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

Worth Rises, Falls 'With Markets and Attitudes And With Feelings, Even My Own Feeling'

It's one of the great mysteries of the business world: How much is Donald Trump really worth?

The world famous real-estate developer and television personality has consistently said it's in the billions. A 2005 book citing anonymous sources said it was between $150 million and $250 million. Mr. Trump sued the writer for defamation. He alleged damage to his reputation that caused him to lose out on future deals in locales from Philadelphia to Kiev.

A hearing in that case will take place Monday in a state court in Camden, N.J. As part of the proceedings, the Donald, as he's known to fans and detractors alike, has provided under oath the secrets to how he values his wealth and treasure. In one case, he says, he does "mental projections."

"My net worth fluctuates, and it goes up and down with markets and with attitudes and with feelings, even my own feeling," he told lawyers in the December 2007 deposition.

The deposition, marked "Confidential," comes to light at a time when some of Mr. Trump's projects, including several condominium developments that bear his name, are struggling. Among the problems are anemic sales, lawsuits, sharp declines in value and troubles with creditors.

In a telephone interview Sunday, Mr. Trump disputed that these are tough times for him. "We have a lot of cash right now. We're starting to buy things," he said while taking a break from playing golf at a Trump course in Bedminster, N.J. He said he stood by the statements he made in the deposition.

In the deposition, given to lawyers representing the book's author, Timothy O'Brien, and its publisher, a unit of French-based Lagardere SCA, Mr. Trump described his public persona. "I'm not different from a politician running for office," he said.

In the deposition, Mr. Trump said that his 2007 estimate of his net worth -- over $4 billion -- is "a very conservative number, in my opinion." He also said $6 billion is a good number, counting his brand value. (In the interview Sunday, he said he was worth $5 billion, not counting brand value.)

Mr. Trump was asked whether he has ever exaggerated in statements about his properties. "I think everybody does," he said in the deposition. "Who wouldn't?"

A follow-up question: Does that mean he inflates the value of his properties in general, nonfinancial public statements? "Not beyond reason," he said in the testimony.

The deposition reveals he told his bankers and New Jersey casino authorities in 2004 and 2005 that he was worth approximately $3.6 billion. In 2005, Deutsche Bank evaluated his net worth as part of underwriting a $640 million construction loan it made to Mr. Trump's Chicago condo and hotel project. The bank said his worth was $788 million, according to information presented by the author's lawyers present during Mr. Trump's deposition.

In his testimony, Mr. Trump discounted that and other low-ball evaluations as "ridiculous." And he noted, "They [Deutsche Bank] still come up with numbers that are many times" what the book's author, Mr. O'Brien, reported. In his interview Sunday, he said Deutsche Bank looked at some of his assets, not all of them, and didn't do independent appraisals. A Deutsche Bank spokesman couldn't be reached.

Mr. Trump said Sunday that Mr. O'Brien, author of "TrumpNation: The Art of Being the Donald," will "wish he never heard of that God damn book" and predicted that "the publishing company will pay me hundreds of millions of dollars" as a result of the suit.

Mr. O'Brien, who is an editor at the New York Times, declined to comment through his attorney, citing the ongoing litigation.

In the deposition, Mr. Trump discussed how he determined the value of a residential development on old rail yards on Manhattan's west side. According to the deposition, when a newsletter reporter writing about the project's 2005 sale for $1.8 billion said Mr. Trump had a "small interest," Mr. Trump wrote him a note. "You're a real loser. Thanks for the nice story. Is 50% small?"

But Mr. Trump had a 30% limited-partnership interest in the project, according to legal documents. A group of Hong Kong investors were the owners. Asked about this during the deposition, Mr. Trump explained that, in his eyes, he owned half because he gets paid fees for managing the buildings and because he didn't have to put up cash in the deal. "In my own mind I've always felt that," he said. "That 30% is equated to 50%," he said. In his interview Sunday, Mr. Trump said he had owned the equivalent of "more than 50%."

Mr. Trump often licenses his name to other developers in return for a fee or a cut of the sales. During the deposition, Mr. O'Brien's lawyer, Andrew Ceresney, noted that Mr. Trump had claimed publicly that he had a major ownership in one such project.

For example, in a November 2007 Wall Street Journal interview cited by Mr. Ceresney, Mr. Trump said he had sold out units at an eponymous condo-hotel project in Hawaii. "The building is largely owned by me," he said in the interview. But in the deposition, Mr. Ceresney produced the licensing agreement for the project. Mr. Trump wasn't a major equity holder in the project, it showed, a fact Mr. Trump didn't dispute.

"Because this is such a strong licensing agreement that I consider it to be a form of ownership," Mr. Trump said. "I'd rather have this than own the building," he said. Moments later he said: "I would say that it could be interpreted to be a form of ownership in the building."

In the deposition, Mr. Trump is asked about the Bedminster, N.J. golf course, which financial statements showed had a net loss of $4.6 million in 2005. Has he ever done a financial analysis of his investment there?

"Yes, I've done mental projections," he said, figuring he'd eventually make $120 million. He never put them down on paper. "You don't really have to," he said. Mr. Ceresney, asks: "Have you discounted in your mind for the risk that you won't sell [memberships] at the prices you are anticipating?"

"I think I will, but it's possible I won't. But I think I will," Mr. Trump said.

At one point during the deposition, Mr. Trump explained the importance of putting his projects in the best light possible. "Would you like me to say, oh, gee, the building is not doing well, blah, blah, blah, come by, the building -- nobody talks that way. Who would ever talk that way?"