Mohegan Tribal Gaming Results Up

26 Apr 2006

UNCASVILLE, Connecticut – (PRESS REELASE) -- The Mohegan Tribal Gaming Authority, or the Authority, the operator of a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a harness racetrack located in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs, or Pocono Downs, announced today its operating results for the quarter ended March 31, 2006.

Results for the quarter ended March 31, 2006 were as follows:

* Record second quarter gaming revenues of $303.9 million, a 6.9% increase over the corresponding period in the prior year

* Gross slot revenues of $216.7 million, a 7.9% increase over the corresponding period in the prior year

* Table games revenues of $84.9 million, a 4.7% increase over the corresponding period in the prior year

* Non-gaming revenues of $59.5 million, a 7.1% increase over the corresponding period in the prior year

* Income from operations of $64.2 million, a 10.7% increase over the corresponding period in the prior year

* Net income of $34.8 million, a 23.0% increase over the corresponding period in the prior year

* Record second quarter Adjusted EBITDA, a non-GAAP measure more fully described below, of $87.7 million, a 9.1% increase over the corresponding period in the prior year

Second Quarter Operating Results

Net income for the quarter ended March 31, 2006 increased by $6.5 million, or 23.0%, to $34.8 million compared to $28.3 million for the same period in the prior year. The increase in net income is primarily due to a $9.1 million increase in income from operations at Mohegan Sun as described below.

Adjusted EBITDA for the quarter ended March 31, 2006 increased by $7.3 million, or 9.1%, to $87.7 million compared to $80.4 million for the same period in the prior year. The Adjusted EBITDA margin (Adjusted EBITDA as a percentage of net revenues) for the quarter ended March 31, 2006 was 26.1% compared to a 25.7% Adjusted EBITDA margin for the same period in the prior year. The increase in the Adjusted EBITDA margin for the quarter ended March 31, 2006 was primarily attributable to the increase in the Adjusted EBITDA margin for Mohegan Sun as described below.

Interest expense increased by $500,000 to $22.8 million for the quarter ended March 31, 2006 as compared to $22.3 million for the same period in the prior year due to increases in weighted average outstanding debt and weighted average interest rate. The weighted average outstanding debt was $1.25 billion for the quarter ended March 31, 2006 versus $1.23 billion for the quarter ended March 31, 2005. The weighted average interest rate was 7.4% for the quarter ended March 31, 2006 compared to 7.2% for the same period in the prior year.

"Our operating results for the quarter are remarkable," said Bruce Bozsum, Chairman of the Mohegan Tribal Gaming Authority, "The Management Board is extremely pleased with the continuing success of our properties and acknowledges that a great deal of the success is the result of the outstanding work of all our employees."

Mohegan Sun

Adjusted EBITDA at Mohegan Sun for the quarter ended March 31, 2006 increased by $8.6 million, or 10.4%, to $91.2 million compared to $82.6 million for the same period in the prior year. The Adjusted EBITDA margin at Mohegan Sun for the quarter ended March 31, 2006 was 27.8% compared to a 27.0% Adjusted EBITDA margin for the same period in the prior year. The Adjusted EBITDA margin increase is attributable to decreased marketing costs as a percentage of gaming revenues, greater employee productivity, and increases in revenues in our gaming and non-gaming offerings.

"We could not be more pleased with the quarter," commented Mitchell Etess, Mohegan Sun President and CEO, referring to the results of Mohegan Sun for the quarter ended March 31, 2006, "As our market continues to experience steady growth, our variety of gaming and entertainment attractions, combined with outstanding customer service from our staff, has enabled us to continue to capture more and more share of the Connecticut slot market."

Net revenues for the quarter ended March 31, 2006 increased by $22.2 million, or 7.2%, to $328.7 million from $306.5 million for the same period in the prior year. This increase is the result of a 6.6% growth in gaming revenues and a 6.9% growth in non-gaming revenues at Mohegan Sun.

Gross slot revenues, which the Authority also refers to as gross slot win, for the quarter ended March 31, 2006 increased by $15.8 million, or 7.9%, to $216.7 million from $200.9 million for the same period in the prior year. The State of Connecticut reported slot revenues of $413.1 million and $392.4 million for the quarters ended March 31, 2006 and 2005, respectively, representing an increase of 5.3%. Mohegan Sun increased its slot market share to 52.5% of the Connecticut market versus 51.2% in the quarter ended March 31, 2005. Gross slot hold percentage, or gross slot revenues divided by slot handle, for the quarter ended March 31, 2006 was 8.8% compared to 8.6% for the same period in the prior year. Gross slot win per unit per day was $388 and $357 for the quarters ended March 31, 2006 and 2005, respectively.

Table games revenues for the quarter ended March 31, 2006 increased by $3.9 million, or 4.7%, to $84.9 million from $81.0 million for the same period in the prior year. Table games hold percentage, or table games revenues divided by table games drop, was 15.0% and 16.0% for the quarters ended March 31, 2006 and 2005, respectively. Table games hold percentage is relatively predictable over long periods of time but can fluctuate significantly over shorter periods. Table games revenue per unit per day was $3,151 and $3,110 for the quarters ended March 31, 2006 and 2005, respectively.

Food and beverage revenues increased by $1.8 million, or 9.0%, to $22.2 million for the quarter ended March 31, 2006 from $20.4 million for the same period in the prior year. The increase in revenues is primarily attributable to a 5.9% increase in the number of meals served, or food covers, partially due to the opening of the 285-seat Uncas American Indian Grill to the public in July 2005.

Hotel revenues increased by $100,000, or 0.7%, to $11.6 million for the quarter ended March 31, 2006 from $11.5 million for the same period in the prior year. Hotel occupancy decreased slightly to 90.4% for the quarter ended March 31, 2006 compared to 90.6% for the quarter ended March 31, 2005. The average daily room rate, or ADR, of $114 for the quarter ended March 31, 2006 was consistent with ADR for the same period in the prior year. Revenue per Available Room, or REVPAR, of $103 for the quarter ended March 31, 2006 also was consistent with REVPAR for the same period in the prior year.

Retail, entertainment and other revenues increased by $1.8 million, or 8.1%, to $24.9 million for the quarter ended March 31, 2006 from $23.1 million for the same period in the prior year. The increase is mostly attributable to entertainment revenues, which increased by $3.4 million or 67.9%. During the period, the Mohegan Sun Arena had a 20.7% increase in ticket sales and a 43.8% in average ticket price because of the large number of headliner shows at the Arena. Retail revenues decreased by $1.3 million due to a redirection of promotions offered to casino patrons.

Income from operations for the quarter ended March 31, 2006 increased by $9.1 million, or 14.9%, to $70.0 million from $60.9 million for the quarter ended March 31, 2005.

Mohegan Sun at Pocono Downs

Adjusted EBITDA for the quarter ended March 31, 2006 decreased by $1.0 million to $(329,000) compared to $738,000 for the same period in the prior year. The Adjusted EBITDA margin for the quarter ended March 31, 2006 was (4.4)% compared to a 11.8% Adjusted EBITDA margin for the same period in the prior year. Racing revenues for the quarter ended March 31, 2006 increased by $1.2 million, or 19.7%, to $6.8 million from $5.6 million for the same period in the prior year. The increase in racing revenues is due to a full period of operations for the quarter ended March 31, 2006. The quarter ended March 31, 2005 included only racing revenues from January 25, 2005 (the date of acquisition of the facility) to the end of the quarter.

Net revenues for the quarter ended March 31, 2006 increased by $1.3 million, or 20.1%, to $7.5 million from $6.2 million for the same period in the prior year. This increase is the result of a full period of operations as discussed above.

Loss from operations for the quarter ended March 31, 2006 was $1.9 million compared to income from operations of $182,000 for the same period in the prior year. The loss from operations for the quarter ended March 31, 2006 includes $949,000 in pre-opening costs and expenses comprised of personnel, consulting and other costs related to the development plans described below.

In December 2005, Downs Racing, LP, a subsidiary of the Authority that owns and operates Mohegan Sun at Pocono Downs, submitted applications for a conditional and permanent Category One Slot Machine License with the Pennsylvania Gaming Control Board, or PGCB. Upon receipt of a conditional or permanent license, Downs Racing, LP will be required to pay a one-time $50.0 million licensing fee to the Commonwealth of Pennsylvania. As required by the PGCB, the Authority delivered to the PGCB a letter of credit in the amount of $50.0 million as security for Downs Racing, LP's future license fee payment. The PGCB announced that the date for a public hearing on the slot machine license application for Mohegan Sun at Pocono Downs will be April 27, 2006.

In anticipation of receipt of a slot machine license, Downs Racing, LP is making significant improvements and additions at Mohegan Sun at Pocono Downs, including a new state of the art simulcast facility, which opened to the public on March 13, 2006, improvements to the grandstand for the installation of approximately 1,080 slot machines, a new 10,000 square foot food court and road and parking infrastructure enhancements. The Authority is providing updated guidance on the cost of these improvements which are now estimated to be approximately $70.0 million -- or $23.0 million greater than the previously estimated amount of $47.0 million. This estimate includes the procurement and related implementation costs associated with new business systems for the planned slot facility and other infrastructure related improvements expected to be incorporated into the future casino development at the site. Construction of these improvements is estimated to be completed by the summer of 2006.

The Authority previously announced plans for the development of a new 400,000 square foot gaming and entertainment facility to be constructed on the existing grounds of Mohegan Sun at Pocono Downs. The plans, the scope and timing of such development continue to be refined through our rigorous planning process. Our current plans for such development provide for a combined total of approximately 2,000 slot machines, 3 full-service restaurants, a 300 seat buffet, a 15,000 square foot food court, several bars and lounges, an 18,000 square foot nightclub, a "Kid's Quest" center, 20,000 square feet of retail space, additional parking and an enhanced employee service area. Construction of the new facility is expected to begin following the issuance of a Category One Slot Machine License by the PGCB, which is currently anticipated to occur in late summer or early fall 2006. The opening date of the new facility is projected to be approximately 14 months from the beginning of construction. The Authority also is providing updated guidance on the construction of the new facility which is now estimated to be approximately $135.0 million -- lower than the previously estimated range of $140.0 million to $160.0 million.

The Authority anticipates that it will seek an amendment to its existing bank credit facility to increase spending levels for Pocono Downs prior to the start of construction of the new facility.

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	Mohegan Tribal Gaming Results Up 26 Apr 2006 <a href='https://ad.casinocity.com/adclick.php?n=a21efcd1'><img src='https://ad.casinocity.com/adview.php?what=-site:vendors/width:250/RON&n=a21efcd1' border='0' alt='' /></a> UNCASVILLE, Connecticut – (PRESS REELASE) -- The Mohegan Tribal Gaming Authority, or the Authority, the operator of a gaming and entertainment complex located near Uncasville, Connecticut, known as Mohegan Sun, and a harness racetrack located in Plains Township, Pennsylvania, known as Mohegan Sun at Pocono Downs, or Pocono Downs, announced today its operating results for the quarter ended March 31, 2006. Results for the quarter ended March 31, 2006 were as follows: * Record second quarter gaming revenues of $303.9 million, a 6.9% increase over the corresponding period in the prior year * Gross slot revenues of $216.7 million, a 7.9% increase over the corresponding period in the prior year * Table games revenues of $84.9 million, a 4.7% increase over the corresponding period in the prior year * Non-gaming revenues of $59.5 million, a 7.1% increase over the corresponding period in the prior year * Income from operations of $64.2 million, a 10.7% increase over the corresponding period in the prior year * Net income of $34.8 million, a 23.0% increase over the corresponding period in the prior year * Record second quarter Adjusted EBITDA, a non-GAAP measure more fully described below, of $87.7 million, a 9.1% increase over the corresponding period in the prior year Second Quarter Operating Results Net income for the quarter ended March 31, 2006 increased by $6.5 million, or 23.0%, to $34.8 million compared to $28.3 million for the same period in the prior year. The increase in net income is primarily due to a $9.1 million increase in income from operations at Mohegan Sun as described below. Adjusted EBITDA for the quarter ended March 31, 2006 increased by $7.3 million, or 9.1%, to $87.7 million compared to $80.4 million for the same period in the prior year. The Adjusted EBITDA margin (Adjusted EBITDA as a percentage of net revenues) for the quarter ended March 31, 2006 was 26.1% compared to a 25.7% Adjusted EBITDA margin for the same period in the prior year. The increase in the Adjusted EBITDA margin for the quarter ended March 31, 2006 was primarily attributable to the increase in the Adjusted EBITDA margin for Mohegan Sun as described below. Interest expense increased by $500,000 to $22.8 million for the quarter ended March 31, 2006 as compared to $22.3 million for the same period in the prior year due to increases in weighted average outstanding debt and weighted average interest rate. The weighted average outstanding debt was $1.25 billion for the quarter ended March 31, 2006 versus $1.23 billion for the quarter ended March 31, 2005. The weighted average interest rate was 7.4% for the quarter ended March 31, 2006 compared to 7.2% for the same period in the prior year. "Our operating results for the quarter are remarkable," said Bruce Bozsum, Chairman of the Mohegan Tribal Gaming Authority, "The Management Board is extremely pleased with the continuing success of our properties and acknowledges that a great deal of the success is the result of the outstanding work of all our employees." Mohegan Sun Adjusted EBITDA at Mohegan Sun for the quarter ended March 31, 2006 increased by $8.6 million, or 10.4%, to $91.2 million compared to $82.6 million for the same period in the prior year. The Adjusted EBITDA margin at Mohegan Sun for the quarter ended March 31, 2006 was 27.8% compared to a 27.0% Adjusted EBITDA margin for the same period in the prior year. The Adjusted EBITDA margin increase is attributable to decreased marketing costs as a percentage of gaming revenues, greater employee productivity, and increases in revenues in our gaming and non-gaming offerings. "We could not be more pleased with the quarter," commented Mitchell Etess, Mohegan Sun President and CEO, referring to the results of Mohegan Sun for the quarter ended March 31, 2006, "As our market continues to experience steady growth, our variety of gaming and entertainment attractions, combined with outstanding customer service from our staff, has enabled us to continue to capture more and more share of the Connecticut slot market." Net revenues for the quarter ended March 31, 2006 increased by $22.2 million, or 7.2%, to $328.7 million from $306.5 million for the same period in the prior year. This increase is the result of a 6.6% growth in gaming revenues and a 6.9% growth in non-gaming revenues at Mohegan Sun. Gross slot revenues, which the Authority also refers to as gross slot win, for the quarter ended March 31, 2006 increased by $15.8 million, or 7.9%, to $216.7 million from $200.9 million for the same period in the prior year. The State of Connecticut reported slot revenues of $413.1 million and $392.4 million for the quarters ended March 31, 2006 and 2005, respectively, representing an increase of 5.3%. Mohegan Sun increased its slot market share to 52.5% of the Connecticut market versus 51.2% in the quarter ended March 31, 2005. Gross slot hold percentage, or gross slot revenues divided by slot handle, for the quarter ended March 31, 2006 was 8.8% compared to 8.6% for the same period in the prior year. Gross slot win per unit per day was $388 and $357 for the quarters ended March 31, 2006 and 2005, respectively. Table games revenues for the quarter ended March 31, 2006 increased by $3.9 million, or 4.7%, to $84.9 million from $81.0 million for the same period in the prior year. Table games hold percentage, or table games revenues divided by table games drop, was 15.0% and 16.0% for the quarters ended March 31, 2006 and 2005, respectively. Table games hold percentage is relatively predictable over long periods of time but can fluctuate significantly over shorter periods. Table games revenue per unit per day was $3,151 and $3,110 for the quarters ended March 31, 2006 and 2005, respectively. Food and beverage revenues increased by $1.8 million, or 9.0%, to $22.2 million for the quarter ended March 31, 2006 from $20.4 million for the same period in the prior year. The increase in revenues is primarily attributable to a 5.9% increase in the number of meals served, or food covers, partially due to the opening of the 285-seat Uncas American Indian Grill to the public in July 2005. Hotel revenues increased by $100,000, or 0.7%, to $11.6 million for the quarter ended March 31, 2006 from $11.5 million for the same period in the prior year. Hotel occupancy decreased slightly to 90.4% for the quarter ended March 31, 2006 compared to 90.6% for the quarter ended March 31, 2005. The average daily room rate, or ADR, of $114 for the quarter ended March 31, 2006 was consistent with ADR for the same period in the prior year. Revenue per Available Room, or REVPAR, of $103 for the quarter ended March 31, 2006 also was consistent with REVPAR for the same period in the prior year. Retail, entertainment and other revenues increased by $1.8 million, or 8.1%, to $24.9 million for the quarter ended March 31, 2006 from $23.1 million for the same period in the prior year. The increase is mostly attributable to entertainment revenues, which increased by $3.4 million or 67.9%. During the period, the Mohegan Sun Arena had a 20.7% increase in ticket sales and a 43.8% in average ticket price because of the large number of headliner shows at the Arena. Retail revenues decreased by $1.3 million due to a redirection of promotions offered to casino patrons. Income from operations for the quarter ended March 31, 2006 increased by $9.1 million, or 14.9%, to $70.0 million from $60.9 million for the quarter ended March 31, 2005. Mohegan Sun at Pocono Downs Adjusted EBITDA for the quarter ended March 31, 2006 decreased by $1.0 million to $(329,000) compared to $738,000 for the same period in the prior year. The Adjusted EBITDA margin for the quarter ended March 31, 2006 was (4.4)% compared to a 11.8% Adjusted EBITDA margin for the same period in the prior year. Racing revenues for the quarter ended March 31, 2006 increased by $1.2 million, or 19.7%, to $6.8 million from $5.6 million for the same period in the prior year. The increase in racing revenues is due to a full period of operations for the quarter ended March 31, 2006. The quarter ended March 31, 2005 included only racing revenues from January 25, 2005 (the date of acquisition of the facility) to the end of the quarter. Net revenues for the quarter ended March 31, 2006 increased by $1.3 million, or 20.1%, to $7.5 million from $6.2 million for the same period in the prior year. This increase is the result of a full period of operations as discussed above. Loss from operations for the quarter ended March 31, 2006 was $1.9 million compared to income from operations of $182,000 for the same period in the prior year. The loss from operations for the quarter ended March 31, 2006 includes $949,000 in pre-opening costs and expenses comprised of personnel, consulting and other costs related to the development plans described below. In December 2005, Downs Racing, LP, a subsidiary of the Authority that owns and operates Mohegan Sun at Pocono Downs, submitted applications for a conditional and permanent Category One Slot Machine License with the Pennsylvania Gaming Control Board, or PGCB. Upon receipt of a conditional or permanent license, Downs Racing, LP will be required to pay a one-time $50.0 million licensing fee to the Commonwealth of Pennsylvania. As required by the PGCB, the Authority delivered to the PGCB a letter of credit in the amount of $50.0 million as security for Downs Racing, LP's future license fee payment. The PGCB announced that the date for a public hearing on the slot machine license application for Mohegan Sun at Pocono Downs will be April 27, 2006. In anticipation of receipt of a slot machine license, Downs Racing, LP is making significant improvements and additions at Mohegan Sun at Pocono Downs, including a new state of the art simulcast facility, which opened to the public on March 13, 2006, improvements to the grandstand for the installation of approximately 1,080 slot machines, a new 10,000 square foot food court and road and parking infrastructure enhancements. The Authority is providing updated guidance on the cost of these improvements which are now estimated to be approximately $70.0 million -- or $23.0 million greater than the previously estimated amount of $47.0 million. This estimate includes the procurement and related implementation costs associated with new business systems for the planned slot facility and other infrastructure related improvements expected to be incorporated into the future casino development at the site. Construction of these improvements is estimated to be completed by the summer of 2006. The Authority previously announced plans for the development of a new 400,000 square foot gaming and entertainment facility to be constructed on the existing grounds of Mohegan Sun at Pocono Downs. The plans, the scope and timing of such development continue to be refined through our rigorous planning process. Our current plans for such development provide for a combined total of approximately 2,000 slot machines, 3 full-service restaurants, a 300 seat buffet, a 15,000 square foot food court, several bars and lounges, an 18,000 square foot nightclub, a "Kid's Quest" center, 20,000 square feet of retail space, additional parking and an enhanced employee service area. Construction of the new facility is expected to begin following the issuance of a Category One Slot Machine License by the PGCB, which is currently anticipated to occur in late summer or early fall 2006. The opening date of the new facility is projected to be approximately 14 months from the beginning of construction. The Authority also is providing updated guidance on the construction of the new facility which is now estimated to be approximately $135.0 million -- lower than the previously estimated range of $140.0 million to $160.0 million. The Authority anticipates that it will seek an amendment to its existing bank credit facility to increase spending levels for Pocono Downs prior to the start of construction of the new facility.