Mohegan Gaming & Entertainment, a master developer and operator of premier global integrated entertainment resorts, including Mohegan Sun in Uncasville, Connecticut, Mohegan Sun Pocono in Plains Township, Pennsylvania, the MGE Niagara Resorts in Niagara Falls, Canada and INSPIRE Entertainment Resort in Incheon, South Korea, announced today operating results for its first fiscal quarter ended December 31, 2020.

"As we move through the early part of 2021, we have an eye on a broader industry recovery and I am confident in MGE's position to benefit from it," said Mario Kontomerkos, President and Chief Executive Officer of MGE. "Performance in the fiscal first quarter was challenging as COVID cases climbed substantially in virtually all of our markets, but the pressure we observed on our revenues and profitability largely began to reverse itself in late December with positive momentum observed throughout January, most notably at Mohegan Sun. Despite these challenges, adjusted EBITDA margin at the flagship property grew versus the prior-year quarter, reflecting the permanence of significant cost reduction efforts undertaken over the last year. Subsequent to the end of the quarter, MGE successfully completed its refinancing which extended our nearest maturities, increased our financial flexibility, and provided us with ample liquidity as we move forward. We remain quite positive that our business has been optimized to benefit from what we foresee to be significant pent-up demand for leisure consumption in the months ahead."

Selected consolidated operating results for the first quarter ended December 31, 2020 and prior year period (unaudited):

• Net revenues of $230.8 million vs. $399.1 million in the prior year period, a 42.2% decrease;
• Income from operations of $10.6 million vs. $43.4 million in the prior year period, a 75.6% decrease; and
• Adjusted EBITDA of $40.4 million vs. $75.1 million in the prior year period, a 46.2% decrease.

Consolidated net revenues decreased 42.2% as the industry experienced a temporary sequential softening of gaming demand as COVID infection rates increased throughout our operating regions, adding to the negative impact of ongoing COVID-related closures and reductions in capacity. Importantly, visitation and revenue trends started to improve into the end of the calendar year, with the positive momentum continuing into the current quarter. Additionally, MGE was further impacted as Mohegan Sun Pocono was temporarily closed for 23 days in December and early January, while MGE Niagara Resorts remained closed for the entire quarter. Adjusted EBITDA decreased 46.2% during the quarter, reflecting the impact of the property closures noted above and the continued impact of ongoing COVID-related closures and reductions in capacity. Excluding the impact of the closures of Mohegan Sun Pocono and the MGE Niagara Resorts, lower table hold and unfavorable winter weather conditions, net revenues and adjusted EBITDA would have decreased 26.8% and 23.8%, respectively. On an adjusted basis, adjusted EBITDA margin would have been 24.8% for the quarter, up 97 basis points from the prior year, at 23.9%. Despite increased COVID-19 infection rates, property closures and lower table hold, core margin performance was driven by an overall reduction in operating costs and expenses, including lower payroll costs and marketing expenses.