Tuesday, August 7, 2007

Tribe issues quarterly earnings report

The Tribe issed its third quarter earnings report yesterday, reflecting a small increase in profits. The Tribe reported a quarterly profit of $45.7 million versus $42.9 million for the same quarter last year.

Two of Connecticut's newspapers have written articles yesterday on the Tribe's earnings report. The Hartford Courant's article "Profits decline at Mohegan Sun" and The Day newspaper's article "Mohegan's quarterly earnings up 16%" are clearly at odds.

The Day newspaper overstates the Tribe's earnings (profits) by about a factor of nine. The Day reports that earnings (profits) for the quarter increased 16% to $371 million. As stated earlier, the actual profits were actually $45.7 million.

In its earnings release, the Tribe made public the income statement of its gaming arm, the Mohegan Tribal Gaming Authority (MTGA). A more complete financial picture for the quarter will be known later in the month when MTGA files its balance sheet and statement of cash flows with the Securities and Exchange Commission.

The Tribe does not break out the profit for the Pocono Downs in its financial reporting, however the Tribe reports the "income from operations" for that facility, which doesn't take into account interest expense and certain other expenses. The income from operations for Pocono Downs for the quarter was reported at $6.5 million but when interest expense on the monies borrowed to purchase and build improvements are taken into account and the Pocono Downs' share of "corporate department" expenses ($3.2 million) and other expenses that are buried in the corporate financial statements expense line items (administrative and advertising, for instance), it's clear that the Pocono Downs is losing money.

In other recent financial news, tribal councilor Mark Brown reports to the membership that Pocono Downs is "very successful."