Seneca Gaming Corporation Announces Second Quarter Fiscal 2009 Operating Results

NIAGARA FALLS, N.Y., April 29 /PRNewswire/ -- Seneca Gaming Corporation
("SGC", or the "Company") today reported its financial results for the three
month period ended March 31, 2009 ("Second Quarter 2009") and six month period
ended March 31, 2009. SGC is a wholly-owned, tribally chartered corporation
of the Seneca Nation of Indians (the "Nation") that operates all of the
Nation's Class III gaming operations in Western New York. SGC, through its
wholly-owned subsidiaries, Seneca Niagara Falls Gaming Corporation ("SNFGC"),
Seneca Territory Gaming Corporation ("STGC") and Seneca Erie Gaming
Corporation ("SEGC"), operates three casinos, one of which is located in
Niagara Falls, New York, on the Nation's Niagara Territory ("Seneca Niagara
Casino and Hotel"), another of which is located in Salamanca, New York, on the
Nation's Allegany Territory ("Seneca Allegany Casino and Hotel"), and the last
of which is located in Buffalo, New York, on the Nation's Buffalo Creek
Territory ("Seneca Buffalo Creek Casino").

Consolidated Operating Results for the Second Quarters 2009 and 2008 (in
thousands, unaudited):

For the Second Quarters Ended
-------------------------------------
Mar. 31, Mar. 31, Percent
2009 2008 Variance Variance
-------- -------- -------- --------

Gaming revenues $141,320 $154,366 $(13,046) -8.5%
Non-gaming revenues 25,633 28,124 (2,491) -8.9%
Net revenues 140,038 151,017 (10,979) -7.2%
Income from operations 27,296 30,589 (3,293) -10.8%
Net Income 17,595 20,941 (3,346) -16.0%
Adjusted EBITDA before head
lease 57,707 58,507 (800) -1.4%
(a non-GAAP measure described
below)

Consolidated financial results for the Second Quarter 2009 included the
following:
-- Gaming revenues of $141.3 million, an 8.5% decrease from the Second
Quarter 2008;
-- Gross slot revenues of $129.6 million, an 8.3% decrease from the
Second
Quarter 2008;
-- Net table games revenues of $14.5 million, a 15.6% decrease from the
Second Quarter 2008;
-- Non-gaming revenues of $25.6 million, an 8.9% decrease from the Second
Quarter 2008;
-- Net revenues of $140.0 million, a 7.2% decrease from the Second
Quarter
2008;
-- Income from operations of $27.3 million, a 10.8% decrease from the
Second Quarter 2008;
-- Net income of $17.6 million, a 16.0% decrease from the Second Quarter
2008; and

-- Adjusted EBITDA before head lease, a non-GAAP measure described below,
of $57.7 million, a 1.4% decrease from the Second Quarter 2008.

Commenting on the financial results for the Second Quarter 2009, Cathy Walker,
Chief Operating Officer and acting principal executive officer of Seneca
Gaming Corporation, said, "Our second quarter operating results reflect the
ongoing challenges faced by Seneca Gaming Corporation and the gaming industry
in this unfavorable economic environment, but more importantly, our results
also reflect positively on our team's ongoing ability to respond and adapt to
challenging and often unpredictable economic conditions. We are pleased to
report that through the diligent efforts of our team members, we were again
able to produce quarterly Adjusted EBITDA before head lease substantially
consistent with that achieved during the same period in the prior year."

SGC's Second Quarter 2009 Adjusted EBITDA before head lease decreased $0.8
million, or 1.4%, when compared to Second Quarter 2008. While net revenues
decreased $11.0 million, this decrease was offset through the implementation
of various cost savings measures, including reductions in: payroll and related
costs of $2.5 million; promotional and special event expenses of $2.0 million;
cost of goods sold of $1.2 million; advertising expenses of $1.3 million;
gaming equipment lease expense of $0.6 million and utility expense of $0.6
million. We also experienced a $2.3 million reduction in exclusivity fees
payable to the State of New York due to lower slot revenue.

Cochise Redeye, Chairman of the SGC Board of Directors commented,
"Notwithstanding the continued challenges we are presented in such turbulent
economic times, the quality and depth of our team has helped us continue to
adapt to changes in consumer demand and priorities, resulting in Adjusted
EBITDA before head lease substantially consistent with the prior year. We
have been successful in providing our patrons with value-conscious gaming and
entertainment options tailored to these times, including programs like our
"Best Bets" campaign, without compromising our ability to deliver a
world-class experience that is unparalleled in Western New York. Team Seneca
continues to illustrate its ability to collectively work towards ensuring the
success of Seneca Gaming Corporation."

Net revenues for the Second Quarter 2009 decreased primarily due to the
ongoing economic recession which has resulted in decreased consumer
discretionary spending, including discretionary spending on gaming and
entertainment.

Selected Gaming Data for the Second Quarters 2009 and 2008 (in thousands,
unaudited):

For the Second Quarters Ended
-----------------------------
Mar. 31, Mar. 31, Percent
2009 2008 Variance Variance
---------- ---------- --------- --------
Slot handle $1,520,560 $1,648,864 $(128,304) -7.8%
Gross slot revenues 129,582 141,304 (11,722) -8.3%
Net slot revenues 113,885 122,691 (8,806) -7.2%
Table games drop 90,649 102,845 (12,196) -11.9%
Net table games revenue 14,455 17,132 (2,677) -15.6%

SGC's net slot revenue for the Second Quarter 2009 decreased 7.2% when
compared to the same period in the prior year. Table games revenue per unit
per day for the Second Quarter 2009 was $1,130, compared to $1,317 for the
Second Quarter 2008.

We believe the reduction in net slot revenue and table games revenue is
primarily attributable to weakened consumer spending due to the unfavorable
economic environment, specifically for gaming and other forms of
entertainment. SGC's gross slot hold percentage and gross slot win per unit
per day for the Second Quarter 2009 were 8.5% and $216, respectively, compared
to 8.6% and $232, respectively, for the Second Quarter 2008.

Non-Gaming Revenues for the Second Quarters 2009 and 2008 (in thousands,
unaudited):

For the Second Quarters Ended
-----------------------------
Mar. 31, Mar. 31, Percentage
2009 2008 Variance Variance
-------- -------- -------- ----------
Food and Beverage $14,231 $15,568 $(1,337) -8.6%
Lodging 5,577 6,910 (1,333) -19.3%
Retail, entertainment and
other 5,825 5,646 179 3.2%

Food and beverage revenues decreased 8.6% when comparing the Second Quarter
2009 to the Second Quarter 2008. We believe the decrease is primarily
attributable to the decrease in consumer spending, which resulted in a
decrease in the number of covers, offset by an increase in the average revenue
per check. During the Second Quarter 2009, the number of covers and average
per check were approximately 956,000 and $14.88, respectively, compared to
1,071,000 and $14.54, during the Second Quarter 2008.

In addition, lodging revenue decreased by $1.3 million, or 19.3% when
comparing the Second Quarter 2009 to the Second Quarter 2008, for the same
reasons. The average daily room rate, or ADR, and occupancy percentage were
$80.88 and 94.5%, respectively, for the Second Quarter 2009, compared to
$99.60 and 94.3%, respectively, for the Second Quarter 2008. During the
Second Quarter 2009, SGC implemented marketing strategies and offered hotel
room rates at discounted prices in an effort to continue to stimulate casino
patron visitation and encourage longer trip duration. The cash and
complimentary occupancy percentages were 21% and 79%, respectively, for the
Second Quarter 2009, and 17% and 83%, respectively, for the Second Quarter
2008.

Consolidated Financial Results for the Six Month Periods Ended March 31, 2009
and 2008 (in thousands, unaudited):

For the Six Month Periods Ended
Mar. 31, Mar. 31, Percent
2009 2008 Variance Variance
-------- -------- -------- --------
Gaming revenues $278,343 $304,446 $(26,103) -8.6%
Non-gaming revenues 52,573 56,923 (4,350) -7.6%
Net revenues 278,757 301,218 (22,461) -7.5%
Income from operations 48,428 55,872 (7,444) -13.3%
Net Income 29,069 33,351 (4,282) -12.8%
Adjusted EBITDA before head 111,734 113,025 (1,291) -1.1%
lease
(a non-GAAP measure described
below)

Consolidated financial results for the six month period ended March 31, 2009
(in thousands, unaudited):
-- Gaming revenues of $278.3 million, an 8.6% decrease from the six month
period ended March 31, 2008;
-- Gross slot revenues of $254.4 million, an 8.1% decrease from the six
month period ended March 31, 2008;
-- Net table games revenues of $29.8 million, a 16.1% decrease from the
six
month period ended March 31, 2008;
-- Non-gaming revenues of $52.6 million, a 7.6% decrease from the six
month
period ended March 31, 2008;
-- Net revenues of $278.8 million, a 7.5% decrease from the six month
period ended March 31, 2008;
-- Income from operations of $48.4 million, a 13.3% decrease from the six
month period ended March 31, 2008;
-- Net income of $29.1 million, a 12.8% decrease from the six month
period
ended March 31, 2008; and

-- Adjusted EBITDA before head lease, a non-GAAP measure described below,
of $111.7 million, a 1.1% decrease from the six month period ended
March
31, 2008.

SGC's Adjusted EBITDA before head lease for the six month period ended March
31, 2009 decreased $1.3 million, or 1.1%, when compared to the six month
period ended March 31, 2008. While net revenues decreased $22.5 million, this
decrease was offset through the implementation of various cost savings
measures, such as reductions in: payroll and related costs of $4.5 million,
promotional and special event expenses of $4.4 million, cost of goods sold of
$2.7 million, advertising expenses of $2.3 million, gaming equipment lease
expense of $1.2 million, utilities expense of $0.7 million and repair
maintenance expense of $0.5 million. SGC also experienced a $4.3 million
reduction in exclusivity fee expense payable to the State of New York due to
lower slot revenue.

Net revenues for the six month period ended March 31, 2009 decreased primarily
due to the ongoing economic recession, which has resulted in decreased
consumer spending.

Selected Gaming Data for the Six Month Periods Ended March 31, 2009 and 2008
(in thousands, unaudited):

For the Six Month Periods Ended
-------------------------------
Mar. 31, Mar. 31, Percent
2009 2008 Variance Variance
-------- -------- -------- --------
Slot handle $2,992,796 $3,245,653 $(252,857) -7.8%
Gross slot revenues 254,445 277,063 (22,618) -8.1%
Net slot revenues 225,461 242,221 (16,760) -6.9%
Table games drop 183,004 213,826 (30,822) -14.4%
Net table games revenue 29,753 35,457 (5,704) -16.1%

SGC's net slot revenue for the six month period ended March 31, 2009 decreased
6.9% when compared to the same period in the prior year. Table games revenue
per unit per day for the six month period ended March 31, 2009 was $1,152,
compared to $1,361 for the six month period ended March 31, 2008.

We believe the reduction in net slot revenue and table games revenue is
primarily attributable to weakened consumer spending due to the unfavorable
economic environment, specifically for gaming and other forms of
entertainment. SGC's gross slot hold percentage and gross slot win per unit
per day for the six month period ended March 31, 2009 were 8.5% and $210,
respectively, compared to 8.5% and $227, respectively, for the six month
period ended March 31, 2008.

Non-Gaming Revenues for the Six Month Periods Ended March 31, 2009 and 2008
(in thousands, unaudited):

For the Six Month Periods Ended
-------------------------------
Mar. 31, Mar. 31, Percentage
2009 2008 Variance Variance
-------- -------- -------- ----------
Food and Beverage $28,435 $30,382 $(1,947) -6.4%
Lodging 11,872 14,224 (2,352) -16.5%
Retail, entertainment and
other 12,266 12,317 (51) -0.4%

Food and beverage revenues decreased 6.4% when comparing the six month period
ended March 31, 2009 to the six month period ended March 31, 2008. We believe
the decrease is primarily attributable to the decrease in consumer spending,
which resulted in a decrease in the number of covers, offset by an increase in
the average revenue per check. During the six month period ended March 31,
2009, the number of covers and average per check were approximately 1,891,000
and $15.04, respectively, compared to 2,098,000 and $14.48, during the six
month period ended March 31, 2008.

In addition, we believe lodging revenue decreased by $2.4 million, or 16.5%
when comparing the six month period ended March 31, 2009 to the six month
period ended March 31, 2008, for the same reasons. The average daily room
rate, or ADR, and occupancy percentage were $81.11 and 93.6%, respectively,
for the six month period ended March 31, 2009, compared to $96.14 and 92.4%,
respectively, for the six month period ended March 31, 2008. During the six
month period ended March 31, 2009, SGC implemented marketing strategies and
offered hotel room rates at discounted prices in an effort to continue to
stimulate casino patron visitation and encourage longer trip duration. The
cash and complimentary occupancy percentages were 24% and 76%, respectively,
for the six month period ended March 31, 2009, and 21% and 79%, respectively,
for the six month period ended March 31, 2008.

Liquidity, Capital Resources and Capital Spending

As of March 31, 2009, SGC held cash and cash equivalents of $65.6 million, an
increase of approximately $12.3 million when compared to September 30, 2008.

Debt:

SGC's total debt was $516.9 million as of March 31, 2009, compared to $496.4
million as of September 30, 2008. In October 2008, SGC borrowed $20.0 million
under its $50.0 million Senior Secured Revolving Loan Agreement. The $50.0
million Senior Secured Revolving Loan Agreement also supports letters of
credit, as required by certain SGC contractual agreements and ongoing legal
matters, totaling approximately $17.7 million as of March 31, 2009. Given
these letters of credit, together with the $20.0 million previously borrowed
under this facility, SGC had $12.3 million of available funds under the Senior
Secured Revolving Loan Agreement as of March 31, 2009.

On April 9, 2009, SGC made a $5.0 million payment on the Senior Secured
Revolving Loan Agreement, resulting in an outstanding unpaid principal balance
of $15.0 million as of April 29, 2009.

Interest Expense:

Interest expense of $9.7 million for the Second Quarter 2009 consists
primarily of interest on our $500 million aggregate principal amount of 7-1/4%
senior notes, $0.8 million of amortization related to financing costs and
original issue discount, and is partially offset by $0.4 million capitalized
interest on our construction activities for our Seneca Hickory Stick Golf
Course.

Interest expense of $19.3 million for the six month period ended March 31,
2009 consists primarily of interest on our $500 million aggregate principal
amount of 7-1/4% senior notes, $1.6 million of amortization related to
financing costs and original issue discount, and is partially offset by $0.7
million capitalized interest on our construction activities for our Seneca
Hickory Stick Golf Course.

Capital Expenditures:

SGC's capital expenditures totaled $33.8 million for the six month period
ended March 31, 2009, compared to $58.2 million in the six month period ended
March 31, 2008. The $33.8 million of capital expenditures consisted
principally of $14.0 million relating to the permanent Seneca Buffalo Creek
Casino and Hotel; $5.6 million relating to construction costs for the
additional hotel tower at Seneca Allegany Casino and Hotel; $3.3 million
relating to construction of the Seneca Hickory Stick Golf Club; and $1.0
million for the conversion of the temporary gaming facility at Seneca Allegany
Casino and Hotel into an events center with related amenities. The remaining
$9.9 million in capital expenditures were principally for the acquisition of
equipment for existing casino operations.

Construction of the second tower at Seneca Allegany Casino and Hotel and
construction of the permanent casino and hotel complex on the Buffalo Creek
Territory both remain suspended. Construction activities at these locations
remain suspended for reasons including: the continuing economic recession,
inability to obtain construction financing at reasonable interest rates and
operating and other demands on our available cash, such as our payments and
distributions to the Nation. SGC continues to engage in ongoing strategic
planning efforts relative to the recommencement of construction activities at
these locations.

SGC reviews the return on revenue generating maintenance capital investment
and assesses critical maintenance capital expenditure needs, such as product
quality and replacement, information technology and life safety expenditures,
on an ongoing basis.

Capital Resources:

Distributions paid to our owner, the Seneca Nation, totaled $31.2 million for
the six month period ended March 31, 2009, compared to $33.9 million for the
six month period ended March 31, 2008.

SGC continues to engage in joint planning initiatives with its owner, the
Seneca Nation of Indians, to assess the Corporation's financial condition and
its liquidity needs, and to help ensure that appropriate strategic plans are
being developed and implemented to meet the Corporation's liquidity
requirements and the ongoing challenges presented by the current economic
environment. Management intends to continue to work closely with SGC's owner
to ensure cash generated from operations, available cash and cash equivalents,
short-term investments and cash available under Senior Secured Revolving Loan
Agreement are sufficient to service our debt, satisfy our other financial
obligations and commitments and meet our working capital requirements for the
remainder of the fiscal year.

On February 23, 2009, the Tribal Council of the Seneca Nation of Indians
("Council") authorized several measures arising out of such joint planning
initiatives, including principally, rescission of an earlier Council request
for $20 million relating to certain capital improvement projects of the
Nation, a reduction in monthly distributions to the Nation from the current
level of $4 million per month to $3 million per month commencing in March
2009, the return of $5 million previously distributed to the Nation for the
capital improvement projects described above (which has been, and will be,
used as a credit against SGC's monthly distribution obligations), and a $5
million reduction in proposed rent under the Corporation's real property
leases ("Head Leases") for the fiscal year ended September 30, 2009.

SGC had previously approved an aggregate increase in rent under the Head
Leases for the fiscal year ended September 30, 2009 from $62 million to $81
million, effective October 1, 2008. Council's February 23, 2009 action
reduced the aggregate rent obligation under the Head Leases from $81 million
to $76 million for the fiscal year ended September 30, 2009. The foregoing
modifications to the Head Leases remain subject to compliance with all
obligations legally binding upon the Nation, SGC and its subsidiaries, or to
which the premises (described in the Head Leases) are subject, including the
Corporation's obligations under the Senior Notes Indenture, the Distribution
Agreement, and the Senior Secured Revolving Loan Agreement.

Non-GAAP Financial Measure

EBITDA is a non-GAAP financial measure, but is commonly used in the gaming
industry as a measure of performance and basis for valuation of gaming
companies. A reconciliation of net income to EBITDA is provided at the end of
this press release.

SGC defines EBITDA as earnings before interest, taxes, depreciation and
amortization. SGC is not subject to U.S. federal income taxation under
current interpretations of the U.S. federal tax code. EBITDA is presented to
provide additional information that SGC's management uses to assess its
business and because management believes it is frequently used by securities
analysts, investors and other interested parties in the evaluation of
companies in the industry. However, other companies in the gaming industry may
calculate EBITDA differently than we do. EBITDA is not a measurement of
financial condition or profitability under generally accepted accounting
principles and should not be considered as an alternative to cash flow from
operating activities or as a measure of liquidity or an alternative to net
income as indicators of our operating performance or any other measures of
performance derived in accordance with generally accepted accounting
principles.

SGC defines Adjusted EBITDA before head lease expense as EBITDA plus
pre-opening expense, other non-operating expenses and head lease expense.

Adjusted EBITDA before head lease expense provides an additional measurement
by which to evaluate SGC's operations and, when viewed with both the SGC's
GAAP results and its reconciliations of Adjusted EBITDA before head lease
expense to net income, the SGC believes that it provides a more complete
understanding of its business than could be otherwise obtained absent this
disclosure. Adjusted EBITDA before head lease expense is presented solely as a
supplemental disclosure because: (1) SGC believes it enhances an overall
understanding of SGC's financial performance; (2) SGC believes it is a useful
tool for investors to assess the operating performance of the business in
comparison to other operators within the gaming and hospitality industry since
Adjusted EBITDA before head lease expense excludes certain items that may not
be indicative of SGC's operating results; (3) measures that are comparable to
Adjusted EBITDA before head lease expense are often used as an important basis
for the valuation of gaming and hospitality companies; and (4) SGC uses
Adjusted EBITDA before head lease expense internally to evaluate the
performance of its operating personnel and management and as a benchmark to
evaluate its operating performance in comparison to its competitors.

Because SGC's calculation of EBITDA and Adjusted EBITDA before head lease
expense may be different from the calculation used by other companies,
comparisons of EBITDA and Adjusted EBITDA before head lease expense may be
limited. EBITDA and Adjusted EBITDA before head lease expense should not be
construed as a substitute for operating income or net income, as they are
determined in accordance with generally accepted accounting principles.

Forward-Looking Statements

This earnings release contains certain forward-looking statements intended to
qualify for the safe harbor from liability established by the Private
Securities Litigation Reform Act of 1995. The words "believe", "estimate",
"anticipate", "intend", "plan", "expect", "will", "continue", "evaluate", and
words of similar meaning, with reference to SGC and its management, indicate
forward looking statements. Similarly, statements that describe our plans or
goals are all forward-looking statements. Forward-looking statements involve
risks, uncertainties and other factors that could cause actual results to
differ materially from those expressed in or implied by the forward looking
statements contained in this earnings release, including, but not limited to
SGC's ongoing ability to respond to a challenging and often unpredictable
economic climate and its impact on SGC's continuing ability to satisfactorily
address its liquidity and working capital needs with the Nation. Additional
information concerning potential factors that could affect SGC's financial
condition, results of operations, and expansion projects are described from
time to time in SGC's periodic reports filed with the SEC, including, but not
limited to, SGC's Annual Report on Form 10-K. These Reports may be viewed
free of charge on the SEC's website, www.sec.gov, or on SGC's website,
www.senecagamingcorporation.com.

SGC disclaims any obligation to update any forward-looking statements. You are
cautioned not to place undue reliance on any forward-looking statements
included in this earnings release, which speak only as of the date of this
earnings release.

SENECA GAMING CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED) ($000's omitted)
----------------------------------------------------------------

March 31, September 30,
2009 2008
--------- -------------
Assets

Current assets:
Cash and cash equivalents $65,612 $53,305
Short-term investments 150 300
Other receivables, net 3,044 2,705
Inventories 3,821 4,196
Other current assets 12,075 9,127
--------- --------
Total current assets 84,702 69,633

Property and equipment, net 792,045 799,335
Other long-term assets 66,065 66,750
-------- --------
Total assets $942,812 $935,718
-------- --------
Liabilities and Shareholders'
Equity

Current liabilities:
Trade payables 1,603 3,368
Construction payables 13,720 29,619
Distributions payable to Nation - 24,000
Exclusivity fees payable 9,271 9,234
Accrued interest payable 15,104 15,104
Accrued regulatory costs 31,634 27,888
Accrued gaming liabilities 16,081 15,657
Accrued payroll and related
liabilities 13,779 10,138
Other current liabilities 12,087 13,511
Senior secured revolving loan payable 20,000 -
------- --------
Total current liabilities 133,279 148,519

Long-term debt 496,857 496,353
-------- --------
Total liabilities 630,136 644,872
-------- --------
Capital:
Retained earnings 312,676 290,846
-------- --------
Total liabilities and capital $942,812 $935,718
-------- --------

SENECA GAMING CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED) ($000's omitted)
--------------------------------------------------- -------------------
Three Month Periods Six Month Periods
Ended: Ended:
------------------- -------------------
March 31, March 31, March 31, March 31,
2009 2008 2009 2008
--------- --------- --------- ---------
Revenues:
Gaming $141,320 $154,366 $278,343 $304,446
Food and beverage 14,231 15,568 28,435 30,382
Lodging 5,577 6,910 11,872 14,224
Retail, entertainment and
other 5,825 5,646 12,266 12,317
Less: promotional allowances (26,915) (31,473) (52,159) (60,151)
-------- -------- -------- --------
140,038 151,017 278,757 301,218
-------- -------- -------- --------
Expenses:
Gaming 36,424 41,509 73,650 82,947
Food and beverage 10,697 12,098 21,904 24,715
Lodging 3,128 3,279 6,159 6,526
Retail, entertainment and
other 3,467 3,814 7,445 8,173
Advertising, general and
administrative 46,365 47,310 95,865 96,832
Pre-opening costs 78 131 136 224
Depreciation and amortization 12,583 12,287 25,170 25,929
------- ------- ------- -------
Total operating expenses 112,742 120,428 230,329 245,346
------- ------- ------- -------
Operating income 27,296 30,589 48,428 55,872
Other non-operating expenses (50) (150) (163) (3,900)
Interest income 23 374 81 1,122
Interest expense (9,674) (9,872) (19,277) (19,743)
------- ------- -------- --------
Net Income $17,595 $20,941 $29,069 $33,351
------- ------- ------- --------

SENECA GAMING CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOW
(UNAUDITED) ($000's omitted)
-----------------------------------------------------------------------

Six Month Periods Ended
March 31,
-----------------------
2009 2008
---------- ----------
(Dollars in Thousands)
Cash flows relating to operating activities:
Net income $29,069 $33,351
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 25,170 25,929
Loss on disposal of assets 7 71
Amortization of deferred financing costs and
debt discount 1,621 1,619
Other than temporary decline in investments 150 3,900
Provision for bad debts 201 22

Change in operating assets and liabilities:
Current assets (3,113) 828
Long-term assets 50 (289)
Current liabilities 4,659 (143)
------- ------
Net cash provided by operating activities 57,814 65,288

Cash flows relating to investing activities:
Purchases of property and equipment (33,786) (58,237)
Land acquisition costs (482) (3,706)
Decrease in restricted cash - (2,074)
Sale of investments, net - 14,600
-------- --------
Net cash used in investing activities (34,268) (49,417)

Cash flows relating to financing activities:
Proceeds from senior secured revolving loan
agreement 20,000 -
Distributions paid to the Nation (31,239) (33,905)
-------- --------
Net cash used in financing activities (11,239) (33,905)

Net increase (decrease) in cash 12,307 (18,034)

Cash balances:
Beginning of period 53,305 78,662
------- -------
End of period $65,612 $60,628
------- -------

SENECA GAMING CORPORATION
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
before Head Lease
Three month period ended March 31, 2009
(UNAUDITED) ($000's omitted)

Consolidated

Net Income (loss) $17,595
Depreciation and amortization 12,583
Interest, net 9,651
-------
EBITDA 39,829
Pre-opening costs 78
Other Non-operating expense 50
Head Lease 17,750
-------
Adjusted EBITDA before Head Lease $57,707
-------

SENECA GAMING CORPORATION
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
before Head Lease
Three month period ended March 31, 2008
(UNAUDITED) ($000's omitted)

Consolidated

Net Income (loss) $20,941
Depreciation and amortization 12,287
Interest, net 9,498
-------
EBITDA 42,726
Pre-opening costs 131
Other Non-operating expense 150
Head Lease 15,500
-------
Adjusted EBITDA before Head Lease $58,507
-------

SENECA GAMING CORPORATION
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
before Head Lease
Six month period ended March 31, 2009
(UNAUDITED) ($000's omitted)

Consolidated

Net Income (loss) $29,069
Depreciation and amortization 25,170
Interest, net 19,196
--------

EBITDA 73,435
Pre-opening costs 136
Other Non-operating expense 163
Head Lease 38,000
--------

Adjusted EBITDA before Head Lease $111,734
--------

SENECA GAMING CORPORATION
Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
before Head Lease
Six month period ended March 31, 2008
(UNAUDITED) ($000's omitted)

Consolidated

Net Income (loss) $33,351
Depreciation and amortization 25,929
Interest, net 18,621
--------

EBITDA 77,901
Pre-opening costs 224
Other Non-operating expense 3,900
Head Lease 31,000
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Adjusted EBITDA before Head Lease $113,025
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SOURCE Seneca Gaming Corporation

David Sheridan, Chief Financial Officer, Seneca Gaming Corporation,
+1-716-501-2010