Thursday, April 30, 2009

Flash: Mohegan Gaming Authority Issues Second Quarter Profit Report Today

By Ken Davison
Feather News

The Mohegan Tribal Gaming Authority (MTGA) today announced a profit of $33.2 million for the second quarter, which covers the three-month period of January 1, 2009 through March 31, 2009. This profit, or net income, represents less than 1 percent decline over the profits reported in the same period last year.

In February, MTGA reported a $3.8 million loss for the first quarter, which was for the three-month period of October 1, 2008 through December 31, 2008. MTGA operates on a fiscal year basis, which begins on October 1st of each year. Today's announcement by MTGA was for the second quarter of January through March.

Included in the second quarter profit of $33.2 million is a gain of $8.5 million on the early extinguishment of debt, which resulted from paying down $14.3 million of bonds due in 2011 at a favorable rate. Distributions that MTGA pays the Mohegan Tribal government are not subtracted from MTGA profits.

Steep revenue declines at Mohegan Sun in the second quarter were partially offset by a decrease in operating expenses.

Combined gaming revenues at Mohegan Sun and Pocono Downs were down 9.5 percent compared to the same three-month period last year. Gaming revenues at Mohegan Sun alone were down about 15 percent. Hotel revenues were down 24 percent, food and beverage sales were down almost 20 percent and retail and entertainment revenues were down about 27 percent.

Combined operating expenses decreased by 11 percent over the same period last year.

When taking interest expense into account, Pocono Downs continued to lose money. The Pennsylvania facility registered income from operations of about $3.5 million, a slight increase over the $3.2 million in the second quarter of 2007. Interest expense is not deducted from the income from operations figure. After deducting interest expense, Pocono Downs is estimated to have lost about $5 million for the three-month period, despite a 30 percent increase in its gaming revenues due to the doubling of slot machines in the expansion that opened last July.

MTGA's total debt was approximately $1.6 billion as of March 31 and the weighted average interest rate was 6.9 percent.