887,614        720,858        689,124
                                                         -----------    -----------    -----------    -----------    -----------
Income from operations ...............................       127,186        137,989            603        120,341        137,618
Interest and other non-operating income ..............         2,891          5,508          3,813          4,145          2,633
Interest expense .....................................      (144,140)      (154,578)      (153,759)      (153,664)      (154,283)
                                                         -----------    -----------    -----------    -----------    -----------
Net loss .............................................   $   (14,063)   $   (11,081)   $  (149,343)   $   (29,178)   $   (14,032)
                                                         ===========    ===========    ===========    ===========    ===========

Balance Sheet Data (at end of period):
     Cash and cash equivalents .......................   $   114,879    $    80,954    $    75,061    $    67,205    $    70,909
     Property and equipment, net .....................     1,460,050      1,432,965      1,322,599      1,290,638      1,277,002
     Total assets ....................................     1,739,073      1,688,606      1,570,866      1,542,446      1,540,453
     Total long-term debt, net current maturities ....     1,300,027      1,299,217      1,302,824      1,303,019      1,307,643
     Total capital ...................................   $   327,939    $   272,759    $   123,416    $    94,238    $    80,206
</TABLE>


                                       22

<PAGE>

(a)   On September 15, 1999, an agreement was reached between Taj Associates,
      All Star and Planet Hollywood International, Inc. to terminate the All
      Star Cafe Lease effective September 24, 1999. Upon termination of the All
      Star Cafe Lease, all property, improvements, alterations and All Star's
      personal property, with the exception of specialty trade fixtures, became
      the property of Taj Associates. Taj Associates recorded the $17,200,000
      estimated fair market value of these assets in other revenue based on an
      independent appraisal.

      Taj Associates has since remodeled the facility into an entertainment
      complex called the "Casbah," consisting of a Boardwalk level bar, a
      seasonal outdoor dining area with live entertainment and a centerpiece
      high-energy night club. The Casbah complex opened in June 2000.

(b)   Includes, for all years presented, reclassification of certain amounts in
      accordance with EITF-00-22 accounting for "Points" and certain other time-
      based or volume-based sales incentive offers, and offers for free products
      or services to be delivered in the future.

(c)   On October 4, 1999, THCR closed Trump World's Fair. The estimated cost of
      closing Trump World's Fair was approximately $124,773,000, which includes
      $97,221,000 for the writedown of the net book value of the assets and
      $27,552,000 of costs incurred and to be incurred in connection with the
      closing and demolition of the building.

ITEM 7. MANAGEMENT'S DISCUSSION & ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.

      In this section, the words "Company," "we," "our," "ours," and "us" refer
to Trump Atlantic City Associates ("Trump AC") and its wholly owned
subsidiaries, unless otherwise noted. Trump AC owns and operates the Trump Plaza
Hotel and Casino ("Trump Plaza") and the Trump Taj Mahal Casino Resort (the "Taj
Mahal"). Terms not defined in this section shall have the meanings ascribed to
them elsewhere in this Annual Report on Form 10-K.

      This section contains forward-looking statements that involve risks and
uncertainties, many of which are beyond the ability of the Company to control or
predict. The Company's actual results may differ substantially from the results
discussed in the forward-looking statements. The following discussion should be
read in conjunction with the Consolidated Financial Statements of the Company
and the related notes thereto.

General

      The Company Wants to Refinance or Modify Its Public Debt and Increase
Capital Expenditures to Compete Effectively.

      The Company has substantial indebtedness. At December 31, 2001, the
Company's long-term debt was approximately $1.3 billion and its ratio of debt to
capital was approximately 16.4 to 1. Interest expense as a percentage of net
revenues was 17.3%, 18.3% and 18.7% for the fiscal years ended December 31,
1999, 2000 and 2001, respectively.

      As previously announced, the Company is seeking to refinance or modify the
terms of the TAC Notes, which were approximately $1.3 billion aggregate
principal amount as of December 31, 2001. Management believes that, based upon
its current cash flow forecasts for 2002, Trump AC will have sufficient cash
flows to meet its debt service and operating expense requirements throughout
2002.

      The primary reason to refinance or modify the TAC Notes is to reduce the
high levels of interest expense associated with such indebtedness in order to
devote more resources to capital expenditures at the Trump AC Properties.
Capital expenditures, such as room refurbishments, amenity upgrades and new
gaming equipment, are necessary to preserve the competitiveness of the Trump AC
Properties. The Atlantic City market is very competitive. Although the Company
was able to reduce its corporate expenses in 2001 and increase consolidated
EBITDA by approximately $14.8 million on slightly declining net revenues, there
is a limit as to how much further corporate expenses can be reduced and
uncertainty as to whether recent levels of expense reductions can be maintained.
Management believes that the Company must reduce its interest expense
substantially and defer the maturity of principal in order to provide for
capital expenditures that its believes are necessary to compete effectively in
the short and long-term. To this end, management believes that it is preferable
to address the Trump AC Properties' anticipated capital resource needs before
any liquidity problems become acute.

      If refinancing or modifying its public debt issues cannot be consummated,
the Registrants will consider other options. There can be no assurances,
however, that any of such alternatives could be successfully completed. See
"Business; Competition."

                                       23

<PAGE>

     The Company has retained financial advisors to provide financial advisory
services in connection with these matters, which may proceed independently from
discussions regarding THCR's and its other subsidiaries' debt issues. We have
had discussions with a committee comprised of certain holders of the TAC Notes
(the "TAC Notes Committee"). During such discussions, we apprised the TAC Notes
Committee of our desire to reduce our interest expense and increase capital
expenditures in order to compete effectively in an increasingly competitive
market place. In particular, we suggested modifying the TAC Notes by lowering
the interest rate thereon and extending the maturity date thereof. Modification
of certain covenant restrictions was also suggested. This type of transaction
would reduce interest expense and hopefully allow THCR to finance a capital
improvements program, including the possible construction of additional hotel
rooms at certain of its Atlantic City properties. Discussions to date with the
TAC Notes Committee have not resulted in a transaction. If a proposal for the
TAC Notes is ultimately agreed upon with the TAC Notes Committee, it would
likely require various consents and approvals, including the consent of the
holders of TAC Notes.

     In connection with discussions with the TAC Notes Committee, certain
members thereof were provided with confidential information concerning THCR and
certain of its subsidiaries, which is summarized in the preceding paragraph.

     There are no assurances as to any of the following:


     .    That any proposal will be agreed upon with the TAC Notes Committee or
          any other bondholder constituencies;

     .    That any proposal that is agreed upon with the TAC Notes Committee
          will be approved by other holders of the TAC Notes or that it will be
          consummated as proposed;

     .    That any transaction that is consummated will not adversely affect the
          holders of THCR's and its subsidiaries' various debt securities or
          THCR's Common Stock;

     .    That a transaction, if agreed to, will be completed by a specific date
          and time, if at all; or

     .    That any transaction, if agreed to, will be approved by the New Jersey
          Casino Control Commission.

     The ability of Trump AC and its subsidiaries to pay interest on and
principal of approximately $1.3 billion in TAC Notes depends primarily on the
ability of the Trump Plaza and the Taj Mahal to generate cash from operations
sufficient for such purposes. In the case of principal payments at maturity, the
ability to refinance such indebtedness is also important. The future operating
performance of the Trump Plaza and the Taj Mahal is subject to general economic
conditions, industry conditions, including competition and regulatory matters,
and numerous other factors, many of which are unforeseeable or are beyond the
control of the Trump Plaza and the Taj Mahal. There can be no assurance that the
future operating performance of the Trump Plaza and the Taj Mahal will be
sufficient to generate the cash flows required to meet the debt service
obligations of the Trump Plaza, Taj Mahal or Trump AC. The ability of the Trump
Plaza, Taj Mahal and Trump AC to pay the principal amount of their public debt
at maturity (whether scheduled or by acceleration thereof) is primarily
dependent upon their ability to obtain refinancing. There is also no assurance
that the general state of the economy, the status of the capital markets
generally, or the receptiveness of the capital markets to the gaming industry or
to the Company will be conducive to refinancing debt at any given time.

     The ability of Trump AC to distribute funds to THCR is also limited by
various covenants that bind such companies, including financial ratios that
require certain levels of cash flow be achieved as a condition to the
distribution of funds to THCR.

     We Do Not Know How the Borgata, When Opened, Will Affect Us.

     In September 2000, Boyd Gaming and MGM Mirage commenced their joint
development of a 25-acre site located in the Marina District of Atlantic City
for the construction of the "Borgata," a proposed Tuscan-style casino expected
to feature a 40-story tower with 2,010 rooms and suites, as well as a 135,000
square-foot casino, restaurants, retail shops, a spa and pool, and entertainment
venues. Construction of the Borgata is scheduled to be completed by the
mid-summer of 2003, and is estimated to cost approximately $1.0 billion. The
Borgata could have a material adverse effect on the business and operations of
the Trump AC Properties. This potential adverse effect could include
deteriorating net revenues caused by a loss of gaming patrons. See "Business;
Competition."

     New York Has Enacted Gaming Legislation Which May Harm Our Trump AC
Properties and Other States May Do So In The Future.

     In October 2001, the New York State legislature passed extensive
legislation that could adversely affect the Company. The legislation permits
three new casinos in western New York, one in Niagra Falls, one in Buffalo and
one on land owned by the Seneca Indian Nation, all of which would be owned by
the Seneca Indian Nation. It is possible that the Niagra Falls and Buffalo
casinos could be open within a year. The legislation also permits up to three
casinos in the Catskills in Ulster and Sullivan counties, also to be owned by
Native Americans, which could open as early as mid-2005. In addition, slot
machines would be allowed to be placed in Indian-owned casinos. Video lottery
terminals would be installed and five horse racing tracks across the state of
New York and, if local governments approve, at certain other tracks. Finally,
the law provides for New York joining the Powerball lottery that operates in 26
states with large jackpots. The net affect of these facilities and other items,
when operational, on Atlantic City cannot be predicted. The Company believes,
however, that a substantial amount of existing and potential new gaming
customers could patronize such facilities instead of Atlantic City, at least
occasionally. On January 29, 2002, a lawsuit was commenced contesting the above
legislation package on the grounds that certain of its provisions were adopted
in violation of the State's constitution. The likely outcome of this lawsuit
cannot be ascertained at this time. See "Business; Competition."


                                       24

<PAGE>

      We also believe that Pennsylvania, Virginia and Delaware are among the
other states currently contemplating some form of gaming legislation. Since our
market is primarily a drive-to market, legalized gambling in one or more states
neighboring or within close proximity to New Jersey could have a material
adverse affect on the Atlantic City gaming industry overall, including THCR and
the Trump AC Properties.

      Our Business is Subject to a Variety of Other Risks and Uncertainties.

      As noted elsewhere, our financial condition and results of operations
could be affected by many events that are beyond our control, such as (i)
capital market conditions which could affect our ability to raise capital or
pursue other alternatives, (ii) future acts of terrorism and their impact on
capital markets and on consumer behavior, (iii) competition from existing and
potential new competitors in Atlantic City and other nearby markets, which is
likely to increase over the next five years, (iv) possible increases in gasoline
prices which could discourage auto travel to Atlantic City, and (v) adverse
weather conditions. Good weather is particularly important to the relative
performance of our Atlantic City Properties in the winter months and our
improved performance in the fourth quarter of 2001 is partially attributable to
mild weather conditions in the Northeast during such period, as well as to
expense reduction. Also, insurance related costs, limitations, deductibles and
availability are expected to be adversely affected in the wake of the September
11, 2001 terrorist attacks. As noted below, there is no assurance that we will
be able to continue to reduce or contain costs in the future. See "Business;
Competition."

Critical Accounting Policies

     The preparation of our financial statements in conformity with generally
accepted accounting principles in the United States requires us to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosures of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Our estimates, judgements and assumptions are
continually evaluated based on available information and experience. Because of
the use of estimates inherent in the financial reporting process, actual results
could differ from those estimates

     Certain of our accounting policies require higher degrees of judgement than
others in their application. See Notes to Consolidated Financial Statements for
a discussion of our significant accounting policies.

     Recent Accounting Pronouncements

     In January 2001, the Emerging Issues Task Force ("EITF") reached a
consensus on certain issues within Issue No. 00-22, "Accounting for `Points' and
Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for
Free Products or Services to Be Delivered in the Future" ("EITF 00-22").
Application of EITF 00-22 is required for interim and annual periods ending
after February 15, 2001. EITF 00-22 requires volume-based cash rebates to be
classified as a reduction of revenue. Accordingly, such rebates of $85,210,000,
$92,616,000 and $92,932,000 in 1999, 2000 and 2001 have been classified as
promotional allowances. The Partnership previously classified these expenditures
as a gaming expense. Prior period amounts have been reclassified to conform with
the current presentation.

     In July 2001, the FASB issued Statement No. 141 "Business Combinations"
("SFAS 141") and Statement No. 142 "Goodwill and Other Intangible Assets" ("SFAS
142"). SFAS 141 is effective as follows: a) use of the pooling-of-interest
method is prohibited for business combinations initiated after June 30, 2001;
and b) the provisions of SFAS 141 also apply to all business combinations
accounted for by the purchase method that are completed after June 30, 2001.
SFAS 142 is effective for fiscal years beginning after December 15, 2001 and
applies to all goodwill and other intangible assets recognized in an entity's
statement of financial position at that date, regardless of when those assets
were initially recognized. The Company does not believe that the provisions of
SFAS 141 and SFAS 142 will have a material effect on its financial position or
results of operations.

     Also in July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". This standard addresses the financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The standard is effective for
fiscal years beginning after June 15, 2002. The Partnership's management does
not expect the adoption of SFAS No. 143 to have a material impact on the
Partnership's financial results.

     In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Disposal of Long-Lived Assets". This standard addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
The standard is effective for fiscal years beginning after December 15, 2001.
The Partnership's management does not expect the adoption of SFAS No. 144 to
have a material impact on the Partnership's financial results.

     In November 2001, the EITF reached a consensus on Issue No. 01-09,
"Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor's Products)" ("EITF 01-09"). For a sales incentive
offered voluntarily by a vendor to its patrons, EITF 01-09 requires the vendor
to recognize the cost of the sales incentive at the later of the date at which
the related revenue is recorded by the vendor, or the date at which the sales
incentive is offered. Accordingly, at December 31, 2001, the Partnership has
accrued for the expected cost of certain cash incentives offered to casino
patrons based on their past levels of play. Application of EITF 01-09 is
required in annual or interim financial statements for periods beginning after
December 15, 2001. The Partnership elected to adopt EITF 01-09 in the quarter
ended December 31, 2001. The adoption of EITF 01-09 did not have a material
impact on Trump AC's financial results



                                       25

<PAGE>

Financial Condition -

Liquidity and Capital Resources

     Cash flows from operating activities of the Trump Plaza and the Taj Mahal
are the Company's sole source of liquidity. The Company's ability to borrow
funds for its liquidity needs is severely restricted by covenants in the various
indentures governing its public debt issues and by its already high levels of
indebtedness. Sources of the Company's short-term and long-term liquidity
include: (i) table win, (ii) slot win, (iii) room occupancy, (iv) food and
beverage sales and (v) miscellaneous items, less promotional expenses. Although
we expect the Company to have sufficient liquidity from the operating activities
of the Trump Plaza and the Taj Mahal to meet its short-term obligations, there
can be no assurances in this regard. A variety of factors, including a decrease
or change in the demand for our services, could have a material adverse effect
on our liquidity.

     The Trump Plaza and the Taj Mahal compete with other Atlantic City
casino/hotels on the basis of the quality of their guests' experience. We seek
to provide high-quality service and amenities and a first class casino gaming
experience. In a competitive marketplace like Atlantic City, the ability to
offer a high-quality casino gaming experience is largely dependant upon the
attractiveness of a casino/hotel and on the extent and quality of the
facilities.

     Because the Company has substantial indebtedness and related interest
expenses, its capital expenditures in recent years have not been sufficient to
maintain the overall attractiveness of the Trump Plaza and the Taj Mahal at
desired levels. Moreover, the Company has not been able to pursue various
capital expansion plans, such as the addition of more hotel rooms, that the
Company believes are needed to compete effectively.

                         TRUMP ATLANTIC CITY ASSOCIATES
                       CONSOLIDATING CAPITAL EXPENDITURES
                                 (IN THOUSANDS)

                                              TAJ
                                          ASSOCIATES      PLAZA         TOTAL
                                              (A)       ASSOCIATES     TRUMP AC
                                          ----------    ----------    ----------
FOR THE YEAR ENDED DECEMBER 31, 2000
Purchase of Property & Equipment .....    $   10,793    $    4,332    $   15,125
Capital Lease Additions (B) ..........         3,285           874         4,159
                                          ----------    ----------    ----------
Total Capital Expenditures ...........    $   14,078    $    5,206    $   19,284
                                          ==========    ==========    ==========

FOR THE YEAR ENDED DECEMBER 31, 2001
Purchase of Property & Equipment .....    $    5,758    $    2,006    $    7,764
Capital Lease Additions (B) ..........         6,460         6,620        13,080
                                          ----------    ----------    ----------
Total Capital Expenditures ...........    $   12,218    $    8,626    $   20,844
                                          ==========    ==========    ==========

      (A)   Includes Trump Administration. See "Business; General; Casino
            Services Agreement; Trump Administration."
      (B)   Capital lease additions for Trump AC were principally slot machines.

      Summary of the Company's Public Indebtedness

      TAC Notes. Trump AC's debt consists primarily of the (i) TAC I Notes, (ii)
TAC II Notes and (iii) TAC III Notes (collectively, the "TAC Notes").

                                       26

<PAGE>

      The TAC Notes bear interest at the rate of 11-1/4% per annum, payable on
May 1st and November 1st of each year, and mature on May 1, 2006. The TAC Notes
are redeemable in whole or in part, at any time upon not less than 30 but not
more than 60 days notice. If redeemed at any time during the twelve-month period
prior to May 1, 2002, the redemption price is 105.625% of the outstanding
principal amount, plus accrued interest. For the twelve-month period commencing
on May 1, 2002, the redemption price decreases to 103.75% of the outstanding
principal amount, plus accrued interest. For the twelve-month period commencing
on May 1, 2003, the redemption price further decreases to 101.875% of the
outstanding principal amount, plus accrued interest. If any of the TAC Notes are
redeemed on or after May 1, 2004, the redemption price is 100.0% of the
outstanding principal amount of the TAC Notes redeemed, plus accrued interest.

      As of December 31, 2001, principal amounts of $1.2 billion, $75.0 million
and $25.0 million of the TAC I Notes, TAC II Notes and TAC III Notes,
respectively, were outstanding.

      The TAC Notes are secured on a senior basis by substantially all of the
real and personal property owned or leased by Plaza Associates and Taj
Associates. The liens securing the TAC Notes are subordinate to liens securing
approximately $1.2 million of senior indebtedness. The obligations evidenced by
the TAC Notes are jointly and severally guaranteed by Taj Associates, Plaza
Associates and Trump AC and all future subsidiaries of Trump AC (other than
Trump AC Funding).

      The ability of Trump AC and its subsidiaries to pay interest on and
principal of approximately $1.3 billion in Public Mortgage Notes depends
primarily on the ability of the Trump Plaza and the Taj Mahal to generate cash
from operations sufficient for such purposes. In the case of principal payments
at maturity, the ability to refinance such indebtedness is also important. The
future operating performance of the Trump Plaza and the Taj Mahal is subject to
general economic conditions, industry conditions, including competition and
regulatory matters, and numerous other factors, many of which are unforeseeable
or are beyond the control of the Trump Plaza and the Taj Mahal. There can be no
assurance that the future operating performance of the Trump Plaza and the Taj
Mahal will be sufficient to generate the cash flows required to meet the debt
service obligations of the Trump Plaza, the Taj Mahal or Trump AC. The ability
of the Trump Plaza, the Taj Mahal and Trump AC to pay the principal amount of
their public debt at maturity (whether scheduled or by acceleration thereof) is
primarily dependent upon their ability to obtain refinancing. There is also no
assurance that the general state of the economy, the status of the capital
markets generally, or the receptiveness of the capital markets to the gaming
industry or to the Company will be conducive to refinancing debt at any given
time.

      The indentures governing the public indebtedness of Trump AC restrict such
entities' ability to make distributions to THCR Holdings.

      In addition, the ability of Plaza Associates and Taj Associates (through
Trump AC) to make payments, dividends or distributions to THCR Holdings may be
restricted by the New Jersey Casino Control Commission ("CCC").

      "Events of Default." Pursuant to each of the indentures governing the
public indebtedness of the Company (collectively, the "Indentures"), if an
"Event of Default" occurs and is continuing, the trustee or the holders of 25.0%
of the aggregate principal amount of the respective debit issue then
outstanding, by notice in writing to the respective issuer or issuers, may, and
the trustee at the request of such holders shall, declare all principal and
accrued interest of such debt issue to be immediately due and payable. An "Event
of Default" under each of the Indentures includes, but is not limited to, the
occurrence of one or more of the following events: (i) a default in an
installment payment of any interest (including any defaulted interest) on a
respective debt issue when due and payable and which continues for 30 days; (ii)
any Indebtedness (as defined) of the respective issuers or any of their
Subsidiaries (as defined) for borrowed money having an outstanding principal
amount of $20.0 million in the aggregate becoming by declaration or otherwise,
due and payable prior to its stated maturity; (iii) one or more judgments,
orders or decrees for the payment of money in excess of $10.0 million, either
individually or in the aggregate, being rendered against the respective issuers
or any of their Subsidiaries (as defined) or any of their respective properties
and not discharged, and either an enforcement proceeding shall have been
consummated by any creditor upon such judgment, order or decree or there shall
be a period of 60 days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect; (iv)
an entry by a court having competent jurisdiction in the premises of a decree or
order for relief in an involuntary case or proceeding under any applicable
bankruptcy law or a decree or order adjudging the respective issuers or any of
their Significant Subsidiaries (as defined) bankrupt or insolvent or seeking
reorganization, arrangement, adjustment or composition of or in respect of the
issuers or any of their Significant Subsidiaries (as defined) under any
applicable federal or state law; and (v) the issuers or any of their Significant
Subsidiaries (as defined) commencing a voluntary case or proceeding under any
applicable bankruptcy law or any other case or proceeding to be adjudicated
bankrupt or insolvent or the issuers or any of their Significant Subsidiaries
(as defined) filing a petition, answer or consent seeking reorganization or
relief under any applicable federal or state law.

Contractual Obligations and Commercial Commitments.

      The following tables set forth summaries of the Company's obligations and
commitments to make future payments under contracts, such as debt and lease
agreements, and under contingent commitments, such as debt guarantees:


                                       27

<PAGE>

<TABLE>
<CAPTION>
                                                              Payments Due by Period
                                                                  (In Thousands)
                                      -----------------------------------------------------------------------
Contractual Obligations                  Total          2002        2003 - 2004    2005 - 2006     Thereafter
----------------------------------    -----------    -----------    -----------    -----------    -----------
<S>                                   <C>            <C>            <C>            <C>            <C>
Long-Term Debt                        $ 1,301,174    $        68    $       155    $ 1,300,184    $       767
Capital Lease Obligations                  15,469          7,198          7,667            604             --
Operating Leases                           92,139          3,682          2,978          2,219         83,260
Other Long-Term Obligations                 9,368          6,315          3,053             --             --
                                      -----------    -----------    -----------    -----------    -----------
Total Contractual Cash Obligations    $ 1,418,150    $    17,263    $    13,853    $ 1,303,007    $    84,027
                                      ===========    ===========    ===========    ===========    ===========
</TABLE>

Effects of Transactions with Related and Certain Other Parties.

      Affiliate party transactions are governed by the provisions of the TAC I
Note Indenture, the TAC II Note Indenture and the TAC III Note Indenture, which
provisions generally require that such transactions be on terms as favorable as
would be obtainable from an unaffiliated party, and require the approval of a
majority of the independent directors of THCR for certain affiliated
transactions.

      Trump and certain affiliates have engaged in certain related party
transactions with respect to Trump AC and its subsidiaries. See "Executive
Compensation; Compensation Committee Interlocks and Insider Participation;
Certain Related Party Transactions--THCR," "--Plaza Associates," "--Taj
Associates," "--Castle Associates" and "--Other Relationships."

Results of Operations for the Years Ended December 31, 2000 and 2001

      The financial information presented below reflects the results of
operations of Plaza Associates and Taj Associates. Because Trump AC has no
business operations other than its interest in Plaza Associates and Taj
Associates, its results of operations are not discussed below.

      The following tables include selected data of Plaza Associates and Taj
Associates for the years ended December 31, 2000 and 2001 (Trump AC also
includes TCS and Trump Administration, which are not separately disclosed):

<TABLE>
<CAPTION>
                                                                        Year Ended December 31,
                                         -------------------------------------------------------------------------------------
                                            2000           2001          2000            2001          2000           2001
                                           Plaza          Plaza           Taj             Taj          Total          Total
                                         Associates     Associates    Associates      Associates     Trump AC *     Trump AC *
                                         ----------     ----------     ----------     ----------     ----------     ----------
                                                                      (in millions)
<S>                                      <C>            <C>            <C>            <C>            <C>            <C>
Revenues:
     Gaming .........................    $    320.2     $    324.3     $    538.3     $    525.1     $    858.5     $    849.4
     Other ..........................          75.3           72.5          113.1          108.7          188.4          181.2
                                         ----------     ----------     ----------     ----------     ----------     ----------
     Gross Revenues .................         395.5          396.8          651.4          633.8        1,046.9        1,030.6
     Less: Promotional Allowances ...          86.5           85.0          119.1          118.8          205.7          203.9
                                         ----------     ----------     ----------     ----------     ----------     ----------
          Net Revenues ..............         309.0          311.8          532.3          515.0          841.2          826.7
                                         ----------     ----------     ----------     ----------     ----------     ----------
Costs & Expenses:
     Gaming .........................         176.2          170.6          261.2          252.7          437.3          423.3
     Other ..........................          20.5           19.4           36.1           35.6           56.7           54.9
     General & Administrative .......          72.5           64.3          101.6           97.0          174.1          161.5
     Depreciation & Amortization ....          16.3           15.6           35.6           33.8           51.9           49.4
     Trump World's Fair closing .....           0.8             --             --             --            0.8             --
                                         ----------     ----------     ----------     ----------     ----------     ----------
          Total Costs and Expenses ..         286.3          269.9          434.5          419.1          720.8          689.1
                                         ----------     ----------     ----------     ----------     ----------     ----------
Income from Operations ..............          22.7           41.9           97.8           95.9          120.4          137.6
                                         ----------     ----------     ----------     ----------     ----------     ----------
  Interest and Other Income .........           1.1            1.1            2.2            1.4            4.1            2.7
  Interest Expense ..................         (47.8)         (48.0)         (93.4)         (93.3)        (153.7)        (154.3)
                                         ----------     ----------     ----------     ----------     ----------     ----------
  Total Non-Operating ...............         (46.7)         (46.9)         (91.2)         (91.9)        (149.6)        (151.6)
                                         ----------     ----------     ----------     ----------     ----------     ----------
  Net Income/(Loss) .................    $    (24.0)    $     (5.0)    $      6.6     $      4.0     $    (29.2)    $    (14.0)
                                         ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>

*     Intercompany eliminations and expenses of Trump AC, Trump AC Funding,
      Trump AC Funding II and Trump AC Funding III are not separately shown.


                                       28

<PAGE>

<TABLE>
<CAPTION>
                                                                       Year Ended December 31,
                                        ----------------------------------------------------------------------------------------
                                           2000          2001           2000            2001             2000            2001
                                          Plaza         Plaza            Taj             Taj            Total           Total
                                        Associates    Associates      Associates      Associates       Trump AC        Trump AC
                                        ----------------------------------------------------------------------------------------
                                                                            (in millions)
<S>                                     <C>           <C>             <C>             <C>             <C>             <C>
Table Game Revenues ................    $     93.1    $     95.9      $    182.2      $    163.8      $    275.3      $    259.7
Incr (Decr) over Prior Period ......                  $      2.8                      $    (18.4)                     $    (15.6)
Table Game Drop ....................    $    648.7    $    582.1      $  1,071.2      $    999.5      $  1,719.9      $  1,581.6
Incr (Decr) over Prior Period ......                  $    (66.6)                     $    (71.7)                     $   (138.3)
Table Win Percentage ...............          14.4%         16.5%           17.0%           16.4%           16.0%           16.4%
Incr (Decr) over Prior Period ......                     2.1 pts                       (0.6) pts                         0.4 pts
Number of Table Games ..............            96            96             143             141             239             237
Incr (Decr) over Prior Period ......                          --                              (2)                             (2)

Slot Revenues ......................    $    227.0    $    228.4      $    333.7      $    338.1      $    560.7      $    566.5
Incr (Decr) over Prior Period ......                  $      1.4                      $      4.4                      $      5.8
Slot Handle ........................    $  2,905.9    $  2,963.5      $  4,313.2      $  4,450.8      $  7,219.1      $  7,414.3
Incr (Decr) over Prior Period ......                  $     57.6                      $    137.6                      $    195.2
Slot Win Percentage ................           7.8%          7.7%            7.7%            7.6%            7.8%            7.6%
Incr (Decr) over Prior Period ......                   (0.1) pts                       (0.1) pts                       (0.2) pts
Number of Slot Machines ............         2,839         2,836           4,557           4,725           7,396           7,561
Incr (Decr) over Prior Period ......                          (3)                            168                             165

Poker Revenues .....................            --            --      $     19.9      $     21.0      $     19.9      $     21.0
Incr (Decr) over Prior Period ......                          --                      $      1.1                      $      1.1
Number of Poker Tables .............            --            --              67              67              67              67
Incr (Decr) over Prior Period ......                          --                              --                              --

Other Gaming Revenues ..............            --            --      $      2.5      $      2.2      $      2.5      $      2.2
Incr (Decr) over Prior Period ......                          --                      $     (0.3)                     $     (0.3)

Total Gaming Revenues ..............    $    320.2    $    324.3      $    538.3      $    525.1      $    858.5      $    849.4
Incr (Decr) over Prior Period ......                  $      4.1                      $    (13.2)                     $     (9.0)

Number of Guest Rooms ..............           904           904           1,250           1,250           2,154           2,154
Occupancy Rate .....................          88.8%         91.4%           93.3%           94.4%           91.4%           93.1%
Average Daily Rate (Room Revenue) ..    $    80.29    $    81.94      $    84.47      $    81.09      $    82.38      $    81.44
</TABLE>

      Gaming revenues are the primary source of Trump AC's revenues. The year
over year decrease in gaming revenues was caused by table games activity. Table
game revenues decreased by approximately $15.6 million or 5.7% from the
comparable period in 2000 due to a decrease in table drop at both the Taj Mahal
and Trump Plaza. Table drop was negatively affected by decreased activity from
premium international table game customers, a weak domestic market as well as
the negative national economic impacts of the September 11, 2001 terrorist
attacks. Overall Trump AC's table win percentage increased to 16.4% from 16.0%
in the comparable period in 2000. Table game revenues represent the amount
retained by Trump AC from amounts wagered at table games. The table win
percentage tends to be fairly constant over the long term, but may vary
significantly in the short term, due to large wagers by "high rollers". The
Atlantic City industry table win percentages were 15.4% and 15.6% for the years
ended December 31, 2000 and 2001, respectively.

      Slot revenues increased by approximately $5.8 million or 1.0% from the
comparable period in 2000 as a result of innovative marketing initiatives and
management's efforts to improve the slot product on the casino floor which were
partially affected by the negative national economic impacts of the September
11, 2001 terrorist attacks.

      Gaming expenses decreased by approximately $14.0 million or 3.2% from the
comparable period in 2000. Expense decreases at the Taj Mahal were primarily
marketing expenses and gaming taxes associated with decreased table game
revenues. Expense decreases at the Trump Plaza were primarily due to decreased
marketing expenses and incentives.

      General and Administrative expenses decreased by approximately $12.6
million or 7.2% from the comparable period in 2000. Expense decreases at the Taj
Mahal were primarily due to decreased insurance, litigation, entertainment,
payroll and CRDA expenses. Expense decreases at the Trump Plaza were primarily
due to decreased entertainment, insurance, payroll and advertising expenses.


                                      29

<PAGE>

Results of Operations for the Years Ended December 31, 1999 and 2000

      The financial information presented below reflects the results of
operations of Plaza Associates and Taj Associates. Because Trump AC has no
business operations other than its interest in Plaza Associates and Taj
Associates its results of operations are not discussed below.

      The following table includes selected data of Plaza Associates and Taj
Associates for the years ended December 31, 1999 and 2000 (Trump AC also
includes TCS which are not separately disclosed):

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                       -------------------------------------------------------------------------------------
                                          1999           2000          1999           2000           1999           2000
                                         Plaza          Plaza           Taj            Taj           Total          Total
                                       Associates     Associates     Associates     Associates     Trump AC *     Trump AC *
                                       -------------------------------------------------------------------------------------
                                                                           (in millions)
<S>                                    <C>            <C>            <C>            <C>            <C>            <C>
Revenues:
   Gaming .........................    $    354.5     $    320.2     $    513.1     $    538.3     $    867.6     $    858.5
   Other (a) ......................          97.8           75.3          132.8          113.1          230.6          188.4
                                       ----------     ----------     ----------     ----------     ----------     ----------
   Gross Revenues .................         452.3          395.5          645.9          651.4        1,098.2        1,046.9
   Less: Promotional Allowances ...          98.2           86.5          111.7          119.1          209.9          205.7
                                       ----------     ----------     ----------     ----------     ----------     ----------
       Net Revenues ...............         354.1          309.0          534.2          532.3          888.3          841.2
                                       ----------     ----------     ----------     ----------     ----------     ----------
Costs & Expenses:
     Gaming .......................         176.8          176.2          288.4          261.2          465.2          437.3
     Other ........................          30.0           20.5           36.3           36.1           66.2           56.7
     General & Administrative .....          76.4           72.5           97.1          101.6          173.6          174.1
     Depreciation & Amortization ..          21.9           16.3           36.7           35.6           58.6           51.9
     Trump World's Fair closing ...         124.0            0.8             --             --          124.0            0.8
                                       ----------     ----------     ----------     ----------     ----------     ----------
       Total Costs and Expenses ...         429.1          286.3          458.5          434.5          887.6          720.8
                                       ----------     ----------     ----------     ----------     ----------     ----------
Income/(loss) from Operations .....         (75.0)          22.7           75.7           97.8            0.7          120.4
                                       ----------     ----------     ----------     ----------     ----------     ----------
  Interest and Other Income .......           1.1            1.1            2.1            2.2            3.8            4.1
  Interest Expense ................         (47.5)         (47.8)         (93.6)         (93.4)        (153.8)        (153.7)
                                       ----------     ----------     ----------     ----------     ----------     ----------
  Total Non-Operating Expense .....         (46.4)         (46.7)         (91.5)         (91.2)        (150.0)        (149.6)
                                       ----------     ----------     ----------     ----------     ----------     ----------
  Net Income/(Loss) ...............    $   (121.4)    $    (24.0)    $    (15.8)    $      6.6     $   (149.3)    $    (29.2)
                                       ==========     ==========     ==========     ==========     ==========     ==========
</TABLE>

*     Intercompany eliminations and expenses of Trump AC, Trump AC Funding,
      Trump AC Funding II and Trump AC Funding III are not separately shown.

----------
(a)   On September 15, 1999, an agreement was reached between Taj Associates,
      All Star and Planet Hollywood International, Inc. to terminate the All
      Star Cafe Lease effective September 24, 1999. Upon termination of the All
      Star Cafe Lease, all property, improvements, alterations and All Star's
      personal property, with the exception of specialty trade fixtures, became
      the property of Taj Associates. Taj Associates recorded the $17,200,000
      estimated fair market value of these assets in other revenue based on an
      independent appraisal.

      Taj Associates has since remodeled the facility into an entertainment
      complex called the "Casbah," consisting of a Boardwalk level bar, a
      seasonal outdoor dining area with live entertainment and a centerpiece
      high-energy nightclub. The Casbah complex opened in June 2000.


                                     30

<PAGE>

<TABLE>
<CAPTION>
                                                                      Year Ended December 31,
                                        -------------------------------------------------------------------------------------
                                           1999          2000           1999          2000            1999           2000
                                          Plaza         Plaza            Taj           Taj            Total          Total
                                        Associates    Associates      Associates    Associates       Trump AC       Trump AC
                                        -------------------------------------------------------------------------------------
                                                                      (in millions)
<S>                                     <C>           <C>             <C>           <C>             <C>            <C>
Table Game Revenues ................    $     97.6    $     93.1      $    173.3    $    182.2      $    270.8     $    275.3
Incr (Decr) over Prior Period ......                  $     (4.5)                   $      8.9                     $      4.5
Table Game Drop ....................    $    631.5    $    648.7      $  1,079.4    $  1,071.2      $  1,710.9     $  1,719.9
Incr (Decr) over Prior Period ......                  $     17.2                    $     (8.2)                    $      9.0
Table Win Percentage ...............          15.4%         14.4%           16.1%         17.0%           15.8%          16.0%
Incr (Decr) over Prior Period ......                   (1.0) pts                       0.9 pts                        0.2 pts
Number of Table Games ..............            98            96             143           143             241            239
Incr (Decr) over Prior Period ......                          (2)                           --                             (2)

Slot Revenues ......................    $    256.9    $    227.0      $    317.1    $    333.7      $    574.0     $    560.7
Incr (Decr) over Prior Period ......                  $    (29.9)                   $     16.6                     $    (13.3)
Slot Handle ........................    $  3,250.3    $  2,905.9      $  3,996.9    $  4,313.2      $  7,247.2     $  7,219.1
Incr (Decr) over Prior Period ......                  $   (344.4)                   $    316.3                     $    (28.1)
Slot Win Percentage ................           7.9%          7.8%            7.9%          7.7%            7.9%           7.8%
Incr (Decr) over Prior Period ......                   (0.1) pts                     (0.2) pts                      (0.1) pts
Number of Slot Machines ............         3,807         2,839           4,452         4,557           8,259          7,396
Incr (Decr) over Prior Period ......                        (968)                          105                           (863)

Poker Revenues .....................            --            --      $     20.0    $     19.9      $     20.0     $     19.9
Incr (Decr) over Prior Period ......                          --                    $     (0.1)                    $     (0.1)
Number of Poker Tables .............            --            --              67            67              67             67
Incr (Decr) over Prior Period ......                          --                            --                             --

Other Gaming Revenues ..............            --            --      $      2.7    $      2.5      $      2.7     $      2.5
Incr (Decr) over Prior Period ......                          --                    $     (0.2)                    $     (0.2)

Total Gaming Revenues ..............    $    354.5    $    320.2      $    513.1    $    538.3      $    867.6     $    858.5
Incr (Decr) over Prior Period ......                  $    (34.3)                   $     25.2                     $     (9.1)

Number of Guest Rooms ..............         1,283           904           1,250         1,250           2,533          2,154
Occupancy Rate .....................          89.9%         88.8%           95.2%         93.3%           92.5%          91.4%
Average Daily Rate (Room Revenue) ..    $    84.25    $    80.29      $    88.81    $    84.47      $    86.56     $    82.38
</TABLE>

      Gaming revenues are the primary source of Trump AC's revenues. Table game
revenues increased approximately $4.5 million or 1.7% from the comparable period
in 1999 due to increased volumes and an improved table win percentage at the Taj
Mahal. Overall Trump AC's table win percentage increased to 16.0% from 15.8% in
the comparable period in 1999. Table game revenues represent the amount retained
by Trump AC from amounts wagered at table games. The table win percentage tends
to be fairly constant over the long term, but may vary significantly in the
short term, due to large wagers by "high rollers". The Atlantic City industry
table win percentages were 15.3% and 15.4% for the years ended December 31, 1999
and 2000, respectively.

      Slot revenues decreased approximately $13.3 million or 2.3% from the
comparable period in 1999. Slot revenues at the Taj Mahal increased
approximately $16.6 million or 5.2% from the comparable period in 1999 but were
offset by a decline at Trump Plaza due to the closing of Trump World's Fair.

      Other non-gaming revenues and their associated expenses, as well as
Depreciation & Amortization were reduced from the comparable period in 1999 due
to the closing of Trump World's Fair. Additionally, 1999 Other non-gaming
revenues at the Taj Mahal included a one time nonrecurring gain on the lease
termination of the All Star Cafe in the amount of $17.2 million.

      Gaming costs and expenses decreased approximately $27.9 million or 6.0%
from the comparable period in 1999. Gaming costs and expenses at the Trump Plaza
decreased approximately $.6 million or .3% due to the closing of Trump World's
Fair offset by increases in Promotional Costs. Gaming cost and expenses at the
Taj Mahal decreased approximately $27.2 million or 9.4% due primarily to reduced
gaming bad debt expenses.

      General and Administrative expenses increased approximately $0.5 million
from the comparable period in 1999. General and Administrative expenses at Trump
Plaza decreased approximately $3.9 million or 5.1% from the comparable period in
1999 due to the closing of Trump World's Fair. Expenses at the Taj Mahal
increased approximately $4.5 million or 4.6% from the comparable period in 1999
primarily due to additional entertainment costs resulting from a higher ratio of
cash to complimentary ticket sales, CRDA donations as well as increases in
regulatory costs, utilities expense, real estate taxes and insurance reserves.


                                     31

<PAGE>

Seasonality

      Cash flows from the Trump Plaza and the Taj Mahal operating activities are
seasonal in nature, with spring and summer traditionally being peak seasons and
autumn and winter being non-peak seasons. Consequently, the Company's operating
results during the two quarters ending in March and December are not
historically as profitable as the two 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 the
Trump Plaza and the Taj Mahal are unable to generate excess cash flows in one or
more peak seasons, they may not be able to subsidize non-peak seasons, if
necessary.

Inflation

      There was no significant impact on operations as a result of inflation
during 1999, 2000 or 2001.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

      Management has reviewed the disclosure requirements for Item 7A and, based
upon the Registrants' current capital structure, scope of operations and
financial statement structure, management believes that such disclosure is not
warranted at this time. Since conditions may change, the Registrants' will
periodically review its compliance with this disclosure requirement to the
extent applicable.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

      An index to financial statements and required financial statement
schedules is set forth in Item 14 of this Form 10-K.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

      None.


                                       32

<PAGE>

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANTS.

Management of Trump AC, Trump AC Funding, Funding II and Funding III

      THCR is the sole general partner of THCR Holdings. As the sole general
partner of THCR Holdings, THCR generally has the exclusive rights,
responsibilities and discretion in the management and control of THCR Holdings.
THCR Holdings owns 100.0% of Trump AC, directly and through its ownership of
Trump AC Holding. Trump AC Funding, Funding II and Funding III are wholly owned
subsidiaries of Trump AC. Trump AC and TACC are the general partners of Plaza
Associates and Taj Associates. The Board of Directors of each of Trump AC
Funding, Funding II and Funding III consists of Messrs. Trump, Robert M. Pickus,
Wallace B. Askins and Don M. Thomas. The TAC I Note Indenture, TAC II Note
Indenture and TAC III Note Indenture each requires that two directors of Trump
AC Funding, Funding II and Funding III be persons who would qualify as
"Independent Directors" as such term is defined by the rules of the American
Stock Exchange, Inc. ("Amex") (the "Independent Directors"). The Amex rules
define "Independent Directors" as those who are not officers of the company, are
neither related to its officers nor represent concentrated family holdings of
its shares and who, in view of the company's Board of Directors, are free of any
relationship that would interfere with the exercise of independent judgment.
Messrs. Askins and Thomas are deemed to be Independent Directors.

      Set forth below are the names, ages, positions and offices held with the
Registrants and a brief account of the business experience during the past five
years of each member of the board of directors of Trump AC Funding, Funding II
and Funding III and of the executive officers of the Registrants.

<TABLE>
<CAPTION>
                                                              Position(s) and Office(s) with:
                                 ------------------------------------------------------------------------------------------
Name                                   Trump AC          Trump AC Funding            Funding II              Funding III
----                             -------------------   -------------------      -------------------     -------------------
<S>                              <C>                   <C>                      <C>                     <C>
Donald J. Trump ..............   President and Chief   Chairman, President      Chairman, President     Chairman, President
                                 Executive Officer     and Chief Executive      and Chief Executive     and Chief Executive
                                                       Officer                  Officer                 Officer

Mark A. Brown ................   Chief Operating       --                       --                      --
                                 Officer

Robert M. Pickus .............   Executive Vice        Secretary and Director   Secretary and Director  Secretary and Director
                                 President and
                                 Secretary

Francis X. McCarthy, Jr......    Executive Vice        Executive Vice           Executive Vice          Executive Vice
                                 President of Corp.    President                President of Corp.      President of Corp.
                                 Fin. and Chief        of Corp. Fin. and        Fin. and Chief          Fin. and Chief
                                 Financial Officer     Chief Financial Officer  Financial Officer       Financial Officer

John P. Burke ................   Executive Vice        Treasurer                Treasurer               Treasurer
                                 President and
                                 Corporate Treasurer

Joseph A. Fusco ..............   Executive Vice        --                       --                      --
                                 President of
                                 Government
                                 Relations/
                                 Regulatory Affairs

Wallace B. Askins ............   --                    Director                 Director                Director

Don M. Thomas ................   --                    Director                 Director                Director
</TABLE>

      Donald J. Trump (55 years old) has been serving as the President and Chief
      ---------------
Executive Officer of each of THCR, THCR Funding and THCR Holdings since June
2000. Also since June 2000, Trump has been serving as the (i) President of each
of Trump AC Holding, Trump AC, Trump AC Funding, Funding II, Funding III, TACC
and THCR Enterprises, Inc.; (ii) President and Chief Executive Officer of each
of Trump Indiana, Castle Funding and TCHI; (iii) President and Treasurer of
THCR/LP; and (iv) Chief Executive Officer of Taj Associates. Since June 1998,
Trump has been serving as the President, Treasurer and sole director of TCI.
Until April 1998, Trump served as the President and Treasurer of Castle Funding.
Since November 1997, Trump has been serving as the Chairman of each of Funding
II and Funding III, and as the Chairman of THCR Enterprises, Inc. since January
1997. Since January 1996, he has been serving as the Chairman of Trump AC
Funding. Since March 1995, Trump has been the Chairman of each of THCR, THCR
Funding and THCR Holdings. Since February 1993, Trump has been the Chairman of
Trump AC Holding. Since December 1992, Trump has been serving as the sole
director of Trump Indiana. Since May 1992, Trump has been the Chairman of the
Board of Partner Representatives of Castle Associates. Since November 1991,
Trump has been serving as the President, Treasurer and sole director of TCI-II.
Since October 1991, he has been the Chairman of each of THCR Holding Corp. and
THCR/LP. Since March 1991,


                                     33

<PAGE>

Trump has been the President and Treasurer of THCR Holding Corp. and the sole
director of TACC. Since May 1986, he has been serving as the President and sole
director of Realty Corp. Since March 1986, he has been the Chairman, President
and Treasurer of Plaza Funding. Since March 1985, Trump has been the Chairman of
TCHI. From February 1993 through December 1997, Trump served as the President of
Trump AC Holding. From March 1991 through December 1997, Trump served as the
President and Treasurer of TACC. Trump is also currently the President and Chief
Executive Officer of The Trump Organization, Inc. which has been in the
business, through its affiliates and subsidiaries, of acquiring, developing and
managing real estate properties for more than the past five years.

      Mark A. Brown (41 years old) has been serving as the Chief Operating
      -------------
Officer of each of THCR and Trump AC since June 2000. Also since June 2000, Mr.
Brown has been serving as the Chief Executive Officer of each of Taj Associates,
Plaza Associates, Castle Associates and Trump Indiana. From January 2000, Mr.
Brown has been the Chief Operating Officer of Taj Associates. Until January
2000, he served as a Vice President of TCHI. From November 1997 to January 2000,
Mr. Brown served as the President and Chief Operating Officer of Castle
Associates. From July 1995 to November 1997, he served as the Executive Vice
President of Operations of Castle Associates.

      Robert M. Pickus (47 years old) has been the Executive Vice President,
      ----------------
General Counsel and Secretary of THCR since March 1995. Since June 2000, Mr.
Pickus has been the Secretary and Vice President of THCR/LP. Since April 2000,
he has been serving as the Executive Vice President and General Counsel of each
of THCR Holdings and Trump AC. Since April 1998, Mr. Pickus has been the
Secretary of Castle Funding. Since February 1998, he has been serving as the (i)
Secretary of each of TACC and Trump AC Holding and (ii) Assistant Secretary and
a director of TCHI. Until February 1998, Mr. Pickus served as the Assistant
Secretary of TACC. Since January 1997, Mr. Pickus has been serving as the (i)
Secretary of THCR Holding Corp. and (ii) Vice President, Secretary and a
director of THCR Enterprises, Inc. Since November 1997, he has been serving as a
director of each of Funding II and Funding III. Since February 1996, Mr. Pickus
has been serving as the Secretary of Castle Associates. Since January 1996, he
has been serving as the Secretary and a director of Trump AC Funding. Since
October 1995, Mr. Pickus has been serving as a member of the Board of Partner
Representatives of Castle Associates. Since February 1995, he has been serving
as the Executive Vice President of Corporate and Legal Affairs of each of Taj
Associates, Plaza Associates and Castle Associates. Since December 1992, Mr.
Pickus has been serving as the Executive Vice President and Secretary of Trump
Indiana. Since March 1986, Mr. Pickus has been serving as the Vice President and
Secretary of Plaza Funding. From April to December 2000, Mr. Pickus served as
the President of TCS. From June 1996 to April 2000, he served as the Executive
Vice President of TCS. From November 1995 to May 2000, Mr. Pickus served as a
director of each of THCR Holding Corp. and THCR/LP. From April 1994 to February
1998, he served as the Assistant Secretary of Trump AC Holding. Mr. Pickus has
been admitted to practice law in the states of New York and New Jersey since
1980, and in the Commonwealth of Pennsylvania since 1981.

      Francis X. McCarthy, Jr. (49 years old) has been serving as the Executive
      ------------------------
Vice President of Corporate Finance and Chief Financial Officer of each of THCR,
THCR Holdings and THCR Funding since September 1998. Since August 2000, Mr.
McCarthy has been the (i) Chief Financial Officer of Castle Associates and (ii)
Chief Financial Officer, Chief Accounting Officer and Assistant Treasurer of
Castle Funding. Since September 1998, he has been the Chief Financial Officer of
each of Trump AC, Trump AC Funding, Funding II and Funding III. From October
1996 to December 2000, Mr. McCarthy served as the Executive Vice President of
Corporate Finance of TCS.

      John P. Burke (54 years old) has been serving as the Executive Vice
      -------------
President of each of THCR, THCR Holdings, THCR Funding and Trump AC since
January 1999. Since April 1998, he has been serving as the Assistant Treasurer
of TCHI. Since February 1998, Mr. Burke has been the (i) Assistant Treasurer of
each of THCR Holding Corp. and THCR/LP and (ii) Treasurer of TACC. Since
November 1997, he has been serving as the Treasurer of each of Funding II and
Funding III. Since March 1997, Mr. Burke has been serving as a member of the
Board of Partner Representatives of Castle Associates. Since January 1997, he
has been a Vice President and the Treasurer of THCR Enterprises, Inc. Since
January 1996, Mr. Burke has been the Treasurer of Trump AC Funding. Since March
1995, he has been serving as the Corporate Treasurer of each of THCR, THCR
Holdings, THCR Funding and Trump AC. Since December 1993, Mr. Burke has been
serving as a Vice President of each of Castle Associates, Castle Funding, TCI-II
and TCHI. Since December 1992, Mr. Burke has been the Treasurer of Trump
Indiana. Since October 1991, he has been the Corporate Treasurer of each of Taj
Associates, Plaza Associates and Castle Associates. From June 1997 to January
1999, Mr. Burke served as a Senior Vice President of each of THCR, THCR Holdings
and THCR Funding. From January 1996 to June 1997, he served as the Senior Vice
President of Corporate Finance of THCR.

      Joseph A. Fusco (57 years old) has been serving as the Executive Vice
      ---------------
President of Government Relations & Regulatory Affairs of each of THCR, THCR
Holdings and Trump AC since June 1996 and of TCS from July 1996 until December
2000. From August 1985 to June 1996, Mr. Fusco practiced law as a partner in
various Atlantic City law firms specializing in New Jersey casino regulatory,
commercial and administrative law matters, most recently from January 1994 to
June 1996 as a partner in the law firm of Sterns & Weinroth, P.C., located in
Atlantic City. Mr. Fusco previously served as Atlantic County Prosecutor, a
Gubernatorial appointment, from April 1981 to July 1985 and as Special Counsel
for Licensing for the CCC from the inception of that agency in September 1977 to
March 1981. Mr. Fusco has been admitted to practice law in the state of New
Jersey since 1969.

      Wallace B. Askins (71 years old) has been serving as a director of each of
      -----------------
THCR and THCR Funding since June 1995. Since December 1997, Mr. Askins as been a
director of Funding II and Funding III. Since April 1996, he has been serving as
a director of Trump AC Funding. Since April 1994, Mr. Askins has been serving as
a director of Trump AC Holding. Mr. Askins also serves as a director of
EnviroSource, Inc., a waste and recycling management company.


                                     34

<PAGE>

      Don M. Thomas (71 years old) has been serving as a director of each of
      -------------
THCR and THCR Funding since June 1995. Since December 1997, Mr. Thomas has been
serving as a director of each of Funding II and Funding III. Since April 1996,
he has been a director of Trump AC Funding. Since 1983, Mr. Thomas has been a
director of Trump AC Holding. Since January 1985, Mr. Thomas has been serving as
the Senior Vice President of Corporate Affairs of the Pepsi-Cola Bottling Co. of
New York. From 1985 through 1987, Mr. Thomas served as a Commissioner and the
acting Chairman of the CRDA, and a Commissioner of the CCC from 1980 through
1984 during a portion of which time Mr. Thomas also served as the acting
Chairman. Mr. Thomas is an attorney licensed to practice law in the state of New
York.

      The officers of the Registrants serve at the pleasure of the Board of
Directors of THCR, subject to any contractual rights contained in any employment
agreement. See "Executive Compensation; Employment Agreements, Termination of
Employment and Change-in-Control Arrangements."

      All of the persons listed above are citizens of the United States and have
been qualified or licensed by the CCC. THCR is the general partner of THCR
Holdings. As the sole general partner of THCR Holdings, THCR generally has the
exclusive rights, responsibilities and discretion in the management and control
of THCR Holdings.

Management of Plaza Associates

      Trump AC is the managing general partner of Plaza Associates. Trump AC
Holding is the managing general partner of Trump AC. The Board of Directors of
Trump AC Holding consists of Messrs. Trump (Chairman), Askins and Thomas.

      Set forth below are the names, ages, positions and offices held with Plaza
Associates and a brief summary of the business experience during the past five
years of each of the executive officers of Plaza Associates other than those who
are also directors or executive officers of THCR.

      Matthew A. Harkness (45 years old) has been the Chief Operating Officer of
      -------------------
Plaza Associates since January 2001. Mr. Harkness served as Senior Vice
President of Marketing at the Taj Mahal throughout 2000. From September 1995 to
December 1999, Mr. Harkness served as the Executive Director of Marketing at
Trump Marina. Mr. Harkness has served in various Atlantic City casinos in
operational and marketing capacities since 1979.

      Theresa Glebocki (40 years old) has been the Vice President of Finance of
      ----------------
Plaza Associates since September 2000. Ms. Glebocki served as the Executive
Director of Finance of Plaza Associates and TCS from November 1996 until
September 2000, and Financial Controller of Plaza Associates from 1991 until
1996. Prior to that, Ms. Glebocki held various financial positions at Bally's
Grand (now the Atlantic City Hilton).

      All of the persons listed above are citizens of the United States and are
licensed by the CCC.

Management of Taj Associates

      Trump AC is the managing general partner of Taj Associates. Trump AC
Holding is the managing general partner of Trump AC. The Board of Directors of
Trump AC Holding consists of Messrs. Trump (Chairman), Askins and Thomas.

      Set forth below are the names, ages, positions and offices held with Taj
Associates and a brief summary of the business experience during the past five
years of each of the executive officers and certain key employees of Taj
Associates other than those who are also directors or executive officers of the
Registrants.

      Mark A. Brown--See "--Management of Trump AC, Trump AC Funding, Funding II
      -------------
and Funding III."

      Stephen S. Oskiera (43 years old) serves as the Senior Vice President of
      ------------------
Finance of Taj Associates since January 2000. Mr. Oskiera previously served as
the Vice President of Finance of TCS from November 1999 until January 2000 and
as Vice President of Finance of Castle Associates from October 1998 until
November 1999. Mr. Oskiera served as Executive Director of Finance for both
Castle Associates and TCS from October 1995 to October 1998. Previously, Mr.
Oskiera served as Corporate Controller of American Gaming & Entertainment, Ltd.,
a casino development company, from December 1993 to October 1995 and, prior to
that, served as Financial Controller for Greate Bay Hotel & Casino, Inc. d/b/a/
the Sands Hotel & Casino in Atlantic City, New Jersey from May 1987 to December
1993.

      All of the persons listed above are citizens of the United States and are
licensed by the CCC.

Section 16(a) Beneficial Ownership Reporting Compliance

      Not applicable


                                       35

<PAGE>

ITEM 11. EXECUTIVE COMPENSATION.

      Plaza Associates and Taj Associates do not offer their executive officers
stock option or stock appreciation right plans, long-term incentive plans or
defined benefit pension plans.

      The following table sets forth compensation paid or accrued during the
years ended December 31, 2001, 2000 and 1999 to the Chairman of the Board of
Trump AC Holding, the Chief Executive Officer of Plaza Associates and Taj
Associates, and any person who served in such capacities during the fiscal year
ended December 31, 2001, and each of the four most highly compensated executive
officers of Plaza Associates and Taj Associates whose salary and bonus exceeded
$100,000 for the year ended December 31, 2001 (collectively, the "Named
Executive Officers").

                           Summary Compensation Table

<TABLE>
<CAPTION>
                                                                     Annual Compensation
                                                      ------------------------------------------------
                                                                                           All Other
         Name and Principal Position                  Year      Salary        Bonus       Compensation
         ---------------------------                  ----    ----------    ----------    ------------
<S>                                                   <C>     <C>           <C>           <C>
Donald J. Trump ....................................  2001    $       --    $       --    $       --
    -Chairman of the Board of Directors and           2000    $       --    $       --    $       --
     President of Trump AC Holding (I)                1999    $       --    $       --    $       --

Mark A. Brown ......................................  2001    $1,146,462    $       --    $    4,500(2)
    -President and Chief Executive Officer of         2000    $  788,710    $  175,036    $    3,932(2)
     Plaza Associates and Taj Associates              1999    $       --    $       --    $       --

Matthew A. Harkness ................................  2001    $  247,414    $       --    $    4,296(2)
    -Chief Operating Officer of Trump Plaza           2000    $  157,415    $       --    $    4,372(2)
                                                      1999    $       --    $       --    $       --

Stephen S. Oskiera .................................  2001    $  164,754    $       --    $    5,100(2)
    -Senior Vice President of Finance of Taj
     Associates                                       2000    $  150,308    $       --    $    4,510(2)
                                                      1999    $       --    $       --    $       --

Theresa Glebocki ...................................  2001    $  143,849    $       --    $    4,315(2)
    -Vice President of Finance of Plaza Associates    2000    $  131,335    $       --    $    3,845(2)
                                                      1999    $       --    $       --    $       --
</TABLE>

----------
(1)   Mr. Trump is compensated for his services rendered to Plaza Associates and
      Taj Associates pursuant to an Executive Agreement, dated June 12, 1995,
      among Mr. Trump, THCR and THCR Holdings.

(2)   Represents vested and unvested contributions made by Plaza Associates, Taj
      Associates, and/or TCS to Trump Plaza Hotel and Casino Retirement Savings
      Plan, Trump Taj Mahal Retirement Savings Plan and Trump Casino Services
      Retirement Savings Plan, respectively. Funds accumulated for an employee
      under these plans consisting of a certain percentage of the employee's
      compensation plus the employer matching contributions equaling 50.0% of
      the participant's contributions, are retained until termination of
      employment, attainment of age 591/2 or financial hardship, at which time
      the employee may withdraw his or her vested funds.

Employment Agreements, Termination of Employment and Change-in-Control
Arrangements

      Mark A. Brown. On January 4, 2000, Mr. Brown's employment agreement with
Castle Associates, dated as of March 6, 1998, was amended and assigned to Taj
Associates (the "Brown Employment Agreement"). The Brown Employment Agreement
was to expire on January 2, 2003, and provided for annual compensation of
$600,000, $650,000, and $700,000 during years 2000, 2001, and 2002,
respectively. On August 4, 2000, the Brown Employment Agreement was amended,
effective as of July 1, 2000 ("Brown Amended Employment Agreement"), to confirm
Brown's employment as President and Chief Executive Officer of each of Taj
Associates, Plaza Associates, Castle Associates and Trump Indiana (collectively,
the "Trump Entities"), subject to necessary licensing by the Indiana Gaming
Commission. The Brown Amended Employment Agreement expires on July 31, 2003.
During the term of the Brown Amended Employment Agreement, Brown is to receive
an annual salary of (i) $1.0 million, effective as of July 1, 2000, (ii) $1.1
million, commencing January 1, 2001, and (iii) $1.2 million, commencing January
1, 2002. Upon 180 days' notice prior to expiration, the Brown Amended Employment
Agreement may be extended by the Trump Entities to July 31, 2005. If so
extended, Brown is to receive an annual salary of (i) $1.3 million, commencing
August 1, 2003, and (ii) $1.4 million, commencing August 1, 2004. Brown's
employment may be terminated by the Trump Entities for "Cause," defined as (i)
the revocation of Mr. Brown's casino key employee license, (ii) Mr. Brown's
conviction for certain crimes, (iii) Mr. Brown's disability or death or (iv) Mr.
Brown's breach of loyalty to the Trump Entities. Upon termination for "Cause,"
Mr. Brown is entitled to receive compensation earned as of the date


                                      36

<PAGE>

of termination; provided, however, that if Mr. Brown's employment is terminated
due to Mr. Brown's death or disability, Mr. Brown or his estate will be entitled
to a lump sum severance payment equal to six months' compensation based on his
then current salary. Mr. Brown may terminate the Brown Amended Employment
Agreement at any time following a "Change of Control," effective on the 30th day
after such notice, and Mr. Brown shall be entitled to receive a lump sum payment
for the full amount of unpaid compensation for the full term of the Brown
Amended Employment Agreement. "Change of Control" is defined as (i) the
acquisition of (x) the Trump Entities or (y) more than thirty-five percent
(35.0%) of THCR's Common Stock, or equivalent limited partnership interests of
THCR Holdings, by an unrelated party or (ii) the sale or long-term lease of all
or substantially all of the assets of Trump Entities. Also, in the event Mr.
Brown is transferred to a position located outside of Atlantic City, New Jersey,
Mr. Brown shall have the right to terminate his employment within seven days of
the occurrence of such transfer and be entitled to receive a severance payment
equal to three months' compensation based on his then current salary. During the
term of the Brown Amended Employment Agreement, Mr. Brown has agreed not to
obtain employment for or on behalf of any other casino hotel located in Atlantic
City, New Jersey.

      Stephen S. Oskiera. On March 1, 2001 Taj Associates entered into an
employment agreement with Mr. Oskiera ("the Oskiera Agreement") pursuant to
which Mr. Oskiera serves as Senior Vice President of Finance. The Oskiera
agreement, the terms of which expires June 30, 2003, if not extended, provides
for $160,000 annual compensation. Mr. Oskiera's employment may be terminated by
Taj Associates for "cause" defined as (i) the revocation of Mr. Oskiera's casino
key employee license, (ii) Mr. Oskiera's conviction for certain crimes, (iii)
Mr. Oskiera's disability or death or (iv) Mr. Oskiera's breach of duty to the
Trump Companies. Upon termination for cause Mr. Oskiera will earn compensation
earned as of the date of termination. Taj Associates may terminate the Oskiera
Agreement at any time for "no cause" and Mr. Oskiera will be entitled to
compensation in an amount equal to the lesser of six (6) months or the number of
months then remaining in this agreement

Compensation of Directors

      Each of the directors of Trump AC Funding, Funding II and Funding III
currently serves as an officer or a member of the Board of Directors of THCR,
and receives no additional compensation for services rendered to Trump AC
Funding, Funding II or Funding III. Directors of THCR who are also employees or
consultants of THCR or its affiliates receive no directors' fees. Non-employee
directors are paid a stipend of $50,000 per year, plus $2,000 per meeting
attended and reasonable out-of-pocket expenses incurred in attending such
meetings.

Compensation Committee Interlocks and Insider Participation

      In general, the compensation of executive officers of Plaza Associates and
Taj Associates is determined by Trump AC Holding, Trump AC's managing general
partner. During the fiscal year ended December 31, 2001, no officer or employee
of Trump AC Holding, other than Mr. Trump who served on the Board of Directors
of Trump AC Holding, participated in the deliberations concerning executive
compensation.

Certain Related Party Transactions

      Trump AC. Beginning in late 1997, Trump Plaza and the Taj Mahal began to
utilize certain facilities owned by Trump to entertain high-end customers.
Management believes that the ability to utilize these facilities has enhanced
Trump AC's revenues. In 1999, 2000 and 2001, Trump AC incurred approximately
$1.6 million, $386,000 and $302,000, respectively, for customer costs associated
with such utilization. In exchange for having Trump's airplane available to
customers of Trump Plaza and the Taj Mahal, Trump AC has incurred pilot costs of
approximately $238,000, $241,000 and $239,000, for the years ended December 31,
1999, 2000 and 2001, respectively.

      Taj Associates. In September 1992, Taj Associates had entered into the Taj
Mahal Trump Tower Lease with Trump-Equitable Company for the lease of office
space in the Trump Tower in New York City for marketing purposes. The monthly
payments under the lease had been $1,000, and the premises were leased at such
rent for four months in 1992, the full 12 months in each of 1993 and 1994 and
eight months in 1995. On September 1, 1995, the Taj Mahal Trump Tower Lease was
renewed for an additional term of five years with an option for Taj Associates
to terminate the Taj Mahal Trump Tower Lease on September 1st of each year, upon
six months' prior written notice and payment of the six months' rent. Under the
renewed Taj Mahal Trump Tower Lease, the monthly payments were $2,285. In March
2000, THCR assumed the Taj Mahal Trump Tower Lease and moved to this office
space from its previous location in Trump Tower.

      Other Relationships. The Commission requires registrants to disclose the
existence of any other corporation in which both (i) an executive officer of the
registrant serves on the board of directors and/or compensation committee, and
(ii) a director of the registrant serves as an executive officer. Messrs. Pickus
and Burke, executive officers of the Registrants, have served on the boards of
directors of other entities in which members of the Board of Directors of THCR
(namely, Mr. Trump) served and continue to serve as executive officers.
Management believes that such relationships have not affected the decisions made
by the Board of Directors of Trump AC Funding, Funding II and Funding III in the
last fiscal year.

      Mr. Trump serves as the Chairman of the Board of Directors of THCR.
Messrs. Brown, Pickus, McCarthy, Burke and Fusco are executive officers of THCR
and are compensated for their services by THCR.


                                       37

<PAGE>

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

      Trump AC. Through its ownership of 100.0% of Trump AC Holding, THCR
Holdings currently beneficially owns 100.0% of Trump AC.

      Trump AC Funding. Through its ownership of 100.0% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100.0% of Trump AC Funding's common stock since
Trump AC Funding's formation in January 1996.

      Funding II. Through its ownership of 100.0% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100.0% of Funding II's common stock since
Funding II's formation in November 1997.

      Funding III. Through its ownership of 100.0% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100.0% of Funding II's common stock since
Funding III's formation in November 1997.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

      Affiliate party transactions are governed by the provisions of the TAC I
Note Indenture, the TAC II Note Indenture and the TAC III Note Indenture which
provisions generally require that such transactions be on terms as favorable as
would be obtainable from an unaffiliated party, and require the approval of a
majority of the independent directors of Trump AC Funding, Funding II or Funding
III, as applicable.

      Trump and certain affiliates have engaged in certain related party
transactions with respect to THCR and its subsidiaries. See "Executive
Compensation-Compensation Committee Interlocks and Insider Participation-Certain
Related Party Transactions-Trump AC," "-Taj Associates" and "-Other
Relationships."

      Indemnification Agreements. In addition to the indemnification provisions
in THCR's and its subsidiaries' employment agreements (see "Executive
Compensation-Employment Agreements"), certain former and current directors of
Plaza Funding entered into separate indemnification agreements in May 1992 and
June 1993 with Plaza Associates pursuant to which such persons are afforded the
full benefits of the indemnification provisions of the partnership agreement
governing Plaza Associates. Plaza Associates also entered into an
indemnification trust agreement in November 1992 with Midlantic (the
"Indemnification Trustee") pursuant to which the sum of $100,000 was deposited
by Plaza Associates with the Indemnification Trustee for the benefit of the
directors of Plaza Funding and certain former directors of Trump Plaza GP to
provide a source for indemnification for such persons if Plaza Associates, Plaza
Funding or Trump Plaza GP, as the case may be, fails to immediately honor a
demand for indemnification by such persons. The indemnification agreements with
the directors of Plaza Funding and directors of Trump Plaza GP were amended in
June 1993 to provide, among other things, that Plaza Associates would (i) not
terminate, amend or modify certain agreements in a manner which may adversely
affect the rights or interests of such directors unless an additional sum of
$600,000 was first deposited with the Indemnification Trustee, and (ii) maintain
directors' and officers' insurance covering such persons during the ten-year
term (subject to extension) of the indemnification agreements; provided,
however, that if such insurance would not be available on a commercially
practicable basis, Plaza Associates could, in lieu of obtaining such insurance,
annually deposit an amount in a trust fund equal to $500,000 for the benefit of
such directors; provided further that deposits relating to the failure to obtain
such insurance shall not exceed $2.5 million. Such directors are covered by
directors' and officers' insurance maintained by Plaza Associates. In June 1993,
an additional sum of $600,000 was deposited with the Indemnification Trustee for
the benefit of the directors of Plaza Funding and certain former directors of
Trump Plaza GP.

      In connection with the Taj Acquisition, Trump AC has agreed to provide to
the former officers and Directors of THCR Holding Corp. and THCR/LP (the "Taj
Indemnified Parties"), including Messrs. Pickus and Burke, indemnification as
provided in the THCR's Amended and Restated Certificate of Incorporation and
Amended and Restated By-Laws until April 17, 2002. In addition, THCR agreed, and
agreed to cause THCR Holding Corp. and THCR/LP to agree, that until April 17,
2002, unless otherwise required by law, the Certificate of Incorporation and
By-Laws of THCR Holding Corp. and THCR/LP shall not be amended, repealed or
modified to reduce or limit the rights of indemnity afforded to the former
directors, officers and employees of THCR Holding Corp. and THCR/LP or the
ability of THCR Holding Corp. or THCR/LP to indemnify such persons, nor to
hinder, delay or make more difficult the exercise of such rights of indemnity or
the ability to indemnify. In addition, Trump AC has also agreed to purchase and
maintain in effect, until April 17, 2002, directors' and officers' liability
insurance policies covering the Taj Indemnified Parties on terms no less
favorable than the terms of the then current insurance policies' coverage or, if
such directors' and officers' liability insurance is unavailable for an amount
no greater than 150.0% of the premium paid by THCR Holding Corp. (on an
annualized basis) for directors' and officers' liability insurance during the
period from January 1, 1996, to April 17, 1996, Trump AC has agreed to obtain as
much insurance as can be obtained for a premium not in excess (on an annualized
basis) of such amount.

      In March 2000, the Board of Directors of THCR authorized and directed THCR
to cause Taj Associates and Plaza Associates to enter into indemnification
agreements with each of the Directors of THCR in connection with the performance
of their duties as Directors.


                                  38

<PAGE>

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.

      (a)   Financial Statements. See the index immediately following the
            signature page.

      (b)   Reports on Form 8-K. On October 31, 2001, the Registrants filed a
            Current Report on Form 8-K with the Commission therein announcing
            that the THCR is seeking to negotiate the terms of THCR's and its
            subsidiaries' public debt and was withholding interest payments
            thereon until such as discussions between THCR and the bondholders
            had commenced. The following debt issues of THCR and its
            subsidiaries have been affected: (i) THCR Holdings' and THCR
            Funding's 15-1/2% Senior Secured Notes due 2005; (ii) each of Trump
            AC's and (A) Trump AC Funding' s (B) Funding II's and (C) Funding
            III's 11-1/4% Mortgage Notes due 2006; (iii) Castle Associates' and
            Castle Funding's 10-1/4% Senior Notes due 2003; (iv) Castle
            Associates' and Castle Funding's 11-3/4% Mortgage Notes due 2003 and
            (v) Castle Associates' and TCHI's 10-1/4% Senior Notes due 2003.
            THCR is seeking to negotiate the terms of the public debt in light
            of the economic consequences of the September 11th terrorist attacks
            on the World Trade Center which have led New York State to approve
            the largest gambling package in its history, including six casinos,
            three of which will be ninety minutes away from Manhattan in the
            Catskills, and video slot machines at numerous racetracks, including
            Aqueduct in New York City and Yonkers. See "Business; Recent
            Events"; "-Certain Indebtedness"; "-Competition; New York State
            Legislation" and "Management's Discussion and Analysis of
            Financial Condition and Results of Operations; Financial
            Condition-Liquidity and Capital Resources; Summary of Certain
            Debt; TAC Notes."

            The Registrants subsequently filed a Current Report on Form 8-K with
            the Commission on November 28, 2001, therein announcing that THCR
            had decided to make interest payments in the aggregate amount of
            approximately $91.0 million on the overdue debt issues based upon
            the establishment of the Bondholders Committee for the purpose of
            good faith negotiations between the bondholders and THCR. See
            "Business; Recent Events"; "-Certain Indebtedness"; "-Competition;
            New York State Legislation" and "Management's Discussion and
            Analysis of Financial Condition and Results of Operations;
            Financial Condition-Liquidity and Capital Resources; Summary of
            Certain Debt; TAC Notes."

      (c)   Exhibits.

3.1.1(19)   Certificate of Incorporation of Trump Atlantic City Funding, Inc.
            (formerly THCR Atlantic City Funding, Inc.)

3.1.2(19)   Certificate of Amendment of Certificate of Incorporation of Trump
            Atlantic City Funding, Inc. (formerly THCR Atlantic City Funding,
            Inc.).

3.2(19)     By-Laws of Trump Atlantic City Funding, Inc. (formerly THCR Atlantic
            City Funding, Inc.)

3.3-3.7     Intentionally omitted.

3.8.1(5)    Partnership Agreement of Trump Atlantic City Associates (formerly
            Trump Plaza Holding Associates).

3.8.2(5)    Amendment No. 1 to the Partnership Agreement of Trump Atlantic City
            Associates (formerly Trump Plaza Holding Associates).

3.8.3(12)   Amendment No. 2 to the Partnership Agreement of Trump Atlantic City
            Associates (formerly Trump Plaza Holding Associates).

3.8.4(20)   Amended and Restated Partnership Agreement of Trump Atlantic City
            Associates.

3.9.1(4)    Agreement and Plan of Merger between TP/GP Corp. and Trump Plaza
            Funding, Inc.

3.9.2(19)   Form of Second Amended and Restated Agreement of Limited Partnership
            of Trump Hotels & Casino Resorts Holdings, L.P.

3.10(25)    Certificate of Incorporation of Trump Atlantic City Funding II, Inc.

3.11(25)    By-Laws of Trump Atlantic City Funding II, Inc.

3.12(24)    Certificate of Incorporation of Trump Atlantic City Funding III,
            Inc.

3.13(24)    By-Laws of Trump Atlantic City Funding III, Inc.

3.14(26)    Certificate of Incorporation of Trump Atlantic City Corporation, as
            amended.

3.15(26)    By-Laws of Trump Atlantic City Corporation.


                                       39

<PAGE>

3.16(25)    Certificate of Formation of Trump Casino Services, L.L.C.

3.17(25)    Operating Agreement of Trump Casino Services, L.L.C.

3.18(25)    Certificate of Formation of Trump Communications, L.L.C.

3.19(25)    Operating Agreement of Trump Communications, L.L.C.

3.20(26)    Third Amended and Restated Partnership Agreement of Trump Plaza
            Associates, dated April 17, 1996, by and between Trump Atlantic City
            Associates, Trump Plaza Funding, Inc. and Trump Taj Mahal
            Corporation (now known as Trump Atlantic City Corporation).

3.21(26)    Second Amended and Restated Partnership Agreement of Trump Taj Mahal
            Associates, dated April 17, 1996, by and between Trump Atlantic City
            Associates, TM/GP Corporation (now known as THCR/LP Corporation),
            Trump Taj Mahal Corporation (now known as Trump Atlantic City
            Corporation) and Trump Taj Mahal, Inc. (now known as Trump Casinos,
            Inc.).

3.22        Agreement and Plan of Merger, dated as of December 27, 2000, between
            Trump Taj Mahal Associates and Trump Casino Services, L.L.C.

4.1(5)      Mortgage Note Indenture, among Trump Plaza Funding, Inc., as issuer,
            Trump Plaza Associates, as guarantor, and First Bank National
            Association, as trustee.

4.2(5)      Indenture of Mortgage, between Trump Plaza Associates, as mortgagor,
            and Trump Plaza Funding, Inc., as mortgagee.

4.3(5)      Assignment Agreement between Trump Plaza Funding, Inc. and First
            Bank National Association, as trustee.

4.4(5)      Assignment of Operating Assets from Trump Plaza Associates to Trump
            Plaza Funding, Inc.

4.5(5)      Assignment of Leases and Rents from Trump Plaza Associates to Trump
            Plaza Funding, Inc.

4.6(5)      Indenture of Mortgage between Trump Plaza Associates and First Bank
            National Association, as trustee.

4.7(5)      Assignment of Leases and Rents from Trump Plaza Associates to First
            Bank National Association, as trustee.

4.8(5)      Assignment of Operating Assets from Trump Plaza Associates to First
            Bank National Association, as trustee.

4.9(5)      Trump Plaza Associates Note to Trump Plaza Funding, Inc.

4.10(5)     Mortgage Note Certificate (included in Exhibit 4.1).

4.11(5)     Pledge Agreement of Trump Plaza Funding, Inc., in favor and for the
            benefit of First Bank National Association, as trustee.

4.12-4.18   Intentionally omitted.

4.19.6(20)  Pledge Agreement, dated April 17, 1996, from Trump Atlantic City
            Associates, as pledgor, to 4.26.1(20) Indenture, among Trump
            Atlantic City Associates and Trump Atlantic City Funding, Inc., as
            issuers, Trump Plaza Associates, Trump Taj Mahal Associates and The
            Trump Taj Mahal Corporation, as guarantors, and First Bank National
            Association, as trustee.

4.27.1(20)  First Mortgage Note Certificate (included in Exhibit 4.26.1).

4.28.1(20)  Indenture of Mortgage and Security Agreement, among Trump Taj Mahal
            Associates, as mortgagor, and First Bank National Association, as
            collateral agent, as mortgagee.

4.28.2(20)  Indenture of Mortgage and Security Agreement, among Trump Plaza
            Associates, as mortgagor, and First Bank National Association, as
            collateral agent, as mortgagee.

4.29.1(20)  Assignment of Leases and Rents, among Trump Taj Mahal Associates, as
            assignor, and First Bank National Association, as collateral agent,
            as mortgagee.

4.29.2(20)  Assignment of Leases and Rents, among Trump Plaza Associates, as
            assignor, and First Bank National Association, as collateral agent,
            as mortgagee.

4.30.1(20)  Collateral Agency Agreement, among First Bank National Association,
            as collateral agent, and First Bank National Association, as
            trustee, Trump Atlantic City Associates, Trump Atlantic City
            Funding, Inc., the other secured parties signatory thereto and the
            guarantors under the First Mortgage Note Indenture.


                                       40

<PAGE>

4.31(26)    Indenture, dated as of December 10, 1997, by and among Trump
            Atlantic City Associates and Trump Atlantic City Funding II, Inc.,
            as issuers, Trump Atlantic City Corporation, Trump Casino Services,
            L.L.C., Trump Communications, L.L.C., Trump Plaza Associates and
            Trump Taj Mahal Associates, as guarantors, and U.S. Bank National
            Association, as trustee.

4.32(25)    Registration Rights Agreement, dated as of December 10, 1997, by and
            among Trump Atlantic City Associates and Trump Atlantic City Funding
            II, as issuers, Trump Atlantic City Corporation, Trump Casino
            Services, L.L.C., Trump Communications, L.L.C., Trump Plaza
            Associates and Trump Taj Mahal Associates, as guarantors, and
            Donaldson, Lufkin & Jenrette Securities Corporation, as initial
            purchaser.

4.33(27)    Indenture, dated as of December 10, 1997, by and among Trump
            Atlantic City Associates and Trump Atlantic City Funding III, Inc.,
            as issuers, Trump Atlantic City Corporation, Trump Casino Services,
            L.L.C., Trump Communications, L.L.C., Trump Plaza Associates and
            Trump Taj Mahal Associates, as guarantors, and U.S. Bank National
            Association, as trustee.

4.34(24)    Registration Rights Agreement, dated as of December 10, 1997, by and
            among Trump Atlantic City Associates and Trump Atlantic City Funding
            III, as issuers, Trump Atlantic City Corporation, Trump Casino
            Services, L.L.C., Trump Communications, L.L.C., Trump Plaza
            Associates and Trump Taj Mahal Associates, as guarantors, and
            Donaldson, Lufkin & Jenrette Securities Corporation, as initial
            purchaser.

4.35(25)    Indenture of Mortgage and Security Agreement by Trump Plaza
            Associates as mortgagor and U.S. Bank National Association (as
            Collateral Agent) as mortgagee.

4.36(25)    Indenture of Mortgage and Security Agreement by Trump Taj Mahal
            Associates as mortgagor and U.S. Bank National Association (as
            Collateral Agent) as mortgagee.

4.37(25)    Assignment of Leases and Rents by Trump Plaza Associates as assignor
            and U.S. Bank National Association (as Collateral Agent) as
            assignee.

4.38(25)    Assignment of Leases and Rents by Trump Taj Mahal Associates as
            assignor and U.S. Bank National Association (as Collateral Agent) as
            assignee.

4.39(25)    Debtors' Consent by Trump Atlantic City Associates, Trump Atlantic
            City Funding II, Inc., Trump Atlantic City Corporation, Trump Plaza
            Associates, Trump Taj Mahal Associates, Trump Casino Services,
            L.L.C. and Trump Communications, L.L.C.

4.40(24)    Debtors' Consent by Trump Atlantic City Associates, Trump Atlantic
            City Funding III, Inc., Trump Atlantic City Corporation, Trump Plaza
            Associates, Trump Taj Mahal Associates, Trump Casino Services,
            L.L.C. and Trump Communications, L.L.C.

10.1-10.27  Intentionally omitted.

10.28(2)    Option Agreement, dated as of February 2, 1993, between Donald J.
            Trump and Trump Plaza Associates.

10.29       Intentionally omitted.

10.30(3)    Amended and Restated Services Agreement between Trump Plaza
            Associates and Trump Plaza Management Corp.

10.31-10.32 Intentionally omitted.

10.33(4)    Mortgage from Donald J. Trump, as nominee, to Albert Rothenberg and
            Robert Rothenberg, dated October 3, 1983.

10.34(4)    Mortgage made by Harrah's Associates to Adeline Bordonaro, dated
            January 28, 1986.

10.35.1(4)  Mortgage from Trump Plaza Associates to The Mutual Benefit Life
            Insurance Company, dated October 5, 1990.

10.35.2(4)  Collateral Assignment of Leases from Trump Plaza Associates to The
            Mutual Benefit Life Insurance Company, dated October 5, 1990.

10.36-10.38 Intentionally omitted.

10.39.2(6)  Severance Agreement between Trump Plaza Associates and Robert M.
            Pickus.

10.39.4(18) Employment Agreement between Robert M. Pickus and Trump Hotels &
            Casino Resorts, Inc.

10.40-10.41 Intentionally omitted.


                                       41

<PAGE>

10.42(9)    Option and Right of First Offer Agreement between Trump Plaza
            Associates and Missouri Boardwalk Inc., dated June 24, 1993.

10.43(9)    Lease between Donald J. Trump and Missouri Boardwalk Inc., dated
            June 24, 1993.

10.44(9)    Sublease between Donald J. Trump and Missouri Boardwalk Inc., dated
            June 24, 1993.

10.45       Intentionally omitted.

10.46(11)   Executive Agreement among Donald J. Trump, Trump Hotels & Casino
            Resorts, Inc. and Trump Hotels & Casino Resorts Holdings, L.P.

10.47-10.49 Intentionally omitted.

10.50(10)   Acquisition Agreement, dated April 27, 1995, between Trump
            Oceanview, Inc. and The New Jersey Sports and Exposition Authority.

10.51-10.55 Intentionally omitted.

10.56(10)   Agreement of Sublease between Donald J. Trump and Time Warner
            Entertainment Company, L.P., 10.57-10.62 Intentionally omitted.

10.63.2(20) Third Amended and Restated Partnership Agreement of Trump Plaza
            Associates.

10.65.1(21) Services Agreement, dated as of July 8, 1996, among Trump Plaza
            Associates, Trump Taj Mahal Associates and Trump Casino Services,
            L.L.C.

10.65.2(22) Amended and Restated Service Agreement, dated as of October 23,
            1996, by and among Trump Plaza Associates, Trump Taj Mahal
            Associates, Trump's Castle Associates, L.P. and Trump Casino
            Services, L.L.C.

10.66(21)   Thermal Energy Service Agreement, dated as of June 30, 1996, by and
            between Atlantic Jersey Thermal Systems, Inc. and Trump Taj Mahal
            Associates.

10.67(22)   Thermal Energy Service Agreement, dated as of September 26, 1996, by
            and between Atlantic Jersey Thermal Systems, Inc. and Trump Plaza
            Associates.

10.68-10.69 Intentionally omitted.

10.70(10)   Lease Agreement between Trump's Castle Associates and Trump Taj
            Mahal Associates, dated as of December 16, 1994.

10.71-10.73 Intentionally omitted.

10.74(23)   Employment Agreement, dated May 3, 1996, between Trump Taj Mahal
            Associates and Loretta I. Viscount.

10.75-10.76 Intentionally omitted.

10.77(28)   Employment Agreement, dated January 4, 2000, between Trump Taj Mahal
            Associates and Mark A. Brown.

10.78(29)   Second Amendment, dated August 3, 2000, of the Employment Agreement,
            dated March 6, 1998, between Mark A. Brown and Trump's Castle
            Associates, as assigned to Trump Taj Mahal Associates and amended
            effective January 3, 2000.

10.79(29)   Employment Agreement, dated April 17, 2000, between Robert M. Pickus
            and Trump Hotels & Casino Resorts, Inc., Trump Hotels & Casino
            Resorts Holdings, L.P. and Trump Atlantic City Associates.

10.80(29)   Employment Agreement dated April 17, 2000, between Francis X.
            McCarthy, Jr. and Trump Hotels & Casino Resorts, Inc., Trump Hotels
            & Casino Resorts Holdings, L.P. and Trump Atlantic City Associates.

10.81(29)   Employment Agreement dated April 17, 2000, between Joseph A. Fusco
            and Trump Hotels & Casino Resorts, Inc., Trump Hotels & Casino
            Resorts Holdings, L.P. and Trump Atlantic City Associates.

10.82(29)   Employment Agreement dated April 17, 2000, between John P. Burke and
            Trump Hotels & Casino Resorts, Inc., Trump Hotels & Casino Resorts
            Holdings, L.P. and Trump Atlantic City Associates.

21(28)      List of Subsidiaries of the Registrants.

99.1        Letter, dated March 29, 2002, from Trump Atlantic City Associates to
            the Securities and Exchange Commission pursuant to Temporary Note 3T
            to Article 3 of Regulation S-X.


                                      42

<PAGE>

(1)   Incorporated herein by reference to the identically numbered Exhibit to
      the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc., Trump
      Plaza Associates and Trump Plaza Holding Associates for the quarter ended
      September 30, 1992.

(2)   Incorporated herein by reference to the identically numbered Exhibit in
      the Annual Report on Form 10-K of Trump Plaza Funding, Inc. for the year
      ended December 31, 1992.

(3)   Previously filed in the Registration Statement on Form S-1, Registration
      No. 33-58608, of Trump Atlantic City Associates (formerly Trump Plaza
      Holding Associates).

(4)   Incorporated herein by reference to the identically numbered Exhibit in
      the Registration Statement on Form S-1, Registration No. 33-58602, of
      Trump Plaza Funding, Inc. and Trump Plaza Associates.

(5)   Incorporated herein by reference to the identically numbered Exhibit in
      the Registration Statement on Form S-1, Registration No. 33-58608, of
      Trump Atlantic City Associates (formerly Trump Plaza Holding Associates).

(6)   Incorporated herein by reference to the identically numbered Exhibit in
      the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
      Atlantic City Associates (formerly Trump Plaza Holding Associates) for the
      year ended December 31, 1993.

(7)   Incorporated herein by reference to the identically numbered Exhibit in
      the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc. and Trump
      Atlantic City Associates (formerly Trump Plaza Holding Associates) for the
      quarter ended September 30, 1994.

(8)   Incorporated herein by reference to the Exhibit in the Quarterly Report on
      Form 10-Q of Trump Taj Mahal Funding, Inc. and Trump Taj Mahal Associates
      for the quarter ended September 30, 1994.

(9)   Incorporated herein by reference to the identically numbered Exhibit in
      the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
      Atlantic City Associates (formerly Trump Plaza Holding Associates) for the
      year ended December 31, 1994.

(10)  Incorporated herein by reference to the Exhibit in the Annual Report on
      Form 10-K of Trump Taj Mahal Funding, Inc. and Trump Taj Mahal Associates
      for the year ended December 31, 1994.

(11)  Incorporated herein by reference to the identically numbered Exhibit in
      the Quarterly Report on Form 10-Q of Trump Hotels & Casino Resorts, Inc.,
      Trump Hotels & Casino Resorts Holdings, L.P. and Trump Hotels & Casino
      Resorts Funding, Inc. for the quarter ended June 30, 1995.

(12)  Incorporated herein by reference to the identically numbered Exhibit to
      the Quarterly Report on Form 10-Q of Trump Plaza Funding, Inc., Trump
      Plaza Associates and Trump Atlantic Associates (formerly Trump Plaza
      Holding Associates) for the quarter ended June 30, 1995.

(13)  Incorporated herein by reference to the Exhibit in the Quarterly Report on
      Form 10-Q of Trump Taj Mahal Funding, Inc. and for the quarter ended
      September 30, 1995.

(14)  Incorporated herein by reference to the identically numbered Exhibit in
      the Annual Report on Form 10-K of Trump Plaza Funding, Inc. and Trump
      Plaza Associates for the year ended December 31, 1995.

(15)  Incorporated herein by reference to the Exhibit in the Annual Report on
      Form 10-K of Taj Mahal Holding Corp. for the year ended December 31, 1995.

(16)  Incorporated herein by reference to the identically numbered Exhibit in
      the Current Report on Form 8-K of Trump Hotels & Casino Resorts, Inc.,
      dated January 10, 1996.

(17)  Incorporated herein by reference to the identically numbered Exhibit in
      the Current Report on Form 8-K of Trump Hotels & Casino Resorts, Inc.
      dated February 1, 1996.

(18)  Incorporated herein by reference to the identically numbered Exhibit to
      the Registration Statement on Form S-4, Registration No. 333-153, of Trump
      Hotels & Casino Resorts, Inc.

(19)  Previously filed in Registration Statement on Form S-1, Registration No.
      333-643, of Trump Atlantic City Associates, Trump Atlantic City Funding,
      Inc. and Trump Plaza Associates.

(20)  Incorporated herein by reference to the identically numbered Exhibit to
      the Quarterly Report on Form 10-Q of Trump Atlantic City Associates and
      Trump Atlantic City Funding, Inc. for the quarter ended March 31, 1996.


                                       43

<PAGE>

(21)  Incorporated herein by reference to the identically numbered Exhibit to
      the Quarterly Report on Form 10-Q of Trump Atlantic City Associates and
      Trump Atlantic City Funding, Inc. for the quarter ended June 31, 1996.

(22)  Incorporated herein by reference to the identically numbered Exhibit to
      the Quarterly Report on Form 10-Q of Trump Atlantic City Associates and
      Trump Atlantic City Funding, Inc. for the quarter ended September 31,
      1996.

(23)  Incorporated herein by reference to the identically numbered Exhibit to
      the Annual Report on Form 10-K of Trump Atlantic City Associates and Trump
      Atlantic City Funding, Inc. for the year ended December 31, 1996.

(24)  Incorporated herein by reference to the identically numbered Exhibit to
      the Registration Statement on Form S-4, Registration No. 333-43975, of
      Trump Atlantic City Associates and Trump Atlantic City Funding III, Inc.

(25)  Incorporated herein by reference to the identically numbered Exhibit to
      the Registration Statement on Form S-4, Registration No. 333-43979, of
      Trump Atlantic City Associates and Trump Atlantic City Funding II, Inc.

(26)  Incorporated herein by reference to the identically numbered Exhibit in
      Amendment No. 1 to Registration Statement on Form S-4, Registration No.
      333-43979, of Trump Atlantic City Associates and Trump Atlantic City
      Funding II, Inc.

(27)  Incorporated herein by reference to the identically numbered Exhibit to
      the Annual Report on Form 10-K of Trump Atlantic City Associates, Trump
      Atlantic City Funding, Inc., Trump Atlantic City Funding II, Inc. and
      Trump Atlantic City Funding III, Inc. for the year ended December 31,
      1997.

(28)  Incorporated herein by reference to the identically numbered Exhibit to
      the Annual Report on Form 10-K of Trump Atlantic City Associates, Trump
      Atlantic City Funding, Inc., Trump Atlantic City Funding II, Inc. and
      Trump Atlantic City Funding III, Inc. for the year ended December 31,
      1999.

(29)  Incorporated herein by reference to the identically numbered Exhibit to
      the Annual Report on Form 10-K of Trump Atlantic City Associates, Trump
      Atlantic City Funding, Inc., Trump Atlantic City Funding II, Inc. and
      Trump Atlantic City Funding III, Inc. for the year ended December 31,
      2000.

      (d)   Financial Statement Schedules.

      See "Financial Statements and Supplementary Data-Index to Financial
Statements and Financial Statement Schedule" for a list of the financial
statement schedule included in this Annual Report.


                                       44

<PAGE>

                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, each registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.

                                          TRUMP ATLANTIC CITY ASSOCIATES
                                                       (Registrant)

                                          By: TRUMP ATLANTIC CITY HOLDING, INC.,
                                               its managing general partner

                                                    /S/ DONALD J. TRUMP
                                          --------------------------------------
                                                      Donald J. Trump
                                                         President
                                                      March 29, 2002


                                          TRUMP ATLANTIC CITY FUNDING, INC.
                                                       (Registrant)

                                                    /S/ DONALD J. TRUMP
                                          --------------------------------------
                                                      Donald J. Trump
                                           President and Chief Executive Officer
                                                      March 29, 2002


                                          TRUMP ATLANTIC CITY FUNDING II, INC.
                                                       (Registrant)

                                                    /S/ DONALD J. TRUMP
                                          --------------------------------------
                                                      Donald J. Trump
                                           President and Chief Executive Officer
                                                      March 29, 2002


                                          TRUMP ATLANTIC CITY FUNDING III, INC.
                                                       (Registrant)

                                                    /S/ DONALD J. TRUMP
                                          --------------------------------------
                                                      Donald J. Trump
                                           President and Chief Executive Officer
                                                      March 29, 2002


                                       45

<PAGE>

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY ASSOCIATES

By: TRUMP ATLANTIC CITY HOLDING, INC.,
    its managing general partner

          Signature                         Title                      Date
          ---------                         -----                      ----


     /S/ DONALD J. TRUMP         Chairman of the Board of         March 29, 2002
----------------------------     Directors and President
       Donald J. Trump           (Principal Executive Officer)


/S/ FRANCIS X. MCCARTHY, JR.     Chief Financial Officer          March 29, 2002
----------------------------     (Principal Financial and
  Francis X. McCarthy, Jr.       Accounting Officer)


    /S/ WALLACE B. ASKINS        Director                         March 29, 2002
----------------------------
      Wallace B. Askins


      /S/ DON M. THOMAS          Director                         March 29, 2002
----------------------------
        Don M. Thomas


                                       46

<PAGE>

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY FUNDING, INC.

          Signature                         Title                      Date
          ---------                         -----                      ----


     /S/ DONALD J. TRUMP         Chairman of the Board of         March 29, 2002
----------------------------     Directors,  President and Chief
       Donald J. Trump           Executive Officer
                                 (Principal Executive Officer)


/S/ FRANCIS X. MCCARTHY, JR.     Chief Financial Officer          March 29, 2002
----------------------------     (Principal Financial and
  Francis X. McCarthy, Jr.       Accounting Officer)


    /S/ WALLACE B. ASKINS        Director                         March 29, 2002
----------------------------
      Wallace B. Askins


      /S/ DON M. THOMAS          Director                         March 29, 2002
----------------------------
        Don M. Thomas


                                       47

<PAGE>

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY FUNDING II, INC.

          Signature                         Title                      Date
          ---------                         -----                      ----


     /S/ DONALD J. TRUMP         Chairman of the Board of         March 29, 2002
----------------------------     Directors, President and Chief
       Donald J. Trump           Executive Officer (Principal
                                 Executive Officer)


/S/ FRANCIS X. MCCARTHY, JR.     Chief Financial Officer          March 29, 2002
----------------------------     (Principal Financial and
  Francis X. McCarthy, Jr.       Accounting Officer)


    /S/ WALLACE B. ASKINS        Director                         March 29, 2002
----------------------------
      Wallace B. Askins


      /S/ DON M. THOMAS          Director                         March 29, 2002
----------------------------
        Don M. Thomas


                                       48

<PAGE>

      Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated:

TRUMP ATLANTIC CITY FUNDING III, INC.

          Signature                         Title                      Date
          ---------                         -----                      ----


     /S/ DONALD J. TRUMP         Chairman of the Board of         March 29, 2002
----------------------------     Directors, President and Chief
       Donald J. Trump           Executive Officer (Principal
                                 Executive Officer)


/S/ FRANCIS X. MCCARTHY, JR.     Chief Financial Officer          March 29, 2002
----------------------------     (Principal Financial and
  Francis X. McCarthy, Jr.       Accounting Officer)


    /S/ WALLACE B. ASKINS        Director                         March 29, 2002
----------------------------
      Wallace B. Askins


      /S/ DON M. THOMAS          Director                         March 29, 2002
----------------------------
        Don M. Thomas

      Supplemental Information to be Furnished With Reports Filed Pursuant to
Section 15(d) of the Securities Exchange Act of 1934 by Registrants Which Have
Not Registered Securities Pursuant to Section 12 of the Act.

      The Registrants have not sent (and do not intend to send) an annual report
to security holders covering the Registrants' last fiscal year and have not sent
(and do not intend to send) a proxy statement, form of proxy or other proxy
soliciting materials to security holders.


                                       49


<PAGE>

         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

                                                                            Page
                                                                            ----
Trump Atlantic City Associates and Subsidiaries

Report of Independent Public Accountants..................................   F-2

Consolidated Balance Sheets as of December 31, 2000 and 2001..............   F-3

Consolidated Statements of Operations for the years ended December 31,
      1999, 2000 and 2001.................................................   F-4

Consolidated Statements of Capital for the years ended December 31, 1999,
      2000 and 2001.......................................................   F-5

Consolidated Statements of Cash Flows for the years ended December 31,
      1999, 2000 and 2001.................................................   F-6

Notes to Consolidated Financial Statements................................   F-7

Financial Statement Schedule Report of Independent Public Accountants.....   S-1

Schedule II--Valuation and Qualifying Accounts for the years Ended
      December 31, 1999, 2000 and 2001....................................   S-2


                                      F-1

<PAGE>

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Trump Atlantic City Associates and Subsidiaries:

      We have audited the accompanying consolidated balance sheets of Trump
Atlantic City Associates (a New Jersey general partnership) and Subsidiaries as
of December 31, 2000 and 2001, and the related consolidated statements of
operations, capital and cash flows for each of the three years in the period
ended December 31, 2001. These financial statements are the responsibility of
the management of Trump Atlantic City Associates and Subsidiaries. Our
responsibility is to express an opinion on these financial statements based on
our audits.

      We conducted our audits in accordance with auditing standards generally
accepted in the United States. Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.

      In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of Trump Atlantic City
Associates and Subsidiaries as of December 31, 2000 and 2001, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2001, in conformity with accounting principles generally
accepted in the United States.


                                                         ARTHUR ANDERSEN LLP

Roseland, New Jersey
March 13, 2002


                                      F-2

<PAGE>

                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2000 AND 2001
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                                              2000           2001
                                                                                          -----------    -----------
<S>                                                                                       <C>            <C>
                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents ...........................................................   $    67,205    $    70,909
  Trade receivables, net of allowances for doubtful accounts of $13,080 and $15,610,
     respectively (Note 2) ............................................................        27,620         29,539
  Accounts receivable, other (Note 2) .................................................         6,697          2,349
  Inventories .........................................................................         8,928          8,620
  Prepaid expenses and other current assets ...........................................         6,969          6,278
  Due from affiliates, net (Note 6) ...................................................        80,013         88,842
                                                                                          -----------    -----------
    Total current assets ..............................................................       197,432        206,537
                                                                                          -----------    -----------
PROPERTY AND EQUIPMENT (Note 2):
  Land and land improvements ..........................................................       172,507        172,524
  Buildings and building improvements .................................................     1,275,480      1,292,410
  Furniture, fixtures and equipment ...................................................       231,357        244,868
  Leasehold improvements ..............................................................         2,195         13,362
  Construction in progress ............................................................        17,483          7,691
                                                                                          -----------    -----------
                                                                                            1,699,022      1,730,855
  Less-Accumulated depreciation and amortization ......................................      (408,384)      (453,853)
                                                                                          -----------    -----------
    Net property and equipment ........................................................     1,290,638      1,277,002
                                                                                          -----------    -----------
OTHER ASSETS:
  Deferred bond issuance costs, net of accumulated amortization of $29,341 and
     $34,011, respectively (Note 3) ...................................................        19,509         14,839
  Other assets (Note 2) ...............................................................        34,847         42,075
                                                                                          -----------    -----------
    Total other assets ................................................................        54,356         56,914
                                                                                          -----------    -----------
    Total assets ......................................................................   $ 1,542,426    $ 1,540,453
                                                                                          ===========    ===========
                             LIABILITIES AND CAPITAL
CURRENT LIABILITIES:
  Current maturities of long-term debt (Note 3) .......................................   $     4,553    $     7,266
  Accounts payable ....................................................................        42,190         40,713
  Accrued payroll .....................................................................        21,395         18,176
  Self-insurance reserves (Note 4) ....................................................         8,458          5,438
  Accrued interest payable (Note 3) ...................................................        24,375         24,375
  Other accrued expenses (Note 8) .....................................................        31,109         27,769
  Other current liabilities ...........................................................         7,532         11,797
                                                                                          -----------    -----------
    Total current liabilities .........................................................       139,612        135,534
                                                                                          -----------    -----------
NON-CURRENT LIABILITIES:
  Long-term debt, net of current maturities (Note 3) ..................................     1,303,019      1,307,643
  Other long-term liabilities .........................................................         5,557         17,070
                                                                                          -----------    -----------
    Total non-current liabilities .....................................................     1,308,576      1,324,713
                                                                                          -----------    -----------
    Total liabilities .................................................................     1,448,188      1,460,247
                                                                                          -----------    -----------
COMMITMENTS AND CONTINGENCIES (Note 4):
CAPITAL:
  Partners' capital ...................................................................       329,691        329,691
  Accumulated deficit .................................................................      (235,453)      (249,485)
                                                                                          -----------    -----------
    Total capital .....................................................................        94,238         80,206
                                                                                          -----------    -----------
    Total liabilities and capital .....................................................   $ 1,542,426    $ 1,540,453
                                                                                          ===========    ===========
</TABLE>

      The accompanying notes are an integral part of these balance sheets.


                                      F-3

<PAGE>

                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                  1999           2000           2001
                                              -----------    -----------    -----------
<S>                                           <C>            <C>            <C>
REVENUES:
Gaming ....................................   $   867,556    $   858,473    $   849,426
Rooms .....................................        74,057         59,583         59,639
Food and beverage .........................       106,111         99,521         95,785
Other (Note 7) ............................        50,438         29,308         25,758
                                              -----------    -----------    -----------
   Gross revenues .........................     1,098,162      1,046,885      1,030,608
Less-Promotional allowances (Note 2) ......       209,945        205,686        203,866
                                              -----------    -----------    -----------
   Net revenues ...........................       888,217        841,199        826,742
                                              -----------    -----------    -----------
COSTS AND EXPENSES:
Gaming ....................................       465,231        437,382        423,306
Rooms .....................................        28,712         25,532         24,944
Food and beverage .........................        37,519         31,081         29,969
General and administrative ................       173,578        174,125        161,457
Depreciation and amortization .............        58,615         51,924         49,448
Trump World's Fair closing (Note 8) .......       123,959            814           --
                                              -----------    -----------    -----------
                                                  887,614        720,858        689,124
                                              -----------    -----------    -----------
   Income from operations .................           603        120,341        137,618
                                              -----------    -----------    -----------
NON-OPERATING INCOME (EXPENSE):
Interest and other non-operating income ...         3,813          4,145          2,633
Interest expense (Note 3) .................      (153,759)      (153,664)      (154,283)
                                              -----------    -----------    -----------
   Non-operating expense, net .............      (149,946)      (149,519)      (151,650)
                                              -----------    -----------    -----------
   Net loss ...............................   $  (149,343)   $   (29,178)   $   (14,032)
                                              ===========    ===========    ===========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                      F-4

<PAGE>

                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001
                                 (In Thousands)

                                           Partners'   Accumulated
                                            Capital      Deficit        Total
                                          -------------------------------------

Balance, December 31, 1998 ............   $  329,691    $  (56,932)  $  272,759
Net Loss ..............................           --      (149,343)    (149,343)
                                          ----------    ----------   ----------
Balance, December 31, 1999 ............      329,691      (206,275)     123,416
Net Loss ..............................           --       (29,178)     (29,178)
                                          ----------    ----------   ----------
Balance, December 31, 2000 ............      329,691      (235,453)      94,238
Net Loss ..............................           --       (14,032)     (14,032)
                                          ----------    ----------   ----------
Balance, December 31, 2001 ............   $  329,691    $ (249,485)  $   80,206
                                          ==========    ==========   ==========

        The accompanying notes are an integral part of these statements.


                                      F-5

<PAGE>

                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001
                                 (In Thousands)

<TABLE>
<CAPTION>
                                                                            1999          2000          2001
                                                                         ----------    ----------    ----------
<S>                                                                      <C>           <C>           <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net loss ..........................................................   $ (149,343)   $  (29,178)   $  (14,032)
   Adjustments to reconcile net loss to net cash flows
      provided by operating activities:
      Noncash charges:
         Depreciation and amortization ...............................       58,615        51,924        49,448
         Accretion of discount on indebtedness .......................          681           607           540
         Amortization of deferred loan offering costs ................        5,894         5,241         4,670
         Provision for losses on receivables .........................       24,503         5,437         6,060
         Valuation allowance of CRDA investments .....................        4,270         6,895         4,137
         Gain on acquisition of property .............................      (17,200)           --            --
         (Gain) loss on disposition of property ......................         (460)        1,509          (320)
         Write-off of net book value of Trump World's Fair closing ...       97,221            --            --
   Decrease (increase) in receivables ................................        2,435        (5,873)       (3,310)
   (Increase) decrease in inventories ................................         (276)          530           307
   Decrease (increase) in prepaid expenses and other current assets ..        2,459        (1,554)        1,024
   (Increase) decrease in other assets ...............................          (45)        3,119        (2,327)
   Increase in amounts due from affiliates ...........................      (27,918)      (17,065)       (8,830)
   Increase  (decrease) in accounts payable, accrued expenses
      and other current liabilities ..................................       26,768           253        (8,959)
                                                                         ----------    ----------    ----------
         Net cash provided by operating activities ...................       27,604        21,845        28,408
                                                                         ----------    ----------    ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
   Purchases of property and equipment ...............................      (21,506)      (15,125)       (7,764)
   Purchases of CRDA investments .....................................      (10,960)      (10,861)      (10,657)
   Proceeds from disposition of property .............................        4,502            --            --
                                                                         ----------    ----------    ----------
         Net cash used in investing activities .......................      (27,964)      (25,986)      (18,421)
                                                                         ----------    ----------    ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
   Additional Borrowings .............................................           --         2,978            --
   Payments and current maturities of long-term debt .................       (5,533)       (6,693)       (6,283)
                                                                         ----------    ----------    ----------
         Net cash used in financing activities .......................       (5,533)       (3,715)       (6,283)
                                                                         ----------    ----------    ----------
NET (DECREASE)/INCREASE IN CASH AND CASH EQUIVALENTS .................       (5,893)       (7,856)        3,704
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR .......................       80,954        75,061        67,205
                                                                         ----------    ----------    ----------
CASH AND CASH EQUIVALENTS AT END OF YEAR .............................   $   75,061    $   67,205    $   70,909
                                                                         ==========    ==========    ==========
Supplemental Disclosures of Cash Flow Information:
..     Equipment purchased under capital leases .......................   $    9,416    $    4,159    $   13,080
                                                                         ==========    ==========    ==========
..     Cash paid during the year for interest .........................   $  147,308    $  148,125    $  149,073
                                                                         ==========    ==========    ==========
</TABLE>

        The accompanying notes are an integral part of these statements.


                                      F-6

<PAGE>

                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization

      The accompanying consolidated financial statements include those of Trump
Atlantic City Associates ("Trump AC"), a New Jersey general partnership and its
subsidiaries, Trump Plaza Associates, a New Jersey general partnership ("Plaza
Associates"), which owns and operates the Trump Plaza Hotel and Casino located
in Atlantic City, New Jersey ("Trump Plaza"), Trump Taj Mahal Associates, a New
Jersey general partnership ("Taj Associates"), which owns and operates the Trump
Taj Mahal Casino Resort located in Atlantic City, New Jersey (the "Taj Mahal"),
Trump Atlantic City Funding, Inc., ("Trump AC Funding"), Trump Atlantic City
Funding II, Inc., ("Trump AC Funding II"), Trump Atlantic City Funding III,
Inc., ("Trump AC Funding III"), Trump Atlantic City Corporation, ("TACC"), and
Trump Casino Services, L.L.C., ("TCS"). Effective December 31, 2000, TCS was
merged into Taj Associates, and the obligations and administrative duties and
responsibilities of TCS were assumed by Trump Administration, a separate
division of Taj Associates ("Trump Administration"). Trump AC's sole sources of
liquidity are distributions in respect of its interests in Plaza Associates and
Taj Associates. Trump AC is 100% beneficially owned by Trump Hotels & Casino
Resorts Holdings, L.P., a Delaware limited partnership ("THCR Holdings"), of
which Trump Hotels & Casino Resorts, Inc., ("THCR"), is the sole general
partner. Trump AC, Trump AC Funding, Trump AC Funding II and Trump AC Funding
III have no independent operations and, therefore, their ability to service debt
is dependent upon the successful operations of Plaza Associates and Taj
Associates. There are no restrictions on the ability of the guarantors (the
"Subsidiary Guarantors") of the 11 1/4% First Mortgage Notes due 2006 of Trump
AC and Trump AC Funding, of Trump AC and Trump AC Funding II and of Trump AC and
Trump AC Funding III (the "Trump AC Mortgage Notes") to distribute funds to
Trump AC.

      The separate financial statements of the Subsidiary Guarantors have not
been included because (i) the Subsidiary Guarantors constitute all of Trump AC's
direct and indirect subsidiaries; (ii) the Subsidiary Guarantors have fully and
unconditionally guaranteed the Trump AC Mortgage Notes on a joint and several
basis; (iii) the aggregate assets, liabilities, earnings and equity of the
Subsidiary Guarantors are substantially equivalent to the assets, liabilities,
earnings and equity of Trump AC on a consolidated basis; and (iv) the separate
financial and other disclosures concerning the Subsidiary Guarantors are not
deemed material to investors. The assets and operations of the nonguarantor
subsidiaries are not significant.

      All significant intercompany balances and transactions have been
eliminated in the accompanying condensed consolidated financial statements.

     As discussed in Note 3, repayment of the Trump AC Mortgage Notes is due in
2006. Trump AC and Funding are seeking to refinance or modify the terms of the
Trump AC Mortgage Notes. As shown in the accompanying Consolidated Statement of
Cash Flows, the Partnership has consistently generated sufficient cash for debt
service and operating requirements. Management believes that, based upon its
cash flow projections for 2002, Trump AC will have sufficient cash flows to meet
their debt service and operating expense requirements throughout 2002.

(2) Summary of Significant Accounting Policies

Organization and Basis of Presentation

      Trump AC has no operations, except for its ownership of Plaza Associates
and Taj Associates. A substantial portion of Trump AC's revenues are derived
from its gaming operations. Competition in the Atlantic City casino market is
intense and management believes that this competition will continue as more
casinos are opened and new entrants into the gaming industry become operational.

      The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Revenue Recognition

      Gaming revenues represent the net win from gaming activities which is the
difference between amounts wagered and amounts won by patrons. Revenue from
hotel and other services are recognized at the time the related service is
performed.

      Trump AC provides an allowance for doubtful accounts arising from casino,
hotel and other services, which is based upon a specific review of certain
outstanding receivables as well as historical collection information. In
determining the amount of the allowance, management is required to make certain
estimates and assumptions regarding the timing and amount of collection. Actual
results could differ from those estimates and assumptions.


                                      F-7

<PAGE>

Promotional Allowances

      The retail value of accommodations, food, beverage and other services
provided to customers without charge is included in gross revenue and deducted
as promotional allowances. The estimated departmental costs of providing such
promotional allowances are included in gaming costs and expenses as follows:

                                                 Year Ended December 31,
                                       -----------------------------------------
                                           1999           2000           2001
                                       -----------    -----------    -----------
Rooms .............................    $18,416,000    $17,578,000    $17,945,000
Food and Beverage .................     55,840,000     58,403,000     56,652,000
Other .............................     15,263,000      9,178,000      6,501,000
                                       -----------    -----------    -----------
                                       $89,519,000    $85,159,000    $81,098,000
                                       ===========    ===========    ===========

 Inventories

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

Property and Equipment

      Property and equipment is carried at cost and is depreciated on the
straight-line method using rates based on the following estimated useful lives:

Buildings and building improvements ...............................  40 years
Furniture, fixtures and equipment .................................  3-10 years
Leasehold improvements ............................................  10-40 years

Long-Lived Assets

      The provisions of Statement of Financial Accounting Standard No. 121
"Accounting for the Impairment of Long-Lived Assets" ("SFAS No. 121") requires,
among other things, that an entity review its long-lived assets and certain
related intangibles for impairment whenever changes in circumstances indicate
that the carrying amount of an asset may not be fully recoverable. Impairment of
long-lived assets exists if, at a minimum, the future expected cash flows
(undiscounted and without interest charges) from an entity's operations are less
than the carrying value of these assets. Trump AC does not believe that any such
changes have occurred.

Income Taxes

      State income taxes are recorded in accordance with Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes" ("SFAS No. 109").
SFAS No. 109 requires recognition of deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the
financial statements or tax returns. Under this method, deferred tax assets and
liabilities are determined based on the difference between the financial
statement and the tax basis of assets and liabilities using enacted tax rates.

      The accompanying consolidated financial statements do not include a
provision for federal income taxes since any income or losses are allocated to
the partners and are reportable for federal income tax purposes by the partners.

      Under the New Jersey Casino Control Act (the "Casino Control Act"), both
Plaza Associates and Taj Associates are required to file a New Jersey
corporation business tax return. For New Jersey State Income Tax purposes at
December 31, 2001, Plaza Associates and Taj Associates have net operating loss
carry-forwards of approximately $191,290,000 and $118,900,000, respectively. A
valuation allowance of $191,290,000 and $118,900,000, respectively, has been
provided for the deferred tax benefits of the operating loss carry forwards.

Statements of Cash Flows

      For purposes of the statements of cash flows, cash and cash equivalents
include hotel and casino funds, funds on deposit with banks and temporary
investments purchased with a maturity of three months or less.


                                      F-8

<PAGE>

Recent Accounting Pronouncements

      In January 2001, the Emerging Issues Task Force ("EITF") reached a
consensus on certain issues within Issue No. 00-22, "Accounting for 'Points' and
Certain Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for
Free Products or Services to Be Delivered in the Future" ("EITF 00-22").
Application of EITF 00-22 is required for interim and annual periods ending
after February 15, 2001. EITF 00-22 requires volume-based cash rebates to be
classified as a reduction of revenue. Accordingly, such rebates of $85,210,000,
$92,616,000 and $92,932,000 in 1999, 2000 and 2001 have been classified as
promotional allowances. The Partnership previously classified these expenditures
as a gaming expense. Prior period amounts have been reclassified to conform with
the current presentation.

      In July 2001, the FASB issued Statement No. 141 "Business Combinations"
("SFAS 141") and Statement No. 142 "Goodwill and Other Intangible Assets" ("SFAS
142"). SFAS 141 is effective as follows: a) use of the pooling-of-interest
method is prohibited for business combinations initiated after June 30, 2001;
and b) the provisions of SFAS 141 also apply to all business combinations
accounted for by the purchase method that are completed after June 30, 2001.
SFAS 142 is effective for fiscal years beginning after December 15, 2001 and
applies to all goodwill and other intangible assets recognized in an entity's
statement of financial position at that date, regardless of when those assets
were initially recognized. The Company does not believe that the provisions of
SFAS 141 and SFAS 142 will have a material effect on its financial position or
results of operations.

      Also in July 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations". This standard addresses the financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The standard is effective for
fiscal years beginning after June 15, 2002. The Partnership's management does
not expect the adoption of SFAS No. 143 to have a material impact on the
Partnership's financial results.

      In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment of Disposal of Long-Lived Assets". This standard addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
The standard is effective for fiscal years beginning after December 15, 2001.
The Partnership's management does not expect the adoption of SFAS No. 144 to
have a material impact on the Partnership's financial results.

      In November 2001, the EITF reached a consensus on Issue No. 01-09,
"Accounting for Consideration Given by a Vendor to a Customer (Including a
Reseller of the Vendor's Products)" ("EITF 01-09"). For a sales incentive
offered voluntarily by a vendor to its patrons, EITF 01-09 requires the vendor
to recognize the cost of the sales incentive at the later of the date at which
the related revenue is recorded by the vendor, or the date at which the sales
incentive is offered. Accordingly, at December 31, 2001, the Partnership has
accrued for the expected cost of certain cash incentives offered to casino
patrons based on their past levels of play. Application of EITF 01-09 is
required in annual or interim financial statements for periods beginning after
December 15, 2001. The Partnership elected to adopt EITF 01-09 in the quarter
ended December 31, 2001. The adoption of EITF 01-09 did not have a material
impact on Trump AC's financial results.

Reclassifications

      Certain reclassifications have been made to prior year financial
statements to conform to the current year presentation.

Other Assets

      Plaza Associates is appealing a real estate tax assessment by the City of
Atlantic City. At December 31, 2000 and 2001, other assets include $8,014,000
which Plaza Associates believes will be recoverable on the settlement of the
appeal.


                                      F-9

<PAGE>

(3) Long-Term Debt

      Long-term debt consists of the following:

<TABLE>
<CAPTION>
                                                                                December 31,      December 31,
                                                                                    2000               2001
                                                                              ---------------    ---------------
<S>                                                                           <C>                <C>
Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006) (a) ......   $ 1,200,000,000    $ 1,200,000,000

Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006), net of
unamortized discount of $1,525,000 and $1,163,000, respectively  (a) ......        73,475,000         73,837,000

Trump AC Mortgage Notes (11 1/4% First Mortgage Notes, due 2006), net of
unamortized discount of $749,000 and $571,000, respectively  (a) ..........        24,251,000         24,429,000

Mortgage notes payable (b) ................................................         1,238,000          1,174,000

Capitalized lease obligations (c) .........................................         8,608,000         15,469,000
                                                                              ---------------    ---------------
                                                                                1,307,572,000      1,314,909,000
Less-Current maturities ...................................................        (4,553,000)        (7,266,000)
                                                                              ---------------    ---------------
                                                                              $ 1,303,019,000    $ 1,307,643,000
                                                                              ===============    ===============
</TABLE>

----------
(a)   Trump AC together with Trump AC Funding issued the Trump AC Mortgage Notes
      in an aggregate principal amount of $1,200,000,000 which bear interest at
      11.25% and are due May 1, 2006. Interest on the Trump AC Mortgage Notes is
      due semiannually. The Trump AC Mortgage Notes are guaranteed as to payment
      of principal and interest jointly and severally by Taj Associates, Plaza
      Associates, Trump AC and all future subsidiaries of Trump AC (other than
      Trump AC Funding). The Trump AC Mortgage Notes are jointly and severally
      secured by mortgages representing a first lien and security interest on
      substantially all of the assets of Taj Associates and Plaza Associates.

      The indenture pursuant to which the Trump AC Mortgage Notes were issued
      restricts the ability of Trump AC and its subsidiaries to make
      distributions or to pay dividends, as the case may be, unless certain
      financial ratios are achieved. In addition, the ability of Plaza
      Associates and Taj Associates to make payments of dividends or
      distributions (except for payment of interest) through Trump AC to THCR
      Holdings may be restricted by the New Jersey Casino Control Commission
      ("CCC").

      Trump AC together with Trump AC Funding II and Trump AC Funding III issued
      Trump AC Mortgage Notes in an aggregate principal amount of $75,000,000
      and $25,000,000, respectively, which bear interest at 11.25% and are due
      May 1, 2006. Interest on the Trump AC Mortgage Notes is due semiannually.
      The Trump AC Mortgage Notes are guaranteed as to payment of principal and
      interest jointly and severally by Taj Associates, Plaza Associates, Trump
      AC and all future subsidiaries of Trump AC (other than Trump AC Funding).
      The Trump AC Mortgage Notes are jointly and severally secured by mortgages
      representing a first lien and security interest on substantially all of
      the assets of Taj Associates and Plaza Associates.

      Costs of $48,850,000 associated with the issuance of the Trump AC Mortgage
      Notes are being amortized over the term of the Trump AC Mortgage Notes.
      Amortization is included in interest expense in the accompanying
      statements of operations and totaled $5,894,000, $5,241,000 and $4,670,000
      for the years ended December 31, 1999, 2000 and 2001, respectively.

(b)   Interest on these notes is payable with an interest rate of 8.5%. The
      notes are due in 2012 and are secured by certain real property.

(c)   Interest on these leases are payable with interest rates ranging from 7.1%
      to 13.0%. The leases are due at various dates between 2002 and 2005 and
      are secured by equipment.

The Trump AC Mortgage Notes include restrictive covenants prohibiting or
limiting, among other things, the sale of assets, the making of acquisitions and
other investments, certain capital expenditures, the incurrence of additional
debt and liens and the payment of dividends and distributions.

Future minimum payments under capital leases (principal portion included in the
table of debt maturities below) are as follows:

2002  ...........................................................    $ 8,582,000
2003  ...........................................................      5,404,000
2004  ...........................................................      3,222,000
2005  ...........................................................        612,000
2006  ...........................................................             --
                                                                     -----------
Total minimum payments ..........................................     17,820,000
Less: Amount representing interest ..............................      2,351,000
                                                                     -----------
Present Value of minimum lease payments .........................    $15,469,000
                                                                     ===========


                                      F-10

<PAGE>

The aggregate maturities of long-term debt as of December 31, 2001 are as
follows:

2002  .........................................................   $    7,266,000
2003  .........................................................        4,716,000
2004  .........................................................        3,106,000
2005  .........................................................          692,000
2006  .........................................................    1,300,096,000
Thereafter ....................................................          767,000
                                                                  --------------
                                                                  $1,316,643,000
                                                                  ==============

      The ability of the Registrants to repay their current and long-term
indebtedness when due will depend on the ability of Trump AC to either generate
cash from operations sufficient for such purposes or to refinance such
indebtedness on or before the date on which it becomes due. Cash flow from
operations will not be sufficient to repay a substantial portion of the
principal amount of the debt at maturity. The future operating performance of
Trump AC and its ability to refinance its debt will be subject to the then
prevailing economic conditions, industry conditions and numerous other
financial, business and other factors, many of which are beyond the control of
Trump AC. There can be no assurance that the future operating performance of
Trump AC will be sufficient to meet these repayment obligations or that the
general state of the economy, the status of the capital markets or the
receptiveness of the capital markets to the gaming industry will be conducive to
refinancing this debt or other attempts to raise capital. As discussed in Note
1, Trump AC and Funding are seeking to refinance or modify the terms of the
Trump AC Mortgage Notes due in 2006.

     The Registrants are seeking to refinance or modify the terms of their
public debt. Management believes that they will have sufficient cash flows to
meet their debt service and operating expense requirements throughout 2002
without such refinancing or modification.

(4) Commitments and Contingencies

      Leases and Employment Agreements

      Trump AC leases certain property (primarily land), office, warehouse
space, certain parking space, and various equipment under operating leases. Rent
expense for the years ended December 31, 1999, 2000 and 2001 was $6,890,000,
$6,099,000 and $7,517,000, respectively.

      Future minimum lease payments under the noncancellable operating leases
are as follows:

2002  ............................................................   $ 3,682,000
2003  ............................................................     1,582,000
2004  ............................................................     1,396,000
2005  ............................................................     1,109,000
2006  ............................................................     1,110,000
Thereafter .......................................................    83,260,000
                                                                     -----------
                                                                     $92,139,000
                                                                     ===========

      Certain of these leases contain options to purchase the leased properties
at various prices throughout the leased terms.

      As of December 31, 2001, Trump AC had employment agreements with certain
key employees with commitments of approximately $9,368,000. These commitments
mature at various dates through 2003.

      Taj Associates received a permit under the Coastal Area Facilities Review
Act ("CAFRA") (which included a condition of Taj Associates' casino license)
that initially required Taj Associates begin construction of certain
improvements on the Steel Pier by October 1992, which improvements were to be
completed within 18 months of commencement. Taj Associates initially proposed a
concept to improve the Steel Pier, the estimated cost of which was $30,000,000.
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 the 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 terminates on December 31,
2003 unless extended.


                                      F-11

<PAGE>

Casino License Renewal

      The operation of an Atlantic City hotel and casino is subject to
significant regulatory controls which affect virtually all of its operations.
Under the Casino Control Act, Plaza Associates and Taj Associates are required
to maintain certain licenses. Casino licenses must be renewed periodically, are
not transferable, are dependent on the financial stability of the licensee and
can be revoked at any time.

      In June 1999, the CCC renewed Plaza Associates' and Taj Associates' casino
licenses to operate Trump Plaza and the Taj Mahal for a period of four years
through June 30, 2003 and March 31, 2003, respectively. Also, in June 1999, the
CCC renewed Trump Services' casino license for a period of four years through
July 23, 2003. Upon revocation, suspension for more than 120 days, or failure to
renew the casino license, the Casino Control Act provides for the mandatory
appointment of a conservator to take possession of the hotel and casino's
business and property, subject to all valid liens, claims and encumbrances.

Legal Proceedings

      Plaza Associates, Taj Associates, its Partners, certain members of its
former Executive Committee, and certain of its employees, have been involved in
various legal proceedings. In general, Plaza Associates and Taj Associates have
agreed to indemnify such persons 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 said legal proceedings.

      Various legal proceedings are now pending against Plaza Associates and Taj
Associates. Plaza Associates and Taj Associates consider all such proceedings to
be ordinary litigation incident to the character of their business. Plaza
Associates and Taj Associates believe that the resolution of these claims will
not, individually or in the aggregate, have a material adverse effect on their
financial condition or results of operations.

      Plaza Associates and Taj Associates are also a party to various
administrative proceedings involving allegations that they have violated certain
provisions of the Casino Control Act. Plaza Associates and Taj Associates
believe that the final outcome of these proceedings will not, either
individually or in the aggregate, have a material adverse effect on their
financial condition, results of operations or on the ability of Plaza Associates
or Taj Associates to otherwise retain or renew any casino or other licenses
required under the Casino Control Act for the operation of the respective
properties.

Self-Insurance Reserves

      Self-insurance reserves represent the estimated amounts of uninsured
claims related to employee health medical costs, workmans' 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.

Federal Income Tax Examination

      Plaza Associates and Taj Associates are currently involved in examinations
with the Internal Revenue Service ("IRS") concerning Plaza Associates' federal
partnership income tax returns for the years 1993 through 1996 and Taj
Associates' federal partnership income tax returns for the tax years 1994
through 1996. While any adjustment which results from this examination could
affect Plaza Associates' and Taj Associates' state income tax returns, Plaza
Associates and Taj Associates do not believe that adjustments, if any, will have
a material adverse effect on its financial condition or results of operations.

Casino Reinvestment Development Authority Obligations

      Pursuant to the provisions of the Casino Control Act, Plaza Associates and
Taj Associates, must either obtain investment tax credits (as defined in the
Casino Control Act), in an amount equivalent to 1.25% of its gross casino
revenues, or pay an alternative tax of 2.5% of its gross casino revenues (as
defined in the Casino Control Act). Investment tax credits may be obtained by
making qualified investments or by the purchase of bonds at below market
interest rates from the Casino Reinvestment Development Authority ("CRDA").
Plaza Associates and Taj Associates intend on satisfying their obligations
primarily by depositing funds to be used for the purchase of bonds or by making
qualified investments. Plaza Associates and Taj Associates are required to make
quarterly deposits with the CRDA based on 1.25% of its gross revenue. For the
years ended December 31, 1999, 2000 and 2001, Trump AC charged to operations
$4,178,000, $4,843,000 and $3,844,000 respectively, to give effect to the below
market interest rates associated with CRDA bonds that have either been issued or
are expected to be issued from funds deposited. From time to time Plaza
Associates and Taj Associates have elected to donate funds they have on deposit
with the CRDA for various projects. Donations in the amounts of $145,000,
$3,920,000 and $593,000 were made during the years ended December 31, 1999, 2000
and 2001, respectively. As a result of these donations, Trump AC charged the
carrying value to operations of $92,000, $2,052,000 and $293,000 during the
years ended December 31, 1999, 2000 and 2001.


                                      F-12

<PAGE>

Concentrations of Credit Risks

      In accordance with casino industry practice, Plaza Associates and Taj
Associates extend credit to qualified casino patrons, after background checks
and investigations of credit worthiness. For the years ended December 31, 1999,
2000 and 2001 approximately 29.1%, 17.5% and 14.8%, respectively, of casino
receivables (before allowances) were from customers whose primary residence is
outside the United States, and approximately 5.9%, 6.4% and 5.0%, respectively,
represents credit extended to patrons from the Far East.

(5) Employee Benefit Plans

      Plaza Associates and Taj Associates have a retirement savings plan (the
"Plan") for its nonunion employees under Section 401(k) of the Internal Revenue
Code. Employees are eligible to contribute up to 20% of their earnings to the
Plan and Plaza Associates and Taj Associates will match 50% of the first 6%.
Trump AC recorded charges of $3,560,000, $3,637,000 and $3,433,000 for matching
contributions for the years ended December 31, 1999, 2000 and 2001,
respectively.

      Plaza Associates and Taj Associates make payments to various trusteed
multi-employer pension plans under industry-wide union agreements. The payments
are based on the hours worked by or gross wages paid to covered employees. Under
the Employee Retirement Income Security Act, Plaza Associates and Taj Associates
may be liable for their share of the plan's unfunded liabilities, if any, if the
plans are terminated. Pension expense charged to operations for the years ended
December 31, 1999, 2000 and 2001 was $2,074,000, $2,906,000 and $3,418,000
respectively.

(6) Transactions with Affiliates

      Trump AC has engaged in certain transactions with Trump and entities that
are wholly or partially owned by Trump. Amounts receivable/(payable) at December
31 are as follows:

                                                       Year Ended December 31,
                                                     --------------------------
                                                         2000           2001
                                                     -----------   ------------
Castle Associates (a) ............................   $15,947,000   $  6,554,000
Trump Organization (a) ...........................       483,000       (232,000)
THCR Holdings (a) ................................    63,583,000     82,520,000
                                                     -----------   ------------
                                                     $80,013,000   $ 88,842,000
                                                     ===========   ============

(a)   Trump Atlantic City Associates engages in various transactions with the
      other Atlantic City hotel/casinos and related casino entities owned by
      Trump. These transactions are charged at cost or normal selling price in
      the case of retail items and include certain shared professional fees,
      insurance, and payroll costs as well as complimentary services offered to
      customers.

      Beginning in late 1997, Trump Plaza and the Taj Mahal utilize certain
      facilities owned by Trump to entertain high-end customers. Management
      believes that the ability to utilize these facilities has enhanced Trump
      AC's revenues. In 1999, 2000 and 2001, Trump AC incurred approximately
      $1,574,000, $386,000 and $241,000, respectively, for customer costs
      associated with such utilization. In addition, in exchange for having
      Trump's plane available to customers of Trump Plaza and the Taj Mahal,
      Trump AC has incurred pilot costs of approximately $238,000, $241,000 and
      $242,000 for the years ended December 31, 1999, 2000 and 2001,
      respectively.

      Trump Services was formed for the purpose of realizing cost savings and
      operational synergies by consolidating certain administrative functions
      of, and providing certain services to, Plaza Associates, Taj Associates
      and Castle Associates. Effective December 31, 2000, Trump Services was
      merged into Taj Associates, and the obligations and administrative duties
      and responsibilities of Trump Services were assumed by Trump
      Administration, a separate division of Taj Associates ("Trump
      Administrations"). Management believes that Trump Administration's
      services will continue to result in substantial cost savings and
      operational synergies.

(7) All Star Cafe Transaction

      All Star Cafe, Inc. ("All Star") had entered into a twenty-year lease (the
"All Star Cafe Lease") with Taj Associates for the lease of space at the Taj
Mahal to operate an All Star Cafe. The basic rent under the All Star Cafe Lease
was $1,000,000 per year, payable in equal monthly installments. In addition, All
Star was to pay percentage rent as defined.


                                      F-13

<PAGE>

      On September 15, 1999 an agreement was reached between Taj Associates, All
Star and Planet Hollywood International, Inc. to terminate the All Star Cafe
Lease effective September 24, 1999. Upon termination of the All Star Cafe Lease,
all property, improvements, alterations and All Star's personal property with
the exception of specialty trade fixtures became the property of Taj Associates.
Taj Associates recorded the $17,200,000 estimated fair market value of these
assets in other revenue based on an independent appraisal.

      Taj Associates has since remodeled the facility into an entertainment
complex called the "Casbah" consisting of a Boardwalk level bar, a seasonal
outdoor dining area with live entertainment and a centerpiece high-energy
nightclub. The Casbah complex opened in June 2000.

(8) Trump World's Fair Closing

      On October 4, 1999, THCR closed Trump World's Fair. The estimated cost of
closing Trump World's Fair at December 31, 1999 was $123,959,000, which included
$97,221,000 for the writedown of the net book value of the assets and
$26,738,000 of costs incurred and to be incurred in connection with the closing
and demolition of the building. For the year ended December 31, 2000, an
additional $814,000 was charged to operations.

(9) Fair Value of Financial Instruments

      The carrying amount of the following financial instruments approximates
fair value, as follows: (a) cash and cash equivalents, receivables and payables
are based on the short term nature of these financial instruments and (b) CRDA
bonds and deposits are based on the allowances to give effect to the below
market interest rates.

      The estimated fair values of other financial instruments are as follows:

                                                       December 31, 2001
                                                --------------------------------
                                                Carrying Amount      Fair Value
                                                ---------------     ------------
Trump AC Mortgage Notes ....................    $ 1,200,000,000     $780,000,000
Trump AC Funding II Mortgage Notes .........    $    73,837,000     $ 47,250,000
Trump AC Funding III Mortgage Notes ........    $    24,429,000     $ 15,500,000

      The fair values of the Trump AC Mortgage Notes, Trump AC Funding II
Mortgage Notes and Trump AC Funding III Mortgages Notes are based on quoted
market prices as of December 31, 2001.

There are no quoted market prices for other notes payable and a reasonable
estimate could not be made without incurring excessive costs.

(10) Combined Financial Information - Trump AC Funding, Trump AC Funding II and
Trump AC Funding III

      Combined financial information relating to Trump AC Funding, Trump AC
Funding II and Trump AC Funding III as of December 31, 2001 is as follows:

<TABLE>
<S>                                                                                <C>
Total Assets (including First Mortgage Notes receivable of $1,298,266,000 and
      related interest receivable) .............................................   $1,322,641,000
                                                                                   ==============
Total Liabilities and Capital (including First Mortgage Notes payable of
      $1,298,266,000 and related interest payable) .............................   $1,322,641,000
                                                                                   ==============
Interest Income ................................................................   $  146,890,000
                                                                                   --------------
Interest Expense ...............................................................      146,890,000
                                                                                   --------------
Net Income .....................................................................   $           --
                                                                                   ==============
</TABLE>


                                      F-14

<PAGE>

(11) Quarterly Financial Data (unaudited) - Selected quarterly financial data of
Trump AC is as follows:

<TABLE>
<CAPTION>
                                                                     2000
                                     -------------------------------------------------------------------
                                      First Quarter    Second Quarter     Third Quarter   Fourth Quarter
                                     --------------    --------------    --------------   --------------
<S>                                  <C>               <C>               <C>              <C>
Net Revenues .....................   $  198,824,000    $  210,930,000    $  238,164,000   $  193,281,000
Income/(loss) from Operations ....       25,853,000        29,535,000        51,400,000       13,553,000
Net Income/(Loss) ................      (11,798,000)       (7,969,000)       13,786,000      (23,197,000)

<CAPTION>
                                                                     2001
                                     -------------------------------------------------------------------
                                      First Quarter    Second Quarter     Third Quarter   Fourth Quarter
                                     --------------    --------------    --------------   --------------
<S>                                  <C>               <C>               <C>              <C>
Net Revenues .....................   $  192,954,000    $  208,669,000    $  231,304,000   $  193,815,000
Income from Operations ...........       20,937,000        33,479,000        54,069,000       29,133,000
Net Income/(loss) ................      (16,542,000)       (4,126,000)       16,003,000       (9,367,000)
</TABLE>

(12) Industry Segment Information

      Trump AC's primary business activity is gaming. It operates two casinos in
the Atlantic City market: the Trump Taj Mahal Casino Resort and the Trump Plaza
Hotel and Casino.


                                      F-15

<PAGE>

To Trump Atlantic City Associates and Subsidiaries:

      We have audited in accordance with auditing standards generally accepted
in the United States, the consolidated financial statements of Trump Atlantic
City Associates and Subsidiaries included in this Form 10-K and have issued our
report thereon dated March 13, 2002. Our audit was made for the purpose of
forming an opinion on the basic consolidated financial statements taken as a
whole. The accompanying schedule is the responsibility of the management of
Trump Atlantic City Associates and Subsidiaries and is presented for purposes of
complying with the Securities and Exchange Commission's rules and is not part of
the basic consolidated financial statements. This schedule has been subjected to
the auditing procedures applied in the audit of the basic consolidated financial
statements and, in our opinion, fairly states in all material respects the
financial data required to be set forth therein in relation to the basic
consolidated financial statements taken as a whole.

                                                             ARTHUR ANDERSEN LLP

Roseland, New Jersey
March 13, 2002


                                      S-1

<PAGE>

                                                                     SCHEDULE II

                 TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
                        VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED DECEMBER 31, 1999, 2000 AND 2001

<TABLE>
<CAPTION>
                                                Balance at     Charged to         Other          Balance at
                                                Beginning      Costs and          Changes          End of
                                                of Period       Expenses       (Deductions)        Period
<S>                                            <C>            <C>            <C>                <C>
YEAR ENDED DECEMBER 31, 1999:
Allowance for doubtful accounts ............   $ 25,701,000   $ 24,503,000   $(40,396,000)(A)   $  9,808,000
Valuation allowance for CRDA investments ...   $ 10,798,000   $  4,270,000   $ (2,118,000)(B)   $ 12,950,000
YEAR ENDED DECEMBER 31, 2000:
Allowance for doubtful accounts ............   $  9,808,000   $  5,437,000   $ (2,165,000)(A)   $ 13,080,000
Valuation allowance for CRDA investments ...   $ 12,950,000   $  6,895,000   $ (7,957,000)(C)   $ 11,888,000
YEAR ENDED DECEMBER 31, 2001:
Allowance for doubtful accounts ............   $ 13,080,000   $  6,060,000   $ (3,530,000)(A)   $ 15,610,000
Valuation allowance for CRDA investments ...   $ 11,888,000   $  4,137,000   $ (1,932,000)(D)   $ 14,093,000
</TABLE>

-----------
(A)   Writeoff of uncollectible accounts.
(B)   Includes the reclassification of approximately $5,792,000 of previous CRDA
      deposits, the carrying value of which was $2,497,000 to property and
      equipment.
(C)   Includes the reclassification of approximately $6,397,000 of previous CRDA
      deposits, the carrying value of which was $3,802,000 to property and
      equipment.
(D)   Includes the reclassification of approximately $3,218,000 of previous CRDA
      deposits, the carrying value of which was $962,000 to property and
      equipment.


                                      S-2

<PAGE>

                                  Exhibit Index
                                  -------------


Exhibit No.   Description                                              Page No.
-----------   -----------                                              --------

3.22          Agreement and Plan of Merger, dated as of December 27,
              2000, between Trump Taj Mahal Associates and Trump
              Casino Services, L.L.C.

99.1          Letter, dated March 29, 2002, from Trump Atlantic City Associates
              to the Securities and Exchange Commission pursuant to Temporary
              Note 3T to Article 3 of Regulation S-X.