Pocono Downs - Mohegan Tribal Gaming Authority

Transcription

MOHEGAN TRIBAL
GAMING AUTHORITY
Presented By:
Peter J. Roberti
Vice President - Finance, MTGA
James Wood
Director - Finance, MTGA
Wells Fargo Securities Gaming
and Lodging Conference
May 26, 2010
Disclosure Regarding Forward-Looking Statements
Some information included in this presentation is not strictly historical in nature and involves
important risks and uncertainties that could significantly affect anticipated results in the future.
Such statements are forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forwardlooking statements are only predictions and actual events or results may differ materially from
any forward-looking statements made during this presentation. Factors that could cause actual
results to vary from these forward-looking statements are more fully described in our Annual
Report on Form 10-K, as filed with the Securities and Exchange Commission, for the fiscal year
ended September 30, 2009, under the heading “Risk Factors.” Forward-looking statements
made during this presentation represent our current outlook only as of today’s date. We do not
undertake any obligation to update or supplement any forward-looking statements to reflect
subsequent events or circumstances. The Authority cannot assure that projected results will be
achieved or that predicted events will occur. The following presentation includes certain financial
measures of performance that are not calculated in accordance with accounting principles
generally accepted in the United States of America, or GAAP.
2
Agenda
 Our Properties
 Mohegan Sun
 Pocono Downs
 Market Overview
 Competitive Landscape
 Update on Financial Results
 Mohegan Sun at Pocono Downs – Introduction of Table Games
 Mohegan Sun at Pocono Downs – Hotel Project
 Massachusetts Update
 Capital Structure & Debt Maturities
 Capital Expenditures & Tribal Distributions
 Strategic Focus
 Q&A
3
Our Properties
4
Mohegan Sun
 Located on a 185-acre site on the
Mohegan Tribe’s reservation in
Uncasville, Connecticut overlooking
the Thames River
 Approximately 3.1 million s.f. facility
 Three individually themed casinos:
 Casino of the Earth
 Casino of the Sky
 Casino of the Wind
 Approximately 6,400 slot machines,
over 330 table games and 42 poker
tables
5
Casino of the Wind
6
Royal Suite
Hotel Refurbishment Project:
7
Bobby Flay’s Bar Americain
Opened November 2009:
8
Winter Entrance - Tribal History Walkway
Opened April 2010:
9
The Shops at Mohegan Sun:
Featuring more than 60 restaurants,
retail outlets and lounges!
Included:
•Boccelli
•Brookstone
•LUSH Cosmetics
•Godiva
•Landau
•Coach
•Swarovski
•Citizen Watch
•Tiffany & Co
•Yankee Candle
10
The Mohegan Sun 10,000 Seat Arena:
Featuring the industry’s hottest acts
including Billy Joel, Elton John, Britney
Spears, The Eagles and so many more!
Upcoming Acts:
•Conan O’Brien
•Carole King & James
Taylor
•Backstreet Boys
•Yes & Peter
Frampton
•Styx & Foreigner
•Ringo Starr
•Michael Buble
•Sting
•Chicago
•Meat Loaf
•American Idol Live
•Christina Aguilera
•Rush
•Carlos Santana
•Goo Goo Dolls
•Rihanna
•Jeff Dunham
•Shakira
11
Mohegan Sun at Pocono Downs
 Located in Wilkes-Barre, Pennsylvania
 Approximately 400,000 s.f. facility (including grandstand)
 Approximately 2,400 slot machines and electronic table games
 Dining options include: Ruth’s Chris Steakhouse, Rustic Kitchen Bistro and Bar,
Bar Louie, Timbers Buffet and a food court including several dining outlets
 Retail options include: Brookstone, Marshall Rousso and Misura
 Live harness racing 105 days a year
12
Market Overview
13
Trends in the Northeast Gaming Market
Mohegan Sun – Connecticut:
 Visitation is stable, however gaming spend per visit is down across all patron
gaming levels
 Consumers prefer greater value for their discretionary spend
 Consumers are more selective with their demand for products and services creating
downward pressure on pricing of non-gaming products and services
 Market is becoming more competitive
 Use of free bet and free slot play are becoming the norm
Pocono Downs – Pennsylvania:
 Many of the same trends as Connecticut
 Spend per visit has stabilized year-over-year
 Growth is slowing as markets are becoming more mature, though still positive
 Increased use of non-cash incentives (free slot play) due to increased competition
14
Market Areas
 Mohegan Sun and Mohegan Sun at Pocono Downs maintain a leading market share
in the Connecticut and Northeastern Pennsylvania markets
Market Participants
Mt. Airy
Mighty M
Connecticut: 2 properties
Twin River
Rhode Island: 2 properties
New York: 3 properties
Atlantic City: 11 properties
Tioga
Downs
Pennsylvania: 13 properties (a)
Newport
Grand
(a) 13 of 14 gaming licenses have been issued.
Foxwoods
Empire City
(Yonkers)
Sands
Bethlehem
Note: Circles represent approx. 60
and 100 mile radii around Pocono
Downs and Mohegan Sun CT
respectively.
15
Mohegan Sun vs. Foxwoods Comparison
 For the twelve months ended April 30, 2010, Mohegan Sun operated an average of 6,627 slot
machines with a net WPU/Day of $313 versus Foxwoods who operated an average of 7,414 slot
machines with a net WPU/Day of $246. Net WPU excludes free promotional slot play.
$450
9,000
$400
8,000
$350
7,000
$300
6,000
$250
5,000
$200
4,000
$150
3,000
$100
2,000
$50
1,000
$-
Number of Slot Machines
Slot WPU (by month)
Monthly Slot WPU vs. Number of Slot Machines
May-09
Jun-09
Jul-09
Mohegan Sun WPU
Aug-09
Sep-09
Foxwoods WPU
Oct-09
Nov-09
Dec-09
Mohegan Sun Number of Slot Machines
Jan-10
Feb-10
Mar-10
Apr-10
Foxwoods Number of Slot Machines
Source: State of Connecticut Division of Special Revenue
16
Mohegan Sun Slot Win Efficiency in Northeast Market
 Mohegan Sun’s win efficiency for the 12 months ended April 30, 2010 was 121.0%
 Mohegan Sun consistently wins more than its fair share of the Northeast slot market
Slot Market Win Efficiency in the Northeast Market
150.00%
125.00%
100.00%
75.00%
50.00%
25.00%
Mohegan Sun
Foxwoods
Twin River
Newport Grand
Empire City - Yonkers
0.00%
May-09
Jun-09
Jul-09
Aug-09
Sep-09
Oct-09
Nov-09
Dec-09
Jan-10
Feb-10
Mar-10
Apr-10
Note: The Northeast comparable set includes Mohegan Sun, Foxwoods, Twin River, Newport Grand and Yonkers Empire City
Source: State of Connecticut Division of Special Revenue, Rhode Island Lottery Website, NY Lottery Website
17
Mohegan Sun Rated Gaming Revenue by State
Gaming Revenue
Fiscal Year to Date March 31, 2010
Total Database: Approximately 4,000,000
18
Pocono Downs Slot Win Market Share and Win Efficiency
 For the twelve months ended April 30, 2010, Mohegan Sun at Pocono Downs’ slot win was
approximately 37.2% of the Northeastern Pennsylvania market
Slot Win Market Share and Slot Win Efficiency
Sands Opening
160.00%
80.00%
129.8%
127.1%
116.4%
118.8%
115.3%
118.4%
116.1%
117.9%
116.2%
120.2%
140.00%
123.4%
120.00%
110.3%
60.00%
100.00%
44.3%
40.00%
36.0%
36.6%
35.7%
36.9%
37.4%
36.9%
38.1%
35.6%
36.2%
36.7%
Slot Win Efficiency
Slot Win Market / Unit Share
100.00%
36.4%
80.00%
20.00%
60.00%
0.00%
40.00%
May-09
Jun-09
Jul-09
Aug-09
MSPD Slot Win Share
Sep-09
Oct-09
Nov-09
Dec-09
MSPD Slot Unit Share
Jan-10
Feb-10
Mar-10
Apr-10
MSPD Slot Win Efficiency
Note: Northeastern Pennsylvania’s comparable set includes Pocono Downs, Mount Airy Resort and Sands Bethlehem.
Source: MTGA & Pennsylvania Gaming Control Board
19
Pocono Downs vs. Northeastern Pennsylvania
 For twelve months ended April 30, 2010, Mohegan Sun at Pocono Downs operated 2,432 slot
machines with a WPU/Day of $251 versus the Northeastern PA Market average WPU/Day of $211
Monthly Slot WPU vs. Number of Slot Machines
Sands Opening
$450
8,000
$400
7,000
Slot WPU (by month)
6,000
$300
5,000
$250
4,000
$200
3,000
$150
Number of Slot Machines
$350
2,000
$100
1,000
$50
$-
May-09
Mohegan Sun WPU
Jun-09
Jul-09
Aug-09
Northeast Market WPU
Sep-09
Oct-09
Nov-09
Dec-09
Mohegan Sun Number of Slot Machines
Jan-10
Feb-10
Mar-10
Apr-10
NE Slot Mkt Avg. Number of Slot Machines
Note: Northeastern Pennsylvania’s comparable set includes Pocono Downs, Mount Airy Resort and Sands Bethlehem.
Source: MTGA & Pennsylvania Gaming Control Board
20
Pocono Downs Rated Gaming Revenue by State
Gaming Revenue
Fiscal Year to Date March 31, 2010
Total Database: Approximately 400,000
21
Competitive Landscape
22
23
24
Operating Results
Second Quarter Ended March 31, 2010
25
FY 2010 Consolidated Operating Results – MTGA
2nd Quarter Ended March 31, 2010
($ in millions)
MTGA Net Revenue
MTGA Adjusted EBITDA & EBITDA Margin
$500
$100
35%
$85.1
$400
$76.8
$80
$351
30%
$352
$60
$300
25%
24.2%
$40
21.8%
20%
$200
$100
FY '09
FY '10
$20
15%
$-
10%
FY '09
FY '10
 2nd Quarter MTGA net revenues increased by $0.9m or 0.3% when compared to the prior year
2nd Quarter
 Adjusted EBITDA decreased by $8.3m or 9.7% for the 2nd Quarter Fiscal Year 2010 when
compared to the prior year 2nd Quarter, in addition EBITDA Margin decreased by 2.4%
26
FY 2010 Operating Results – Mohegan Sun (CT)
($ in millions)
Mohegan Sun Net Revenue
Mohegan Sun Adjusted EBITDA & EBITDA Margin
$100
$500
$80
35%
$78.6
$70.6
$400
$60
$300
$290
27.1%
$290
30%
25%
24.3%
$40
20%
$200
$20
15%
$100
$-
10%
FY '09
FY '10
FY '09
FY '10
 2nd Quarter Mohegan Sun net revenues were flat when compared to the prior year 2nd Quarter
 Adjusted EBITDA decreased by $8.0m or 10.2% for the 2nd Quarter of Fiscal Year 2010 when
compared to the prior year 2nd Quarter, in addition EBITDA Margin decreased by 2.8%
27
FY 2010 Operating Results – Pocono Downs (PA)
($ in millions)
Pocono Downs Net Revenue
$100
Pocono Downs Adjusted EBITDA & EBITDA Margin
$16
35%
$14
30%
$80
$61
$62
$12
$10
$60
$9.6
$9.7
25%
20%
$8
$40
$6
15%
15.7%
15.6%
10%
$4
$20
$FY '09
FY '10
$2
5%
$-
0%
FY '09
FY '10
 2nd Quarter Pocono Downs net revenues increased by $1.3m or 2.1% when compared to the
prior year 2nd Quarter
 Adjusted EBITDA increased by $0.1m or 1.1% for the 2nd Quarter of Fiscal Year 2010 when
compared to the prior year 2nd Quarter, however EBITDA Margin decreased by 0.1%
28
Operating Results
Last Twelve Months Ended March 31, 2010
29
Consolidated Operating Results – MTGA
($ in millions)
MTGA Net Revenue
$1,600
MTGA Adjusted EBITDA & EBITDA Margin
$320
$1,508
35%
$302.7
$1,434
$300
$1,400
30%
$281.8
$280
$1,200
25%
$260
$1,000
21.1%
$240
20%
18.7%
$800
15%
$220
$600
$200
LTM - Mar 31, 2009
LTM - Mar 31, 2010
10%
LTM - Mar 31, 2009
LTM - Mar 31, 2010
 For the twelve months ended March 31, 2010, Mohegan Sun net revenues decreased by
$74.2m or 4.9% when compared to the same period in the prior fiscal year
 Adjusted EBITDA increased by $21.0m or 7.4% when compared to the same period in the prior
fiscal year, and EBITDA Margin increased by 2.4% over prior year
30
Operating Results – Mohegan Sun (CT)
($ in millions)
Mohegan Sun Net Revenue
$1,600
Mohegan Sun Adjusted EBITDA & EBITDA Margin
$300
$1,400
$280
$1,275
$1,178
$1,200
35%
$276.7
$269.3
$260
30%
25%
23.5%
$1,000
$240
$800
$220
15%
$600
$200
10%
LTM - Mar 31, 2009
LTM - Mar 31, 2010
20%
21.1%
LTM - Mar 31, 2009
LTM - Mar 31, 2010
 For the twelve months ended March 31, 2010, Mohegan Sun net revenues decreased by
fiscal year, and EBITDA Margin increased by 2.4% over prior year
31
Operating Results – Pocono Downs (PA)
($ in millions)
Pocono Downs Net Revenue
$300
Pocono Downs Adjusted EBITDA & EBITDA Margin
$50
35%
$256
$250
$41.1
$40
$233
25%
$31.9
$200
30%
20%
$30
16.1%
13.7%
$150
15%
10%
$20
5%
$100
$10
LTM - Mar 31, 2009
LTM - Mar 31, 2010
0%
LTM - Mar 31, 2009
LTM - Mar 31, 2010
 For the twelve months ended March 31, 2010, Pocono Downs net revenues increased by
fiscal year, in addition EBITDA Margin increased by 2.4% over prior year
32
Introduction of Table Games
33
Introduction of Table Games at Pocono Downs
 In January 2010 Governor Edward Rendell signed Senate Bill No. 711 approving table
games in the Commonwealth of Pennsylvania
 Initial tax rate of 16%, reduced to 14% after two years of operation
 Upfront license fee of $16.5 million due by June 1, 2010
 We have long planned for the addition of table games and have taken the following
steps toward accommodating the additional gaming product on the existing gaming
floor:
 Initial property master plan was designed for the integration of table games
 Project budget established at $15.8m
 Project includes realignment of some slot product
 Staffing schedules have been developed
 Our renovation is almost complete, with the MTGA Development Team selfperforming the table games construction project
 In March 2010 the Pennsylvania Gaming Control Board approved Pocono Downs’
petition to operate table games
 Facility could open as early as June 15, 2010
34
Pocono Downs – Table Games Renderings
Main Floor - Before
Main Floor – After
35
Pocono Downs – Table Games Floor Layout
36
Hotel Project
37
Pocono Downs Hotel Project Update
 MTGA has entered into a non-binding Memorandum of Understanding with
a third party developer for the development and construction of a 294-room
hotel and convention center
Proposed Deal Structure
 Hotel building costs will be the sole expense of Developer
 50 Year Ground Lease Term
 Developer will sublease the hotel to MSPD after construction is
completed (for a 20 year term with two additional 5 year renewals at
MSPD’s option)
 MSPD will have full operational control of the hotel, including yielding of
rooms, and will pay Developer lease fees
 MSPD will have an option to purchase the hotel
 MSPD also has the right of first refusal to purchase throughout the term
of the Ground Lease
38
Pocono Downs – Rendering of Proposed Hotel
39
Massachusetts Update
40
Massachusetts Gaming Bill
 On April 14th, 2010 an expanded gaming bill sponsored by House
Speaker Robert A. DeLeo was approved by the Massachusetts
House of Representatives (a 120-37 vote)
 The proposed bill:
 Would authorize full casino gaming 24 hours per day, 7 days a
week at two Resort Casinos and slot machines at the
Commonwealth’s two horse and two dog tracks
 Would create a five member gaming commission to oversee the
application and selection process
 Locations for the Casino Resorts were not defined in the House bill
41
Massachusetts Gaming Bill
(2) Resort Casino Licenses (Category 1)
 15 year term
 Minimum up-front license fee of $100 million
 Required to spend a minimum of $500 million on the facility (excluding license fee)
 Facilities must have a hotel and other non-gaming amenities
(entertainment, retail, etc.)
 25% tax rate on gross gaming revenues
(4) Racino Licenses (Category 2 and 3)
 5 year term
 Minimum up-front license fee of $15 million
 Must spend a minimum of $75 million within two years of receiving a license
 Allowed a maximum of 750 slot units
 48% to 50% tax rate on gross gaming revenues
42
Massachusetts – What Happens Next?
 Massachusetts Senate is expected to introduce and its own version
of an expanded gambling bill in June
 The Massachusetts legislative session ends on July 31, 2010
43
Palmer, Massachusetts
44
Palmer, Massachusetts Update
 During the last two years, MTGA has established a presence in the Western
Massachusetts market as an interested developer for a potential gaming
license
 In March 2008, we formed Mohegan Resorts Mass, LLC an investment
entity/non-guarantor and subsidiary of Mohegan Resorts, LLC
 In October 2008, Mohegan Resorts Mass, LLC entered into a 99-year ground
lease with Northeast Realty & Associates for 152 acres of land in Palmer, MA
 Potential site for gaming opportunity if Massachusetts approves gaming
 Proposed site is located on Route 32, adjacent to exit 8 off the Mass Pike
 Assuming favorable legislation is passed, MTGA would apply for a Category
1 gaming license for our site in Palmer, Massachusetts
 If selected, we would seek candidates from our experienced management
pool to lead any future casino in Massachusetts
45
Massachusetts – Rendering of Palmer Facility
 Palmer Massachusetts is located approximately 20 minutes east of Springfield
 Preliminary program would include: 3,000 slots, 100 table games, 25 poker
tables, 600 hotel rooms with convention space, 4-5 restaurants including a buffet
46
Capital Structure & Debt Maturities
47
Our Current Capital Structure
($ in millions)
As of
03/31/10
Leverage Ratio
Senior Secured Debt
Bank Credit Facility - Revolver
11.5% 2nd Lien Senior Secured Notes due 11/1/17
Total Senior Secured Debt
$
Senior Unsecured Debt
6.125% Senior Notes due 2/15/13
SM Bank Credit Facility
Mohegan Tribe Note Payable due 10/1/10
Notes Payables, Line of Credit & Capital Leases
Total Senior Unsecured Debt
1,017.1
Subordinated Debt
8.375% Senior Subordinated Notes due 7/1/11
8% Senior Subordinated Notes due 4/1/12
Total Subordinated Debt
Weighted Average Interest Rate
2.95x
250.0
14.3
10.0
10.8
285.1
Total Senior Debt
Total Debt
532.0
200.0
732.0
4.03x (a)
2.0
250.0
225.0
150.0
627.0
$
1,644.1
6.55x (a)
6.90%
(a) Calculated in accordance with the Bank Credit Facility Agreement
48
Our Focus on the MTGA Balance Sheet
 Upcoming Maturities
 2012
 $675M Bank Credit Facility due March 9, 2012
 $250M Senior Subordinated Notes due April 1, 2012
 2013
 $250M Senior Notes due February 15, 2013
 The recent transactions provided MTGA sufficient time to address near
term maturities
 We are currently evaluating advice from our lender institutions
 We are working closely with our Management Board regarding the
financing alternatives
 We plan to complete our financing strategy no later than September
30, 2010
49
Our Current Debt Maturities
As of 03/31/10
$1,000
$900
Bank
$782
$800
Bond
$700
$600
$532
$500
$400
$250
$300
$225
$150
$200
$200
$100
$13
$250
2011
2012
$14
$2010
2013
2014
2015
Thereafter
Note: Excludes Bank of America Swing Line, Lahaniatis Capital Lease, Route 32 Capital Lease and MKGA Note Payable
50
Capital Expenditures & Tribal
Distributions
51
Capital Expenditures
Total Capital Expenditures (2004 – 2010)
$384
$400
Development Capex
$350
Maintenance Capex
($ in millions)
$300
$250
$342
$200
$162
$150
$102
$100
$50
$94
$103
$31
$1
$51
$59 (a)
$61
$79
$13
$30
$38
$41
FY '04
FY '05
FY '06
$59
$38
$42
$FY '07
FY '08
$15
$21
FY '09
FY '10E
(a) FY10 estimates exclude $16.5m license fee and $2m in pre-opening costs and expenses for Pocono Downs table games
52
Tribal Distributions
Tribal Distributions (2004 – 2010)
$100.0
$89
$90.0
$80
$75
$80.0
($ in millions)
$70.0
$65
$72
$68
$62
(a)
$60.0
$50.0
$40.0
$30.0
$20.0
$10.0
$0.0
FY '04
FY '05
FY '06
FY '07
FY '08
FY '09
FY '10E
(a)
(a)
(a) Based on the mid-point of the guidance range from $59-$64 million as disclosed in MTGA’s press release dated April 29, 2010
53
Strategic Focus
54
Free Cash Flow Generation & Deleveraging
 Incremental EBITDA opportunity with Pennsylvania table
games
 Additional Free Cash Flow generation from third-party
development deals
 Aggressive operating cost reduction measures
 Will result in strong operating flow-through in the
business when the market improves
 Low near-term maintenance capital expenditures
55
Q&A
56

Pocono Downs - Mohegan Tribal Gaming Authority

Transcription

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