Title: NASDAQ: MNTG
1- NASDAQ MNTG
- A Leading Developer and Operator of Gaming
Properties in Evolving Middle Markets
SIDOTI COMPANY 5TH ANNUAL PALM BEACH
CONFERENCE January 22, 2008
2In addition to historical facts or statements of
current condition, this presentation contains
forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. Some of these
statements are those regarding our prospects for
future growth. These statements are subject to a
number of risks and uncertainties that could
cause the statements made to be incorrect and the
actual results to differ materially. The Company
describes certain of these risks and
uncertainties in its filings with the Securities
and Exchange Commission, including its Annual
Report on Form 10-K for the fiscal year ended
December 31, 2006. Some of these risks include
those relating to regulatory approvals,
availability of financing sources, development
and construction activities, costs and delays,
weather, permits, competition and business
conditions in the gaming industry. Furthermore,
the Company does not intend to update publicly
any forward-looking statements, except as may be
required by law. The cautionary advice in this
paragraph is permitted by the Private Securities
Litigation Reform Act of 1995.
3COMPANY OVERVIEW
- Diversified gaming operator with primary focus on
middle-market properties - Currently operate in WV, PA, OH, MI and NV
- Total slots 5,608
- Table games 56
- Poker tables 39
- Hotel rooms 454
- Restaurants 22
- Employees 3,300
- Instrumental in securing favorable new gaming
legislation in states in which MTR operates,
including table games in WV - Fiscal 06 net revenues of 372.8 mm and EBITDA
of 48.6 mm first nine months of 07 net
revenues of 373.2 mm and EBITDA of 43.8 mm - 2008 CapEx spending is estimated at less than 25
mm, absent customer demand for a significant
project (e.g. parking garage or hotel expansion
at Mountaineer).
4INVESTMENT HIGHLIGHTS
- Proven ability to successfully develop and
operate middle-market gaming properties - Key growth drivers new properties, expanded
gaming and the potential for additional expanded
gaming - Presque Isle Downs Casino Erie, PA
- Casino opened 2/28/07 with 2,000 slots
- Pari-mutuel wagering commenced on July 27, 2007
- A state-of the art thoroughbred racetrack opened
9/01/07 - Mountaineer opened 37 poker tables on October
19, 2007 and approximately 50 table games on
December 20, 2007 - Construction of harness track and card room in MN
(50 ownership) harness track expected to open
in mid-Q208 and card room expected to open in
Q308 - Potential for gaming legislation authorizing
slots in Michigan, Ohio and Minnesota
5STRATEGIC LOCATIONS
6MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
7MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- History
- Current management assumed responsibility for the
property in 1995 - Instrumental in legalization of slots in WV
(1994) and in legalization of table games in WV
(2007) - Gradually built-up the property, added resort
amenities and increased the number and types of
slots
8MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- Now
- Destination hotel, convention and resort facility
- 3,220 slots (approximately 90
ticket-in-ticket-out) 37 poker tables opened on
October 19, 2007, and approximately 50 table
games opened on December 20, 2007 - Thoroughbred horse racing simulcasting
- Sole WV racetrack authorized to position slots
away from the track - 2006 net revenues of 292.3 mm and EBITDA of
67.7 mm first nine months of 07 net revenues
of 201.5 mm and EBITDA of 38.5 mm - 2006 ADR was 71.22 occupancy was 73.3 average
win/slot/day was 221. For the first nine months
of 07, ADR was 63.83 occupancy was 77.6
average win/slot/day was 201
Regulatory approval for up to 3,500, with no
legislative ceiling
9MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- Stables
- Hold 1,200 horses
- year-round
- Year-round
- Thoroughbred
- Race Track,
- Clubhouse
- Grandstand
- 1 mile dirt track
- 7 furlong turf track
- 450 slots
- Import export simulcasting
- 37 poker tables
- Fitness
- Center
- 12,000 sq. ft
- Tennis courts
- Hotel,
- Gaming, Convention Center Spa
- 359 hotel rooms
- 2,770 slots
- 50 table games
- 11,866 sq ft
- convention ctr
- Indoor and
- outdoor pools
-
- The Harv
- 69,000 sq. ft.
- theater events center hosting top performers
- Fine dining and entertainment throughout
- Golf course 8 miles away
10MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- Strong demographics
- 6.2 mm adults within a 2-hour drive
- 2.6 million adults within 50 miles
- 40 miles south of Youngstown 100 miles south of
Cleveland 35 miles west of Pittsburgh 140 miles
south of Erie
11MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- Competitive position
- 1 of 4 legislatively authorized WV racinos
- Nearest competition is 40 miles away
approximately 1,400 limited video lottery (LVL)
machines in surrounding counties (local bars are
allowed up to 5 LVLs, and fraternal organizations
are allowed up to 10 LVLs) - 66 of customers from OH 30 from PA 2 from WV
- Approximately 2,350-acre landholding, with only
385 acres currently developed 2.9 miles of Ohio
River frontage
12MOUNTAINEER CASINO, RACETRACK RESORT CHESTER,
WV
- Growth opportunities
- Table games opened on December 20, 2007
- Initially 50 tables roulette, craps and
blackjack -- with no statutory limit on bets and
number of games - Initially, four pits in the Hotel Speakeasy
Casino (21,800 square feet), with a fifth pit to
open in the Grandstand in the near future - Will draw new customers, increase business from
existing customers, improve competitive position - 9,900 square feet River Poker Room opened on
October 19, 2007, with 37 tables and 4 additional
poker tables in the near future - Casino is now open 24 hours a day
13PRESQUE ISLE DOWNS ERIE, PA
14PRESQUE ISLE DOWNS ERIE, PA
- 2/28/07 opened 140,000 sq ft Clubhouse with
gaming - 2,000 slots (100 TITO), including 9 electronic
BJ games and 4 electronic roulette games - Fine and casual dining bars
- Between 2/28/07 and 12/30/07, average
win/slot/day was - 231 generated 141.4 mm in gaming revenues
- A state-of the art thoroughbred racetrack
opened 9/01/07, with - racing in 2008 scheduled from May 9 to
September 27 - 272-acre site, with 58 acres of open space
Authorized for 3,000 slots
15PRESQUE ISLE DOWNS ERIE, PA
- Attractive demographics
- Approximately 3,000 hotel rooms in the Erie area
- Excellent highway access
- 0.5 mm adults w/in 50 miles
- 2.2 mm adults w/in 90 miles
- Nearest competition is 75 miles away
16SCIOTO DOWNS COLUMBUS, OH
- Harness horse racing facility with pari-mutuel
wagering, year-round simulcasting, live racing
(May Sept, 80 days) acquired in 2003 - 5 miles from downtown Columbus easy access from
I-70 I-71
- 1.6 mm adults within 50 miles 3.2 mm within 90
miles - 2006 net revenues of 5.5 mm EBITDA of (4.1
mm), including - 3.1 mm spent in support of a slot referendum
in Ohio first nine - months 07 net revenues of 3.7 mm and
EBITDA of (1.4 mm) - 208-acre site could be developed into
destination resort - Potential for slot legislation
17JACKSON HARNESS RACEWAY JACKSON, MI
- 90 interest in Jackson Harness Raceway acquired
in 2005 for 2 mm - Live harness racing (April - July, 36 days) at
Jackson County Fairgrounds - Year-round simulcasting
- Pari-mutuel wagering
- Casual dining
- About 35 miles from Lansing 40 miles from Ann
Arbor 70 miles from Detroit and 70 miles from
Toledo, OH - 2006 net revenues of 3.2 mm EBITDA of
(328,000) first nine months of 07 net revenues
of 2.5 mm and EBITDA of (397,000) - Potential for slot legislation if favorable
gaming legislation is passed, MTRs ownership
interest would decrease to 80
18PROPERTY UNDER DEVELOPMENT RUNNING ACES HARNESS
PARK MINNEAPOLIS, MN
19PROPERTY UNDER DEVELOPMENT RUNNING ACES HARNESS
PARK MINNEAPOLIS, MN
- 50 interest in JV with Southwest Casino Hotel
- First harness racetrack in MN second racetrack
in Minneapolis area - No additional racetracks or card rooms permitted
in Minneapolis-St.Paul metropolitan area - 30 miles northeast of downtown Minneapolis 40
miles from the Mall of America - Population approx. 3.2 mm
20PROPERTY UNDER DEVELOPMENT RUNNING ACES HARNESS
PARK MINNEAPOLIS, MN
- Licensed to open card room after tracks first
50-day live race meet and regulatory approval of
plan of operation - Harness track expected to open in mid-Q208 and
card room expected to open in Q308 with 50
tables offering non-banked games (casino card
games poker) - MTRs expected investment through 2007
approximately 12.5 mm - Non-recourse construction financing of
approximately 42 mm total development cost of
approx. 63 mm - Peer Canterbury Park Racetrack Card Club
- 2006 revenues of 56.1 mm EBITDA of 7.0 mm
- Mystic Lake and Little Six (Indian) casinos
located within 5 miles of Canterbury Park - Potential for slot legislation
21PROPERTY BEING SOLDBINIONS GAMBLING HALL
HOTEL
- Acquired assets for 22 mm in 2004
- 800 slots, 47 tables, 35 poker tables, 365 hotel
rooms - June 07 definitive agreement to sell Binions
for 32 mm in cash to TLC Casino Enterprises
- Subject to obtaining governmental approvals,
other customary conditions, and certain purchase
price adjustments - Reflected as an asset held for sale on MTRs
financial statements
Excluding a 5 mm claim by Harrahs, which MTR
is disputing but which MTR has fully accrued
22PROPERTY BEING SOLDSPEEDWAY CASINO
- Acquired in May 98 for 5.6 mm
- Total asset value (excluding cash) as of
12/31/06 10.7 mm - 2006 net revenues of 12.0 mm and EBITDA of 2.5
mm first nine months of 07 net revenues of 8.4
mm and EBITDA of 1.2 mm - Jan. 08 sold the real estate for 11.4 mm
- Jan. 08 agreement to sell the Speedway assets
for 6.775 mm, with 4.775 mm contingent on
future revenue - Subject to obtaining governmental approvals and
other customary conditions
23STRONG HISTORICAL RESULTS
(Dollars in millions)
TOTAL REVENUES EBITDA
- EBITDA in 05 and 06 reflects the carrying
costs of MTRs growth - initiatives
The financial results in the above charts include
Binion's. Definition and reconciliation of
EBITDA included in later slides
24SUMMARY TAX INFORMATION
- West Virginia
- Slots
- Effective rate 56.8
- Based on 55.4 of the first 160 million of slot
revenue, and 59.7 of the excess - Table games
- Effective rate 38-40
- Based on State rate of 35 plus 2.5 million
annual license fee - Pennsylvania slots
- Effective rate 58-60
- Based on State rate of 55 plus a minimum tax of
the greater of 2 or 10 million for the
municipal/county
25OVERVIEW OF CAPITAL STRUCTURE
- Common Stock Outstanding 27.6 mm shares
- 9.75 Senior Notes due 2010 130 mm
- Redeemable on or after April 1, 2007, at
specified redemption prices - 9 Senior Subordinated Notes due 2012 125 mm
- Redeemable on or after June 1, 2009, at specified
redemption prices - Senior Secured Revolving Credit Facility 155
mm - As of November 7, 2007, MTR had drawn 141 mm and
had issued 1.5 mm in letters of credit under
this Facility
26SUMMARY
- Proven ability to successfully develop and
operate middle-market gaming properties - Mountaineer solid base business, exciting upside
potential with the addition of table games - Presque Isle Downs Casino represents major
diversification - Key growth drivers new properties the
potential for expanded gaming at existing/new
properties - Pari-mutuel wagering commenced on July 27, 2007,
and racing on September 1, 2007, at Presque Isle
Downs Casino - Poker operation commenced on October 19, 2007,
and table games commenced on December 20, 2007,
at Mountaineer - Harness track and card room in Minneapolis
- Potential for slots legislation in Michigan,
Minnesota and Ohio
27RECONCILIATION OF NET INCOME TO EBITDA
- EBITDA represents earnings (losses) before
interest, income tax expense (benefit),
depreciation and amortization, equity in loss of
unconsolidated joint venture and (gain) loss on
disposal of property. EBITDA is not a measure of
performance or liquidity calculated in accordance
with generally accepted accounting principles
(GAAP), is unaudited and should not be
considered an alternative to, or more meaningful
than, net income or income from operations as an
indicator of our operating performance, or cash
flows from operating activities, as a measure of
liquidity. EBITDA has been presented as a
supplemental disclosure because it is a widely
used measure of performance and basis for
valuation of companies in our industry. Uses of
cash flows that are not reflected in EBITDA
include capital expenditures (which are
significant given our expansion), interest
payments, income taxes, and debt principal
repayments. Moreover, other companies that
provide EBITDA information may calculate EBITDA
differently than we do. A reconciliation of GAAP
operating income to EBITDA is included in the
financial table on the next slide.
28RECONCILIATION OF NET INCOME TO EBITDA