Attached files
file | filename |
---|---|
EX-32.1 - EX-32.1 - MOHEGAN TRIBAL GAMING AUTHORITY | ck1005276-ex321_78.htm |
EX-31.1 - EX-31.1 - MOHEGAN TRIBAL GAMING AUTHORITY | ck1005276-ex311_79.htm |
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
☒ |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended June 30, 2020
OR
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission file number 033-80655
MOHEGAN TRIBAL GAMING AUTHORITY
(Exact name of registrant as specified in its charter)
Not Applicable |
|
06-1436334 |
(State or other jurisdiction of incorporation or organization) |
|
(IRS Employer Identification No.) |
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|
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One Mohegan Sun Boulevard, Uncasville, CT |
|
06382 |
(Address of principal executive offices) |
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(Zip Code) |
(860) 862-8000
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
None |
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None |
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None |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☐ No ☒*
* The registrant is a voluntary filer of reports required to be filed by certain companies under Sections 13 or 15(d) of the Securities Exchange Act of 1934 and has filed all reports that would have been required during the preceding 12 months had it been subject to such filing requirements.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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☐ |
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Accelerated filer |
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☐ |
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|||
Non-accelerated filer |
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☒ |
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Smaller reporting company |
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☐ |
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Emerging growth company |
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☐ |
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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. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
MOHEGAN TRIBAL GAMING AUTHORITY
INDEX TO FORM 10-Q
|
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Page Number |
PART I. |
|
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|
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Item 1. |
|
|
|
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Condensed Consolidated Balance Sheets as of June 30, 2020 and September 30, 2019 (unaudited) |
3 |
|
|
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4 |
|
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|
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5 |
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6 |
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Notes to Condensed Consolidated Financial Statements (unaudited) |
7 |
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Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations |
21 |
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Item 3. |
31 |
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Item 4. |
31 |
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PART II. |
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Item 1. |
32 |
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Item 1A. |
32 |
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Item 5. |
32 |
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Item 6. |
33 |
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Signatures. |
34 |
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands) (unaudited)
|
|
June 30, 2020 |
|
|
September 30, 2019 |
|
||
ASSETS |
|
|
|
|
|
|
|
|
Current assets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
149,435 |
|
|
$ |
130,138 |
|
Restricted cash and cash equivalents |
|
|
1,698 |
|
|
|
4,960 |
|
Accounts receivable, net of allowance for doubtful accounts of $15,041 and $11,715, respectively |
|
|
48,499 |
|
|
|
52,764 |
|
Inventories |
|
|
17,431 |
|
|
|
18,248 |
|
Due from Ontario Lottery and Gaming Corporation |
|
|
4,806 |
|
|
|
10,946 |
|
Casino Operating and Services Agreement customer contract asset |
|
|
8,902 |
|
|
|
3,004 |
|
Other current assets |
|
|
45,989 |
|
|
|
47,276 |
|
Total current assets |
|
|
276,760 |
|
|
|
267,336 |
|
Restricted cash and cash equivalents |
|
|
61,148 |
|
|
|
145,631 |
|
Property and equipment, net |
|
|
1,480,397 |
|
|
|
1,520,687 |
|
Right-of-use operating lease assets |
|
|
341,533 |
|
|
|
— |
|
Other intangible assets, net |
|
|
327,078 |
|
|
|
455,265 |
|
Casino Operating and Services Agreement customer contract asset, net of current portion |
|
|
118,841 |
|
|
|
50,192 |
|
Notes receivable |
|
|
2,514 |
|
|
|
2,514 |
|
Other assets, net |
|
|
80,899 |
|
|
|
69,971 |
|
Total assets |
|
$ |
2,689,170 |
|
|
$ |
2,511,596 |
|
LIABILITIES AND CAPITAL |
|
|
|
|
|
|
|
|
Current liabilities: |
|
|
|
|
|
|
|
|
Current portion of long-term debt |
|
$ |
77,829 |
|
|
$ |
76,909 |
|
Current portion of finance lease obligations |
|
|
2,291 |
|
|
|
1,133 |
|
Current portion of right-of-use operating lease obligations |
|
|
14,019 |
|
|
|
— |
|
Trade payables |
|
|
23,634 |
|
|
|
16,672 |
|
Accrued payroll |
|
|
32,387 |
|
|
|
53,225 |
|
Construction payables |
|
|
46,236 |
|
|
|
11,888 |
|
Accrued interest payable |
|
|
14,395 |
|
|
|
19,804 |
|
Due to Ontario Lottery and Gaming Corporation |
|
|
30,353 |
|
|
|
30,662 |
|
Other current liabilities |
|
|
155,505 |
|
|
|
174,231 |
|
Total current liabilities |
|
|
396,649 |
|
|
|
384,524 |
|
Long-term debt, net of current portion |
|
|
1,963,011 |
|
|
|
1,832,248 |
|
Finance lease obligations, net of current portion |
|
|
28,067 |
|
|
|
28,561 |
|
Right-of-use operating lease obligations, net of current portion |
|
|
344,100 |
|
|
|
— |
|
Accrued payroll |
|
|
868 |
|
|
|
— |
|
Build-to-suit liability |
|
|
— |
|
|
|
90,292 |
|
Other long-term liabilities |
|
|
33,648 |
|
|
|
38,538 |
|
Total liabilities |
|
|
2,766,343 |
|
|
|
2,374,163 |
|
Commitments and Contingencies |
|
|
|
|
|
|
|
|
Capital: |
|
|
|
|
|
|
|
|
Retained earnings (deficit) |
|
|
(76,615 |
) |
|
|
137,124 |
|
Accumulated other comprehensive loss |
|
|
(7,730 |
) |
|
|
(6,633 |
) |
Total capital attributable to Mohegan Tribal Gaming Authority |
|
|
(84,345 |
) |
|
|
130,491 |
|
Non-controlling interests |
|
|
7,172 |
|
|
|
6,942 |
|
Total capital |
|
|
(77,173 |
) |
|
|
137,433 |
|
Total liabilities and capital |
|
$ |
2,689,170 |
|
|
$ |
2,511,596 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND COMPREHENSIVE INCOME (LOSS)
(in thousands) (unaudited)
|
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For the |
|
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For the |
|
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For the |
|
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For the |
|
||||
|
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Three Months Ended |
|
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Three Months Ended |
|
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Nine Months Ended |
|
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Nine Months Ended |
|
||||
|
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June 30, 2020 |
|
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June 30, 2019 |
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
||||
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming |
|
$ |
89,379 |
|
|
$ |
235,418 |
|
|
$ |
569,642 |
|
|
$ |
669,172 |
|
Food and beverage |
|
|
3,009 |
|
|
|
37,171 |
|
|
|
91,098 |
|
|
|
105,485 |
|
Hotel |
|
|
2,589 |
|
|
|
23,794 |
|
|
|
50,293 |
|
|
|
68,776 |
|
Retail, entertainment and other |
|
|
12,222 |
|
|
|
51,224 |
|
|
|
109,919 |
|
|
|
131,371 |
|
Net revenues |
|
|
107,199 |
|
|
|
347,607 |
|
|
|
820,952 |
|
|
|
974,804 |
|
Operating costs and expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gaming, including related party transactions of $755, $703, $2,265 and $2,107, respectively |
|
|
41,834 |
|
|
|
135,238 |
|
|
|
330,200 |
|
|
|
389,872 |
|
Food and beverage |
|
|
5,075 |
|
|
|
29,080 |
|
|
|
79,160 |
|
|
|
81,611 |
|
Hotel, including related party transactions of $2,161, $2,161, $6,483 and $6,483, respectively |
|
|
4,296 |
|
|
|
12,052 |
|
|
|
26,611 |
|
|
|
31,881 |
|
Retail, entertainment and other |
|
|
4,026 |
|
|
|
22,934 |
|
|
|
45,178 |
|
|
|
63,203 |
|
Advertising, general and administrative, including related party transactions of $4,517, $10,601, $23,129 and $33,417, respectively |
|
|
35,672 |
|
|
|
53,534 |
|
|
|
172,768 |
|
|
|
149,664 |
|
Corporate, including related party transactions of $1,679, $1,821, $6,060 and $4,655, respectively |
|
|
7,700 |
|
|
|
13,839 |
|
|
|
31,959 |
|
|
|
38,728 |
|
Depreciation and amortization |
|
|
26,477 |
|
|
|
22,810 |
|
|
|
82,847 |
|
|
|
92,682 |
|
Impairment of Mohegan Sun Pocono's intangible assets |
|
|
— |
|
|
|
— |
|
|
|
126,596 |
|
|
|
— |
|
Other, net |
|
|
2,656 |
|
|
|
2,910 |
|
|
|
9,000 |
|
|
|
6,357 |
|
Total operating costs and expenses |
|
|
127,736 |
|
|
|
292,397 |
|
|
|
904,319 |
|
|
|
853,998 |
|
Income (loss) from operations |
|
|
(20,537 |
) |
|
|
55,210 |
|
|
|
(83,367 |
) |
|
|
120,806 |
|
Other income (expense): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest income |
|
|
270 |
|
|
|
1,149 |
|
|
|
1,549 |
|
|
|
5,639 |
|
Interest expense, net of capitalized interest |
|
|
(32,478 |
) |
|
|
(35,690 |
) |
|
|
(98,830 |
) |
|
|
(106,832 |
) |
Other, net |
|
|
120 |
|
|
|
(254 |
) |
|
|
(2,904 |
) |
|
|
(582 |
) |
Total other expense |
|
|
(32,088 |
) |
|
|
(34,795 |
) |
|
|
(100,185 |
) |
|
|
(101,775 |
) |
Income (loss) before income tax |
|
|
(52,625 |
) |
|
|
20,415 |
|
|
|
(183,552 |
) |
|
|
19,031 |
|
Income tax benefit (provision) |
|
|
2,696 |
|
|
|
(538 |
) |
|
|
3,016 |
|
|
|
(730 |
) |
Net income (loss) |
|
|
(49,929 |
) |
|
|
19,877 |
|
|
|
(180,536 |
) |
|
|
18,301 |
|
Income attributable to non-controlling interests |
|
|
(116 |
) |
|
|
(38 |
) |
|
|
(209 |
) |
|
|
(198 |
) |
Net income (loss) attributable to Mohegan Tribal Gaming Authority |
|
|
(50,045 |
) |
|
|
19,839 |
|
|
|
(180,745 |
) |
|
|
18,103 |
|
Comprehensive income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign currency translation adjustment |
|
|
6,088 |
|
|
|
(4,041 |
) |
|
|
(1,076 |
) |
|
|
(8,346 |
) |
Other |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
44 |
|
Other comprehensive income (loss) |
|
|
6,088 |
|
|
|
(4,041 |
) |
|
|
(1,076 |
) |
|
|
(8,302 |
) |
Other comprehensive (income) loss attributable to non-controlling interests |
|
|
(229 |
) |
|
|
231 |
|
|
|
(21 |
) |
|
|
446 |
|
Other comprehensive income (loss) attributable to Mohegan Tribal Gaming Authority |
|
|
5,859 |
|
|
|
(3,810 |
) |
|
|
(1,097 |
) |
|
|
(7,856 |
) |
Comprehensive income (loss) attributable to Mohegan Tribal Gaming Authority |
|
$ |
(44,186 |
) |
|
$ |
16,029 |
|
|
$ |
(181,842 |
) |
|
$ |
10,247 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
4
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN CAPITAL
(in thousands) (unaudited)
|
|
Retained Earnings (Deficit) |
|
|
Accumulated Other Comprehensive Income (Loss) |
|
|
Total Capital Attributable to Mohegan Tribal Gaming Authority |
|
|
Non- controlling Interests |
|
|
Total Capital |
|
|||||
Balance, March 31, 2020 |
|
$ |
(17,989 |
) |
|
$ |
(13,589 |
) |
|
$ |
(31,578 |
) |
|
$ |
6,827 |
|
|
$ |
(24,751 |
) |
Net income (loss) |
|
|
(50,045 |
) |
|
|
— |
|
|
|
(50,045 |
) |
|
|
116 |
|
|
|
(49,929 |
) |
Foreign currency translation adjustment |
|
|
— |
|
|
|
5,859 |
|
|
|
5,859 |
|
|
|
229 |
|
|
|
6,088 |
|
Distributions to Mohegan Tribe |
|
|
(8,333 |
) |
|
|
— |
|
|
|
(8,333 |
) |
|
|
— |
|
|
|
(8,333 |
) |
Distributions to Salishan Company, LLC related to the Cowlitz Project |
|
|
(248 |
) |
|
|
— |
|
|
|
(248 |
) |
|
|
— |
|
|
|
(248 |
) |
Balance, June 30, 2020 |
|
$ |
(76,615 |
) |
|
$ |
(7,730 |
) |
|
$ |
(84,345 |
) |
|
$ |
7,172 |
|
|
$ |
(77,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2019 |
|
$ |
137,124 |
|
|
$ |
(6,633 |
) |
|
$ |
130,491 |
|
|
$ |
6,942 |
|
|
$ |
137,433 |
|
Net income (loss) |
|
|
(180,745 |
) |
|
|
— |
|
|
|
(180,745 |
) |
|
|
209 |
|
|
|
(180,536 |
) |
Foreign currency translation adjustment |
|
|
— |
|
|
|
(1,097 |
) |
|
|
(1,097 |
) |
|
|
21 |
|
|
|
(1,076 |
) |
Distributions to Mohegan Tribe |
|
|
(32,333 |
) |
|
|
— |
|
|
|
(32,333 |
) |
|
|
— |
|
|
|
(32,333 |
) |
Distributions to Salishan Company, LLC related to the Cowlitz Project |
|
|
(661 |
) |
|
|
— |
|
|
|
(661 |
) |
|
|
— |
|
|
|
(661 |
) |
Balance, June 30, 2020 |
|
$ |
(76,615 |
) |
|
$ |
(7,730 |
) |
|
$ |
(84,345 |
) |
|
$ |
7,172 |
|
|
$ |
(77,173 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, March 31, 2019 |
|
$ |
174,053 |
|
|
$ |
7,016 |
|
|
$ |
181,069 |
|
|
$ |
7,658 |
|
|
$ |
188,727 |
|
Net income |
|
|
19,839 |
|
|
|
— |
|
|
|
19,839 |
|
|
|
38 |
|
|
|
19,877 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
(3,810 |
) |
|
|
(3,810 |
) |
|
|
(231 |
) |
|
|
(4,041 |
) |
Distributions to Mohegan Tribe |
|
|
(15,000 |
) |
|
|
— |
|
|
|
(15,000 |
) |
|
|
— |
|
|
|
(15,000 |
) |
Balance, June 30, 2019 |
|
$ |
178,892 |
|
|
$ |
3,206 |
|
|
$ |
182,098 |
|
|
$ |
7,465 |
|
|
$ |
189,563 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance, September 30, 2018 |
|
$ |
250,707 |
|
|
$ |
11,062 |
|
|
$ |
261,769 |
|
|
$ |
9,025 |
|
|
$ |
270,794 |
|
Cumulative-effect adjustment for the adoption of ASC 606 "Revenue from Contracts with Customers" |
|
|
(41,575 |
) |
|
|
— |
|
|
|
(41,575 |
) |
|
|
— |
|
|
|
(41,575 |
) |
Net income |
|
|
18,103 |
|
|
|
— |
|
|
|
18,103 |
|
|
|
198 |
|
|
|
18,301 |
|
Foreign currency translation adjustment |
|
|
— |
|
|
|
(7,900 |
) |
|
|
(7,900 |
) |
|
|
(446 |
) |
|
|
(8,346 |
) |
Distributions to Mohegan Tribe |
|
|
(39,000 |
) |
|
|
— |
|
|
|
(39,000 |
) |
|
|
— |
|
|
|
(39,000 |
) |
Distributions to Mohegan Tribe related to the Cowlitz Project |
|
|
(730 |
) |
|
|
— |
|
|
|
(730 |
) |
|
|
— |
|
|
|
(730 |
) |
Redemption of Mohegan Tribe membership interest in the Cowlitz Project |
|
|
(4,114 |
) |
|
|
— |
|
|
|
(4,114 |
) |
|
|
(5,886 |
) |
|
|
(10,000 |
) |
Redemption of membership interest related to the New England Black Wolves franchise |
|
|
(4,499 |
) |
|
|
— |
|
|
|
(4,499 |
) |
|
|
4,574 |
|
|
|
75 |
|
Other |
|
|
— |
|
|
|
44 |
|
|
|
44 |
|
|
|
— |
|
|
|
44 |
|
Balance, June 30, 2019 |
|
$ |
178,892 |
|
|
$ |
3,206 |
|
|
$ |
182,098 |
|
|
$ |
7,465 |
|
|
$ |
189,563 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
MOHEGAN TRIBAL GAMING AUTHORITY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands) (unaudited)
|
|
For the |
|
|
For the |
|
||
|
|
Nine Months Ended |
|
|
Nine Months Ended |
|
||
|
|
June 30, 2020 |
|
|
June 30, 2019 |
|
||
Cash flows provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Net income (loss) |
|
$ |
(180,536 |
) |
|
$ |
18,301 |
|
Adjustments to reconcile net income (loss) to net cash flows provided by (used in) operating activities: |
|
|
|
|
|
|
|
|
Depreciation and amortization |
|
|
82,847 |
|
|
|
92,682 |
|
Non-cash operating lease expense |
|
|
9,364 |
|
|
|
— |
|
Accretion of discounts |
|
|
857 |
|
|
|
864 |
|
Amortization of discounts and debt issuance costs |
|
|
13,977 |
|
|
|
14,619 |
|
Provision for losses on receivables |
|
|
2,676 |
|
|
|
962 |
|
Impairment of Mohegan Sun Pocono's intangible assets |
|
|
126,596 |
|
|
|
— |
|
Deferred income tax provision |
|
|
(3,262 |
) |
|
|
— |
|
Other, net |
|
|
2,255 |
|
|
|
(26 |
) |
Changes in operating assets and liabilities, net of effect of the MGE Niagara Resorts acquisition: |
|
|
|
|
|
|
|
|
Accounts receivable |
|
|
1,237 |
|
|
|
(9,023 |
) |
Accrued interest on notes receivable related to the Cowlitz Project |
|
|
— |
|
|
|
71,696 |
|
Inventories |
|
|
714 |
|
|
|
(269 |
) |
Due from Ontario Lottery and Gaming Corporation |
|
|
5,482 |
|
|
|
— |
|
Casino Operating and Services Agreement customer contract asset |
|
|
(78,210 |
) |
|
|
— |
|
Other assets |
|
|
398 |
|
|
|
(6,901 |
) |
Trade payables |
|
|
6,672 |
|
|
|
965 |
|
Accrued interest |
|
|
(5,402 |
) |
|
|
(9,189 |
) |
Due to Ontario Lottery and Gaming Corporation |
|
|
3,598 |
|
|
|
— |
|
Operating lease liabilities |
|
|
(162 |
) |
|
|
— |
|
Other liabilities |
|
|
(22,713 |
) |
|
|
(1,712 |
) |
Net cash flows provided by (used in) operating activities |
|
|
(33,612 |
) |
|
|
172,969 |
|
Cash flows used in investing activities: |
|
|
|
|
|
|
|
|
Purchases of property and equipment |
|
|
(104,384 |
) |
|
|
(52,289 |
) |
Acquisition of the MGE Niagara Resorts, net of cash acquired |
|
|
(1,666 |
) |
|
|
(72,287 |
) |
Proceeds from notes receivable related to the Cowlitz Project |
|
|
— |
|
|
|
32,026 |
|
Investment in Mohegan Hotel Holding, LLC |
|
|
(10,750 |
) |
|
|
— |
|
Other, net |
|
|
(1,171 |
) |
|
|
(12,698 |
) |
Net cash flows used in investing activities |
|
|
(117,971 |
) |
|
|
(105,248 |
) |
Cash flows provided by financing activities: |
|
|
|
|
|
|
|
|
Senior secured credit facility borrowings - revolving and line of credit |
|
|
807,525 |
|
|
|
1,014,972 |
|
Senior secured credit facility repayments - revolving and line of credit |
|
|
(662,525 |
) |
|
|
(966,972 |
) |
Senior secured credit facility repayments - term loans A and B |
|
|
(37,104 |
) |
|
|
(51,011 |
) |
MGE Niagara Resorts credit facility borrowings - revolving and line of credit |
|
|
77,537 |
|
|
|
— |
|
MGE Niagara Resorts credit facility repayments - revolving and line of credit |
|
|
(51,110 |
) |
|
|
— |
|
MGE Niagara Resorts credit facility borrowings - term loan |
|
|
— |
|
|
|
75,220 |
|
MGE Niagara Resorts credit facility repayments - term loan |
|
|
(2,770 |
) |
|
|
— |
|
Proceeds from MGE Niagara Resorts convertible debenture |
|
|
— |
|
|
|
30,088 |
|
Other borrowings |
|
|
2,845 |
|
|
|
11,335 |
|
Other repayments |
|
|
(14,230 |
) |
|
|
(6,938 |
) |
Payments on finance lease obligations |
|
|
(1,034 |
) |
|
|
— |
|
Distributions to Mohegan Tribe |
|
|
(32,333 |
) |
|
|
(39,000 |
) |
Distributions to Salishan Company, LLC related to the Cowlitz Project |
|
|
(661 |
) |
|
|
(730 |
) |
Redemption of Mohegan Tribe membership interest in the Cowlitz Project |
|
|
— |
|
|
|
(10,000 |
) |
Payments of financing fees |
|
|
(34 |
) |
|
|
(3,256 |
) |
Other, net |
|
|
(1,527 |
) |
|
|
(1,527 |
) |
Net cash flows provided by financing activities |
|
|
84,579 |
|
|
|
52,181 |
|
Net increase (decrease) in cash, cash equivalents, restricted cash and restricted cash equivalents |
|
|
(67,004 |
) |
|
|
119,902 |
|
Effect of exchange rate on cash, cash equivalents, restricted cash and restricted cash equivalents |
|
|
(1,444 |
) |
|
|
(6,155 |
) |
Cash, cash equivalents, restricted cash and restricted cash equivalents at beginning of period |
|
|
280,729 |
|
|
|
234,626 |
|
Cash, cash equivalents, restricted cash and restricted cash equivalents at end of period |
|
$ |
212,281 |
|
|
$ |
348,373 |
|
Reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents to the condensed consolidated balance sheets: |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
149,435 |
|
|
$ |
162,066 |
|
Restricted cash and cash equivalents, current |
|
|
1,698 |
|
|
|
9,321 |
|
Restricted cash and cash equivalents, non-current |
|
|
61,148 |
|
|
|
176,986 |
|
Cash, cash equivalents, restricted cash and restricted cash equivalents |
|
$ |
212,281 |
|
|
$ |
348,373 |
|
Supplemental disclosures: |
|
|
|
|
|
|
|
|
Cash paid for interest |
|
$ |
95,211 |
|
|
$ |
101,393 |
|
Non-cash transactions: |
|
|
|
|
|
|
|
|
Right-of-use operating lease assets |
|
$ |
360,933 |
|
|
$ |
— |
|
Right-of-use operating lease obligations |
|
$ |
361,078 |
|
|
$ |
— |
|
Finance lease assets and obligations |
|
$ |
2,511 |
|
|
$ |
29,140 |
|
Construction payables |
|
$ |
46,236 |
|
|
$ |
15,739 |
|
Senior secured credit facility reductions |
|
$ |
10,514 |
|
|
$ |
13,296 |
|
MGE Niagara Resorts - recognition (derecognition) of build-to-suit asset and liability |
|
$ |
(90,675) |
|
|
$ |
77,403 |
|
MGE Niagara Resorts – recognition of parking license asset and liability |
|
|
— |
|
|
|
5,222 |
|
Payment by third-party for interactive gaming license |
|
$ |
— |
|
|
$ |
8,000 |
|
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
MOHEGAN TRIBAL GAMING AUTHORITY
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
NOTE 1—ORGANIZATION AND BASIS OF PRESENTATION:
Organization
The Mohegan Tribe of Indians of Connecticut (the “Mohegan Tribe”) established the Mohegan Tribal Gaming Authority in July 1995 with the exclusive authority to conduct and regulate gaming activities for the Mohegan Tribe on tribal lands and the non-exclusive authority to conduct such activities elsewhere. The Mohegan Tribe is a sovereign Indian nation with independent legal jurisdiction over its people and land. Like other sovereign governments, the Mohegan Tribe and its entities, including the Mohegan Tribal Gaming Authority, are generally not subject to federal, state or local income taxes. However, MGE Niagara Entertainment Inc. (“MGE Niagara”), a wholly-owned subsidiary, is subject to tax in Ontario, Canada, and certain non-tribal entities are subject to state or local income taxes in the United States. The Mohegan Tribal Gaming Authority d/b/a Mohegan Gaming & Entertainment (the “Company”) is primarily engaged in the ownership, operation and development of integrated entertainment facilities both domestically and internationally, including Mohegan Sun, a gaming and entertainment complex located on an approximately 196-acre site in Uncasville, Connecticut, and Mohegan Sun Pocono, a gaming and entertainment facility located on an approximately 400-acre site in Plains Township, Pennsylvania.
In September 2018, MGE Niagara was selected by the Ontario Lottery and Gaming Corporation (the “OLG”) to be the service provider for the Niagara Fallsview Casino Resort, Casino Niagara and the 5,000-seat Niagara Falls Entertainment Centre, all in Niagara Falls, Canada (collectively, the “MGE Niagara Resorts”). On June 11, 2019 (the “Closing Date”), MGE Niagara completed the acquisition of the MGE Niagara Resorts (the “Acquisition”) and assumed the day-to-day operations of the properties under the terms of a 21-year Casino Operating and Services Agreement (the “COSA”) with the OLG.
The Company also (i) owns 100% of Salishan-Mohegan, LLC (“Salishan-Mohegan”), which developed and currently manages ilani Casino Resort in Clark County, Washington, a gaming and entertainment facility owned by the federally-recognized Cowlitz Indian Tribe and the Cowlitz Tribal Gaming Authority, (ii) holds the development rights to any future development at ilani Casino Resort through Salishan-Mohegan Development Company, LLC, a majority-owned subsidiary of Salishan-Mohegan, (iii) manages Resorts Casino Hotel in Atlantic City, New Jersey and owns 10% of the casino’s holding company and its subsidiaries, including those conducting or licensing online gaming and retail sports wagering in New Jersey, (iv) manages Paragon Casino Resort in Marksville, Louisiana and (v) owns 100% of Inspire Integrated Resort Co., Ltd. and MGA Korea, LLC, which were formed to develop and construct an integrated resort and casino project to be located adjacent to the Incheon International Airport in South Korea.
Impact of the COVID-19 Pandemic and Company Response
In March 2020, the World Health Organization declared the outbreak of COVID-19 a global pandemic and the United States federal government declared it a national emergency. The spread of COVID-19 has affected most segments of the global economy, including the Company’s operations. On March 18, 2020, the Company announced the temporary suspension of operations at its North American owned, operated and managed properties to ensure the health and safety of its employees, guests and the surrounding communities in which the Company operates, consistent with directives from various government bodies.
The following properties subsequently reopened as follows: (i) Paragon Casino Resort on May 20, 2020, (ii) ilani Casino Resort on May 28, 2020, (iii) Mohegan Sun on June 1, 2020, (iv) Mohegan Sun Pocono on June 22, 2020 and (v) Resorts Casino Hotel on July 2, 2020. As of the date of the filing of this Quarterly Report on Form 10-Q, the MGE Niagara Resorts remain temporarily closed. Like other integrated resort operators, these business disruptions have had a material adverse impact on the Company’s financial condition, results of operations and cash flows.
While some of the Company's properties have reopened, it cannot predict when its remaining closed properties will be able to reopen or the conditions upon which additional reopenings may occur. In addition, while the Company has experienced some level of continued business disruption since the reopening of its properties, it expects this disruption to gradually
7