If last year is any indication, then the Mohegan Tribal Gaming Authority could release its fourth quarter results from operations as early as next week. The results from operations report is essentially a glimpse at profits, in this case the profits for the three-month period of July through September.
Last year, MTGA released the figures on November 20 but the release date this year could be different from last year's date. We have not confirmed the release date (the Feather News is considering an investment in a telephone in the upcoming year, which we are told is a useful tool in the reporting industry). The three-month period, which is MTGA's last quarter in the fiscal year that ended on September 30, is also expected to be the busiest quarter of the year given the seasonal nature of gambling in the Northeast.
Profits were slim over the summer months last year. The Feather News reported on November 20, 2009, " Profits (or net income) for the fourth quarter [of fiscal year 2009], which is the three-month period of July through September, was reported to be $66.4 million but this figure includes a one-time annual adjustment of $45.7 million that relates to estimated payouts to the casino's former management company, Trading Cove Associates. Had the one-time annual adjustment of $45.7 million not been included, then profits would have been $20.7 million for what is by far the busiest three-month period in MTGA's seasonal calendar. Note that distributions to the tribal government are not deducted from the profit figure."
Basically what that means is that even though MTGA pays out money to Trading Cove Associates, the manner in which the accounting is done allowed MTGA to treat the transaction as adding to profits. In a nutshell, during the fourth quarter of every fiscal year, the accountants estimate what the total remaining payout to Trading Cove will be up until the contract ends on December 31, 2014 (which is recorded as a liability on the balance sheet) and since the payouts over that entire period were estimated to be lower than previous estimates, they take that difference and it goes to the fourth quarter's bottom line.
And, poof, a bad year looks much better on paper. It is impossible to understand MTGA's financial statements without a clear understanding of the accounting treatment of the Trading Cove contract.
In 2001, when the expansion first opened, MTGA had a bad year and the accounting treatment of the Trading Cove contract added to profits in that year also even though MTGA paid money out to Trading Cove. But the closer MTGA gets to that 2014 contract end date, the smaller the adjustments will be to the estimated remaing Tracing Cove payout.
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