Donald Trump on His Business Operations

Donald Trump described his business operations in a December 2007 deposition as part of his legal case against author Timothy L. O'Brien. Mr. O'Brien's book, "TrumpNation: The Art of Being the Donald," cited anonymous sources close to Mr. Trump that his net worth was around $250 million, not the many billions that Mr. Trump claims. Mr. Trump sued Mr. O'Brien and his publisher in Camden, N.J., state court claiming defamation and lost business.

Trump on Trump: Testimony Offers Glimpse of How He Values His Empire

Here are some additional details that emerged from the case:

Trump on Brand Value
The 62-year-old developer told Mr. O'Brien that he was worth $6 billion. But it emerged during the deposition that Mr. Trump had told his bankers and New Jersey Casino officials that he was worth around $3.6 billion. This all occurred around the same time period in 2004 and 2005.

Mr. Trump said the $3.6 billion figure that he told the banks didn't "include anything having to do with branding," he said in the deposition. "There are those that say the value of the brand is very, very valuable," he said. Asked if he keeps his net worth documents nearby, he said: "I do keep one actually on my desk, hidden." In an interview Sunday, Mr. Trump said his net worth is now above $5 billion, not including the brand value.

Trump on Being 'Sold-Out'
Mr. Trump told The Wall Street Journal in November 2007 that he sold all 1,282 units at his Las Vegas condo project that he owns with casino and hand-truck magnate Phil Ruffin. There were $1.3 billion in proceeds coming from that project, he told The Journal and other news outlets, including CNBC.

In the deposition one month later, he said he had deposits for around 900 units. Mr. O'Brien's lawyer, Andrew Ceresney, asked whether Mr. Trump was caught in a lie?

"That's not a lie," Mr. Trump said. He said that he was holding on to the rest of the units as an investment. "I'm a buyer also, essentially."

On Sales per Square Foot
At the condo and hotel project in Las Vegas, Mr. Trump had told reporters on several occasions that the project sold for $1,300 a square foot on average.

At the deposition, the lawyer, Mr. Ceresney, asks if that sales figure is true.

"For some units it is, yes. We got some -- we sold -- we got 1,300 -- I averaged on some units $1,300 a foot," Mr. Trump said.

Mr. Ceresney then asked: "Do you understand the concept of an average, Mr. Trump?

Mr. Trump's lawyer objected to the form of the question. Then Mr. Trump said: "Well, I'm saying on certain units I averaged $1,300 a foot."

Trump on Accounting
Asked if he understands the concept behind GAAP, or generally accepted accounting principles, the set of rules used by businesses, he said, "No. I'm not an accountant."

At one point a lawyer asked Mr. Trump: "Are you familiar with the concept of net present value?" Net present value is a key measure used in real estate to estimate the worth of an asset in today's dollars based on its future cash flow and the time-value of money.

"The concept of net present value to me would be the value of the land currently after debt," Mr. Trump said. He added, "Well, to me, the word 'net' is an interesting word. It's really -- the word 'value' is the important word. If you have an asset that you can do other things with but you don't choose to do them -- I haven't chosen to do that."

In an interview Sunday, Mr. Trump says that he stands by his answers and that he leaves financial reporting to his accounts.

On Trump Tower
One of Mr. Trump's most prominent buildings is Trump Tower, the black glass skyscraper he built in the 1980s on Fifth Avenue and 57th Street in Manhattan.

According to the deposition, in 2006 a Forbes magazine reporter calculated that Mr. Trump's portion of the tower was worth $288 million. To do that, the reporter estimated the building generated $17.5 million of cash flow a year. The deposition shows, according to Mr. Trump's internal financial statements presented by Mr. O'Brien's lawyer that the building had a net loss of $587,730 that year. And including depreciation, amortization and interest expenses, the financial statements showed the operating income was about $4 million.

Asked if he knows how to calculate operating income, he said: "I don't do that. I really don't." Mr. Trump said in the interview Sunday that he stands by his answers and that he leaves financial reporting to his accounts. With regard to Trump Tower, he says a recent lease he signed with luxury retailer Gucci is one of the most lucrative in the world.

In the deposition, he also pointed out in the discussion of Trump Tower's income statement that the statement didn't take into account that he occupies two and half floors there for his headquarters. "I pay no rent, which you have to put a value on too, I guess; right?" Referring to his three adult children -- Ivanka, Eric and Donald Jr. -- who work for him in Trump Tower : "Maybe I'll move my children into a less expensive location."

Trump on Using Email
Asked if he uses computers or personal electronic devices, Mr. Trump told Mr. O'Brien's lawyers he doesn't own a computer at work or at home. Nor does he have a BlackBerry. He relies on his staff to send emails. "I generally would write letters or make telephone calls," he said. "Sometimes I'll just write a note to somebody. I don't do the email thing."

Source: Wall Street Journal 18 May 2009