UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
| Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Securities registered pursuant to Section 12(b) of the Act:
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 2.02. | RESULTS OF OPERATIONS AND FINANCIAL CONDITION |
The Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming & Entertainment (“MGE”, the “Company”, “we” or “our”) is furnishing the below preliminary unaudited estimates and statements for the three months ended December 31, 2020. These preliminary unaudited estimates and statements are the opinion of the Company management, represent ranges of estimates and expectations based on the most current information available, are preliminary and may change. While the Company believes that its assumptions and these estimates are reasonable, it is very difficult to predict the impact of known factors and it is impossible for the Company to anticipate all factors that could affect our actual results. The Company has provided a range for these estimates because the Company has yet to complete its normal review procedures for this period. The actual results may not be within these ranges, and may differ materially from the estimated ranges presented.
These preliminary unaudited estimated results should not be viewed as a substitute for full interim financial information prepared in accordance with GAAP. The preliminary estimated results are not necessarily indicative of the results to be achieved for the rest of the 2021 fiscal year or any future period. The Company’s independent registered public accounting firm, Deloitte & Touche LLP, has not audited, reviewed, compiled or performed any procedures with respect to any of the estimates contained herein. Accordingly, Deloitte & Touche LLP does not express an opinion or any other form of assurance with respect thereto. As a result of the foregoing considerations and limitations, investors are cautioned not to place undue reliance on this estimated financial information.
Across Mohegan Sun and Mohegan Sun Pocono, we have experienced a decline in overall gaming revenues and a proportional decline in non-gaming demand, including lower hotel occupancy. In addition, Mohegan Sun Pocono was closed by government order due to the current resurgence of COVID-19 from December 12, 2020 through January 4, 2021. Mohegan Sun has continuously maintained reduced operating hours for restaurants and bars, in cooperation with the November 4, 2020 state of Connecticut mandate. ilani continues to demonstrate strong performance, including an estimated year-over-year increase in net revenues for the quarter ended December 31, 2020. The steep increase in COVID-19 infection rates and corresponding tightening of social distancing practices, along with decreases in federal aid and the uncertain election/post-election environment, have driven the net revenues declines.
With regard to labor and marketing, we have reinstituted payroll reductions, with a comprehensive 20% reduction in compensation through mandatory hour reduction. We also continue to benefit from reduced marketing expenses.
We expect that first quarter fiscal year 2021 adjusted EBITDA margins will be lower than that of the fourth quarter of fiscal year 2020, due in large part to the estimated decline in net revenues.
Presented below are certain current preliminary estimated results (expressed as a range of estimates) for the three months ended December 31, 2020, along with our historical results for the three months ended December 31, 2019:
| Mohegan Sun | Mohegan Sun Pocono | |||||||||||||||||||||||
| For the Three Months Ended December 31, |
For the Three Months Ended December 31, |
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| ($ in thousands, except where noted) | 2020 (1) | 2020 (2) | 2019 | 2020 (1) | 2020 (2) | 2019 | ||||||||||||||||||
| Net revenues |
$ | 161,000 | $ | 167,600 | $ | 243,300 | $ | 37,300 | $ | 38,900 | $ | 62,000 | ||||||||||||
| Labor costs |
42,800 | 44,600 | 67,100 | 5,600 | 5,800 | 10,400 | ||||||||||||||||||
| Marketing costs and expenses |
6,900 | 7,200 | 14,000 | 300 | 300 | 1,100 | ||||||||||||||||||
| Slot handle |
1,187,500 | 1,235,900 | 1,618,800 | 312,800 | 325,600 | 583,000 | ||||||||||||||||||
| Hotel occupancy % |
80 | % | 83 | % | 95 | % | 54 | % | 56 | % | 79 | % | ||||||||||||
| Management and Development Fees For the Three Months Ended December 31, |
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| ($ in thousands) | 2020 (1) | 2020 (2) | 2019 | |||||||||
| Management and development fees |
$ | 12,200 | $ | 12,700 | $ | 9,000 | ||||||
| (1) | Lower bound of preliminary range. |
| (2) | Upper bound of preliminary range. |
The information contained in this Item 2.02 of this Current Report on Form 8-K is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any of MGE’s filings with the Securities and Exchange Commission regardless of the general incorporation language of such filings, except as shall be expressly set forth by specific reference in such filings.
| ITEM 7.01. | REGULATION FD DISCLOSURE |
The Company is furnishing the information included in Exhibit 99.1 to this Current Report on Form 8-K pursuant to Regulation FD. The information contained in this Item 7.01 of this report is being “furnished” and shall not be deemed “filed” for purposes of Section 18 of the Exchange Act or otherwise subject to the liabilities of that section, and such information shall not be deemed incorporated by reference into any of MGE’s filings with the Securities and Exchange Commission regardless of the general incorporation language of such filings, except as shall be expressly set forth by specific reference in such filings. This Current Report on Form 8-K will not be deemed an admission as to the materiality of any information in the report (including Exhibit 99.1) that is required to be disclosed solely by Regulation FD.
| ITEM 8.01. | OTHER EVENTS |
On January 13, 2021, MGE issued a press release announcing that the Company has commenced an offering (the “Offering”) of $1.175 billion aggregate principal amount of second priority senior secured notes due 2026 (the “Notes”) in a private placement. The Notes will be guaranteed by certain of the Company’s subsidiaries. The Notes will be offered only to persons reasonably believed to be qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside the United States in accordance with Regulation S under the Securities Act.
The completion of the Offering is conditioned upon, among other things, either the Company’s replacement of its current senior secured credit facilities (the “Senior Secured Credit Facilities”) with a new revolving credit facility, or an amendment and restatement of the Senior Secured Credit Facilities into a new revolving credit facility, in either case with commitments of not less than $250 million (the “New Senior Secured Credit Facility”) prior to or substantially concurrent with the Offering. The net proceeds from the Offering and borrowings under the New Senior Secured Credit Facility, together with cash on hand, will be used to (i) fund the repayment, satisfaction and discharge of certain existing indebtedness of the Company, including all loans outstanding under the Senior Secured Credit Facilities, all obligations in respect of the Company’s Main Street term loan facility and MGE’s debt to the Mohegan Tribe in respect of certain subordinated loans, and (ii) pay related fees and expenses.
A copy of the Company’s press release is attached hereto as Exhibit 99.2, which is incorporated by reference herein.
This report is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful. The Offering is made only by, and pursuant to, the terms set forth in the related preliminary offering memorandum.
Forward-Looking Statements
This document and the exhibits to it contain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act, and Section 21E of the Exchange Act. Certain statements contained in this document or in the exhibits to this document, including those that express a belief, expectation or intention, as well as all statements that are not statements of historical fact, are forward-looking statements within the meaning of the federal securities laws and as such are based upon the current beliefs of MGE as to the outcome and timing of future events. There can be no assurance that the expectations, conclusions
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or beliefs expressed in any forward-looking statements will in fact occur. Examples of forward looking statements in this document or in the exhibits to this document include, but are not limited to, statements regarding: (i) the financial performance of our various operations; (ii) the impact of the COVID-19 pandemic and related societal, economic and regulatory effects; (iii) the impact of competition on our various gaming facilities; (iv) our expected liquidity and leverage, (v) anticipated benefits from our various properties; (vi) the effects of our efforts to expand and diversify; (vii) operational efficiencies; and (vii) expected future market conditions.
Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “hypothetical,” “continue,” “future” or other similar words or expressions. All forward-looking statements included in this document or in the exhibits to this document are based upon information available to the Company on the date hereof and the Company is under no duty to update any of the forward-looking statements after the date of this document to conform these statements to actual results. The forward-looking statements involve a number of significant risks and uncertainties, and there are important factors that, among others, could cause the Company’s future financial condition or results to differ materially from the views expressed in the forward-looking statements. These factors include the financial performance of the Company’s various operations; the impact of the COVID-19 pandemic and related societal, economic and regulatory effects, including required shutdowns of any the Company’s facilities; the local, regional, national or global economic climate; increased competition; the Company’s leverage and ability to meet its debt service obligations and maintain compliance with financial debt covenants; the continued availability of financing; the Company’s dependence on existing management; the Company’s ability to integrate new amenities from expansions to its facilities into its current operations and manage the expanded facilities; changes in federal or state tax laws or the administration of such laws; changes in gaming laws or regulations, including the limitation, denial or suspension of licenses requires under gaming laws and regulations; cyber security risks relating to the Company’s information technology and other systems, including misappropriation of patron information or other breaches of information security; changes in applicable laws pertaining to the service of alcohol, smoking or other amenities offered at the Company’s facilities; the Company’s ability to successfully implement its diversification strategy; an act of terrorism; the Company’s customers’ access to inexpensive transportation to the Company’s facilities and changes in oil, fuel or other transportation-related expenses; unfavorable weather conditions; risks associated with operations in foreign jurisdictions; failure by the Company’s employees, agents, affiliates, vendors or businesses to comply with applicable laws, rules and regulations; and fluctuations in foreign currency exchange rates. Additional factors that could have a material adverse effect on the Company’s operations and future prospects are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020, including the sections entitled “Risk Factors” contained therein. The factors set forth in the Risk Factors section and otherwise described in the Company’s filings with SEC could cause the Company’s actual results to differ significantly from those contained in any forward-looking statement contained in this document or the exhibits to this document. The Company does not guarantee that the assumptions underlying such forward-looking statements are free from errors.
Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s business, financial condition, liquidity, cash flows and results could differ materially from those expressed in any forward-looking statement. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Use caution in relying on past forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends.
| ITEM 9.01. | FINANCIAL STATEMENTS AND EXHIBITS |
(d) Exhibits.
| Exhibit |
Description of Exhibit | |
| 99.1 | Regulation FD disclosure | |
| 99.2 | Press release, dated January 13, 2021 | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | |
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| Date: January 13, 2021 |
MOHEGAN TRIBAL GAMING AUTHORITY D/B/A MOHEGAN GAMING & ENTERTAINMENT | |||||
| By: | /s/ RALPH JAMES GESSNER, JR. | |||||
| Ralph James Gessner, Jr. Chairman, Management Board | ||||||
5
Exhibit 99.1
Terms capitalized but not defined in this exhibit have the meaning given to such terms in the Current Report on Form 8-K to which this document forms an exhibit.
New Senior Secured Credit Facility
It is a condition to the consummation of the Offering that MGE enter into the New Senior Secured Credit Facility, providing for a senior secured revolving credit facility of no less than $250 million (the “New Revolving Facility”) prior to or substantially concurrent with consummation of the Offering.
There is no assurance that MGE will enter into the New Senior Secured Credit Facility. The description below sets forth certain anticipated terms of the facility, all of which are subject to change.
The New Senior Secured Credit Facility is expected to mature in April 2023.
As of the closing date of the Offering, loans outstanding under the New Revolving Facility are expected to total approximately $97 million, with additional letters of credit issued under the New Revolving Facility of approximately $2 million.
Borrowings under the New Senior Secured Credit Facility are expected to bear interest as follows: (i) for base rate loans under the New Revolving Facility, a base rate equal to the highest of (a) the prime rate, (b) the federal funds rate plus 50 basis points and (c) the one-month LIBOR rate plus 100 basis points (the highest of (a), (b) and (c), the “base rate”), plus a leverage-based margin and (ii) for Eurodollar rate loans under the New Revolving Facility, the applicable LIBOR rate plus a leverage-based margin. MGE is also expected to be required to pay a leverage-based commitment fee of between 37.5 and 50 basis points for unused commitments under the New Revolving Facility. Interest on base rate loans is expected to be payable quarterly in arrears. Interest on Eurodollar rate loans of three months or less is expected to be payable at the end of each applicable interest period and for Eurodollar rate loans of more than three months, interest is expected to be payable at intervals of three months duration after the beginning of such interest period and at the end of the applicable interest period.
MGE’s obligations under the New Senior Secured Credit Facility are expected to be guaranteed on a first priority lien basis by each of MGE’s subsidiaries that guarantee its existing indebtedness and that are expected to guarantee the Notes and to be secured by substantially all of the assets of MGE and its guarantor subsidiaries other than certain excluded assets.
The New Senior Secured Credit Facility is expected to contain customary covenants applicable to MGE and its restricted subsidiaries, including covenants governing: incurrence of indebtedness, incurrence of liens, payment of dividends and other distributions, investments, asset sales, affiliate transactions and mergers or consolidations. Additionally, the New Senior Secured Credit Facility is expected to include financial maintenance covenants pertaining to total leverage, senior secured leverage and minimum fixed charge coverage ratios, as well as a minimum liquidity covenant.
Certain Financial Information
As of and for the twelve months ended September 30, 2020, the existing unrestricted subsidiaries and investment entities of the Company, in the aggregate, accounted for approximately 17% of consolidated assets and approximately 20% of the consolidated net revenues of the Company.
For the fiscal year ended September 30, 2020, loss from operations for the Company and its subsidiaries that are expected to constitute “restricted subsidiaries” under the indenture governing the Notes (collectively, the “restricted group”) was approximately $8 million and loss from operations (which includes loss from operations attributable to the unrestricted subsidiaries) was approximately $33 million. For the fiscal year ended September 30, 2019, income from operations for the restricted group was approximately $131 million and income from operations (which includes income from operations attributable to the unrestricted subsidiaries) was approximately $136 million. For the fiscal year ended September 30, 2020, adjusted EBITDA for the restricted group was approximately $205 million and MGE’s adjusted EBITDA (which includes adjusted EBITDA attributable to the unrestricted subsidiaries) was approximately $218 million. For the fiscal year ended September 30, 2019, adjusted EBITDA for the restricted group was approximately $288 million and MGE’s adjusted EBITDA was approximately $310 million.
The restricted group’s annualized income from operations for the three months ended September 30, 2020 was approximately $261 million. The restricted group’s annualized adjusted EBITDA for the three months ended September 30, 2020 was approximately $344 million.
On a pro forma, as adjusted basis based on the Company’s indebtedness as of September 30, 2020, adjusted to give effect to the incurrence of the Main Street term loan facility, the New Senior Secured Credit Facility, the issuance of the Notes and the use of proceeds therefrom (including to repay the Main Street term loan facility), the Company and its restricted subsidiaries would have had approximately $1,834 million of total debt outstanding (including current maturities, but excluding financing leases), consisting of $126 million of first lien secured debt, $1,175 million of second lien secured debt, and $533 million of unsecured debt, and the Company would have had total liquidity of approximately $257 million, consisting of $93 million of restricted group cash and $164 million of availability under the New Senior Secured Credit Facility.
Properties and Strategies
Mohegan Sun
As of September 30, 2018 and 2019, Mohegan Sun had approximately 5,360 and 5,160 full-time equivalent employees, respectively, which decreased to approximately 3,370 full-time equivalent employees as of September 30, 2020.
Mohegan Sun Casino at Virgin Hotels Las Vegas
MGE estimates that opening the gaming floor at the Mohegan Sun Casino at Virgin Hotels Las Vegas would require approximately $21 million in investments, which MGE expects to be made in fiscal year 2021.
Project Inspire
Project Inspire is a multiphase development that will span over 660 acres in Incheon, South Korea. In February 2016, MGE was awarded pre-approval for a foreigner-only gaming license to be issued upon completion of the construction of Project Inspire. In August 2016, MGE entered into an agreement with the Incheon International Airport Authority for the long-term lease and development of approximately 4.4 million square meters of land located directly adjacent to Terminal 2 of the Incheon International Airport in South Korea. Phase 1, the integrated casino resort phase of Project Inspire, is planned to open in early 2023. Project Inspire will compete with another casino resort located in Incheon and several other smaller casino-only operations located in downtown Seoul.
Hanwha Group, one of Korea’s largest corporations, is an important strategic partner for MGE and Project Inspire in Korea. Within the Hanwha Group, Hanwha Engineering & Construction is the general contractor for the Project Inspire development, who will also provide a full completion guarantee in connection with the project. Additionally, Hanwha Engineering & Construction will, along with Hanwha Hotels & Resorts, provide credit support to segments of the project financing, and plans to contribute up to 100 billion Korean won strategic investment into Project Inspire. Hanwha Hotels & Resorts will be the hotel management partner for the Project Inspire hotels.
As part of the Phase 1 Project Inspire development, MGE expects to receive development and management fees after completion of construction and commencement of operations. A portion of the development fee has already been paid, and the remainder of the development fee is anticipated to be $30.0 million. The management fee is anticipated to be 3.0% of net revenues of Project Inspire. It is anticipated that payment of both the development and management fees will be subject to excess cash flow limits under the terms of the project financing. At this time, MGE expects to begin receiving deferred development and management fee distributions in 2023.
MGE has $300 million of equity contribution invested to date in Project Inspire. The New Senior Secured Credit Facility is expected to require that certain management and development fees from Project Inspire be promptly paid to the restricted group.
INSPIRE Athens
In October 2020, the Company’s joint venture was selected by the Hellenic Gaming Commission as the provisional contractor to develop the first integrated resort and casino in Greece at the Hellinikon, a large multi-purpose development project near Athens on the Athenian Riviera. This resort and casino serves as an anchor to over 1,000 acres of waterfront development at the old Hellinikon Airport. The Company has partnered with GEK TERNA, a large regional construction company and 35% equity partner, with construction expected to begin in 2022 and a potential opening in 2025-26.
The Company anticipates earning fees based on a percent of net revenue and development cost, plus equity distributions. There is a $13 million license fee payment due in March 2021, which represents the Company’s 65% portion of the initial 10% component of the license fee.
Fourth Quarter Fiscal Year 2020 Performance for Total Consolidated MGE
Net revenue for the three months ended September 30, 2020 was approximately $294 million, compared to approximately $414 million for the three months ended September 30, 2019. Net income for the three months ended September 30, 2020 was approximately $19 million, compared to net loss of approximately $21 million for the three months ended September 30, 2019. Adjusted EBITDA and margin for the three months ended September 30, 2020 were approximately $83 million and 28.2%, respectively, compared to approximately $89 million and 21.6% for the three months ended September 30, 2019. These results represented a fiscal year-over-year adjusted EBITDA margin improvement in the Company’s restricted group of approximately 656 basis points.
This document contains certain annualized financial data based on the Company’s adjusted EBITDA, recurring operating cash flow, maintenance capital expenditures and interest expense from the fourth quarter of the Company’s 2020 fiscal year (ending September 30, 2020) and assuming $70 million in annual distributions to the Mohegan Tribe. Such financial data is not representative of the Company’s performance during the 2020 fiscal year, as it annualizes data from a single fiscal quarter. This annualized data is more favorable than the Company’s actual performance from the Company’s full 2020 fiscal year. In addition, this annualized financial data is not expected to be representative of the Company’s future performance. These figures should be considered only in conjunction with other financial information about the Company presented in this document and in filings by the Company with the SEC.
Supplemental Financial and Operating Information
MGE’s direct operating expenses (defined as operating costs and expenses, less depreciation, amortization, impairment and other charges) were approximately $1,014 million and $1,078 million in fiscal years 2018 and 2019, respectively, and decreased to approximately $844 million on an annualized basis for the three months ended September 30, 2020. MGE correspondingly generated recent increases in adjusted EBITDA, adjusted EBITDA margins and free cash flow generation.
For fiscal year 2018, net income was approximately $132 million. For fiscal year 2019, net loss was approximately $2 million. For the three months ended September 30, 2020, net income was approximately $74 million on an annualized basis. For fiscal years 2018 and 2019, adjusted EBITDA was approximately $339 million and $310 million, respectively, which increased to approximately $331 million on an annualized basis for the three months ended September 30, 2020. For fiscal years 2018 and 2019, adjusted EBITDA margin was approximately 25.0% and 22.3%, respectively, which increased to approximately 28.2% on an annualized basis for the three
months ended September 30, 2020. For fiscal years 2018 and 2019, unlevered free cash flow was approximately $303 million and $285 million, respectively, which increased to approximately $312 million on an annualized basis for the three months ended September 30, 2020.
For the fourth quarter of fiscal year 2020, on an annualized basis, the Company would have had income from operations of approximately $201 million, adjusted EBITDA of approximately $331 million and recurring operating cash flow of approximately $98 million (after subtracting for maintenance capital expenditure of approximately $19 million, interest expenses of approximately $144 million and assuming annual distributions to the Mohegan Tribe of $70 million). As of September 30, 2020, and after giving effect to the incurrence of the Main Street term loan facility, the New Senior Secured Credit Facility, the issuance of the Notes and the use of proceeds therefrom (including to repay the Main Street term loan facility), the Company would have had total liquidity of approximately $258 million, consisting of $93 million of restricted group cash and $164 million of availability under the New Senior Secured Credit Facility.
The Company anticipates spending approximately $14 million for maintenance capital expenditures through the first three fiscal quarters of 2021.
The Company anticipates that cash investments into the unrestricted group through the first three fiscal quarters of 2021 will primarily consist of approximately $21 million relating to the opening of the gaming floor for the Mohegan Sun Casino at Virgin Hotels Las Vegas and approximately $13 million for the Company’s 65% portion of the 10% upfront license payment for Inspire Athens.
Consent Solicitation for 2024 Senior Notes
In connection with or following the completion of the Offering of the Notes, the Company may solicit consents from the holders of the Company’s senior unsecured notes due 2024 (the “2024 Senior Notes”) in order to amend the indenture governing the 2024 Senior Notes to align more closely with certain of the terms of the indenture governing the Notes, including with respect to permissible investments and restricted payments. There can be no assurance that the Company will solicit such consents, as to whether the consents of the requisite holders of the 2024 Senior Notes will be received if such consents are solicited, or of the terms of any amendments to the indenture governing the 2024 Senior Notes if such consents are received. If such consents are solicited, the Company may determine to pay a fee to the holders of the 2024 Senior Notes in exchange for such consents.
Mohegan Expo Credit Facility and Guaranteed Credit Facility
The Company is currently seeking waivers under the Mohegan Expo Credit Facility and the Guaranteed Credit Facility (each as defined in the Company’s annual report on Form 10-K for the fiscal year ended September 30, 2020) relating to disclosures in the Company’s Form 10-K regarding the Company’s ability to continue as a going concern. If the Company does not obtain such waivers, it may repay either or both of those facilities with borrowings under the New Senior Secured Credit Facility and/or cash on hand. The pro forma liquidity and indebtedness figures in this document do not assume the repayment of these facilities.
Summary Financial Data of MGE
The summary financial data shown below should be read in conjunction with MGE’s consolidated financial statements and related notes, which are included in periodic reports filed by MGE with the SEC. Amounts shown in the following tables are in thousands.
| As of or for the Three Months Ended September 30, |
As of or for the Fiscal Years Ended September 30, | |||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2018 | ||||||||||||||||
| Operating Results: |
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| Gross revenues |
$ | 294,010 | $ | 414,006 | $ | 1,114,962 | $ | 1,388,810 | $ | 1,456,980 | ||||||||||
| Less-Promotional allowances |
— | — | — | — | (101,348 | ) | ||||||||||||||
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| Net revenues |
$ | 294,010 | $ | 414,006 | $ | 1,114,962 | $ | 1,388,810 | $ | 1,355,632 | ||||||||||
| Income (loss) from operations(1) |
50,150 | 15,656 | (33,217 | ) | 136,462 | 244,534 | ||||||||||||||
| Interest expense, net of capitalized interest |
(36,095 | ) | (37,298 | ) | (134,925 | ) | (144,130 | ) | (126,653 | ) | ||||||||||
| Other income (expense), net |
787 | 1,994 | (568 | ) | 6,321 | 14,202 | ||||||||||||||
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| Income (loss) before income tax |
14,842 | (19,648 | ) | (168,710 | ) | (1,347 | ) | 132,083 | ||||||||||||
| Income tax benefit (provision) |
3,678 | (1,029 | ) | 6,694 | (1,029 | ) | (475 | ) | ||||||||||||
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| Net income (loss) |
18,520 | (20,677 | ) | (162,016 | ) | (2,376 | ) | 131,608 | ||||||||||||
| Income attributable to non-controlling interests |
70 | 29 | (139 | ) | (169 | ) | (1,054 | ) | ||||||||||||
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| Net income (loss) attributable to Mohegan Tribal Gaming Authority |
$ | 18,590 | $ | (20,648 | ) | $ | (162,155 | ) | $ | (2,545 | ) | $ | 130,554 | |||||||
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| Cash Flows Data: |
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| Net cash flows provided by operating activities |
$ | 81,824 | $ | 27,430 | $ | 48,212 | $ | 200,399 | $ | 214,710 | ||||||||||
| Capital expenditures incurred |
35,753 | 22,683 | 176,674 | 80,994 | 122,802 | |||||||||||||||
| Distributions to the Tribe |
27,667 | 21,000 | 60,000 | 60,000 | 60,000 | |||||||||||||||
| Balance Sheet Data: |
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| Cash and cash equivalents |
$ | 112,665 | $ | 130,138 | $ | 112,665 | $ | 130,138 | $ | 103,944 | ||||||||||
| Total assets |
2,707,188 | 2,511,596 | 2,707,188 | 2,511,596 | 2,312,119 | |||||||||||||||
| Long-term debt and finance leases, net of current portions |
1,922,864 | 1,860,809 | 1,922,864 | 1,860,809 | 1,740,923 | |||||||||||||||
| Other Data: |
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| Total debt |
$ | 2,021,280 | $ | 1,966,906 | $ | 2,021,280 | $ | 1,966,906 | $ | 1,888,636 | ||||||||||
| Total restricted group debt (2) |
1,809,896 | 1,756,902 | 1,809,896 | 1,756,902 | 1,773,511 | |||||||||||||||
| Total restricted group secured debt (3) |
1,271,970 | 1,223,871 | 1,271,970 | 1,223,871 | 1,249,846 | |||||||||||||||
| Total leverage ratio (4) |
5.2x | 5.2x | 5.6x | 5.3x | 4.8x | |||||||||||||||
| Adjusted EBITDA (5): |
||||||||||||||||||||
| Mohegan Sun |
$ | 80,113 | $ | 64,811 | $ | 201,720 | $ | 259,998 | $ | 308,233 | ||||||||||
| Mohegan Sun Pocono |
10,804 | 11,759 | 25,010 | 48,248 | 51,495 | |||||||||||||||
| MGE Niagara Resorts |
(9,071 | ) | 10,191 | (2,068 | ) | 13,493 | — | |||||||||||||
| Management, development and other |
6,028 | 4,806 | 16,306 | 11,385 | 1,988 | |||||||||||||||
| Corporate |
(5,057 | ) | (1,450 | ) | (23,357 | ) | (22,086 | ) | (23,115 | ) | ||||||||||
| Inter-segment |
(32 | ) | (705 | ) | (63 | ) | (920 | ) | — | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 82,785 | $ | 89,412 | $ | 217,548 | $ | 310,118 | $ | 338,601 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Adjusted EBITDA margin |
28.2 | % | 21.6 | % | 19.5 | % | 22.3 | % | 25.0 | % | ||||||||||
| Unlevered free cash flow (5) |
$ | 78,015 | $ | 84,251 | $ | 196,431 | $ | 284,903 | $ | 302,726 | ||||||||||
| (1) | Income (loss) from operations includes a $126.6 million impairment charge related to Mohegan Sun Pocono’s intangible assets in the second quarter of fiscal 2020 and a $39.5 million impairment charge related to Mohegan Sun Pocono’s goodwill in the fourth quarter of fiscal 2019. |
| (2) | Reflects notional value of the restricted group’s total debt. |
| (3) | Reflects notional value of the restricted group’s senior secured debt. |
| (4) | Restricted group leverage ratio represents consolidated funded indebtedness/consolidated EBITDA as defined in the Senior Credit Facilities that will be replaced by the New Senior Secured Credit Facilities prior to or substantially concurrent with the consummation of the Offering. Leverage ratios for the three months ended September 30, 2019 and 2020 assume annualized EBITDA for those periods. |
| (5) | Reconciliations of net income (loss), a financial measured determined in accordance with GAAP, to adjusted EBITDA and unlevered free cash flow are shown below (in thousands): |
| For the Three Months Ended September 30, |
For the Fiscal Years Ended September 30, | |||||||||||||||||||
| 2020 | 2019 | 2020 | 2019 | 2018 | ||||||||||||||||
| Net income (loss) |
$ | 18,520 | $ | (20,677 | ) | $ | (162,016 | ) | $ | (2,376 | ) | $ | 131,608 | |||||||
| Income tax (benefit) provision |
(3,678 | ) | 1,029 | (6,694 | ) | 1,029 | 475 | |||||||||||||
| Interest expense, net of capitalized interest |
36,095 | 37,298 | 134,925 | 144,130 | 126,653 | |||||||||||||||
| Loss on modification of debt |
2,888 | — | 2,888 | — | — | |||||||||||||||
| Interest income |
(205 | ) | (1,164 | ) | (1,754 | ) | (6,803 | ) | (15,468 | ) | ||||||||||
| Other, net |
(3,470 | ) | (830 | ) | (566 | ) | 482 | 1,266 | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Income from operations |
$ | 50,150 | $ | 15,656 | $ | (33,217 | ) | $ | 136,462 | $ | 244,534 | |||||||||
| Adjusted EBITDA attributable to non-controlling interests |
(201 | ) | (122 | ) | (695 | ) | (895 | ) | (2,942 | ) | ||||||||||
| Depreciation and amortization |
26,220 | 29,975 | 109,067 | 122,657 | 81,789 | |||||||||||||||
| Impairment of Mohegan Sun Pocono’s intangible assets |
— | — | 126,596 | — | — | |||||||||||||||
| Impairment of Mohegan Sun Pocono’s goodwill |
— | 39,459 | — | 39,459 | — | |||||||||||||||
| Other, net |
6,616 | 4,444 | 15,797 | 12,435 | 15,220 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Adjusted EBITDA |
$ | 82,785 | $ | 89,412 | $ | 217,548 | $ | 310,118 | $ | 338,601 | ||||||||||
| Maintenance capital expenditures |
(4,770 | ) | (5,161 | ) | (21,117 | ) | (25,215 | ) | (35,875 | ) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Unlevered Free Cash Flow |
$ | 78,015 | $ | 84,251 | $ | 196,431 | $ | 284,903 | $ | 302,726 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended September 30, 2020 Annualized | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA |
||||||||||||||||
| Mohegan Sun |
$ | $249,992 | $ | 70,252 | $ | 208 | $ | — | $ | 320,452 | ||||||||||
| Mohegan Sun Pocono |
30,248 | 13,076 | (108 | ) | — | 43,216 | ||||||||||||||
| MGE Niagara Resorts |
(58,052 | ) | 21,424 | 344 | — | (36,284 | ) | |||||||||||||
| Management, development and other |
(1,144 | ) | 40 | 26,020 | (804 | ) | 24,112 | |||||||||||||
| Corporate |
(20,316 | ) | 88 | — | — | (20,228 | ) | |||||||||||||
| Inter-segment |
(128 | ) | — | — | — | (128 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 200,600 | $ | 104,880 | $ | 26,464 | $ | (804 | ) | $ | 331,140 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended September 30, 2020 Annualized | ||||||||||||||||
| Income from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA | |||||||||||||
| Restricted group Adjusted EBITDA |
$ | 260,724 | $ | 83,416 | $ | 100 | $ | 344,240 | ||||||||
| For the Three Months Ended September 30, 2020 Annualized | ||||||||||||||||||||||||||||
| Income from Operations |
Depreciation and Amortization |
Other, net |
Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA |
Maintenance Capital Expenditures |
Unlevered Free Cash Flow |
||||||||||||||||||||||
| Unlevered free cash flow |
$ | 200,600 | $ | 104,880 | $ | 26,464 | $ | (804 | ) | $ | 331,140 | $ | (19,080 | ) | $ | 312,060 | ||||||||||||
| For the Fiscal Year Ended September 30, 2020 | ||||||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Impairment of Mohegan Sun Pocono’s Intangible Assets |
Other, net | Adjusted EBITDA Attributable to Non-Controlling Interests |
Adjusted EBITDA | |||||||||||||||||||
| Mohegan Sun |
$ | 128,449 | $ | 72,992 | $ | — | $ | 279 | $ | — | $ | 201,720 | ||||||||||||
| Mohegan Sun Pocono |
(115,073 | ) | 13,580 | 126,596 | (93 | ) | — | 25,010 | ||||||||||||||||
| MGE Niagara Resorts |
(24,676 | ) | 22,351 | — | 257 | — | (2,068 | ) | ||||||||||||||||
| Management, development and other |
1,585 | 62 | — | 15,354 | (695 | ) | 16,306 | |||||||||||||||||
| Corporate |
(23,439 | ) | 82 | — | — | — | (23,357 | ) | ||||||||||||||||
| Inter-segment |
(63 | ) | — | — | — | — | (63 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | (33,217 | ) | $ | 109,067 | $ | 126,596 | $ | 15,797 | $ | (695 | ) | $ | 217,548 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| For the Fiscal Year Ended September 30, 2019 | ||||||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Impairment of Mohegan Sun Pocono’s Goodwill |
Other, net | Adjusted EBITDA Attributable to Non-Controlling Interests |
Adjusted EBITDA | |||||||||||||||||||
| Mohegan Sun |
$ | 156,276 | $ | 102,508 | $ | — | $ | 833 | $ | 381 | $ | 259,998 | ||||||||||||
| Mohegan Sun Pocono |
(5,253 | ) | 14,004 | 39,459 | 38 | — | 48,248 | |||||||||||||||||
| MGE Niagara Resorts |
7,368 | 6,125 | — | — | — | 13,493 | ||||||||||||||||||
| Management, development and other |
1,152 | (55 | ) | — | 11,564 | (1,276 | ) | 11,385 | ||||||||||||||||
| Corporate |
(22,161 | ) | 75 | — | — | — | (22,086 | ) | ||||||||||||||||
| Inter-segment |
(920 | ) | — | — | — | — | (920 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | 136,462 | $ | 122,657 | $ | 39,459 | $ | 12,435 | $ | (895 | ) | $ | 310,118 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| For the Fiscal Year Ended September 30, 2018 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non-Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| $ | 230,890 | $ | 67,997 | $ | 8,199 | $ | 1,147 | $ | 308,233 | |||||||||||
| Mohegan Sun Pocono |
37,541 | 13,640 | 314 | — | 51,495 | |||||||||||||||
| Management, development and other |
(686 | ) | 56 | 6,707 | (4,089 | ) | 1,988 | |||||||||||||
| Corporate |
(23,211 | ) | 96 | — | — | (23,115 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 244,534 | $ | 81,789 | $ | 15,220 | $ | (2,942 | ) | $ | 338,601 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
The data shown below for each of the three months ended September 30, 2020, June 30, 2020, March 31, 2020, December 31, 2019, September 30, 2019, June 30, 2019, March 31, 2019, and December 31, 2018 are derived from the Company’s unaudited consolidated statements of income (loss).
| For the Three Months Ended September 30, 2020 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 62,498 | $ | 17,563 | $ | 52 | $ | — | $ | 80,113 | ||||||||||
| Mohegan Sun Pocono |
7,562 | 3,269 | (27 | ) | — | 10,804 | ||||||||||||||
| MGE Niagara Resorts |
(14,513 | ) | 5,356 | 86 | — | (9,071 | ) | |||||||||||||
| Management, development and other |
(286 | ) | 10 | 6,505 | (201 | ) | 6,028 | |||||||||||||
| Corporate |
(5,079 | ) | 22 | — | — | (5,057 | ) | |||||||||||||
| Inter-segment |
(32 | ) | — | — | — | (32 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 50,150 | $ | 26,220 | $ | 6,616 | $ | (201 | ) | $ | 82,785 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended June 30, 2020 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 1,692 | $ | 17,660 | $ | 103 | $ | — | $ | 19,455 | ||||||||||
| Mohegan Sun Pocono |
(8,888 | ) | 3,344 | — | — | (5,544 | ) | |||||||||||||
| MGE Niagara Resorts |
(9,778 | ) | 5,441 | — | — | (4,337 | ) | |||||||||||||
| Management, development and other |
2,200 | 10 | 2,553 | (201 | ) | 4,562 | ||||||||||||||
| Corporate |
(5,749 | ) | 22 | — | — | (5,727 | ) | |||||||||||||
| Inter-segment |
(14 | ) | — | — | — | (14 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | (20,537 | ) | $ | 26,477 | $ | 2,656 | $ | (201 | ) | $ | 8,395 | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended March 31, 2020 | ||||||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Impairment of Mohegan Sun Pocono’s Intangible Assets |
Other, net | Adjusted EBITDA Attributable to Non-Controlling Interests |
Adjusted EBITDA | |||||||||||||||||||
| Mohegan Sun |
$ | 19,194 | $ | 17,803 | $ | — | $ | 57 | $ | — | $ | 37,054 | ||||||||||||
| Mohegan Sun Pocono |
(121,541 | ) | 3,490 | 126,596 | (4 | ) | — | 8,541 | ||||||||||||||||
| MGE Niagara Resorts |
948 | 6,500 | — | 81 | — | 7,529 | ||||||||||||||||||
| Management, development and other |
589 | 12 | — | 3,144 | (159 | ) | 3,586 | |||||||||||||||||
| Corporate |
(5,447 | ) | 21 | — | — | — | (5,426 | ) | ||||||||||||||||
| Inter-segment |
2 | — | — | — | — | 2 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | (106,255 | ) | $ | 27,826 | $ | 126,596 | $ | 3,278 | $ | (159 | ) | $ | 51,286 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| For the Three Months Ended December 31, 2019 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 45,065 | $ | 19,966 | $ | 67 | $ | — | $ | 65,098 | ||||||||||
| Mohegan Sun Pocono |
7,794 | 3,477 | (62 | ) | — | 11,209 | ||||||||||||||
| MGE Niagara Resorts |
(1,333 | ) | 5,054 | 90 | — | 3,811 | ||||||||||||||
| Management, development and other |
(918 | ) | 30 | 3,152 | (134 | ) | 2,130 | |||||||||||||
| Corporate |
(7,164 | ) | 17 | — | — | (7,147 | ) | |||||||||||||
| Inter-segment |
(19 | ) | — | — | — | (19 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 43,425 | $ | 28,544 | $ | 3,247 | $ | (134 | ) | $ | 75,082 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended September 30, 2019 | ||||||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Impairment of Mohegan Sun Pocono’s Goodwill |
Other, net | Adjusted EBITDA Attributable to Non-Controlling Interests |
Adjusted EBITDA | |||||||||||||||||||
| Mohegan Sun |
$ | 43,488 | $ | 21,065 | $ | — | $ | 258 | $ | — | $ | 64,811 | ||||||||||||
| Mohegan Sun Pocono |
(31,263 | ) | 3,473 | 39,459 | 90 | — | 11,759 | |||||||||||||||||
| MGE Niagara Resorts |
4,784 | 5,407 | — | — | — | 10,191 | ||||||||||||||||||
| Management, development and other |
820 | 12 | — | 4,096 | (122 | ) | 4,806 | |||||||||||||||||
| Corporate |
(1,468 | ) | 18 | — | — | — | (1,450 | ) | ||||||||||||||||
| Inter-segment |
(705 | ) | — | — | — | — | (705 | ) | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| Total |
$ | 15,656 | $ | 29,975 | $ | 39,459 | $ | 4,444 | $ | (122 | ) | $ | 89,412 | |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
| For the Three Months Ended June 30, 2019 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 48,812 | $ | 18,335 | $ | 150 | $ | — | $ | 67,297 | ||||||||||
| Mohegan Sun Pocono |
10,604 | 3,728 | (43 | ) | — | 14,289 | ||||||||||||||
| MGE Niagara Resorts |
2,584 | 718 | — | — | 3,302 | |||||||||||||||
| Management, development and other |
(9 | ) | 12 | 3,640 | (144 | ) | 3,499 | |||||||||||||
| Corporate |
(6,566 | ) | 17 | — | — | (6,549 | ) | |||||||||||||
| Inter-segment |
(215 | ) | — | — | — | (215 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 55,210 | $ | 22,810 | $ | 3,747 | $ | (144 | ) | $ | 81,623 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended March 31, 2019 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 19,913 | $ | 39,471 | $ | (43 | ) | $ | — | $ | 59,341 | |||||||||
| Mohegan Sun Pocono |
8,214 | 3,387 | (9 | ) | — | 11,592 | ||||||||||||||
| Management, development and other |
754 | (94 | ) | 2,375 | (114 | ) | 2,921 | |||||||||||||
| Corporate |
(6,655 | ) | 18 | — | — | (6,637 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 22,226 | $ | 42,782 | $ | 2,323 | $ | (114 | ) | $ | 67,217 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| For the Three Months Ended December 31, 2018 | ||||||||||||||||||||
| Income (Loss) from Operations |
Depreciation and Amortization |
Other, net | Adjusted EBITDA Attributable to Non- Controlling Interests |
Adjusted EBITDA | ||||||||||||||||
| Mohegan Sun |
$ | 44,063 | $ | 23,637 | $ | 468 | $ | 381 | $ | 68,549 | ||||||||||
| Mohegan Sun Pocono |
7,192 | 3,416 | — | — | 10,608 | |||||||||||||||
| Management, development and other |
(413 | ) | 15 | 1,453 | (896 | ) | 159 | |||||||||||||
| Corporate |
(7,472 | ) | 22 | — | — | (7,450 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Total |
$ | 43,370 | $ | 27,090 | $ | 1,921 | $ | (515 | ) | $ | 71,866 | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||
| Restricted Group Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||||
| $ in thousands |
For the Three Months Ended, | For the fiscal years ended, | ||||||||||||||||||||||||||||||||||||||
| 12/31/2018 | 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | 3/31/2020 | 6/30/2020 | 9/30/2020 | 9/30/2019 | 9/30/2020 | |||||||||||||||||||||||||||||||
| Income (loss) from operations |
$ | 44,297 | $ | 21,378 | $ | 53,028 | $ | 12,044 | $ | 46,395 | $ | (107,213 | ) | $ | (12,658 | ) | $ | 65,181 | $ | 130,747 | $ | (8,295 | ) | |||||||||||||||||
| Depreciation & Amortization |
27,074 | 42,877 | 22,081 | 24,555 | 23,460 | 21,314 | 21,025 | 20,854 | 116,587 | 86,653 | ||||||||||||||||||||||||||||||
| Impairment of Mohegan Sun Pocono’s goodwill |
— | — | — | 39,459 | — | — | — | — | 39,459 | — | ||||||||||||||||||||||||||||||
| Impairment of Mohegan Sun Pocono’s intangible |
— | — | — | — | — | 126,596 | — | — | — | 126,596 | ||||||||||||||||||||||||||||||
| Other, net |
468(52 | ) | 107 | 348 | 5 | 53 | 103 | 25 | 871 | 186 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to non-controlling interests |
381 | — | — | — | — | — | — | — | 381 | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Adjusted EBITDA |
$ | 72,220 | $ | 64,203 | $ | 75,216 | $ | 76,406 | $ | 69,860 | $ | 40,750 | $ | 8,470 | $ | 86,060 | $ | 288,045 | $ | 205,140 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
| Adjusted EBITDA | ||||||||||||||||||||||||||||||||||||||||
| $ in thousands |
For the Three Months Ended, | For the fiscal years ended, | ||||||||||||||||||||||||||||||||||||||
| 12/31/2018 | 3/31/2019 | 6/30/2019 | 9/30/2019 | 12/31/2019 | 3/31/2020 | 6/30/2020 | 9/30/2020 | 9/30/2019 | 9/30/2020 | |||||||||||||||||||||||||||||||
| Income (loss) from operations |
$ | 43,370 | $ | 22,226 | $ | 55,210 | $ | 15,656 | $ | 43,425 | $ | (106,255 | ) | $ | (20,537 | ) | $ | 50,150 | $ | 136,462 | $ | (33,217 | ) | |||||||||||||||||
| Depreciation & Amortization |
27,090 | 42,782 | 22,810 | 29,975 | 28,544 | 27,826 | 26,477 | 26,220 | 122,657 | 109,067 | ||||||||||||||||||||||||||||||
| Impairment of Mohegan Sun Pocono’s goodwill |
— | — | — | 39,459 | — | — | — | — | 39,459 | — | ||||||||||||||||||||||||||||||
| Impairment of Mohegan Sun Pocono’s intangible |
— | — | — | — | — | 126,596 | — | — | — | 126,596 | ||||||||||||||||||||||||||||||
| Other, net |
1,921 | 2,323 | 3,747 | 4,444 | 3,247 | 3,278 | 2,656 | 6,616 | 12,435 | 15,797 | ||||||||||||||||||||||||||||||
| Adjusted EBITDA attributable to non-controlling interests |
(515 | ) | (114 | ) | (144 | ) | (122 | ) | (134 | ) | (159 | ) | (201 | ) | (201 | ) | (895 | ) | (695 | ) | ||||||||||||||||||||
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| Adjusted EBITDA |
$ | 71,866 | $ | 67,217 | $ | 81,623 | $ | 89,412 | $ | 75,082 | $ | 51,286 | $ | 8,395 | $ | 82,785 | $ | 310,118 | $ | 217,548 | ||||||||||||||||||||
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Forward-Looking Statements
This document contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Certain statements contained in this document, including those that express a belief, expectation or intention, as well as all statements that are not statements of historical fact, are forward-looking statements within the meaning of the federal securities laws and as such are based upon the current beliefs of MGE as to the outcome and timing of future events. There can be no assurance that the expectations, conclusions or beliefs expressed in any forward-looking statements will in fact occur. Examples of forward looking statements in this document include, but are not limited to, statements regarding: (i) the financial performance of our various operations; (ii) the impact of the COVID-19 pandemic and related societal, economic and regulatory effects; (iii) the impact of competition on our various gaming facilities; (iv) our expected liquidity and leverage; (v) anticipated benefits from our various properties; (vi) the effects of our efforts to expand and diversify; (vii) operational efficiencies; and (vii) expected future market conditions.
Forward-looking statements are generally identifiable by use of forward-looking terminology such as “may,” “will,” “should,” “potential,” “intend,” “expect,” “seek,” “anticipate,” “estimate,” “believe,” “could,” “project,” “predict,” “hypothetical,” “continue,” “future” or other similar words or expressions. All forward-looking statements included in this document are based upon information available to the Company on the date hereof and the Company is under no duty to update any of the forward-looking statements after the date of this document to conform these statements to actual results. The forward-looking statements involve a number of significant risks and uncertainties, and there are important factors that, among others, could cause the Company’s future financial condition or results to differ materially from the views expressed in the forward-looking statements. These factors include the financial performance of the Company’s various operations; the impact of the COVID-19 pandemic and related societal, economic and regulatory effects, including required shutdowns of any the Company’s facilities; the local, regional, national or global economic climate; increased competition; the Company’s leverage and ability to meet its debt service obligations and maintain compliance with financial debt covenants; the continued availability of financing; the Company’s dependence on existing management; the Company’s ability to integrate new amenities from expansions to its facilities into its current operations and manage the expanded facilities; changes in federal or state tax laws or the administration of such laws; changes in gaming laws or regulations, including the limitation, denial or suspension of licenses requires under gaming laws and regulations; cyber security risks relating to the Company’s information technology and other systems, including misappropriation of patron information or other breaches of information security; changes in applicable laws pertaining to the service of alcohol, smoking or other amenities offered at the Company’s facilities; the Company’s ability to successfully implement its diversification strategy; an act of terrorism; the Company’s customers’ access to inexpensive transportation to the Company’s facilities and changes in oil, fuel or other transportation-related expenses; unfavorable weather conditions; risks associated with operations in foreign jurisdictions; failure by the Company’s employees, agents, affiliates, vendors or businesses to comply with applicable laws, rules and regulations; and fluctuations in foreign currency exchange rates. Additional factors that could have a material adverse effect on the Company’s operations and future prospects are set forth in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2020, including the sections entitled “Risk Factors” contained therein. The factors set forth in the Risk Factors section and otherwise described in the Company’s filings with SEC could cause the Company’s actual results to differ significantly from those contained in any forward-looking statement contained in this document. The Company does not guarantee that the assumptions underlying such forward-looking statements are free from errors.
Should one or more of these risks or uncertainties occur, or should underlying assumptions prove incorrect, the Company’s business, financial condition, liquidity, cash flows and results could differ materially from those expressed in any forward-looking statement. While forward-looking statements reflect the Company’s good faith beliefs, they are not guarantees of future performance. Any forward-looking statement speaks only as of the date on which it is made. New risks and uncertainties arise over time, and it is not possible for us to predict the occurrence of those matters or the manner in which they may affect us. The Company disclaims any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, of new information, data or methods, future events or other changes. Use caution in relying on past forward-looking statements, which were based on results and trends at the time they were made, to anticipate future results or trends.
Non-GAAP Financial Measures
This document includes certain non-GAAP financial measures. The non-GAAP measures provided herein may not be directly comparable to similar measures used by other companies in MGE’s industry, as other companies may define such measures differently. The non-GAAP measures presented herein are not measurements of financial performance under GAAP, and should not be considered as alternatives to, and should only be considered together with, MGE’s financial results in accordance with GAAP. The Company does not consider these non-GAAP financial measures to be a substitute for, or superior to, the information provided by GAAP financial results. A reconciliation of the non-GAAP measures to the corresponding amounts prepared in accordance with GAAP appears in the tables in this document. The tables provide additional information as to the items and amounts that have been excluded from the adjusted measures.
Exhibit 99.2
MOHEGAN GAMING & ENTERTAINMENT ANNOUNCES REFINANCING TRANSACTIONS
Uncasville, Connecticut, January 13, 2021 – Mohegan Gaming & Entertainment (“MGE” or the “Company”) today announced that it has commenced a private offering (the “Offering”) of $1.175 billion aggregate principal amount of second priority senior secured notes due 2026 (the “Notes”). The consummation of the Offering is conditioned on, among other things, MGE’s replacement of its existing senior secured credit facilities (the “Senior Secured Credit Facilities”) with a new revolving credit facility, or an amendment and restatement of the Senior Secured Credit Facilities into a new revolving credit facility, in either case with commitments of not less than $250 million (the “New Senior Secured Credit Facility”) prior to or substantially concurrent with the Offering. The net proceeds from the Offering and borrowings under the New Senior Secured Credit Facility, together with cash on hand, will be used to fund the repayment, satisfaction and discharge of certain existing indebtedness of MGE, including all loans outstanding under the Senior Secured Credit Facilities, all obligations in respect of MGE’s Main Street term loan facility and MGE’s debt to the Mohegan Tribe in respect of certain subordinated loans, and to pay related fees and expenses.
The Notes will be guaranteed by certain of the Company’s subsidiaries.
The Offering will be made only to persons reasonably believed to be “qualified institutional buyers” pursuant to Rule 144A under the Securities Act of 1933, as amended (the “Securities Act”), and to non-U.S. persons outside the United States pursuant to Regulation S under the Securities Act. The Notes will be subject to restrictions on transferability and resale and may not be transferred or resold, except in compliance with the registration requirements of the Securities Act or pursuant to an exemption therefrom and in compliance with other applicable securities laws. The Notes will not be registered under the Securities Act or any state or other securities laws and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements of the Securities Act and applicable state laws.
No Offer or Solicitation
This press release is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other securities and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other securities in any jurisdiction in which such offer, solicitation or sale is unlawful. The Offering is made only by, and pursuant to, the terms set forth in the related offering memorandum. The Offering is not being made to persons in any jurisdiction in which the making or acceptance thereof would not be in compliance with the securities, blue sky or other laws of such jurisdiction.
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, as amended. 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, 2020, 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.
Contact:
Christopher Jones
Vice President, Corporate Finance
Mohegan Gaming & Entertainment
(860) 862-8000
-2-
Document and Entity Information |
Jan. 13, 2021 |
|---|---|
| Cover [Abstract] | |
| Amendment Flag | false |
| Entity Central Index Key | 0001005276 |
| Document Type | 8-K |
| Document Period End Date | Jan. 13, 2021 |
| Entity Registrant Name | MOHEGAN TRIBAL GAMING AUTHORITY |
| Entity File Number | 033-80655 |
| Entity Tax Identification Number | 06-1436334 |
| Entity Address, Address Line One | One Mohegan Sun Boulevard |
| Entity Address, City or Town | Uncasville |
| Entity Address, State or Province | CT |
| Entity Incorporation State Country Code | CT |
| Entity Address, Postal Zip Code | 06382 |
| City Area Code | (860) |
| Local Phone Number | 862-8000 |
| Written Communications | false |
| Soliciting Material | false |
| Pre Commencement Tender Offer | false |
| Pre Commencement Issuer Tender Offer | false |
| Entity Emerging Growth Company | false |