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River Rock Entertainment Authority reports results

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.

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