Mohegan Tribal Gaming Authority Announces Fourth-Quarter and Year-End Results

Business Wire, Oct 28, 1998

UNCASVILLE, Conn.--(BUSINESS WIRE)--Oct. 28, 1998--The Mohegan Tribal Gaming Authority ("Mohegan Sun") Wednesday announced results for both the fourth quarter and the twelve months ended Sept. 30, 1998.

Mohegan Sun reported fourth quarter earnings before interest, taxes, depreciation, amortization, management fees and Bingo ("EBITDAMB") of $61.8 million, a 34-percent increase over the same period last year. EBITDAMB for the twelve months ended Sept. 30, 1998 was $200.2 million, a 45-percent increase over the same period last year.

Net revenues for the quarter were $159.3 million, an increase of $26.7 million, or 20 percent over the fourth quarter of 1997. Fourth quarter revenues include a slot win per unit per day of $423 vs. $339 for the same period last year. Fourth quarter slot revenue grew by 26 percent over the same period last year.

Also significant during the quarter was the opening of a simulcasting Race Book facility featuring the New York Racing Association circuit as well as greyhound racing and jai alai. The facility has been well-received by the market place.

The 34-percent increase in EBITDAMB for the fourth quarter was attributable to the 20-percent increase in gaming revenue for the quarter combined with labor and operating expense efficiencies. Mohegan Sun achieved an EBITDAMB margin of 39 percent for the quarter. Results from Mohegan Sun Bingo operations were much improved for the quarter as a result of achieving improved operating efficiencies.

For the year ended Sept. 30, 1998, net revenues were $571.5 million, an increase of $105.8 million, or 23 percent over 1997's $465.7 million. The Authority recorded slot win per unit per day of $373 vs. $327 for the twelve months ended Sept. 30, 1997. Mohegan Sun reported slot revenues of $409.1 million for the year, a 28-percent improvement from 1997's $320.1 million.

Management is pleased with the strength of the Connecticut slot market, as total slot revenues were $1.1 billion for the twelve months ended Sept. 30, 1998.

The 45-percent increase in EBITDAMB for the year is attributable to the 24-percent increase in gaming revenue, combined with significant improvements in operating margins, continued acceptance of the strong Mohegan Sun product and the outstanding performance of more than 5,000 employees. Mohegan Sun achieved an EBITDAMB margin of 35 percent for the year ended Sept. 30, 1998.

Bingo operations for the year ended Sept. 30, 1998, earned a profit of $81,000 compared with a loss of $2.3 million for the same period in the prior year. The improvement over last year's results is attributable to increased promotion and awareness of Mohegan Sun Bingo as well as improved operations.

In February 1998, the Mohegan Tribe announced plans to begin development of project "Sunburst." The proposed development plans include 100,000 square feet of additional gaming space, a luxury hotel (or hotels) with approximately 1,500 rooms, a convention/events center with seating for 10,000 patrons, and convention space. Additional retail and restaurant facilities are also contemplated in the development. Groundbreaking is expected to occur in mid-1999. -0-

                   Mohegan Tribal Gaming Authority
                             Mohegan Sun
                    Condensed Statement of Income
                             (unaudited)
                            (in thousands)

                         For the quarter ended    For the year ended
                                Sept. 30,               Sept. 30,
                            1998        1997        1998        1997
Revenues:
 Gaming                  $151,038    $125,668    $543,869    $440,540
 Food and beverage         15,611      13,376      55,544      46,925
 Other                     10,734       6,856      36,322      21,491
  Gross Revenues          177,383     145,900     635,735     508,956
 Less - promotional
   allowance              (18,122)    (13,365)    (64,268)    (43,276)
  Net Revenues            159,261     132,535     571,467     465,680
Total Cost and Expenses
 before Bingo Operations   97,461      86,262     371,294     327,903
Earnings before interest,
 taxes, depreciation,
 amortization, management
 fees and Bingo            61,800      46,273     200,173     137,777
Income (Loss) from Bingo
 Operations                   140        (295)         81      (2,338)
Earnings before interest,
 taxes, depreciation,
 amortization, management
 fees                    $ 61,940    $ 45,978    $200,254    $135,439