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                                 UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
 
                                   FORM 10-K
 
/X/  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
   ACT OF 1934
 
                  FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
                                       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)
 
<TABLE>
<S>                                                                            <C>
                                 NEW JERSEY                                                         22-3213714
       (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
                               2500 BOARDWALK
                          ATLANTIC CITY, NEW JERSEY                                                    08401
                  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                          (ZIP CODE)
     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (609) 441-6060
</TABLE>
 
                       TRUMP ATLANTIC CITY FUNDING, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                                            <C>
                                  DELAWARE                                                          22-3418939
       (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
                               2500 BOARDWALK
                          ATLANTIC CITY, NEW JERSEY                                                    08401
                  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                          (ZIP CODE)
     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (609) 441-6060
</TABLE>
 
                      TRUMP ATLANTIC CITY FUNDING II, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                                            <C>
                                  DELAWARE                                                          22-3550202
       (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
                               2500 BOARDWALK
                          ATLANTIC CITY, NEW JERSEY                                                    08401
                  (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                          (ZIP CODE)
     REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (609) 441-6060
</TABLE>
 
                     TRUMP ATLANTIC CITY FUNDING III, INC.
             (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
 
<TABLE>
<S>                                                                  <C>
                             DELAWARE                                                          22-3550203
  (STATE OR OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION)                 (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
                          2500 BOARDWALK
                     ATLANTIC CITY, NEW JERSEY                                                    08401
             (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)                                          (ZIP CODE)
</TABLE>
 
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (609) 441-6060
 
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 16, 1998 was _$0._
    The aggregate market value of the voting stock of Trump Atlantic City
Funding II, Inc. held by non-affiliates as of March 16, 1998 was _$0._
    The aggregate market value of the voting stock of Trump Atlantic City
Funding III, Inc. held by non-affiliates as of March 16, 1998 was _$0._
    Indicate by check mark whether the Registrants have filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.  _X_ No
    As of March 16, 1998, there were 100 shares of Trump Atlantic City Funding,
Inc.'s Common Stock outstanding.
 
    As of March 16, 1998, there were 100 shares of Trump Atlantic City Funding
II, Inc.'s Common Stock outstanding.
 
    As of March 16, 1998, there were 100 shares of Trump Atlantic City Funding
III, Inc.'s Common Stock outstanding.
 
    Documents Incorporated by Reference--Not applicable.
 
--------------------------------------------------------------------------------
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<PAGE>
                                   FORM 10-K
 
                               TABLE OF CONTENTS
 
<TABLE>
<CAPTION>
ITEM                                                                                                         PAGE
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<S>                                                                                                        <C>
PART I...................................................................................................          1
  ITEM 1. BUSINESS.......................................................................................          1
    Recent Events........................................................................................          1
    General..............................................................................................          1
    Trump Plaza..........................................................................................          2
    The Taj Mahal........................................................................................          7
    TCS..................................................................................................         11
    Trademark/Licensing..................................................................................         12
    Certain Indebtedness.................................................................................         12
    Atlantic City Market.................................................................................         13
    Competition..........................................................................................         14
    Gaming and Other Laws and Regulations................................................................         17
 
  ITEM 2. PROPERTIES.....................................................................................         25
    Trump Plaza..........................................................................................         25
    Taj Mahal............................................................................................         26
 
  ITEM 3. LEGAL PROCEEDINGS..............................................................................         28
 
  ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................         31
 
PART II..................................................................................................         31
 
  ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS..........................         31
 
  ITEM 6. SELECTED FINANCIAL DATA........................................................................         32
 
  ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..........         34
    Results of Operations for the Years Ended December 31, 1997 and 1996.................................         34
    Results of Operations for the Years Ended December 31, 1996 and 1995.................................         35
    Liquidity and Capital Resources......................................................................         37
    Seasonality..........................................................................................         38
    Inflation............................................................................................         38
 
  ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK....................................         38
 
  ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA....................................................         38
 
  ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...........         38
 
PART III.................................................................................................         39
 
  ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT............................................         39
 
  ITEM 11. EXECUTIVE COMPENSATION........................................................................         44
    Employment Agreements................................................................................         46
    Compensation of Directors............................................................................         49
    Compensation Committee Interlocks and Insider Participation..........................................         49
 
  ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT................................         51
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
ITEM                                                                                                         PAGE
---------------------------------------------------------------------------------------------------------  ---------
<S>                                                                                                        <C>
  ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS................................................         51
 
PART IV..................................................................................................         53
 
  ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K..............................         53
 
IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS.................................................         59
 
SIGNATURES...............................................................................................         60
  TRUMP ATLANTIC CITY ASSOCIATES.........................................................................         61
  TRUMP ATLANTIC CITY FUNDING, INC.......................................................................         62
  TRUMP ATLANTIC CITY FUNDING II, INC....................................................................         63
  TRUMP ATLANTIC CITY FUNDING III, INC...................................................................         64
</TABLE>
<PAGE>
                                     PART I
 
ITEM 1. BUSINESS.
 
RECENT EVENTS
 
    Management announced in the first quarter of 1998 that it had retained
Donaldson, Lufkin & Jenrette, Inc. and Bear, Stearns & Co. to explore
transactions involving Trump Hotels & Casino Resorts, Inc. ("THCR"), including
the possible sale of all or a portion of the company.
 
    On January 9, 1998, Trump Atlantic City Associates ("Trump AC") and Trump
Atlantic City Funding II, Inc. ("Funding II") filed a Registration Statement
(the "TAC II Registration Statement") with the Securities and Exchange
Commission ("SEC") in connection with an offer to exchange $75,000,000 principal
amount of 11 1/4 First Mortgage Notes (TAC II) due 2006, Series A (the "TAC II
Notes") issued and sold in a transaction exempt from registration under the
Securities Act of 1933, as amended (the "Securities Act"), for $75,000,000 in
principal amount of 11 1/4 First Mortgage Notes (TAC II) due 2006, Series B
("TAC II Exchange Notes"). On March 16, Trump AC and Funding II filed Amendment
No. 1 to the TAC II Registration Statement with the SEC.
 
    On January 9, 1998, Trump AC and Trump Atlantic City Funding III, Inc.
("Funding III") filed a Registration Statement (the "TAC III Registration
Statement") with the SEC in connection with an offer to exchange $25,000,000
principal amount of 11 1/4 First Mortgage Notes (TAC III) due 2006, Series A
(the "TAC III Notes") issued and sold in a transaction exempt from registration
under the Securities Act for $25,000,000 in principal amount of 11 1/4 First
Mortgage Notes (TAC III) due 2006, Series B ("TAC III Exchange Notes").
 
GENERAL
 
    Trump AC, a New Jersey general partnership, was formed under the name of
Trump Plaza Holding Associates on February 17, 1993. Trump Atlantic City
Funding, Inc., a Delaware corporation ("Trump AC Funding"), was formed on
January 30, 1996. Funding II and Funding III, each a Delaware corporation, were
formed on November 18, 1997. Each of the Registrants are wholly owned
subsidiaries of Trump Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings"),
of which THCR is the general partner. THCR is the exclusive vehicle through
which Donald J. Trump ("Trump") engages in new gaming activities in both
emerging and established gaming jurisdictions. Trump AC owns and operates the
Trump Plaza Hotel and Casino ("Trump Plaza"), which also includes Trump World's
Fair, and the Trump Taj Mahal Casino Resort (the "Taj Mahal"), each located on
The Boardwalk in Atlantic City, New Jersey.
 
    - TRUMP PLAZA. In May 1996, Trump AC completed an expansion program which
      further enhanced Trump Plaza's gaming space and hotel capacity (the "Trump
      Plaza Expansion") while maintaining its commitment to first class customer
      service. This strategy was designed to capitalize on Trump Plaza's
      reputation for excellence, as well as to meet both existing and
      anticipated demand for the increased number of rooms and infrastructure
      improvements that are currently being implemented to enhance further the
      "vacation destination appeal" of Atlantic City. As part of the Trump Plaza
      Expansion, Trump AC renovated and integrated into Trump Plaza a hotel
      adjacent to Trump Plaza's main tower ("Trump Plaza East") and renovated
      and integrated into Trump Plaza the former Trump Regency Hotel, located on
      The Boardwalk adjacent to the original Atlantic City Convention Center,
      which is next to Trump Plaza and is now known as Trump World's Fair. The
      renovations at Trump Plaza East were completed in February 1996 and at
      Trump World's Fair in May 1996. Trump Plaza has 138,305 square feet of
      gaming space, housing a total of approximately 4,090 slot machines and 117
      table games, making Trump Plaza's casino the largest in Atlantic City (in
      terms of square footage). Trump Plaza's hotel capacity consists of 1,404
      guest rooms, making Trump Plaza's guest room inventory one of the largest
      in Atlantic City.
 
    - TAJ MAHAL. Management believes that the acquisition of the Taj Mahal on
      April 17, 1996 (the "Taj Acquisition") has strengthened Trump AC's
      position as a leader in the casino entertainment
 
                                       1
<PAGE>
      industry through its ownership of two successful land-based casino hotels
      on The Boardwalk. Furthermore, the Taj Acquisition has enhanced Trump AC's
      presence in the growing Atlantic City gaming market (the "Atlantic City
      Market"). After giving effect to the Taj Acquisition and the Trump Plaza
      Expansion, Trump AC had acquired approximately one-quarter of Atlantic
      City's casino square footage, slot machines, table games and hotel room
      inventory. The combination of the Taj Mahal with Trump Plaza's operations
      has provided opportunities for operational efficiencies, economies of
      scale and benefits from the talent, expertise and experience of management
      at the operating entities. In July 1997, Trump AC completed an expansion
      plan at the Taj Mahal (the "Taj Mahal Expansion"), which included
      construction of a new bus terminal, expansion of parking facilities and
      expansion of casino floor space.
 
    - THE "TRUMP" NAME. Trump AC capitalizes on the widespread recognition of
      the "Trump" name and its association with high quality amenities and first
      class service. To this end, Trump AC provides a broadly diversified gaming
      and entertainment experience consistent with the "Trump" name and
      reputation for quality.
 
      The following table profiles Trump AC's current casino and hotel capacity:
 
<TABLE>
<CAPTION>
                                                               TRUMP
                                                               PLAZA                   TRUMP
                                                               MAIN        TRUMP      WORLD'S
                                                             FACILITY   PLAZA EAST     FAIR      TAJ MAHAL     TOTAL
                                                             ---------  -----------  ---------  -----------  ---------
<S>                                                          <C>        <C>          <C>        <C>          <C>
      Gaming square footage................................     74,226      14,886      49,193     147,720     286,025
      Slot machines........................................      2,201         371       1,518       4,136       8,226
      Table games..........................................        101           0          16         218         335
      Hotel rooms..........................................        555         349         500       1,250       2,654
</TABLE>
 
      The Registrants operate in only one industry segment. See "Financial
      Statements and Supplementary Data."
 
TRUMP PLAZA
 
    Management believes that Trump Plaza's "Four Star" Mobil Travel Guide rating
and "Four Diamond" American Automobile Association rating reflect the high
quality amenities and services that Trump Plaza provides to its casino patrons
and hotel guests. These amenities and services include a broad selection of
dining choices, headline entertainment, deluxe accommodations, tennis courts and
swimming and health spa facilities.
 
    Management believes that as a result of the Trump Plaza Expansion and Trump
Plaza's strategic location, Trump Plaza is one of the premier host properties in
Atlantic City. The Trump Plaza Expansion was completed in May 1996 and increased
Trump Plaza's prime central frontage on The Boardwalk to nearly a quarter of a
mile. Management believes that the construction of the new convention center and
the tourist corridor linking the new convention center with The Boardwalk
enhances the desirability of Atlantic City generally and, as a result of Trump
Plaza's central location, benefits Trump Plaza in particular. In addition,
management has taken advantage of recent gaming regulatory changes that allow
casino space to be directly visible and accessible from The Boardwalk. Trump
Plaza's location on The Boardwalk at the end of the main highway into Atlantic
City makes it highly accessible for both "drive-in" and "walk-in" patrons.
 
    As part of the Trump Plaza Expansion, Trump Plaza opened the Ocean View
Casino and Bar and a total of 349 rooms, including nine super suites, located at
Trump Plaza East, which is fully integrated into Trump Plaza. Trump Plaza East
has approximately 15,000 square feet of casino space. Trump Plaza also completed
construction of a new entranceway to Trump Plaza to provide easier access by car
to Trump Plaza.
 
                                       2
<PAGE>
    In May 1996, Trump AC completed the renovations and integration of Trump
World's Fair, located on The Boardwalk adjacent to the original Atlantic City
Convention Center, into Trump Plaza. Trump World's Fair contains 49,193 square
feet of casino floor space, approximately 16,000 square feet of which is
directly accessible from The Boardwalk, and 500 hotel rooms, connected to Trump
Plaza's main tower by an enclosed walkway overlooking The Boardwalk.
 
    Management believes the increased hotel capacity as a result of the Trump
Plaza Expansion enables Trump Plaza to better meet demand and accommodate its
casino guests, as well as to host additional and larger conventions and
corporate meetings.
 
    The following table details Trump Plaza's current casino and hotel capacity:
 
<TABLE>
<CAPTION>
                                                                       TRUMP                      TRUMP
                                                                    PLAZA MAIN    TRUMP PLAZA    WORLD'S
                                                                     FACILITY        EAST         FAIR       TOTAL
                                                                    -----------  -------------  ---------  ---------
<S>                                                                 <C>          <C>            <C>        <C>
Gaming square footage.............................................      74,226        14,886       49,193    138,305
Slot machines.....................................................       2,201           371        1,518      4,090
Table games.......................................................         101             0           16        117
Hotel rooms.......................................................         555           349          500      1,404
</TABLE>
 
    Trump Plaza's management team has launched a variety of initiatives designed
to increase the level of casino gaming activity generally at Trump Plaza and to
attract casino patrons who tend to wager more frequently than the typical
Atlantic City patron. These initiatives include targeted marketing and
advertising campaigns directed to select groups of customers in the Boston-New
York-Washington, D.C. corridor, the introduction of new slot machines and table
games and the addition of bill acceptors on slot machines.
 
    ATLANTIC CITY MARKETING STRATEGY
 
    TRUMP PLAZA.  Trump Plaza East has been integrated into Trump Plaza and
together the two are operated as a single casino hotel facility. Trump Plaza
presently intends to continue the marketing strategies it has found successful
in the past, including targeting lucrative high-end drive-in slot customers.
Management believes the additional hotel rooms and gaming facilities at Trump
Plaza East better enable Trump Plaza to accommodate the more profitable weekend
drive-in patron, who tends to wager more per play and per visit than the typical
walk-in or bus patron.
 
    TRUMP WORLD'S FAIR.  Trump World's Fair is seeking to attract the "middle
market" segment (primarily bus customers and Boardwalk pedestrian traffic) by
offering high value food and entertainment attractions in a festive "World's
Fair" atmosphere. The first floor of Trump World's Fair features a Boardwalk
level casino offering walk-in customers direct access from The Boardwalk to 569
slot machines. In addition, Trump World's Fair contains a new bus terminal that
has a dedicated escalator leading directly to a separate casino entertainment
area that contains a 500-seat buffet-style restaurant and a casino with
approximately 510 slot machines. The new bus terminal and dedicated casino
facilities allow Trump World's Fair to serve efficiently a high volume of bus
customers. The second floor of Trump World's Fair has approximately 439 slot
machines and 16 table games along with additional restaurants. Moreover, with
its prime location adjoining the original Atlantic City Convention Center and
near the new Atlantic City Convention Center, and its newly refurbished room
base of 500 rooms and approximately 50,000 square feet of total gaming space,
management believes that Trump World's Fair is ideally suited to attract
convention visitor traffic.
 
    TRUMP PLAZA BUSINESS STRATEGY
 
    GENERAL.  A primary element of Trump Plaza's business strategy is to seek to
attract patrons who tend to wager more frequently and in larger denominations
than the typical Atlantic City gaming customer. Such high-end players typically
wager $5 or more per play in slots and $25 or more per play in table games. In
the fall of 1992, Trump Plaza Associates ("Plaza Associates"), the owner and
operator of Trump Plaza, decided to de-emphasize marketing efforts directed at
"high roller" patrons from the Far East, who tend to
 
                                       3
<PAGE>
wager $50,000 or more per play in table games. Plaza Associates determined that
the potential benefit derived from these patrons did not outweigh the high costs
associated with attracting such players and the resultant volatility in the
results of operations of Trump Plaza. Revenues derived from high roller patrons
have declined since 1992, although management believes that such revenue loss
has not had a significant impact on profitability for the reasons discussed
above. In addition, this shift in marketing strategy has allowed Plaza
Associates to focus its efforts on attracting high-end players.
 
    Although considered one property, Trump Plaza and Trump World's Fair have
separate marketing identities. Trump Plaza caters to the mid to high level
segment while Trump World's Fair focuses on the "middle" market. Trump Plaza's
concentration of special events, entertainment, suites and variety of gourmet
restaurants define its presence and highly perceived image. The suite renovation
and high-end slot club expansion projects indicate Plaza Associates' commitment
to this segment of the market. While Trump Plaza strives to accommodate the more
lucrative drive-in patron, Trump World's Fair offers a fun, relaxing experience
which is extremely appealing to the bus rider. A combination of lower slot
denominations, including Atlantic City's largest nickel lounge, lower table
limits, sweepstakes, bus bingo programs, on-floor tournaments and a premier
buffet make this possible.
 
    "COMPING" STRATEGY.  In order to compete effectively with other Atlantic
City casino hotels, Plaza Associates offers complimentary drinks, meals, room
accommodations and/or travel arrangements to its patrons ("complimentaries" or
"comps"). Management monitors Trump Plaza's policy so as to provide
complimentaries primarily to patrons with a demonstrated propensity to wager at
Trump Plaza. A patron's propensity to wager is determined by a review of the
patron's prior gaming history at Trump Plaza as well as other gaming
establishments in Atlantic City. Each patron is analyzed to ensure that the
patron's gaming activity, net of any complimentaries, is profitable to Plaza
Associates.
 
    ENTERTAINMENT.  Trump Plaza offers headline entertainment as part of its
strategy to attract high-end and other patrons. Trump Plaza offers headline
entertainment weekly during the summer and monthly during the off-season, and
also features other entertainment and revue shows.
 
    PLAYER DEVELOPMENT/CASINO HOSTS.  Plaza Associates currently employs gaming
representatives in New Jersey, New York and other states, as well as several
international representatives, to promote Trump Plaza to prospective gaming
patrons. Player development personnel host special events, offer incentives and
contact patrons directly in an effort to attract high-end table game patrons
from the United States, Canada and South America. Trump Plaza's casino hosts
assist patrons on the casino floor, make room and dinner reservations and
provide general assistance. They also solicit Trump Card (the frequent player
slot card) sign-ups in order to increase Plaza Associates' marketing base.
 
    PROMOTIONAL ACTIVITIES.  The Trump Card constitutes a key element in Trump
Plaza's direct marketing program. Slot machine players are encouraged to
register for and utilize their personalized Trump Card to earn various
complimentaries based upon their level of play. The Trump Card is inserted
during play into a card reader attached to the slot machine for use in
computerized rating systems. Plaza Associates' computer systems record data
about the cardholders, including playing preferences, frequency and denomination
of play and the amount of gaming revenues produced.
 
    Trump Plaza designs promotional offers, conveyed via direct mail and
telemarketing, to patrons 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.
Promotional activities include the mailing of vouchers for complimentary slot
play. Trump Plaza also utilizes a special events calendar (E.G., birthday
parties, sweepstakes and special competitions) to promote its gaming operations.
 
    BUS PROGRAM.  Trump Plaza has a bus program, which transports approximately
1,700 gaming patrons per day during the week and 2,400 per day on the weekends.
Trump Plaza's bus program offers incentives and discounts to certain scheduled
and chartered bus customers. Trump Plaza's Transportation Facility (as
 
                                       4
<PAGE>
defined) contains 13 bus bays and is connected by an enclosed pedestrian walkway
to Trump Plaza. The Transportation Facility provides patrons with immediate
access to the casino, and contains a comfortable lounge area for patrons waiting
for return buses. Trump World's Fair has a newly constructed bus terminal with a
dedicated escalator leading directly to a casino entertainment area complete
with an international buffet. Trump World's Fair's bus terminal provides patrons
with a spacious lounge area with a view of the Atlantic Ocean and The Boardwalk.
Trump World's Fair's bus program transports approximately 1,200 gaming patrons
per day during the week and 2,100 per day on weekends.
 
    CREDIT POLICY.  Historically, Trump Plaza has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1995, 1996 and 1997 credit play as a percentage of total dollars wagered was
approximately 17.7%, 17.4% and 18.9%, respectively. As part of Trump Plaza's
business strategy, Trump Plaza has imposed stricter standards on applications
for new or additional credit. Trump Plaza bases credit limits on each individual
patron's creditworthiness, as determined by an examination of the following
criteria: (i) checking each patron's personal checking account for current and
average balances, (ii) performing a credit check on each domestic patron and
(iii) checking each patron's credit limits and indebtedness at all casinos in
the United States as well as many island casinos. The above determination of a
patron's continued creditworthiness is performed for continuing patrons on a
yearly basis or more frequently if Trump Plaza deems a re-determination of
credit worthiness is necessary. In addition, depositing of markers is regulated
by the State of New Jersey. Markers in increments of $1,000 or less are
deposited in a maximum of 7 days; markers of increments of $1,001 to $5,000 are
deposited in a maximum of 14 days; and markers in increments of over $5,001 are
deposited in a maximum of 45 days. Markers may be deposited sooner at the
request of patrons or at Trump Plaza's discretion.
 
    FACILITIES AND AMENITIES
 
    TRUMP PLAZA.  The casino in Trump Plaza's main tower currently offers 101
table games and 2,201 slot machines. In addition to the casino, Trump Plaza's
main tower consists of a 31-story tower with 555 guest rooms, including 62
suites. Trump Plaza's main tower also offers 10 restaurants, a 750-seat cabaret
theater, four cocktail lounges, 28,000 square feet of convention, ballroom and
meeting room space, a swimming pool, tennis courts and a health spa.
 
    The entry level of Trump Plaza's main tower includes a cocktail lounge,
three gift shops, a deli, a coffee shop, an ice cream parlor and a buffet. The
casino level houses the casino, a fast food restaurant, an exclusive slot lounge
for high-end patrons and an ocean view high-end slot area. An enclosed walkway
connects Trump Plaza at the casino level with the original Atlantic City
Convention Center and with Trump World's Fair.
 
    On February 16, 1996, Trump Plaza opened the approximately 15,000
square-foot Ocean View Casino and Bar and 249 of its 349 hotel rooms at Trump
Plaza East. Management opened the remaining rooms and suites at Trump Plaza East
in March 1996. The Ocean View Casino and Bar is the first gaming room in
Atlantic City to combine a casino, bar and entertainment area, and features a
70-foot long bar with 27 bar-top slot machines, live entertainment and a 58
square-foot video wall, complemented by six additional television sets along the
bar. With its high ceilings and windows overlooking the Atlantic Ocean and The
Boardwalk, Trump Plaza has created a new and exciting entertainment environment
for its casino patrons.
 
    Trump Plaza's guest rooms are located in two towers which afford most guest
rooms a view of the ocean. While rooms are of varying size, a typical guest room
consists of approximately 400 square feet. 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 Trump Plaza's main tower and
offer luxurious accommodations and 24-hour butler and maid service. The Super
Suites and certain other suites are located on the "Club Level" which requires
guests to use a special elevator key for access, and contains a lounge area that
offers food and bar facilities.
 
    Trump Plaza's main tower is connected by an enclosed pedestrian walkway to a
10-story parking garage, which can accommodate approximately 2,650 cars, and
contains 13 bus bays, a comfortable lounge,
 
                                       5
<PAGE>
a gift shop and a waiting area (the "Transportation Facility"). The
Transportation Facility provides patrons with immediate access to the casino,
and is located directly off the Atlantic City Expressway, the main highway into
Atlantic City.
 
    In July 1994, Time Warner Entertainment Company, L.P. ("Time Warner") opened
its second largest Warner Brothers Studio Store occupying the entire first floor
of retail space on The Boardwalk at Trump Plaza East (approximately 17,000
square feet).
 
    TRUMP WORLD'S FAIR.  Trump World's Fair is connected to Trump Plaza's main
tower by an enclosed walkway overlooking The Boardwalk and adds an additional
500 hotel rooms to Trump Plaza. In addition, Trump World's Fair is outfitted
with approximately 50,000 square feet of casino floor space housing 1,518-slot
machines and 16 table games. In addition to the casino, Trump World's Fair
features three restaurants, including a state-of-the-art buffet, a cocktail
lounge, convention and ballroom and meeting room space. The enclosed walkway
runs through a portion of the original Atlantic City Convention Center, which is
located between Trump World's Fair and Trump Plaza's main tower. Plaza
Associates has acquired an easement with regard to this walkway through the
original Atlantic City Convention Center.
 
    EMPLOYEES AND LABOR RELATIONS
 
    Plaza Associates has approximately 3,770 full time equivalent employees of
whom approximately 1,500 are covered by collective bargaining agreements. The
collective bargaining agreement with Local No. 54 expires on September 15, 1999.
Management believes that its relationships with its employees are satisfactory.
Certain of Plaza Associates' employees must be licensed or registered under the
Casino Control Act.
 
    In April 1993, the National Labor Relations Board (the "NLRB") found that
Plaza Associates had violated the National Labor Relations Act (the "NLRA") in
the context of a union organizing campaign by table game dealers of Plaza
Associates in association with the Sports Arena and Casino Employees Union Local
137 ("Local 137"). In connection with such finding, Plaza Associates was ordered
to refrain from interfering with, restraining or coercing employees in the
exercise of the rights guaranteed them by Section 7 of the NLRA, to notify its
employees of such rights and to hold an election by secret ballot among its
employees regarding whether they desired to be represented for collective
bargaining by Local 137. The election was held on May 20 and 21, 1994 and the
vote, which has been certified by the NLRB, was in favor of management and
against representation by Local 137.
 
    HISTORICAL BACKGROUND
 
    THE 1992 EVENTS.  Plaza Associates and Trump Plaza Funding ("Plaza Funding")
restructured their indebtedness through a prepackaged plan of reorganization
under Chapter 11 of the Bankruptcy Code ("the 1992 Plaza Restructuring") in
order to alleviate their liquidity problems. On May 29, 1992, Plaza Associates
and Plaza Funding completed the 1992 Plaza Restructuring, the purpose of which
was to improve the amortization schedule and extend the maturity of Plaza
Associates' indebtedness by (i) eliminating the sinking fund requirement on
Plaza Funding's 12 7/8% Mortgage Bonds due 1998 (the "Original Plaza Bonds"),
(ii) extending the maturity of such indebtedness from 1998 to 2002, (iii)
lowering the interest rate from 12 7/8% per annum to 12% per annum, (iv)
reducing the aggregate principal amount of the indebtedness under the Original
Plaza Bonds and certain other indebtedness from $250 million to $225 million and
(v) eliminating certain other indebtedness by reconstituting such debt in part
as new bonds (the "Successor Plaza Bonds") and in part as Stock Units (as
defined). The 1992 Plaza Restructuring was necessitated by the inability to
either generate cash flow or obtain additional financing sufficient to make the
scheduled sinking fund payment on the Original Plaza Bonds. In connection with
the 1992 Plaza Restructuring, each holder of $1,000 principal amount of Original
Plaza Bonds and such other indebtedness received (i) $900 principal amount of
Successor Plaza Bonds, (ii) 12 Stock Units, each representing one share of
Common Stock of Plaza Funding and one share of Preferred Stock of Plaza Funding
(the "Stock Units") and (iii) cash payments of approximately $58.65, reflecting
accrued interest.
 
                                       6
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    On May 29, 1992, Plaza Funding, which theretofore had no interest in Plaza
Associates, received a 50% beneficial interest in TP/GP, Inc. ("Trump Plaza
GP"), and Plaza Funding and Trump Plaza GP were admitted as partners of Plaza
Associates. Plaza Funding also issued approximately three million Stock Units to
holders of the Original Plaza Bonds and certain other indebtedness. Pursuant to
the terms of Plaza Associates' partnership agreement, Plaza Funding was issued a
preferred partnership interest, which provided Plaza Funding with partnership
distributions designed to pay dividends on, and the redemption price of, the
Stock Units. Trump Plaza GP became the managing general partner of Plaza
Associates, and, through its Board of Directors, managed the affairs of Plaza
Associates. Trump Plaza GP was subsequently merged with and into Plaza Funding,
which became the managing general partner of Plaza Associates.
 
    THE 1993 EVENTS.  The Successor Plaza Bonds and the Stock Units were
redeemed in 1993 out of the proceeds of a refinancing designed to enhance Plaza
Associates' liquidity and to position Plaza Associates for a subsequent
deleveraging transaction. The 1993 refinancing included (i) the sale by Plaza
Funding of $330 million in aggregate principal amount of 10 7/8% Mortgage Notes
due 2001 (the "Plaza Notes") and (ii) the sale by Trump AC (known prior to April
17, 1996 as Trump Plaza Holding Associates) of $60 million aggregate principal
amount of 12 1/2% Pay-In-Kind Notes due 2003 (the "Plaza PIK Notes") and
warrants to acquire an aggregate of $12 million in principal amount of
additional Plaza PIK Notes (the "Plaza PIK Note Warrants"). Upon consummation of
the refinancing, Plaza Funding held a 1% equity interest in Plaza Associates and
Trump Atlantic City Holding, Inc., known prior to April 17, 1996 as Trump Plaza
Holding, Inc. ("Trump AC Holding"), held a 99% equity interest.
 
    THE 1995 AND 1996 EVENTS.  In connection with the initial public offering
(the "June 1995 Stock Offering") of 10 million shares of THCR Common Stock, THCR
Holdings repurchased and redeemed the Plaza PIK Notes and the Plaza PIK Note
Warrants. In addition, in connection with the June 1995 Stock Offering and the
offering by THCR Holdings and its wholly owned finance subsidiary, Trump Hotels
& Casino Resorts Funding, Inc. ("THCR Funding"), of $155 million 15 1/2% Senior
Secured Notes due 2005 (the "Senior Notes") (the "June 1995 Note Offering" and,
together with the June 1995 Stock Offering, the "June 1995 Offerings"), Trump
transferred, pursuant to a contribution agreement, to THCR Holdings his
ownership interests in Plaza Funding and Trump AC. Upon the consummation of the
June 1995 Offerings, THCR Holdings owned Plaza Associates. In connection with
the Taj Acquisition, THCR Holdings became the owner of both Plaza Associates and
Trump Taj Mahal Associates ("Taj Associates"), the owner and operator of the Taj
Mahal, through its ownership interest in Trump AC. As part of the 1996
Offerings, Trump AC and its wholly owned finance subsidiary, Trump AC Funding,
issued the TAC I Notes (as defined).
 
    THE 1997 EVENTS.  In December 1997, Trump AC and Funding II issued the TAC
II Notes and Trump AC and Funding III issued the TAC III Notes.
 
THE TAJ MAHAL
 
    The Taj Mahal ranked first among all Atlantic City casinos in terms of total
gaming revenues for the year ended December 31, 1997. The Taj Mahal 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 "Four Star" Mobil Travel Guide rating. 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 will enable the Taj Mahal to benefit
from growth of the Atlantic City market.
 
    In recent years, Taj Associates has completed construction of the Taj
Entertainment Complex (as defined), reconfigured and expanded the casino floor
to provide race simulcasting, poker wagering and keno, opened an Asian themed
table game area, opened the Bengal Club for mid-level slot players and increased
the number of poker tables and slot machines. The Taj Mahal's poker room is the
largest in Atlantic City, which management believes adds to its customers'
overall gaming experience. Taj Associates continually monitors operations to
adapt to and anticipate industry trends. From 1994 to mid-1997, the Taj
 
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Mahal refurbished substantially all of its hotel guest rooms and corridors and
replaced all of its existing slot machines with new, more efficient machines
with bill acceptors. Moreover, to further attract high-end players, the Taj
Mahal opened the Dragon Room, an Asian themed table gaming area with 16 table
games, and the Sultan's Palace, a separate 5,900 square-foot high-end slot
lounge. In connection with the Sultan's Palace, the Taj Mahal opened the
relocated and expanded President's Club for high-end slot players.
 
    The Taj Mahal Expansion consisted of the construction of a new 14-bay bus
terminal, which was completed in December 1996, a 2,400 space expansion of the
existing self parking facilities, which was completed in May 1997, and an
approximately 7,000 square foot casino expansion with approximately 260 slot
machines with frontage on The Boardwalk, which was completed in July 1997. In
addition, to increase entertainment opportunities for customers, the Hard Rock
Cafe opened in November 1996, the All Star Cafe opened in March 1997 and the
Stage Deli of New York opened in October 1997. A Warner Brothers Studio Store
opened at the Taj Mahal in May 1997.
 
    THE TAJ MAHAL OPERATIONS
 
    GENERAL.  The Taj Mahal currently has approximately 147,700 square feet of
gaming space, 218 table games and 4,136 slot machines, which includes an
approximately 12,000 square-foot poker, keno and race simulcasting room with 63
poker tables, which was added in 1993 and expanded in 1994. The casino's
offerings include blackjack, progressive blackjack, craps, roulette, baccarat,
mini baccarat, sic-bo, pai gow, pai gow poker, Caribbean stud poker, big six,
mini big six, mini dice and let it ride poker. In December 1995, the Taj Mahal
opened an Asian themed table game area which offers 16 popular Asian table games
catering to the Taj Mahal's growing Asian clientele. In May 1996, the Taj Mahal
opened the Sultan's Palace, a high-end slot lounge. In August 1996, the Taj
Mahal opened the relocated and expanded President's Club for high-end slot
players in conjunction with the Sultan's Palace.
 
    In December 1996, the Taj Mahal opened a new bus terminal with 14 bays. In
November 1996, the Hard Rock Cafe opened at the Taj Mahal adjacent to the casino
and The Boardwalk. In March 1997, the All Star Cafe opened at the Taj Mahal. A
Warner Brothers Studio Store opened in May 1997. An additional simulcasting
facility featuring horse racing was completed in June 1997. Construction of an
approximately 7,000 square-foot casino expansion with 260 slot machines, with
Boardwalk frontage, was completed in July 1997. In October 1997, the Stage Deli
of New York opened at the Taj Mahal. In addition, as a special bonus to high-end
players, the Taj Mahal offers three clubs for the exclusive use of select
customers: the Maharajah Club for high-end table game players, the President's
Club for high-end slot players and the Bengal Club for other preferred slot
players.
 
    The Taj Mahal currently consists of a 42-story hotel tower and contiguous
low-rise structure sited on approximately 30 acres of land. The Taj Mahal has
1,250 guest rooms (including 242 suites), 18 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. In
addition, the Taj Mahal features a 20,000 square-foot multi-purpose
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 (the "Taj Entertainment Complex") and the Mark Etess
Arena, which comprises an approximately 63,000 square-foot exhibition hall and
entertainment facility. The Xanadu Theater and Mark Etess Arena have allowed the
Taj Mahal to offer longer running, more established productions that cater to
the tastes of the Taj Mahal's high-end international guests, and has afforded
the Taj Mahal more flexibility in the use of its facilities for sporting and
other headline programs. The Taj Mahal regularly engages well-known musicians
and entertainment personalities and will continue to emphasize weekend marquee
events such as Broadway revues, high visibility sporting events, international
festivals and contemporary concerts to maximize casino traffic and to maintain
the highest level of glamour and excitement at the Taj Mahal.
 
                                       8
<PAGE>
    GAMING ENVIRONMENT.  The Taj Mahal's management continues to capitalize on
the Taj Mahal's status as one of the largest facilities in Atlantic City and a
"must see" attraction, while maintaining the attractiveness of the property and
providing a comfortable gaming experience. In 1994, the Taj Mahal completed a
major redecoration of the hotel lobby, a casino floor expansion and a
reconfiguration, as well as the addition of a new mid-level player slot club.
The casino floor expansion and reconfiguration accommodated the addition of
keno, poker tables and slot machines. In the period 1994 through 1996, the Taj
Mahal substantially replaced all of its existing slot machines with new, more
efficient machines with bill acceptors. In addition, in June 1993, the Taj Mahal
completed a 10,000 square-foot poker and simulcast area (which was subsequently
enlarged to 12,000 square feet), which features 63 poker tables in the largest
poker room in Atlantic City. For the year ended December 31, 1997, the Taj Mahal
captured approximately 45.3% of the total Atlantic City poker revenues. In 1996
and 1997 the Taj Mahal expanded its casino floor by approximately 6,200 and
8,600 square feet, respectively. The 1997 expansion accommodated casino space
with Boardwalk frontage and a second horserace simulcasting location.
 
    The Taj Mahal currently intends to reconfigure its casino floor, subject to
approval by the CCC on an ongoing basis, to accommodate changes in patron
demand. Management continuously monitors the configuration of the casino floor
and the games it offers to patrons with a view towards making changes and
improvements. For example, the Taj Mahal's casino floor has clear, large signs
for the convenience of patrons. Additionally, as new games have been approved by
the CCC, management has integrated such games to the extent it deems
appropriate. In 1994, the Taj Mahal introduced the newly-approved games of keno
and Caribbean stud poker and, in 1995, introduced the games of pai gow, pai gow
poker and let it ride poker. Progressive blackjack and mini dice were also added
in 1996 and 1997, respectively.
 
    "COMPING" STRATEGY.  In order to compete effectively with other casino
hotels, the Taj Mahal offers complimentaries. Currently, the policy at the Taj
Mahal is to focus promotional activities, including complimentaries, on middle
and upper middle market "drive in" patrons who visit Atlantic City frequently
and have proven to be the most profitable market segment. A patron's propensity
to wager is determined by a review of the patron's prior gaming history at the
Taj Mahal as well as other gaming establishments in Atlantic City. Each patron
is analyzed to ensure that the patron's gaming activity, net of any
complimentaries, is profitable to Taj Associates. 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.  The Taj Mahal believes headline entertainment, as well as
other entertainment and revue shows, is an effective means of attracting and
retaining gaming patrons. The Xanadu Theater allows the Taj Mahal to offer
longer running, more established productions that cater to the tastes of the Taj
Mahal's high-end international guests. 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 programs. The Taj Mahal regularly engages
well-known musicians and entertainment personalities and will continue to
emphasize weekend "marquee" events such as Broadway revues, high visibility
sporting events, festivals and contemporary concerts to maintain the highest
level of glamour and excitement. Mid-week uses for the facilities include
convention events and casino marketing sweepstakes.
 
    PLAYER DEVELOPMENT.  The Taj Mahal employs sales representatives as a means
of attracting high-end slot and table gaming patrons to the property. The Taj
Mahal currently employs numerous gaming representatives in New Jersey, New York
and other states, as well as several international representatives, to host
special events, offer incentives and contact patrons directly in the United
States, Canada and South America. In addition, targeted marketing to
international clientele will be continued and expanded through new sales
representatives in Latin America, Mexico, Europe, the Far East and the Middle
East.
 
                                       9
<PAGE>
    The casino hosts assist patrons on the casino floor, make room and dinner
reservations and provide general assistance. They also solicit Trump Card (a
player identification card) sign-ups in order to increase the Taj Mahal's
marketing base.
 
    The Taj Mahal also plans to continue the development of its slot and coin
programs through direct mail and targeted marketing campaigns emphasizing the
high-end player. "Motorcoach Marketing," 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 Trump Card, a player identification card,
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 Trump Card to earn various complimentaries and incentives based on
their level of play. The Trump Card is inserted during play into a card reader
attached to the table or slot machine for use in computerized rating systems.
These computer systems record data about the cardholder, including playing
preferences, frequency and denomination of play and the amount of gaming
revenues produced. Sales and management personnel are able to monitor the
identity and 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 on the casino floor.
 
    The Taj Mahal designs promotional offers, conveyed via direct mail and
telemarketing, to patrons 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 games supervisor.
Promotional activities at the Taj Mahal include the mailing of vouchers for
complimentary slot play and utilization of a special events calendar (e.g.,
birthday parties, sweepstakes and special competitions) to promote its gaming
operations.
 
    The Taj Mahal conducts 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 tend to play 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.
 
    CREDIT POLICY.  Historically, the Taj Mahal has extended credit on a
discretionary basis to certain qualified patrons. For the years ended December
31, 1995, 1996 and 1997, the Taj Mahal's credit play as a percentage of total
dollars wagered was approximately 24.5%, 29.7% and 31.2%, respectively. The Taj
Mahal bases credit limits on each individual patron's creditworthiness, as
determined by an examination of the following criteria: (i) checking each
patron's personal checking account for current and average balances, (ii)
performing a credit check on each domestic patron and (iii) checking each
patron's credit limits and indebtedness at all casinos in the United States as
well as many island casinos. The above determination of a patron's continued
creditworthiness is performed for continuing patrons on a yearly basis or more
frequently if the Taj Mahal deems a re-determination of credit worthiness is
necessary. In addition, depositing of markers is regulated by the State of New
Jersey. Markers in increments of $1,000 or less are deposited in a maximum of 7
days; markers of increments of $1,001 to $5,000 are deposited in a maximum of 14
days; and markers in increments of over $5,001 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
 
    Taj Associates has approximately 4,500 full time equivalent employees for
the operation of the Taj Mahal, of whom approximately 1,750 employees are
covered by collective bargaining agreements. The collective bargaining agreement
with Local No. 54 expires on September 15, 1999. Management believes that its
relationships with its employees are satisfactory and that its staffing levels
are sufficient to provide
 
                                       10
<PAGE>
superior service. Certain of Taj Associates' employees must be licensed or
registered under the Casino Control Act.
 
    TAJ ACQUISITION
 
    On April 17, 1996, a subsidiary of THCR was merged (the "Taj Merger") with
and into THCR Holding Corp., known prior to April 17, 1996 as Taj Mahal Holding
Corp. As a result of the Taj Merger and the related transactions discussed
below, THCR Holdings acquired Taj Associates. The Taj Acquisition included,
among other things:
 
        (a) the payment of an aggregate of approximately $31,181,000 in cash and
    the issuance of 323,423 shares of THCR Common Stock to the holders of THCR
    Holding Corp.'s Class A Common Stock, par value $.01 per share;
 
        (b) the contribution (i) by Trump to Trump AC of all of his direct and
    indirect ownership interests in Taj Associates, pursuant to the contribution
    agreement, dated as of April 17, 1996, among, Trump, Trump Casinos, Inc.
    ("TCI"), TM/GP Corporation, known after the Taj Acquisition as THCR/LP
    Corporation ("THCR/LP"), and THCR Holdings in exchange for a modification of
    Trump's limited partnership interest in THCR Holdings and (ii) by THCR to
    Trump AC of all of its direct ownership interests in Taj Associates acquired
    in the Taj Merger;
 
        (c) the public offerings by (i) THCR of 12,500,000 shares of THCR Common
    Stock (plus 750,000 shares of THCR issued in connection with the partial
    exercise of the underwriters' over-allotment option (together, the "1996
    Stock Offering")), and (ii) Trump AC and Trump AC Funding of the TAC I Notes
    (collectively with the 1996 Stock Offering, the "1996 Offerings");
 
        (d) the redemption, immediately prior to the Taj Merger, of the
    outstanding shares of THCR Holding Corp.'s Class B Common Stock, par value
    $.01 per share, in accordance with its terms, for $.50 per share;
 
        (e) the redemption of the outstanding 11.35% Mortgage Bonds, Series A,
    due 1999 issued by Trump Taj Mahal Funding, Inc. (the "Taj Bonds");
 
        (f) the retirement of the outstanding Plaza Notes;
 
        (g) the satisfaction of the indebtedness of Taj Associates under its
    loan agreement with National Westminster Bank USA ("Nat West");
 
        (h) the purchase of certain real property used in the operation of the
    Taj Mahal (the "Specified Parcels") that was leased from Taj Mahal Realty
    Corp. ("Realty Corp.");
 
        (i) the purchase of Trump Plaza East;
 
        (j) the payment to Bankers Trust Company ("Bankers Trust")to obtain
    releases of liens and guarantees that Bankers Trust had in connection with
    indebtedness owed by Trump to Bankers Trust; and
 
        (k) the issuance to Trump of warrants to purchase 1,800,000 shares of
    THCR Common Stock (the "Trump Warrants").
 
TCS
 
    Trump Casino Services, a New Jersey limited liability company ("TCS"), was
formed on June 27, 1996 for the purpose of reducing operating costs by
consolidating certain administrative functions of, and providing certain
services to, each of Plaza Associates and Taj Associates, the owner and operator
of Trump Plaza and the Taj Mahal, respectively. Trump AC and Trump Atlantic City
Corporation ("TACC"), a wholly owned subsidiary of Trump AC, own a 99% and 1%
interest, respectively, in TCS. In June 1996,
 
                                       11
<PAGE>
the CCC granted TCS an initial casino license which, in July 1997, was renewed
through July 1998. On July 8, 1996, TCS, Plaza Associates and Taj Associates
entered into an agreement (the "TCS Services Agreement") pursuant to which TCS
provides to each of Taj Associates and Plaza Associates certain management,
financial and other functions and services necessary and incidental to the
respective operation of each of their casino hotels. On October 23, 1996, TCS,
Plaza Associates, Taj Associates and Trump Castle Associates, L.P. ("Castle
Associates"), the owner and operator of Trump Marina Hotel Casino ("Trump
Marina"), entered into an Amended and Restated Services Agreement pursuant to
which TCS also provides those same functions and services to Castle Associates
in connection with the operation of Trump Marina. Trump Communications, L.L.C.
("Trump Communications"), a New Jersey limited liability company and a
subsidiary of TCS, was formed on January 31, 1997 for the purpose of reducing
operating costs by consolidating advertising functions of, and providing certain
services, to each of Plaza Associates, Taj Associates and Castle Associates.
 
TRADEMARK/LICENSING
 
    Subject to certain restrictions, THCR has the exclusive right to use the
"Trump" name and likeness in connection with gaming and related activities
pursuant to a trademark license agreement between Trump and THCR (the "License
Agreement"). Pursuant to the License Agreement, Trump granted to THCR the
world-wide right and license to use the names "Trump," "Donald Trump" and
"Donald J. Trump" (including variations thereon, the "Trump Names") and related
intellectual property rights (collectively, the "Marks") in connection with
casino and gaming activities and related services and products. The License
Agreement does not restrict or restrain Trump from the right to use or further
license the Trump Names in connection with services and products other than
casino services and products.
 
    The license is for a term of the later of: (i) June 2015; (ii) such time as
Trump and his affiliates no longer hold a 15% or greater voting interest in
THCR; or (iii) such time as Trump ceases to be employed or retained pursuant to
an employment, management, consulting or similar services agreement with THCR.
Upon expiration of the term of the license, Trump will grant THCR a
non-exclusive license for a reasonable period of transition on terms to be
mutually agreed upon between Trump and THCR. Trump's obligations under the
License Agreement are secured by a security agreement, pursuant to which Trump
granted 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.  As a part of the Taj Acquisition, Trump AC and Trump AC
Funding issued in an underwritten offering $1,200,000,000 aggregate principal
amount of Mortgage Notes which mature on May 1, 2006 (the "TAC I Notes"). The
TAC I Notes include restrictive covenants prohibiting or limiting, among other
things, the sale of assets, the making of acquisitions and other investments,
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.
 
    TAC II NOTES.  In December 1997, Trump AC and Funding II issued in a private
offering, exempt from registration under the Securities Act, $75,000,000
principal amount of the TAC II Notes which mature on May 1, 2006. The TAC II
Notes include restrictive covenants prohibiting or limiting, among other things,
the sale of assets, the making of acquisitions and other investments, 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.
 
    TAC III NOTES.  In December 1997, Trump AC and Funding III issued in a
private offering, exempt from registration under the Securities Act, $25,000,000
principal amount of the TAC III Notes which mature on May 1, 2006. The TAC III
Notes include restrictive covenants prohibiting or limiting, among other things,
the sale of assets, the making of acquisitions and other investments, 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.
 
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<PAGE>
    PLAZA NOTES.  The Plaza Notes were retired in connection with the Taj
Acquisition. The Plaza Notes were issued by Plaza Funding, with Plaza Associates
providing a full and unconditional guaranty thereof. The Plaza Notes were
retired through repurchase and defeasance and Plaza Funding and Plaza Associates
were released from their obligations under all financial and negative covenants
and certain other provisions contained in the indenture under which the Plaza
Notes were issued (the "Plaza Note Indenture"), and the Plaza Note Security (as
defined in the Plaza Note Indenture) was released against the deposit of cash or
U.S. government obligations in an amount sufficient to effect the redemption on
June 15, 1998 of all of the Plaza Notes so defeased, at a redemption price of
105% of the principal amount thereof, together with accrued and unpaid interest
to such date. Additionally, Plaza Funding irrevocably instructed the Plaza Note
Trustee (as defined in the Plaza Note Indenture) to provide notice of such
redemption not less than 30 or more than 60 days prior to June 15, 1998.
 
    OTHER INDEBTEDNESS.  In addition to the foregoing, Trump AC's long-term
indebtedness includes approximately $11.3 million of indebtedness, including, as
of December 31, 1997, approximately $3.2 million due under outstanding mortgage
notes described above.
 
ATLANTIC CITY MARKET
 
    The Atlantic City market has demonstrated continued growth despite the
recent proliferation of new gaming venues across the country. The 12 casino
hotels in Atlantic City generated approximately $3.91 billion in gaming revenues
in 1997, an approximately 2.1% increase over 1996 gaming revenues of
approximately $3.83 billion. From 1992 to 1997, total gaming revenues in
Atlantic City have increased approximately 21.4%, while hotel rooms increased by
25.5% during that period. Although total visitor volume to Atlantic City
remained relatively constant in 1997, the volume of bus customers dropped to 9.4
million in 1997, continuing a decline from 11.7 million in 1991. The volume of
customers traveling by other means to Atlantic City has grown from 20.4 million
in 1992 to 34.3 million in 1997.
 
    Casino revenue growth in Atlantic City has lagged behind that of other
traditional gaming markets, principally Las Vegas, for the last five years.
Management believes that this relatively slower growth is primarily attributable
to two key factors. First, there were no significant additions to hotel capacity
in Atlantic City until 1996. Las Vegas visitor volumes have increased, in part,
due to the continued addition of new hotel capacity. Both markets have exhibited
a strong correlation between hotel room inventory and total casino revenues.
Secondly, the regulatory environment and infrastructure problems in Atlantic
City have made it more difficult and costly to operate. Total regulatory costs
and tax levies in New Jersey have exceeded those in Nevada since inception, and
there is generally a higher level of regulatory oversight in New Jersey than in
Nevada. The infrastructure problems, manifested by impaired accessibility of the
casinos, downtown Atlantic City congestion and the condition of the areas
surrounding the casinos have made Atlantic City less attractive to the gaming
customer.
 
    Total Atlantic City slot revenues increased 3.6% in 1997, continuing a trend
of increases over the past five years. From 1992 through 1997, slot revenue
growth in Atlantic City has averaged 5.2% per year. Total table revenue did not
increase in 1997, while table game revenue from 1992 to 1997 has increased on
average 0.8% per year. Management believes the slow growth in table revenue is
primarily attributable to two factors. First, the slot product has been
significantly improved over the last five years. Bill acceptors, new slot
machines, video poker and blackjack and other improvements have increased the
popularity of slot play among a wider universe of casino patrons. Casino
operators in Atlantic City have added slot machines in favor of table games due
to increased public acceptance of slot play and due to slot machines'
comparatively higher profitability as a result of lower labor and support costs.
Since 1992, the number of slot machines in Atlantic City has increased 54%,
while the number of table games has increased by 12.6%. Slot revenues increased
from 66% of total casino revenues in 1992 to 70% in 1997. The second reason for
historic slow growth in table revenue is that table game players are typically
higher end players and are more likely to be interested in overnight stays and
other amenities. During peak season and weekends,
 
                                       13
<PAGE>
room availability in Atlantic City is currently inadequate to meet demand,
making it difficult for casino operators to aggressively promote table play.
 
    The regulatory environment in Atlantic City has improved recently. Most
significantly, 24-hour gaming has been approved, poker and keno have been added
and regulatory burdens have been reduced. In particular, comprehensive
amendments to New Jersey gaming laws were made in January 1995, which have
eliminated duplicative regulatory oversight and channeled operator's funds from
regulatory support into uses of the CRDA. Administrative costs of regulation
will be reduced while increasing funds will be available for new development. In
addition, in 1994, legislation was enacted which eliminated the requirement that
a casino consist of a "single room" in a casino hotel. A casino may now consist
of "one or more locations or rooms" approved by the CCC for casino gaming.
 
    Atlantic City's new convention center, with approximately 500,000 square
feet of exhibit and pre-function space, 45 meeting rooms, food-service
facilities and a 1,600-car underground parking garage, is the largest exhibition
space between New York City and Washington, D.C. It is located at the base of
the Atlantic City Expressway and opened in May 1997. The old convention center,
built in the late 1920s and located on The Boardwalk, will receive an
approximately $50 million facelift following the opening of the new convention
center and will continue to be used for special events. The State of New Jersey
has commenced a long-term capital plan to upgrade and expand the Atlantic City
International Airport. To date, approximately $18 million has been spent on
renovation of the airport terminal and upgrades of the airport's access roads
and parking facilities.
 
    In addition to the planned casino expansions, major infrastructure
improvements have begun. The CRDA is currently overseeing the development of the
$88 million "Grand Boulevard" corridor that will link the new convention center
with The Boardwalk. The project has been substantially completed as of December
31, 1997.
 
    Management believes that recent gaming regulatory reforms will serve to
permit future reductions in operating expenses of casinos in Atlantic City and
to increase the funds available for additional infrastructure development
through the CRDA. Due principally to an improved regulatory environment, general
improvement of economic conditions and high occupancy rates, significant
investment in the Atlantic City market has been initiated and/or announced.
Management believes that these increases in hotel capacity, together with
infrastructure improvements, will be instrumental in stimulating future revenue
growth in the Atlantic City market. See "--Competition."
 
COMPETITION
 
    ATLANTIC CITY.  Competition in the Atlantic City casino hotel market is
intense. Trump Plaza and the Taj Mahal (the "Atlantic City Properties") compete
with each other and with other casino hotels located in Atlantic City, including
Trump Marina, which is wholly owned by THCR Holdings, the parent of Trump AC.
Trump Plaza and the Taj Mahal are located on The Boardwalk, approximately 1.2
miles apart from each other. At present, there are 12 casino hotels located in
Atlantic City, including the Atlantic City Properties, all of which compete for
patrons. In addition, there are several sites on The Boardwalk and the Marina on
which casino hotels could be built in the future and various applications for
casino licenses have been filed and announcements with respect thereto made from
time to time (including a casino resort by Mirage to be built at the Marina and
a casino resort by MGM Grand, Inc. to be built on The Boardwalk), although
management is not aware of any current construction on such sites by third
parties. Substantial new expansion and development activity has recently been
completed or has been announced in Atlantic City, including the expansion at
Harrah's, Hilton, Caesar's, Resorts, Tropicana and Bally's Wild West Casino,
which intensifies competitive pressures in the Atlantic City market. While
management believes that the addition of hotel capacity would be beneficial to
the Atlantic City market generally, there can be no assurance that such
expansion would not be materially disadvantageous to the Atlantic City
Properties.
 
                                       14
<PAGE>
There also can be no assurance that the Atlantic City development projects which
are planned or underway will be completed.
 
    Total Atlantic City gaming revenues have increased over the past five years,
although at varying rates. In 1993, nine casinos experienced increased gaming
revenues compared to 1992 (including the Taj Mahal), while three casinos
(including Trump Plaza) experienced decreased revenues. In 1994, ten casinos
experienced increased gaming revenues compared to 1993 (including the Taj
Mahal), while two casinos (including Trump Plaza) experienced decreased
revenues. During 1995, all 12 casinos experienced increased gaming revenues
compared to 1994. During 1996, six casinos (including Trump Plaza and the Taj
Mahal) experienced increased gaming revenues compared to 1995, while six casinos
experienced decreased revenues. In 1997, eight casinos (including Trump Plaza
and the Taj Mahal) experienced increased gaming revenues compared to 1996, while
four casinos experienced decreased revenues.
 
    In 1992, the Atlantic City casino industry experienced an increase of 6.9%
in gaming revenues per square foot from 1991. Gaming revenues per square foot
increased by 1.4% for 1993 (excluding poker and race simulcast rooms, which were
introduced for the first time in such year), compared to 1992. In 1994, gaming
revenues per square foot decreased 2.5% (or 4.5% including square footage
devoted to poker, keno and race simulcasting). The 1994 decline was due, in
part, to the increase in casino floor space in Atlantic City as a result of
expansion of a number of casinos and to the severe weather conditions which
affected the Northeast during the winter of 1994. Between April 30, 1993 and
December 31, 1995, many operators in Atlantic City expanded their facilities in
anticipation of and in connection with the June 1993 legalization of
simulcasting and poker, increasing total gaming square footage by approximately
181,200 square feet (23.3%) of which approximately 83,700 square feet is
currently devoted to poker, keno and race simulcasting. During this same period,
172 poker tables and 5,500 slot machines were added. During 1996, a total of
approximately 65,870 square feet of casino floor space was added, an increase of
47.2%, including Trump World's Fair's 49,193 square feet. Slot machines
increased by approximately 1,911 units during 1996 and table games increased by
approximately 44 units during 1996, of which Trump World's Fair accounted for
1,518 units and 16 units, respectively. 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 1997.
 
    The Atlantic City 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 a lesser extent, the Atlantic City Properties face competition
from gaming facilities nationwide, including land-based, cruise line, riverboat
and dockside casinos located in Colorado, Illinois, Indiana, Iowa, Louisiana,
Mississippi, Missouri, Nevada, 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. In
September 1995, New York introduced a keno lottery game, which is played on
video terminals that have been set up in approximately 1,800 bars, restaurants
and bowling alleys across the state. In December 1996, Bay Cruises began
operation of a gambling cruise ship where patrons are taken from a pier in
Sheepshead Bay in Brooklyn, New York to international waters to gamble. Bay
Cruises temporarily ceased operations pending the outcome of its appeal of a
federal prosecutor's ruling that the ships must travel 12, rather than 3, miles
offshore to reach international waters. On December 2, 1997, a federal judge
overruled the prosecutor's ruling, and Bay Cruises announced plans to resume
operations. In September 1997, another gambling cruise ship was launched off the
coast of Montauk, New York. On January 28, 1998, Manhattan Cruises began
offering nightly gambling cruises departing from Manhattan, New York City and
five other companies are currently seeking permission to operate similar
cruises. On December 5, 1997, the mayor of New York City proposed the
construction of a casino on Governors Island, located in the middle of New York
Harbor; however the proposal would
 
                                       15
<PAGE>
require an amendment to the New York State Constitution and the sale of the
island to New York by the federal government. In Delaware, a total of
approximately 2,000 slot machines were installed at 3 horse tracks in 1996, and
track owners in several other states are seeking to do the same. In December
1996, the temporary Casino Niagara opened in Niagara Falls, Ontario. Ontario
officials expect that two-thirds of Casino Niagara's patrons will come from the
United States, predominantly from western New York. In February 1998, the
Ontario Casino Commission designated a consortium whose principal investor is
Hyatt Hotels Corporation ("Hyatt") as the preferred developer of the permanent
Casino Niagara.
 
    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 Atlantic City Properties compete directly with each other and
with Trump Marina for gaming patrons.
 
    OTHER COMPETITION.  In addition, the Atlantic City Properties face
competition from casino facilities in a number of states operated by federally
recognized Native American tribes. Pursuant to 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 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
Atlantic City Properties. In March 1996, the United States Supreme Court struck
down a provision of IGRA which allowed Native American tribes to sue states in
federal court for failing to negotiate gaming compacts in good faith. Management
cannot predict the impact of this decision on the ability of Native American
tribes to negotiate compacts with states.
 
    In 1991, the Mashantucket Pequot Nation opened Foxwoods, a casino 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, which currently offers 24-hour gaming and
contains over 5,500 slot machines. An ongoing expansion at Foxwoods, due to be
completed in April 1998, will include additional hotel rooms, restaurants and
retail stores. A high speed ferry between New York City and Foxwoods is due to
begin service in March 1998. 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. In addition, in October 1996, the
Mohegan Nation opened the Mohegan Sun Resort in Uncasville, Connecticut, located
10 miles from Foxwoods. Developed by Sun Hotel International, Ltd., the Mohegan
Sun Resort has 75% of the gaming capacity of Foxwoods. The Mohegan Nation has
announced plans for an expansion of the casino facilities and the construction
of a hotel, convention center and entertainment center to be completed by the
year 2000. In addition, the Eastern Pequots are seeking formal recognition as a
Native American tribe for the purpose of opening a casino in the North
Stonington area. 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 would not have a materially adverse impact on the operations of the
Atlantic City Properties.
 
    A group in Cumberland County, New Jersey calling itself the "Nanticoke Lenni
Lenape" tribe has filed a notice of intent with the Bureau of Indian Affairs
seeking formal federal recognition as a Native American tribe. Also, it has been
reported that a Sussex County, New Jersey businessman has offered to donate land
he owns there to the Oklahoma-based Lenape/Delaware Indian Nation which
originated in New Jersey and already has federal recognition, but does not have
a reservation in New Jersey. The Lenape/Delaware Indian Nation has signed an
agreement with the town of Wildwood, New Jersey to open a casino; however, the
plan requires federal and state approval in order to proceed. In July 1993, the
Oneida Nation opened a casino featuring 24-hour table gaming and electronic
gaming systems, but without slot machines, near Syracuse, New York. The Oneida
Nation opened a hotel in October 1997 that included expanded gaming facilities,
and has announced plans to construct a golf course and convention center.
Representatives of the St. Regis Mohawk Nation signed a gaming compact with New
York State officials
 
                                       16
<PAGE>
for the opening of a casino, without slot machines, in the northern portion of
the state close to the Canadian border. The St. Regis Mohawks have also
announced their intent to open a casino at the Monticello Race Track in the
Catskill Mountains region of New York; however, any Native American gaming
operation in the Catskills is subject to the approval of the Governor of New
York. The Narragansett Nation of Rhode Island, which has federal recognition, is
seeking to open a casino in Rhode Island. The Aquinnah Wampanoag Tribe is
seeking to open a casino in Fall River, 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.
 
    STATE LEGISLATION.  Legislation permitting other forms of casino gaming has
been proposed, from time to time, in various states, including those bordering
New Jersey. Six states have presently legalized riverboat gambling while others
are considering its approval, including New York and Pennsylvania. Several
states are considering or have approved large scale land-based casinos.
Additionally, since 1993, the gaming space in Las Vegas has expanded
significantly, with additional capacity planned and currently under
construction. The operations of the Atlantic City Properties could be adversely
affected by such competition, particularly if casino gaining were permitted in
jurisdictions near or elsewhere in New Jersey or in other states in the
Northeast. In December 1993, the Rhode Island Lottery Commission approved the
addition of slot machine games on video terminals at Lincoln Greyhound Park and
Newport Jai Alai, where poker and blackjack have been offered for over three
years. Currently, casino gaming, other than Native American gaming, is not
allowed in other areas of New Jersey or in Connecticut, New York or
Pennsylvania. On November 17, 1995, a proposal to allow casino gaming in
Bridgeport, Connecticut was voted down by that state's Senate. On January 28,
1997, the New York State Senate rejected a constitutional amendment to legalize
casino gambling in certain areas of New York State, effectively postponing any
new gambling constitutional amendment until 1999. 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, would have a material adverse impact on Trump AC.
 
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. UNLESS OTHERWISE
INDICATED, ALL REFERENCES TO "TRUMP PLAZA" INCLUDE (A) TRUMP PLAZA'S MAIN TOWER,
INCLUDING TRUMP PLAZA EAST AND (B) TRUMP WORLD'S FAIR.
 
    NEW JERSEY GAMING REGULATIONS
 
    In general, the Casino Control Act and its implementing regulations 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; equal employment opportunities for employees of
casino operators, contractors of casino facilities and others; and advertising,
entertainment and alcoholic beverages.
 
                                       17
<PAGE>
    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.
 
    OPERATING LICENSES.  In June 1995, the CCC renewed Plaza Associates' license
to operate Trump Plaza through June 1999. In May 1996, the CCC granted Plaza
Associates a license to operate Trump World's Fair through May 1997. In December
1996, the CCC allowed Plaza Associates to operate Trump Plaza and Trump World's
Fair under one casino license through May 1999. In June 1995, the CCC renewed
Taj Associates' license to operate the Taj Mahal through March 1999. In June
1996, the CCC also granted TCS a license through July 1997, which license has
been renewed through July 1998. Timely applications for renewal of the TCS
casino license will be made to the CCC. In June 1995, the CCC renewed Castle
Associates' casino license and approved Trump as a natural person qualifier
through May 1999. None of these licenses are transferable and their renewal will
include a financial review of the relevant operating entities as well as their
holding and intermediary companies. Upon revocation, suspension for more than
120 days or failure to renew a casino license, the Casino Control Act provides
for the appointment of a conservator to take possession of the hotel and
casino's business and property, subject to all valid liens, claims and
encumbrances.
 
    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, Taj Associates and Castle Associates are
renewable for periods of up to four years and the license held by TCS is
renewable for a period of up to one year. 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").
 
    Each casino license, except the TCS license, entitles the holder to operate
one casino. Further, no person may be the holder of a casino license if the
holding of such license will result in undue economic concentration in Atlantic
City casino operations by that person. On May 17, 1995, the CCC adopted a
regulation defining the criteria for determining undue economic concentration
which outlines the content of existing CCC precedent with respect to the
subject. In its May 18, 1995 declaratory rulings with respect to Plaza
Associates' petition, the CCC, among other things, determined that Plaza
Associates' operation of Trump World's Fair casino space would not result in
undue economic concentration in Atlantic City casino operations.
 
    To be considered financially stable, a licensee must demonstrate the
following ability: 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."
 
                                       18
<PAGE>
    Management believes that it has adequate financial resources to meet the
financial stability requirements under the Casino Control Act for the
foreseeable future.
 
    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.
 
    CONTROL PERSONS.  An entity qualifier or intermediary or holding company,
such as Trump AC, Trump AC Holding, Plaza Funding or TACC 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 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
15% of an issue of publicly-traded mortgage bonds so long as the bonds remained
widely distributed and freely traded in the public market and the holder has no
ability to control the casino licensee. The CCC may require holders of less than
15% 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
 
                                       19
<PAGE>
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% or less of the total outstanding debt of the company or
(B) 50% or less of any issue of outstanding debt of the company, (y) the
securities are equity securities and represent less than 10% 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 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. Trump AC, Trump AC Funding, Funding II and
Funding III are deemed to be Regulated Companies, 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.
 
                                       20
<PAGE>
    Under the terms of the indentures which govern the TAC I Notes (the "TAC I
Note Indenture"), the TAC II Notes (the "TAC II Note Indenture") and the TAC III
Notes (the "TAC III Note Indenture"), if a holder of such securities does not
qualify under the Casino Control Act when required to do so, such holder must
dispose of its interest in such securities, and Trump AC, Trump AC Funding,
Funding II and Funding III may redeem the securities at the lesser of the
outstanding amount or fair market value.
 
    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 that 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, the 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 to 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.
 
    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.
 
                                       21
<PAGE>
    APPROVED HOTEL FACILITIES.  The CCC may permit an existing licensee 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 durational term
exceeding 30 years, must concern 100% 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% 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% on its gross casino revenues. For the years ended December 31, 1995,
1996 and 1997, Plaza Associates' gross revenue tax was approximately $24.0
million, $29.8 million and $30.1 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $4.4 million,
$6.0 million and $4.9 million, respectively. For the years ended December 31,
1995, 1996 and 1997, Taj Associates' gross revenue tax was approximately $40.2
million, $40.7 million and $41.7 million, respectively, and its license,
investigation and other fees and assessments totaled approximately $5.2 million,
$5.0 million and $3.9 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 (the "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 ten 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
 
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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% of its eligible tax credit in any one year.
 
    From the monies made available to the CRDA, the CRDA was required to set
aside $175 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 were used to fund up to 27% 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.  Since July 1, 1993, each casino licensee
has been 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, Trump AC Funding, Funding II, Funding III, Taj Associates 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.
 
    QUALIFICATION OF EMPLOYEES.  Certain employees of Plaza Associates, Taj
Associates and TCS 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.  Plaza Associates' and Taj Associates' casino games are
conducted on a credit as well as cash basis. Gaming debts arising in Atlantic
City in accordance with applicable regulations are
 
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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.
 
    CONTROL PROCEDURES.  Gaming at the Atlantic City 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 camera 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, Plaza Associates and Taj
Associates are 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.
 
    In the past, the Service had taken the position that gaming winnings from
table games by nonresident aliens were subject to a 30% 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.
 
    As the result of an audit conducted by the Treasury's Office of Financial
Enforcement in 1995, Plaza Associates was alleged to have failed to file timely
the Currency Transaction Report in connection with 65 individual currency
transactions in excess of $10,000 during the period from October 31, 1986 to
December 10, 1988. Plaza Associates paid a fine of $292,500 in connection with
these violations. Plaza Associates has revised its internal control procedures
to ensure continued compliance with these regulations. From 1992 through 1995,
the Service conducted an audit of Currency Transaction Reports filed by Taj
Associates for the period from April 2, 1990 through December 31, 1991. The
Treasury has received a report detailing the audit as well as the response of
Taj Associates. As a result of Taj Associates' audit, the Treasury has notified
Taj Associates that it failed to timely file Currency Transaction Reports in
connection with certain currency transactions. In December 1997, Taj Associates
paid a fine of $477,000 in connection with 106 of these violations.
 
    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 self-disciplinary program for employee violations of the
policy.
 
    Trump AC 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 Trump AC has been obtained for operations
in New Jersey.
 
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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.  Trump Plaza's main tower is located on The Boardwalk
in Atlantic City, New Jersey, next to the Atlantic City Convention Center. 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%
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 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 whatever 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, Plaza Associates
exercised its option to purchase certain of the fee and leasehold interests
comprising Trump Plaza East for a purchase price of $28.0 million. During the
years ended December 31, 1995 and 1996, Plaza Associates incurred approximately
$3.8 million and $1.1 million, respectively, in expenses associated with its
lease of Trump Plaza East. Plaza Associates currently leases a portion of the
land which comprises Trump Plaza East from an unrelated third party.
 
    In September 1993, Trump (as predecessor in interest to Plaza Associates
under the lease for Trump Plaza East) entered into a sublease with Time Warner
(the "Time Warner Sublease") pursuant to which Time Warner subleased the entire
first floor of retail space for a new Warner Brothers Studio Store which opened
in July 1994. Time Warner renovated the premises in connection with opening of
the Warner Brothers Studio Store. The lease term is for ten years and gives Time
Warner the option to renew for two additional 5-year terms. Time Warner is
required to pay percentage rent monthly in an amount equal to (i) 7.5% of gross
annual sales up to $15.0 million and (ii) 10% of gross annual sales in excess of
$15 million. The terms of the Time Warner Sublease give Time Warner the right to
terminate the sublease if (i) gross annual sales are less than $5.0 million for
year two or less than $5.0 million as adjusted by CPI for years three through
nine; and (ii) Trump Plaza ceases to operate as a first class hotel.
 
    TRUMP WORLD'S FAIR.  Pursuant to the option to purchase Trump World's Fair,
on June 12, 1995, using proceeds from the June 1995 Offerings, Plaza Associates
acquired title to Trump World's Fair. Further,
 
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pursuant to an easement agreement with the NJSEA, Plaza Associates has an
exclusive easement over, in and through the portions of the original Atlantic
City Convention Center used as the pedestrian walkway connecting Trump Plaza's
main tower and Trump World's Fair. The easement is for a 25-year term and may be
renewed at the option of Plaza Associates for one additional 25-year period. In
consideration of the granting of the easement, Plaza Associates must pay to
NJSEA the sum of $2.0 million annually, such annual payment to be adjusted every
five years to reflect changes in the consumer price index. Plaza Associates has
the right to terminate the easement agreement at any time upon six months'
notice to NJSEA in consideration of a termination payment of $1,000,000. See
"Business--Gaming and Other Laws and Regulations--New Jersey Gaming
Regulations--Approved Hotel Facilities."
 
    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 Transportation Facility on the Plaza Garage Parcel. An enclosed pedestrian
walkway from the parking garage accesses 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 ("Additional Parcel 1")
and owns another parcel on Mississippi Avenue adjacent to Additional Parcel 1
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, 1997, of approximately $1.4 million and is encumbered by the Plaza
Mortgages. This facility is currently being utilized by TCS.
 
    SUPERIOR MORTGAGES.  The liens securing the indebtedness on the Plaza Garage
Parcel, the Egg Harbor Parcel and liens securing indebtedness on certain parking
facilities are each senior to the liens of the Plaza Mortgages. The principal
amount currently secured by such mortgages is, in the aggregate, approximately
$3.2 million.
 
    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, the TAC II Notes and the
TAC III Notes.
 
    THE CASINO PARCEL.  The land comprising the Taj Mahal site consists of
approximately 30 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
 
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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 connection with the Taj Acquisition, Taj Associates
purchased the approximately 3.6 acre pier and related property located across
The Boardwalk from the Taj Mahal (the "Steel Pier") from Realty Corp. Taj
Associates initially proposed a concept to improve the Steel Pier, the estimated
cost of which improvements was $30 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, 1998 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. In connection with
the Taj Acquisition, Taj Associates purchased from Realty Corp. a warehouse
complex of approximately 34,500 square feet.
 
    Taj Associates has entered into a lease with Trump-Equitable Company for the
lease of office space in Trump Tower in New York City, which Taj Associates uses
as a marketing office. 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 twelve
months in 1993 and 1994 and eight months in 1995. On September 1, 1995, the
lease was renewed for a term of five years with an option for Taj Associates to
cancel the lease on September 1 of each year, upon six months' notice and
payment of six months' rent. Under the renewed lease, the monthly payments are
$2,184.
 
    PARKING.  The Taj Mahal provides parking for approximately 6,950 cars of
which 6,725 spaces are located in indoor parking garages and 225 surface spaces
are located on land purchased from Realty Corp. in connection with the Taj
Acquisition. In addition, Taj Associates entered into a lease agreement with
Castle Associates to share its employee parking facilities.
 
    THEMED RESTAURANTS AND SPECIALTY STORE.  Hard Rock Cafe International
(N.J.), Inc. ("Hard Rock") has entered into a fifteen-year lease (the "Hard Rock
Cafe Lease") with Taj Associates for the lease of space at the Taj Mahal for a
Hard Rock Cafe. The basic rent under the Hard Rock Cafe Lease is $750,000 per
year, paid in equal monthly installments, for the first 10 years of the lease
term, and will be $825,000 per year, paid in equal monthly installments, for the
remaining 5 years of the lease term. In addition, Hard Rock will pay percentage
rent in an amount equal to 10% of Hard Rock's annual gross sales in excess of
$10,000,000. 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
lease for an additional five-year period at an annual basic rent of $907,500
during such renewal term. The Hard Rock Cafe opened in November 1996.
 
    All Star Cafe, Inc. ("All Star") has entered into a twenty-year lease (the
"All Star Cafe Lease") with Taj Associates for the lease of space at the Taj
Mahal for an All Star Cafe. The basic rent under the All Star Cafe Lease is $1.0
million per year, paid in equal monthly installments. In addition, All Star will
pay percentage rent in an amount equal to the difference, if any, between (i) 8%
of All Star's gross sales made during each calendar month during the first lease
year, 9% of All Star's gross sales made during each calendar month during the
second lease year and 10% of All Star's gross sales made during each calendar
 
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month during the third through the twentieth lease years, and (ii) one-twelfth
of the annual basic rent. The All Star Cafe opened in March 1997.
 
    Stage Deli of Atlantic City, Inc. ("Stage Deli") has entered into a ten-year
and five-month lease commencing 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. The basic rent under the Stage Deli Lease is (i)
$400,000 per year for the first three years of the lease, (ii) $436,000 per year
for the fourth through sixth years of the lease, (iii) $475,240 per year for the
seventh through ninth years of the lease and (iv) $518,011.56 per year for the
last year of the lease, paid in equal monthly installments. In addition, Stage
Deli will pay percentage rent in an amount equal to the difference, if any,
between (i) 6% of Stage Deli's gross monthly sales made during each lease year
and (ii) the applicable monthly basic rent. The Stage Deli of New York opened in
October 1997.
 
    Time Warner has 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. Time Warner has an option to renew the Time Warner Taj
Lease for two additional five-year terms. Time Warner pays percentage rent
monthly in an amount equal to (i) 7.5% of gross annual sales up to $5.0 million
and (ii) 10% sales of gross annual sales in excess of $5.0 million. No minimum
or "base" rent is payable under the Time Warner Taj Lease. The terms of the
lease give Time Warner the right to terminate the lease if (i) gross annual
sales are 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 ceases to operate as a first class hotel. The Warner
Brothers Studio Store opened in May 1997.
 
ITEM 3. LEGAL PROCEEDINGS.
 
    General.  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.
 
    PLAZA ASSOCIATES.  The CRDA is required to set aside funds for investment in
hotel development projects in Atlantic City undertaken by casino licensees which
result in the construction or rehabilitation of at least 200 hotel rooms. These
investments are to fund up to 27% of the cost to casino licensees of such
projects. See "Business--Gaming and Other Laws and Regulations--New Jersey
Gaming Regulations-- Investment Alternative Tax Obligations." In June 1993,
Plaza Associates made application for such funding to the CRDA with respect to
its proposed construction of the Trump Plaza East facilities, demolition of a
certain structure adjacent thereto, development of an appurtenant public park,
roadway and parking area and acquisition of the entire project site. The CRDA,
in rulings through January 10, 1995, approved the hotel development project and,
with respect to same and pursuant to a credit agreement between them, reserved
to Plaza Associates the right to take investment tax credits up to approximately
$14.2 million. Plaza Associates has, except for three small parcels discussed
below, acquired the site and had constructed and presently operates and
maintains the proposed hotel tower, public park, roadway and parking area.
 
    As part of its approval and on the basis of its powers of eminent domain,
the CRDA, during 1994, initiated certain condemnation proceedings in the
Superior Court of New Jersey, Atlantic County, to acquire certain small parcels
of land within the project site. Plaza Associates has since acquired two of the
parcels and proceedings with respect to those parcels have been concluded. The
proceedings with respect to the remaining three parcels, which, if acquired,
will be included in the public park and parking area of the project, are
currently pending and include a claim by the defendants that the CRDA did not
properly determine that the parcels were to be used for public purposes. The
CRDA motion seeking dismissal of
 
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this claim has been briefed and, in February 1998, argued by the parties.
Additionally, with respect to the two parcels to be included in the public park
portion of the project, the CRDA, by a separate motion, seeks an order that the
Plaza Associates' application and credit agreement be deemed amended so as to
terminate the CRDA obligation to acquire the two parcels and enabling the CRDA
to abandon the condemnation proceedings with respect to these two parcels. This
motion, which is opposed by Plaza Associates, has been briefed and, in February
1998, argued by Plaza Associates and the CRDA.
 
    The defendants in two of the condemnation proceedings filed a separate joint
complaint in the New Jersey Superior Court alleging, among other claims, that
the CRDA and Plaza Associates are wrongfully attempting to deprive them of
property rights in violation of their constitutional and civil rights. COKING,
ET AL. V. CASINO REINVESTMENT DEVELOPMENT AUTHORITY, ET AL., Docket No.
ATL-L-2555-97. The CRDA's motion for summary judgment on the complaint and Plaza
Associates' motion to dismiss it for failure to state a claim were granted by
the New Jersey Superior Court on October 24, 1997 and November 11, 1997.
 
    OTHER LITIGATION.  On March 13, 1997, THCR filed a lawsuit in the United
States District Court, District of New Jersey, against Mirage, the State of New
Jersey ("State"), the New Jersey Department of Transportation ("NJDOT"), the
South Jersey Transportation Authority ("SJTA"), the CRDA, the New Jersey
Transportation Trust Fund Authority and others. THCR was seeking declaratory and
injunctive relief to recognize and prevent violations by the defendants of the
casino clause of the New Jersey State Constitution and various federal
securities and environmental laws relating to proposed infrastructure
improvements in the Atlantic City marina area. While this action was pending,
defendants State and CRDA then filed an action in the New Jersey State Court
seeking declaration of the claim relating to the casino clause of the New Jersey
State Constitution. On May 1, 1997, the United States District Court dismissed
the federal claims and ruled that the State constitutional claims should be
pursued in State Court. This decision is currently being appealed. On May 14,
1997 the State Court entered a summary judgment in favor of the State and CRDA.
This decision is also being appealed.
 
    On June 26, 1997, THCR filed an action against NJDOT, SJTA, Mirage and
others, in the Superior Court of New Jersey, Chancery Division, Atlantic County
(the "Chancery Division Action"). THCR is seeking to declare unlawful and enjoin
certain actions and omissions of the defendants arising out of and relating to a
certain Road Development Agreement dated as of January 10, 1997, by and among
NJDOT, SJTA and Mirage (the "Road Development Agreement") and the public funding
of a certain road and tunnel project to be constructed in Atlantic City, as
further described in the Road Development Agreement. THCR moved to consolidate
this action with other previously filed related actions. Defendants opposed
THCR's motion to consolidate the Chancery Division Action, initially moved to
dismiss this action on procedural grounds and subsequently moved to dismiss this
action on substantive grounds. On October 20, 1997, the Chancery Court denied
the defendants' motion to dismiss this action on procedural grounds, but granted
the motion to dismiss this action on substantive grounds. This decision is
currently being appealed.
 
    On June 26, 1997, THCR also filed an action, in lieu of prerogative writs,
against the CRDA, in the Superior Court of New Jersey, Law Division, Atlantic
County, seeking review of the CRDA's April 15, 1997 approval of funding ($120
million principal amount plus interest) for the road and tunnel project
discussed above, a declaratory judgment that the said project is not eligible
for such CRDA funding, and an injunction prohibiting the CRDA from contributing
such funding to the said project. Defendants moved to dismiss this action on
procedural grounds and also sought to transfer this action to New Jersey's
Appellate Division. On October 3, 1997, the New Jersey Superior Court
transferred this action to the Appellate Division where it is currently pending.
 
    On September 9, 1997, Mirage filed a complaint against Trump, THCR and
Hilton Hotels Corporation, in the United States District Court for the Southern
District of New York. The complaint seeks damages for alleged violations of
antitrust laws, tortious interference with prospective economic advantage and
tortious inducement of a breach of fiduciary duties arising out of activities
purportedly engaged in by
 
                                       29
<PAGE>
defendants in furtherance of an alleged conspiracy to impede Mirage's efforts to
build a casino resort in the Marina district of Atlantic City, New Jersey. Among
other things, Mirage contends that the defendants filed several frivolous
lawsuits and funded others that challenge the proposed state funding mechanisms
for the construction of a proposed roadway and tunnel that would be paid for
chiefly through government funds and which would link the Atlantic City
Expressway with the site of Mirage's proposed new casino resort. On November 10,
1997, THCR and Trump moved to dismiss the complaint.
 
    On August 14, 1996, certain stockholders of THCR filed two derivative
actions in the Court of Chancery in Delaware (Civil Action Nos. 15148 and 15160)
(the "Delaware cases") against each of the members of the Board of Directors of
THCR, THCR, THCR Holdings, Castle Associates and Trump Casinos II, Inc.
("TCI-II"). The plaintiffs claim that the directors of THCR breached their
fiduciary duties in connection with its acquisition of Castle Associates (the
"Castle Acquisition") by purchasing these interests at an excessive price in a
self-dealing transaction. The complaint sought to enjoin the transaction, and
also sought damages and an accounting. The injunction was never pursued. These
plaintiffs served a notice of dismissal in the Delaware cases on December 29,
1997. The Court of Chancery has not yet ordered the Delaware cases dismissed.
 
    On October 16, 1996, a stockholder of THCR filed a derivative action in the
United States District Court, Southern District of New York (96 Civ. 7820)
against each member of the Board of Directors of THCR, THCR, THCR Holdings,
Castle Associates, TCI, TCI-II, TCHI and Salomon Brothers, Inc ("Salomon"). The
plaintiff claims that certain of the defendants breached their fiduciary duties
and engaged in ultra vires acts in connection with the Castle Acquisition and
that Salomon was negligent in the issuance of its fairness opinion with respect
to the Castle Acquisition. The plaintiff also alleges 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. The plaintiff
seeks removal of the directors of THCR, and injunction, rescission and damages.
 
    The Delaware cases were amended and refiled in the Southern District of New
York and consolidated with the federal action for all purposes, including
pretrial proceedings and trial. On or about January 17, 1997, the plaintiffs
filed their Consolidated Amended Derivative Complaint (the "First Amended
Complaint"), reflecting the consolidation. On or about March 24, 1997, the
plaintiffs filed their Second Consolidated Amended Derivative Complaint (the
"Second Amended Complaint"). In addition to the allegations made in the First
Amended Complaint, the Second Amended Complaint claims that certain of the
defendants breached their fiduciary duties and wasted corporate assets in
connection with the previously contemplated transaction with Colony Capital,
Inc. ("Colony Capital"). The Second Amended Complaint also includes claims
against Colony Capital for aiding and abetting certain of those violations. In
addition to the relief sought in the First Amended Complaint, the Second Amended
Complaint sought to enjoin the previously contemplated transaction with Colony
Capital or, if it was effectuated, to rescind it. On March 27, 1997, THCR and
Colony Capital mutually agreed to end negotiations with respect to such
transaction. On June 26, 1997, plaintiffs served their Third Consolidated
Amended Derivative Complaint (the "Third Amended Complaint"), which omitted the
claims against Colony Capital. THCR and the other defendants in the action moved
to dismiss the Third Amended Complaint on August 5, 1997. The plaintiffs opposed
the defendants' motions to dismiss the Third Amended Complaint by response dated
October 24, 1997. The defendants' reply was served December 9, 1997.
 
    Various legal proceedings are now pending against Trump AC. Trump AC
considers all such proceedings to be ordinary litigation incident to the
character of its business. Trump AC believes that the resolution of these
claims, to the extent not covered by insurance, will not, individually or in the
aggregate, have a material adverse effect on the financial condition or results
of operations of Trump AC.
 
    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,
 
                                       30
<PAGE>
management believes that the final outcome of these proceedings will not, either
individually or in the aggregate, have a material adverse effect on Plaza
Associates or Taj Associates 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 and the Taj Mahal.
 
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
 
    No matters were submitted by the Registrants to their security holders for a
vote during the fourth quarter of 1997.
 
                                    PART II
 
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
  MATTERS.
 
    TRUMP AC.  THCR Holdings has beneficially owned 100% of the partnership
interests in Trump AC since June 12, 1995.
 
    TRUMP AC FUNDING.  Trump AC has owned 100% 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% 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% 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.
 
                                       31
<PAGE>
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, 1993
through 1997 (see Notes 1 and 2 below).
 
    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,
                                                             --------------------------------------------------------------
<S>                                                          <C>         <C>         <C>         <C>           <C>
                                                                1993        1994        1995         1996          1997
                                                             ----------  ----------  ----------  ------------  ------------
 
<CAPTION>
                                                                                 (DOLLARS IN THOUSANDS)
<S>                                                          <C>         <C>         <C>         <C>           <C>
STATEMENT OF OPERATIONS DATA:
  REVENUES:
    Gaming.................................................  $  264,081  $  261,451  $  298,073  $    752,228  $    889,116
    Other..................................................      69,203      66,869      74,182       190,995       231,235
      Gross revenues.......................................     333,284     328,320     372,255       943,223     1,120,351
    Promotional allowances.................................      32,793      33,257      45,077       113,743       138,085
                                                             ----------  ----------  ----------  ------------  ------------
      Net revenues.........................................     300,491     295,063     327,178       829,480       982,266
                                                             ----------  ----------  ----------  ------------  ------------
  COSTS AND EXPENSES:
    Gaming.................................................     136,895     139,540     164,396       453,841       555,547
    Other..................................................      24,778      23,380      21,261        54,613        65,462
    General and administrative.............................      71,624      73,075      65,521       147,464       168,143
    Depreciation and amortization..........................      17,554      15,653      16,213        60,870        66,018
    Preopening.............................................      --          --          --             4,145       --
                                                             ----------  ----------  ----------  ------------  ------------
      Total costs and expenses.............................     250,851     251,648     267,391       720,933       855,080
                                                             ----------  ----------  ----------  ------------  ------------
  Income from operations...................................      49,640      43,415      59,787       108,547       127,186
  Interest expense, net....................................     (39,889)    (48,219)    (43,261)     (112,122)     (141,249)
  Other non-operating income (expense)(a)..................      (3,873)     (4,931)     (5,743)       14,194
  Extraordinary (loss) gain(b).............................       4,120      --          (9,250)      (59,132)
  (Provision) benefit for income taxes.....................        (660)        865      --           --            --
                                                             ----------  ----------  ----------  ------------  ------------
  Net income (loss)........................................  $    9,338  $   (8,870) $    1,533  $    (48,513) $    (14,063)
                                                             ----------  ----------  ----------  ------------  ------------
                                                             ----------  ----------  ----------  ------------  ------------
 
BALANCE SHEET DATA (AT END OF PERIOD):
  Cash and cash equivalents................................  $   14,393  $   11,144  $   15,937  $     71,320       114,879
  Property and equipment, net..............................     293,141     298,354     425,262     1,456,267     1,460,050
  Total assets.............................................     374,498     375,643     480,024     1,659,006     1,739,073
  Total long-term debt, net of current maturities..........     395,948     403,214     332,721     1,207,795     1,300,027
  Total capital (deficit)..................................     (54,710)    (63,580)    110,812       331,858       327,939
</TABLE>
 
------------------------
 
Note 1: On June 12, 1995, as part of the June 1995 Offerings, THCR issued $140
        million of THCR Common Stock and contributed the proceeds from such
        offering to THCR Holdings, the beneficial owner of 100% of Trump AC, for
        an approximately 60% general partnership interest in THCR Holdings.
 
Note 2: On April 17, 1996, as part of the Taj Acquisition, THCR acquired Taj
        Associates. In connection with the Taj Acquisition, Taj Associates
        became a wholly owned subsidiary of Trump AC. Therefore, the financial
        data as of December 31, 1996 and 1997 reflect the Taj Acquisition and
        includes the operations of Taj Associates for the period from the date
        of acquisition (April 17, 1996) through December 31, 1996.
 
                                       32
<PAGE>
(a)    Other non-operating expense for the years ended December 31, 1993, 1994
       and 1995 includes $3.9 million, $4.9 million and $3.7 million,
       respectively, of real estate taxes and leasing costs associated with
       Trump Plaza East. Other non-operating expense for the year ended December
       31, 1995 also includes $2.0 million in costs associated with Trump
       World's Fair. Other non-operating income for the year ended December 31,
       1996 includes $15.0 million license fee revenue.
 
(b)    The excess of the carrying value of a note obligation over the amount of
       the settlement payment, net of related prepaid expenses, in the amount of
       $4,120,000 has been reported as an extraordinary gain for the year ended
       December 31, 1993. The extraordinary loss of $9,250,000 for the period
       from January 1, 1995 through June 12, 1995 relates to the redemption of
       the Plaza PIK Notes and Plaza PIK Note Warrants and the write off of
       related unamortized deferred financing costs. The extraordinary loss for
       the year ended December 31, 1996 of $59.1 million relates to the
       redemption of the Plaza Notes and the Plaza PIK Note Warrants and the
       write-off of unamortized deferred financing costs.
 
                                       33
<PAGE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
  OF OPERATIONS
 
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1996 AND 1997
 
    The financial information presented below reflects the results of operations
of Trump AC. 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. Taj Associates was acquired on April 17, 1996.
 
    The following table includes selected data of Plaza Associates and Taj
Associates (since April 17, 1996, date of acquisition) for the years ended
December 31, 1996 and 1997:
 
<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                  ------------------------------------------------------------------------------
                                                                                1996
                                                     1996         1997           TAJ          1997         1996         1997
                                                     PLAZA        PLAZA      ASSOCIATES        TAJ         TOTAL        TOTAL
                                                  ASSOCIATES   ASSOCIATES        (1)       ASSOCIATES    TRUMP AC     TRUMP AC
                                                  -----------  -----------  -------------  -----------  -----------  -----------
<S>                                               <C>          <C>          <C>            <C>          <C>          <C>
                                                                                  (IN MILLIONS)
Revenues:
  Gaming........................................   $   368.9    $   370.7     $   383.3     $   518.4    $   752.2    $   889.1
  Other.........................................       105.7        108.0          85.3         123.2        191.0        231.2
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Gross Revenues................................       474.6        478.7         468.6         641.6        943.2      1,120.3
Less: Promotional Allowances....................        65.6         64.4          48.1          73.7        113.7        138.1
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Net Revenues..................................       409.0        414.3         420.5         567.9        829.5        982.2
                                                  -----------  -----------  -------------  -----------  -----------  -----------
Costs & Expenses:
  Gaming........................................       223.9        233.8         230.0         321.6        453.9        555.5
  Pre-opening...................................         4.1       --            --            --              4.1       --
  General & Administrative......................        83.3         80.2          64.2          88.0        147.5        168.1
  Depreciation & Amortization...................        23.0         24.4          37.8          41.4         60.9         66.0
  Other.........................................        28.4         32.0          26.2          33.5         54.6         65.5
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Total Costs and Expenses......................       362.7        370.4         358.2         484.5        721.0        855.1
                                                  -----------  -----------  -------------  -----------  -----------  -----------
Income from Operations..........................        46.3         43.9          62.3          83.4        108.5        127.1
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Non-Operating Income..........................         4.9           .6          10.7           1.1         16.6          2.9
  Interest Expense..............................       (47.1)       (48.6)        (67.4)        (94.7)      (114.5)      (144.1)
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Total Non-Operating Expense...................       (42.2)        48.0         (56.7)        (93.6)       (97.9)      (141.2)
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Income (loss) before extraordinary loss.......         4.1         (4.1)          5.6         (10.2)        10.6        (14.1)
  Extraordinary Loss............................       (59.1)      --            --            --            (59.1)      --
                                                  -----------  -----------  -------------  -----------  -----------  -----------
  Net Income/(loss).............................   $   (55.0)   $    (4.1)    $     5.6     $   (10.2)   $   (48.5)   $   (14.1)
                                                  -----------  -----------  -------------  -----------  -----------  -----------
                                                  -----------  -----------  -------------  -----------  -----------  -----------
</TABLE>
 
                                       34
<PAGE>
<TABLE>
<CAPTION>
                                                                             YEAR ENDED DECEMBER 31,
                                                  ------------------------------------------------------------------------------
                                                                                1996
                                                     1996         1997           TAJ          1997         1996         1997
                                                     PLAZA        PLAZA      ASSOCIATES        TAJ         TOTAL        TOTAL
                                                  ASSOCIATES   ASSOCIATES        (1)       ASSOCIATES    TRUMP AC     TRUMP AC
                                                  -----------  -----------  -------------  -----------  -----------  -----------
                                                                                  (IN MILLIONS)
<S>                                               <C>          <C>          <C>            <C>          <C>          <C>
Table Game Revenues.............................   $   104.1    $    96.4     $   161.9     $   202.7    $   266.0    $   299.1
Incr (Decr) over Prior Period...................                $    (7.7)                  $    40.8                 $    33.1
Table Game Drop.................................   $   686.9    $   654.4     $   942.5     $ 1,279.1    $ 1,629.4    $ 1,933.5
Incr (Decr) over Prior Period...................                $   (32.5)                  $   336.6                 $   304.1
Table Win Percentage............................        15.2%        14.7%         17.2%         15.9%        16.3%        15.5%
                                                                      (.5)                       (1.3)
Incr (Decr) over Prior Period...................                         pts                         pts                    (.8) pts
Number of Table Games...........................         127          117           167           155          284          282
Incr (Decr) over Prior Period...................                      (10)                         (2)                      (12)
Slot Revenues...................................   $   264.8    $   274.3     $   206.2     $   297.4    $   471.0    $   571.7
Incr (Decr) over Prior Period...................                $     9.5                   $    91.2                 $   100.7
Slot Handle.....................................   $ 3,179.8    $ 3,381.1     $ 2,510.3     $ 3,583.7    $ 5,690.1    $ 6,964.8
Incr (Decr) over Prior Period...................                $   201.3                   $ 1,073.4                 $ 1,274.7
Slot Win Percentage.............................         8.3%         8.1%          8.2%          8.3%         8.3%         8.2%
                                                                      (.2)
Incr (Decr) over Prior Period...................                         pts                   .1 pts                       (.1) pts
Number of Slot Machines.........................       3,629        4,083         3,799         4,136        7,428        8,219
Incr (Decr) over Prior Period...................                      454                         337                       791
Poker Revenues..................................          --           --     $    13.1     $    16.0    $    13.1    $    16.0
Incr (Decr) over Prior Period...................                   --                       $     2.9                 $     2.9
Number of Poker Tables..........................          --           --            64            63           64           63
Incr (Decr) over Prior Period...................                       --                          (1)                       (1)
Other Gaming Revenues...........................          --           --     $     2.1     $     2.3    $     2.1    $     2.3
Incr (Decr) over Prior Period...................                       --                   $      .2                 $      .2
Total Gaming Revenues...........................   $   368.9    $   370.7     $   383.3     $   518.4    $   752.2    $   889.1
Incr (Decr) over Prior Period...................                $     1.8                   $   135.1                 $   136.9
</TABLE>
 
------------------------
(1) Since date of acquisition April 17, 1996.
 
    Gaming revenues are the primary source of Trump AC's revenues. The increase
in gaming revenues is primarily attributable to the acquisition of Taj
Associates on April 17, 1996.
 
    Table games 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 15.0% for the years December 31, 1996 and 1997, respectively.
 
    During the second quarter of 1997, Trump AC revised its estimates of the
useful lives of buildings, building improvements, and furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
reevaluated to have a new forty year life and furniture and fixtures were
determined to have a seven year life. Trump AC believes these changes more
appropriately reflect the timing of the economic benefits to be received from
these assets during their estimated useful lives. For the year ended December
31, 1997, the net effect of applying these new lives was to increase net income
by $6.0 million.
 
    Non-operating income for the year ended December 31, 1996 included a
one-time $15.0 million non-refundable licensing fee resulting from an agreement
with Atlantic Jersey Thermal Systems, Inc.
 
    The extraordinary loss of $59.1 million for the year ended December 31, 1996
relates to the redemption of the Plaza Notes and the write-off of unamortized
deferred financing costs on April 17, 1996.
 
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995 AND 1996
 
    The financial information presented below reflects the results of operations
of Trump AC. 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. Taj Associates was acquired on April 17, 1996.
 
                                       35
<PAGE>
    The following table includes selected data of Plaza Associates and Taj
Associates (since date of acquisition) for the year ended December 31, 1996 and
of Plaza Associates for the year ended December 31, 1995:
 
<TABLE>
<CAPTION>
                                                                               YEAR ENDED DECEMBER 31,
                                                                 ----------------------------------------------------
                                                                                               1996
                                                                    1995         1996           TAJ          1996
                                                                    PLAZA        PLAZA      ASSOCIATES       TOTAL
                                                                 ASSOCIATES   ASSOCIATES        (1)        TRUMP AC
                                                                 -----------  -----------  -------------  -----------
<S>                                                              <C>          <C>          <C>            <C>
                                                                                    (IN MILLIONS)
REVENUES:
  Gaming.......................................................   $   298.1    $   368.9     $   383.3     $   752.2
  Other........................................................        74.2        105.7          85.3         191.0
                                                                 -----------  -----------  -------------  -----------
  Gross Revenues...............................................       372.3        474.6         468.6         943.2
Less: Promotional Allowances...................................        45.1         65.6          48.1         113.7
                                                                 -----------  -----------  -------------  -----------
  Net Revenues.................................................       327.2        409.0         420.5         829.5
                                                                 -----------  -----------  -------------  -----------
Costs & Expenses:
  Gaming.......................................................       164.4        223.9         230.0         453.9
  Pre-opening..................................................      --              4.1        --               4.1
  General & Administrative.....................................        65.5         83.3          64.2         147.5
  Depreciation & Amortization..................................        16.2         23.0          37.8          60.9
  Other........................................................        21.3         28.4          26.2          54.6
                                                                 -----------  -----------  -------------  -----------
  Total Costs and Expenses.....................................       267.4        362.7         358.2         721.0
                                                                 -----------  -----------  -------------  -----------
Income from Operations.........................................        59.8         46.3          62.3         108.5
                                                                 -----------  -----------  -------------  -----------
  Non-Operating Income (Expense)...............................        (4.7)         4.9          10.7          16.6
  Interest Expense.............................................       (44.3)       (47.1)        (67.4)       (114.5)
                                                                 -----------  -----------  -------------  -----------
  Total Non-Operating Expense..................................       (49.0)       (42.2)        (56.7)        (97.9)
                                                                 -----------  -----------  -------------  -----------
  Income before extraordinary loss.............................        10.8          4.1           5.6          10.6
  Extraordinary Loss...........................................        (9.3)       (59.1)       --             (59.1)
                                                                 -----------  -----------  -------------  -----------
Net (Loss) Income..............................................   $     1.5    $   (55.0)    $     5.6     $   (48.5)
                                                                 -----------  -----------  -------------  -----------
                                                                 -----------  -----------  -------------  -----------
Table Game Revenues............................................   $    96.4    $   104.1     $   161.9     $   266.0
Incr (Decr) over Prior Period..................................                $     7.7     $   161.9     $   169.6
Table Game Drop................................................   $   626.8    $   686.9     $   942.5     $ 1,629.4
Incr (Decr) over Prior Period..................................                $    60.1     $   942.5     $ 1,002.6
Table Win Percentage...........................................        15.4%        15.2%         17.2%         16.3%
                                                                                    (0.2)
Incr (Decr) over Prior Period..................................                         pts        17.2pts     .9 pts
Number of Table Games..........................................          97          127           167           294
Incr (Decr) over Prior Period..................................                       30           167           197
 
Slot Revenues..................................................   $   201.7    $   264.8     $   206.2     $   471.0
Incr (Decr) over Prior Period..................................                $    63.1     $   206.2     $   269.3
Slot Handle....................................................   $ 2,368.7    $ 3,179.8     $ 2,510.3     $ 5,690.1
Incr (Decr) over Prior Period..................................                $   811.1     $ 2,510.3     $ 3,321.4
Slot Win Percentage............................................         8.5%         8.3%          8.2%          8.3%
                                                                                    (0.2)
Incr (Decr) over Prior Period..................................                         pts         8.2pts        (.2) pts
Number of Slot Machines........................................       2,339        3,629         3,799         7,428
Incr (Decr) over Prior Period..................................                    1,290         3,799         5,089
 
Poker Revenues.................................................      --           --         $    13.1     $    13.1
Incr (Decr) over Prior Period..................................                   --         $    13.1     $    13.1
Number of Poker Tables.........................................      --           --                64            64
Incr (Decr) over Prior Period..................................                   --                64            64
 
Other Gaming Revenues..........................................      --           --         $     2.1     $     2.1
Incr (Decr) over Prior Period..................................                   --         $     2.1     $     2.1
 
Total Gaming Revenues..........................................   $   298.1    $   368.9     $   383.3     $   752.2
Incr (Decr) over Prior Period..................................                $    70.8     $   383.3     $   454.1
</TABLE>
 
------------------------
 
(1) Since date of acquisition April 17, 1996.
 
                                       36
<PAGE>
    Gaming revenues are the primary source of Trump AC's revenues. The increase
in gaming revenues is primarily attributable to the acquisition of Taj
Associates on April 17, 1996.
 
    Table games 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
15.8% and 15.4% for the year ended December 31, 1995 and 1996, respectively.
 
    Non-operating income for the year ended December 31, 1996 included a
one-time $15.0 million non-refundable licensing fee resulting from an agreement
with Atlantic Jersey Thermal Systems, Inc.
 
    The extraordinary loss of $59.1 million for the year ended December 31, 1996
relates to the redemption of the Plaza Notes and the write-off of unamortized
deferred financing costs on April 17, 1996. The extraordinary loss of $9.3
million for the year ended December 31, 1995 relates to the redemption and
write-off of unamortized deferred financing costs relating to the redemption of
Plaza PIK Notes and Plaza PIK Note Warrants on June 12, 1995.
 
LIQUIDITY AND CAPITAL RESOURCES
 
    Cash flows from operating activities are Trump AC's principal source of
liquidity. Proceeds from the 1997 Offerings are intended by Trump AC to provide
expansion funds and working capital for operations. Accordingly, the company
expects to have sufficient liquidity to meet its obligations. Cash flow is
managed based upon the seasonality of the operations. Any excess cash flow
achieved from operations during peak periods is utilized to subsidize non-peak
periods where necessary. With proceeds from the 1996 Offerings, Trump AC, among
other things, retired the outstanding Taj Bonds, retired the outstanding Plaza
Notes, satisfied the indebtedness of Taj Associates under its loan agreement
with Nat West, purchased certain real property used in the operation of Trump
Plaza and the Taj Mahal and paid Bankers Trust to release certain liens and
guarantees.
 
    The indentures under which the TAC I Notes, the TAC II Notes and the TAC III
Notes were issued restrict the ability of Trump AC and its subsidiaries to make
distributions or 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").
 
    Capital expenditures for Trump AC for the year's ended December 31, 1996 and
1997 were $193.0 million and $56.4 million respectively. Capital expenditures
for the year ended December 31, 1996 includes Trump Plaza East and Trump World's
Fair expansions of $35.5 million and $57.9 million respectively. Capital
expenditures for improvements to Trump Plaza's existing facilities were
approximately $8.3 million and $14.8 million for the years ended December 31,
1996 and 1997, respectively. In addition, in 1996 and 1997, Plaza Associates
exercised its option to purchase from Trump Seashore Associates and Seashore
Four Associates, both entities beneficially owned by Trump, two of the parcels
of land underlying Trump Plaza's main tower, pursuant to the terms of the
leases, the payments under which were terminated upon the exercise of such
option. The exercise price and associated closing costs were $14.5 million for
Trump Seashore Associates and $10.2 million for Seashore Four Associates.
 
    Capital expenditures attributable to the Taj Mahal were $90.9 million for
the period from acquisition, April 17, 1996 , to December 31, 1996 and $40.8
million for the year ended December 31, 1997. Capital expenditures for
improvements to existing facilities were approximately $18.8 million for the
period from acquisition, April 17, 1996, to December 31, 1996 and $7.6 million
for the year ended December 31, 1997. Capital expenditures attributable to the
expansion of the facility were approximately $10.3 million for the period from
acquisition, April 17, 1996, to December 31, 1996 and $33.2 million for the year
ended December 31, 1997. Capital expenditures for the period from acquisition,
April 17, 1996, to December 31,
 
                                       37
<PAGE>
1996 included the purchase of property previously leased upon which a portion of
the casino hotel complex is situated for $61.8 million.
 
    The Taj Mahal Expansion consisted of the construction of a new 14-bay bus
terminal which was completed in December 1996, a 2,400 space expansion of the
existing self parking facilities, which was completed in May 1997, and an
approximate 7,000 square foot casino expansion with 260 slot machines which was
completed in July 1997. The total costs of the Taj Mahal Expansion including
amounts expended in 1996 were approximately $43.5 million and have been funded
principally out of cash from operations.
 
    Trump AC has assessed the Year 2000 issue and has begun implementing a plan
to resolve the issue, which is expected to be completed in early 1999. Based
upon management's assessment it is anticipated that associated costs incurred to
satisfactorily complete the plan will not be material.
 
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.
 
INFLATION
 
    There was no significant impact on operations as a result of inflation
during 1995, 1996 or 1997.
 
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
 
    Pursuant to the General Instructions to Rule 305 of Regulation S-K, the
quantitative and qualitative disclosures called for by this Item 7A and by Rule
305 of Regulation S-K are inapplicable to the Registrants at this time.
 
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
 
    An index to financial statements and required financial statement schedules
is set forth in Item 14.
 
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
  FINANCIAL DISCLOSURE.
 
    None.
 
                                       38
<PAGE>
                                    PART III
 
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
 
    MANAGEMENT OF TRUMP AC, TRUMP AC FUNDING, FUNDING II AND FUNDING III
 
    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. THCR Holdings owns
100% 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, Nicholas L. Ribis, Robert M. Pickus,
Wallace B. Askins and Don M. Thomas. The TAC I Note Indenture, the TAC II Note
Indenture and the 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.
 
    Set forth below are the names, ages, positions and offices held with Trump
AC, Trump AC Funding, Funding II and Funding III 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 Trump AC, Trump AC Funding, Funding II and Funding III.
 
    DONALD J. TRUMP--Trump, 51 years old, has been Chairman of the Board of THCR
and THCR Funding since their formation in 1995. Trump was a 50% shareholder,
Chairman of the Board of Directors, President and Treasurer of Trump Plaza GP
and the managing general partner of Plaza Associates prior to June 1993. Trump
was Chairman of the Executive Committee and President of Plaza Associates from
May 1986 to May 1992 and was a general partner of Plaza Associates until June
1993. Trump has been a director of Trump AC Holding since February 1993 and was
President of Trump AC Holding from February 1993 until December 1997. Trump was
a partner in Trump AC from February 1993 until June 1995. Trump has been
Chairman of the Board of Directors of Trump AC Funding since its formation in
January 1996 and the Chairman of the Board of Directors of Funding II and
Funding III since their formation in November 1997. Trump has been Chairman of
the Board of Directors of THCR Holding Corp. and THCR/LP since October 1991;
President and Treasurer of THCR Holding Corp. since March 4, 1991; Chairman of
the Board of Directors, President and Treasurer of TCI since June 1988; Chairman
of the Executive Committee of Taj Associates from June 1988 to October 1991; and
President and sole Director of Realty Corp. since May 1986. Trump has been the
sole director of TACC since March 1991. Trump was President and Treasurer of
TACC from March 1991 until December 1997. Trump has been the sole director of
Trump Indiana since its formation. Trump has been Chairman of the Board of
Partner Representatives of Castle Associates, the partnership that owns Trump
Marina, since May 1992; and was Chairman of the Executive Committee of Castle
Associates from June 1985 to May 1992. Trump is the Chairman of the Board of
Directors, President and Treasurer of Trump's Castle Funding, Inc. ("Castle
Funding"). Trump is the Chairman of the Board and Treasurer of Trump's Castle
Hotel & Casino, Inc. ("TCHI"). Trump is the President, Treasurer, sole director
and sole shareholder of TCI-II. Trump has been a Director of THCR Enterprises,
Inc., a Delaware corporation ("THCR Enterprises"), since its formation in
January 1997. Trump is also the President of The Trump Organization, 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. Trump was a member of the Board of Directors of Alexander's Inc. from
1987 to March 1992.
 
                                       39
<PAGE>
    NICHOLAS L. RIBIS--Mr. Ribis, 53 years old, has been President, Chief
Executive Officer, Chief Financial Officer, and a director of THCR and THCR
Funding and Chief Executive Officer of THCR Holdings since their formation in
1995. Mr. Ribis has been the Chief Executive Officer of Plaza Associates since
February 1991, was President from April 1994 to February 1995, was a member of
the Executive Committee of Plaza Associates from April 1991 to May 29, 1992 and
was a director and Vice President of Trump Plaza GP from May 1992 until June
1993. Mr. Ribis served as Vice President of Trump AC Holding from February 1995
until December 1997. Mr. Ribis has served as President of Trump AC Holding since
December 1997. Mr. Ribis has served as a director of Trump AC Holding since June
1993. Mr. Ribis has been Chief Executive Officer, President and a director of
Trump AC Funding since its formation in January 1996 and Chief Executive
Officer, President and a director of Funding II and Funding III since their
formation in November 1997. Mr. Ribis served as Vice President of TACC until
December 1997. Mr. Ribis has served as the President of TACC since December
1997. Mr. Ribis has been the President and Chief Executive Officer of Trump
Indiana since its formation. Mr. Ribis has been a Director of THCR/LP and THCR
Holding Corp. since October 1991 and was Vice President of THCR/LP and THCR
Holding Corp. until June 1995; Chief Executive Officer of Taj Associates since
February 1991; Vice President of TCI since February 1991 and Secretary of TCI
since September 1991; Director of Realty Corp. since October 1991; and a member
of the Executive Committee of Taj Associates from April 1991 to October 1991.
Mr. Ribis has served as Vice President of THCR/LP and THCR Holding Corp. since
February 1998. He has also been Chief Executive Officer of Castle Associates
since March 1991; member of the Executive Committee of Castle Associates from
April 1991 to May 1992; member of the Board of Partner Representatives of Castle
Associates since May 1992; and has served as the Vice President and Assistant
Secretary of TCHI since December 1993 and January 1991, respectively. Mr. Ribis
is now a director of TCHI. Mr. Ribis has served as Vice President of TCI-II
since December 1993 and had served as Secretary of TCI-II from November 1991 to
May 1992. Mr. Ribis has been Vice President of Trump Corp. since September 1991.
Mr. Ribis has been the President and a director of THCR Enterprises since
January 1997. From January 1993 to January 1995 Mr. Ribis served as the Chairman
of the Casino Association of New Jersey and has been a member of the Board of
Trustees of the CRDA since October 1993. From January 1980 to January 1991, Mr.
Ribis was Senior Partner in, and from February 1991 to December 1995, was
Counsel to the law firm of Ribis, Graham & Curtin (now practicing as Graham,
Curtin & Sheridan, A Professional Association), which serves as New Jersey legal
counsel to all of the above-named companies and certain of their affiliated
entities.
 
    ROBERT M. PICKUS--Mr. Pickus, 43 years old, has been Executive Vice
President and Secretary of THCR since its formation in 1995. He has also been
the Executive Vice President of Corporate and Legal Affairs of Plaza Associates
since February 1995. From December 1993 to February 1995, Mr. Pickus was the
Senior Vice President and General Counsel of Plaza Associates. Mr. Pickus served
as the Assistant Secretary of Trump AC Holding from April 1994 until February
1998. Since February 1998, Mr. Pickus has served as the Secretary of Trump AC
Holding. Mr. Pickus has been Secretary and a director of Trump AC Funding since
its formation in January 1996 and Secretary and a director of Funding II and
Funding III since their formation in November 1997. Mr. Pickus has been the
Executive Vice President and Secretary of Trump Indiana since its inception. Mr.
Pickus has been the Executive Vice President of Corporate and Legal Affairs of
Taj Associates since February 1995, and a Director of THCR Holding Corp. and
THCR/ LP since November 1995. He was the Senior Vice President and Secretary of
Castle Funding from June 1988 to December 1993 and General Counsel of Castle
Associates from June 1985 to December 1993. Mr. Pickus served as the Assistant
Secretary of TACC until February 1998. Since February 1998, Mr. Pickus has
served as the Secretary of TACC. Mr. Pickus was also Secretary of TCHI from
October 1991 until December 1993. Mr. Pickus is a director of TCHI, and has
served as the Assistant Secretary of TCHI since February 1998. Mr. Pickus has
been the Executive Vice President of Corporate and Legal Affairs of Castle
Associates since February 1995, Secretary of Castle Associates since February
1996 and a member of the Board of Partner Representatives of Castle Associates
since October 1995. Mr. Pickus is
 
                                       40
<PAGE>
currently the Secretary of THCR Holding Corp., has been the Vice President,
Secretary and Director of THCR Enterprises since January 1997 and has been
Executive Vice President of TCS since its inception.
 
    R. BRUCE MCKEE-- Mr. McKee, 52 years old, has served as the Senior Vice
President of Corporate Finance of THCR, Trump AC Funding and TACC since June
1997. Mr. McKee has served as the Senior Vice President of Corporate Finance of
Funding II and Funding III since December 1997. Mr. McKee served as President
and Chief Operating Officer of Castle Associates from October 1996 until June
1997. Mr. McKee was acting Chief Operating Officer of Taj Associates from
October 1995 through October 1996, Senior Vice President, Finance of Taj
Associates from July 1993 through October 1996 and Vice President, Finance of
Taj Associates from September 1990 through June 1993. Mr. McKee has been the
Assistant Treasurer of THCR/LP, Realty Corp. and TCI since September 1991 Mr.
McKee served as the Assistant Treasurer of THCR Holding Corp. from September
1991 until February 1998. Previously, Mr. McKee was Vice President of Finance of
Elsinore Shore Associates, the owner and operator of the Atlantis Casino Hotel
Atlantic City, from April 1984 to September 1990 and Treasurer of Elsinore
Finance Corp., Elsinore of Atlantic City and Elsub Corp. from June 1986 to
September 1990. The Atlantis Casino Hotel now constitutes the portion of Trump
Plaza known as Trump World's Fair.
 
    JOHN P. BURKE--Mr. Burke, 50 years old, served as the Senior Vice President
of Corporate Finance of THCR from January 1996 until June 1997. Mr. Burke has
served as the Senior Vice President of THCR since June 1997. Mr. Burke has been
Senior Vice President of Corporate Finance of THCR Holdings and THCR Funding
since January 1996, and has been the Corporate Treasurer of THCR, THCR Holdings
and THCR Funding since their formation in 1995. He has also been Corporate
Treasurer of Plaza Associates and Taj Associates since October 1991. Mr. Burke
has been the Treasurer of Trump Indiana since its formation. Mr. Burke has been
Treasurer of Trump AC Funding since its formation in January 1996 and Treasurer
of Funding II and Funding III since their formation in November 1997 Mr. Burke
has been Treasurer of TACC since February 1998. Mr. Burke was a Director of
THCR/LP and THCR Holding Corp. from October 1991 to April 1996 and was Vice
President of THCR/LP until June 1995. Mr. Burke has served as the Assistant
Treasurer of THCR Holding Corp. and THCR/LP since February 1998. Mr. Burke has
been the Corporate Treasurer of Castle Associates since October 1991, the Vice
President of Castle Associates, Castle Funding, TCI-II and TCHI since December
1993, a member of the Board of Partner Representatives of Castle Associates
since March 1997 and the Vice President-Finance of The Trump Organization since
September 1990. Mr. Burke was an Executive Vice President and Chief
Administrative Officer of Imperial Corporation of America from April 1989
through September 1990. Mr. Burke has been the Vice President and Treasurer of
THCR Enterprises since January 1997.
 
    WALLACE B. ASKINS--Mr. Askins, 67 years old, has been a director of THCR and
THCR Funding since June 1995. He has also been a director of Trump AC Holding
since April 11, 1994, and was a partner representative of the Board of Partner
Representatives of Castle Associates from May 1992 to June 1995. Mr. Askins has
been a director of Trump AC Funding since April 1996 and a director of Funding
II and Funding III since December 1997. Mr. Askins served as a director of
TCI-II from May 1992 to December 1993. From June 1984 to November 1992, Mr.
Askins served as Executive Vice President, Chief Financial Officer and as a
director of Armco Inc. Mr. Askins also serves as a director of EnviroSource,
Inc.
 
    DON M. THOMAS--Mr. Thomas, 67 years old, has been a director of THCR and
THCR Funding since June 1995. Mr. Thomas has been a director of Trump AC Funding
since April 1996 and a director of Funding II and Funding III since December
1997. He has also been the Senior Vice President of Corporate Affairs of the
Pepsi-Cola Bottling Co. of New York since January 1985. Mr. Thomas was the
acting Chairman, and a Commissioner, of the CRDA from 1985 through 1987, and a
Commissioner of the CCC from 1980 through 1984 during a portion of which time
Mr. Thomas served as acting Chairman of the CCC. Mr. Thomas was a director of
Trump Plaza GP until June 1993 and has been a director of Trump AC Holding since
June 1993. Mr. Thomas is an attorney licensed to practice law in the State of
New York.
 
                                       41
<PAGE>
    All of the persons listed above are citizens of the United States and have
been qualified or licensed by the CCC.
 
    Trump was a partner of Plaza Operating Partners Ltd. when it filed a
petition for reorganization under Chapter 11 of the Bankruptcy Code on November
2, 1992. The plan of reorganization for Plaza Operating Partners Ltd. was
confirmed on December 11, 1992 and declared effective in January 1993.
 
    MANAGEMENT OF TRUMP PLAZA
 
    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, Ribis, Wallace B. Askins and Don M.
Thomas.
 
    Set forth below are the names, ages, positions and offices held with Plaza
Associates and a brief account 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 Trump AC, Trump AC Funding, Funding
II or Funding III.
 
    BARRY J. CREGAN--Mr. Cregan, 43 years old, has been Chief Operating Officer
of Plaza Associates since September 19, 1994 and President since March 1995.
Since February 21, 1995, Mr. Cregan has been Vice President of Trump AC Holding.
Prior to accepting these positions at Trump Plaza, Mr. Cregan was President of
The Plaza Hotel in New York for approximately three years. Prior to joining The
Plaza Hotel, he was Vice President of Hotel Operations at Trump Marina. In
addition, Mr. Cregan has worked for Hilton and Hyatt in executive capacities as
well as working in Las Vegas and Atlantic City in executive capacities.
 
    FRED A. BURO--Mr. Buro, 41 years old, has been the Executive Vice President
of Marketing of Plaza Associates since May 1994. Mr. Buro previously served as
the President of Casino Resources, Inc., a casino marketing, management and
development organization from 1991 through 1994. Prior to that, Mr. Buro served
from 1984 through 1991 as the President of a professional services consulting
firm.
 
    JAMES A. RIGOT--Mr. Rigot, 46 years old, has been Executive Vice President
of Casino Operations of Plaza Associates since November 1994. Mr. Rigot served
as Vice President of Casino Operations of Tropicana Casino and Entertainment
Resort from July 1989 through November 1994. From January 1989 through July
1989, Mr. Rigot was Assistant Casino Manager of Resorts Casino Hotel.
 
    All of the persons listed above are citizens of the United States and are
licensed by the CCC.
 
    MANAGEMENT OF THE TAJ MAHAL
 
    Set forth below are the names, ages, positions and offices held with Taj
Associates and a brief account 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
Trump AC, Trump AC Funding, Funding II or Funding III.
 
    RODOLFO E. PRIETO--Mr. Prieto, 54 years old, has been Chief Operating
Officer of Taj Associates since October 1996. Mr. Prieto has been Vice President
of Trump AC Holding since February 1998. From December 1995 to October 1996, Mr.
Prieto was the Executive Vice President, Operations of Taj Associates. Prior to
joining the Taj Mahal, Mr. Prieto was Executive Vice President and Chief
Operating Officer for Elsinore Corporation from May 1995 to November 1995;
Executive Vice President in charge of the development of the Mojave Valley
Resort for Elsinore Corporation from December 1994 to April 1995 and Executive
Vice President and Assistant General Manager for the Tropicana Resort and Casino
from September 1986 to November 1994.
 
    LARRY W. CLARK--Mr. Clark, 53 years old, has been Executive Vice President,
Casino Operations of Taj Associates since November 1991, Senior Vice President,
Casino Operations of Taj Associates from
 
                                       42
<PAGE>
May 1991 to November 1991, and Vice President, Casino Administration of Taj
Associates from April 1991 to May 1991 and from January 1990 to November 1990.
Prior to joining the Taj Mahal, Mr. Clark was Vice President, Casino Operations
of the Dunes Hotel & Country Club from November 1990 to April 1991 and Director
of Casino Marketing and Vice President, Casino Operations of the Showboat Hotel
& Casino from November 1988 to January 1990.
 
    WALTER KOHLROSS--Mr. Kohlross, 56 years old, has been Senior Vice President,
Food & Beverages of Taj Associates since June 1992, Vice President International
Marketing of Taj Associates from June 1993 through October 1995, Vice President,
Hotel Operations of Taj Associates from June 1991 to June 1992, and was Vice
President, Food & Beverage of Taj Associates from 1988 to June 1991.
 
    NICHOLAS J. NIGLIO--Mr. Niglio, 51 years old, has been Executive Vice
President, International Marketing of Taj Associates since May 1996. From
November 1995 to May 1996, Mr. Niglio was Senior Vice President, Casino
Marketing of Taj Associates. From February 1995 to October 1995, Mr. Niglio was
Vice President, International Marketing of Taj Associates. Prior to joining Taj
Associates, Mr. Niglio was Executive Vice President of International
Marketing/Player Development for Castle Associates from 1993 until 1995. Prior
to that, Mr. Niglio served as Senior Vice President, Marketing of Caesar's World
Marketing Corporation from 1991 until 1993.
 
    PATRICK J. O'MALLEY--Mr. O'Malley, 43 years old, has been the Executive Vice
President of Finance of Taj Associates since October 1996. Prior to joining the
Taj Mahal, Mr. O'Malley was the Executive Vice President of Hotel Operations of
Plaza Associates from September 1995 to October 1996. Prior to joining Trump
Plaza, from September 1994 until September 1995, Mr. O'Malley was President of
The Plaza Hotel in New York City. From December 1989 until September 1994, Mr.
O'Malley was the Vice President of Finance of The Plaza Hotel in New York City.
Prior to joining The Plaza Hotel in New York City, from 1986 to 1989, Mr.
O'Malley was a Regional Financial Controller for the Four Seasons Hotel and
Resorts, Ltd. From 1979 to 1986, Mr. O'Malley worked in the Middle East and
Europe as Hotel Controller for Marriott International Hotels.
 
    LORETTA I. VISCOUNT--Ms. Viscount, 38 years old, has been Assistant
Secretary of Trump AC Holding since February 1998, Vice President of Legal
Affairs of Taj Associates since January 1997, Executive Director of Legal
Affairs for Taj Associates from May 1996 to January 1997; and Executive Director
of Legal Affairs for Castle Associates from September 1987 to May 1996. Prior to
that, Ms. Viscount served as in-house counsel to the Claridge Hotel and Casino
and had been engaged in the private practice of law since 1982.
 
    All of the persons listed above are citizens of the United States and are
licensed by the CCC.
 
    Rodolfo E. Prieto was an Executive Vice President and the Chief Operating
Officer for Elsinore Corporation when it filed a petition for reorganization
under Chapter 11 of the Bankruptcy Code on October 31, 1995. Elsinore
Corporation filed a plan of reorganization on February 28, 1996, which became
effective on February 28, 1997.
 
    MANAGEMENT OF TCS
 
    Set forth below are the names, ages, positions and offices held with TCS and
a brief account of the business experience during the past five years of each of
the executive officers of TCS, other than those who are directors and officers
of Trump AC or Trump AC Funding.
 
    JOSEPH A. FUSCO--Mr. Fusco, 53 years old, has been Executive Vice-President
for Government Relations & Regulatory Affairs of THCR since June 1996 and of TCS
since July 1996. From August 1985 to June 1996, he 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. Mr. Fusco
previously served as Atlantic County Prosecutor, a Gubernatorial appointment,
from April 1981 to July 1985 and as Special Counsel for
 
                                       43
<PAGE>
Licensing for the CCC from the inception of that agency in September 1977 to
March 1981. He has been admitted to practice law in the State of New Jersey
since 1969.
 
    FRANCIS X. MCCARTHY, JR.--Mr. McCarthy, 45 years old, has been the Executive
Vice President of Finance of TCS since October 1996. Mr. McCarthy was Vice
President of Finance and Accounting of Trump Plaza GP from October 1992 until
June 1993, Senior Vice President of Finance and Administration of Plaza
Associates from August 1990 to June 1994 and Executive Vice President of Finance
and Administration of Plaza Associates from June 1994 to October 1996. Mr.
McCarthy previously served in a variety of financial positions for Greate Bay
Hotel and Casino, Inc. from June 1980 through August 1990.
 
    KEVIN S. SMITH--Mr. Smith, 41 years old, has been the Vice President of
Corporate Litigation of TCS since October 1996. Mr. Smith was the Vice
President, General Counsel of Plaza Associates from February 1995 to October
1996. Mr. Smith was previously associated with Cooper Perskie April Niedelman
Wagenheim & Levenson, an Atlantic City law firm specializing in trial
litigation. From 1989 until February 1992, Mr. Smith handled criminal trial
litigation for the State of New Jersey, Department of Public Defender, assigned
to the Cape May and Atlantic County Conflict Unit.
 
    All of the persons listed above are citizens of the United States and are
licensed by the CCC.
 
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, 1997, 1996 and 1995 to the Chairman of the Board of Trump AC
Holding, the Chief Executive Officer of Plaza Associates and Taj Associates,
each of the four most highly compensated executive officers of Plaza Associates
and Taj Associates whose salary and bonuses exceeded $100,000 for the year ended
December 31, 1997.
 
                                       44
<PAGE>
                           SUMMARY COMPENSATION TABLE
 
<TABLE>
<CAPTION>
                                                                 ANNUAL COMPENSATION
                                                -----------------------------------------------------
                   NAME AND                                                            OTHER ANNUAL      ALL OTHER
              PRINCIPAL POSITION                  YEAR        SALARY       BONUS     COMPENSATION(1)   COMPENSATION
----------------------------------------------  ---------  ------------  ----------  ----------------  -------------
<S>                                             <C>        <C>           <C>         <C>               <C>
Donald J. Trump...............................       1997  $    --       $   --             --          $   --
  Chairman of the Board, President & Treasurer       1996       --           --             --            1,031,000(2)
  of Trump AC Holding                                1995       --           --             --            2,743,000(2)
 
Nicholas L. Ribis.............................       1997  $  1,098,076  $   --         $   --          $     2,613(3)
  Chief Executive Officer of Plaza Associates        1996       998,250      --             --                1,188(3)
  and Taj Associates                                 1995     1,075,881      --             --                1,294(3)
 
Barry J. Cregan...............................       1997  $    766,632  $   --         $   --          $     4,000(3)
  President and Chief Operating Officer of           1996       744,813      28,500         --                4,737(3)
  Plaza Associates                                   1995       637,000     284,800         --                4,576(3)
 
Rudolfo Prieto(4).............................       1997  $    459,116  $   --         $   --          $     4,000(3)
  President and Chief Operating Officer Casino       1996       316,106      --             --                3,800(3)
  Operations of Taj Associates                       1995        17,673      --             --              --
 
Larry Clark...................................       1997  $    340,538  $  235,476     $   --          $     4,000(3)
  Executive V.P. Casino Operations of Taj            1996       309,400     109,700         --                3,800(3)
  Associates                                         1995       276,611     124,000         --                3,696(3)
 
Nicholas L. Niglio(5).........................       1997  $    332,515  $  287,563     $   --          $     4,000(3)
  Senior V.P. Casino Marketing of Taj                1996       278,984     186,916     $   --                3,800(3)
  Associates                                         1995       228,792     100,236         --                3,696(3)
</TABLE>
 
------------------------
 
(1) Represents the dollar value of annual compensation not properly categorized
    as salary or bonus, including amounts reimbursed for income taxes and
    directors' fees. Following Commission rules, perquisites and other personal
    benefits are not included in this table if the aggregate amount of that
    compensation is the lesser of either $50,000 or 10% of the total of salary
    and bonus for that officer.
 
(2) The amounts listed represent (i) amounts paid by Plaza Associates to Trump
    Plaza Management Corp. ("TPM"), a corporation beneficially owned by Trump,
    for services provided under a services agreement (the "TPM Services
    Agreement") and (ii) amounts paid pursuant to the Taj Services Agreement. In
    addition, Trump was reimbursed $483,000 and $549,000 in 1996 and 1995,
    respectively, for expenses incurred pursuant to the TPM Services Agreement
    and the Taj Services Agreement. The TPM Services Agreement and the Taj
    Services Agreement both expired in 1996. Trump is not an employee of Plaza
    Associates or Taj Associates.
 
(3) Represents vested and unvested contributions made by Plaza Associates, Taj
    Associates and/or TCS under the Trump Plaza Hotel and Casino Retirement
    Savings Plan, the 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% of the participant's contributions, are retained until termination of
    employment, attainment of age 59 1/2 or financial hardship, at which time
    the employee may withdraw his or her vested funds.
 
(4) Mr. Prieto commenced employment with Taj Associates in December 1995.
 
(5) Mr. Niglio commenced employment with Taj Associates in February 1995.
 
                                       45
<PAGE>
EMPLOYMENT AGREEMENTS
 
    As a result of the June 1995 Offerings, THCR and THCR Holdings entered into
a revised employment agreement with Mr. Ribis (the "Ribis THCR Agreement"),
pursuant to which he agreed to serve as President and Chief Executive Officer of
THCR and Chief Executive Officer of THCR Holdings. The term of the Ribis THCR
Agreement is five years. Under the Ribis THCR Agreement, Mr. Ribis's annual
salary is $1,996,500. Mr. Ribis's annual salary is paid in equal parts by THCR,
Plaza Associates, Taj Associates and Castle Associates. In the event Mr. Ribis's
employment is terminated by THCR other than for "cause" or if he incurs a
"constructive termination without cause," Mr. Ribis will receive a severance
payment equal to one year's base salary, and the phantom stock units and options
will become fully vested. The Ribis THCR Agreement defines (a) "cause" as Mr.
Ribis's (i) conviction of certain crimes, (ii) gross negligence or willful
misconduct in carrying out his duties, (iii) revocation of his casino key
employee license or (iv) material breach of the agreement, and (b) "constructive
termination without cause" as the termination of Mr. Ribis's employment at his
initiative following the occurrence of certain events, including (i) a reduction
in compensation, (ii) failure to elect Mr. Ribis as Chief Executive Officer of
THCR, (iii) failure to elect Mr. Ribis a director of THCR or (iv) a material
diminution of his duties. The phantom stock units will also automatically vest
upon the death or disability of Mr. Ribis. The Ribis THCR Agreement also
provides for up to an aggregate of $2.0 million of loans to Mr. Ribis to be used
by him to pay his income tax liability in connection with stock options, phantom
stock units and stock bonus awards, which loans will be forgiven, including both
principal and interest, in the event of a "change of control." The Ribis THCR
Agreement defines "change of control" as the occurrence of any of the following
events: (i) any person (other than THCR Holdings, Trump or an affiliate of
either) becomes a beneficial owner of 50% or more of the voting stock of THCR,
(ii) the majority of the Board of Directors of THCR consists of individuals that
were not directors on June 12, 1995 (the "June 12 Directors"), PROVIDED,
HOWEVER, that any person who becomes a director subsequent to June 12, 1995,
shall be considered a June 12 Director if his election or nomination was
supported by three-quarters of the June 12 Directors, (iii) THCR adopts and
implements a plan of liquidation or (iv) all or substantially all of the assets
or business of THCR are disposed of in a sale or business combination in which
shareholders of THCR would not beneficially own the same proportion of voting
stock of the successor entity. The Ribis THCR Agreement also provides certain
demand and piggyback registration rights for THCR Common Stock issued pursuant
to the foregoing. Pursuant to the Ribis THCR Agreement, Mr. Ribis has agreed
that upon termination of his employment other than for "cause" or following a
"change of control," he would not engage in any activity competitive with THCR
for a period of up to one year.
 
    Mr. Ribis had an employment agreement with Taj Associates pursuant to which
Mr. Ribis acted as Chief Executive Officer of Taj Associates. This agreement has
been terminated in connection with the Taj Acquisition and the Castle
Acquisition and now Mr. Ribis is compensated for his services to Taj Associates
under the Ribis THCR Agreement.
 
    Plaza Associates had an employment agreement with Barry J. Cregan (the
"Cregan Agreement") pursuant to which Mr. Cregan acted as President and Chief
Operating Officer of Plaza Associates. The Cregan Agreement, which expired on
December 31, 1997, provided for an annual base salary of $750,000. Pursuant to
the Cregan Agreement, Mr. Cregan devoted all of his professional time to Plaza
Associates. Subsequent to the expiration of the Cregan Agreement, Mr. Cregan has
continued to act as President and Chief Operating Officer of Plaza Associates.
 
    Plaza Associates has an employment agreement with James A. Rigot (the "Rigot
Agreement") pursuant to which Mr. Rigot acts as Executive Vice President of
Casino Operations of Plaza Associates. The Rigot Agreement, which expires on May
4, 2000, provides for an annual base salary of $300,000, with any bonus and
increases in salary provided in Plaza Associates' sole and absolute discretion,
however, at no time shall such salary be less than $300,000. Pursuant to the
Rigot Agreement, Mr. Rigot devotes all of his professional time to Plaza
Associates. In the event that Plaza Associates terminates the Rigot Agreement
(i) because Mr. Rigot's CCC license is terminated or (ii) because Mr. Rigot has
committed an act
 
                                       46
<PAGE>
constituting Cause (defined as a breach by Mr. Rigot of any provision of the
Rigot Agreement or any employee conduct rules, an act of dishonesty, the
deliberate and intentional refusal by Mr. Rigot to perform his duties under the
Rigot Agreement, certain disabilities or death), Plaza Associates shall pay to
Mr. Rigot all compensation earned to the date of such termination. In the event
that Plaza Associates terminates the Rigot Agreement for any other reason, Plaza
Associates shall offer to pay Mr. Rigot an amount equal to twelve months of Mr.
Rigot's then current salary, which offer, if accepted, will constitute complete
satisfaction of all obligations and liabilities arising out of the Rigot
Agreement. So long as Plaza Associates continues to pay Mr. Rigot's salary
pursuant to the Rigot Agreement, Mr. Rigot shall not accept employment, either
as an employee, consultant or independent contractor, for or on behalf of any
other casino hotel located in Atlantic City, New Jersey.
 
    Plaza Associates has an employment agreement with Fred Buro (the "Buro
Agreement") pursuant to which Mr. Buro acts as Executive Vice President of
Marketing of Plaza Associates. The Buro Agreement, which expires on May 11,
2000, provides for an annual base salary of $300,000, with any bonus and
increases in salary provided in Plaza Associates' sole and absolute discretion,
however, at no time shall such salary be less than $300,000. Pursuant to the
Buro Agreement, Mr. Buro devotes all of his professional time to Plaza
Associates. In the event that Plaza Associates terminates the Buro Agreement (i)
because Mr. Buro's CCC license is terminated or (ii) because Mr. Buro has
committed an act constituting Cause (defined as a breach by Mr. Buro of any
provision of the Buro Agreement or any employee conduct rules, an act of
dishonesty, the deliberate and intentional refusal by Mr. Buro to perform his
duties under the Buro Agreement, certain disabilities or death), Plaza
Associates shall pay to Mr. Buro all compensation earned to the date of such
termination. In the event that Plaza Associates terminates the Buro Agreement
for any other reason, Plaza Associates shall offer to pay Mr. Buro an amount
equal to twelve months of Mr. Buro's then current salary, which offer, if
accepted, will constitute complete satisfaction of all obligations and
liabilities arising out of the Buro Agreement. So long as Plaza Associates
continues to pay Mr. Buro's salary pursuant to the Buro Agreement, Mr. Buro
shall not accept employment, either as an employee, consultant or independent
contractor, for or on behalf of any other casino hotel located in Atlantic City,
New Jersey.
 
    The Rigot Agreement and the Buro Agreement provide for discretionary
bonuses. Factors considered by Plaza Associates in the awarding of all
discretionary bonuses generally are the attainment by Plaza Associates of
budgeted or forecasted goals and the individual's perceived contribution to the
attainment of such goals.
 
    TCS has an employment agreement with Kevin S. Smith, Esq. (the "Smith
Agreement") pursuant to which Mr. Smith acts as the Vice President of Corporate
Litigation & Risk Management of TCS. The Smith Agreement, which expires on
December 31, 2000, provides for a bonus of $25,000 upon signing and an annual
base salary of $160,000, with any bonus and increases in salary provided in
TCS's sole and absolute discretion. Pursuant to the Smith Agreement, Mr. Smith
devotes all of his professional time to TCS. In the event that TCS terminates
the Smith Agreement because Mr. Smith has committed an act constituting Cause
(defined as the denial or revocation of Mr. Smith's CCC license, conviction of a
disqualifying crime, breach of trust, certain disabilities or death), TCS shall
pay to Mr. Smith all compensation earned to the date of such termination.
 
    Taj Associates has an employment agreement with Rodolfo E. Prieto (the
"Prieto Agreement") pursuant to which he serves as President and Chief Operating
Officer of Taj Associates. The Prieto Agreement, which expires December 31,
2000, provides for a bonus of $100,000 upon signing, an annual salary of
$550,000 through July 1998, $600,000 through July 1999, and $650,000 through
expiration, and, in addition, an annual bonus at the sole discretion of Taj
Associates. Pursuant to the Prieto Agreement, Mr. Prieto has agreed that in the
event the agreement is terminated by him, he would not solicit or contact,
directly or through any other casino in Atlantic City, any customers whom he
developed during his employment with Taj Associates for a period of one year.
 
                                       47
<PAGE>
    Taj Associates has an agreement with Patrick O'Malley (the "O'Malley
Agreement") pursuant to which Mr. O'Malley serves as Executive Vice President of
Finance and Accounting of Taj Associates. The O'Malley Agreement, which expires
on October 13, 1999, provides for an annual base salary of $250,000 per year and
an annual bonus at the sole discretion of Taj Associates. In the event Taj
Associates terminates the O'Malley Agreement because Mr. O'Malley's casino
license is revoked, terminated and/or suspended for more than 30 days or for
Cause (defined as a breach by Mr. O'Malley of the material provisions of the
O'Malley Agreement or an act of dishonesty), Taj Associates is required to pay
Mr. O'Malley an amount equal to his salary earned to the date of such
termination. In the event Mr. O'Malley terminates the O'Malley Agreement for
Good Cause (defined as the assignment to Mr. O'Malley, without his consent, of
any duties inconsistent with the position of Executive Vice President of Finance
and Accounting, a demotion or change in Mr. O'Malley's title or office, any
removal from his position or a change in control of Taj Associates, except in
connection with the termination of Mr. O'Malley's employment upon revocation of
his casino key employee license, death or disability), or if Taj Associates
terminates the O'Malley Agreement without Cause, Taj Associates shall pay Mr.
O'Malley all compensation, reimbursements and benefits provided for under the
O'Malley Agreement (i) due on the date of such termination and (ii) payable from
such date of termination through the expiration date of the O'Malley Agreement,
which amount shall not be less than one year annual base salary then payable,
and any bonuses accrued to such date of termination. Upon termination of the
O'Malley Agreement, Mr. O'Malley will not accept employment, either as an
employee, consultant or independent contractor, for or on behalf of any other
casino hotel located within a 300-mile radius of Atlantic City, New Jersey.
 
    Taj Associates has an employment agreement with Larry W. Clark (the "Clark
Agreement") pursuant to which he serves as Executive Vice President, Casino
Operations of Taj Associates. The Clark Agreement, which expires on June 30,
2001, provides for a bonus of $50,000, net of taxes, upon signing, an annual
salary of $350,000 and, in addition, a minimum guaranteed bonus of at least
$125,000 per annum. Pursuant to the Clark Agreement, Mr. Clark has agreed that
in the event the agreement is terminated by him for any reason or by Taj
Associates for cause, he would not engage in employment for or on behalf of any
other casino hotel located in Atlantic City for a period of one year.
 
    Taj Associates has an employment agreement with Nicholas J. Niglio (the
"Niglio Agreement") pursuant to which he serves as Executive Vice President,
International Marketing of Taj Associates. The Niglio Agreement, which expires
on June 30, 2001, provides for a bonus of $100,000, net of taxes, upon signing,
an annual salary of $350,000 and, in addition, a minimum guaranteed bonus of
$100,000, net of taxes. Pursuant to the Niglio Agreement, Mr. Niglio has agreed
that upon termination of his employment he would not solicit or contact,
directly or through any other casino in Atlantic City, any customers whom he had
developed during his employment with Taj Associates for a period of one year.
 
    Taj Associates may terminate the employment agreements of Messrs. Clark,
Prieto and Niglio in its sole discretion, without cause. If Mr. Clark's
employment agreement is terminated without cause, Taj Associates would be
obligated to pay Mr. Clark the greater of one year's salary or his salary for
the number of months remaining in the agreement, each at his then current
salary. If Mr. Prieto's agreement is terminated without cause, Taj Associates
would be obligated to pay Mr. Prieto for the number of months remaining in the
agreement plus expenses to move to Nevada. If Mr. Niglio's employment agreement
is terminated without cause, Taj Associates would be obligated to pay Mr. Niglio
the lesser of twelve month's salary or his salary for the number of months
remaining in the agreement, each at his then current salary. Taj Associates may
also terminate the Clark Agreement, the Prieto Agreement and the Niglio
Agreement (a) in the event that the CCC license of Mr. Clark, Mr. Prieto or Mr.
Niglio, respectively, is revoked or terminated or (b) for "cause," which is
defined in each of the agreements as (i) a material breach of the agreement or
of any employee conduct rules, (ii) dishonesty, (iii) intentional refusal to
perform duties or to properly perform them upon notice, (iv) alcohol or drug
abuse or (v) disability or death.
 
    The Prieto Agreement and the O'Malley Agreement provide for discretionary
bonuses. Factors considered by Taj Associates in the awarding of all
discretionary bonuses generally are the attainment by
 
                                       48
<PAGE>
Taj Associates of budgeted or forecasted goals and the individual's perceived
contribution to the attainment of such goals.
 
COMPENSATION OF DIRECTORS
 
    All of the directors of Trump AC Funding, Funding II and Funding III
currently serve as an officer or on the Board of Directors of THCR and receive
no additional compensation for their service with Trump AC Funding, Funding II,
and Funding III. Directors of THCR who are also employees or consultants of THCR
and its affiliates receive no directors' fees. Non-employee directors are paid
an annual directors' fee of $50,000, plus $2,000 per meeting attended plus
reasonable out-of-pocket expenses incurred in attending these 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's managing general partner, Trump AC
Holding. No officer or employee of Trump AC Holding, other than Messrs. Trump
and Ribis who serve on the Board of Directors of Trump AC Holding, participated
in the deliberations concerning executive compensation.
 
    TAJ ACQUISITION.  On April 17, 1996, a subsidiary of THCR was merged with
and into THCR Holding Corp. and each outstanding share of THCR Holding Corp.'s
Class A Common Stock, which in the aggregate represented 50% of the economic
interest in Taj Associates, was converted into the right to receive, at each
holder's election, either (a) $30 in cash or (b) that number of shares of THCR
Common Stock having a market value equal to $30. Trump held the remaining 50%
interest in Taj Associates and contributed such interest in Taj Associates to
Trump AC in exchange for limited partnership interests in THCR Holdings. The
outstanding shares of THCR Holding Corp.'s Class C Common Stock all of which
were held by Trump, were canceled in connection with the Taj Acquisition. In
addition, Trump received the Trump Warrants. See "Business--The Taj Mahal--Taj
Acquisition."
 
    CERTAIN RELATED PARTY TRANSACTIONS--PLAZA ASSOCIATES.  Seashore Four was the
fee owner of a parcel of land constituting a portion of the Plaza Casino Parcel,
which it leased to Plaza Associates. Plaza Associates recorded rental expenses
of approximately $1.0 million in 1996 concerning rent owed to Seashore Four. In
January 1997, Plaza Associates exercised the option to purchase the land under
the lease with Seashore Four for $10 million.
 
    Trump Seashore was the fee owner of a parcel of land constituting a portion
of the Plaza Casino Parcel, which it leased to Plaza Associates. Plaza
Associates made rental payments to Trump Seashore of approximately $1.0 million
in 1996. In September 1996, Plaza Associates exercised the option to purchase
the land under the lease with Trump Seashore for $14.5 million.
 
    On June 24, 1993, in connection with the 1993 refinancing of Trump Plaza,
(i) Trump transferred title to Trump Plaza East to Missouri Boardwalk, Inc.
("MBI"), a wholly owned subsidiary of Midlantic National Bank ("Midlantic"), in
exchange for a reduction in indebtedness to Midlantic, (ii) MBI leased Trump
Plaza East to Trump (the "Trump Plaza East Lease") for a term of five years,
which would have expired on June 30, 1998, during which time Trump would have
been obligated to pay MBI $260,000 per month in lease payments and (iii) Plaza
Associates acquired an option to purchase Trump Plaza East. In October 1993,
Plaza Associates assumed the Trump Plaza East Lease and related expenses. On
April 17, 1996, in connection with the Taj Acquisition, Plaza Associates
purchased Trump Plaza East and the Trump Plaza East Lease, and related
obligations were terminated.
 
    CERTAIN RELATED PARTY TRANSACTIONS--TAJ ASSOCIATES.  Taj Associates has a
lease with Trump-Equitable Company, for the lease of office space in The Trump
Tower in New York City, which Taj Associates uses as a marketing office. On
September 1, 1995, the lease was renewed for a term of five years with an option
for
 
                                       49
<PAGE>
Taj Associates to cancel the lease on September 1 of each year, upon six months'
notice and payment of six months' rent. Under the renewed lease, the monthly
payments are $2,184.
 
    From October 4, 1991 until April 17, 1996, Taj Associates leased the
Specified Parcels from Realty Corp., consisting of land adjacent to the site of
the Taj Mahal, which is used primarily for a bus terminal, surface parking and
the Taj Entertainment Complex, as well as the Steel Pier and a warehouse
complex. During 1993, 1994 and 1995, lease obligations to Realty Corp. for these
facilities were approximately $3.3 million per year. On April 17, 1996, in
connection with the Taj Acquisition, Taj Associates purchased the Specified
Parcels from Realty Corp. and the lease and related obligations were terminated.
 
    On October 4, 1991, Taj Associates entered into a guarantee with First
Fidelity Bank, National Association (now known as First Union National Bank)
("First Fidelity") of the performance by Realty Corp. of its obligations under a
loan of approximately $78 million owing to First Fidelity (the "First Fidelity
Loan"), which loan was secured by a mortgage on the Specified Parcels. Such
guarantee was limited to any deficiency in the amount owed under the First
Fidelity Loan when due, up to a maximum of $30 million. In connection with the
purchase of the Specified Parcels, Realty Corp.'s obligations to First Fidelity
under the First Fidelity Loan were satisfied and First Fidelity, among other
things, released Taj Associates from the guarantee.
 
    Taj Associates and Trump were parties to the Taj Services Agreement, which
became effective in April 1991, and which provided that Trump would render to
Taj Associates marketing, advertising, promotional and related services with
respect to the business operations of Taj Associates through December 31, 1999.
In consideration for the services to be rendered, Taj Associates paid an annual
fee (the "Annual Fee") equal to 1% of Taj Associates' earnings before interest,
taxes and depreciation less capital expenditures for such year, with a minimum
base fee of $500,000 per annum. During the year 1995, and the period from
January 1, 1996 to April 17, 1996, Trump earned approximately $1.7 million and
$0.4 million, respectively, in respect of the Annual Fee, including amounts paid
to a third party pursuant to an assignment agreement. In addition, during the
year 1995, and the period from January 1, 1996 to April 17, 1996, Taj Associates
reimbursed Trump $261,000 and $148,000, respectively, for expenses pursuant to
the Taj Services Agreement. Taj Associates agreed to indemnify Trump from and
against any licensing fees arising out of his performance of the Taj Services
Agreement, and against any liability arising out of his performance of the Taj
Services Agreement, other than that due to his gross negligence or willful
misconduct. The Taj Services Agreement was terminated upon consummation of the
Taj Acquisition on April 17, 1996.
 
    On April 1, 1991, in connection with the Taj Services Agreement, Taj
Associates and Trump entered into an Amended and Restated License Agreement (the
"Taj License Agreement") which amended and restated an earlier license agreement
between the parties. Pursuant to the Taj License Agreement, Taj Associates had
the non-exclusive right to use the name and likeness of Trump, and the exclusive
right to use the name and related marks and designs of the Taj Mahal
(collectively, the "Taj Marks"), in its advertising, marketing and promotional
activities through December 31, 1999. Upon consummation of the Taj Acquisition,
the Taj License Agreement was terminated and the Taj Marks were licensed to THCR
under the License Agreement.
 
    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. Ribis,
Pickus and Burke, executive officers of THCR, have served on the boards of
directors of other entities in which members of the Board of Directors of THCR
(namely, Messrs. Trump and Ribis) served and continue to serve as executive
officers. Management believes that such relationships have not affected the
compensation decisions made by the Board of Directors of THCR in the last fiscal
year.
 
    Trump is the sole director of TACC, a general partner of Plaza Associates,
of which Messrs. Trump, Ribis and Pickus are executive officers. Messrs. Trump
and Ribis also serve on the Board of Directors of
 
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<PAGE>
Trump AC Holding, of which Messrs. Trump, Ribis and Burke are also executive
officers. Trump is not compensated by such entities for serving as an executive
officer, however, he has entered into a personal services agreement with Plaza
Associates and THCR. Messrs. Ribis and Burke are not compensated by the
foregoing entities, however, they are compensated by Plaza Associates for their
service as executive officers.
 
    Messrs. Ribis, Pickus and Burke serve on the Board of Directors of THCR
Holding Corp., which held, prior to April 17, 1996, an indirect equity interest
in Taj Associates, of which Mr. Trump is an executive officer. Such persons also
serve on the Board of Directors of THCR/LP, the former managing general partner
of Taj Associates, of which Messrs. Trump and Ribis are executive officers. See
"--Employment Agreements."
 
    Mr. Ribis also serves on the Board of Directors of Realty Corp., which,
prior to the Taj Acquisition, leased certain real property to Taj Associates, of
which Trump is an executive officer. Trump, however, does not receive any
compensation for serving as an executive officer of Realty Corp.
 
    Messrs. Ribis, Pickus and Burke are members of the Board of Partner
Representatives of Castle Associates and members of the Board of Directors of
TCHI, the general partner of Castle Associates of which Messrs. Ribis, Pickus
and Burke are executive officers. In addition, Trump is the sole director and an
officer of Castle Funding. Messrs. Ribis, Pickus and Burke received no
compensation from these entities other than from Castle Associates for their
services as executive officers. Trump is not compensated by these entities other
than pursuant to the Castle Services Agreement.
 
    Messrs. Trump and Ribis serve on the Board of Directors of THCR, of which
Trump is Chairman of the Board. Messrs. Ribis, Pickus and Burke are executive
officers of THCR and are compensated for their services by THCR.
 
    John Barry, Trump's brother-in-law, is a partner of Barry & McMoran, a New
Jersey law firm which provides, from time to time, legal services to Plaza
Associates and Taj Associates.
 
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
 
    TRUMP AC FUNDING.  Through its ownership of 100% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100% of Trump AC Funding's common stock since
its formation on January 30, 1996.
 
    FUNDING II.  Through its ownership of 100% of Trump AC and Trump AC Holding,
THCR Holdings has owned 100% of Funding II's common stock since its formation on
November 18, 1997.
 
    FUNDING III.  Through its ownership of 100% of Trump AC and Trump AC
Holding, THCR Holdings has owned 100% of Funding II's common stock since its
formation on November 18, 1997.
 
    TRUMP AC.  Through its ownership of 100% of Trump AC Holding, THCR Holdings
currently beneficially owns 100% of Trump AC.
 
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, Ribis 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--Plaza Associates," "--Taj
Associates" and "-- Other Relationships."
 
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<PAGE>
    Plaza Associates and Taj Associates have joint insurance coverage with
Castle Associates and other entities affiliated with Trump, for which the annual
premiums paid by Plaza Associates and Taj Associates were approximately $3.0
million for the year ended December 31, 1997.
 
    Plaza Associates leased portions of its Egg Harbor Parcel to Castle
Associates. Lease payments by Castle Associates to Plaza Associates totaled
$5,000 in 1996. Castle Associates did not make any lease payments to Plaza
Associates in 1997.
 
    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. Ribis, 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% 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.
 
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<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.
 
    The Registrants did not file any reports on Form 8-K during the year ended
December 31, 1997.
 
    (C) EXHIBITS
 
<TABLE>
<S>         <C>
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.
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.).
</TABLE>
 
                                       53
<PAGE>
<TABLE>
<S>         <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 First Bank National Association, as Senior Note Trustee.
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.
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.
</TABLE>
 
                                       54
<PAGE>
<TABLE>
<S>         <C>
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        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.
10.1-10.6   Intentionally omitted.
10.7(7)     Employment Agreement between Trump Plaza Associates and Barry Cregan.
10.8-10.27  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.
10.36-10.37 Intentionally omitted.
</TABLE>
 
                                       55
<PAGE>
<TABLE>
<S>         <C>
10.38(11)   Employment Agreement between Trump Hotels & Casino Resorts Holdings, L.P. and
            Nicholas L. Ribis (with exhibits).
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(9)    Employment Contract, dated as of February 7, 1995, between Trump Plaza
            Associates and Kevin S. Smith.
10.41(9)    Employment Agreement between Trump Plaza Associates and James A. Rigot.
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(8)    Employment Agreement, dated August 1, 1994, between R. Bruce McKee and Trump Taj
            Mahal Associates.
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., as amended.
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(8)    Employment Agreement, dated December 10, 1993, between Larry W. Clark and Trump
            Taj Mahal Associates.
10.69(8)    Employment Agreement, dated August 1, 1994, between Walter F. Kohlross and Trump
            Taj Mahal Associates.
10.70(10)   Lease Agreement between Trump's Castle Associates and Trump Taj Mahal
            Associates, dated as of December 16, 1994.
10.71(13)   Employment Agreement, extended and modified, dated October 10, 1995, between
            Larry W. Clark and Trump Taj Mahal Associates.
10.71.1(26) Second Amendment to Employment Agreement dated May 27, 1997, between Larry W.
            Clark and Trump Taj Mahal Associates.
10.72(15)   Employment Agreement, dated October 25, 1995, between Rodolfo E. Prieto and
            Trump Taj Mahal Associates.
10.73(23)   Employment Agreement, dated October 14, 1996, between Trump Taj Mahal Associates
            and Patrick J. O'Malley.
</TABLE>
 
                                       56
<PAGE>
<TABLE>
<S>         <C>
10.74(23)   Employment Agreement, dated May 3, 1996, between Trump Taj Mahal Associates and
            Loretta I. Viscount.
10.75       Intentionally omitted.
21.1        List of Subsidiaries of the Registrants.
23.1        Independent Auditor's Consent of Arthur Anderson LLP
27.1        Financial Data Schedule of Trump Atlantic City Associates
27.2        Financial Data Schedule for Trump Atlantic City Funding, Inc.
27.3        Financial Data Schedule for Trump Atlantic City Funding II, Inc.
27.4        Financial Data Schedule for Trump Atlantic City Funding III, Inc.
</TABLE>
 
------------------------
 
 (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.
 
                                       57
<PAGE>
(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.
 
(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.
 
    (D) FINANCIAL STATEMENT SCHEDULES.
 
    See "Financial Statements and Supplementary Date--Index to Financial
Statements and Financial Statement Schedule" for a list of the financial
statement schedule included in this Annual Report.
 
                                       58
<PAGE>
            IMPORTANT FACTORS RELATING TO FORWARD LOOKING STATEMENTS
 
    The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements so long as those statements are
identified as forward-looking and are accompanied by meaningful cautionary
statements identifying important factors that could cause actual results to
differ materially from those projected in such statements. In connection with
certain forward-looking statements contained in this Annual Report on Form 10-K
and those that may be made in the future by or on behalf of the Registrants, the
Registrants note that there are various factors that could cause actual results
to differ materially from those set forth in any such forward-looking
statements. The forward-looking statements contained in this Annual Report were
prepared by management and are qualified by, and subject to, significant
business, economic, competitive, regulatory and other uncertainties and
contingencies, all of which are difficult or impossible to predict and many of
which are beyond the control of the Registrants. Accordingly, there can be no
assurance that the forward-looking statements contained in this Annual Report
will be realized or that actual results will not be significantly higher or
lower. The statements have not been audited by, examined by, compiled by or
subjected to agreed-upon procedures by independent accountants, and no
third-party has independently verified or reviewed such statements. Readers of
this Annual Report should consider these facts in evaluating the information
contained herein. In addition, the business and operations of the Registrants
are subject to substantial risks which increase the uncertainty inherent in the
forward-looking statements contained in this Annual Report. The inclusion of the
forward-looking statements contained in this Annual Report should not be
regarded as a representation by the Registrants or any other person that the
forward-looking statements contained in this Annual Report will be achieved. In
light of the foregoing, readers of this Annual Report are cautioned not to place
undue reliance on the forward-looking statements contained herein.
 
                                       59
<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.
 
<TABLE>
<S>                             <C>
                                TRUMP ATLANTIC CITY ASSOCIATES
                                By: Trump Atlantic City Holding, Inc.,
                                   its general partner
</TABLE>
 
<TABLE>
<S>                             <C>
                                /s/ NICHOLAS L. RIBIS
                                ------------------------------------------
                                By: Nicholas L. Ribis
                                Title: President
                                Date: March 16, 1998
 
                                TRUMP ATLANTIC CITY FUNDING, INC.
 
                                /s/ NICHOLAS L. RIBIS
                                ------------------------------------------
                                By: Nicholas L. Ribis
                                Title: Chief Executive Officer and
                                President
                                Date: March 16, 1998
 
                                TRUMP ATLANTIC CITY FUNDING II, INC.
 
                                /s/ NICHOLAS L. RIBIS
                                ------------------------------------------
                                By: Nicholas L. Ribis
                                Title: Chief Executive Officer and
                                President
                                Date: March 16, 1998.
 
                                TRUMP ATLANTIC CITY FUNDING III, INC.
 
                                /s/ NICHOLAS L. RIBIS
                                ------------------------------------------
                                By: Nicholas L. Ribis
                                Title: Chief Executive Officer and
                                President
                                Date: March 16, 1998.
</TABLE>
 
                                       60
<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:
 
<TABLE>
  <S>  <C>                                       <C>
  TRUMP ATLANTIC CITY ASSOCIATES
  By:  Trump Atlantic City Holding, Inc.,
      its general partner
</TABLE>
 
<TABLE>
<CAPTION>
                   SIGNATURES                      TITLE                    DATE
         ------------------------------  --------------------------  -------------------
<S>      <C>                             <C>                         <C>
              /s/ DONALD J. TRUMP        Chairman of the Board of
By:      ------------------------------    Directors (principal        March 16, 1998
                Donald J. Trump            executive officer)
 
          /s/ FRANCIS X. MCCARTHY, JR.   Chief Financial Officer
By:      ------------------------------    (principal financial and    March 16, 1998
            Francis X. McCarthy, Jr.       accounting officer)
 
             /s/ NICHOLAS L. RIBIS
By:      ------------------------------  Director                      March 16, 1998
               Nicholas L. Ribis
 
             /s/ WALLACE B. ASKINS
By:      ------------------------------  Director                      March 16, 1998
               Wallace B. Askins
 
               /s/ DON M. THOMAS
By:      ------------------------------  Director                      March 16, 1998
                 Don M. Thomas
</TABLE>
 
                                       61
<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:
 
<TABLE>
  <S>  <C>                                       <C>
  TRUMP ATLANTIC CITY FUNDING, INC.
</TABLE>
 
<TABLE>
<CAPTION>
                   SIGNATURES                      TITLE                    DATE
         ------------------------------  --------------------------  -------------------
<S>      <C>                             <C>                         <C>
              /s/ DONALD J. TRUMP
By:      ------------------------------  Chairman of the Board of      March 16, 1998
                Donald J. Trump            Directors
 
                                         President, Chief Executive
             /s/ NICHOLAS L. RIBIS         Officer,
By:      ------------------------------    Chief Financial Officer     March 16, 1998
               Nicholas L. Ribis           (principal executive and
                                           financial officer)
 
              /s/ ROBERT M. PICKUS
By:      ------------------------------  Director                      March 16, 1998
                Robert M. Pickus
 
                                         Senior Vice President of
               /s/ R. BRUCE MCKEE          Corporate Finance
By:      ------------------------------    (principal accounting       March 16, 1998
                 R. Bruce McKee            officer)
 
             /s/ WALLACE B. ASKINS
By:      ------------------------------  Director                      March 16, 1998
               Wallace B. Askins
 
               /s/ DON M. THOMAS
By:      ------------------------------  Director                      March 16, 1998
                 Don M. Thomas
</TABLE>
 
                                       62
<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:
 
<TABLE>
  <S>  <C>                                       <C>
  TRUMP ATLANTIC CITY FUNDING II, INC.
</TABLE>
 
<TABLE>
<CAPTION>
                   SIGNATURES                      TITLE                    DATE
         ------------------------------  --------------------------  -------------------
<S>      <C>                             <C>                         <C>
              /s/ DONALD J. TRUMP
By:      ------------------------------  Chairman of the Board of      March 16, 1998
                Donald J. Trump            Directors
 
                                         President, Chief Executive
             /s/ NICHOLAS L. RIBIS         Officer,
By:      ------------------------------    Chief Financial Officer     March 16, 1998
               Nicholas L. Ribis           (principal executive and
                                           financial officer)
 
              /s/ ROBERT M. PICKUS
By:      ------------------------------  Director                      March 16, 1998
                Robert M. Pickus
 
                                         Senior Vice President of
               /s/ R. BRUCE MCKEE          Corporate Finance
By:      ------------------------------    (principal accounting       March 16, 1998
                 R. Bruce McKee            officer)
 
             /s/ WALLACE B. ASKINS
By:      ------------------------------  Director                      March 16, 1998
               Wallace B. Askins
 
               /s/ DON M. THOMAS
By:      ------------------------------  Director                      March 16, 1998
                 Don M. Thomas
</TABLE>
 
                                       63
<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:
 
<TABLE>
  <S>  <C>                                       <C>
  TRUMP ATLANTIC CITY FUNDING III, INC.
</TABLE>
 
<TABLE>
<CAPTION>
                   SIGNATURES                      TITLE                    DATE
         ------------------------------  --------------------------  -------------------
<S>      <C>                             <C>                         <C>
              /s/ DONALD J. TRUMP
By:      ------------------------------  Chairman of the Board of      March 16, 1998
                Donald J. Trump            Directors
 
                                         President, Chief Executive
             /s/ NICHOLAS L. RIBIS         Officer,
By:      ------------------------------    Chief Financial Officer     March 16, 1998
               Nicholas L. Ribis           (principal executive and
                                           financial officer)
 
              /s/ ROBERT M. PICKUS
By:      ------------------------------  Director                      March 16, 1998
                Robert M. Pickus
 
                                         Senior Vice President of
               /s/ R. BRUCE MCKEE          Corporate Finance
By:      ------------------------------    (principal accounting       March 16, 1998
                 R. Bruce McKee            officer)
 
             /s/ WALLACE B. ASKINS
By:      ------------------------------  Director                      March 16, 1998
               Wallace B. Askins
 
               /s/ DON M. THOMAS
By:      ------------------------------  Director                      March 16, 1998
                 Don M. Thomas
</TABLE>
 
                                       64
<PAGE>
    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.
 
                                       65
<PAGE>
         INDEX TO FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE
 
<TABLE>
<CAPTION>
                                                                                                               PAGE
                                                                                                             ---------
<S>                                                                                                          <C>
Trump Atlantic City Associates and Subsidiaries
  Report of Independent Public Accountants.................................................................        F-2
  Consolidated Balance Sheets as of December 31, 1996 and 1997.............................................        F-3
  Consolidated Statements of Operations for the years ended December 31, 1995, 1996 and 1997...............        F-4
  Consolidated Statements of Capital for the years ended December 31, 1995, 1996 and 1997..................        F-5
  Consolidated Statements of Cash Flows for the years ended December 31, 1995, 1996 and 1997...............        F-6
  Notes to Consolidated Financial Statements...............................................................        F-8
 
Financial Statement Schedule
  Report of Independent Public Accountants.................................................................        S-1
  Schedule II--Valuation and Qualifying Accounts for the Years Ended December 31, 1995, 1996 and 1997......        S-2
</TABLE>
 
                                      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 and Subsidiaries (a New Jersey general partnership) as
of December 31, 1996 and 1997, and the related consolidated statements of
operations, capital and cash flows for each of the three years in the period
ended December 31, 1997. These consolidated 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 generally accepted auditing
standards. 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, 1996 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1997, in conformity with generally accepted accounting
principles.
 
                                          ARTHUR ANDERSEN LLP
 
ROSELAND, NEW JERSEY
FEBRUARY 5, 1998
 
                                      F-2
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                          CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 1996 AND 1997
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                              1996       1997
                                                                                            ---------  ---------
<S>                                                                                         <C>        <C>
                                                     ASSETS
CURRENT ASSETS:
  Cash and cash equivalents...............................................................  $  71,320  $ 114,879
  Trade receivables, net of allowances for doubtful accounts of $17,355 and $17,095,
    respectively (Note 2).................................................................     39,087     47,417
  Accounts receivable, other (Note 5).....................................................      6,144      9,061
  Inventories.............................................................................      9,393      9,880
  Prepaid expenses and other current assets...............................................      6,495      7,319
  Due from affiliates, net (Note 7).......................................................      5,237     21,880
                                                                                            ---------  ---------
    Total current assets..................................................................    137,676    210,436
                                                                                            ---------  ---------
PROPERTY AND EQUIPMENT (Notes 2, 5 and 7):
  Land and land improvements..............................................................    159,390    171,364
  Buildings and building improvements.....................................................  1,280,947  1,334,794
  Furniture, fixtures and equipment.......................................................    194,050    217,623
  Leasehold improvements..................................................................      2,404      2,404
  Construction in progress................................................................     23,067      1,404
                                                                                            ---------  ---------
                                                                                            1,659,858  1,727,589
  Less--Accumulated depreciation and amortization.........................................   (203,591)  (267,539)
                                                                                            ---------  ---------
    Net property and equipment............................................................  1,456,267  1,460,050
                                                                                            ---------  ---------
OTHER ASSETS:
  Deferred bond issuance costs, net of accumulated amortization of $5,052 and $11,613,
    respectively
    (Note 3)..............................................................................     39,153     36,842
  Other Assets............................................................................     25,910     31,745
                                                                                            ---------  ---------
    Total other assets....................................................................     65,063     68,587
                                                                                            ---------  ---------
    Total assets..........................................................................  $1,659,006 $1,739,073
                                                                                            ---------  ---------
                                                                                            ---------  ---------
                                            LIABILITIES AND CAPITAL
CURRENT LIABILITIES:
  Current maturities of long-term debt (Note 3)...........................................  $   9,410  $   6,964
  Accounts payable........................................................................     22,598     23,392
  Accrued payroll.........................................................................     16,653     17,759
  Self-insurance reserves (Note 5)........................................................      9,911     10,508
  Accrued interest payable (Note 3).......................................................     23,160     23,850
  Other accrued expenses..................................................................     25,202     14,908
  Other current liabilities...............................................................      3,578      6,911
                                                                                            ---------  ---------
    Total current liabilities.............................................................    110,512    104,292
                                                                                            ---------  ---------
NON-CURRENT LIABILITIES:
  Long-term debt, net of current maturities (Note 3)......................................  1,207,795  1,300,027
  Other long-term liabilities.............................................................      8,841      6,815
                                                                                            ---------  ---------
    Total non-current liabilities.........................................................  1,216,636  1,306,842
                                                                                            ---------  ---------
    Total liabilities.....................................................................  1,327,148  1,411,134
                                                                                            ---------  ---------
COMMITMENTS AND CONTINGENCIES (Note 5):
CAPITAL:
  Partners' Capital.......................................................................    363,646    373,790
  Accumulated Deficit.....................................................................    (31,788)   (45,851)
                                                                                            ---------  ---------
  Total Capital...........................................................................    331,858    327,939
                                                                                            ---------  ---------
  Total liabilities and capital...........................................................  $1,659,006 $1,739,073
                                                                                            ---------  ---------
                                                                                            ---------  ---------
</TABLE>
 
         The accompanying notes to financial statements are an integral
                part of these consolidated financial statements.
 
                                      F-3
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF OPERATIONS
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
 
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                 1995              1996              1997
                                                           ----------------  ----------------  ----------------
<S>                                                        <C>               <C>               <C>
REVENUES:
Gaming...................................................    $    298,073      $    752,228      $    889,116
Rooms....................................................          19,986            68,214            81,619
Food and Beverage........................................          44,602            98,635           114,597
Other....................................................           9,594            24,146            35,019
                                                           ----------------  ----------------  ----------------
    Gross Revenues.......................................         372,255           943,223         1,120,351
Less-Promotional allowances..............................          45,077           113,743           138,085
                                                           ----------------  ----------------  ----------------
    Net Revenues.........................................         327,178           829,480           982,266
                                                           ----------------  ----------------  ----------------
COSTS AND EXPENSES:
Gaming...................................................         164,396           453,841           555,457
Rooms....................................................           8,656            22,690            28,229
Food and Beverage........................................          12,605            31,923            37,233
General and Administrative...............................          65,521           147,464           168,143
Depreciation and Amortization............................          16,213            60,870            66,018
Preopening...............................................         --                  4,145           --
                                                           ----------------  ----------------  ----------------
                                                                  267,391           720,933           855,080
                                                           ----------------  ----------------  ----------------
    Income from operations...............................          59,787           108,547           127,186
                                                           ----------------  ----------------  ----------------
NON-OPERATING INCOME (EXPENSE):
Interest income..........................................           1,003             2,339             2,891
Interest expense (Note 3)................................         (44,264)         (114,461)         (144,140)
Non-operating income (expense)(Note 4)...................          (5,743)           14,194           --
                                                           ----------------  ----------------  ----------------
    Non-operating expense, net...........................         (49,004)          (97,928)         (141,249)
                                                           ----------------  ----------------  ----------------
Income (loss) before extraordinary items.................          10,783            10,619           (14,063)
Extraordinary loss.......................................          (9,250)          (59,132)          --
                                                           ----------------  ----------------  ----------------
Net income (loss)........................................    $      1,533      $    (48,513)     $    (14,063)
                                                           ----------------  ----------------  ----------------
                                                           ----------------  ----------------  ----------------
</TABLE>
 
         The accompanying notes to financial statements are an integral
                part of these consolidated financial statements.
 
                                      F-4
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                       CONSOLIDATED STATEMENTS OF CAPITAL
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                                 (IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                           RETAINED
                                                                                          EARNINGS/
                                                                             PARTNERS'   (ACCUMULATED
                                                                              CAPITAL      DEFICIT)      TOTAL
                                                                             ----------  ------------  ----------
<S>                                                                          <C>         <C>           <C>
Balance, December 31, 1994.................................................  $  (78,772)  $   15,192   $  (63,580)
Capital Contributed by Trump Hotels & Casino Resorts Holdings, L.P.........     172,859           --      172,859
Net Income.................................................................          --        1,533        1,533
                                                                             ----------  ------------  ----------
Balance, December 31, 1995.................................................      94,087       16,725      110,812
Capital Contributed by Trump Hotels & Casino Resorts Holdings, L.P.........     269,559           --      269,559
Net Loss...................................................................          --      (48,513)     (48,513)
                                                                             ----------  ------------  ----------
Balance, December 31, 1996.................................................     363,646      (31,788)     331,858
Capital Contributed by Trump Hotels & Casino Resorts Holdings, L.P.........      10,144           --       10,144
Net Loss...................................................................          --      (14,063)     (14,063)
                                                                             ----------  ------------  ----------
Balance, December 31, 1997.................................................  $  373,790   $  (45,851)  $  327,939
                                                                             ----------  ------------  ----------
                                                                             ----------  ------------  ----------
</TABLE>
 
         The accompanying notes to financial statements are an integral
                part of these consolidated financial statements.
 
                                      F-5
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
                     (IN THOUSANDS, EXCEPT FOR SHARE DATA)
 
<TABLE>
<CAPTION>
                                                                 1995              1996              1997
                                                           ----------------  ----------------  ----------------
<S>                                                        <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
  Net income (loss)......................................     $    1,533        $  (48,513)       $  (14,063)
  Adjustments to reconcile net income (loss) to net cash
    flows provided by operating activities:
    Noncash charges:
      Extraordinary loss.................................          9,250            59,132                --
      Depreciation and amortization......................         16,213            60,870            66,018
      Accretion of discount on indebtedness..............          1,130               132                68
      Amortization of deferred loan offering costs.......          1,791             5,588             6,561
      Provision for losses on receivables................          1,057             8,599             7,399
      Utilization of CRDA credits and donations..........            388                --                53
      Valuation allowance of CRDA investments............         (1,098)            3,013             3,762
    Increase in receivables..............................         (8,318)          (20,296)          (20,944)
    Decrease (increase) in inventories...................            371                47              (486)
    Decrease (increase) in prepaid expenses and other
      current assets.....................................           (765)            1,495              (408)
    Decrease (increase) in other assets..................          6,283            (2,309)               97
    Decrease in amounts due from affiliates..............         (1,504)           (3,668)          (16,643)
    Increase (decrease) in accounts payable, accrued
      expenses and other current liabilities.............            592           (16,153)           (3,775)
    Decrease in other long-term liabilities..............             --            (1,430)           (2,438)
                                                           ----------------  ----------------  ----------------
    Net cash flows provided by operating activities......         26,923            46,507            25,201
                                                           ----------------  ----------------  ----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
    Purchases of property and equipment..................       (109,756)         (193,000)          (56,368)
    Purchases of CRDA investments........................         (3,178)           (6,725)           (8,723)
    Purchase of Taj Holding, net cash received...........             --            46,714                --
                                                           ----------------  ----------------  ----------------
    Net cash flows used in investing activities..........       (112,934)         (153,011)          (65,091)
                                                           ----------------  ----------------  ----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
    Cost of issuing debt.................................             --           (41,042)           (4,254)
    Issuance of Trump AC Mortgage Notes..................             --         1,200,000            95,605
    Retirement of long-term debt.........................             --        (1,156,836)               --
    Retirement of NatWest Loan...........................             --           (36,500)               --
    Additional Borrowings................................          4,218             6,170             3,440
    Payments and current maturities of long-term debt....         (4,527)          (14,690)          (11,342)
    Redemption of PIK Notes..............................        (81,746)               --                --
    Contributed Capital by Trump Hotel and Casino Resorts
      Holdings, L.P......................................        172,859           204,785                --
                                                           ----------------  ----------------  ----------------
    Net cash flows provided by financing activities......         90,804           161,887            83,449
                                                           ----------------  ----------------  ----------------
NET INCREASE IN CASH AND CASH EQUIVALENTS................          4,793            55,383            43,559
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR...........         11,144            15,937            71,320
                                                           ----------------  ----------------  ----------------
CASH AND CASH EQUIVALENTS AT END OF YEAR.................     $   15,937        $   71,320        $  114,879
                                                           ----------------  ----------------  ----------------
                                                           ----------------  ----------------  ----------------
</TABLE>
 
                                      F-6
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
                     CONSOLIDATED STATEMENTS OF CASH FLOWS
              FOR THE YEARS ENDED DECEMBER 31, 1995, 1996 AND 1997
               (IN THOUSANDS, EXCEPT FOR SHARE DATA) (CONTINUED)
 
<TABLE>
<CAPTION>
                                                                 1995              1996              1997
                                                           ----------------  ----------------  ----------------
<S>                                                        <C>               <C>               <C>
Supplemental Disclosures of Cash Flow Information:
 
    - During 1996 and 1997, THCR Holdings purchased
     certain parcels of land amounting to $14,455 and
     $10,144, respectively and contributed the parcels to
     Trump AC.
 
    - Equipment purchased under capital leases...........     $    3,317        $    9,994        $    3,569
 
    - Cash paid during the year for interest.............     $   36,936        $  138,128        $  128,617
                                                           ----------------  ----------------  ----------------
                                                           ----------------  ----------------  ----------------
    Supplemental Disclosure of Noncash Activities:
 
    - During 1996, THCR purchased all of the capital stock of Taj Holding for $31,181 in cash and 323,423
     shares of its common stock valued at $9,319. In addition, the contribution by Trump of his 50% interest in
     Taj Associates amounting to $40,500, net of the $10,000 payment to Bankers Trust, was recorded as minority
     interest. In conjunction with the acquisition, the accumulated deficit amounting to $108,574 was recorded
     as an increase to Property, Plant & Equipment.
 
    - This transaction has been recorded by Trump AC.
        Fair Value of net assets acquired....................................................     $1,005,816
        Cash paid for the capital stock and payment to Bankers Trust.........................        (41,181)
        Minority interest of Trump...........................................................        (30,500)
                                                                                               ----------------
          Liabilities assumed................................................................     $  934,135
</TABLE>
 
    - In connection with the purchase of the Specified Parcels, in 1996 THCR
      issued 500,000 shares of its common stock valued at $10,500, and
      contributed the Specified Parcels to Trump AC.
 
         The accompanying notes to financial statements are an integral
                part of these consolidated financial statements.
 
                                      F-7
<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 formerly
known as Trump Plaza Holding Associates, 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., a Delaware corporation ("Trump AC Funding"), Trump
Atlantic City Funding II, ("Trump AC Funding II"), Trump Atlantic City Funding
III, Inc. ("Trump AC Funding III)", Trump Atlantic City Corporation, a Delaware
Corporation ("TACC"), Trump Casino Services, L.L.C., a New Jersey limited
liability company ("Trump Services"), and Trump Communications, L.L.C., a New
Jersey limited liability company. Trump AC's sole sources of liquidity are
distributions in respect of its interests in Plaza Associates and Taj
Associates. Trump AC is owned by Trump Hotels & Casino Resorts Holdings, L.P., a
Delaware limited partnership ("THCR Holdings") (See below). Trump AC and Trump
AC Funding 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 Trump AC Mortgage Notes (as defined below) 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 consolidated financial statements. The minority interests in
Plaza Associates and Taj Associates have not been separately reflected in the
consolidated financial statements of Trump AC since they are not material.
 
    Trump AC was formed in February 1993. On June 12, 1995, Trump Hotels &
Casino Resorts, Inc., ("THCR"), completed a public offering of 10,000,000 shares
of common stock (the "Common Stock"), at $14.00 per share (the "Stock Offering")
for gross proceeds of $140,000,000. Concurrently with the Stock Offering, Trump
Hotels & Casino Resorts Holdings, L.P. ("THCR Holdings"), a then 60% subsidiary
of THCR, issued 15 1/2% Senior Secured Notes (the "Senior Secured Notes") for
gross proceeds of $155,000,000 (the "Note Offering" and, together with the Stock
Offerings, the "1995 Offerings"). From the proceeds from the Stock Offering,
THCR contributed $126,848,000 to THCR Holdings. THCR Holdings subsequently
contributed $172,859,000 to Trump AC.
 
    Prior to the 1995 Offerings, Donald J. Trump ("Trump") was the sole
stockholder of THCR and sole beneficial owner of THCR Holdings. Concurrent with
the 1995 Offerings, Trump contributed to THCR Holdings all of his beneficial
interest in Plaza Associates. Trump also contributed to THCR Holdings all of his
existing interest and rights to new gaming activities in both emerging and
established gaming jurisdictions, including Trump Indiana but excluding his
interests in the Trump Taj Mahal Casino Resort (the "Taj Mahal") and Trump's
Castle Casino Resort.
 
                                      F-8
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(1) ORGANIZATION (CONTINUED)
    On April 17, 1996, pursuant to the Agreement and Plan of Merger, as amended
(the "Taj Merger Agreement"), between THCR and Taj Mahal Holding Corp. ("Taj
Holding"), each outstanding share of Class A Common Stock of Taj Holding (the
"Taj Holding Class A Common Stock"), which in the aggregate represented 50% of
the economic interest in Taj Associates, was converted into the right to
receive, at each holder's election, either (a) $30 in cash or (b) that number of
shares of Common Stock having a market value equal to $30. Trump held the
remaining 50% interest in Taj Associates and contributed such interest in Taj
Associates to Trump AC in exchange for limited partnership interests in THCR
Holdings. In addition, the outstanding shares of Taj Holding's Class C Common
Stock, all of which were held by Trump, were canceled in connection with the Taj
Merger. The following transactions occurred in connection with the Taj Merger
(collectively referred to as the "Taj Merger Transaction"):
 
        (a) the payment of an aggregate of $31,181,000 in cash and the issuance
    of 323,423 shares of THCR Common Stock to the holders of Taj Holding Class A
    Common Stock pursuant to the Taj Merger Agreement;
 
        (b) the contribution by Trump to Trump AC of all of his direct and
    indirect ownership interests in Taj Associates, and the contribution by THCR
    to Trump AC of all of its indirect ownership interests in Taj Associates
    acquired in the Taj Merger Transaction;
 
        (c) the public offerings by (i) THCR of 12,500,000 shares of Common
    Stock (plus 750,000 shares of Common Stock issued in connection with the
    partial exercise of the underwriters' over-allotment option) (the "1996
    Stock Offering") for net proceeds of $386,062,000 and (ii) Trump AC and
    Trump Atlantic City Funding, Inc. ("Trump AC Funding"), Trump AC's wholly
    owned finance subsidiary, of $1,200,000,000 aggregate principal amount of
    11 1/4% First Mortgage Notes due 2006 (the "Trump AC Mortgage Notes") (the
    "1996 Notes Offering" and together with the 1996 Stock Offering, the "1996
    Offerings");
 
        (d) the redemption of the outstanding shares of Taj Holding's Class B
    Common Stock, par value $.01 per share, immediately prior to the Taj Merger
    Transaction for $.50 per share in accordance with its terms;
 
        (e) the redemption of the outstanding 11.35% Mortgage Bonds, Series A,
    due 1999 of Trump Taj Mahal Funding, Inc. (the "Taj Bonds");
 
        (f) the retirement of the outstanding 10 7/8% Mortgage Notes due 2001 of
    Trump Plaza Funding, Inc.;
 
        (g) the satisfaction of the indebtedness of Taj Associates under its
    loan agreement with National Westminster Bank USA;
 
        (h) the purchase of certain real property used in the operation of the
    Taj Mahal that was leased from a corporation wholly owned by Trump (the
    "Specified Parcels");
 
        (i) the purchase of certain real property used in the operation of Trump
    Plaza that was leased from an unaffiliated third party;
 
        (j) the payment to Bankers Trust Company ("Bankers Trust") to obtain
    releases of liens and guarantees that Bankers Trust had in connection with
    indebtedness owed by Trump to Bankers Trust; and
 
                                      F-9
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(1) ORGANIZATION (CONTINUED)
        (k) the issuance to Trump of warrants (the "Trump Warrants") to purchase
    an aggregate of 1.8 million shares of Common Stock, (i) 600,000 shares of
    which may be purchased on or prior to April 17, 1999, at $30 per share, (ii)
    600,000 shares of which may be purchased on or prior to April 17, 2000, at
    $35 per share, and (iii) 600,000 shares of which may be purchased on or
    prior to April 17, 2001, at $40 per share.
 
    As a result of the contribution by Trump to Trump AC of his direct and
indirect ownership interests in Taj Associates and the contribution by THCR to
Trump AC of its indirect ownership interests in Taj Associates acquired in the
Taj Merger Transaction, together with THCR's contribution to THCR Holdings of
the proceeds from the 1996 Stock Offering. Trump's aggregate beneficial equity
interest in THCR Holdings decreased from approximately 40% to approximately 25%,
and THCR's aggregate beneficial equity interest in THCR Holdings increased from
approximately 60% to approximately 75%. Trump's limited partnership interest in
THCR Holdings represents his economic interest in the assets and operations of
THCR Holdings. In 1996, as a result of THCR Holdings acquisition of Castle
Associates, Trump's beneficial interest increased to 37% which is used to
calculate minority interest in 1996 and all subsequent periods. Due to the
acquisition of 1,706,500 shares of treasury stock during 1997, Trump's voting
interest in THCR increased to 38% as of December 31, 1997.
 
    The Taj Merger Transaction has been accounted for as a "purchase" for
accounting and reporting purposes and the results of Taj Associates have been
included in the accompanying financial statements since the date of acquisition.
Accordingly, the excess of the purchase price over the fair value of the net
assets acquired ($200,782,000), which was allocated to land ($7,979,000) and
building ($192,803,000) based on an appraisal on a pro rata basis, consists of
the following:
 
        (a) $40,500,000 representing the payment of $30.00 for each of the
    1,350,000 shares of Taj Holding Class A Common Stock. Holders of 298,739
    shares of Taj Holding Class A Common Stock elected to receive 323,423 shares
    of THCR Common Stock and holders of 1,051,261 shares of Taj Holding Class A
    Common Stock elected to receive $31,181,000 in cash;
 
        (b) $40,500,000, representing the contribution by Trump to Trump AC (on
    behalf, and at the direction, of THCR Holdings) of all direct and indirect
    ownership interest in 50% of Taj Associates;
 
        (c) $9,900,000 of fees and expenses associated with the Taj Merger
    Transaction;
 
        (d) $108,574,000, representing the negative book value of Taj Associates
    at the date of the Taj Merger Transaction; and
 
        (e) $1,308,000 of closing costs associated with the purchase of the
    Specified Parcels.
 
    In connection with the Taj Merger Transaction, THCR purchased the Specified
Parcels from Trump Taj Mahal Realty Corp., a corporation owned by Trump, and Taj
Associates was released from its guarantee to First Union National Bank (the
"Guarantee"). The aggregate cost of acquiring the Specified Parcels was
$50,600,000 in cash and 500,000 shares of THCR Common Stock valued at
$10,500,000 (an average value of $21.00 per share based on the price of the THCR
Common Stock several days before and after the date of the amended Taj Merger
Agreement). The obligation of Taj Associates which had been accrued with respect
to the Guarantee ($17,923,000) was eliminated. In addition, THCR exercised the
option to purchase a tower adjacent to Trump Plaza's main tower ("Trump Plaza
East") for $28,084,000, which amount has been included in land and building.
 
                                      F-10
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(1) ORGANIZATION (CONTINUED)
    Unaudited pro forma information, assuming that the Taj Merger had occurred
on January 1, 1996, is as follows:
 
<TABLE>
<CAPTION>
                                                                                  YEAR ENDED
                                                                                 DECEMBER 31,
                                                                                     1996
                                                                                --------------
<S>                                                                             <C>
Net revenues..................................................................  $  984,789,000
                                                                                --------------
                                                                                --------------
Income from operations........................................................  $  115,504,000
                                                                                --------------
                                                                                --------------
Loss before extraordinary loss................................................  $  (11,906,000)
                                                                                --------------
                                                                                --------------
Extraordinary loss............................................................  $  (59,132,000)
                                                                                --------------
                                                                                --------------
Net income (loss).............................................................  $  (71,038,000)
                                                                                --------------
                                                                                --------------
</TABLE>
 
    The pro forma information is presented for informational purposes only and
does not purport to present what the results of operations would have been had
the Taj Merger Transaction, in fact, occurred on January 1, 1996 or to project
the results of operations for any future period.
 
(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. Through these entities, Trump AC operates luxury casino hotels,
located on The Boardwalk in Atlantic City which provide high quality amenities
and services to its casino patrons and hotel guests. 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 generally
accepted accounting principles 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-11
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    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:
 
<TABLE>
<CAPTION>
                                                            YEAR ENDED DECEMBER 31
                                                  -------------------------------------------
<S>                                               <C>            <C>            <C>
                                                      1995           1996           1997
                                                  -------------  -------------  -------------
Rooms...........................................  $   4,836,000  $  14,906,000  $  19,175,000
Food and Beverage...............................     22,868,000     54,754,000     63,644,000
Other...........................................     10,240,000      4,076,000     15,783,000
                                                  -------------  -------------  -------------
                                                  $  31,780,000  $  79,900,000  $  98,602,000
                                                  -------------  -------------  -------------
                                                  -------------  -------------  -------------
</TABLE>
 
    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:
 
<TABLE>
<S>                                                           <C>
Buildings and building improvements.........................  40 years
Furniture, fixtures and equipment...........................  3-10 years
Leasehold improvements......................................  10-40 years
</TABLE>
 
    During the second quarter of 1997, Trump AC revised its estimates of the
useful lives of buildings, building improvements and furniture and fixtures
which were acquired in 1996. Buildings and building improvements were
reevaluated to have a forty year life and furniture and fixtures were determined
to have a seven year life. Trump AC believes these changes more appropriately
reflect the timing of the economic benefits to be received from these assets
during their estimated useful lives. For the year ended December 31, 1997, the
net effect of applying these new lives was to increase net income by $5,995,000.
 
    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.
 
                                      F-12
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
    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, Plaza
Associates and Taj Associates have net operating loss carry-forwards of
approximately $100,000,000 and $225,000,000, respectively. No tax benefit has
been reflected in the accompanying financial statements for those losses as
utilization of such carryforwards are not considered more likely than not.
 
    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.
 
    RECLASSIFICATIONS
 
    Certain reclassifications have been made to prior year financial statements
to conform to the current year presentation.
 
                                      F-13
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(3) LONG-TERM DEBT
 
    Long-term debt consists of the following:
 
<TABLE>
<CAPTION>
                                                                                 DECEMBER 31,      DECEMBER 31,
                                                                                     1996              1997
                                                                               ----------------  ----------------
<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 $2,900,000 (a).....................................                --        72,100,000
Trump AC Mortgage Notes (11 1/4 First Mortgage Notes, due 2006), net of
  unamortized discount of $1,427,000 (a).....................................                --        23,573,000
Mortgage notes payable (b)...................................................         3,407,000         3,229,000
Capitalized lease obligations (c)............................................        13,798,000         8,089,000
                                                                               ----------------  ----------------
                                                                                  1,217,205,000     1,306,991,000
Less--current maturities.....................................................         9,410,000         6,964,000
                                                                               ----------------  ----------------
                                                                               $  1,207,795,000  $  1,300,027,000
                                                                               ----------------  ----------------
                                                                               ----------------  ----------------
</TABLE>
 
------------------------
 
(a) On April 17, 1996, Trump AC together with Trump AC Funding, a wholly owned
    subsidiary of Trump AC, 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 semi-annually on
    each May 1 and November 1, commencing on November 1, 1996. 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 CCC.
 
   On December 10, 1997, Trump AC together with Trump AC Funding II, a wholly
    owned subsidiary of Trump AC, issued Trump AC Mortgage Notes in an aggregate
    principal amount of $75,000,000 which bear interest at 11.25% and are due
    May 1, 2006. Interest on the Trump AC Mortgage Notes is due semi-annually on
    each May 1 and November 1. 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.
 
   On December 10, 1997, Trump AC together with Trump AC Funding III, a wholly
    owned subsidiary of Trump AC, issued Trump AC Mortgage Notes in an aggregate
    principal amount of $25,000,000 which bear interest at 11.25% and are due
    May 1, 2006. Interest on the Trump AC Mortgage Notes is due
 
                                      F-14
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(3) LONG-TERM DEBT (CONTINUED)
    semi-annually on each May 1 and November 1. 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.
 
   Underwriting costs, legal and accounting fees, printing costs and other
    expenses of $45,296,000 associated with the issuance of the Trump AC
    Mortgage Notes are being amortized using the effective interest method over
    the term of the Trump AC Mortgage Notes. Amortization is included in
    interest expense in the accompanying statements of operations and totaled
    $5,052,000 and $6,561,000 from the date of issuance through December 31,
    1996 and for the year ended December 31, 1997, respectively.
 
(b) Interest on these notes is payable with interest rates ranging from 8.5% to
    10.5%. The notes are due at various dates between 1998 and 2012 and are
    secured by certain real property.
 
(c) Interest on these leases are payable with interest rate ranging from 7.9% to
    13.5%. The leases are due at various dates between 1998 and 2000 and are
    secured by equipment.
 
   Future minimum payments under capital leases (principal portion included in
    the table below of debt maturities) are as follows:
 
<TABLE>
<S>                                                                <C>
1998.............................................................  $  6,808,000
1999.............................................................     2,417,000
2000.............................................................       309,000
                                                                   ------------
Total Minimum Payments...........................................     8,806,000
Less--Amount representing interest...............................       717,000
                                                                   ------------
Present Value of minimum lease payments..........................  $  8,089,000
                                                                   ------------
                                                                   ------------
</TABLE>
 
    The aggregate maturities of long-term debt as of December 31, 1997 are as
follows:
 
<TABLE>
<S>                                                                <C>
1998.............................................................  $     6,964,000
1999.............................................................        2,755,000
2000.............................................................          361,000
2001.............................................................           63,000
2002.............................................................           68,000
Thereafter.......................................................    1,296,780,000
                                                                   ---------------
                                                                   $ 1,306,991,000
                                                                   ---------------
                                                                   ---------------
</TABLE>
 
   The ability of Trump AC to repay its long-term debt when due will depend on
    the ability of Plaza Associates and Taj Associates to generate cash from
    operations sufficient for such purposes or on the ability of Trump AC to
    refinance such indebtedness. Cash Flow from operations may not be sufficient
    to repay a substantial portion of the principal amount of the Trump AC
    Mortgage Notes upon maturity in 2006. The future operating performance and
    the ability to refinance such indebtedness 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
 
                                      F-15
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(3) LONG-TERM DEBT (CONTINUED)
    be no assurance that the future operating performance of Plaza Associates
    and Taj Associates will be sufficient to meet these repayment obligations or
    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
    will be conducive to refinancing or other attempts to raise capital.
 
(4) NON-OPERATING INCOME (EXPENSE)
 
    Non-operating income (expense) in 1995 and 1996 included $3,939,000 and
$806,000, respectively, of costs associated with Trump Plaza East and Trump
World's Fair (see Note 7), net of miscellaneous non-operating credits.
 
    During 1996, Plaza Associates and Taj Associates each entered into an
agreement with Atlantic Thermal Systems, Inc. ("Atlantic Thermal") pursuant to
which Atlantic Thermal was granted an exclusive license to use, operate and
maintain certain steam and chilled water production facilities located at Plaza
Associates and Taj Associates. In consideration for the license, Atlantic
Thermal paid Plaza Associates and Taj Associates a $15,000,000 non-refundable
license fee. This amount has been included in other non-operating income in the
accompanying financial statements.
 
(5) COMMITMENTS AND CONTINGENCIES
 
    LEASES AND EMPLOYMENT AGREEMENTS
 
    Pursuant to the acquisition of Trump World's Fair described in Note 7, Plaza
Associates entered into an easement agreement with the New Jersey Sports and
Exposition Authority ("NJSEA"). Under the terms of the agreement, Plaza
Associates has an exclusive easement over, in and through portions of the old
Atlantic City Convention Center. The easement is for a 25-year term with annual
payments of $2,000,000, adjusted every five years for changes in the Consumer
Price Index.
 
    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, 1995, 1996 and 1997 was $3,609,000,
$7,200,000 and $7,129,000, respectively, of which $2,127,000, $1,981,000, and
$0, respectively, relates to affiliates.
 
    Future minimum lease payments under the noncancelable operating leases are
as follows:
 
<TABLE>
<CAPTION>
                                                                                    TOTAL
                                                                                --------------
<S>                                                                             <C>
1998..........................................................................  $    9,249,000
1999..........................................................................       6,703,000
2000..........................................................................       4,450,000
2001..........................................................................       3,747,000
2002..........................................................................       3,000,000
Thereafter....................................................................     111,000,000
                                                                                --------------
                                                                                $  138,149,000
                                                                                --------------
                                                                                --------------
</TABLE>
 
    Certain of these leases contain options to purchase the leased properties at
various prices throughout the leased terms.
 
                                      F-16
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(5) COMMITMENTS AND CONTINGENCIES (CONTINUED)
    As of December 31, 1997, Trump AC has entered into employment agreements
with certain key employees and had approximately $9,415,000 of commitments under
employee agreements. These commitments mature at various dates through 2001.
 
    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 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, 1998 unless extended.
 
    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 1995, the New Jersey Casino Control Commission ("CCC") renewed Plaza
Associates' and Taj Associates' licenses to operate Trump Plaza and the Taj
Mahal. The CCC renewed Plaza Associates' and Taj Associates' casino licenses for
a period of four years through 1999. In June 1996, the CCC granted TCS, an
initial casino license which, in July 1997, was renewed through July 1998. 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
 
                                      F-17
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(5) COMMITMENTS AND CONTINGENCIES (CONTINUED)
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, workmen's 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 1989 through 1992 and Taj
Associates' federal partnership income tax returns for the tax years 1992 and
1993. 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. 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, 1995,
1996 and 1997, Trump AC charged to operations $1,141,000, $3,477,000 and
$3,789,000 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. Additionally, for the years ended December 31,
1995, 1996 and 1997, Plaza Associates credited operations for $2,239,000,
$464,000 and $27,000, respectively, resulting from the recapture of the
valuation allowance on the CRDA receivable.
 
    In connection with Trump Plaza East (see Note 7), the CRDA has approved the
refund of up to $14,135,000 of qualifying deposits made by Plaza Associates.
Included in receivables at December 31, 1997, is a receivable from the CRDA of
$5,115,000. While the receivable is fully realizable by Plaza Associates,
 
                                      F-18
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(5) COMMITMENTS AND CONTINGENCIES (CONTINUED)
the amount of actual reimbursements Plaza Associates will receive in any one
year is limited to 75% and 50%, respectively, of the amount of funds Plaza
Associates deposited with the CRDA to cover its Atlantic City non-housing and
South Jersey obligations. Accordingly, Plaza Associates has recorded $2,836,000
as a current receivable and $2,279,000 as other assets in the accompanying
financial statements.
 
    CONCENTRATIONS OF CREDIT RISKS
 
    In accordance with casino industry practice, Plaza Associates and Taj
Associates extend credit to a limited number of casino patrons, after extensive
background checks and investigations of credit worthiness. For the years ended
December 31, 1996 and 1997, approximately 49% of Plaza Associates and Taj
Associates casino receivables (before allowances) were from customers whose
primary residence is outside the United States, of which approximately 36% and
32%, respectively, represents credit extended to patrons from the Far East.
 
(6) 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 15% of their earnings to the
Plan and Plaza Associates and Taj Associates will match 50% of the first 5% of
an eligible employee's contributions. Trump AC recorded charges of $886,000,
$1,882,000 and $2,680,000 for matching contributions for the years ended
December 31, 1995, 1996 and 1997, 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. Based upon 1996 information, the most recent information
available, the combined withdrawal liability of Plaza Associates and Taj
Associates related to the most significant plan's unfunded status approximates
$3,071,000. Pension expense charged to operations for the years ended December
31, 1995, 1996 and 1997 was $423,000, $1,285,000 and $1,595,000 respectively.
 
                                      F-19
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(7) TRANSACTIONS WITH AFFILIATES
 
    Trump AC has engaged in certain transactions with Trump and entities that
are wholly or partially owned by Trump. Amounts receivable from (owed to) at
December 31 are as follows:
 
<TABLE>
<CAPTION>
                                                                     YEAR ENDED DECEMBER 31
                                                                   ---------------------------
<S>                                                                <C>           <C>
                                                                       1996          1997
                                                                   ------------  -------------
Seashore Four Associates (a).....................................  $   (571,000) $          --
Castle Associates (b)............................................     1,689,000     20,964,000
Trump Casino Services, L.L.C. (b)................................            --             --
Trump Organization (b)...........................................       184,000        670,000
THCR Holdings (b)................................................     3,935,000        246,000
                                                                   ------------  -------------
                                                                   $  5,237,000  $  21,880,000
                                                                   ------------  -------------
                                                                   ------------  -------------
</TABLE>
 
------------------------
 
(a) Plaza Associates previously leased two parcels of land under long-term
    ground leases from Seashore Four Associates ("Seashore Four") and Trump
    Seashore Associates ("Seashore Associates"). In 1995 and 1996, Plaza
    Associates paid $950,000 and $1,000,000, respectively, to Seashore Four, and
    paid $1,195,000 and $981,000 in 1995 and 1996, respectively, to Seashore
    Associates. Plaza Associates purchased the tract from Seashore Associates in
    September 1996 and the tract from Seashore Four in January 1997 for
    $14,500,000 and $10,000,000, respectively.
 
(b) 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.
 
    TCS was formed on June 27, 1996 for the purpose of realizing cost savings
and operational synergies by consolidating certain administrative functions of,
and providing certain services to, Plaza Associates, Castle Associates and Taj
Associates.
 
    SERVICES AGREEMENT
 
    Pursuant to the terms of a Services Agreement with Trump Plaza Management
Corp. ("TPM"), a corporation beneficially owned by Trump, in consideration for
services provided, Plaza Associates paid TPM each year an annual fee of
$1,000,000 in equal monthly installments, and reimbursed TPM on a monthly basis
for all reasonable out-of-pocket expenses incurred by TPM in performing its
obligations under such services agreement, up to certain amounts. Under such
services agreement, approximately $1,300,000 and $1,000,000 was charged to
expense for the years ended December 31, 1995 and 1996. The service agreement
was terminated in August 1996.
 
    Taj Associates had entered into a Services Agreement which provided that
Trump render to Taj Associates marketing, advertising, promotional and related
services with respect to the business operations of Taj Associates. In
consideration for the services to be rendered, Taj Associates was to pay an
annual fee equal to 1.5% of Taj Associates earnings before interest, taxes and
depreciation, as defined, less capital expenditures and partnership
distributions for such year, with a minimum base fee of $500,000 plus expenses.
For the year ended December 31, 1995 and for the period from January 1, 1996
through
 
                                      F-20
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(7) TRANSACTIONS WITH AFFILIATES (CONTINUED)
April 17, 1996, Taj Associates incurred $2,004,000 and $512,000, respectively,
under the Services Agreement.
 
    TRUMP PLAZA EAST
 
    Under an agreement with Midlantic National Bank, Trump had (i) an option to
acquire Trump Plaza East and (ii) had a lease agreement for Trump Plaza East
which would expire on June 30, 1998 requiring $260,000 per month in lease
payments. In October 1993, Plaza Associates assumed the option and the lease
agreement from Trump.
 
    Until such time as the Trump Plaza East Purchase Option was exercised or
expired, Plaza Associates was obligated, from and after the date it entered into
the Trump Plaza East Purchase Option, to pay the net expenses associated with
Trump Plaza East. During 1995 and for part of 1996, Plaza Associates incurred
approximately $2,340,000 and $1,100,000, respectively, of such expenses of which
$2,045,000 and $348,000, respectively, are included in non-operating expenses in
the accompanying consolidated financial statements.
 
    In connection with the Taj Merger Transaction described in Note 1, Plaza
Associates exercised its option to acquire Trump Plaza East. The purchase price
of $28,084,000 has been included in land and building in the accompanying
financial statements.
 
(8) 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:
 
<TABLE>
<CAPTION>
                                                                   DECEMBER 31, 1997
                                                           ----------------------------------
<S>                                                        <C>               <C>
                                                           CARRYING AMOUNT      FAIR VALUE
                                                           ----------------  ----------------
Trump AC Mortgage Notes..................................  $  1,200,000,000  $  1,170,000,000
Trump AC Funding II Mortgage Notes.......................  $     72,100,000  $     72,100,000
Trump AC Funding III Mortgage Notes......................  $     23,573,000  $     23,573,000
</TABLE>
 
    The fair values of the Trump AC Mortgage Notes are based on quoted market
prices as of December 31, 1997. The fair value of the Trump AC Funding II
Mortgage Notes and the Trump AC Funding III Mortgage Notes approximate the
carrying value based upon the short term nature of the period outstanding.
 
    There are no quoted market prices for other notes payable and a reasonable
estimate could not be made without incurring excessive costs.
 
                                      F-21
<PAGE>
                         TRUMP ATLANTIC CITY ASSOCIATES
                                AND SUBSIDIARIES
 
             NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
 
(9) 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, 1997 is as follows:
 
<TABLE>
<S>                                                            <C>
Total Assets (including First Mortgage Notes receivable of
  $1,295,673,000 and related interest receivable)............  $1,318,861,000
                                                               -------------
                                                               -------------
Total Liabilities and Capital (including First Mortgage Notes
  payable of $1,295,673,000 and related interest payable)....  $1,318,861,000
                                                               -------------
                                                               -------------
Interest Income..............................................  $ 135,688,000
                                                               -------------
                                                               -------------
Interest Expense.............................................  $ 135,688,000
                                                               -------------
                                                               -------------
Net Income...................................................             --
                                                               -------------
                                                               -------------
</TABLE>
 
                                      F-22
<PAGE>
To Trump Atlantic City Associates and
  Subsidiaries:
 
    We have audited in accordance with generally accepted auditing standards,
the consolidated financial statements of Trump Atlantic City Associates and
Subsidiaries (Partnerships) included in this Form 10-K and have issued our
report thereon dated February 5, 1998. Our audit was made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The
accompanying schedule is the responsibility of the Partnerships' management 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
FEBRUARY 5, 1998
 
                                      S-1
<PAGE>
                                                                     SCHEDULE II
 
                TRUMP ATLANTIC CITY ASSOCIATES AND SUBSIDIARIES
 
                       VALUATION AND QUALIFYING ACCOUNTS
 
              FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
 
<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, 1996:
  Allowance for doubtful accounts.................  $   8,077,000  $  8,598,000  $     680,000(C) $  17,355,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
  Valuation allowance for interest differential on
    CRDA bonds....................................  $   1,077,000  $  3,477,000  $   7,907,000(D) $  12,461,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
YEAR ENDED DECEMBER 31, 1995:
  Allowance for doubtful accounts.................  $   8,493,000  $  1,057,000  $  (1,473,000 (A) $   8,077,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
  Valuation allowance for interest differential on
    CRDA bonds....................................  $   2,174,000  $  1,141,000  $  (2,238,000 (B) $   1,077,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
YEAR ENDED DECEMBER 31, 1994:
  Allowance for doubtful accounts.................  $  10,616,000  $    323,000  $  (2,446,000 (A) $   8,493,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
  Valuation allowance for interest differential on
    CRDA bonds....................................  $   2,981,000  $    838,000  $  (1,645,000 (B) $   2,174,000
                                                    -------------  ------------  -------------  -------------
                                                    -------------  ------------  -------------  -------------
</TABLE>
 
------------------------
 
(A) Write-off of uncollectible accounts.
 
(B) Adjustment of allowance applicable to contribution of CRDA deposits.
 
(C) Includes $(6,916,000) representing the write-off of uncollectible amounts
    and $7,596,000 which represents Taj Associates' beginning balance as of
    April 17, 1996.
 
(D) Includes $(464,000) representing the adjustment of allowance applicable to
    CRDA contributions and $8,371,000 which represents Taj Associates' beginning
    balance as of April 17, 1996.
 
                                      S-2
<PAGE>
                                 EXHIBIT INDEX
 
<TABLE>
<CAPTION>
 EXHIBIT
   NO.                                              DESCRIPTION OF EXHIBIT
----------  ------------------------------------------------------------------------------------------------------
<C>         <S>
   4.33     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.
 
  21        List of Subsidiaries of Trump Atlantic City Associates.
 
  23.1      Independent Auditor's Consent of Arthur Anderson LLP.
 
  27.1      Financial Data Schedule of Trump Atlantic City Associates.
 
  27.2      Financial Data Schedule of Trump Atlantic City Funding, Inc.
 
  27.3      Financial Data Schedule of Trump Atlantic City Funding II, Inc.
 
  27.4      Financial Data Schedule of Trump Atlantic City Funding III, Inc.
</TABLE>
 
                                      S-3