UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transaction period___________________ to _________________________ .
Commission file number: 033-80655
---------
MOHEGAN TRIBAL GAMING AUTHORITY
-------------------------------
(Exact name of Registrant as specified in its charter)
N/A 06-1436334
--- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
Mohegan Sun Boulevard, Uncasville, CT 06382
- ------------------------------------- -----
(Address of principal executive offices) (Zip Code)
(860)204-7190
-------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the Registrants (1) have filed all reports
required to filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the Registrant
was required to file such reports), and (2) have been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Total number of pages in this report: 16
MOHEGAN TRIBAL GAMING AUTHORITY
INDEX TO FORM 10-Q
PART I -- FINANCIAL INFORMATION Page
Number
------
ITEM 1 -- Financial Statements
Report of Independent Public Accountants 1
Financial Information 2
Condensed Balance Sheets of Mohegan Tribal Gaming Authority as of 3
December 31, 1996 (unaudited) and September 30, 1996.
Condensed Statement of Income and Capital of Mohegan Tribal Gaming 4
Authority for the Period October 12, 1996 (date of commencement of
operations), through December 31, 1996 (unaudited).
Condensed Statement of Cash Flow of Mohegan Tribal Gaming 5
Authority for the Period October 12, 1996 (date of commencement of
operations), through December 31, 1996 (unaudited).
Notes to Condensed Financial Statements of Mohegan Tribal Gaming 6-9
Authority.
ITEM 2 -- Management's Discussion and Analysis of Financial 10-14
Condition and Results of Operations.
PART II -- OTHER INFORMATION
ITEM 1 -- Legal Proceedings 15
ITEM 2 -- Changes in Securities 15
ITEM 3 -- Defaults upon Senior Securities 15
ITEM 4 -- Submission of Matters to a Vote of Security Holders 15
ITEM 5 -- Other Information 15
ITEM 6 -- Exhibits and Reports on Form 8-K 15
Signatures - Mohegan Tribal Gaming Authority 16
REVIEW REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Mohegan Tribal Gaming Authority:
We have reviewed the accompanying condensed balance sheet of Mohegan Tribal
Gaming Authority ("Authority") as of December 31, 1996, and the related
condensed statements of income and capital for the period October 12, 1996 (date
of commencement of operations), through December 31, 1996, and the related
condensed statements of cash flows for the period October 12, 1996 (date of
commencement of operations), through December 31, 1996. These condensed
financial statements are the responsibility of the Company's management.
We conducted our review in accordance with standards established by the American
Institute of Certified Public Accountants. A review of interim financial
information consists principally of applying analytical procedures to financial
data and making inquiries of persons responsible for financial and accounting
matters. It is substantially less in scope than an audit conducted in
accordance with generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements taken as a
whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications that should
be made to the financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the condensed balance sheet of Mohegan Tribal Gaming Authority as of
September 30, 1996, and the related cash flow for the year then ended (not
presented herein), and, in our report dated November 27, 1996, we expressed an
unqualified opinion on those financial statements. In our opinion, the
information set forth in the accompanying condensed balance sheet of Mohegan
Tribal Gaming Authority as of September 30, 1996, is fairly stated, in all
material respects, in relation to the balance sheet from which it has been
derived.
Arthur Andersen LLP
Hartford, Connecticut
February 7, 1997
1
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The unaudited condensed financial information as of December 31, 1996, and for
the three-month period ended December 31, 1996, included in this report was
reviewed by Arthur Andersen LLP, independent public accountants. In accordance
with the professional standards and procedures established for such reviews by
the American Institute of Certified Public Accountants.
2
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
December 31, September 30,
1996 1996
------------ -------------
(unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $31,211 $7,437
Restricted cash 9,917 5,100
Receivables, net 1,749 -
Inventories 3,519 819
Other current assets 1,325 8,035
------- ------
Total current assets 47,721 21,391
NON-CURRENT ASSETS:
Capitalized property and
equipment, net 293,926 264,918
Other assets, net 22,804 21,172
-------- --------
Total assets $364,451 $307,481
-------- --------
-------- --------
LIABILITIES AND CAPITAL
CURRENT LIABILITIES:
Current maturities of
long-term debt $20,174 $4,999
Accounts payable and accrued
expenses 47,791 44,250
Accrued interest payable 12,966 15,232
-------- --------
Total current liabilities 80,931 64,481
NON-CURRENT LIABILITIES:
Long-term debt, net of
current maturities 282,552 243,000
-------- --------
Total liabilities 363,483 307,481
-------- --------
CAPITAL:
Accumulated income 1,967 -
Distribution to Tribe (999) -
-------- --------
Total capital 968 -
-------- --------
Total liabilities & capital $364,451 $307,481
-------- --------
-------- --------
The accompanying notes are an integral part of these
condensed balance sheets.
3
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED STATEMENT OF INCOME AND CAPITAL
(UNAUDITED)
(IN THOUSANDS)
For the period October 12, 1996
(date of commencement of operations)
through December 31, 1996
-------------------------
REVENUES:
Gaming $90,896
Food and beverage 9,620
Other 2,444
-------
Gross revenues 102,960
Less - Promotional allowance (5,948)
-------
Net revenues 97,012
-------
COST AND EXPENSES:
Gaming 43,644
Loss from bingo operations 1,322
Food and beverage 6,561
General and administration 21,595
Depreciation and amortization 7,664
Management fee 2,358
Other 2,400
-------
Total costs and expenses 85,544
-------
Income from operations 11,468
-------
NONOPERATING INCOME AND (EXPENSES):
Interest income and other income 235
Interest expense (9,736)
-------
(9,501)
-------
Net income $ 1,967
-------
CAPITAL
Balance October 12, 1996 $ -
Net income 1,967
Distribution to Tribe (999)
-------
Balance December 31, 1996 $ 968
-------
-------
The accompanying notes are an integral part of
these condensed financial statements.
4
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED STATEMENT OF CASH FLOW
(UNAUDITED)
(IN THOUSANDS)
For the period October 12, 1996
(date of commencement of operations)
through December 31, 1996
-------------------------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income $1,967
Adjustments to reconcile net income
to net cash flow provided by
operating activities -
Depreciation and amortization of
property and equipment 7,664
Provisions for losses on receivables 19
Changes in assets and liabilities
Increase in receivables and other
current assets (3,983)
Increase in accounts payable and
accrued expenses 20,533
-------
Net cash flow provided by operating
activities 26,200
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment (32,079)
Decrease in construction payable (19,258)
-------
Net cash flow used in investing activities (51,337)
-------
CASH FLOW FROM FINANCING ACTIVITIES:
Distribution to Tribe (999)
Increase in short-term borrowings 8,094
Proceeds from Equipment Financing 32,500
Additional Borrowing From Subordinated
Notes 15,000
Payments on current maturities of
long-term debt (867)
-------
Net cash flow provided by financing
activities 53,728
-------
Net increase in cash and cash
equivalents 28,591
Cash and cash equivalents at October 12, 1996 12,537
-------
Cash and cash equivalents at December 31, 1996 $41,128
-------
-------
Cash interest paid $12,567
-------
-------
The accompanying notes are an integral part of these
condensed financial statements
5
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
BASIS OF PRESENTATION
The Mohegan Tribal Gaming Authority (the "Authority"), established on July 15,
1995, is an instrumentality of the Mohegan Tribe of Indians of Connecticut (the
"Tribe"). The Authority commenced operation of its gaming and entertainment
facility (the "Mohegan Sun") on October 12, 1996.
Prior to October 12, 1996, the Authority was classified as a Development
Stage enterprise as defined by Statement of Financial Accounting Standards No.
7.
The Authority has engaged Trading Cove Associates ("TCA") to manage the
development, construction and operation of the Mohegan Sun. TCA is 50% owned by
Sun Cove, an affiliate of Sun International Hotels Limited ("Sun
International"), and 50% owned by Waterford Gaming, LLC.
The condensed financial statements have been prepared in accordance with the
accounting policies described in the Authority's 1996 Annual Report on Form 10-K
and should be read in conjunction with the Notes to Condensed Financial
Statements which appear in that report. The Condensed Balance Sheet at
September 30, 1996, contained herein, was derived from audited financial
statements, but does not include all disclosures contained in the Form 10-K and
applicable under generally accepted accounting principles.
In the opinion of the Authority, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the results for the
interim periods have been included. The results reflected in the condensed
financial statements for the first quarter of 1997 are not necessarily
indicative of expected results for the full year, as the casino industry in
Connecticut is seasonal in nature.
The Authority's operation of a casino in Connecticut is subject to significant
regulatory controls which affect virtually all of its operations.
2. ISSUANCE OF LONG-TERM DEBT:
Long-term debt consists of the following:
December 31, September 30,
1996 1996
---- ----
(000's) (000's)
Authority:
- ----------
Senior Secured Notes (A) $175,000 $175,000
Subordinated Notes (B) 82,000 67,000
Lines of Credit (working capital)(C) 12,806 4,749
Equipment Financing (D) 31,920 --
Other 1,000 1,250
--------- ---------
302,726 247,999
Less - Current Maturities 20,174 4,999
--------- ---------
$282,552 $243,000
--------- ---------
--------- ---------
6
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
2. ISSUANCE OF LONG-TERM DEBT CONTINUED:
A. On September 29, 1995, the Authority issued $175 million in Senior Secured
Notes due 2002 (the "Senior Notes") with fixed interest payable at a rate of
13.50% per annum and Cash Flow Participation Interest in an aggregate amount of
5.0% of the Authority's Cash Flow up to a limit, during any two consecutive
semi-annual periods, ending September 30, of $250 million of the Authority's
Cash Flow. Fixed interest is payable semi-annually and commenced May 15, 1996.
The aggregate amount of Cash Flow Participation Interest payable will be reduced
pro rata for reductions in outstanding principal amount of Senior Notes. The
payment of Cash Flow Participation Interest may be deferred if the Authority's
Fixed Charge Coverage Ratio is less than 2 to 1. The Senior Notes are
redeemable at set prices as set forth in the Senior Notes after November 15,
1999, at the option of the Authority. Upon the occurrence of certain events (as
specified in the Indenture for the Senior Notes) each holder of Senior Notes can
require the Authority to repurchase the notes at prices specified in the Senior
Notes. Beginning with fiscal year ending September 30, 1997, the Authority will
be required, under certain circumstances, to offer to purchase, at set prices,
certain amounts of Senior Notes then outstanding.
B. The Authority has obtained $82.0 million of subordinated financing from Sun
International and Waterford Gaming LLC in the form of notes. The Authority has
issued $20.0 million of subordinated notes to each of Sun International and
Waterford Gaming LLC (Subordinated Notes), which notes bear interest at 15% per
year, payable semi-annually. Interest on the Subordinated Notes is being
deferred and will not be paid until at least half of the Senior Notes have been
retired (or offered to be retired, pursuant to the terms of the Indenture
governing the Senior Notes) and certain other conditions have been fulfilled.
The Authority also has issued $42.0 million in subordinated notes to Sun
International evidencing draws made by the Authority under the $50.0 million
secured completion guarantee provided by Sun International (Secured Completion
Guarantee), which notes bear interest at 1% over prime. As of January 3, 1997,
the Authority borrowed the final $8.0 million available under the Secured
Completion Guarantee for a total of $50.0 million and issued additional
subordinated notes to Sun International for such amount. All such notes are due
2003; however, principal cannot be paid until the Senior Notes have been paid in
full, unless certain conditions are met.
C. The Authority has obtained two lines of credit totaling $13.2 million. The
line of credit for $12.5 million, obtained from Fleet Bank, provides for
interest based on various floating indexes (9.25% as of December 31, 1996). The
second line of credit for $650,000 was obtained from Norwich Savings Society and
bears interest at a rate of 7.75%. As of
7
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
2. ISSUANCE OF LONG-TERM DEBT CONTINUED:
December 31, 1996, $12.8 million was outstanding under both lines of credit.
These amounts were used for working capital and Bingo operations.
D. The Authority has received gaming equipment financing of $23.0 million from
CIT-Group/Equipment Financing, Inc. ("CIT Group"). The terms of this agreement
provide that borrowings bear interest of 2% over prime, commencing from the date
of delivery of the equipment. Principal payments will be over 48 months and
commenced December 1996.
The Authority has received equipment financing of $9.0 million from the CIT
Group and Phoenixcor, Inc. ("Phoenixcor"). The CIT Group agreement provides for
funding of $5.0 million with an interest rate of 9.17%. Principal payments will
be over 48 months and commenced December 1996. The Phoenixcor terms of this
agreement consist of funding for $4.0 million with an interest rate of 8.95%.
Principal payments will be over 48 months and commenced December 1996.
The Authority received working capital financing of $500,000 from New Horizon
Kids Quest IV, Inc. The terms consist of an interest rate of 2% over prime.
Principal payments will be over 36 months, which commenced October 1996.
3. OPERATING LEASES:
The Authority has entered into three operating leases. The PDS Financial
Corporation has two operating leases with the Authority. The proceeds of the
first agreement are $10.4 million with a fixed monthly payment of $253,000.
The lease payments will be over 48 months and commenced October 1996. The
proceeds of the second lease agreement are $4.1 million with a fixed monthly
payment of $95,000. The lease payments will be over 48 months and commenced
November 1996.
The third agreement is with Pitney Bowes Credit Corp. provided $4.0 million with
a fixed monthly payment of $112,000. The lease payments will be over 42 months
commencing in January 1997.
8
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO CONDENSED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
4. COMMITMENTS:
The Tribe's Compact with the State of Connecticut stipulates that a portion of
the revenues earned on slot machines must be paid to the State of Connecticut
("Slot Win contribution"). For each twelve-month period commencing July 1,
1995, the minimum contribution of the Tribe to the State of Connecticut shall be
the lesser of (a) 30% of gross revenues from slot machines, or (b) the greater
of (i) 25% of gross revenues from slot machines or (ii) $80,000,000. These
payments will not be required if the State of Connecticut legalizes any other
gaming operations with slot machines to be operated in the State of Connecticut
(other than on certain Indian lands). The Authority has reflected $16,712,000
in expense in its financial statements for the required Slot Win Contribution
payments to the State of Connecticut for the fiscal period ended December 31,
1996.
5. RELATED PARTY TRANSACTIONS:
For the period ending December 31, 1996, the Tribe provided Governmental and
Administrative services to the Authority in conjunction with the operation of
Mohegan Sun. The Authority paid the Tribe $1,371,000 for such service.
In addition, the Tribe, through two of its limited liability companies, has
entered into various land lease agreements with the Authority. Amounts paid by
the Authority under these lease agreements to the limited liability companies
was $902,000 for the period ended December 31, 1996.
9
ITEM 2 -- MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
RESULTS OF OPERATIONS
CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY
The Mohegan Sun commenced operations on October 12, 1996. During the period
from October 12 through December 31, 1996, cash provided by operations was
$26,200,000. On November 15, 1996, Mohegan Sun made an interest payment of
$11,813,000 to the holders of the Senior Notes. This interest payment consisted
of $9,304,000, which was funded from the Authority's pre-opening construction
account (funds available before operations commenced on October 12, 1996) and
$2,509,000 which was funded from the operation cash flow.
The Authority historically has funded its operations through the issuance of
debt. On September 29, 1995, the Authority issued $175 million in principal
amount of Senior Secured Notes due 2002 (the "Senior Notes") with fixed interest
payable at a rate of 13.5% per annum and participation interest equal to 5.0% of
the Authority's cash flow up to a limit, during any two consecutive semi-annual
periods ending on September 30, of $250 million of the Authority's cash flow.
Fixed interest is payable semi-annually on May 15 and November 15. The Senior
Notes are redeemable after November 15, 1999, at the option of the Authority, at
prices set forth in the Senior Notes. Upon the occurrence of certain events (as
specified in the Indenture for the Senior Notes), each holder of Senior Notes
can require the Authority to repurchase the Notes at prices specified in the
Senior Notes. Beginning with the current fiscal year, the Authority will be
required, under certain circumstances, to offer to purchase, at set prices,
certain amounts of Senior Notes then outstanding. The Indenture governing the
Senior Notes contains certain covenants restricting the Authority's ability to,
among other things, make certain cash payments, incur liens or additional
indebtedness, sell assets, lease property, enter into transactions with
affiliates or effect any merger, consolidation or any transfer or sale of
substantially all of its assets. The authority believes it currently is in
compliance with all of the covenants and restrictions contained in the
Indenture.
On September 29, 1995, the Authority issued $40.0 million of subordinated notes
(the "Subordinated Notes") to Sun International. Subsequent to issuance, Sun
International resold fifty-percent of the Subordinated Notes, with a principal
amount equal to $20.0 million, to Waterford Gaming LLC. The Subordinated Notes
bear interest at 15% per year, payable semi-annually, and are due in 2003;
however, principal cannot be paid until the Senior Notes have been paid in full,
unless certain conditions are met. Interest on the Subordinated Notes is being
deferred and will not be paid until at least half of the Senior Notes have been
retired (or offered to be retired, pursuant to the terms of the Indenture
governing the Senior Notes) and certain other conditions have been fulfilled.
10
RESULTS OF OPERATIONS
CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY CONTINUED
The Authority's capital spending associated with the development of the facility
totaled $51,337,000 for the period from October 12, 1996, through December 31,
1996. Including land and capitalized interest, the Mohegan Sun is expected to
cost approximately $318 million. As of December 31, 1996, the Authority had
incurred expenditures of approximately $293.3 million with the development of
the facility. The Authority may not obligate itself to pay development costs in
excess of $325 million without the further consent of the National Indian Gaming
Commission (the "NIGC"). In the event final development costs exceed $325
million, the Authority would require additional consent of the NIGC, and there
can be no assurances such consent would be given. Based upon its review of the
budget and the open cost items, the Authority believes that the total cost of
developing, constructing, equipping and opening the Mohegan Sun will not exceed
the sum of the proceeds from the sale of the Senior Notes and the Subordinated
Notes, amounts available under the Secured Completion Guarantee, the Equipment
Financing and the Working Capital Financing and cash flow from operations.
However, there is no assurance that such costs will not exceed budgeted amounts.
Capital expenditures for post-opening enhancement projects at the facility
totaled $502,000 for the period from October 12, 1996, through December 31,
1996. Capital spending will increase over the remaining three quarters of the
fiscal year. The additional expenditures will represent capital projects at the
facility that in the Authority's opinion will further enhance the guest's
experience at the facility. The Authority believes that borrowings under its
existing financing agreements and cash flow from operations will be sufficient
to fund its currently planned capital expenditures.
During the period ended December 31, 1996, the Authority had net short-term
borrowings under its bank lines of credit totaling approximately $8.1 million.
The funds were used for the initial working capital needs in conjunction with
the opening of the facility.
The Authority has a $12.5 million line of credit which expires on September 24,
1997. Borrowings under this line bear interest at various rates. As of
December 31, 1996, approximately $12.5 million was outstanding under this line
at an interest rate of 9.25%. The Authority also has a $650,000 line of credit
which expires on July 31, 1997. As of December 31, 1996, approximately $650,000
was outstanding under this line at an interest rate of 7.75%. The funds were
used for the initial working capital needs in conjunction with the opening of
the facility.
11
RESULTS OF OPERATIONS
CAPITAL RESOURCES, CAPITAL SPENDING AND LIQUIDITY CONTINUED
The Authority entered into $32.0 million of equipment leasing arrangements with
several finance companies, under varying terms. As of December 31, 1996, the
Authority had outstanding borrowings under these arrangements of $23.0 million,
at an interest rate of 2% over prime; $5.0 million, at an interest rate of
9.17%; and $4.0 million, at an interest rate of 8.95%. All of such amounts are
being repaid by the Authority over the 48 months commencing with December 1996.
The Authority for the quarter ending December 31, 1996, borrowed an additional
$15 million which was available under the Secured Completion Guarantee to fund
construction development costs associated with the completion of the facility.
As of January 3, 1997, the Authority borrowed the final $8.0 million available
under the Secured Completion Guarantee for a total of $50.0 million.
The Authority believes that existing cash balances and operating cash flow will
provide the Authority with sufficient resources to meet its existing debt
obligations and capital expenditure requirements. However, the ability of the
Authority to meet its debt service requirements will be entirely dependent upon
the completion and future successful performance of the Mohegan Sun, which is
subject to financial, economic, political, competitive, and other factors, many
of which are beyond the Authority's control.
PRIVATE SECURITIES LITIGATION REFORM ACT
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information included in this Form 10-Q
filed by the Authority with the Securities and Exchange Commission contains
statements that are forward-looking, such as statements relating to plans for
future expansion and other business development activities, ability to meet
existing debt obligations, as well as other capital spending, financing sources
and the effects of regulation (including gaming and tax regulation) and
competition. Such forward-looking information involves important risks and
uncertainties that could significantly affect anticipated results in the future
and, accordingly, such results may differ from those expressed in any
forward-looking statements made by or on behalf of the Authority. These risks
and uncertainties include, but are not limited to, those relating to development
and construction activities, dependence on existing management, leverage and
debt service (including sensitivity to fluctuations in interest rates),
competition for gaming patrons in the northeastern United States domestic or
global economic conditions, changes in federal tax laws or the administration of
such laws and changes in gaming laws or regulations (including the legalization
of gaming in certain jurisdictions).
12
OPERATING RESULTS FOR THE PERIOD OCTOBER 12, 1996 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1996-
OPERATING REVENUES AND EXPENSES CONTINUED
Mohegan Sun has 150,000 square feet of gaming space, 2,652 slot machines and 173
gaming tables, dining, entertainment, and retail shopping. The facility had
5,593 employees as of December 31, 1996. Mohegan Sun is approximately a two
hour drive from New York City and Boston.
Gaming revenues were $90,896,000 for the period October 12, 1996, through
December 31, 1996. The first quarter reflects 84 days of gaming activity.
Table games and slot machines were in operation for 81 and 84 days respectively
for the first quarter ended December 31, 1996.
Slot revenues were $64,692,000 for the period October 12, 1996, through December
31, 1996 and reflects a win per unit per day of $306 for the quarter.
Table game revenues were $26,204,000 for the period October 12, 1996, through
December 31, 1996.
Other revenues were $12,064,000 for the period October 12, 1996, through
December 31, 1996. Other revenues primarily represent revenues from food and
beverage and retail operations.
Gaming costs and expenses were $43,644,000 for the period October 12, 1996,
through December 31, 1996, which reflects costs and expenses associated with
table games, slot operations, slot win contribution expense and promotional
items given to patrons.
Under its Tribal-State Compact, the Authority is required to pay Slot Win
contributions to the State of Connecticut equal to the lesser of (i) 30% of
gross operating revenues derived from video facsimiles during the State's fiscal
year, or (ii) the greater of 25% of gross operating revenues from such devices
during the State's fiscal year or $80,000,000. For the period October 12, 1996,
through December 31, 1996, $16,712,0000 was paid by the Authority in accordance
with the agreement and recorded as gaming expenses.
Loss from Bingo operations reflects the operating results, excluding
depreciation, amortization and interest of $77,000 of the Mohegan Sun's Bingo
operations. Bingo is operated by the Mohegan Tribal Gaming Authority and not
managed by Trading Cove Associates.
13
OPERATING RESULTS FOR THE PERIOD OCTOBER 12, 1996 (COMMENCEMENT OF OPERATIONS)
THROUGH DECEMBER 31, 1996-
OPERATING REVENUES AND EXPENSES CONTINUED
Depreciation and amortization includes amortization of pre-opening costs
amounting to $4,593,000 associated with the development of Mohegan Sun.
Management fee reflects Trading Cove Associates management fee associated with
net revenue of Mohegan Sun before bingo operations, which is operated directly
by the Authority and not managed by Trading Cove Associates. For the period
October 12, 1996, through December 31, 1996, management fee payments were
$2,358,000.
Income from operations was $11,468,000 for the period October 12, 1996, through
December 31, 1996. Earnings before depreciation, interest, and taxes for the
quarter were $19,132,000.
Net interest expense was $9,501,000 for the period October 12, 1996, through
December 31, 1996. The interest expense reflects both fixed and participating
interest from the Senior Secured Notes, Equipment Financing and Subordinated
Notes.
14
Part II - OTHER INFORMATION:
Item I -- LEGAL PROCEEDINGS:
None
Item 2 -- CHANGES IN SECURITIES:
None
Item 3 -- DEFAULTS UPON SENIOR SECURITIES:
None
Item 4 -- SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
Item 5 -- OTHER INFORMATION:
None
Item 6 -- EXHIBITS AND REPORTS ON FORM 8-K:
a. Exhibits:
Exhibit 27 - Financial Data Schedule
b. Current reports on Form 8-K: None
15
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
MOHEGAN TRIBAL GAMING AUTHORITY
Date: February 13, 1997 By: /s/ William J. Velardo
----------------------------------
William J. Velardo,
Executive Vice President (Duly
Authorized Officer)
Date: February 13, 1997 By: /s/ Jeffrey E. Hartmann
----------------------------------
Jeffrey E. Hartmann, Chief
Financial Officer and Senior Vice
President of Finance (Principal
Financial and Accounting Officer)
16