GEYSERVILLE, Calif.--(BUSINESS WIRE)--The River Rock Entertainment Authority (the “Authority”), the operator of the River Rock Casino in Sonoma County, California, today announced second quarter operating results for the period ended June 30, 2008.

Second Quarter Operating Results for the Period Ended June 30, 2008

Net revenues for the second quarter ended June 30, 2008 were $33.7 million. Casino revenue totaled $34.7 million and included slot revenue of $27.6 million and table game and poker revenue of $3.6 million. Food, beverage and retail revenues were $2.2 million. The retail value of e-coupons, food and beverages provided to customers without charge is included in gross revenues and then deducted as promotional allowances. The redemption of cash incentives earned by the Players Club members is also recorded as promotional allowances. Promotional allowances for the second quarter of fiscal 2008 were $3.4 million.

Operating expenses for the second quarter ended June 30, 2008 were $22.7 million. Operating expenses consisted of casino expense of $4.9 million, food, beverage and retail expense of $2.5 million, selling, general and administrative expense of $11.8 million, depreciation expense of $2.4 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 second quarter of 2008 was $13.6 million, or 40.4% of net revenues, compared to $16.5 million in the second quarter of 2007. Income from operations for the second quarter 2008 was $10.9 million and represented 32.4% of net revenues. Other expense, net for the second quarter 2008 was $5.0 million and included $5.2 million of interest expense.

Chief Executive Officer Shawn Smyth stated, “We were pleased with our performance, particularly given the challenges presented by the current macroeconomic environment. In June we began offering alcohol to our guests, and we believe that this has begun to have a positive impact on our business and has enhanced the overall customer experience at the casino. We also remain very excited about our plans for a new 750,000-square foot destination resort to replace the current casino. The project’s many planned features and amenities promise to make the resort one of the area’s most compelling destinations.”

Liquidity and Capital Resources

Net cash provided by operating activities for the second quarter totaled $14.7 million. Net cash used in capital and related financing activities for the second quarter totaled $2.3 million. Cash provided by investing activities totaled $0.3 million for the second quarter. Cash used in non-capital financing activities for the second quarter totaled $4.3 million, which represented net distributions to the Tribe. Cash and cash equivalents net of restricted cash at June 30, 2008 totaled $44.4 million.

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

“EBITDA” is income before distributions to the Tribe plus interest, taxes, depreciation and amortization. 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
	June 30,
		2008			2007
	(Dollars in Thousands)
Net Income before distributions to the Tribe	$	5,961		$	8,264
Add back Interest		5,217			5,217
Add back Depreciation & Amortization		2,410			2,997
EBITDA	$	13,588		$	16,478

⁽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.

⁽²⁾ Credit Enhancement Fees: Until the exercise of our buy-out option on March 2, 2007, we were obligated to pay Dry Creek Casino, LLC twenty percent (20%) of the Authority’s net income before distributions to the Tribe plus depreciation and amortization plus annual interest on $25.0 million principal amount of the senior notes, less revenues from sales of alcoholic beverages. This was treated as an operating expense and therefore was adjusted out of EBITDA for comparison purposes.

Conference Call

The Authority will host a conference call to discuss second quarter financial results at 5:00 PM ET on Thursday, August 14, 2008. The call can be accessed live over the phone by dialing (888) 221-3848 or for international callers by dialing (913) 312-6697. 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 August 21, 2008 by dialing (888) 203-1112; password 1290434.

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 947 enrolled members and approximately 75-acre reservation in Sonoma County, California. We own and operate the River Rock Casino, a 62,000 square foot facility which is on the reservation and overlooks the scenic Alexander Valley, 75 miles north of San Francisco. River Rock Casino features 35,500 square feet of gaming space containing 1,570 slot and video poker machines, 22 table games, as well as a full-service restaurant.

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.

BALANCE SHEETS
(Unaudited)
(In Thousands)
ASSETS	June 30, 2008				December 31, 2007
CURRENT ASSETS:
Cash and cash equivalents	$	44,274			$	46,533
Restricted cash-current		467				467
Accounts receivable		419				307
Inventories		188				153
Prepaid expenses and other current assets		1,372				1,428
Total current assets		46,720				48,888
RESTRICTED CASH-Net of Current		6,897				6,869
PROPERTY AND EQUIPMENT:
Buildings, land and building improvements		130,104				129,643
Furniture, fixtures and equipment		32,916				29,969
		163,019				159,612
Accumulated depreciation		(49,811	)			(44,461	)
Construction in progress		18,931				9,257
Property and equipment-net		132,139				124,408
DEPOSITS AND OTHER ASSETS		4,083				4,339
TOTAL ASSETS	$	189,839			$	184,504
LIABILITIES AND FUND DEFICIT
CURRENT LIABILITIES:
Accounts payable:
Trade	$	3,203			$	3,563
Construction		-				467
Accrued liabilities		8,062				7,567
Current maturities of long-term debt		187				213
Total current liabilities		11,452				11,810
LONG-TERM DEBT - net of current maturities		198,886				198,747
Total long term liabilities		198,886				198,747
FUND DEFICIT
Invested in capital assets-net of related debt		(66,560	)			(74,553	)
Restricted for capital projects		7,364				7,335
Unrestricted		38,696				41,164
Total Fund Deficit		(20,499	)			(26,053	)
TOTAL LIABILITIES AND FUND DEFICIT	$	189,839			$	184,504
The accompanying notes are an integral part of these unaudited financial statements.

RIVER ROCK ENTERTAINMENT AUTHORITY
(A Governmental Instrumentality of the Dry Creek Rancheria Band of Pomo Indians)
STATEMENTS OF REVENUES, EXPENSES AND CHANGES IN FUND DEFICIT
(Unaudited)
(In Thousands)
		Three-Month								Six-Month
		Period Ended								Period Ended
		June 30,								June 30,
			2008				2007				2008				2007
REVENUES:
Casino		$	34,690			$	36,215			$	69,421			$	71,675
Food, beverage & retail			2,171				1,800				4,070				3,515
Other			154				161				302				320
Gross revenues			37,015				38,176				73,793				75,510
Promotional allowance			(3,357	)			(3,403	)			(6,963	)			(6,605	)
Net revenues			33,658				34,773				66,830				68,905
OPERATING EXPENSES:
Casino			4,862				4,981				9,900				10,176
Food, beverage & retail			2,505				1,414				4,230				2,856
Selling, general and administrative			11,781				11,096				22,199				20,932
Depreciation			2,410				2,997				5,350				5,925
Credit enhancement fee			-				-				-				11,349
Gaming commission expense			854				820				1,856				1,495
Compact revenue sharing trust fund			334				334				668				668
Total Operating expenses			22,746				21,642				44,203				53,401
INCOME FROM OPERATIONS			10,913				13,131				22,627				15,504
OTHER EXPENSE-Net
Interest expense			(5,217	)			(5,217	)			(10,434	)			(10,436	)
Interest income			266				351				756				718
Loss on sale of assets			-				-				-				5
Other expense			-				-				(9	)			(1	)
Other expense-net			(4,951	)			(4,866	)			(9,687	)			(9,714	)
INCOME BEFORE DISTRIBUTIONS TO TRIBE			5,962				8,264				12,940				5,790
DISTRIBUTIONS TO TRIBE			(4,264	)			(3,122	)			(7,386	)			(6,182	)
NET INCOME AFTER DISTRIBUTIONS TO TRIBE			1,698				5,142				5,554				(392	)
FUND DEFICIT-Beginning of period			(22,197	)			(39,898	)			(26,053	)			(34,336	)
FUND DEFICIT-End of period		$	(20,499	)		$	(34,756	)		$	(20,499	)		$	(34,728	)
The accompanying notes are an integral part of these unaudited financial statements.

Integrated Corporate Relations
Don Duffy, 203-682-8200