EXHIBIT 99. (c.17)
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITIES Preliminary
OVERVIEW / SUMMARY
latest, "lean" edition (excess demand/low op costs):
1,500 slots (@$340/day), a minimum of $25mn up front, $34mn cash invested
in everything but slots (new construction is $25mn), slots assumed to be
leased by the State, and the Wonderland property included on the balance
sheet at $13mn, for a (baseline) total asset base of $73mn:
Exhibit: A15 Balance Sheet (lean / $25 million fee)
B15/35 Income Statement (35%* retention) IRR = 24.3%
C15 Income Statements for Other Operations
Notes to Financial Projections
the income statement is also presented for the following:
B15/30 Income Statement (30%* retention) IRR = 12.4%
B15/25 Income Statement (25%* retention) IRR = -0.8%
(Table D15 presents the EBITDA lines for each retention
rate from 25% to 35%)
Similar projections are presented for 2,000 slots; new construction is
$30mn, various other capital costs increase slightly (though the $25mn up
front remains unchanged), for a total asset base of $82mn:
Exhibit: A20 Balance Sheet (lean / $25 million fee)
B20/35 Income Statement (35%* retention) IRR = 32.6%
C20 Income Statements for Other Operations
the income statement is also presented for the following:
B20/30 Income Statement (30%* retention) IRR = 18.9%
B20/25 Income Statement (25%* retention) IRR = 3.8%
(Table D20 presents the EBITDA lines for each retention
rate from 25% to 35%)
* These projections assume that the state leases the slots; the if
operator does so, add 5% to the retention rate (i.e., 35% "without"
slot costs = 40% "with")
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
B1357189.1
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT A15: BALANCE SHEET (LEAN / $25 MILLION FEE)
(At full-scale opening, in millions of 2003 dollars)
24.3%
ASSETS:
Cash / Working Capital $ 3.6
Existing Land, Buildings, Etc. na
less accumulated depreciation na
--------
Net Existing Property $ 13.0(1)
New Construction for Slots $ 25.0
Slot Machines (1,500) 0.0(2)
Food & Beverage Equipment 2.3
Other Equipment 4.5
Initial License Fee 25.0
--------
Total Assets $ 73.3
LIABILITIES:
Payables, etc. $ 0.7
Long-Term Debt 0.0
Equity 72.6
--------
Total Liabilities $ 73.3
(1) Contribution of existing property at appraised value of $13mn; assumed to be
recouped in "terminal value" at end of Year 5.
(2) 1,500 slots assumed to be leased by the State Lottery. Revenue projections
assume ongoing replacement at usual industry rates.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B15/35: INCOME STATEMENT ($25 MILLION FEE / 35% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
1,500 slots
Slot Win $340 win/slot/day $ 186.2 $ 191.7 $ 197.5 $ 203.4 $ 209.5
EXPENSES: 35.0%
Not retained by operator 65.0% $ 121.0 $ 124.6 $ 128.4 $ 132.2 $ 136.2
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 9.1 9.3 9.6 9.9 10.2
Payroll Taxes & Benefits 1.8 1.9 1.9 2.0 2.0
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 3.7 3.8 3.9 4.1 4.2
Building Operating Costs 2.8 2.9 3.0 3.1 3.1
Property Tax 1.8 1.8 1.9 2.0 2.0
Advertising/Media Marketing 3.7 3.8 3.9 4.1 4.2
Promotion: Food & Beverage $ 9.7
Other Players' Club 4.7
Bussing & Other 1.9
Total Promotion -------- 16.2 16.7 17.2 17.7 18.2
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.2
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.2 7.2 7.2 7.2 7.2
-------- ------- ------- ------- -------
Total Expenses $ 167.3 $ 172.1 $ 177.0 $ 182.1 $ 187.4
-------- ------- ------- ------- -------
Net Income from Slot Operations $ 18.9 $ 19.7 $ 20.5 $ 21.3 $ 22.2
Net Income / Food & Beverage(1) $ 4.3 $ 4.4 $ 4.7 $ 5.1 $ 5.8(1)
-------- ------- ------- ------- -------
Consolidated Net Income Before Tax $ 23.2 $ 24.1 $ 25.2 $ 26.4 $ 27.9
Corporate Income Taxes ($ 7.0) ($ 7.2) ($ 7.6) ($ 7.9) ($ 8.4)
-------- ------- ------- ------- -------
Net Income After Corporate Taxes $ 16.2 $ 16.9 $ 17.6 $ 18.5 $ 19.6
Add back: Depreciation (inc F&B) $ 7.6 $ 7.6 $ 7.6 $ 7.6 $ 7.6
Subtract: Capital Invested ($ 72.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) -------- -------- ------- ------- ------- -------
Result: Net Cash Flow ($ 72.6) $ 23.8 $ 24.5 $ 25.2 $ 26.1 $ 40.2
IRR = 24.3%
EBITDA: $ 30.8 $ 31.7 $ 32.8 $ 34.0 $ 35.5
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT C15: INCOME STATEMENTS FOR OTHER OPERATIONS
($ million, based on 2003 dollars)
FOOD & BEVERAGE YEAR 1
Total Food Sales ("comped" amount) $ 22.3 ($4.5)
Total Beverage Sales ("comped" amount) 13.0 (5.2)
-------- -------
Total Food & Beverage Revenues (Comps) $ 35.4 ($9.7)
Cost of Goods Sold $ 11.1
Direct Payroll 11.1
Payroll Taxes & Benefits 2.2
Other Operating Costs 6.2
Depreciation 0.5
--------
Total Food & Beverage Expenses $ 31.1
--------
Food & Beverage Net Income $ 4.3
7/24/03 CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
NOTES TO "LEAN" FINANCIAL PROJECTIONS
SLOT OPERATIONS
Not retained by operator 65% x slot win
General inflation rate 3.0% per year
Cash/working capital 1.0 weeks of revenues
Slot lease rate (inc. systems) 0.0% x slot win
Revenue participation machines na
Lessor's share of such slots' revenues na
Ancillary equipment $ 3,000 per slot
New construction $ 10,000 per slot (plus base)
Slot replacements in later years 0% each year (NA)
Payables as % of working capital 20% x working capital
Projected Total Slot jobs 303 FTE
Payroll Taxes & Benefits 20% x direct payroll
Other Slot Operating Costs 2.0% x non-particip'n revenue
Building Operating Costs 1.5% x slot win
Property Tax 2.0% x assets except cash
Advertising/Media Marketing 2.0% x slot win
Promotion:
Complimentary Food 20% x food sales
Complimentary Beverages 40% x beverage sales
Other Players' Club 2.5% x slot win
Bussing & Other 1.0% 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 12% 7% x slot win
Cost of Goods Sold 38% 20% x gross sales
Direct Payroll 38% 20% x gross sales
Payroll Taxes & Benefits 20% 20% x direct payroll
Other Operating Costs 19% 15% x gross sales
F & B equipment $ 1,500 per slot
Projected Total Food & Bev jobs 444 FTE
Projected Total jobs 746 FTE
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT A20: BALANCE SHEET (LEAN / $25 MILLION FEE)
(At full-scale opening, in millions of 2003 dollars)
32.6%
ASSETS:
Cash / Working Capital $ 4.8
Existing Land, Buildings, Etc. na
less accumulated depreciation na
--------
Net Existing Property $ 13.0(1)
New Construction for Slots $ 30.0
Slot Machines (2,000) 0.0(2)
Food & Beverage Equipment 3.0
Other Equipment 6.0
Initial License Fee 25.0
--------
Total Assets $ 81.8
LIABILITIES:
Payables, etc. $ 1.0
Long-Term Debt 0.0
Equity 80.8
--------
Total Liabilities $ 81.8
(1) Contribution of existing property at appraised value of $13mn; assumed to be
recouped in "terminal value" at end of Year 5.
(2) 2,000 slots assumed to be leased by the State Lottery. Revenue projections
assume ongoing replacement at usual industry rates.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B20-35: INCOME STATEMENT ($25 MILLION FEE / 35% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
2,000 slots
Slot Win $340 win/slot/day $ 248.2 $ 255.6 $ 263.3 $ 271.2 $ 279.4
EXPENSES: 35.0%
Not retained by operator 65.0% $ 161.3 $ 166.2 $ 171.2 $ 176.3 $ 181.6
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 11.5 11.9 12.2 12.6 13.0
Payroll Taxes & Benefits 2.3 2.4 2.4 2.5 2.6
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 5.0 5.1 5.3 5.4 5.6
Building Operating Costs 3.7 3.8 3.9 4.1 4.2
Property Tax 1.9 2.0 2.1 2.1 2.2
Advertising/Media Marketing 5.0 5.1 5.3 5.4 5.6
Promotion: Food & Beverage $ 12.9
Other Players' Club 6.2
Bussing & Other 2.5
Total Promotion -------- 21.6 22.2 22.9 23.6 24.3
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.7
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.7 7.7 7.7 7.7 7.7
-------- -------- -------- -------- --------
Total Expenses $ 220.0 $ 226.4 $ 233.0 $ 239.7 $ 246.7
-------- -------- -------- -------- --------
Net Income from Slot Operations $ 28.2 $ 29.2 $ 30.3 $ 31.5 $ 32.7
Net Income / Food & Beverage (1) $ 5.7 $ 5.9 $ 6.3 $ 6.9 $ 7.7(1)
-------- -------- -------- -------- --------
Consolidated Net Income Before Tax $ 33.9 $ 35.2 $ 36.6 $ 38.3 $ 40.4
Corporate Income Taxes ($ 10.2) ($ 10.5) ($ 11.0) ($ 11.5) ($ 12.1)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 23.7 $ 24.6 $ 25.6 $ 26.8 $ 28.3
Add back: Depreciation (inc F&B) $ 8.3 $ 8.3 $ 8.3 $ 8.3 $ 8.3
Subtract: Capital Invested ($ 80.8) 0.0 0.0 0.0 13.0
(inc Terminal Value) -------- -------- -------- -------- -------- --------
Result: Net Cash Flow ($ 80.8) $ 32.0 $ 32.9 $ 33.9 $ 35.1 $ 49.6
IRR = 32.6%
EBITDA: $ 42.2 $ 43.5 $ 44.9 $ 46.6 $ 48.7
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B15/30: INCOME STATEMENT ($25 MILLION FEE / 30% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES: (1)
1,500 slots
Slot Win $340 win/slot/day $ 186.2 $ 191.7 $ 197.5 $ 203.4 $ 209.5
EXPENSES: 30.0%
Not retained by operator 70.0% $ 130.3 $ 134.2 $ 138.2 $ 142.4 $ 146.7
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 9.1 9.3 9.6 9.9 10.2
Payroll Taxes & Benefits 1.8 1.9 1.9 2.0 2.0
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 3.7 3.8 3.9 4.1 4.2
Building Operating Costs 2.8 2.9 3.0 3.1 3.1
Property Tax 1.8 1.8 1.9 2.0 2.0
Advertising/Media Marketing 3.7 3.8 3.9 4.1 4.2
Promotion: Food & Beverage $ 9.7
Other Players' Club 4.7
Bussing & Other 1.9
Total Promotion -------- 16.2 16.7 17.2 17.7 18.2
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.2
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.2 7.2 7.2 7.2 7.2
-------- -------- -------- -------- --------
Total Expenses $ 176.6 $ 181.7 $ 186.9 $ 192.3 $ 197.8
-------- -------- -------- -------- --------
Net Income from Slot Operations $ 9.6 $ 10.1 $ 10.6 $ 11.1 $ 11.7
Net Income / Food & Beverage (1) $ 4.3 $ 4.4 $ 4.7 $ 5.1 $ 5.8(1)
-------- -------- -------- -------- --------
Consolidated Net Income Before Tax $ 13.9 $ 14.5 $ 15.3 $ 16.3 $ 17.5
Corporate Income Taxes ($ 4.2) ($ 4.4) ($ 4.6) ($ 4.9) ($ 5.2)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 9.7 $ 10.2 $ 10.7 $ 11.4 $ 12.2
Add back: Depreciation (inc F&B) $ 7.6 $ 7.6 $ 7.6 $ 7.6 $ 7.6
Subtract: Capital Invested ($ 72.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) -------- -------- -------- -------- -------- --------
Result: Net Cash Flow ($ 72.6) $ 17.3 $ 17.8 $ 18.3 $ 19.0 $ 32.8
IRR = 12.4%
EBITDA: $ 21.5 $ 22.1 $ 22.9 $ 23.9 $ 25.1
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT C20: INCOME STATEMENTS FOR OTHER OPERATIONS
($ million, based on 2003 dollars)
FOOD & BEVERAGE YEAR 1
Total Food Sales ("comped" amount) $ 29.8 ($ 6.0)
Total Beverage Sales ("comped" amount) 17.4 (6.9)
-------- -------
Total Food & Beverage Revenues (Comps) $ 47.2 ($ 12.9)
Cost of Goods Sold $ 14.8
Direct Payroll 14.8
Payroll Taxes & Benefits 3.0
Other Operating Costs 8.3
Depreciation 0.6
--------
Total Food & Beverage Expenses $ 41.4
--------
Food & Beverage Net Income $ 5.7
7/24/03 CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B15/25: INCOME STATEMENT ($25 MILLION FEE / 25% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES:(1)
1,500 slots
Slot Win $340 win/slot/day $ 186.2 $ 191.7 $ 197.5 $ 203.4 $ 209.5
EXPENSES: 25.0%
Not retained by operator 75.0% $ 139.6 $ 143.8 $ 148.1 $ 152.6 $ 157.1
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 9.1 9.3 9.6 9.9 10.2
Payroll Taxes & Benefits 1.8 1.9 1.9 2.0 2.0
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 3.7 3.8 3.9 4.1 4.2
Building Operating Costs 2.8 2.9 3.0 3.1 3.1
Property Tax 1.8 1.8 1.9 2.0 2.0
Advertising/Media Marketing 3.7 3.8 3.9 4.1 4.2
Promotion: Food & Beverage $ 9.7
Other Players' Club 4.7
Bussing & Other 1.9
Total Promotion -------- 16.2 16.7 17.2 17.7 18.2
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.2
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.2 7.2 7.2 7.2 7.2
-------- -------- -------- -------- --------
Total Expenses $ 185.9 $ 191.2 $ 196.8 $ 202.5 $ 208.3
-------- -------- -------- -------- --------
Net Income from Slot Operations $ 0.3 $ 0.5 $ 0.7 $ 1.0 $ 1.2
Net Income / Food & Beverage (1) $ 4.3 $ 4.4 $ 4.7 $ 5.1 $ 5.8(1)
-------- -------- -------- -------- --------
Consolidated Net Income Before Tax $ 4.6 $ 4.9 $ 5.4 $ 6.1 $ 7.0
Corporate Income Taxes ($ 1.4) ($ 1.5) ($ 1.6) ($ 1.8) ($ 2.1)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 3.2 $ 3.5 $ 3.8 $ 4.3 $ 4.9
Add back: Depreciation (inc F&B) $ 7.6 $ 7.6 $ 7.6 $ 7.6 $ 7.6
Subtract: Capital Invested ($ 72.6) 0.0 0.0 0.0 13.0
(inc Terminal Value) ------- -------- -------- -------- -------- --------
Result: Net Cash Flow ($ 72.6) $ 10.8 $ 11.1 $ 11.4 $ 11.9 $ 25.5
IRR = -0.8%
EBITDA: $ 12.2 $ 12.5 $ 13.0 $ 13.7 $ 14.6
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B20/30: INCOME STATEMENT ($25 MILLION FEE / 30% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES: (1)
2,000 slots
Slot Win $340 win/slot/day $ 248.2 $ 255.6 $ 263.3 $ 271.2 $ 279.4
EXPENSES: 30.0%
Not retained by operator 70.0% $ 173.7 $ 179.0 $ 184.3 $ 189.9 $ 195.5
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 11.5 11.9 12.2 12.6 13.0
Payroll Taxes & Benefits 2.3 2.4 2.4 2.5 2.6
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 5.0 5.1 5.3 5.4 5.6
Building Operating Costs 3.7 3.8 3.9 4.1 4.2
Property Tax 1.9 2.0 2.1 2.1 2.2
Advertising/Media Marketing 5.0 5.1 5.3 5.4 5.6
Promotion: Food & Beverage $ 12.9
Other Players' Club 6.2
Bussing & Other 2.5
Total Promotion -------- 21.6 22.2 22.9 23.6 24.3
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.7
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.7 7.7 7.7 7.7 7.7
-------- -------- -------- -------- --------
Total Expenses $ 232.5 $ 239.2 $ 246.1 $ 253.3 $ 260.7
-------- -------- -------- -------- --------
Net Income from Slot Operations $ 15.7 $ 16.4 $ 17.2 $ 17.9 $ 18.7
Net Income / Food & Beverage (1) $ 5.7 $ 5.9 $ 6.3 $ 6.9 $ 7.7(1)
-------- -------- -------- -------- --------
Consolidated Net Income Before Tax $ 21.5 $ 22.4 $ 23.5 $ 24.8 $ 26.4
Corporate Income Taxes ($ 6.4) ($ 6.7) ($ 7.0) ($ 7.4) ($ 7.9)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 15.0 $ 15.7 $ 16.4 $ 17.3 $ 18.5
Add back: Depreciation (inc F&B) $ 8.3 $ 8.3 $ 8.3 $ 8.3 $ 8.3
Subtract: Capital Invested ($ 80.8) 0.0 0.0 0.0 13.0
(inc Terminal Value) -------- -------- -------- -------- -------- --------
Result: Net Cash Flow ($ 80.8) $ 23.3 $ 24.0 $ 24.7 $ 25.6 $ 39.8
IRR = 18.9%
EBITDA: $ 29.8 $ 30.7 $ 31.8 $ 33.1 $ 34.7
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITY Preliminary
EXHIBIT B20/25: INCOME STATEMENT ($25 MILLION FEE / 25% RETENTION)
($ million, based on 2003 dollars)
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
REVENUES: (1)
2,000 slots
Slot Win $340 win/slot/day $ 248.2 $ 255.6 $ 263.3 $ 271.2 $ 279.4
EXPENSES: 25.0%
Not retained by operator 75.0% $ 186.2 $ 191.7 $ 197.5 $ 203.4 $ 209.5
Other deductions (0%) 0.0 0.0 0.0 0.0 0.0
Direct Payroll 11.5 11.9 12.2 12.6 13.0
Payroll Taxes & Benefits 2.3 2.4 2.4 2.5 2.6
Slot Lease Payments 0.0 0.0 0.0 0.0 0.0
Other Slot Operating Costs 5.0 5.1 5.3 5.4 5.6
Building Operating Costs 3.7 3.8 3.9 4.1 4.2
Property Tax 1.9 2.0 2.1 2.1 2.2
Advertising/Media Marketing 5.0 5.1 5.3 5.4 5.6
Promotion: Food & Beverage $ 12.9
Other Players' Club 6.2
Bussing & Other 2.5
Total Promotion -------- 21.6 22.2 22.9 23.6 24.3
Depr'n &c: Slots (3 years) $ 0.0
Bldgs & Other (20/5 years) 2.7
Initial License Fee (5 years) 5.0
Total Dep'n & Amort'n -------- 7.7 7.7 7.7 7.7 7.7
-------- -------- -------- -------- --------
Total Expenses $ 244.9 $ 252.0 $ 259.3 $ 266.9 $ 274.6
-------- -------- -------- -------- --------
Net Income from Slot Operations $ 3.3 $ 3.7 $ 4.0 $ 4.4 $ 4.7
Net Income / Food & Beverage (1) $ 5.7 $ 5.9 $ 6.3 $ 6.9 $ 7.7(1)
-------- -------- -------- -------- --------
Consolidated Net Income Before Tax $ 9.1 $ 9.6 $ 10.3 $ 11.2 $ 12.4
Corporate Income Taxes ($ 2.7) ($ 2.9) ($ 3.1) ($ 3.4) ($ 3.7)
-------- -------- -------- -------- --------
Net Income After Corporate Taxes $ 6.4 $ 6.7 $ 7.2 $ 7.9 $ 8.7
Add back: Depreciation (inc F&B) $ 8.3 $ 8.3 $ 8.3 $ 8.3 $ 8.3
Subtract: Capital Invested ($ 80.8) 0.0 0.0 0.0 13.0
(inc Terminal Value) -------- -------- -------- -------- -------- --------
Result: Net Cash Flow ($ 80.8) $ 14.7 $ 15.0 $ 15.5 $ 16.2 $ 30.0
IRR = 3.8%
EBITDA: $ 17.4 $ 17.9 $ 18.6 $ 19.5 $ 20.7
(1) Food, beverage, and racing operations presented on a net basis; see Exhibit
C.
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITIES Preliminary
SENSITIVITY ANALYSIS: 1500 SLOTS, $340/DAY/SLOT, $25MN UP FRONT
D15 EBITDA ($MN), GIVEN RETENTION RATES AS FOLLOWS:
retention rate YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
35% $ 30.8 $ 31.7 $ 32.8 $ 34.0 $ 35.5
34% $ 28.9 $ 29.8 $ 30.8 $ 32.0 $ 33.5
33% $ 27.1 $ 27.9 $ 28.8 $ 30.0 $ 31.4
32% $ 25.2 $ 26.0 $ 26.9 $ 27.9 $ 29.3
31% $ 23.3 $ 24.0 $ 24.9 $ 25.9 $ 27.2
30% $ 21.5 $ 22.1 $ 22.9 $ 23.9 $ 25.1
29% $ 19.6 $ 20.2 $ 20.9 $ 21.8 $ 23.0
28% $ 17.8 $ 18.3 $ 19.0 $ 19.8 $ 20.9
27% $ 15.9 $ 16.4 $ 17.0 $ 17.8 $ 18.8
26% $ 14.0 $ 14.5 $ 15.0 $ 15.7 $ 16.7
25% $ 12.2 $ 12.5 $ 13.0 $ 13.7 $ 14.6
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES
PRO FORMA FINANCIAL STATEMENTS FOR MASS. TRACK SLOT FACILITIES Preliminary
SENSITIVITY ANALYSIS: 2000 SLOTS, $340/DAY/SLOT, $25MN UP FRONT
D20 EBITDA ($MN), GIVEN RETENTION RATES AS FOLLOWS:
retention rate YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
35% $ 42.2 $ 43.5 $ 44.9 $ 46.6 $ 48.7
34% $ 39.7 $ 40.9 $ 42.3 $ 43.9 $ 45.9
33% $ 37.2 $ 38.3 $ 39.7 $ 41.2 $ 43.1
32% $ 34.8 $ 35.8 $ 37.0 $ 38.5 $ 40.3
31% $ 32.3 $ 33.2 $ 34.4 $ 35.8 $ 37.5
30% $ 29.8 $ 30.7 $ 31.8 $ 33.1 $ 34.7
29% $ 27.3 $ 28.1 $ 29.1 $ 30.4 $ 31.9
28% $ 24.8 $ 25.6 $ 26.5 $ 27.7 $ 29.1
27% $ 22.3 $ 23.0 $ 23.9 $ 24.9 $ 26.3
26% $ 19.9 $ 20.4 $ 21.2 $ 22.2 $ 23.5
25% $ 17.4 $ 17.9 $ 18.6 $ 19.5 $ 20.7
7/24/03 CONFIDENTIAL TREATMENT CUMMINGS ASSOCIATES