River Rock Entertainment Authority Announces Third Quarter 2010 Financial Results

GEYSERVILLE, Calif., Nov 12, 2010 (BUSINESS WIRE) -- The River Rock Entertainment Authority (the "Authority"), the operator of the River Rock Casino in Sonoma County, California, today announced third quarter operating results for the period ended September 30, 2010.

Third Quarter Operating Results for the Period Ended September 30, 2010 Net revenues for the third quarter ended September 30, 2010 were $30.4 million.

Casino revenues totaled $29.1 million and included slot revenue of $26.4 million and table games and poker revenue of $2.7 million. Food, beverage and retail revenues were $1.5 million.

Operating expenses for the third quarter ended September 30, 2010 were $19.9 million. Operating expenses consisted of casino expense of $4.2 million, food, beverage and retail expense of $1.9 million, selling, general and administrative expense of $9.9 million, depreciation expense of $2.6 million, gaming commission and surveillance expense of $0.9 million and compact revenue sharing trust fund expense of $0.3 million.

EBITDA (1) for the third quarter of 2010 was $13.1 million, or 43% of net revenues. Income from operations for the third quarter 2010 was $10.5 million and represented 35% of net revenues. Non-operating expense, net for the third quarter 2010 was $5.2 million and included $5.2 million of interest expense.

"The renovation continues to work in our favor as we continue to experience better customer retention, longer stays, and an increase in the number of visits. We are confident that we'll make River Rock Casino more comfortable and entertaining for our guests, which will ultimately drive improved performance," stated David Fendrick, Chief Executive Officer and General Manager of the River Rock Casino.

Liquidity and Capital Resources Net cash provided by operating activities at September 30, 2010 totaled $43.5 million. Net cash used in capital and related financing activities at September 30, 2010 totaled $21.3 million. Cash provided by investing activities totaled $47,485 at September 30, 2010. Cash used in non-capital financing activities as of September 30, 2010 totaled $10.2 million, which represented net distributions to the Tribe. Cash and cash equivalents net of restricted cash at September 30, 2010 totaled $43.7 million.

Current cash balances and operating cash flow are expected to provide the Authority with sufficient resources to meet its current budgeted capital expenditure requirements and distributions to the Tribe.

EBITDA should not be construed as an alternative to operating income, as an indicator of the Authority's operating performance, or as an alternative to cash flows from operating activities, as a measure of liquidity, or as any other measure determined in accordance with generally accepted accounting principles (GAAP). Moreover, our calculations of EBITDA may not be comparable to that reported by other companies. EBITDA is a basis upon which we assess our liquidity and because certain covenants in the Indenture for our $200 million senior notes are tied to similar measures. EBITDA also presents useful information regarding our ability to service and incur indebtedness. EBITDA does not take into account our debt service requirements, and accordingly, is not necessarily indicative of amounts that may be available for debt service.

The following table is the calculation of EBITDA for the periods indicated (in thousands): Three-Months Ended September 30, 2010 2009 -------------------- -------------------- (Dollars in Thousands) Net Income before distributions to the Tribe $ 5,305 $ 5,612 Add back Interest $ 5,215 $ 5,215 Add back Depreciation & Amortization $ 2,598 $ 2,388 --------- --------- --------- --------- EBITDA $ 13,118 $ 13,215 --------- --------- --------- --------- (1) EBITDA provides a metric to analyze our operations that should be considered with both our GAAP results and the reconciliation to net cash provided by operating activities. EBITDA is presented solely as a supplemental disclosure because the Authority believes it provides a more complete understanding of our business, it may be used by investors to assess the operating performance of the business in comparison to other operators in the gaming industry and the Authority uses EBITDA as a benchmark to evaluate its own performance in comparison to its competitors.

Conference Call The Authority will host a conference call to discuss third quarter 2010 financial results on November 12, 2010 at 1:00 PM ET. The call can be accessed live over the phone by dialing (888) 490-2763 or for international callers by dialing (719) 457-2714. To access the webcast, please visit www.riverrockcasino.com and click on 'Contact Us' and then 'Investor Relations.' A replay of the call will be available until November 19, 2010 by dialing (877) 870-5176; password 2624482.

River Rock Entertainment Authority We are a Tribal governmental instrumentality of the Dry Creek Rancheria Band of Pomo Indians (the "Tribe"), a federally recognized self-governing Indian tribe.

The Tribe has 1,002 enrolled members and approximately 75-acre reservation in Sonoma County, California.

Forward-Looking Statements This release contains certain "forward-looking statements" within the meaning of the Unites States Private Securities Litigation Reform Act of 1995. Whenever you read a statement that is not simply a statement of historical fact (such as when we describe what we "believe," "expect" or "anticipate" will occur and other similar statements), you must remember that our expectations may not be correct, even though we believe they are reasonable. We do not guarantee that the transactions and events described in this press release will happen as described (or that they will happen at all). You should read this press release completely and with the understanding that actual future results may be materially different from what we expect. We will not update these forward-looking statements, even though our situation will change in the future.

Whether actual results will conform to our expectations and predictions is subject to a number of risks and uncertainties, including: Our financial performance Our dependence on a single gaming site Our levels of leverage and ability to meet our debt service and other obligations General local, domestic and global economic conditions Changes in federal or state tax laws or regulations, including the Compact Maintenance of licenses required under gaming laws and regulations and construction permits and approvals required under applicable laws and regulations; and Development of new competitive gaming properties.

RIVER ROCK ENTERTAINMENT AUTHORITY

(A Governmental Instrumentality of the Dry Creek Rancheria Band

of Pomo Indians)

CONDENSED STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN NET

ASSETS (DEFICIT)

(Unaudited)

Three-Month Period Ended Nine-Month Period Ended

September 30,

September 30,

----------------------------- ----------------------------

2010 2009

2010 2009

------------ ------------- ------------ ------------- OPERATING REVENUES:

Casino $ 29,059,197 $ 28,151,221 $ 91,135,512 $ 87,572,755

Food, beverage, and retail 1,499,183 1,459,193 4,422,390 4,366,065

Other 274,169 224,493

781,441 686,858

------------ ------------- ------------ -------------

Gross revenues 30,832,549 29,834,907 96,339,343 92,625,678

Promotional allowances (462,355) (318,348) (1,281,280) (1,006,645)

------------ ------------- ------------ -------------

Net revenues 30,370,194 29,516,559 95,058,063 91,619,033

------------ ------------- ------------ -------------

OPERATING EXPENSES:

Casino 4,225,756 3,670,167 12,110,705 11,767,556

Food, beverage, and retail 1,914,685 1,811,574 5,420,269 5,576,559

Selling, general, and administrative 9,944,330 9,521,985 30,647,743 29,419,073

Depreciation 2,598,240 2,388,383 7,392,513 7,144,404

Gaming commission and surveillance expense 853,775 985,703 2,389,222 2,901,577

Compact revenue sharing trust fund 333,750 333,750 1,001,250 1,001,250

(Gain) on sale of assets - -

- (33,000)

Total Operating expenses 19,870,536 - 18,711,562 58,961,702 57,777,419

------------ ------------- ------------ -------------

INCOME FROM OPERATIONS 10,499,658 10,804,997 36,096,361 33,841,614

------------ ------------- ------------ -------------

NON-OPERATING EXPENSE-Net:

Interest expense (5,214,736) (5,214,781) (15,644,208) (15,645,267)

Interest income 19,609 21,244

47,485 53,044

------------ ------------- ------------ -------------

Non-operating expense-net (5,195,127) (5,193,537) (15,596,723) (15,592,223)

------------ ------------- ------------ -------------

INCOME BEFORE DISTRIBUTIONS TO TRIBE 5,304,531 5,611,460 20,499,638 18,249,391

------------ ------------- ------------ -------------

DISTRIBUTIONS TO TRIBE (3,397,978) (3,324,979) (10,193,936) (9,974,938)

------------ ------------- ------------ -------------

CHANGES IN NET ASSETS 1,906,553 2,286,481 10,305,702 8,274,453

------------ ------------- ------------ -------------

NET ASSETS (DEFICIT) -Beginning of period 3,075,067 (9,681,182) (5,324,082) (15,669,154)

------------ ------------- ------------ -------------

NET ASSETS (DEFICIT) -End of period $ 4,981,620 $ (7,394,701) $ 4,981,620 $ (7,394,701)

============ ============= ============ =============

RIVER ROCK ENTERTAINMENT AUTHORITY

(A Governmental Instrumentality of the Dry Creek Rancheria Band

of Pomo Indians)

CONDENSED BALANCE SHEETS

September 30, 2010 December 31, 2009

------------------ ----------------- ASSETS (Unaudited)

CURRENT ASSETS:

Cash and cash equivalents $ 43,653,977 $ 31,617,507

Accounts receivable 34,952

266,146

Inventories 80,309

77,643

Prepaid expenses and other current assets 1,299,216 1,379,133

------------------ -----------------

Total current assets 45,068,454 33,340,429

RESTRICTED CASH 4,328,870 7,097,526

------------------ -----------------

CAPITAL ASSETS:

Buildings and building improvements 132,886,286 131,361,604

Furniture, fixtures and equipment 33,020,780 35,102,290

Accumulated depreciation (63,891,253) (60,121,221)

Construction in progress 75,337,956 59,588,618

------------------ -----------------

Capital assets - net 177,353,769 165,931,291

------------------ -----------------

DEPOSITS AND OTHER ASSETS 1,772,584 1,936,623

------------------ -----------------

TOTAL ASSETS $ 228,523,677 $ 208,305,869

================== =================

LIABILITIES AND NET ASSETS (DEFICIT)

CURRENT LIABILITIES:

Accounts payable $ 3,223,149 $ 6,060,663

Payable to Tribe 7,517,818

-

Accrued liabilities 13,166,441 7,695,373

Current maturities of long-term debt -

492,203

------------------ -----------------

Total current liabilities 23,907,408 14,248,239

LONG-TERM DEBT - net of current maturities 199,634,649 199,381,712

------------------ -----------------

Total long-term liabilities 199,634,649 199,381,712

------------------ -----------------

TOTAL LIABILITIES 223,542,057 213,629,951

------------------ -----------------

COMMITMENTS AND CONTINGENCIES

NET ASSETS (DEFICIT)

Invested in capital assets-net of related debt (22,280,880) (33,942,624)

Restricted for capital projects 4,328,870 7,097,526

Unrestricted 22,933,630 21,521,016

------------------ -----------------

Total net assets (deficit) 4,981,620 (5,324,082)

------------------ -----------------

TOTAL LIABILITIES AND NET ASSETS (DEFICIT) $ 228,523,677 $ 208,305,869

================== ================= SOURCE: The River Rock Entertainment Authority CONTACT: ICR, LLC Don Duffy, 203-682-8215 Copyright Business Wire 2010 -0- KEYWORD: United States

North America

California INDUSTRY KEYWORD: Entertainment

Casino/Gaming SUBJECT CODE: Earnings

Conference Call

Webcast