Mohegan Gaming & Entertainment Announces Second Quarter Fiscal 2018 Operating Results

News provided by

Mohegan Gaming & Entertainment

May 03, 2018, 07:30 ET

UNCASVILLE, Conn., May 3, 2018 /PRNewswire/ -- Mohegan Gaming & Entertainment, or MGE, 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 second fiscal quarter ended March 31, 2018.

"We are pleased with our fiscal second quarter revenues and earnings performance, as our properties performed admirably despite a combination of challenging comparisons, the imposition of additional gaming taxes in Pennsylvania and several weather disruptions at all of our Northeastern properties in the quarter," said Mario Kontomerkos, Chief Executive Officer of MGE. "Also during the quarter, we reached an amicable agreement to purchase our South Korean partner's stake in Project Inspire, thereby bringing MGE's ownership in the project to 100% and furthering our diversification efforts in Asia, the world's fastest-growing major gaming and entertainment market. Here in Connecticut, we look forward to the addition of the Mohegan Sun Exposition and Convention Center, slated to open this summer, which will continue to position Mohegan Sun as the premier gaming and entertainment destination in the Northeast for years to come."

Consolidated operating results for the second quarter ended March 31, 2018 (unaudited):

  • Net revenues of $332.0 million, a 1.4% decrease from the second quarter of fiscal 2017
  • Gaming revenues of $288.7 million, a 1.7% decrease from the second quarter of fiscal 2017
  • Gross slot revenues of $197.6 million, relatively flat compared to the second quarter of fiscal 2017
  • Table game revenues of $92.3 million, a 2.5% decrease from the second quarter of fiscal 2017
  • Non-gaming revenues of $66.0 million, relatively flat compared to the second quarter of fiscal 2017
  • Income from operations of $56.1 million, a 5.6% decrease from the second quarter of fiscal 2017
  • Net income attributable to MGE of $28.6 million, a 9.1% decrease from the second quarter of fiscal 2017
  • Adjusted EBITDA, a non-GAAP measure described below, of $79.9 million, a 6.3% decrease from the second quarter of fiscal 2017

Lower gaming revenues at both Mohegan Sun and Mohegan Sun Pocono were driven principally by a combination of lower overall hold and more difficult hold comparisons to the prior period. Collectively, these were the primary contributors to the year-over-year declines in Adjusted EBITDA, net income attributable to MGE and income from operations. Results at Mohegan Sun Pocono were also negatively impacted by an increase in slot taxes assessed by the Commonwealth of Pennsylvania.

Mohegan Sun

Operating results (in thousands, unaudited):  










For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Adjusted EBITDA

$                 77,746

$           81,988

$        (4,242)

(5.2%)

Income from operations

$                 57,779

$           66,485

$        (8,706)

(13.1%)

Operating costs and expenses

$               202,575

$         198,509

$          4,066

2.0%

Net revenues

$               260,354

$         264,994

$        (4,640)

(1.8%)

Gaming revenues

$               226,131

$         229,912

$        (3,781)

(1.6%)

Non-gaming revenues

$                 52,714

$           53,467

$           (753)

(1.4%)








Despite strong overall gaming volumes, Mohegan Sun experienced declines in Adjusted EBITDA and income from operations primarily due to lower gaming revenues resulting from decreases in year-over-year hold percentages for both slots and table games. The declines in Adjusted EBITDA and income from operations also reflected higher medical insurance costs, partially offset by lower casino marketing and promotional expenses. Overall results for the quarter were somewhat impacted by a difficult comparison to the prior period and a weaker entertainment calendar featuring fewer headliner shows. Adjusted EBITDA margin declined slightly to 29.9% for the quarter ended March 31, 2018 from 30.9% in the second quarter of fiscal 2017.

  

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



For the Three Months Ended  


March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Slots:






  Handle

$            1,823,811

$        1,794,537

$          29,274

1.6%

  Gross revenues 

$               146,653

$           147,464

$              (811)

(0.5%)

  Net revenues 

$               140,205

$           142,213

$           (2,008)

(1.4%)

  Free promotional slot plays (1)

$                 14,961

$             14,593

$                368

2.5%

  Weighted average number of machines (in units)

4,830

5,009

(179)

(3.6%)

  Hold percentage (gross)

8.0%

8.2%

(0.2%)

(2.4%)

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

$                      337

$                  327

$                 10

3.1%








Table games:






  Drop

$               475,461

$           468,837

$            6,624

1.4%

  Revenues

$                 82,745

$             84,516

$          (1,771)

(2.1%)

  Weighted average number of games (in units)

275

274

1

0.4%

  Hold percentage (2)

17.4%

18.0%

(0.6%)

(3.3%)

  Win per unit per day (in dollars)

$                   3,348

$               3,432

$               (84)

(2.4%)








Poker:






  Revenues 

$                   2,266

$               2,363

$               (97)

(4.1%)

  Weighted average number of tables (in units)

42

42

-

-

  Revenue per unit per day (in dollars)

$                      600

$                  625

$               (25)

(4.0%)

___________________________________________






(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  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Food and beverage:






  Revenues

$                 15,643

$           15,613

$               30

0.2%

  Meals served

708

721

(13)

(1.8%)

  Average price per meal served (in dollars)

$                   15.92

$             15.62

$            0.30

1.9%








Hotel:






  Revenues

$                 13,723

$           13,794

$             (71)

(0.5%)

  Rooms occupied

133

135

(2)

(1.5%)

  Occupancy rate

94.4%

96.5%

(2.1%)

(2.2%)

  Average daily room rate (in dollars)

$                      100

$                  99

$                 1

1.0%

  Revenue per available room (in dollars)

$                        94

$                  95

$               (1)

(1.1%)








Retail, entertainment and other:






  Revenues

$                 23,348

$           24,060

$           (712)

(3.0%)

  Arena events (in events)

30

30

-

-

  Arena tickets 

178

184

(6)

(3.3%)

  Average price per Arena ticket (in dollars)

$                   33.56

$             38.84

$          (5.28)

(13.6%)

Mohegan Sun Pocono

Operating results (in thousands, unaudited):



For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Adjusted EBITDA 

$                 12,230

$           12,657

$           (427)

(3.4%)

Income from operations

$                   8,872

$             9,691

$           (819)

(8.5%)

Operating costs and expenses

$                 58,258

$           58,612

$           (354)

(0.6%)

Net revenues

$                 67,130

$           68,303

$        (1,173)

(1.7%)

Gaming revenues

$                 62,604

$           63,824

$        (1,220)

(1.9%)

Non-gaming revenues

$                   8,698

$             9,133

$           (435)

(4.8%)

The declines in Adjusted EBITDA and income from operations primarily resulted from higher slot taxes driven, in part, by a 1% increase in slot taxes assessed by the Commonwealth of Pennsylvania which went into effect on January 1, 2018. The declines in Adjusted EBITDA and income from operations were also driven by lower overall gaming revenues. In general, the decreases in gaming and non-gaming revenues reflected lower overall business volumes driven, in part, by a repositioning of our promotional offers. These results were partially offset by lower payroll costs. Adjusted EBITDA margin declined slightly to 18.2% for the quarter ended March 31, 2018 from 18.5% in the second quarter of fiscal 2017.

  

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



For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Slots:






  Handle

$               606,051

$            626,828

$      (20,777)

(3.3%)

  Gross revenues

$                 50,904

$              51,091

$           (187)

(0.4%)

  Net revenues

$                 50,831

$              51,276

$           (445)

(0.9%)

  Free promotional slot plays (1)

$                   9,653

$              10,860

$        (1,207)

(11.1%)

  Weighted average number of machines (in units)

2,331

2,235

96

4.3%

  Hold percentage (gross)

8.4%

8.2%

0.2%

2.4%

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

$                      242

$                   255

$             (13)

(5.1%)








Table games:






  Drop

$                 48,342

$              47,923

$             419

0.9%

  Revenues

$                   9,512

$              10,129

$           (617)

(6.1%)

  Weighted average number of games (in units)

73

73

-

-

  Hold percentage (2)

19.7%

21.1%

(1.4%)

(6.6%)

  Win per unit per day (in dollars)

$                   1,448

$                1,542

$             (94)

(6.1%)








Poker:






  Revenues 

$                      566

$                   655

$             (89)

(13.6%)

  Weighted average number of tables (in units)

18

18

-

-

  Revenue per unit per day (in dollars)

$                      376

$                   404

$             (28)

(6.9%)

___________________________________________






(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  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Food and beverage:






  Revenues

$                   5,527

$             6,118

$           (591)

(9.7%)

  Meals served

107

121

(14)

(11.6%)

  Average price per meal served (in dollars)

$                   20.74

$             21.42

$          (0.68)

(3.2%)








Hotel:






  Revenues

$                   1,234

$             1,125

$             109

9.7%

  Rooms occupied

18

19

(1)

(5.3%)

  Occupancy rate

82.6%

90.9%

(8.3%)

(9.1%)

  Average daily room rate (in dollars)

$                        62

$                  55

$                 7

12.7%

  Revenue per available room (in dollars)

$                        52

$                  50

$                 2

4.0%








Retail, entertainment and other:   






  Revenues

$                   1,937

$             1,890

$               47

2.5%

Corporate

Operating results (in thousands, unaudited):



For the Three Months Ended  

March 31,

March 31,


Percentage

2018

2017

Variance

 Variance








Adjusted EBITDA 

$               (10,122)

$           (9,439)

$           (683)

(7.2%)

Loss from operations

$               (10,579)

$         (16,752)

$          6,173

36.8%

Operating costs and expenses

$                 15,172

$           20,339

$        (5,167)

(25.4%)

Net revenues

$                   4,593

$             3,587

$          1,006

28.0%

    

Adjusted EBITDA for the quarter ended March 31, 2018 reflect increased development costs associated with our various diversification initiatives, largely driven by Project Inspire and overall development efforts in Asia. The declines in loss from operations and operating costs and expenses primarily reflected the impact of share-based compensation that was recorded in the second quarter of fiscal 2017. The increase in net revenues was primarily driven by management fees earned in connection with our management contract with ilani Casino Resort, which opened in April 2017.

MGE 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



March 31,

March 31,

March 31,

March 31,

March 31,

March 31,



2018

2017

2018

2017

2018

2017

Mohegan Sun

$         260,354

$        264,994

$           57,779

$           66,485

$           77,746

$           81,988

Mohegan Sun Pocono

67,130

68,303

8,872

9,691

12,230

12,657

Corporate

4,593

3,587

(10,579)

(16,752)

(10,122)

(9,439)

Inter-segment revenues

(60)

(60)

-

-

-

-

Total

$         332,017

$        336,824

$           56,072

$           59,424

$           79,854

$           85,206































Net Revenues

Income (Loss) from Operations

Adjusted EBITDA



      For the Six Months Ended

For the Six Months Ended

For the Six Months Ended



March 31,

March 31,

March 31,

March 31,

March 31,

March 31,



2018

2017

2018

2017

2018

2017

Mohegan Sun 

$         523,291

$        524,197

$         114,172

$         115,834

$         151,280

$         147,162

Mohegan Sun Pocono

131,934

136,721

16,547

17,601

23,247

23,616

Corporate

8,396

7,018

(19,647)

(24,591)

(18,688)

(16,429)

Inter-segment revenues

(120)

(120)

-

-

-

-

Total

$         663,501

$        667,816

$         111,072

$         108,844

$         155,839

$         154,349














Other Information

Liquidity                                                                                                                                                             As of March 31, 2018, MGE held cash and cash equivalents of $­101.1 million compared to $89.0 million as of September 30, 2017. As of March 31, 2018, $41.0 million was drawn on MGE's $170.0 million revolving credit facility, while $20.6 million was drawn on MGE's $25.0 million line of credit. As of March 31, 2018, letters of credit issued under the revolving credit facility totaled $2.3 million, of which no amounts were drawn. Inclusive of letters of credit, which reduce borrowing availability under the revolving credit facility, MGE had approximately $106.2 million of borrowing capacity under its revolving credit facility and line of credit as of March 31, 2018.

Interest Expense
Interest expense increased by $2.2 million, or 7.7%, to $30.8 million for the quarter ended March 31, 2018 compared to $28.6 million in the second quarter of fiscal 2017. Weighted average interest rate was 6.8% for the quarter ended March 31, 2018 compared to 6.4% in the second quarter of fiscal 2017. Weighted average outstanding debt was $1.81 billion for the quarter ended March 31, 2018 compared to $1.77 billion in the second quarter of fiscal 2017.

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


Capital Expenditures

Six Months Ended

Remaining Forecasted

Forecasted

March 31, 2018

Fiscal Year 2018 

Fiscal Year 2018 






Mohegan Sun:




    Maintenance

$                           13.7

$                           19.6

$                            33.3

    Development

8.3

0.2

8.5

    Expansion - Mohegan Sun Exposition Center

34.5

23.8

58.3

           Subtotal

56.5

43.6

100.1

Mohegan Sun Pocono:




    Maintenance

3.8

4.1

7.9

           Subtotal

3.8

4.1

7.9

Corporate:




    Maintenance

-

0.5

0.5

   Other - Project Inspire

12.2

88.8

101.0

           Subtotal

12.2

89.3

101.5

           Total

$                           72.5

$                         137.0

$                          209.5






Distributions to the Mohegan Tribe
Distributions to the Mohegan Tribe totaled $12.0 million for each of the quarters ended March 31, 2018 and 2017. Distributions to the Mohegan Tribe are anticipated to total $60.0 million for fiscal 2018.

Conference Call
MGE will host a conference call and simultaneous webcast regarding its second quarter of fiscal 2018 operating results on Thursday, May 3, 2018 at 11:00 a.m. (Eastern Daylight Time).

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

­­­­­­­­­­­­­­(877) 756-4274
(508) 637-5458 (International)
Conference ID: 12652340

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 MGE's website at www.mohegangaming.com, under the "Financial Information/Financial Updates" section. Interested parties also may listen to a taped replay of the entire conference call commencing two hours after the call's completion on Thursday, May 3, 2018. This replay will run through May 17, 2018.

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

(855) 859-2056
(404) 537-3406 (International)
Conference ID: 12652340

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

About MGE
MGE owns and operates Mohegan Sun, a gaming and entertainment complex located on an approximately 196-acre site on the Mohegan Tribe's reservation. Through its subsidiary, Downs Racing, L.P., MGE 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.

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 5 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.

MGE has expanded its business to several new markets across the country and internationally, including the management of Resorts Casino Hotel in Atlantic City, New Jersey, the development and management of ilani Casino Resort in Clark County, Washington, and the development and management of Project Inspire, a first-of-its-kind, multi-billion dollar integrated resort and casino project to be built at Incheon International Airport in South Korea.

More information about MGE and its properties can be obtained by visiting www.mohegansun.com, www.mohegansunpocono.com or www.mohegangaming.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 MGE. Information concerning potential factors that could affect MGE's financial results is included in its Annual Report on Form 10-K for the fiscal year ended September 30, 2017, as well as in MGE'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. MGE does not undertake any obligation to update or supplement any forward-looking statements to reflect subsequent events or circumstances. MGE cannot assure that projected results or events will be achieved or will occur.

MOHEGAN GAMING & ENTERTAINMENT

CONSOLIDATED STATEMENTS OF INCOME (LOSS)

(in thousands)

(unaudited)




For the

For the

For the

For the


Three Months Ended

Three Months Ended

Six Months Ended

Six Months Ended


March 31, 2018

March 31, 2017

March 31, 2018

March 31, 2017

Revenues:








   Gaming

$                      288,735

$                   293,736

$                 575,741

$                 578,811

   Food and beverage

21,170

21,731

42,990

44,787

   Hotel

14,957

14,919

29,864

29,622

   Retail, entertainment and other 

29,849

29,508

62,737

63,973

   Gross revenues

354,711

359,894

711,332

717,193

   Less - Promotional allowances

(22,694)

(23,070)

(47,831)

(49,377)

Net revenues

332,017

336,824

663,501

667,816

Operating costs and expenses:








   Gaming 

161,801

160,200

326,116

329,582

   Food and beverage 

10,180

10,241

20,369

20,570

   Hotel

6,647

6,971

13,652

13,174

   Retail, entertainment and other

9,589

11,582

21,206

26,969

   Advertising, general and administrative

49,595

50,193

99,972

100,589

   Corporate 

14,090

20,260

26,243

31,448

   Depreciation and amortization

19,828

18,090

40,035

36,302

   (Gain) loss on disposition of assets

410

(111)

331

(91)

   Severance

2,792

-

2,792

-

   Pre-opening

1,013

(26)

1,713

429

Total operating costs and expenses

275,945

277,400

552,429

558,972

Income from operations

56,072

59,424

111,072

108,844

Other income (expense):








   Accretion of discounts

(65)

-

(1,798)

-

   Interest income

3,877

2,678

7,746

5,578

   Interest expense, net of capitalized interest

(30,806)

(28,594)

(59,142)

(58,629)

   Loss on modification and early extinguishment of debt

-

-

-

(73,796)

   Loss from unconsolidated affiliates

(596)

(2,114)

(421)

(2,845)

   Other income (expense), net

(63)

2

(348)

3

Total other expense

(27,653)

(28,028)

(53,963)

(129,689)

Net income (loss) 

28,419

31,396

57,109

(20,845)

Loss attributable to non-controlling interests

189

74

708

693

Net income (loss) attributable to Mohegan Gaming & Entertainment

$                        28,608

$                     31,470

$                   57,817

$                  (20,152)










MOHEGAN GAMING & ENTERTAINMENT

CONSOLIDATED SELECTED FINANCIAL INFORMATION

(in thousands)

(unaudited)


















For the Three Months Ended

For the Six Months Ended





March 31,

March 31,

March 31,

March 31,





2018

2017

2018

2017

Operating Results:










   Gross revenues

$           354,711

$           359,894

$            711,332

$             717,193

   Net revenues

$           332,017

$           336,824

$            663,501

$             667,816

   Income from operations


$             56,072

$             59,424

$            111,072

$             108,844














Other Data:










   Adjusted EBITDA

$             79,854

$             85,206

$            155,839

$             154,349

   Capital expenditures

$             24,778

$             18,974

$              72,535

$               29,621

   Cash interest paid

$             17,093

$             17,394

$              53,119

$               42,220

   Distributions to the Tribe

$             12,000

$             12,000

$              24,000

$               24,000
















































March 31,

September 30,

Balance Sheet Data:





2018

2017

   Cash and cash equivalents




$            101,060

$               88,953

   Long-term debt, including current portion




$         1,657,941

$          1,651,209

   Redemption note payable




$              76,607

$                         -

MOHEGAN SUN

SUPPLEMENTAL DATA 

(unaudited)


















For the Three Months Ended

For the Six Months Ended





March 31,

March 31,

March 31,

March 31,





2018

2017

2018

2017

Operating results:










   Gross revenues (in thousands)

$           278,845

$           283,379

$            562,727

$             563,643

   Net revenues (in thousands)

$           260,354

$           264,994

$            523,291

$             524,197

   Income from operations (in thousands)

$             57,779

$             66,485

$            114,172

$             115,834

   Operating margin

22.2%

25.1%

21.8%

22.1%














Adjusted EBITDA:










   Adjusted EBITDA (in thousands)

$             77,746

$             81,988

$            151,280

$             147,162

   Adjusted EBITDA margin

29.9%

30.9%

28.9%

28.1%














Capital expenditures (in thousands)

$             25,550

$             12,949

$              56,482

$               19,843

Weighted average number of units:









   Slot machines

4,830

5,009

4,855

5,053

   Table games

275

274

275

273

   Poker tables

42

42

42

42

Win per unit per day:










   Slot machines (gross)

$                  337

$                  327

$                   330

$                    321

   Table games

$               3,348

$               3,432

$                3,327

$                 3,250

   Poker tables

$                  600

$                  625

$                   590

$                    593














Hold percentage:










   Slot machines (gross)

8.0%

8.2%

8.0%

8.2%

   Table games

17.4%

18.0%

17.2%

16.4%














Food and beverage statistics:









   Meals served (in thousands)

708

721

1,466

1,423

   Average price per meal served 

$               15.92

$               15.62

$                15.84

$                 15.92














Hotel statistics:










   Rooms occupied (in thousands)

133

135

266

257

   Occupancy rate

94.4%

96.5%

93.5%

96.4%

   Average daily room rate

$                  100

$                    99

$                     99

$                    102

   Revenue per available room

$                    94

$                    95

$                     93

$                      98














Entertainment statistics:










   Arena events (in events)

30

30

59

60

   Arena tickets (in thousands)

178

184

344

393

   Average price per Arena ticket

$               33.56

$               38.84

$                46.52

$                 49.40













MOHEGAN SUN POCONO

SUPPLEMENTAL DATA

(unaudited)



















For the Three Months Ended

For the Six Months Ended






March 31,

March 31,

March 31,

March 31,






2018

2017

2018

2017

Operating results:










   Gross revenues (in thousands)


$              71,302

$            72,957

$          140,258

$          146,573

   Net revenues (in thousands)


$              67,130

$            68,303

$          131,934

$          136,721

   Income from operations (in thousands)


$                8,872

$              9,691

$            16,547

$            17,601

   Operating margin


13.2%

14.2%

12.5%

12.9%














Adjusted EBITDA:










   Adjusted EBITDA (in thousands)


$              12,230

$            12,657

$            23,247

$            23,616

   Adjusted EBITDA margin


18.2%

18.5%

17.6%

17.3%














Capital expenditures (in thousands)


$                1,176

$              1,620

$              3,786

$              2,875














Weighted average number of units:










   Slot machines


2,331

2,235

2,330

2,240

   Table games


73

73

73

73

   Poker tables


18

18

18

18














Win per unit per day:










   Slot machines (gross)


$                   242

$                 255

$                 234

$                 248

   Table games


$                1,448

$              1,542

$              1,410

$              1,558

   Poker tables


$                   376

$                 404

$                 361

$                 407














Hold percentage:










   Slot machines (gross)


8.4%

8.2%

8.3%

8.1%

   Table games


19.7%

21.1%

19.2%

20.9%














Food and beverage statistics:










   Meals served (in thousands)


107

121

214

265

   Average price per meal served 


$                20.74

$              21.42

$              21.19

$              22.00














Hotel statistics:










   Rooms occupied (in thousands)


18

19

36

39

   Occupancy rate


82.6%

90.9%

83.0%

91.7%

   Average daily room rate


$                     62

$                   55

$                   63

$                   60

   Revenue per available room


$                     52

$                   50

$                   53

$                   55

CORPORATE

SUPPLEMENTAL DATA 

(unaudited)



















For the Three Months Ended

For the Six Months Ended






March 31,

March 31,

March 31,

March 31,






2018

2017

2018

2017

Operating results:










   Gross revenues (in thousands)


$                4,624

$              3,618

$              8,467

$              7,097

   Net revenues (in thousands)


$                4,593

$              3,587

$              8,396

$              7,018

   Loss from operations (in thousands)


$            (10,579)

$          (16,752)

$          (19,647)

$           (24,591)














Adjusted EBITDA (in thousands)


$            (10,122)

$            (9,439)

$          (18,688)

$           (16,429)














Capital expenditures (in thousands)


$              (1,948)

$              4,405

$            12,267

$              6,903













MOHEGAN GAMING & ENTERTAINMENT

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

For the Six Months Ended






March 31,

March 31,

March 31,

March 31,






2018

2017

2018

2017














Net income (loss)


$              28,419

$            31,396

$            57,109

$           (20,845)

Other (income) expense, net



63

(2)

348

(3)

Loss from unconsolidated affiliates


596

2,114

421

2,845

Loss on modification and early extinguishment of debt


-

-

-

73,796

Interest expense, net of capitalized interest


30,806

28,594

59,142

58,629

Interest income


(3,877)

(2,678)

(7,746)

(5,578)

Accretion of discounts


65

-

1,798

-

Income from operations


56,072

59,424

111,072

108,844

Adjusted EBITDA attributable to non-controlling interests


(261)

260

(104)

1,296

Pre-opening


1,013

(26)

1,713

429

Severance


2,792

-

2,792

-

(Gain) loss on disposition of assets


410

(111)

331

(91)

Share-based compensation


-

7,569

-

7,569

Depreciation and amortization


19,828

18,090

40,035

36,302

Adjusted EBITDA


$              79,854

$            85,206

$          155,839

$          154,349

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 March 31, 2018















Adjusted EBITDA 




Income (Loss)

Depreciation


(Gain) Loss 




Attributable to 




from

and 

Share-Based

on Disposition of




Non-controlling

Adjusted 



Operations

Amortization

Compensation

Assets

Severance

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$                57,779

$            16,424

$                   -

$                  418

$               2,792

$                    29

$                            304

$          77,746

Mohegan Sun Pocono 

8,872

3,366

-

(8)

-

-

-

12,230

Corporate

(10,579)

38

-

-

-

984

(565)

(10,122)

Total

$                56,072

$            19,828

$                   -

$                  410

$               2,792

$               1,013

$                          (261)

$          79,854





















For the Three Months Ended March 31, 2017















Adjusted EBITDA 




Income (Loss)

Depreciation


(Gain) Loss 




Attributable to 




from

and 

Share-Based

on Disposition of




Non-controlling

Adjusted 



Operations

Amortization

Compensation

Assets

Severance

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$                66,485

$            15,105

$                   -

$                (111)

$                    -

$                  (26)

$                            535

$          81,988

Mohegan Sun Pocono

9,691

2,966

-

-

-

-

-

12,657

Corporate

(16,752)

19

7,569

-

-

-

(275)

(9,439)

Total

$                59,424

$            18,090

$              7,569

$                (111)

$                    -

$                  (26)

$                            260

$          85,206







































For the Six Months Ended March 31, 2018















Adjusted EBITDA 




Income (Loss)

Depreciation


(Gain) Loss 




Attributable to 




from

and 

Share-Based

on Disposition of




Non-controlling

Adjusted 



Operations

Amortization

Compensation

Assets

Severance

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$              114,172

$            33,268

$                   -

$                  322

$               2,792

$                  109

$                            617

$        151,280

Mohegan Sun Pocono

16,547

6,691

-

9

-

-

-

23,247

Corporate

(19,647)

76

-

-

-

1,604

(721)

(18,688)

Total

$              111,072

$            40,035

$                   -

$                  331

$               2,792

$               1,713

$                          (104)

$        155,839





















For the Six Months Ended March 31, 2017















Adjusted EBITDA 




Income (Loss)

Depreciation


(Gain) Loss 




Attributable to 




from

and 

Share-Based

on Disposition of




Non-controlling

Adjusted 



Operations

Amortization

Compensation

Assets

Severance

Pre-Opening

Interests

EBITDA

Mohegan Sun 

$              115,834

$            30,246

$                   -

$                  (91)

$                    -

$                  429

$                            744

$        147,162

Mohegan Sun Pocono

17,601

6,015

-

-

-

-

-

23,616

Corporate

(24,591)

41

7,569

-

-

-

552

(16,429)

Total

$              108,844

$            36,302

$              7,569

$                  (91)

$                    -

$                  429

$                         1,296

$        154,349


















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. MGE historically has evaluated its operating performance with the non-GAAP measure, Adjusted EBITDA, which as used in this press release, represents net income before interest, depreciation and amortization, share-based compensation, gain or loss on disposition of assets, workforce reduction severance, pre-opening costs and expenses, accretion of discounts, 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 MGE's operations and, when viewed with both MGE's GAAP results and the reconciliations provided, MGE 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) MGE believes it enhances an overall understanding of MGE's past and current financial performance; (2) MGE 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 MGE'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) MGE 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 MGE's performance) or cash flows provided by operating activities (as an indicator of MGE's liquidity), nor should it be considered as an indicator of MGE's overall financial performance. MGE'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 MGE's results. MGE 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. MGE strongly encourages investors to review its financial information in its entirety and not to rely on a single financial measure.

Contact:
Mario C. Kontomerkos
Chief Executive Officer
Mohegan Gaming & Entertainment
(860) 862-8000

SOURCE Mohegan Gaming & Entertainment

Related Links

http://mohegangaming.com

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