EX-99.1 2 d446337dex991.htm PRESS RELEASE Press Release

Exhibit 99.1

MOHEGAN TRIBAL GAMING AUTHORITY ANNOUNCES

FOURTH QUARTER FISCAL 2012 OPERATING RESULTS

Uncasville, Connecticut, November 29, 2012 - The Mohegan Tribal Gaming Authority, or the Authority, the owner and operator of Mohegan Sun in Uncasville, Connecticut, and Mohegan Sun at Pocono Downs in Wilkes-Barre, Pennsylvania, announced today the operating results for its fourth quarter ended September 30, 2012.

“Our operating results for the quarter reflect a continuation of recent trends in revenues,” said Mitchell Grossinger Etess, Chief Executive Officer of the Authority. “In response, we continue to be prudent in our marketing approach in order to optimize revenues and profitability and, in late September 2012, we began implementation of further cost saving initiatives at Mohegan Sun in order to align our operations with market conditions. We remain pleased with the performance of Mohegan Sun at Pocono Downs and the progress of Mohegan Gaming Advisors, including its recent management deal with Resorts Casino Hotel in Atlantic City.”

Consolidated operating results and significant events for the fourth quarter ended September 30, 2012 (unaudited):

 

•  

Net revenues of $351.8 million, a 5.8% decrease from the fourth quarter of fiscal 2011

 

•  

Gaming revenues of $313.8 million, a 6.9% decrease from the fourth quarter of fiscal 2011

 

•  

Gross slot revenues of $230.2 million, a 6.7% decrease from the fourth quarter of fiscal 2011

 

•  

Table game revenues of $81.2 million, a 7.3% decrease from the fourth quarter of fiscal 2011

 

•  

Non-gaming revenues of $63.3 million, a 5.6% decrease from the fourth quarter of fiscal 2011

 

•  

Adjusted EBITDA, a non-GAAP measure described below, of $81.0 million, a 10.5% decrease from the fourth quarter of fiscal 2011

 

•  

Income from operations of $58.1 million, a 24.6% decrease from the fourth quarter of fiscal 2011

 

•  

Net income attributable to the Authority of $14.8 million, a 68.3% decrease from the fourth quarter of fiscal 2011

 

•  

Successfully secured financing and broke ground on Project Sunlight, a hotel and convention center expansion at Mohegan Sun at Pocono Downs

 

•  

Implemented a series of cost saving initiatives at Mohegan Sun in Uncasville, Connecticut, which are forecasted to yield at least $20 million in labor and operating cost savings in fiscal 2013

The decline in Adjusted EBITDA was primarily attributable to lower gaming revenues at Mohegan Sun reflecting additional gaming capacity in the Northeast gaming market and a sluggish regional economic environment. These results offset overall changes in our operations designed to improve profitability. The decrease in income from operations primarily reflects $12.5 million in severance charges resulting from a workforce reduction initiative implemented in September 2012, combined with the decline in gaming revenues. The decline in net income attributable to the Authority primarily resulted from the reduction in income from operations, as well as higher interest expense, driven by our March 6, 2012 refinancing transactions.

Mohegan Sun

Operating results (in thousands, unaudited):

 

     For the Three Months Ended  
     September 30,      September 30,            Percentage  
     2012      2011      Variance     Variance  

Adjusted EBITDA

    $ 69,670       $ 80,130       $ (10,460 )      (13.1 %) 

Income from operations

    $ 50,934       $ 71,671       $ (20,737 )      (28.9 %) 

Operating costs and expenses

    $ 221,245       $ 221,371       $ (126 )      (0.1 %) 

Net revenues

    $ 272,179       $ 293,042       $ (20,863 )      (7.1 %) 

Gaming revenues

    $ 239,548       $ 261,943       $ (22,395 )      (8.5 %) 

Non-gaming revenues

    $ 53,834       $ 57,886       $ (4,052 )      (7.0 %) 

 

1

The decline in Adjusted EBITDA was primarily attributable to lower gaming revenues. Adjusted EBITDA margin decreased to 25.6% for the quarter ended September 30, 2012 from 27.3% in the fourth quarter of fiscal 2011.

The decrease in income from operations primarily reflects $12.5 million in severance charges resulting from a workforce reduction initiative implemented in September 2012, as well as the decline in gaming revenues.

Gaming revenues declined due to lower slot and table game revenues reflecting additional gaming capacity in the Northeast gaming market and a sluggish regional economic environment. In addition, gaming revenues declined due to changes in our operations designed to improve profitability, including changes in the slot mix on our gaming floor, and a shift in hotel occupancy from casino patrons to transient guests.

Non-gaming revenues decreased primarily as a result of lower entertainment and food and beverage revenues. The decline in entertainment revenues resulted from reductions in Arena tickets sold and average price per Arena ticket due to fewer events at the Mohegan Sun Arena, including fewer headliner shows. The decrease in food and beverage revenues resulted from a decline in meals served reflecting changes in our operations designed to improve profitability, including the reduction in hours of operation in certain food and beverage outlets and the replacement of certain Mohegan Sun-owned food and beverage outlets with third-party operators. The growth in hotel revenues reflects a shift in hotel occupancy to higher paying transient guests which had the effect of increasing the average daily room rate.

Selected gaming data (in thousands, except where noted, unaudited):

 

     For the Three Months Ended  
     September 30,     September 30,           Percentage  
     2012     2011     Variance     Variance  

Slots:

         

Handle

    $ 2,096,087      $ 2,283,316      $ (187,229 )      (8.2 %) 

Gross revenues

    $ 171,022      $ 186,645      $ (15,623 )      (8.4 %) 

Net revenues

    $ 163,964      $ 178,838      $ (14,874 )      (8.3 %) 

Free promotional slot plays (1)

    $ 18,120      $ 17,360      $ 760        4.4 % 

Weighted average number of machines (in units)

      5,897        6,308        (411 )      (6.5 %) 

Hold percentage (gross)

      8.2 %      8.2 %      —          —     

Win per unit per day (gross) (in dollars)

    $ 315      $ 322      $ (7 )      (2.2 %) 

Table games:

         

Drop

    $ 474,507      $ 515,746      $ (41,239 )      (8.0 %) 

Revenues

    $ 71,301      $ 78,098      $ (6,797 )      (8.7 %) 

Weighted average number of games (in units)

      303        315        (12 )      (3.8 %) 

Hold percentage (2)

      15.0 %      15.1 %      (0.1 %)      (0.7 %) 

Win per unit per day (in dollars)

    $ 2,554      $ 2,698      $ (144 )      (5.3 %) 

Poker:

         

Revenues

    $ 2,575      $ 3,036      $ (461 )      (15.2 %) 

Weighted average number of tables (in units)

      42        42        —          —     

Revenue per unit per day (in dollars)

    $ 666      $ 786      $ (120 )      (15.3 %) 

 

(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.
(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods.

 

2

Non-gaming data (in thousands, except where noted, unaudited):

 

     For the Three Months Ended  
     September 30,     September 30,           Percentage  
     2012     2011     Variance     Variance  

Food and beverage:

         

Revenues

    $ 16,824      $ 19,038      $ (2,214 )      (11.6 %) 

Meals served

      839        940        (101 )      (10.7 %) 

Average price per meal served (in dollars)

    $ 15.70      $ 16.64      $ (0.94 )      (5.6 %) 

Hotel:

         

Revenues

    $ 10,085      $ 9,104      $ 981        10.8 % 

Rooms occupied

      105        105        —          —     

Occupancy rate

      97.2 %      97.5 %      (0.3 %)      (0.3 %) 

Average daily room rate (in dollars)

    $ 92      $ 83      $ 9        10.8 % 

Revenue per available room (in dollars)

    $ 89      $ 81      $ 8        9.9 % 

Retail, entertainment and other:

         

Revenues

    $ 26,925      $ 29,744      $ (2,819 )      (9.5 %) 

Arena events (in events)

      34        38        (4 )      (10.5 %) 

Arena tickets

      214        252        (38 )      (15.1 %) 

Average price per Arena ticket (in dollars)

    $ 41.40      $ 46.64      $ (5.24 )      (11.2 %) 

Mohegan Sun at Pocono Downs

Operating results (in thousands, unaudited):

 

     For the Three Months Ended  
     September 30,      September 30,            Percentage  
     2012      2011      Variance     Variance  

Adjusted EBITDA

    $ 14,915       $ 14,182       $ 733        5.2 % 

Income from operations

    $ 11,636       $ 9,901       $ 1,735        17.5 % 

Operating costs and expenses

    $ 67,735       $ 70,508       $ (2,773 )      (3.9 %) 

Net revenues

    $ 79,371       $ 80,409       $ (1,038 )      (1.3 %) 

Gaming revenues

    $ 74,257       $ 75,295       $ (1,038 )      (1.4 %) 

Non-gaming revenues

    $ 9,135       $ 9,242       $ (107 )      (1.2 %) 

The growth in Adjusted EBITDA was primarily attributable to changes in our operations designed to improve profitability, combined with higher table game revenues. Adjusted EBITDA margin increased to 18.8% for the quarter ended September 30, 2012 from 17.6% in the fourth quarter of fiscal 2011.

The increase in income from operations primarily resulted from changes in our operations designed to improve profitability, as well as lower depreciation expense.

The decline in gaming revenues reflects lower slot revenues, partially offset by higher table game revenues. The decrease in slot revenues resulted from changes in our promotional offers designed to improve profitability. The decline in table game drop, as well as the increase in table game hold primarily resulted from changes in our operations designed to improve profitability.

 

3

Selected gaming data (in thousands, except where noted, unaudited):

 

     For the Three Months Ended  
     September 30,     September 30,           Percentage  
     2012     2011     Variance     Variance  

Slots:

         

Handle

    $ 740,929      $ 772,778      $ (31,849 )      (4.1 %) 

Gross revenues

    $ 59,135      $ 60,096      $ (961 )      (1.6 %) 

Net revenues

    $ 59,182      $ 60,037      $ (855 )      (1.4 %) 

Free promotional slot plays (1)

    $ 15,282      $ 16,872      $ (1,590 )      (9.4 %) 

Weighted average number of machines (in units)

      2,331        2,332        (1 )      (0.0 %) 

Hold percentage (gross)

      8.0 %      7.8 %      0.2 %      2.6 % 

Win per unit per day (gross) (in dollars)

    $ 276      $ 280      $ (4 )      (1.4 %) 

Table games:

         

Drop

    $ 49,764      $ 57,397      $ (7,633 )      (13.3 %) 

Revenues

    $ 9,947      $ 9,595      $ 352        3.7 % 

Weighted average number of games (in units)

      66        66        —          —     

Hold percentage (2)

      20.0 %      16.7 %      3.3 %      19.8 % 

Win per unit per day (in dollars)

    $ 1,638      $ 1,580      $ 58        3.7 % 

Poker:

         

Revenues

    $ 948      $ 1,064      $ (116 )      (10.9 %) 

Weighted average number of tables (in units)

      18        18        —          —     

Revenue per unit per day (in dollars)

    $ 573      $ 642      $ (69 )      (10.7 %) 

 

(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.
(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods.

Non-gaming revenues (in thousands, except where noted, unaudited):

 

     For the Three Months Ended  
     September 30,      September 30,            Percentage  
     2012      2011      Variance     Variance  

Food and beverage:

           

Revenues

    $ 6,698       $ 6,365       $ 333        5.2 % 

Meals served

      174         209         (35 )      (16.7 %) 

Average price per meal served (in dollars)

    $ 16.65       $ 14.41       $ 2.24        15.5 % 

Retail, entertainment and other:

           

Revenues

    $ 2,437       $ 2,877       $ (440 )      (15.3 %) 

Corporate

Loss from operations (in thousands, unaudited):

 

     For the Three Months Ended  
     September 30,      September 30,            Percentage  
     2012      2011      Variance     Variance  

Loss from operations

    $ 4,482       $ 4,577       $ (95 )      (2.1 %) 

 

4

Mohegan Tribal Gaming Authority Property Information

 

     Adjusted EBITDA     Income (Loss) from Operations     Net Revenues  
(in thousands, unaudited)    For the Three Months Ended     For the Three Months Ended     For the Three Months Ended  
     September 30,     September 30,     September 30,     September 30,     September 30,      September 30,  
     2012     2011     2012     2011     2012      2011  

Mohegan Sun

    $ 69,670      $ 80,130      $ 50,934      $ 71,671      $ 272,179       $ 293,042   

Mohegan Sun at Pocono Downs

      14,915        14,182        11,636        9,901        79,371         80,409   

Corporate

      (3,557 )      (3,807 )      (4,482 )      (4,577 )      297         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Total

    $ 81,028      $ 90,505      $ 58,088      $ 76,995      $ 351,847       $ 373,451   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  
     Adjusted EBITDA     Income (Loss) from Operations     Net Revenues  
     For the Fiscal Year Ended     For the Fiscal Year Ended     For the Fiscal Year Ended  
     September 30,     September 30,     September 30,     September 30,     September 30,      September 30,  
     2012     2011     2012     2011     2012      2011  

Mohegan Sun

    $ 270,396      $ 285,048      $ 199,358      $ 223,778      $ 1,084,017       $ 1,115,326   

Mohegan Sun at Pocono Downs

      58,575        51,531        43,296        31,491        314,999         303,053   

Corporate

      (15,063 )      (14,570 )      (17,230 )      (16,865 )      297         —     
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Total

    $ 313,908      $ 322,009      $ 225,424      $ 238,404      $ 1,399,313       $ 1,418,379   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

     

 

 

  

Other Information

Liquidity

As of September 30, 2012, the Authority held cash and cash equivalents of $114.1 million compared to $112.2 million as of September 30, 2011. As of September 30, 2012, no amount was drawn on the Authority’s $75.0 million revolving bank credit facility. As of September 30, 2012, letters of credit issued under the Authority’s bank credit facilities totaled $2.3 million, of which no amounts were drawn. Inclusive of letters of credit, which reduce borrowing availability under the Authority’s bank credit facilities, and after taking into account restrictive financial covenant requirements, the Authority had approximately $64.9 million of borrowing capacity under its bank credit facilities as of September 30, 2012. As of September 30, 2012, the Authority’s debt, including capital leases, totaled $1.71 billion compared to $1.64 billion as of September 30, 2011.

Interest Expense

Interest expense increased by $14.1 million, or 49.0%, to $43.0 million for the quarter ended September 30, 2012 compared to $28.9 million in the fourth quarter of fiscal 2011. The increase in interest expense was primarily due to higher weighted average interest rate. Weighted average interest rate was 10.1% for the quarter ended September 30, 2012 compared to 7.2% in the fourth quarter of fiscal 2011. The increase in weighted average interest rate was primarily driven by our March 6, 2012 refinancing transactions. Weighted average outstanding debt was $1.71 billion for the quarter ended September 30, 2012 compared to $1.61 billion in the fourth quarter of fiscal 2011.

Relinquishment Liability Reassessment

Pursuant to a relinquishment agreement with Trading Cove Associates, or TCA, the Authority is required to make certain payments to TCA, determined as a percentage of revenues generated by Mohegan Sun, through the period ending December 31, 2014. A liability for these payments was established based on the estimated present value of Mohegan Sun’s projected revenues and is periodically reassessed. Based on recent operating trends and the approval of table game operations in the State of Rhode Island, the Authority estimates that Mohegan Sun’s projected revenues over the remaining relinquishment period will decrease from previously projected amounts. Accordingly, the Authority recorded a non-cash relinquishment liability credit of $11.4 million during the quarter ended September 30, 2012. The relinquishment liability was $120.8 million as of September 30, 2012 compared to $178.3 million as of September 30, 2011.

 

5

Cost Saving Initiatives

In September 2012, the Authority implemented a workforce reduction of approximately 330 positions in Uncasville, Connecticut, in an effort to further streamline its organization and better align operating costs with current market and business conditions. In connection with this workforce reduction initiative, the Authority incurred $12.5 million in severance charges. In addition, the Authority implemented a number of other cost saving initiatives, including changes to the slot mix on the gaming floor, modifications to employee medical benefits and replacement of certain Mohegan Sun-owned food and beverage outlets with third-party operators. Labor and operating cost savings for fiscal 2013 are forecasted to be at least $20 million.

Capital Expenditures

The following table presents data related to capital expenditures (in millions, including capitalized interest):

 

     Capital Expenditures  
     Fiscal Year Ended     Forecasted  
     September 30, 2012     Fiscal Year 2013  

Mohegan Sun:

     

Maintenance

    $ 29.4      $ 25.7   

Development

      6.8        3.9   

Expansion - Project Horizon

      0.3        —     
  

 

 

    

 

 

  

Subtotal

      36.5        29.6   

Mohegan Sun at Pocono Downs:

     

Maintenance

      4.1        4.9   

Expansion

      (0.6 )      0.6   
  

 

 

    

 

 

  

Subtotal

      3.5        5.5   

Corporate:

     

Expansion - Project Sunlight

      3.6        41.9   
  

 

 

    

 

 

  

Subtotal

      3.6        41.9   
  

 

 

    

 

 

  

Total

    $ 43.6      $ 77.0   
  

 

 

    

 

 

  

Project Sunlight

In July 2012, Mohegan Sun at Pocono Downs broke ground on Project Sunlight, an estimated $50 million hotel expansion project to be located adjacent to the Mohegan Sun at Pocono Downs casino. This expansion will include a 238-room hotel and a 20,000-square-foot convention center. The hotel will include a combination of standard guest rooms and suites and feature rooms with exclusive views of the race track, as well as a fitness center, an indoor pool and a bistro serving breakfast and light fare. A new porte-cochere also is being added for additional guest convenience. The convention center will be located adjacent to the hotel and will be able to accommodate a number of different sized groups up to 800 for seated banquets. This space also can be converted into a 1,500-seat concert venue. The hotel and convention center are being developed and built by Downs Lodging, LLC, or Downs Lodging, a wholly-owned unrestricted subsidiary of the Authority. The costs for Project Sunlight are being funded through a combination of a $45 million non-recourse term loan obtained by Downs Lodging and a $5 million investment by the Authority. Project Sunlight is expected to be completed by the end of 2013.

Distributions to the Tribe

Distributions to the Tribe totaled $12.5 million for the quarter ended September 30, 2012 compared to $23.4 million in the fourth quarter of fiscal 2011. Distributions to the Tribe are anticipated to total $50 million for fiscal 2013.

 

6

Conference Call

The Authority will host a conference call and simultaneous webcast regarding its fourth quarter fiscal 2012 operating results on Thursday, November 29, 2012 at 11:00 a.m. (Eastern Standard Time).

Those interested in participating in the call should dial as follows:

(877) 756-4274

(706) 643-0107 (International)

Conference ID: 74241571

Please call five minutes in advance to ensure that you are connected prior to the initiation of the call. Questions and answers will be reserved for call-in analysts and investors.

Parties who want to listen to the live conference call on the Internet may do so through a web link on the Authority’s website at www.mtga.com, under the “Investor Relations/Financial News” section. Interested parties also may listen to a taped replay of the entire conference call commencing two hours after the call’s completion on Thursday, November 29, 2012. This replay will run through December 15, 2012.

The access number for a taped replay of the conference call is as follows:

(855) 859-2056

(404) 537-3406 (International)

Conference ID: 74241571

A transcript will be available on the Authority’s website for a period of 90 days following the conference call.

About the Authority

The Authority is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 544-acre reservation situated in Southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on a 185-acre site on the Tribe’s reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun at Pocono Downs, a gaming and entertainment facility located on a 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania.

The Tribe’s gaming operation at Mohegan Sun is one of only two legally authorized gaming operations in New England offering traditional slot machines and table games. Mohegan Sun currently operates in an approximately 3.1 million square-foot facility, which includes Casino of the Earth, Casino of the Sky, Casino of the Wind, 100,000 square feet of retail space, including The Shops at Mohegan Sun, a 10,000-seat Mohegan Sun Arena, a 350-seat Cabaret Theatre, 100,000 square feet of meeting and convention space and the approximately 1,200-room luxury Sky Hotel Tower. Mohegan Sun at Pocono Downs operates in an approximately 400,000-square-foot facility, offering traditional slot machines and table games, live harness racing and simulcast and off-track wagering, several dining and retail options and a bus passenger lounge. More information about the Authority and its properties can be obtained by visiting www.mohegansun.com, www.mohegansunpocono.com or www.mtga.com.

 

7

Special Note Regarding Forward-Looking Statements

Some information included in this press release may contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements can sometimes be identified by the use of forward-looking words such as “may,” “will,” “anticipate,” “estimate,” “expect” or “intend” and similar expressions. Such forward-looking information may involve important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the Authority. Information concerning potential factors that could affect the Authority’s financial results is included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2011, as well as in the Authority’s other reports and filings with the Securities and Exchange Commission. Any forward-looking statements included in this press release are made only as of the date of this release. The Authority does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Authority cannot assure that projected results or events will be achieved or will occur.

MOHEGAN TRIBAL GAMING AUTHORITY

CONSOLIDATED STATEMENTS OF INCOME

(in thousands)

(unaudited)

 

     For the     For the     For the     For the  
     Three Months Ended     Three Months Ended     Fiscal Year Ended     Fiscal Year Ended  
     September 30, 2012     September 30, 2011     September 30, 2012     September 30, 2011  

Revenues:

         

Gaming

    $ 313,805      $ 337,238      $ 1,254,558      $ 1,289,656   

Food and beverage

      23,522        25,403        92,149        91,072   

Hotel

      10,085        9,104        39,609        35,892   

Retail, entertainment and other

      29,736        32,621        112,194        110,568   
  

 

 

    

 

 

    

 

 

    

 

 

  

Gross revenues

      377,148        404,366        1,498,510        1,527,188   

Less - Promotional allowances

      (25,301 )      (30,915 )      (99,197 )      (108,809 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net revenues

      351,847        373,451        1,399,313        1,418,379   
  

 

 

    

 

 

    

 

 

    

 

 

  

Operating costs and expenses:

         

Gaming

      189,892        203,204        771,909        790,451   

Food and beverage

      11,594        10,654        44,949        41,515   

Hotel

      3,590        3,090        14,293        12,996   

Retail, entertainment and other

      10,904        11,599        40,723        34,846   

Advertising, general and administrative

      50,985        50,592        198,171        201,992   

Corporate

      4,726        4,541        17,379        16,704   

Depreciation and amortization

      20,953        21,581        85,030        90,032   

Loss on disposition of assets

      33        —          353        —     

Severance

      12,521        —          12,521        244   

Relinquishment liability reassessment

      (11,439 )      (8,805 )      (11,439 )      (8,805 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total operating costs and expenses

      293,759        296,456        1,173,889        1,179,975   
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

      58,088        76,995        225,424        238,404   
  

 

 

    

 

 

    

 

 

    

 

 

  

Other income (expense):

         

Accretion of discount to the relinquishment liability

      (2,062 )      (2,841 )      (8,248 )      (11,366 ) 

Interest income

      933        669        4,492        2,732   

Interest expense, net of capitalized interest

      (43,010 )      (28,873 )      (146,057 )      (117,710 ) 

Loss on early exchange of debt

      (3 )      —          (14,326 )      —     

Other income (expense), net

      (13 )      9        (44 )      (217 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Total other expense

      (44,155 )      (31,036 )      (164,183 )      (126,561 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

      13,933        45,959        61,241        111,843   

Loss attributable to non-controlling interests

      872        734        2,019        2,134   
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income attributable to Mohegan Tribal Gaming Authority

    $ 14,805      $ 46,693      $ 63,260      $ 113,977   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

 

8

MOHEGAN TRIBAL GAMING AUTHORITY

CONSOLIDATED SELECTED FINANCIAL INFORMATION

(in thousands)

(unaudited)

 

     For the Three Months Ended      For the Fiscal Year Ended  
     September 30,      September 30,      September 30,      September 30,  
     2012      2011      2012      2011  

Operating Results:

           

Gross revenues

    $ 377,148       $ 404,366       $ 1,498,510       $ 1,527,188   

Net revenues

    $ 351,847       $ 373,451       $ 1,399,313       $ 1,418,379   

Income from operations

    $ 58,088       $ 76,995       $ 225,424       $ 238,404   

Other Data:

           

Adjusted EBITDA

    $ 81,028       $ 90,505       $ 313,908       $ 322,009   

Capital expenditures

    $ 9,511       $ 12,464       $ 43,642       $ 46,477   

Cash interest paid

    $ 40,106       $ 26,258       $ 118,225       $ 108,635   
                   September 30,      September 30,  
                   2012      2011  

Balance Sheet Data:

            

Cash and cash equivalents

          $ 114,084       $ 112,174   

Debt, including capital leases

          $ 1,706,626       $ 1,635,758   

MOHEGAN SUN

SUPPLEMENTAL DATA

(unaudited)

 

     For the Three Months Ended     For the Fiscal Year Ended  
     September 30,     September 30,     September 30,     September 30,  
     2012     2011     2012     2011  

Operating results:

         

Gross revenues (in thousands)

    $ 293,382      $ 319,829      $ 1,167,107      $ 1,209,007   

Net revenues (in thousands)

    $ 272,179      $ 293,042      $ 1,084,017      $ 1,115,326   

Income from operations (in thousands)

    $ 50,934      $ 71,671      $ 199,358      $ 223,778   

Operating margin

      18.7 %      24.5 %      18.4 %      20.1 % 

Adjusted EBITDA:

         

Adjusted EBITDA (in thousands)

    $ 69,670      $ 80,130      $ 270,396      $ 285,048   

Adjusted EBITDA margin

      25.6 %      27.3 %      24.9 %      25.6 % 

Capital expenditures (in thousands)

    $ 6,575      $ 11,436      $ 36,542      $ 41,325   

Weighted average number of units:

         

Slot machines

      5,897        6,308        6,038        6,360   

Table games

      303        315        311        325   

Poker tables

      42        42        42        42   

Win per unit per day:

         

Slot machines (gross)

    $ 315      $ 322      $ 306      $ 306   

Table games

    $ 2,554      $ 2,698      $ 2,559      $ 2,567   

Poker tables

    $ 666      $ 786      $ 734      $ 768   

Hold percentage:

         

Slot machines (gross)

      8.2 %      8.2 %      8.3 %      8.1 % 

Table games

      15.0 %      15.1 %      15.2 %      15.2 % 

Food and beverage statistics:

         

Meals served (in thousands)

      839        940        3,252        3,373   

Average price per meal served

    $ 15.70      $ 16.64      $ 16.20      $ 15.82   

Hotel statistics:

         

Rooms occupied (in thousands)

      105        105        413        415   

Occupancy rate

      97.2 %      97.5 %      96.1 %      96.8 % 

Average daily room rate

    $ 92      $ 83      $ 91      $ 83   

Revenue per available room

    $ 89      $ 81      $ 87      $ 80   

Entertainment statistics:

         

Arena events (in events)

      34        38        125        117   

Arena tickets (in thousands)

      214        252        743        701   

Average price per Arena ticket

    $ 41.40      $ 46.64      $ 44.05      $ 51.38   

 

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MOHEGAN SUN AT POCONO DOWNS

SUPPLEMENTAL DATA

(unaudited)

 

     For the Three Months Ended     For the Fiscal Year Ended  
     September 30,     September 30,     September 30,     September 30,  
     2012     2011     2012     2011  

Operating results:

         

Gross revenues (in thousands)

    $ 83,392      $ 84,537      $ 331,029      $ 318,181   

Net revenues (in thousands)

    $ 79,371      $ 80,409      $ 314,999      $ 303,053   

Income from operations (in thousands)

    $ 11,636      $ 9,901      $ 43,296      $ 31,491   

Operating margin

      14.7 %      12.3 %      13.7 %      10.4 % 

Adjusted EBITDA:

         

Adjusted EBITDA (in thousands)

    $ 14,915      $ 14,182      $ 58,575      $ 51,531   

Adjusted EBITDA margin

      18.8 %      17.6 %      18.6 %      17.0 % 

Capital expenditures (in thousands)

    $ (15 )    $ 1,028      $ 3,543      $ 5,152   

Weighted average number of units:

         

Slot machines

      2,331        2,332        2,332        2,390   

Table games

      66        66        66        66   

Poker tables

      18        18        18        18   

Win per unit per day:

         

Slot machines (gross)

    $ 276      $ 280      $ 279      $ 261   

Table games

    $ 1,638      $ 1,580      $ 1,620      $ 1,525   

Poker tables

    $ 573      $ 642      $ 583      $ 652   

Hold percentage:

         

Slot machines (gross)

      8.0 %      7.8 %      8.0 %      7.8 % 

Table games

      20.0 %      16.7 %      18.5 %      17.8 % 

Food and beverage statistics:

         

Meals served (in thousands)

      174        209        720        787   

Average price per meal served

    $ 16.65      $ 14.41      $ 15.91      $ 14.84   

CORPORATE

SUPPLEMENTAL DATA

(unaudited)

 

     For the Three Months Ended      For the Fiscal Year Ended  
     September 30,      September 30,      September 30,      September 30,  
     2012      2011      2012      2011  

Capital expenditures (in thousands)

    $ 2,951       $ —         $ 3,557       $ —     

Capitalized interest (in thousands)

    $ 34       $ —         $ 34       $ —     

MOHEGAN TRIBAL GAMING AUTHORITY

ADJUSTED EBITDA RECONCILIATIONS

(unaudited)

Reconciliations of Adjusted EBITDA to Net Income:

Reconciliations of Adjusted EBITDA to net income, a financial measure determined in accordance with accounting principles generally accepted in the United States of America, or GAAP, are shown below (in thousands):

 

     For the Three Months Ended     For the Fiscal Year Ended  
     September 30,     September 30,     September 30,     September 30,  
     2012     2011     2012     2011  

Adjusted EBITDA

    $ 81,028      $ 90,505      $ 313,908      $ 322,009   

Depreciation and amortization

      (20,953 )      (21,581 )      (85,030 )      (90,032 ) 

Loss on disposition of assets

      (33 )      —          (353 )      —     

Severance

      (12,521 )      —          (12,521 )      (244 ) 

Relinquishment liability reassessment

      11,439        8,805        11,439        8,805   

Loss attributable to non-controlling interests

      (872 )      (734 )      (2,019 )      (2,134 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Income from operations

      58,088        76,995        225,424        238,404   
  

 

 

    

 

 

    

 

 

    

 

 

  

Accretion of discount to the relinquishment liability

      (2,062 )      (2,841 )      (8,248 )      (11,366 ) 

Interest income

      933        669        4,492        2,732   

Interest expense, net of capitalized interest

      (43,010 )      (28,873 )      (146,057 )      (117,710 ) 

Loss on early exchange of debt

      (3 )      —          (14,326 )      —     

Other income (expense), net

      (13 )      9        (44 )      (217 ) 
  

 

 

    

 

 

    

 

 

    

 

 

  

Net income

    $ 13,933      $ 45,959      $ 61,241      $ 111,843   
  

 

 

    

 

 

    

 

 

    

 

 

  

 

 

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Reconciliations of Income (Loss) from Operations to Adjusted EBITDA (unaudited):

Reconciliations of income (loss) from operations, a financial measure determined in accordance with GAAP, to Adjusted EBITDA, are shown below (in thousands):

 

    For the Three Months Ended September 30, 2012  
    Income (Loss)     Depreciation     Loss on           Relinquishment     Loss attributable to        
    from     and     Disposition of           Liability     Non-controlling     Adjusted  
    Operations     Amortization     Assets     Severance     Reassessment     Interests     EBITDA  

Mohegan Sun

   $ 50,934      $ 17,646      $ 32      $ 12,497      $ (11,439 )    $ —        $ 69,670   

Mohegan Sun at Pocono Downs

     11,636        3,278        1        —          —          —          14,915   

Corporate

     (4,482 )      29        —          24        —          872        (3,557 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 58,088      $ 20,953      $ 33      $ 12,521      $ (11,439 )    $ 872      $ 81,028   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    For the Three Months Ended September 30, 2011  
    Income (Loss)     Depreciation     Loss on           Relinquishment     Loss attributable to        
    from     and     Disposition of           Liability     Non-controlling     Adjusted  
    Operations     Amortization     Assets     Severance     Reassessment     Interests     EBITDA  

Mohegan Sun

   $ 71,671      $ 17,264      $ —        $ —        $ (8,805 )    $ —        $ 80,130   

Mohegan Sun at Pocono Downs

     9,901        4,281        —          —          —          —          14,182   

Corporate

     (4,577 )      36        —          —          —          734        (3,807 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 76,995      $ 21,581      $ —        $ —        $ (8,805 )    $ 734      $ 90,505   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    For the Fiscal Year Ended September 30, 2012  
    Income (Loss)     Depreciation     Loss on           Relinquishment     Loss attributable to        
    from     and     Disposition of           Liability     Non-controlling     Adjusted  
    Operations     Amortization     Assets     Severance     Reassessment     Interests     EBITDA  

Mohegan Sun

   $ 199,358      $ 69,912      $ 68      $ 12,497      $ (11,439 )    $ —        $ 270,396   

Mohegan Sun at Pocono Downs

     43,296        14,994        285        —          —          —          58,575   

Corporate

     (17,230 )      124        —          24        —          2,019        (15,063 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 225,424      $ 85,030      $ 353      $ 12,521      $ (11,439 )    $ 2,019      $ 313,908   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  
    For the Fiscal Year Ended September 30, 2011  
    Income (Loss)     Depreciation     Loss on           Relinquishment     Loss attributable to        
    from     and     Disposition of           Liability     Non-controlling     Adjusted  
    Operations     Amortization     Assets     Severance     Reassessment     Interests     EBITDA  

Mohegan Sun

   $ 223,778      $ 69,833      $ —        $ 242      $ (8,805 )    $ —        $ 285,048   

Mohegan Sun at Pocono Downs

     31,491        20,040        —          —          —          —          51,531   

Corporate

     (16,865 )      159        —          2        —          2,134        (14,570 ) 
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Total

   $ 238,404      $ 90,032      $ —        $ 244      $ (8,805 )    $ 2,134      $ 322,009   
 

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

    

 

 

  

Adjusted EBITDA Explanation:

Earnings before interest, income taxes, depreciation and amortization, or EBITDA, is a commonly used measure of performance in the casino and hospitality industry. EBITDA is not a measure of performance calculated in accordance with GAAP. The Authority historically has evaluated its operating performance with the non-GAAP measure, Adjusted EBITDA, which as used in this press release, represents earnings before interest, depreciation and amortization, loss on disposition of assets, workforce reduction severance, reassessment and accretion of discount to a relinquishment liability, loss on early extinguishment of debt, other non-operating income and expense and loss attributable to non-controlling interests.

Adjusted EBITDA provides an additional way to evaluate the Authority’s operations and, when viewed with both the Authority’s GAAP results and the reconciliations provided, the Authority believes that it provides a more complete understanding of its business than could be otherwise obtained absent this disclosure. Adjusted EBITDA is presented solely as a supplemental disclosure because: (1) the Authority believes it enhances an overall understanding of the Authority’s past and current financial performance; (2) the Authority believes it is a useful tool for investors to assess the operating performance of the business in comparison to other operators within the casino and hospitality industry since Adjusted EBITDA excludes certain items that may not be indicative of the Authority’s operating results; (3) measures that are comparable to Adjusted EBITDA are often used as an important basis for the valuation of casino and hospitality companies; and (4) the Authority uses Adjusted EBITDA internally to evaluate the performance of its operating personnel and management and as a benchmark to evaluate its operating performance in comparison to its competitors.

The use of Adjusted EBITDA has certain limitations. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, any GAAP financial measure including net income (as an indicator

 

11

of the Authority’s performance) or cash flows provided by operating activities (as an indicator of the Authority’s liquidity), nor should it be considered as an indicator of the Authority’s overall financial performance. The Authority’s calculation of Adjusted EBITDA is likely to be different from the calculation of Adjusted EBITDA or other similarly titled measurements used by other casino and hospitality companies, and therefore, comparability may be limited. Adjusted EBITDA eliminates certain items from net income, such as interest, depreciation and amortization and reassessment and accretion of discount to the relinquishment liability. Each of these items has been incurred in the past, will continue to be incurred in the future and should be considered in the overall evaluation of the Authority’s results. The Authority compensates for these limitations by providing the relevant disclosure of interest, depreciation and amortization, reassessment and accretion of discount to the relinquishment liability and other items excluded in the calculation of Adjusted EBITDA, both in its reconciliations to the GAAP financial measure of net income and in its consolidated financial statements, all of which should be considered when evaluating its results. The Authority strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

Press Release:

Mohegan Tribal Gaming Authority, Uncasville, Connecticut, November 29, 2012

Contacts:

Mitchell Grossinger Etess

Chief Executive Officer

Mohegan Tribal Gaming Authority

(860) 862-8000

Mario C. Kontomerkos

Chief Financial Officer

Mohegan Tribal Gaming Authority

(860) 862-8000

 

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