Exhibit 99.1
MOHEGAN TRIBAL GAMING AUTHORITY
TO FILE FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 2002
Uncasville, Connecticut, August 19, 2002 - The Mohegan Tribal Gaming Authority
(the "Authority"), the operator of a gaming and entertainment complex located
near Uncasville, Connecticut ("Mohegan Sun"), will file its Quarterly Report on
Form 10-Q for the quarterly period ended June 30, 2002 with the Securities and
Exchange Commission today. This Form 10-Q contains revised financial information
as compared to the information that was included in the press release issued by
the Authority on July 26, 2002.
During the preparation of the Form 10-Q for the quarterly period ended June 30,
2002, the Authority reviewed its capitalized interest calculation for the major
expansion of Mohegan Sun, known as Project Sunburst, and determined that
capitalized interest for this project was understated, and interest expense was
overstated, for the fiscal year ended September 30, 2001, and capitalized
interest was overstated, and interest expense was understated, for the nine
months ended June 30, 2002. As a result of this determination, the Authority
intends to restate its financial statements for the quarterly periods ended
December 31, 2000, March 31, 2001, June 30, 2001, December 31, 2001 and March
31, 2002 and for the fiscal year ended September 30, 2001 to reflect the
anticipated corrections to capitalized interest and interest expense during
these periods.
The net effect of the restatements increases the Authority's net income by $13.2
million for the fiscal year ended September 30, 2001 and reduces the Authority's
net income by $8.4 million for the nine months ended June 30, 2002. The
restatements are non-cash adjustments that do not affect EBITDA or adjusted
EBITDA and thus have no impact on leverage or fixed charge calculations relevant
to compliance with covenants contained in the Authority's $400 million reducing,
revolving, secured credit facility with a syndicate of lenders led by Bank of
America N.A. (formerly known as Bank of America National Trust and Savings
Association) (the "Bank Credit Facility") and related documents thereto, and the
indentures related to the Authority's (i) $200 million Senior Notes with fixed
interest payable at a rate of 8.125% per annum issued March 3, 1999; (ii) $300
million Senior Subordinated Notes with fixed interest payable at a rate of 8.75%
per annum issued March 3, 1999; (iii) $150 million Senior Subordinated Notes
with fixed interest payable at a rate of 8.375% per annum issued July 26, 2001
and (iv) $250 million Senior Subordinated Notes with fixed interest payable at a
rate of 8% per annum issued February 20, 2002. In addition, the Authority also
has reclassified certain other costs, expenses, and balances in the financial
statements. However, these reclassifications have no effect on the Authority's
net income. Such adjustment impacted the Authority's cash flow statement
presentation between operating and investing activities.
The Authority expects to file amended Quarterly Reports on Form 10-Q for the
quarterly periods ended December 31, 2000, March 31, 2001, June 30, 2001,
December 31, 2001, March 31, 2002 and June 30, 2002 and an amended Annual Report
on Form 10-K for the fiscal year ended September 30, 2001 once the Authority's
independent accountants complete their audit of the restated financial
statements for the fiscal year ended September 30, 2001, their reviews of the
restated financial statements for the quarterly periods ended December 31, 2000,
March 31, 2001, June 30, 2001, December 31, 2001, March 31, 2002 and their
review of the amended financial statements for the quarterly period ended June
30, 2002.
The Authority also received the consent of its requisite lenders to Amendment
No. 5 to the Bank Credit Facility on August 14, 2002. This amendment (i)
expanded the definition of "approved swap agreements" and increased the amount
of approved swap agreements and other swap agreements that may be used to secure
other indebtedness of the Authority from the notional amount of $200 million to
the notional amount of $300 million and (ii) waived, for a period of 90 days
from the date of the Amendment, (a) the delivery of audited financial statements
for the fiscal year ended September 30, 2001 and reviewed financial statements
for the quarterly periods ended December 31, 2000, March 31, 2001, June 30,
2001, December 31, 2001 and March 31, 2002, (b) the requirement to file amended
Quarterly Reports on Form 10-Q for the quarterly periods ended December 31,
2000, March 31, 2001, June 30, 2001, December 31, 2001 and March 31, 2002 and an
amended Annual Report on Form 10-K for the fiscal year ended September 30, 2001,
(c) any defaults which may have arisen by reason of any of the restatements in
the financial statements which are described above and (d) any resulting
technical non-compliance with a requirement of law.
About Mohegan Sun and the Authority
The Mohegan Tribal Gaming Authority is an instrumentality of the Mohegan Tribe,
a federally recognized Indian tribe with an approximately 405-acre reservation
located in southeastern Connecticut, which has been granted the exclusive power
to conduct and regulate gaming activities on the existing reservation of the
Tribe located in Uncasville, Connecticut, including the operation of the Mohegan
Sun, a gaming and entertainment complex that is situated on a 240-acre site on
the Tribe's reservation. The Tribe's gaming operation 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 3.0 million
square foot facility, which includes the Casino of the Earth, Casino of the Sky,
the Shops at Mohegan Sun, a 10,000-seat Arena, a 300-seat Cabaret, meeting and
convention space and a 1,200-room luxury hotel. More information about Mohegan
Sun and the Authority can be obtained by visiting www.mohegansun.com.
Special Note Regarding Forward-Looking Statements
Some information included in this press release and other materials filed by the
Authority with the Securities and Exchange Commission contain forward-looking
statements, within the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
These statements can sometimes be identified by our use of forward-looking words
such as "may," "will," "anticipate," "estimate," "expect," or "intend" and
similar expressions. Similarly, these statements include information relating to
plans for future expansion and other business development activities, 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 materially 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, domestic or global
economic conditions, pending litigation, 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). Additional information
concerning potential
factors that could affect the Authority's financial results are included in the
Authority's Form 10-K for the fiscal year ended September 30, 2001 and the
Registrant's other periodic filings and reports with the Securities and Exchange
Commission. The forward-looking statements included in this Current Report on
Form 8-K are made only as of the date of this report. The Authority does not
have and does not undertake any obligation to publicly update any
forward-looking statements to reflect subsequent events or circumstances. The
Authority cannot assure you that projected results or events will be achieved.
Press Release Contact: Jeff Hartmann
Mohegan Tribal Gaming Authority Executive Vice President,
Uncasville, Connecticut Chief Financial Officer
August 19, 2002 (860) 862-8000
Mohegan Tribal Gaming Authority
Condensed Balance Sheets
(in thousands)
Previously Reported Restated
September 30, September 30,
2001* 2001
------------------- --------------------
(unaudited)
ASSETS
Current assets:
Total current assets $ 105,608 $ 105,608
------------------- --------------------
Non-current assets:
Property and equipment, net 935,016 935,016
Construction in process 267,653 280,832
Trademark, net 119,692 119,692
Other assets, net 24,766 24,766
------------------- --------------------
Total assets $ 1,452,735 $ 1,465,914
=================== ====================
LIABILITIES AND CAPITAL
Liabilities:
Total liabilities $ 1,659,132 $ 1,659,132
------------------- --------------------
Capital:
Retained deficit (201,270) (188,091)
Accumulated other comprehensive loss (5,127) (5,127)
------------------- --------------------
Total capital (206,397) (193,218)
------------------- --------------------
Total liabilities and capital $ 1,452,735 $ 1,465,914
=================== ====================
*Previously reported in Amendment No. 1 to Form S-4 filed with the SEC on
May 21, 2002.
Mohegan Tribal Gaming Authority
Condensed Statements of Income
(in thousands)
Previously Reported Restated
For the Year Ended For the Year Ended
September 30, 2001* September 30, 2001
------------------- ------------------
(unaudited)
Revenues:
Net revenues $ 786,605 $ 786,605
------------------- ------------------
Cost and expenses:
Gaming 334,537 382,171
Food and beverage 24,447 24,447
Retail and other 32,114 19,952
General and administration 139,343 103,871
Pre-opening costs 31,344 31,344
Depreciation and amortization 34,753 30,217
Relinquishment liability reassessment (74,410) (74,410)
------------------ ------------------
Total costs and expenses 522,128 517,592
------------------ ------------------
Income from operations 264,477 269,013
------------------ ------------------
Other income (expense):
Accretion of relinquishment liability discount (35,833) (35,833)
Interest and other income 2,920 2,920
Interest expense, net of capitalized interest (25,060) (16,417)
Other non-operating expense (116) (116)
Change in fair value of derivative instruments (949) (949)
------------------ ------------------
(59,038) (50,395)
------------------ ------------------
Income from continuing operations 205,439 218,618
Loss from discontinued operations (591) (591)
------------------ ------------------
Net income $ 204,848 $ 218,027
================== ==================
*Previously reported in Amendment No. 1 to Form S-4 filed with the SEC on
May 21, 2002.
Mohegan Tribal Gaming Authority
Condensed Balance Sheets
(in thousands)
Previously Reported Restated
June 30, June 30,
2002* 2002
------------------- -----------------
(unaudited) (unaudited)
ASSETS
Current assets:
Total current assets $ 104,296 $ 104,296
Non-current assets:
Property and equipment, net 1,405,374 1,409,583
Construction in process 18,944 18,944
Trademark, net 119,692 119,692
Other assets, net 26,783 27,371
------------------- -----------------
Total assets $1,675,089 $1,679,886
=================== =================
LIABILITIES AND CAPITAL
Liabilities:
Total liabilities $1,858,818 $1,858,818
Capital:
Retained deficit (180,208) (175,411)
Accumulated other comprehensive loss (3,521) (3,521)
------------------- -----------------
Total Capital (183,729) (178,932)
------------------- -----------------
Total liabilities and capital $1,675,089 $1,679,886
=================== =================
*Previously reported in the Authority's third quarter press release dated
July 26, 2002.
Mohegan Tribal Gaming Authority
Condensed Statements of Income
(in thousands)
Previously Reported Revised Previously Reported Revised
For the For the For the For the
Quarter Ended Quarter Ended Nine Months Ended Nine Months Ended
June 30, 2002* June 30, 2002 June 30, 2002* June 30, 2002
-------------- ------------- -------------- -------------
(unaudited) (unaudited) (unaudited) (unaudited)
Revenues:
Net revenues $ 263,743 $ 263,743 $ 739,901 $ 739,901
Cost and expenses:
Gaming 131,787 131,787 386,518 386,518
Food and beverage 11,023 11,023 30,037 30,037
Hotel 1,392 1,392 1,392 1,392
Retail, entertainment and other 5,167 5,167 20,133 20,133
General and administration 39,068 39,068 108,007 108,007
Pre-opening costs 4,092 4,092 7,755 7,755
Depreciation and amortization 23,770 20,841 61,046 55,419
------------- ------------- ------------- -------------
Total costs and expenses 216,299 213,370 614,888 609,261
------------- ------------- ------------- -------------
Income from operations 47,444 50,373 125,013 130,640
------------- ------------- ------------- -------------
Other income (expense):
Accretion of relinquishment
liability discount (9,083) (9,083) (27,250) (27,250)
Interest and other income 95 95 335 335
Interest expense, net of
capitalized interest (17,059) (23,395) (49,005) (63,014)
Other non-operating expense (50) (50) (137) (137)
Change in fair value of
derivative instruments 23 23 18 18
------------- ------------- ------------- -------------
(26,074) (32,410) (76,039) (90,048)
------------- ------------- ------------- -------------
Net income $ 21,370 $ 17,963 $ 48,974 $ 40,592
============= ============= ============= =============
*Previously reported in the Authority's third quarter press release dated
July 26, 2002.