EXHIBIT 99.(c.12)
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITIES Preliminary
OVERVIEW / SUMMARY
"our version" of the projections most recently requested by Bob Pozen:
2,000 slots (@$250/day), 43% retention rate, $20mn cash invested in every- thing
but slots, those assumed to be leased at 5% of gross, and the existing
Wonderland property included on the balance sheet at $13mn, for a total asset
base of $33mn (new construction is $7.2mn):
Exhibit: A1 Balance Sheet ($33 million invested)
B1 Income Statement (43% retention) IRR = 35.6%
C1 Income Statements for Other Operations
Notes to Financial Projections
the following include up-front license fee payments in the amounts indicated,
with the retention rate adjusted to yield a 20% IRR on the initial investment
(license fee amortized over 5 years):
"supportable"
B2-10 Initial license fee -- $10mn retention = 41.8%
B2-25 Initial license fee -- $25mn retention = 45.0%
B2-50 Initial license fee -- $50mn retention = 50.4%
the following assume $24.2mn in new construction (vs. $7.2mn above), for a total
base of $50mn:
A3 Balance Sheet ($50 million invested)
B3 Income Statement (43% retention) IRR = 17.2%
B3-10 Initial license fee -- $10mn retention = 46.0%
B3-25 Initial license fee -- $25mn retention = 49.2%
B3-50 Initial license fee -- $50mn retention = 54.6%
the following assume win at $300/slot/day (up from $250):
B4-10 Initial license fee -- $10mn retention = 42.5%
B4-25 Initial license fee -- $25mn retention = 45.2%
B4-50 Initial license fee -- $50mn retention = 49.7%
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
B1356917
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITIES Preliminary
SUMMARY (CONTINUED)
the following indicate the levels of up-front license fee payments that could be
supported at the retention rates indicated (@$300/slot/day and $50mn invested)
("supported" means IRR = 20%):
Exhibit Retention Rate Up-Front Fee
- ------- -------------- -------------
B5-40 40% (1)
B5-41 41% $ 1.7 mn
B5-42 42% $ 7.3 mn
B5-43 43% $ 12.8 mn
B5-44 44% $ 18.4 mn
B5-45 45% $ 24.0 mn
B5-46 46% $ 29.6 mn
B5-47 47% $ 35.1 mn
B5-48 48% $ 40.7 mn
B5-49 49% $ 46.3 mn
B5-50 50% $ 51.8 mn
Each percentage point of tax translates into $5.6mn up front . . .
(1) Marginally "supportable;" IRR = 17.3% without any up-front payment.
Note: In all the $300/day scenarios, "$50mn" investment is actually $50.6mn due
to higher estimate for working capital required.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
B1356917
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT A1: BALANCE SHEET ($33 MILLION INVESTED [+FEE])
(At full-scale opening, in millions of 2003 dollars)
ASSETS:
Cash / Working Capital $ 3.5
Existing Land, Buildings, Etc. na
less accumulated depreciation na
----------
Net Existing Property $ 13.0(1)
New Construction for Slots $ 7.2
Slot Machines (2,000) 0.0(2)
Food & Beverage Equipment 4.0
Other Equipment 6.0
Initial License Fee 0.0
----------
Total Assets $ 33.7
LIABILITIES:
Payables, etc. $ 0.7
Long-Term Debt 0.0
Equity 33.0
----------
Total Liabilities $ 33.7
(1) Contribution of existing property at appraised value of $13mn; assumed to be
recouped in "terminal value" at end of Year 5.
(2) 2000 slots assumed to be leased for 5% of gross win. Revenue projections
assume ongoing replacement at customary industry rates.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B1: INCOME STATEMENT ($33 MILLION INVESTED [+FEE])
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 57.0% $ 104.0 $ 107.1 $ 110.4 $ 113.7 $ 117.1
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.0 1.0 1.1 1.1 1.1
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 1.6
Initial License Fee (5 years) 0.0
Total Dep'n & Amort'n ------- 1.6 1.6 1.6 1.6 1.6
------- ------- ------- ------- -------
Total Expenses $ 169.3 $ 174.3 $ 179.5 $ 184.9 $ 190.4
------- ------- ------- ------- -------
Net Income from Slot Operations $ 13.2 $ 13.6 $ 14.1 $ 14.6 $ 15.0
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 15.4 $ 15.9 $ 16.5 $ 17.2 $ 18.1
Corporate Income Taxes ($ 4.6) ($ 4.8) ($ 5.0) ($ 5.2) ($ 5.4)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 10.8 $ 11.2 $ 11.6 $ 12.1 $ 12.6
Add back: Depreciation (inc F&B) $ 2.4 $ 2.4 $ 2.4 $ 2.4 $ 2.4
Subtract: Capital Invested ($ 33.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 33.0) $ 13.2 $ 13.5 $ 13.9 $ 14.4 $ 28.0
IRR = 35.6%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT C3: INCOME STATEMENT FOR OTHER OPERATIONS
($ million, based on 2003 dollars)
FOOD & BEVERAGE YEAR 1
Total Food Sales ("comped" amount) $ 27.4 ($ 5.5)
Total Beverage Sales ("comped" amount) 12.8 (6.4)
------- ------
Total Food & Beverage Revenues (Comps) $ 40.2 ($ 11.9)
Cost of Goods Sold $ 13.5
Direct Payroll 13.5
Payroll Taxes & Benefits 2.7
Other Operating Costs 7.4
Depreciation 0.8
-------
Total Food & Beverage Expenses $ 37.9
-------
Food & Beverage Net Income $ 2.2
5/17/03 CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
NOTES TO FINANCIAL PROJECTIONS
SLOT OPERATIONS
State + Local Tax on Win 57% x slot win
General inflation rate 3.0% per year
Cash/working capital 1.0 weeks of revenues
Slot lease rate (inc. systems) 5.0% x slot win
Revenue participation machines na
Lessor's share of such slots' revenues na
Ancillary equipment $ 3,000 per slot
Slot replacements in later years 30% each year
Payables as % of working capital 20% x working capital
Projected Total Slot jobs 407 FTE
Payroll Taxes & Benefits 25% x direct payroll
Other Slot Operating Costs 2.5% x non-leased revenue
Building Operating Costs 2.5% x slot win
Property Tax 2.0% x assets except cash
Advertising/Media Marketing 3.0% x slot win
Promotion:
Complimentary Food 20% x food sales
Complimentary Beverages 50% x beverage sales
Other Players' Club 3.5% x slot win
Bussing & Other 3.0% x slot win
Annual interest on long-term debt 10%
Combined corporate income tax rate 30% (state+federal)
FOOD & BEVERAGE OPERATIONS
Food Beverage
Total Sales 15% 7% x slot win
Cost of Goods Sold 40% 20% x gross sales
Direct Payroll 40% 20% x gross sales
Payroll Taxes & Benefits 20% 20% x direct payroll
Other Operating Costs 20% 15% x gross sales
F & B equipment $2,000 per slot
Projected Total Food & Bev jobs 540 FTE
Projected Total jobs 947 FTE
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B2-10: INCOME STATEMENT (MINIMAL INVESTMENT, $10MN LICENSE FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 58.2% $ 106.2 $ 109.4 $ 112.7 $ 116.1 $ 119.5
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.2 1.2 1.3 1.3 1.4
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 1.6
Initial License Fee (5 years) 2.0
Total Dep'n & Amort'n ------- 3.6 3.6 3.6 3.6 3.6
------- ------- ------- ------- -------
Total Expenses $ 173.7 $ 178.8 $ 184.1 $ 189.5 $ 195.1
------- ------- ------- ------- -------
Net Income from Slot Operations $ 8.8 $ 9.2 $ 9.5 $ 9.9 $ 10.3
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 11.0 $ 11.5 $ 12.0 $ 12.6 $ 13.4
Corporate Income Taxes ($ 3.3) ($ 3.4) ($ 3.6) ($ 3.8) ($ 4.0)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 7.7 $ 8.0 $ 8.4 $ 8.8 $ 9.4
Add back: Depreciation (inc F&B) $ 4.4 $ 4.4 $ 4.4 $ 4.4 $ 4.4
Subtract: Capital Invested ($ 43.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 43.0) $ 12.1 $ 12.4 $ 12.8 $ 13.2 $ 26.7
IRR = 20.2%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B2-25: INCOME STATEMENT (MINIMAL INVESTMENT, $25MN LICENSE FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 55.0% $ 100.4 $ 103.4 $ 106.5 $ 109.7 $ 113.0
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.5 1.5 1.6 1.6 1.7
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 1.6
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n ------- 6.6 6.6 6.6 6.6 6.6
------- ------- ------- ------- -------
Total Expenses $ 171.2 $ 176.1 $ 181.2 $ 186.4 $ 191.8
------- ------- ------- ------- -------
Net Income from Slot Operations $ 11.3 $ 11.9 $ 12.4 $ 13.0 $ 13.6
Net Income / Food & Beverage(1) $2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 13.6 $ 14.2 $ 14.9 $ 15.7 $ 16.6
Corporate Income Taxes ($ 4.1) ($ 4.3) ($ 4.5) ($ 4.7) ($ 5.0)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 9.5 $ 9.9 $ 10.4 $ 11.0 $ 11.6
Add back: Depreciation (inc F&B) $ 7.4 $ 7.4 $ 7.4 $ 7.4 $ 7.4
Subtract: Capital Invested ($ 58.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 58.0) $ 16.9 $ 17.3 $ 17.8 $ 18.3 $ 32.0
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B2-50: INCOME STATEMENT (MINIMAL INVESTMENT, $50MN LICENSE FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 49.6% $ 90.5 $ 93.2 $ 96.0 $ 98.9 $ 101.9
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 2.0 2.1 2.1 2.2 2.3
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 1.6
Initial License Fee (5 years) 10.0
Total Dep'n & Amort'n ------- 11.6 11.6 11.6 11.6 11.6
------- ------- ------- ------- -------
Total Expenses $ 166.8 $ 171.5 $ 176.3 $ 181.2 $ 186.3
------- ------- ------- ------- -------
Net Income from Slot Operations $ 15.7 $ 16.5 $ 17.4 $ 18.2 $ 19.1
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 17.9 $ 18.8 $ 19.8 $ 20.9 $ 22.1
Corporate Income Taxes ($ 5.4) ($ 5.6) ($ 5.9) ($ 6.3) ($ 6.6)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 12.6 $ 13.2 $ 13.9 $ 14.6 $ 15.5
Add back: Depreciation (inc F&B) $ 12.4 $ 12.4 $ 12.4 $ 12.4 $ 12.4
Subtract: Capital Invested ($ 83.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 83.0) $ 24.9 $ 25.5 $ 26.2 $ 27.0 $ 40.9
IRR = 20.1%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B3: INCOME STATEMENT ($50 MILLION INVESTED [+FEE])
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 57.0% $ 104.0 $ 107.1 $ 110.4 $ 113.7 $ 117.1
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.3 1.4 1.4 1.5 1.5
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 0.0
Total Dep'n & Amort'n ------- 2.4 2.4 2.4 2.4 2.4
------- ------- ------- ------- -------
Total Expenses $ 170.5 $ 175.5 $ 180.7 $ 186.1 $ 191.6
------- ------- ------- ------- -------
Net Income from Slot Operations $ 12.0 $ 12.4 $ 12.9 $ 13.3 $ 13.8
Net Income / Food & Beverage (1) $ 2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 14.2 $ 14.7 $ 15.3 $ 16.0 $ 16.8
Corporate Income Taxes ($ 4.3) ($ 4.4) ($ 4.6) ($ 4.8) ($ 5.0)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 10.0 $ 10.3 $ 10.7 $ 11.2 $ 11.8
Add back: Depreciation (inc F&B) $ 3.2 $ 3.2 $ 3.2 $ 3.2 $ 3.2
Subtract: Capital Invested ($ 50.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 50.0) $ 13.2 $ 13.5 $ 13.9 $ 14.4 $ 28.0
IRR = 17.24%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B3-10: INCOME STATEMENT ($50MN INVESTED, $10MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 54.0% $ 98.6 $ 101.5 $ 104.6 $ 107.7 $ 110.9
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.5 1.6 1.6 1.7 1.7
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 2.0
Total Dep'n & Amort'n ------- 4.4 4.4 4.4 4.4 4.4
------- ------ ------- ------- -------
Total Expenses $ 167.2 $ 172.1 $ 177.1 $ 182.3 $ 187.7
------- ------ ------- ------- -------
Net Income from Slot Operations $ 15.3 $ 15.9 $ 16.5 $ 17.1 $ 17.7
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------ ------- ------- -------
Consolidated Net Income Before Tax $ 17.5 $ 18.2 $ 18.9 $ 19.8 $ 20.8
Corporate Income Taxes ($ 5.3) ($ 5.5) ($ 5.7) ($ 5.9) ($ 6.2)
------- ------ ------- ------- -------
Net Income After Corporate Taxes $ 12.3 $ 12.7 $ 13.2 $ 13.8 $ 14.5
Add back: Depreciation (inc F&B) $ 5.2 $ 5.2 $ 5.2 $ 5.2 $ 5.2
Subtract: Capital Invested ($ 60.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 60.0) $ 17.5 $ 17.9 $ 18.5 $ 19.1 $ 32.7
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B3-25: INCOME STATEMENT ($50MN INVESTED, $25MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 50.8% $ 92.7 $ 95.5 $ 98.4 $ 101.3 $ 104.3
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 1.8 1.9 2.0 2.0 2.1
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n ------- 7.4 7.4 7.4 7.4 7.4
------- ------- ------- ------- -------
Total Expenses $ 164.7 $ 169.4 $ 174.3 $ 179.3 $ 184.4
------- ------- ------- ------- -------
Net Income from Slot Operations $ 17.8 $ 18.6 $ 19.3 $ 20.1 $ 21.0
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $ 2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 20.1 $ 20.9 $ 21.8 $ 22.8 $ 24.0
Corporate Income Taxes ($ 6.0) ($ 6.3) ($ 6.5) ($ 6.9) ($ 7.2)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 14.0 $ 14.6 $ 15.3 $ 16.0 $ 16.8
Add back: Depreciation (inc F&B) $ 8.2 $ 8.2 $ 8.2 $ 8.2 $ 8.2
Subtract: Capital Invested ($ 75.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 75.0) $ 22.3 $ 22.8 $ 23.5 $ 24.2 $ 38.0
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B3-50: INCOME STATEMENT ($50MN INVESTED, $50MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $250 win/slot/day $ 182.5 $ 188.0 $ 193.6 $ 199.4 $ 205.4
EXPENSES:
Not retained by operator 45.4% $ 82.9 $ 85.3 $ 87.9 $ 90.5 $ 93.3
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 9.1 9.4 9.7 10.0 10.3
Other Slot Operating Costs 4.6 4.7 4.8 5.0 5.1
Building Operating Costs 4.6 4.7 4.8 5.0 5.1
Property Tax 2.3 2.4 2.5 2.6 2.6
Advertising/Media Marketing 5.5 5.6 5.8 6.0 6.2
Promotion: Food & Beverage $ 11.9
Other Players' Club 6.4
Bussing & Other 5.5
Total Promotion ------- 23.7 24.4 25.2 25.9 26.7
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 10.0
Total Dep'n & Amort'n ------- 12.4 12.4 12.4 12.4 12.4
------- ------- ------- ------- -------
Total Expenses $ 160.3 $ 164.8 $ 169.3 $ 174.1 $ 178.9
------- ------- ------- ------- -------
Net Income from Slot Operations $ 22.2 $ 23.2 $ 24.3 $ 25.4 $ 26.5
Net Income / Food & Beverage(1) $ 2.2 $ 2.3 $2.5 $ 2.7 $ 3.0(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 24.4 $ 25.5 $ 26.7 $ 28.1 $ 29.5
Corporate Income Taxes ($ 7.3) ($ 7.7) ($ 8.0) ($ 8.4) ($ 8.9)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 17.1 $ 17.9 $ 18.7 $ 19.6 $ 20.7
Add back: Depreciation (inc F&B) $ 13.2 $ 13.2 $ 13.2 $ 13.2 $ 13.2
Subtract: Capital Invested ($ 100.0) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 100.0) $ 30.3 $ 31.1 $ 31.9 $ 32.8 $ 46.9
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B4-10: INCOME STATEMENT ($50MN INVESTED, $10MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 57.5% $ 125.9 $ 129.7 $ 133.6 $ 137.6 $ 141.7
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 1.5 1.6 1.6 1.7 1.7
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 2.0
Total Dep'n & Amort'n ------- 4.4 4.4 4.4 4.4 4.4
------- ------- ------- ------- -------
Total Expenses $ 204.1 $ 210.1 $ 216.3 $ 222.6 $ 229.2
------- ------- ------- ------- -------
Net Income from Slot Operations $ 14.9 $ 15.5 $ 16.1 $ 16.7 $ 17.3
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 17.8 $ 18.4 $ 19.2 $ 20.1 $ 21.2
Corporate Income Taxes ($ 5.3) ($ 5.5) ($ 5.8) ($ 6.0) ($ 6.4)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 12.4 $ 12.9 $ 13.4 $ 14.1 $ 14.8
Add back: Depreciation (inc F&B) $ 5.2 $ 5.2 $ 5.2 $ 5.2 $ 5.2
Subtract: Capital Invested ($ 60.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 60.6) $ 17.6 $ 18.1 $ 18.7 $ 19.3 $ 33.0
IRR = 20.1%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B4-25: INCOME STATEMENT ($50MN INVESTED, $25MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 54.8% $ 120.0 $ 123.6 $ 127.3 $ 131.1 $ 135.1
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 1.8 1.9 2.0 2.0 2.1
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n ------- 7.4 7.4 7.4 7.4 7.4
------- ------- ------- ------- -------
Total Expenses $ 201.5 $ 207.3 $ 213.3 $ 219.5 $ 225.8
------- ------- ------- ------- -------
Net Income from Slot Operations $ 17.5 $ 18.3 $ 19.0 $ 19.8 $ 20.6
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 20.4 $ 21.2 $ 22.2 $ 23.2 $ 24.5
Corporate Income Taxes ($ 6.1) ($ 6.4) ($ 6.6) ($ 7.0) ($ 7.3)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 14.3 $ 14.8 $ 15.5 $ 16.3 $ 17.1
Add back: Depreciation (inc F&B) $ 8.2 $ 8.2 $ 8.2 $ 8.2 $ 8.2
Subtract: Capital Invested ($ 75.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 75.6) $ 22.5 $ 23.1 $ 23.7 $ 24.5 $ 38.4
IRR = 20.1%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B4-50: INCOME STATEMENT ($50MN INVESTED, $50MN FEE)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 50.3% $ 110.2 $ 113.5 $ 116.9 $ 120.4 $ 124.0
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 2.3 2.4 2.5 2.6 2.6
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 10.0
Total Dep'n & Amort'n ------- 12.4 12.4 12.4 12.4 12.4
------- ------- ------- ------- -------
Total Expenses $ 197.1 $ 202.7 $ 208.4 $ 214.3 $ 220.3
------- ------- ------- ------- -------
Net Income from Slot Operations $ 21.9 $ 22.9 $ 24.0 $ 25.1 $ 26.2
Net Income / Food & Beverage (1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 24.7 $ 25.8 $ 27.1 $ 28.5 $ 30.0
Corporate Income Taxes ($ 7.4) ($ 7.8) ($ 8.1) ($ 8.5) ($ 9.0)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 17.3 $ 18.1 $ 19.0 $ 19.9 $ 21.0
Add back: Depreciation (inc F&B) $ 13.2 $ 13.2 $ 13.2 $ 13.2 $ 13.2
Subtract: Capital Invested ($ 100.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 100.6) $ 30.5 $ 31.3 $ 32.2 $ 33.1 $ 47.2
IRR = 20.1%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B5-40: INCOME STATEMENT ($50MN INVESTED, 40% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 60.0% $ 131.4 $ 135.3 $ 139.4 $ 143.6 $ 147.9
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 1.3 1.4 1.4 1.5 1.5
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 0.0
Total Dep'n & Amort'n ------- 2.4 2.4 2.4 2.4 2.4
------- ------- ------- ------- -------
Total Expenses $ 207.4 $ 213.5 $ 219.9 $ 226.4 $ 233.1
------- ------- ------- ------- -------
Net Income from Slot Operations $ 11.6 $ 12.1 $ 12.5 $ 12.9 $ 13.4
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 14.5 $ 15.0 $ 15.6 $ 16.3 $ 17.2
Corporate Income Taxes ($ 4.3) ($ 4.5) ($ 4.7) ($ 4.9) ($ 5.2)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 10.1 $ 10.5 $ 10.9 $ 11.4 $ 12.1
Add back: Depreciation (inc F&B) $ 3.2 $ 3.2 $ 3.2 $3.2 $ 3.2
Subtract: Capital Invested ($ 50.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 50.6) $ 13.4 $ 13.7 $ 14.1 $ 14.7 $ 28.3
IRR = 17.3%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B5-41: INCOME STATEMENT ($50MN INVESTED, 41% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 59.0% $ 129.2 $ 133.1 $ 137.1 $ 141.2 $ 145.4
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 1.4 1.4 1.5 1.5 1.6
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 0.3
Total Dep'n & Amort'n ------- 2.8 2.8 2.8 2.8 2.8
------- ------- ------- ------- -------
Total Expenses $ 205.6 $ 211.6 $ 217.9 $ 224.4 $ 231.0
------- ------- ------- ------- -------
Net Income from Slot Operations $ 13.4 $ 13.9 $ 14.4 $ 14.9 $ 15.5
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 16.3 $ 16.9 $ 17.6 $ 18.4 $ 19.3
Corporate Income Taxes ($ 4.9) ($ 5.1) ($ 5.3) ($ 5.5) ($ 5.8)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 11.4 $ 11.8 $ 12.3 $ 12.9 $ 13.5
Add back: Depreciation (inc F&B) $ 3.6 $ 3.6 $ 3.6 $ 3.6 $ 3.6
Subtract: Capital Invested ($ 52.3) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 52.3) $ 15.0 $ 15.4 $ 15.8 $ 16.4 $ 30.1
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B5-49: INCOME STATEMENT ($50MN INVESTED, 49% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 51.0% $ 111.7 $ 115.0 $ 118.5 $ 122.0 $ 125.7
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 2.3 2.3 2.4 2.5 2.6
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 9.3
Total Dep'n & Amort'n ------- 11.7 11.7 11.7 11.7 11.7
------- ------- ------- ------- -------
Total Expenses $ 197.8 $ 203.4 $ 209.2 $ 215.1 $ 221.2
------- ------- ------- ------- -------
Net Income from Slot Operations $ 21.2 $ 22.1 $ 23.2 $ 24.2 $ 25.3
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 24.0 $ 25.1 $ 26.3 $ 27.6 $ 29.1
Corporate Income Taxes ($ 7.2) ($ 7.5) ($ 7.9) ($ 8.3) ($ 8.7)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 16.8 $ 17.6 $ 18.4 $ 19.3 $ 20.4
Add back: Depreciation (inc F&B) $ 12.5 $ 12.5 $ 12.5 $ 12.5 $ 12.5
Subtract: Capital Invested ($ 96.9) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------ ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 96.9) $ 29.3 $ 30.0 $ 30.9 $ 31.8 $ 45.9
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B5-50: INCOME STATEMENT ($50MN INVESTED, 50% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $300 win/slot/day $ 219.0 $ 225.6 $ 232.3 $ 239.3 $ 246.5
EXPENSES:
Not retained by operator 50.0% $ 109.5 $ 112.8 $ 116.2 $ 119.7 $ 123.2
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 12.2 12.6 13.0 13.4 13.8
Payroll Taxes & Benefits 3.1 3.1 3.2 3.3 3.4
Slot Lease Payments 11.0 11.3 11.6 12.0 12.3
Other Slot Operating Costs 5.5 5.6 5.8 6.0 6.2
Building Operating Costs 5.5 5.6 5.8 6.0 6.2
Property Tax 2.4 2.5 2.5 2.6 2.7
Advertising/Media Marketing 6.6 6.8 7.0 7.2 7.4
Promotion: Food & Beverage $ 14.2
Other Players' Club 7.7
Bussing & Other 6.6
Total Promotion ------- 28.5 29.3 30.2 31.1 32.0
Interest on Debt 0.0 0.0 0.0 0.0 0.0
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.4
Initial License Fee (5 years) 10.4
Total Dep'n & Amort'n ------- 12.8 12.8 12.8 12.8 12.8
------- ------- ------- ------- -------
Total Expenses $ 196.9 $ 202.4 $ 208.1 $ 213.9 $ 220.0
------- ------- ------- ------- -------
Net Income from Slot Operations $ 22.1 $ 23.2 $ 24.3 $ 25.4 $ 26.5
Net Income / Food & Beverage(1) $ 2.9 $ 2.9 $ 3.1 $ 3.4 $ 3.8(1)
------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 25.0 $ 26.1 $ 27.4 $ 28.8 $ 30.4
Corporate Income Taxes ($ 7.5) ($ 7.8) ($ 8.2) ($ 8.6) ($ 9.1)
------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 17.5 $ 18.3 $ 19.2 $ 20.1 $ 21.2
Add back: Depreciation (inc F&B) $ 13.6 $ 13.6 $ 13.6 $ 13.6 $ 13.6
Subtract: Capital Invested ($ 102.4) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- ------- ------- ------- ------- -------
Result: Net Cash Flow ($ 102.4) $ 31.1 $ 31.9 $ 32.7 $ 33.7 $ 47.8
IRR = 20.0%
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
5/17/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES