Wednesday, August 5, 2009

Mohegan Gaming Authority Announces Quarterly Results

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The Mohegan Tribal Gaming Authority (MTGA) announced today a profit of $23.5 million for the three-month period of April through June.

Distributions to the Tribal government are not deducted from that profit figure. MTGA did not report the amount of distributions to the Tribe for the three-month period reported upon. According to MTGA's press release,"Distributions to the Tribe totaled $46.6 million and $60.1 million for the nine months ended June 30, 2009 and 2008, respectively. Distributions to the Tribe are anticipated to approximate between $65.0 million and $72.5 million for fiscal 2009."

A major difference between that three-month period and the same period last year is the amount of money the casino kept (hold) from customers playing table games. "Table games hold percentage for the quarter ended June 30, 2009 improved to 15.4% compared to an unusually low hold of 11.6% in the third quarter of fiscal 2008," according to an MTGA press release. MTGA also noted that a cost containment program has helped earnings.

Compared to the same three-month period last year, MTGA's gaming revenue decreased 3.1 percent, hotel revenue fell 22 percent and food and beverage revenue fell 12 percent.

The Tribe's racetrack-slot parlor in Pennsylvania seems to still be a drag on MTGA's overall earnings. For the three months of April through June, MTGA reported that the Pocono Downs' income from operations was $5.2 million. That figure does not take into account the interest expense on debt incurred in the purchase and expansion of the facility. The cost to buy and expand Pocono Downs is over $600 million, not taking into account the accumulated losses generated by the facility. After taking the interest expense into account, it is clear that the Pennsylvania racetrack-slot parlor is continuing to lose money.

The Tribe's debt was $1.63 billion as of June 30th, according to the press release. MTGA did not report the interest expense for the three-month period but reported that interest expense over the past nine months was $83.8 million for the nine months that ended on June 30th. Interest expense for that same nine month period last year was $63.2 milion, which was 33 percent lower than the most recent nine-month period even though the weighted average interest rate on the debt declined to 6.9 percent from 7.2 percent last year.

A complete income statement, which MTGA's press release was largely based on, and MTGA's balance sheet and cash flow statement is expected to be released to the public later this month.