Mohegan Tribal Gaming Authority Announces First Quarter Fiscal 2017 Operating Results

News provided by

Mohegan Tribal Gaming Authority

Feb 01, 2017, 06:30 ET

UNCASVILLE, Conn., Feb. 1, 2017 /PRNewswire/ -- The Mohegan Tribal Gaming Authority, or the Authority, the owner and operator of Mohegan Sun in Uncasville, Connecticut, and Mohegan Sun Pocono in Wilkes-Barre, Pennsylvania, announced today the operating results for its first fiscal quarter ended December 31, 2016.

"We were encouraged by the strong gaming and non-gaming volumes underlying our business fundamentals at our flagship property Mohegan Sun during the quarter, which were driven by the opening of the new Earth Hotel tower and the property's 20th anniversary celebration," said Robert J. Soper, President and Chief Executive Officer of the Authority. "Mohegan Sun's profitability in the quarter was impacted by lower than expected table game hold percentage, but after adjusting for this, profit would have grown year-over-year. Looking forward, table game hold percentage has reverted to normal, business volumes look solid and we are only months away from the grand opening of ilani Casino Resort outside of Portland, Oregon."

Consolidated operating results for the first quarter ended December 31, 2016 (unaudited):

  • Net revenues of $331.0 million, relatively flat compared to the first quarter of fiscal 2016
  • Gaming revenues of $285.1 million, a 2.5% decrease from the first quarter of fiscal 2016
  • Gross slot revenues of $197.8 million, relatively flat compared to the first quarter of fiscal 2016
  • Table game revenues of $87.8 million, a 6.0% decrease from the first quarter of fiscal 2016
  • Non-gaming revenues of $72.2 million, an 11.4% increase over the first quarter of fiscal 2016
  • Adjusted EBITDA, a non-GAAP measure described below, of $69.1 million, a 17.3% decrease from the first quarter of fiscal 2016
  • Income from operations of $49.4 million, a 29.5% decrease from the first quarter of fiscal 2016
  • Net loss attributable to the Authority of $51.6 million compared to net income attributable to the Authority of $31.9 million in the first quarter of fiscal 2016

Lower than expected table game revenues driven by lower table game hold percentage in Connecticut was the primary contributor to the year-over-year declines in Adjusted EBITDA and income from operations. Decreased slot revenues at Mohegan Sun Pocono, along with higher Corporate expenses, also contributed to the year-over-year declines in Adjusted EBITDA and income from operations. These results were partially offset by higher non-gaming revenues in both Connecticut and Pennsylvania. Net loss attributable to the Authority resulted from a $73.8 million loss on modification and early extinguishment of debt in connection with our October 2016 refinancing transactions, combined with the decline in income from operations.

Mohegan Sun

Operating results (in thousands, unaudited):

For the Three Months Ended  

December 31,

December 31,


Percentage

2016

2015

Variance

 Variance








Adjusted EBITDA

$

65,174

$

75,096

$

(9,922)

(13.2%)

Income from operations

$

49,349

$

59,054

$

(9,705)

(16.4%)

Operating costs and expenses

$

209,854

$

196,029

$

13,825

7.1%

Net revenues

$

259,203

$

255,083

$

4,120

1.6%

Gaming revenues

$

222,180

$

224,570

$

(2,390)

(1.1%)

Non-gaming revenues

$

58,084

$

49,147

$

8,937

18.2%

Despite strong gaming and non-gaming volumes, Mohegan Sun experienced declines in Adjusted EBITDA and income from operations primarily resulting from lower table game revenues driven by a significant decrease in year-over-year hold percentage. Table game hold at Mohegan Sun decreased 280 basis points to 15.0% for the quarter ended December 31, 2016 from 17.8% in the first quarter of fiscal 2016. We estimate that the decline in year-over-year table game hold percentage negatively impacted table game revenues by approximately $14.0 million. Operating results for the quarter also reflected higher entertainment and other promotional expenses associated with Mohegan Sun's 20th anniversary festivities during the month of October 2016, though these results were partially offset by higher slot and non-gaming revenues driven by strong overall business activity. Business volumes during the quarter also benefited from additional hotel room capacity following the opening of our new 400-room Earth Hotel on November 10, 2016. Adjusted EBITDA margin declined to 25.1% for the quarter ended December 31, 2016 from 29.4% in the first quarter of fiscal 2016.

Selected gaming data (in thousands, except where noted, unaudited):

For the Three Months Ended 

December 31,

December 31,


Percentage

2016

2015

Variance

 Variance








Slots:






  Handle

$

1,795,730

$

1,765,802

$

29,928

1.7%

  Gross revenues 

$

148,181

$

142,947

$

5,234

3.7%

  Net revenues 

$

141,935

$

138,402

$

3,533

2.6%

  Free promotional slot plays (1)

$

14,566

$

14,760

$

(194)

(1.3%)

  Weighted average number of machines (in units)

5,096

5,146

(50)

(1.0%)

  Hold percentage (gross)

8.3%

8.1%

0.2%

2.5%

  Win per unit per day (gross) (in dollars)

$

316

$

302

$

14

4.6%








Table games:






  Drop

$

515,285

$

464,860

$

50,425

10.8%

  Revenues

$

77,198

$

82,820

$

(5,622)

(6.8%)

  Weighted average number of games (in units)

273

267

6

2.2%

  Hold percentage (2)

15.0%

17.8%

(2.8%)

(15.7%)

  Win per unit per day (in dollars)

$

3,072

$

3,370

$

(298)

(8.8%)








Poker:






  Revenues 

$

2,167

$

2,417

$

(250)

(10.3%)

  Weighted average number of tables (in units)

42

42

-

-

  Revenue per unit per day (in dollars)

$

561

$

625

$

(64)

(10.2%)

___________________________________________






(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.

(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods. 

Non-gaming data (in thousands, except where noted, unaudited):


For the Three Months Ended  

December 31,

December 31,


Percentage

2016

2015

Variance

 Variance








Food and beverage:






  Revenues

$

16,123

$

14,994

$

1,129

7.5%

  Meals served

696

651

45

6.9%

  Average price per meal served (in dollars)

$

16.36

$

16.54

$

(0.18)

(1.1%)








Hotel (1):






  Revenues

$

13,342

$

10,981

$

2,361

21.5%

  Rooms occupied

122

106

16

15.1%

  Occupancy rate

96.4%

98.2%

(1.8%)

(1.8%)

  Average daily room rate (in dollars)

$

105

$

96

$

9

9.4%

  Revenue per available room (in dollars)

$

102

$

94

$

8

8.5%








Retail, entertainment and other:






  Revenues

$

28,619

$

23,172

$

5,447

23.5%

  Arena events (in events)

30

26

4

15.4%

  Arena tickets 

209

150

59

39.3%

  Average price per Arena ticket (in dollars)

$

58.70

$

49.94

$

8.76

17.5%

___________________________________________






(1) The new 400-room Earth Hotel opened on November 10, 2016.




Mohegan Sun Pocono

Operating results (in thousands, unaudited):

For the Three Months Ended  

December 31,

December 31,


Percentage

2016 (1)

2015

Variance

 Variance








Adjusted EBITDA 

$

10,959

$

12,046

$

(1,087)

(9.0%)

Income from operations

$

7,910

$

9,006

$

(1,096)

(12.2%)

Operating costs and expenses

$

60,508

$

64,018

$

(3,510)

(5.5%)

Net revenues

$

68,418

$

73,024

$

(4,606)

(6.3%)

Gaming revenues

$

62,895

$

67,827

$

(4,932)

(7.3%)

Non-gaming revenues

$

10,721

$

10,574

$

147

1.4%

___________________________________________






(1) Includes the operations of Downs Lodging, LLC, which was merged out of existence into Mohegan Sun Pocono.

The declines in Adjusted EBITDA and income from operations primarily resulted from a decrease in slot revenues driven by lower year-over-year slot volumes and hold percentage. The reduction in operating costs and expenses primarily reflected lower slot taxes commensurate with the decline in slot revenues. Adjusted EBITDA margin decreased slightly to 16.0% for the quarter ended December 31, 2016 from 16.5% in the first quarter of fiscal 2016.

Selected gaming data (in thousands, except where noted, unaudited):   

For the Three Months Ended  

December 31,

December 31,


Percentage

2016

2015

Variance

 Variance








Slots:






  Handle

$

617,579

$

666,840

$

(49,261)

(7.4%)

  Gross revenues

$

49,645

$

54,554

$

(4,909)

(9.0%)

  Net revenues

$

49,636

$

54,460

$

(4,824)

(8.9%)

  Free promotional slot plays (1)

$

10,600

$

11,659

$

(1,059)

(9.1%)

  Weighted average number of machines (in units)

2,244

2,329

(85)

(3.6%)

  Hold percentage (gross)

8.0%

8.2%

(0.2%)

(2.4%)

  Win per unit per day (gross) (in dollars)

$

240

$

254

$

(14)

(5.5%)








Table games:







  Drop

$

51,245

$

55,969

$

(4,724)

(8.4%)

  Revenues

$

10,564

$

10,509

$

55

0.5%

  Weighted average number of games (in units)

73

73

-

-

  Hold percentage (2)

20.6%

18.8%

1.8%

9.6%

  Win per unit per day (in dollars)

$

1,573

$

1,566

$

7

0.4%








Poker:







  Revenues 

$

678

$

725

$

(47)

(6.5%)

  Weighted average number of tables (in units)

18

18

-

-

  Revenue per unit per day (in dollars)

$

409

$

438

$

(29)

(6.6%)

___________________________________________






(1) Free promotional slot plays are included in slot handle, but not reflected in slot revenues.

(2) Table game hold percentage is relatively predictable over longer periods of time, but can significantly fluctuate over shorter periods. 

Non-gaming revenues (in thousands, except where noted, unaudited):


For the Three Months Ended  

December 31,

December 31,


Percentage

2016

2015

Variance

 Variance








Food and beverage:






  Revenues

$

6,933

$

7,023

$

(90)

(1.3%)

  Meals served

144

158

(14)

(8.9%)

  Average price per meal served (in dollars)

$

22.50

$

19.78

$

2.72

13.8%








Hotel:






  Revenues

$

1,361

$

1,356

$

5

0.4%

  Rooms occupied

20

21

(1)

(4.8%)

  Occupancy rate

92.5%

96.0%

(3.5%)

(3.6%)

  Average daily room rate (in dollars)

$

64

$

60

$

4

6.7%

  Revenue per available room (in dollars)

$

59

$

58

$

1

1.7%








Retail, entertainment and other:   






  Revenues

$

2,427

$

2,195

$

232

10.6%

Corporate

Operating results (in thousands, unaudited):

For the Three Months Ended  

December 31,

December 31,


Percentage

2016 (1)

2015

Variance

 Variance








Adjusted EBITDA 

$

(6,990)

$

(3,497)

$

(3,493)

(99.9%)

Income (loss) from operations

$

(7,839)

$

2,016

$

(9,855)

N.M.

Operating costs and expenses

$

11,270

$

4,336

$

6,934

159.9%

Net revenues

$

3,431

$

6,352

$

(2,921)

(46.0%)

___________________________________________






(1) Excludes the operations of Downs Lodging, LLC, which was merged out of existence into Mohegan Sun Pocono.

      N.M. - Not Meaningful.

The year-over-year declines in Adjusted EBITDA and income from operations were principally driven by several one-time benefits in the prior year quarter, including a reduction in the reserve against reimbursable costs and expenses advanced by us to the Cowlitz Project and a one-time "catch up" on development fees earned on the Cowlitz Project, both of which were recorded in the first quarter of fiscal 2016 following the completion of the project's financing.

Mohegan Tribal Gaming Authority Property Information

Net Revenues

Income (Loss) from Operations

Adjusted EBITDA

(in thousands, unaudited)

      For the Three Months Ended

For the Three Months Ended

For the Three Months Ended



December 31,

December 31,

December 31,

December 31,

December 31,

December 31,



2016

2015

2016

2015

2016

2015

Mohegan Sun

$         259,203

$        255,083

$           49,349

$           59,054

$           65,174

$           75,096

Mohegan Sun Pocono

68,418

73,024

7,910

9,006

10,959

12,046

Corporate

3,431

6,352

(7,839)

2,016

(6,990)

(3,497)

Inter-segment revenues

(60)

(1,273)

-

-

-

-

Total

$         330,992

$        333,186

$           49,420

$           70,076

$           69,143

$           83,645














Other Information

October 2016 Refinancing Transactions
On October 14, 2016, the Authority completed a comprehensive refinancing of its outstanding indebtedness, including the repayment, repurchase and redemption of its then existing senior secured credit facilities, 2013 senior unsecured notes, 2015 senior unsecured notes and 2012 senior subordinated notes, with proceeds from a new $170.0 million senior secured revolving credit facility, a new $445.0 million senior secured term loan A facility, a new $785.0 million senior secured term loan B facility and $500.0 million in new senior notes. The Authority incurred a $73.8 million loss on modification and early extinguishment of debt in connection with these refinancing transactions. The Authority estimates that these refinancing transactions will yield annualized interest savings totaling approximately $16.5 million.

Liquidity
As of December 31, 2016, the Authority held cash and cash equivalents of $­114.7 million compared to $83.7 million as of September 30, 2016. As of December 31, 2016, $99.0 million was drawn on the Authority's $170.0 million revolving credit facility, while no amounts were drawn on the Authority's $25.0 million line of credit. As of December 31, 2016, letters of credit issued under the revolving credit facility totaled $2.5 million, of which no amounts were drawn. Inclusive of letters of credit, which reduce borrowing availability under the revolving credit facility, the Authority had approximately $68.5 million of borrowing capacity under its revolving credit facility and line of credit as of December 31, 2016.

Interest Expense
Interest expense decreased by $4.1 million, or 12.0%, to $30.0 million for the quarter ended December 31, 2016 compared to $34.1 million in the first quarter of fiscal 2016. The reduction in interest expense was attributable to lower weighted average interest rate driven by the Authority's October 2016 refinancing transactions. Weighted average interest rate was 6.7% for the quarter ended December 31, 2016 compared to 7.8% in the first quarter of fiscal 2016. Weighted average outstanding debt was $1.79 billion for the quarter ended December 31, 2016 compared to $1.75 billion in the first quarter of fiscal 2016.

Capital Expenditures
The following table presents data related to capital expenditures (in millions):


Capital Expenditures

Three Months Ended

Remaining Forecasted

Forecasted

December 31, 2016

Fiscal Year 2017

Fiscal Year 2017






Mohegan Sun:




    Maintenance

$

6.1

$

28.9

$

35.0

    Development

0.8

0.1

0.9

           Subtotal

6.9

29.0

35.9

Mohegan Sun Pocono:







    Maintenance

1.3

6.0

7.3

    Development

(0.1)

0.8

0.7

           Subtotal

1.2

6.8

8.0

Corporate:






    Maintenance

-

0.2

0.2

    Development

-

0.7

0.7

    Other

2.5

-

-

           Subtotal

2.5

0.9

0.9

           Total

$

10.6

$

36.7

$

44.8









Distributions to the Tribe
Distributions to the Tribe totaled $12.0 million for the quarter ended December 31, 2016 compared to $10.6 million in the first quarter of fiscal 2016. Distributions to the Tribe are anticipated to total $60.0 million for fiscal 2017.

Conference Call
The Authority will host a conference call and simultaneous webcast regarding its first quarter fiscal 2017 operating results on Wednesday, February 1, 2017 at 11:00 a.m. (Eastern Standard Time).

Those interested in participating in the call should dial as follows:

­­­­­­­­­­­­­­(877) 756-4274
(706) 643-0107 (International)

Conference ID: 85028366

Please call five minutes in advance to ensure that you are connected prior to the initiation of the call. Questions and answers will be reserved for call-in analysts and investors.

Parties who want to listen to the live conference call on the Internet may do so through a web link on the Authority's website at www.mtga.com, under the "Investor Relations/Financial News" section. Interested parties also may listen to a taped replay of the entire conference call commencing two hours after the call's completion on Wednesday, February 1, 2017. This replay will run through February 15, 2017. 

The access number for a taped replay of the conference call is as follows:

(855) 859-2056
(404) 537-3406 (International)

Conference ID: 85028366

A transcript will be available on the Authority's website for a period of 90 days following the conference call.

About the Authority
The Authority is an instrumentality of the Mohegan Tribe of Indians of Connecticut, or the Tribe, a federally-recognized Indian tribe with an approximately 595-acre reservation situated in southeastern Connecticut, adjacent to Uncasville, Connecticut. The Authority has been granted the exclusive authority to conduct and regulate gaming activities on the existing reservation of the Tribe, including the operation of Mohegan Sun, a gaming and entertainment complex located on an approximately 185-acre site on the Tribe's reservation. Through its subsidiary, Downs Racing, L.P., the Authority also owns and operates Mohegan Sun Pocono, a gaming and entertainment facility located on an approximately 400-acre site in Plains Township, Pennsylvania, and several off-track wagering facilities located elsewhere in Pennsylvania.

The Tribe's gaming operation at Mohegan Sun is one of only two legally authorized gaming operations in southern New England offering traditional slot machines and table games. Mohegan Sun currently operates in an approximately 3.1 million square-foot facility, which includes Casino of the Earth, Casino of the Sky, Casino of the Wind, 100,000 square feet of retail space, including The Shops at Mohegan Sun, a 10,000-seat Mohegan Sun Arena, a 350-seat Cabaret Theatre, 100,000 square feet of meeting and convention space, the 1,200-room luxury Sky Hotel Tower and the 400-room Earth Hotel Tower. Mohegan Sun Pocono operates in an approximately 400,000 square-foot facility, offering traditional slot machines and table games, live harness racing and simulcast and off-track wagering, a 238-room hotel, 20,000 square feet of meeting and convention space, several dining and retail options and a bus passenger lounge. More information about the Authority and its properties can be obtained by visiting www.mohegansun.com, www.mohegansunpocono.com or www.mtga.com.

Special Note Regarding Forward-Looking Statements

Some information included in this press release may contain forward-looking statements, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements can sometimes be identified by the use of forward-looking words such as "may," "will," "anticipate," "estimate," "expect" or "intend" and similar expressions. Such forward-looking information may involve important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ materially from those expressed in any forward-looking statements made by or on behalf of the Authority. Information concerning potential factors that could affect the Authority's financial results is included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2016, as well as in the Authority's other reports and filings with the Securities and Exchange Commission. Any forward-looking statements included in this press release are made only as of the date of this release. The Authority does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. The Authority cannot assure that projected results or events will be achieved or will occur.

MOHEGAN TRIBAL GAMING AUTHORITY

CONSOLIDATED STATEMENTS OF INCOME (LOSS) 

(in thousands)

(unaudited)



For the

For the


Three Months Ended

Three Months Ended


December 31, 2016

December 31, 2015

Revenues:



   Gaming

$                      285,075

$                   292,397

   Food and beverage

23,056

22,017

   Hotel

14,703

12,337

   Retail, entertainment and other 

34,465

30,469

   Gross revenues

357,299

357,220

   Less - Promotional allowances

(26,307)

(24,034)

Net revenues

330,992

333,186

Operating costs and expenses:



   Gaming 

169,382

166,993

   Food and beverage 

10,329

10,324

   Hotel

6,203

3,816

   Retail, entertainment and other

15,387

9,489

   Advertising, general and administrative

50,396

49,376

   Corporate 

11,188

4,012

   Depreciation and amortization

18,212

19,128

   (Gain) loss on disposition of assets

20

(28)

   Pre-opening

455

-

Total operating costs and expenses

281,572

263,110

Income from operations

49,420

70,076

Other income (expense):



   Interest income

2,900

2,130

   Interest expense

(30,035)

(34,147)

   Loss on modification and early extinguishment of debt

(73,796)

(207)

   Loss from unconsolidated affiliates

(731)

(393)

   Other income (expense), net

1

(9)

Total other expense

(101,661)

(32,626)

Net income (loss) 

(52,241)

37,450

(Income) loss attributable to non-controlling interests

619

(5,531)

Net income (loss) attributable to Mohegan Tribal Gaming Authority

$                       (51,622)

$                     31,919

MOHEGAN TRIBAL GAMING AUTHORITY

CONSOLIDATED SELECTED FINANCIAL INFORMATION

(in thousands)

(unaudited)













For the Three Months Ended





December 31,

December 31,





2016

2015

Operating Results:





   Gross revenues

$

357,299

$

357,220

   Net revenues

$

330,992

$

333,186

   Income from operations


$

49,420

$

70,076









Other Data:





   Adjusted EBITDA

$

69,143

$

83,645

   Capital expenditures

$

10,647

$

7,547

   Cash interest paid

$

10,244

$

21,177

   Distributions to the Tribe

$

12,000

$

10,600





























December 31,

September 30,

Balance Sheet Data:

2016

2016

   Cash and cash equivalents

$

114,746

$

83,743

   Capital leases

$

-

$

1,521

   Long-term debt, including current portion

$

1,771,553

$

1,685,167








MOHEGAN SUN

SUPPLEMENTAL DATA 

(unaudited)













For the Three Months Ended





December 31,

December 31,





2016

2015

Operating results:





   Gross revenues (in thousands)

$

280,264

$

273,717

   Net revenues (in thousands)

$

259,203

$

255,083

   Income from operations (in thousands)

$

49,349

$

59,054

   Operating margin


19.0%

23.2%









Adjusted EBITDA:





   Adjusted EBITDA (in thousands)

$

65,174

$

75,096

   Adjusted EBITDA margin

25.1%

29.4%









Capital expenditures (in thousands)

$

6,894

$

6,086









Weighted average number of units:




   Slot machines


5,096

5,146

   Table games


273

267

   Poker tables


42

42

Win per unit per day:





   Slot machines (gross)

$

316

$

302

   Table games

$

3,072

$

3,370

   Poker tables

$

561

$

625









Hold percentage:





   Slot machines (gross)


8.3%

8.1%

   Table games


15.0%

17.8%









Food and beverage statistics:




   Meals served (in thousands)

696

651

   Average price per meal served 

$

16.36

$

16.54









Hotel statistics:





   Rooms occupied (in thousands)

122

106

   Occupancy rate


96.4%

98.2%

   Average daily room rate

$

105

$

96

   Revenue per available room

$

102

$

94









Entertainment statistics:





   Arena events (in events)

30

26

   Arena tickets (in thousands)

209

150

   Average price per Arena ticket

$

58.70

$

49.95

MOHEGAN SUN POCONO

SUPPLEMENTAL DATA

(unaudited)















For the Three Months Ended






December 31,

December 31,






2016

2015

Operating results:






   Gross revenues (in thousands)


$

73,616

$

78,401

   Net revenues (in thousands)


$

68,418

$

73,024

   Income from operations (in thousands)


$

7,910

$

9,006

   Operating margin



11.6%

12.3%










Adjusted EBITDA:






   Adjusted EBITDA (in thousands)


$

10,959

$

12,046

   Adjusted EBITDA margin



16.0%

16.5%










Capital expenditures (in thousands)


$

1,255

$

1,374










Weighted average number of units:






   Slot machines



2,244

2,329

   Table games



73

73

   Poker tables



18

18










Win per unit per day:






   Slot machines (gross)


$

240

$

254

   Table games


$

1,573

$

1,566

   Poker tables


$

409

$

438










Hold percentage:






   Slot machines (gross)



8.0%

8.2%

   Table games



20.6%

18.8%










Food and beverage statistics:






   Meals served (in thousands)



144

158

   Average price per meal served 


$

22.50

$

19.78










Hotel statistics:






   Rooms occupied (in thousands)



20

21

   Occupancy rate



92.5%

96.0%

   Average daily room rate


$

64

$

60

   Revenue per available room


$

59

$

58


CORPORATE

SUPPLEMENTAL DATA

(unaudited)















For the Three Months Ended






December 31,

December 31,






2016

2015

Operating results:






   Gross revenues (in thousands)


$

3,479

$

6,375

   Net revenues (in thousands)


$

3,431

$

6,352

   Income (loss) from operations (in thousands)


$

(7,839)

$

2,016










Adjusted EBITDA (in thousands)


$

(6,990)

$

(3,497)










Capital expenditures (in thousands)


$

2,498

$

87

MOHEGAN TRIBAL GAMING AUTHORITY

ADJUSTED EBITDA RECONCILIATIONS

(unaudited)











Reconciliations of Net Income (Loss) to Adjusted EBITDA:













Reconciliations of net income (loss), a financial measure determined in accordance with accounting principles generally 

accepted in the United States of America, or GAAP, to Adjusted EBITDA are shown below (in thousands):


























For the Three Months Ended






December 31,

December 31,






2016

2015











Net income (loss)


$            (52,241)

$            37,450

Other (income) expense, net



(1)

9

Loss from unconsolidated affiliates


731

393

Loss on modification and early extinguishment of debt


73,796

207

Interest expense


30,035

34,147

Interest income


(2,900)

(2,130)

Income from operations


49,420

70,076

Adjusted EBITDA attributable to non-controlling interests


1,036

(5,531)

Pre-opening


455

-

(Gain) loss on disposition of assets


20

(28)

Depreciation and amortization



18,212

19,128

Adjusted EBITDA


$              69,143

$            83,645










Reconciliations of Income (Loss) from Operations to Adjusted EBITDA (unaudited):














Reconciliations of income (loss) from operations, a financial measure determined in accordance with GAAP, to Adjusted EBITDA, are shown below (in thousands):

















For the Three Months Ended December 31, 2016











Adjusted EBITDA 




Income (Loss)

Depreciation

(Gain) Loss 


Attributable to 




from

and 

on Disposition of


Non-controlling

Adjusted 



Operations

Amortization

Assets

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$           49,349

$            15,141

$                  20

$                  455

$                            209

$          65,174

Mohegan Sun Pocono 

7,910

3,049

-

-

-

10,959

Corporate

(7,839)

22

-

-

827

(6,990)

Total

$           49,420

$            18,212

$                  20

$                  455

$                         1,036

$          69,143

















For the Three Months Ended December 31, 2015











Adjusted EBITDA 




Income (Loss)

Depreciation

(Gain) Loss 


Attributable to 




from

and 

on Disposition of


Non-controlling

Adjusted 



Operations

Amortization

Assets

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$           59,054

$            15,835

$                (39)

$                     -

$                            246

$          75,096

Mohegan Sun Pocono

9,006

3,029

11

-

-

12,046

Corporate

2,016

264

-

-

(5,777)

(3,497)

Total

$           70,076

$            19,128

$                (28)

$                     -

$                       (5,531)

$          83,645

Adjusted EBITDA Explanation:
Net income before interest, income taxes, depreciation and amortization, or EBITDA, is a commonly used measure of performance in the casino and hospitality industry. EBITDA is not a measure of performance calculated in accordance with GAAP. The Authority historically has evaluated its operating performance with the non-GAAP measure, Adjusted EBITDA, which as used in this press release, represents net income (loss) before interest, depreciation and amortization, gain or loss on disposition of assets, pre-opening costs and expenses, loss on modification and early extinguishment of debt, loss from unconsolidated affiliates, other non-operating income and expense and Adjusted EBITDA attributable to non-controlling interests.

Adjusted EBITDA provides an additional way to evaluate the Authority's operations and, when viewed with both the Authority's GAAP results and the reconciliations provided, the Authority believes that it provides a more complete understanding of its business than could be otherwise obtained absent this disclosure. Adjusted EBITDA is presented solely as a supplemental disclosure because: (1) the Authority believes it enhances an overall understanding of the Authority's past and current financial performance; (2) the Authority believes it is a useful tool for investors to assess the operating performance of the business in comparison to other operators within the casino and hospitality industry since Adjusted EBITDA excludes certain items that may not be indicative of the Authority's operating results; (3) measures that are comparable to Adjusted EBITDA are often used as an important basis for the valuation of casino and hospitality companies; and (4) the Authority uses Adjusted EBITDA internally to evaluate the performance of its operating personnel and management and as a benchmark to evaluate its operating performance in comparison to its competitors.

The use of Adjusted EBITDA has certain limitations. Adjusted EBITDA should be considered in addition to, not as a substitute for or superior to, any GAAP financial measure including net income (as an indicator of the Authority's performance) or cash flows provided by operating activities (as an indicator of the Authority's liquidity), nor should it be considered as an indicator of the Authority's overall financial performance. The Authority's calculation of Adjusted EBITDA is likely to be different from the calculation of Adjusted EBITDA or other similarly titled measurements used by other casino and hospitality companies, and therefore, comparability may be limited. Adjusted EBITDA eliminates certain items from net income, such as interest and depreciation and amortization. Each of these items has been incurred in the past, will continue to be incurred in the future and should be considered in the overall evaluation of the Authority's results. The Authority compensates for these limitations by providing relevant disclosures of items excluded in the calculation of Adjusted EBITDA, both in its reconciliations to the GAAP financial measure of net income and in its consolidated financial statements, all of which should be considered when evaluating its results. The Authority strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

Contacts:
Robert J. Soper
President and Chief Executive Officer
Mohegan Tribal Gaming Authority
(860) 862-8000

Mario C. Kontomerkos
Chief Financial Officer
Mohegan Tribal Gaming Authority
(860) 862-8000

SOURCE Mohegan Tribal Gaming Authority

Related Links

http://www.mtga.com

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