Exhibit 99.1
MOHEGAN TRIBAL GAMING AUTHORITY ANNOUNCES
SECOND QUARTER FISCAL 2012 OPERATING RESULTS
Uncasville, Connecticut, May 1, 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 second quarter ended March 31, 2012.
“We are quite pleased with our results for the quarter,” said Mitchell Grossinger Etess, Chief Executive Officer of the Authority. “We were able to exceed our EBITDA targets despite only modest improvements in our net revenues. Our operating teams continue to work vigorously towards improving operating margins.” Mr. Etess further commented, “We are also thrilled with the successful completion of our refinancing. With this now behind us, we can truly focus on growing our business.”
Significant events that occurred during the second quarter ended March 31, 2012:
The Authority successfully completed a comprehensive refinancing of its outstanding debt, including:
| • | | The consummation of its private exchange offers and consent solicitations with respect to its outstanding notes |
| • | | The amendment and restatement of its bank credit facility |
| • | | The execution and funding of a new $225 million term loan facility |
Consolidated operating results for the second quarter ended March 31, 2012 (unaudited):
| • | | Net income attributable to the Authority of $15.1 million, a 40.1% decrease from the second quarter of fiscal 2011 |
| • | | Income from operations of $63.0 million, a 10.5% increase over the second quarter of fiscal 2011 |
| • | | Adjusted EBITDA, a non-GAAP measure described below, of $85.0 million, a 6.4% increase over the second quarter of fiscal 2011 |
| • | | Adjusted EBITDA margin of 24.2%, a 120 basis point increase over the second quarter of fiscal 2011 |
| • | | Net revenues of $351.2 million, a 0.9% increase over the second quarter of fiscal 2011 |
| • | | Gaming revenues of $316.1 million, a 0.1% decrease from the second quarter of fiscal 2011 |
| • | | Gross slot revenues of $227.9 million, a 1.7% decrease from the second quarter of fiscal 2011 |
| • | | Table game revenues of $85.7 million, a 4.5% increase over the second quarter of fiscal 2011 |
| • | | Non-gaming revenues of $57.7 million, a 2.6% increase over the second quarter of fiscal 2011 |
The decline in net income attributable to the Authority resulted from a $14.3 million non-operating loss on early exchange of debt in connection with the Authority’s refinancing transactions. The growth in income from operations and Adjusted EBITDA was primarily attributable to higher table game revenues and improved non-gaming results. Results for the quarter also reflect the impact of changes in our operations designed to improve profitability, as well as our continued focus on managing expenses and enhancing operating efficiencies. In addition, our results for the quarter benefited from favorable weather conditions.
Mohegan Sun
Operating results (in thousands, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Income from operations | | $ | 56,630 | | | $ | 53,247 | | | $ | 3,383 | | | | 6.4 | % |
Adjusted EBITDA | | $ | 74,218 | | | $ | 70,309 | | | $ | 3,909 | | | | 5.6 | % |
Operating costs and expenses | | $ | 216,434 | | | $ | 220,918 | | | $ | (4,484 | ) | | | (2.0 | %) |
Net revenues | | $ | 273,064 | | | $ | 274,165 | | | $ | (1,101 | ) | | | (0.4 | %) |
Gaming revenues | | $ | 242,215 | | | $ | 246,442 | | | $ | (4,227 | ) | | | (1.7 | %) |
Non-gaming revenues | | $ | 49,626 | | | $ | 49,163 | | | $ | 463 | | | | 0.9 | % |
The growth in income from operations and Adjusted EBITDA was primarily attributable to higher table game revenues, combined with improved non-gaming results and lower marketing and promotional expenditures. Adjusted EBITDA margin increased to 27.2% for the quarter ended March 31, 2012 from 25.6% in the second quarter of fiscal 2011.
Selected gaming data (in thousands, except where noted, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Slots: | | | | | | | | | | | | | | | | |
Handle | | $ | 2,011,682 | | | $ | 2,182,429 | | | $ | (170,747 | ) | | | (7.8 | %) |
Gross revenues | | $ | 168,057 | | | $ | 175,310 | | | $ | (7,253 | ) | | | (4.1 | %) |
Net revenues | | $ | 161,465 | | | $ | 168,306 | | | $ | (6,841 | ) | | | (4.1 | %) |
Free promotional slot plays (1) | | $ | 14,433 | | | $ | 16,302 | | | $ | (1,869 | ) | | | (11.5 | %) |
Weighted average number of machines (in units) | | | 6,063 | | | | 6,368 | | | | (305 | ) | | | (4.8 | %) |
Hold percentage (gross) | | | 8.4 | % | | | 8.0 | % | | | 0.4 | % | | | 5.0 | % |
Win per unit per day (gross) (in dollars) | | $ | 305 | | | $ | 306 | | | $ | (1 | ) | | | (0.3 | %) |
| | | | |
Table games: | | | | | | | | | | | | | | | | |
Drop | | $ | 473,535 | | | $ | 488,484 | | | $ | (14,949 | ) | | | (3.1 | %) |
Revenues | | $ | 75,950 | | | $ | 73,276 | | | $ | 2,674 | | | | 3.6 | % |
Weighted average number of games (in units) | | | 313 | | | | 332 | | | | (19 | ) | | | (5.7 | %) |
Hold percentage (2) | | | 16.0 | % | | | 15.0 | % | | | 1.0 | % | | | 6.7 | % |
Win per unit per day (in dollars) | | $ | 2,667 | | | $ | 2,455 | | | $ | 212 | | | | 8.6 | % |
| | | | |
Poker: | | | | | | | | | | | | | | | | |
Revenues | | $ | 3,062 | | | $ | 2,874 | | | $ | 188 | | | | 6.5 | % |
Weighted average number of tables (in units) | | | 42 | | | | 42 | | | | — | | | | — | |
Revenue per unit per day (in dollars) | | $ | 801 | | | $ | 760 | | | $ | 41 | | | | 5.4 | % |
| (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. |
Gaming revenues declined primarily due to lower slot revenues resulting from the decline in slot handle. The decline in slot handle resulted from changes in our operations designed to improve profitability, including reduced use of free promotional slot plays and changes in the slot mix on our gaming floor. The decline in slot handle also reflects additional gaming capacity in the Northeast gaming market. The increase in slot hold reflects the reduction in free promotional slot plays redeemed by Player’s Club members and changes in the slot mix on our gaming floor. The increase in table game revenues resulted from higher table game hold. Gaming revenues were negatively impacted by a reduction in the number of headliner shows held at the Mohegan Sun Arena and a shift in hotel occupancy to transient guests.
Non-gaming data (in thousands, except where noted, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Food and beverage: | | | | | | | | | | | | | | | | |
Revenues | | $ | 16,400 | | | $ | 15,746 | | | $ | 654 | | | | 4.2 | % |
Meals served | | | 785 | | | | 785 | | | | — | | | | — | |
Average price per meal served (in dollars) | | $ | 16.22 | | | $ | 15.64 | | | $ | 0.58 | | | | 3.7 | % |
| | | | |
Hotel: | | | | | | | | | | | | | | | | |
Revenues | | $ | 10,254 | | | $ | 8,657 | | | $ | 1,597 | | | | 18.4 | % |
Rooms occupied | | | 103 | | | | 102 | | | | 1 | | | | 1.0 | % |
Occupancy rate | | | 97.0 | % | | | 96.8 | % | | | 0.2 | % | | | 0.2 | % |
Average daily room rate (in dollars) | | $ | 94 | | | $ | 82 | | | $ | 12 | | | | 14.6 | % |
Revenue per available room (in dollars) | | $ | 91 | | | $ | 79 | | | $ | 12 | | | | 15.2 | % |
| | | | |
Retail, entertainment and other: | | | | | | | | | | | | | | | | |
Revenues | | $ | 22,972 | | | $ | 24,760 | | | $ | (1,788 | ) | | | (7.2 | %) |
Arena events (in events) | | | 26 | | | | 26 | | | | — | | | | — | |
Arena tickets | | | 145 | | | | 148 | | | | (3 | ) | | | (2.0 | %) |
Average price per Arena ticket (in dollars) | | $ | 41.01 | | | $ | 56.81 | | | $ | (15.80 | ) | | | (27.8 | %) |
The growth in hotel revenues resulted from a shift in hotel occupancy to higher paying transient guests which had the effect of increasing the average daily room rate. The decline in entertainment revenues reflects a reduction in the number of headliner shows held at the Mohegan Sun Arena which had the effect of lowering the average price per Arena ticket.
Mohegan Sun at Pocono Downs
Operating results (in thousands, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Income from operations | | $ | 10,912 | | | $ | 7,594 | | | $ | 3,318 | | | | 43.7 | % |
Adjusted EBITDA | | $ | 14,807 | | | $ | 12,839 | | | $ | 1,968 | | | | 15.3 | % |
Operating costs and expenses | | $ | 67,178 | | | $ | 66,185 | | | $ | 993 | | | | 1.5 | % |
Net revenues | | $ | 78,090 | | | $ | 73,779 | | | $ | 4,311 | | | | 5.8 | % |
Gaming revenues | | $ | 73,913 | | | $ | 70,002 | | | $ | 3,911 | | | | 5.6 | % |
Non-gaming revenues | | $ | 8,098 | | | $ | 7,101 | | | $ | 997 | | | | 14.0 | % |
The growth in income from operations and Adjusted EBITDA resulted from higher gaming and non-gaming revenues. The increase in income from operations also reflects lower depreciation expense. Adjusted EBITDA margin increased to 19.0% for the quarter ended March 31, 2012 from 17.4% in the second quarter of fiscal 2011.
Selected gaming data (in thousands, except where noted, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Slots: | | | | | | | | | | | | | | | | |
Handle | | $ | 755,358 | | | $ | 700,634 | | | $ | 54,724 | | | | 7.8 | % |
Gross revenues | | $ | 59,798 | | | $ | 56,527 | | | $ | 3,271 | | | | 5.8 | % |
Net revenues | | $ | 59,815 | | | $ | 56,492 | | | $ | 3,323 | | | | 5.9 | % |
Free promotional slot plays (1) | | $ | 16,303 | | | $ | 14,632 | | | $ | 1,671 | | | | 11.4 | % |
Weighted average number of machines (in units) | | | 2,332 | | | | 2,429 | | | | (97 | ) | | | (4.0 | %) |
Hold percentage (gross) | | | 7.9 | % | | | 8.1 | % | | | (0.2 | %) | | | (2.5 | %) |
Win per unit per day (gross) (in dollars) | | $ | 282 | | | $ | 259 | | | $ | 23 | | | | 8.9 | % |
| | | | |
Table games: | | | | | | | | | | | | | | | | |
Drop | | $ | 55,474 | | | $ | 46,164 | | | $ | 9,310 | | | | 20.2 | % |
Revenues | | $ | 9,794 | | | $ | 8,776 | | | $ | 1,018 | | | | 11.6 | % |
Weighted average number of games (in units) | | | 66 | | | | 66 | | | | — | | | | — | |
Hold percentage (2) | | | 17.7 | % | | | 19.0 | % | | | (1.3 | %) | | | (6.8 | %) |
Win per unit per day (in dollars) | | $ | 1,627 | | | $ | 1,477 | | | $ | 150 | | | | 10.2 | % |
| | | | |
Poker: | | | | | | | | | | | | | | | | |
Revenues | | $ | 1,031 | | | $ | 1,078 | | | $ | (47 | ) | | | (4.4 | %) |
Weighted average number of tables (in units) | | | 18 | | | | 18 | | | | — | | | | — | |
Revenue per unit per day (in dollars) | | $ | 630 | | | $ | 665 | | | $ | (35 | ) | | | (5.3 | %) |
| (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. |
Gaming revenues increased as a result of higher slot and table game revenues. The increases in slot and table game revenues reflect strong patron response to our promotional offers and favorable weather conditions during the quarter.
Non-gaming revenues (in thousands, except where noted, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Food and beverage: | | | | | | | | | | | | | | | | |
Revenues | | $ | 6,151 | | | $ | 5,483 | | | $ | 668 | | | | 12.2 | % |
Meals served | | | 176 | | | | 166 | | | | 10 | | | | 6.0 | % |
Average price per meal served (in dollars) | | $ | 15.62 | | | $ | 14.83 | | | $ | 0.79 | | | | 5.3 | % |
| | | | |
Retail, entertainment and other: | | | | | | | | | | | | | | | | |
Revenues | | $ | 1,947 | | | $ | 1,618 | | | $ | 329 | | | | 20.3 | % |
The increase in non-gaming revenues resulted from increased patron visitation to the facility during the quarter.
Corporate
Loss from operations (in thousands, unaudited):
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | Variance | | | Percentage
Variance | |
| | | | |
Loss from operations | | $ | 4,552 | | | $ | 3,813 | | | $ | 739 | | | | 19.4 | % |
The increase in loss from operations primarily resulted from higher development related expenditures.
Mohegan Tribal Gaming Authority Property Information
| | | | | | | | | | | | | | | | | | | | | | | | |
| (in thousands, unaudited) | | Income (Loss) from Operations
For the Three Months Ended | | | Adjusted EBITDA
For the Three Months Ended | | | Net Revenues
For the Three Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
Mohegan Sun | | $ | 56,630 | | | $ | 53,247 | | | $ | 74,218 | | | $ | 70,309 | | | $ | 273,064 | | | $ | 274,165 | |
Mohegan Sun at Pocono Downs | | | 10,912 | | | | 7,594 | | | | 14,807 | | | | 12,839 | | | | 78,090 | | | | 73,779 | |
Corporate | | | (4,552 | ) | | | (3,813 | ) | | | (4,041 | ) | | | (3,306 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total | | $ | 62,990 | | | $ | 57,028 | | | $ | 84,984 | | | $ | 79,842 | | | $ | 351,154 | | | $ | 347,944 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| | | Income (Loss) from Operations
For the Six Months Ended | | | Adjusted EBITDA
For the Six Months Ended | | | Net Revenues
For the Six Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
Mohegan Sun | | $ | 103,623 | | | $ | 95,791 | | | $ | 138,201 | | | $ | 131,236 | | | $ | 546,962 | | | $ | 537,995 | |
Mohegan Sun at Pocono Downs | | | 20,944 | | | | 13,913 | | | | 28,974 | | | | 24,468 | | | | 156,068 | | | | 145,554 | |
Corporate | | | (8,067 | ) | | | (8,392 | ) | | | (7,191 | ) | | | (7,393 | ) | | | — | | | | — | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| | | | | | |
Total | | $ | 116,500 | | | $ | 101,312 | | | $ | 159,984 | | | $ | 148,311 | | | $ | 703,030 | | | $ | 683,549 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
Other Information
Refinancing Transactions
On March 6, 2012, the Authority completed a comprehensive refinancing of its outstanding debt, including the consummation of its private exchange offers and consent solicitations with respect to its outstanding notes, the amendment and restatement of its bank credit facility and the execution and funding of a new term loan. Consummation of the exchange offers resulted in the issuance of approximately $961.8 million in aggregate principal amount of new notes in exchange for an equivalent principal amount of tendered and accepted old notes. The Authority’s bank credit facility now matures on March 31, 2015. The bank credit facility, which was previously comprised of a single $675 million revolving loan, now consists of a $400 million term loan and a $75 million revolving loan. Bank of America, N.A. serves as administrative agent for the amended bank credit facility. The Authority’s new term loan matures on March 31, 2016 and is comprised of a “first lien, second out” term loan in the amount of $225 million. Wells Fargo Gaming Capital, LLC serves as administrative agent for this term loan.
Liquidity
As of March 31, 2012, the Authority held cash and cash equivalents of $158.5 million compared to $112.2 million as of September 30, 2011. As of March 31, 2012, no amount was drawn on the Authority’s $75.0 million revolving bank credit facility. As of March 31, 2012, letters of credit issued under the Authority’s bank credit facilities totaled $2.3 million, of which no amount was 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 $72.7 million of borrowing capacity under its bank credit facilities as of March 31, 2012. As of March 31, 2012, the Authority’s debt, including capital leases, totaled $1.73 billion compared to $1.64 billion as of September 30, 2011.
Interest Expense
Interest expense increased by $3.0 million, or 9.9%, to $32.7 million for the quarter ended March 31, 2012 compared to $29.7 million in the second quarter of fiscal 2011. The increase in interest expense was due to higher weighted average interest rate. Weighted average interest rate was 7.9% for the quarter ended March 31, 2012 compared to 7.2% in the second 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 $1.65 billion for the quarter ended March 31, 2012 compared to $1.66 billion in the second quarter of fiscal 2011.
Capital Expenditures
The following table presents data related to capital expenditures (in millions):
| | | | | | | | | | | | |
| | | Capital Expenditures | |
| | | Six
Months
Ended
March 31,
2012 | | | Remaining
Forecasted
Fiscal
Year 2012 | | | Total
Forecasted
Fiscal
Year 2012 | |
| | | |
Mohegan Sun: | | | | | | | | | | | | |
Maintenance | | $ | 18.7 | | | $ | 14.3 | | | $ | 33.0 | |
Development | | | 3.9 | | | | 6.1 | | | | 10.0 | |
Expansion - Project Horizon | | | 0.3 | | | | — | | | | 0.3 | |
| | | | | | | | | | | | |
Subtotal | | | 22.9 | | | | 20.4 | | | | 43.3 | |
Mohegan Sun at Pocono Downs: | | | | | | | | | | | | |
Maintenance | | | 2.8 | | | | 1.2 | | | | 4.0 | |
Expansion (1) | | | (0.3 | ) | | | — | | | | (0.3 | ) |
| | | | | | | | | | | | |
Subtotal | | | 2.5 | | | | 1.2 | | | | 3.7 | |
| | | | | | | | | | | | |
Total | | $ | 25.4 | | | $ | 21.6 | | | $ | 47.0 | |
| | | | | | | | | | | | |
| (1) | Represents adjustments to the cost for Project Sunrise and table game and poker operations expansions. |
Distributions to the Tribe
Distributions to the Tribe totaled $10.0 million for the quarter ended March 31, 2012 compared to $4.6 million in the second quarter of fiscal 2011. Distributions to the Tribe are anticipated to total $53.0 million for fiscal 2012.
Conference Call
The Authority will host a conference call and simultaneous webcast regarding its second quarter fiscal 2012 operating results on Tuesday, May 1, 2012 at 11:00 a.m. (Eastern Daylight Time).
Those interested in participating in the call should dial as follows:
(877) 756-4274
(706) 643-0107 (International)
Conference ID: 73816825
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 atwww.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 Tuesday, May 1, 2012. This replay will run through May 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: 73816825
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 507-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 visitingwww.mohegansun.com,www.mohegansunpocono.com orwww.mtga.com.
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
Three Months Ended
March 31, 2012 | | | For the
Three Months Ended
March 31, 2011 | | | For the
Six Months Ended
March 31, 2012 | | | For the
Six Months Ended
March 31, 2011 | |
Revenues: | | | | | | | | | | | | | | | | |
Gaming | | $ | 316,128 | | | $ | 316,444 | | | $ | 633,660 | | | $ | 624,101 | |
Food and beverage | | | 22,551 | | | | 21,229 | | | | 45,927 | | | | 43,223 | |
Hotel | | | 10,254 | | | | 8,657 | | | | 19,372 | | | | 17,654 | |
Retail, entertainment and other | | | 24,919 | | | | 26,378 | | | | 52,512 | | | | 48,824 | |
| | | | | | | | | | | | | | | | |
Gross revenues | | | 373,852 | | | | 372,708 | | | | 751,471 | | | | 733,802 | |
Less - Promotional allowances | | | (22,698 | ) | | | (24,764 | ) | | | (48,441 | ) | | | (50,253 | ) |
| | | | | | | | | | | | | | | | |
Net revenues | | | 351,154 | | | | 347,944 | | | | 703,030 | | | | 683,549 | |
| | | | | | | | | | | | | | | | |
Operating costs and expenses: | | | | | | | | | | | | | | | | |
Gaming | | | 190,152 | | | | 194,993 | | | | 388,998 | | | | 388,324 | |
Food and beverage | | | 11,279 | | | | 10,395 | | | | 22,115 | | | | 20,440 | |
Hotel | | | 3,768 | | | | 3,327 | | | | 7,045 | | | | 6,493 | |
Retail, entertainment and other | | | 8,486 | | | | 7,953 | | | | 19,241 | | | | 14,166 | |
Advertising, general and administrative | | | 48,444 | | | | 48,128 | | | | 98,456 | | | | 98,422 | |
Corporate | | | 4,523 | | | | 3,771 | | | | 8,002 | | | | 8,307 | |
Depreciation and amortization | | | 21,481 | | | | 22,615 | | | | 42,384 | | | | 45,830 | |
Loss on disposition of assets | | | 31 | | | | — | | | | 289 | | | | — | |
Severance | | | — | | | | (266 | ) | | | — | | | | 255 | |
| | | | | | | | | | | | | | | | |
Total operating costs and expenses | | | 288,164 | | | | 290,916 | | | | 586,530 | | | | 582,237 | |
| | | | | | | | | | | | | | | | |
Income from operations | | | 62,990 | | | | 57,028 | | | | 116,500 | | | | 101,312 | |
| | | | | | | | | | | | | | | | |
Other income (expense): | | | | | | | | | | | | | | | | |
Accretion of discount to the relinquishment liability | | | (2,062 | ) | | | (2,841 | ) | | | (4,124 | ) | | | (5,683 | ) |
Interest income | | | 687 | | | | 618 | | | | 1,717 | | | | 1,398 | |
Interest expense | | | (32,657 | ) | | | (29,713 | ) | | | (61,466 | ) | | | (59,459 | ) |
Loss on early exchange of debt | | | (14,306 | ) | | | — | | | | (14,306 | ) | | | — | |
Other expense, net | | | (42 | ) | | | (349 | ) | | | (38 | ) | | | (344 | ) |
| | | | | | | | | | | | | | | | |
Total other expense | | | (48,380 | ) | | | (32,285 | ) | | | (78,217 | ) | | | (64,088 | ) |
| | | | | | | | | | | | | | | | |
Net income | | | 14,610 | | | | 24,743 | | | | 38,283 | | | | 37,224 | |
Loss attributable to non-controlling interests | | | 482 | | | | 465 | | | | 811 | | | | 914 | |
| | | | | | | | | | | | | | | | |
Net income attributable to Mohegan Tribal Gaming Authority | | $ | 15,092 | | | $ | 25,208 | | | $ | 39,094 | | | $ | 38,138 | |
| | | | | | | | | | | | | | | | |
MOHEGAN TRIBAL GAMING AUTHORITY
CONSOLIDATED SELECTED FINANCIAL INFORMATION
(in thousands)
(unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
Operating Results: | | | | | | | | | | | | | | | | |
Gross revenues | | $ | 373,852 | | | $ | 372,708 | | | $ | 751,471 | | | $ | 733,802 | |
Net revenues | | $ | 351,154 | | | $ | 347,944 | | | $ | 703,030 | | | $ | 683,549 | |
Income from operations | | $ | 62,990 | | | $ | 57,028 | | | $ | 116,500 | | | $ | 101,312 | |
| | | | |
Other Data: | | | | | | | | | | | | | | | | |
Adjusted EBITDA | | $ | 84,984 | | | $ | 79,842 | | | $ | 159,984 | | | $ | 148,311 | |
Capital expenditures | | $ | 10,192 | | | $ | 10,243 | | | $ | 25,424 | | | $ | 17,142 | |
Cash interest paid | | $ | 42,543 | | | $ | 27,191 | | | $ | 69,510 | | | $ | 54,886 | |
| | | | |
| | | | | | | | | March 31,
2012 | | | September 30,
2011 | |
Balance Sheet Data: | | | | | | | | | | | | | | | | |
Cash and cash equivalents | | | | | | | | | | $ | 158,527 | | | $ | 112,174 | |
Debt, including capital leases | | | | | | | | | | $ | 1,729,518 | | | $ | 1,635,758 | |
MOHEGAN SUN
SUPPLEMENTAL DATA - OPERATING STATISTICS
(unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
Operating results: | | | | | | | | | | | | | | | | |
Gross revenues (in thousands) | | $ | 291,841 | | | $ | 295,605 | | | $ | 587,444 | | | $ | 581,317 | |
Net revenues (in thousands) | | $ | 273,064 | | | $ | 274,165 | | | $ | 546,962 | | | $ | 537,995 | |
Income from operations (in thousands) | | $ | 56,630 | | | $ | 53,247 | | | $ | 103,623 | | | $ | 95,791 | |
Operating margin | | | 20.7 | % | | | 19.4 | % | | | 18.9 | % | | | 17.8 | % |
| | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | |
Adjusted EBITDA (in thousands) | | $ | 74,218 | | | $ | 70,309 | | | $ | 138,201 | | | $ | 131,236 | |
Adjusted EBITDA margin | | | 27.2 | % | | | 25.6 | % | | | 25.3 | % | | | 24.4 | % |
| | | | |
Capital expenditures (in thousands) | | $ | 8,929 | | | $ | 8,685 | | | $ | 22,913 | | | $ | 14,096 | |
| | | | |
Weighted average number of units: | | | | | | | | | | | | | | | | |
Slot machines | | | 6,063 | | | | 6,368 | | | | 6,151 | | | | 6,386 | |
Table games | | | 313 | | | | 332 | | | | 314 | | | | 331 | |
Poker tables | | | 42 | | | | 42 | | | | 42 | | | | 42 | |
| | | | |
Win per unit per day: | | | | | | | | | | | | | | | | |
Slot machines (gross) | | $ | 305 | | | $ | 306 | | | $ | 301 | | | $ | 297 | |
Table games | | $ | 2,667 | | | $ | 2,455 | | | $ | 2,629 | | | $ | 2,402 | |
Poker tables | | $ | 801 | | | $ | 760 | | | $ | 791 | | | $ | 764 | |
| | | | |
Hold percentage: | | | | | | | | | | | | | | | | |
Slot machines (gross) | | | 8.4 | % | | | 8.0 | % | | | 8.3 | % | | | 8.0 | % |
Table games | | | 16.0 | % | | | 15.0 | % | | | 15.4 | % | | | 14.6 | % |
| | | | |
Food and beverage statistics: | | | | | | | | | | | | | | | | |
Meals served (in thousands) | | | 785 | | | | 785 | | | | 1,604 | | | | 1,631 | |
Average price per meal served | | $ | 16.22 | | | $ | 15.64 | | | $ | 16.51 | | | $ | 15.40 | |
| | | | |
Hotel statistics: | | | | | | | | | | | | | | | | |
Rooms occupied (in thousands) | | | 103 | | | | 102 | | | | 205 | | | | 205 | |
Occupancy rate | | | 97.0 | % | | | 96.8 | % | | | 95.5 | % | | | 96.1 | % |
Average daily room rate | | $ | 94 | | | $ | 82 | | | $ | 90 | | | $ | 83 | |
Revenue per available room | | $ | 91 | | | $ | 79 | | | $ | 86 | | | $ | 80 | |
| | | | |
Entertainment statistics: | | | | | | | | | | | | | | | | |
Arena events (in events) | | | 26 | | | | 26 | | | | 53 | | | | 49 | |
Arena tickets (in thousands) | | | 145 | | | | 148 | | | | 300 | | | | 267 | |
Average price per Arena ticket | | $ | 41.01 | | | $ | 56.81 | | | $ | 47.32 | | | $ | 51.89 | |
MOHEGAN SUN AT POCONO DOWNS
SUPPLEMENTAL DATA - OPERATING STATISTICS
(unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Six Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
Operating results: | | | | | | | | | | | | | | | | |
Gross revenues (in thousands) | | $ | 82,011 | | | $ | 77,103 | | | $ | 164,027 | | | $ | 152,485 | |
Net revenues (in thousands) | | $ | 78,090 | | | $ | 73,779 | | | $ | 156,068 | | | $ | 145,554 | |
Income from operations (in thousands) | | $ | 10,912 | | | $ | 7,594 | | | $ | 20,944 | | | $ | 13,913 | |
Operating margin | | | 14.0 | % | | | 10.3 | % | | | 13.4 | % | | | 9.6 | % |
| | | | |
Adjusted EBITDA: | | | | | | | | | | | | | | | | |
Adjusted EBITDA (in thousands) | | $ | 14,807 | | | $ | 12,839 | | | $ | 28,974 | | | $ | 24,468 | |
Adjusted EBITDA margin | | | 19.0 | % | | | 17.4 | % | | | 18.6 | % | | | 16.8 | % |
| | | | |
Capital expenditures (in thousands) | | $ | 1,263 | | | $ | 1,558 | | | $ | 2,511 | | | $ | 3,046 | |
| | | | |
Weighted average number of units: | | | | | | | | | | | | | | | | |
Slot machines | | | 2,332 | | | | 2,429 | | | | 2,332 | | | | 2,448 | |
Table games | | | 66 | | | | 66 | | | | 66 | | | | 66 | |
Poker tables | | | 18 | | | | 18 | | | | 18 | | | | 18 | |
| | | | |
Win per unit per day: | | | | | | | | | | | | | | | | |
Slot machines (gross) | | $ | 282 | | | $ | 259 | | | $ | 279 | | | $ | 247 | |
Table games | | $ | 1,627 | | | $ | 1,477 | | | $ | 1,652 | | | $ | 1,495 | |
Poker tables | | $ | 630 | | | $ | 665 | | | $ | 613 | | | $ | 656 | |
| | | | |
Hold percentage: | | | | | | | | | | | | | | | | |
Slot machines (gross) | | | 7.9 | % | | | 8.1 | % | | | 8.0 | % | | | 7.9 | % |
Table games | | | 17.7 | % | | | 19.0 | % | | | 18.1 | % | | | 18.7 | % |
| | | | |
Food and beverage statistics: | | | | | | | | | | | | | | | | |
Meals served (in thousands) | | | 176 | | | | 166 | | | | 360 | | | | 359 | |
Average price per meal served | | $ | 15.62 | | | $ | 14.83 | | | $ | 15.51 | | | $ | 14.90 | |
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 Six Months Ended | |
| | | March 31,
2012 | | | March 31,
2011 | | | March 31,
2012 | | | March 31,
2011 | |
| | | | |
Adjusted EBITDA | | $ | 84,984 | | | $ | 79,842 | | | $ | 159,984 | | | $ | 148,311 | |
Depreciation and amortization | | | (21,481 | ) | | | (22,615 | ) | | | (42,384 | ) | | | (45,830 | ) |
Loss on disposition of assets | | | (31 | ) | | | — | | | | (289 | ) | | | — | |
Severance | | | — | | | | 266 | | | | — | | | | (255 | ) |
Loss attributable to non-controlling interests | | | (482 | ) | | | (465 | ) | | | (811 | ) | | | (914 | ) |
| | | | | | | | | | | | | | | | |
Income from operations | | | 62,990 | | | | 57,028 | | | | 116,500 | | | | 101,312 | |
| | | | | | | | | | | | | | | | |
Accretion of discount to the relinquishment liability | | | (2,062 | ) | | | (2,841 | ) | | | (4,124 | ) | | | (5,683 | ) |
Interest income | | | 687 | | | | 618 | | | | 1,717 | | | | 1,398 | |
Interest expense | | | (32,657 | ) | | | (29,713 | ) | | | (61,466 | ) | | | (59,459 | ) |
Loss on early exchange of debt | | | (14,306 | ) | | | — | | | | (14,306 | ) | | | — | |
Other expense, net | | | (42 | ) | | | (349 | ) | | | (38 | ) | | | (344 | ) |
| | | | | | | | | | | | | | | | |
Net income | | $ | 14,610 | | | $ | 24,743 | | | $ | 38,283 | | | $ | 37,224 | |
| | | | | | | | | | | | | | | | |
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 March 31, 2012 | |
| | | Income
(Loss)
from
Operations | | | Depreciation
and
Amortization | | | Loss on
Disposition
of Assets | | | Severance | | | Loss
attributable to
Non-controlling
Interests | | | Adjusted
EBITDA | |
Mohegan Sun | | $ | 56,630 | | | $ | 17,549 | | | $ | 39 | | | $ | — | | | $ | — | | | $ | 74,218 | |
Mohegan Sun at Pocono Downs | | | 10,912 | | | | 3,903 | | | | (8 | ) | | | — | | | | — | | | | 14,807 | |
Corporate | | | (4,552 | ) | | | 29 | | | | — | | | | — | | | | 482 | | | | (4,041 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 62,990 | | | $ | 21,481 | | | $ | 31 | | | $ | — | | | $ | 482 | | | $ | 84,984 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | For the Three Months Ended March 31, 2011 | |
| | | Income
(Loss)
from
Operations | | | Depreciation
and
Amortization | | | Loss on
Disposition
of Assets | | | Severance | | | Loss
attributable to
Non-controlling
Interests | | | Adjusted
EBITDA | |
Mohegan Sun | | $ | 53,247 | | | $ | 17,329 | | | $ | — | | | $ | (267 | ) | | $ | — | | | $ | 70,309 | |
Mohegan Sun at Pocono Downs | | | 7,594 | | | | 5,245 | | | | — | | | | — | | | | — | | | | 12,839 | |
Corporate | | | (3,813 | ) | | | 41 | | | | — | | | | 1 | | | | 465 | | | | (3,306 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 57,028 | | | $ | 22,615 | | | $ | — | | | $ | (266 | ) | | $ | 465 | | | $ | 79,842 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | For the Six Months Ended March 31, 2012 | |
| | | Income
(Loss)
from
Operations | | | Depreciation
and
Amortization | | | Loss on
Disposition
of Assets | | | Severance | | | Loss
attributable to
Non-controlling
Interests | | | Adjusted
EBITDA | |
Mohegan Sun | | $ | 103,623 | | | $ | 34,560 | | | $ | 18 | | | $ | — | | | $ | — | | | $ | 138,201 | |
Mohegan Sun at Pocono Downs | | | 20,944 | | | | 7,759 | | | | 271 | | | | — | | | | — | | | | 28,974 | |
Corporate | | | (8,067 | ) | | | 65 | | | | — | | | | — | | | | 811 | | | | (7,191 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 116,500 | | | $ | 42,384 | | | $ | 289 | | | $ | — | | | $ | 811 | | | $ | 159,984 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
| |
| | | For the Six Months Ended March 31, 2011 | |
| | | Income
(Loss)
from
Operations | | | Depreciation
and
Amortization | | | Loss on
Disposition
of Assets | | | Severance | | | Loss
attributable to
Non-controlling
Interests | | | Adjusted
EBITDA | |
Mohegan Sun | | $ | 95,791 | | | $ | 35,192 | | | $ | — | | | $ | 253 | | | $ | — | | | $ | 131,236 | |
Mohegan Sun at Pocono Downs | | | 13,913 | | | | 10,555 | | | | — | | | | — | | | | — | | | | 24,468 | |
Corporate | | | (8,392 | ) | | | 83 | | | | — | | | | 2 | | | | 914 | | | | (7,393 | ) |
| | | | | | | | | | | | | | | | | | | | | | | | |
Total | | $ | 101,312 | | | $ | 45,830 | | | $ | — | | | $ | 255 | | | $ | 914 | | | $ | 148,311 | |
| | | | | | | | | | | | | | | | | | | | | | | | |
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, accretion of discount to a relinquishment liability, loss on early exchange 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 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, May 1, 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
