<Page>

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                   FORM 10-K/A
                                 Amendment No. 1

            /X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

                   For the fiscal year ended December 31, 2002

                                       OR

          / / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                         SECURITIES EXCHANGE ACT OF 1934

               For the transition period from ________ to ________

                        Commission file number 333-17795

                            WATERFORD GAMING, L.L.C.
             (Exact name of registrant as specified in its charter)

                     Delaware                                 06-1465402
          (State or other jurisdiction of                   (IRS Employer
          incorporation or organization)                 Identification No.)
        914 Hartford Turnpike, P.O. Box 715
                   Waterford, CT                                06385
     (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code (860) 442-4559

Securities registered pursuant to Section 12(b) of the Act: NONE

Title of each class                    Name of each exchange on which registered
Not applicable                         Not applicable

Securities registered pursuant to Section 12(g) of the Act:  NONE

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days: Yes /X/ No.

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K: Not applicable.

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act). Yes / / No /X/

<Page>

State the aggregate market value of the voting and non-voting common equity held
by non-affiliates computed by reference to the price at which the common equity
was last sold, or the average bid and asked price of such common equity, as of
the last business day of the registrant's most recently completed second fiscal
quarter. - Not applicable

List hereunder the following documents if incorporated by reference and the Part
of the Form 10-K (e.g., Part I, Part II, etc.) into which the document is
incorporated: (1) Any annual report to security holders; (2) Any proxy or
information statement; and (3) Any prospectus filed pursuant to Rule 424(b) or
(c) under the Securities Act of 1933. The listed documents should be clearly
described for identification purposes (e.g., annual report to security holders
for fiscal year ended December 24, 1980). - Not Applicable

<Page>

                                 PREFATORY NOTE

     Waterford Gaming, L.L.C. (the "COMPANY" or "WATERFORD") has restated its
financial statements for each of the fiscal years 1996 through 2002.

     The Company is a general partner of Trading Cove Associates ("TRADING COVE"
or "TCA") and its investment in TCA is accounted for under the equity method.
TCA has restated its financial statements as described below. As the Company
accounts for its investment in TCA under the equity method, the Company's
financial statements have been restated to reflect the changes recorded by TCA.
The effect of TCA's restatement on the Company's financial statements is
described below.

     The restatement is the result of a change by TCA in the way it has
historically recorded certain contractual liabilities to its partners and their
affiliates, recognized certain revenue, and classified certain distributions to
its partners. As described in more detail below, TCA has restated its historical
financial statements to,

     i)     recognize as an expense certain contractual liabilities owed its
            partners and their affiliates for prior services performed under
            contract when payment of such liabilities became probable, pursuant
            to Statement of Financial Accounting Standard No. 5 ("SFAS 5"), as
            opposed to when such expenses were paid or payable (these expenses
            were previously disclosed as contingent obligations);

     ii)    recognize as revenue junior relinquishment fees from the Mohegan
            Tribal Gaming Authority (the "AUTHORITY") pursuant to the
            Relinquishment Agreement in the quarter in which such fees are
            earned, as opposed to at the end of every six months, when such fees
            became payable; and

     iii)   reclassify certain payments by TCA to its partners as distributions
            on its partnership interests which were previously classified as
            expenses in the statement of operations.

The Company's interest in Trading Cove is its principal asset and source of
income and cash flows.

     To the extent these changes affected TCA's reported net income, the
Company's net income was affected by its proportionate share of TCA's income
recorded under the equity method. To the extent these changes caused TCA to
recognize income from relinquishment fees earlier than it previously had, the
Company's equity income of TCA was increased by its proportionate share of such
income. To the extent TCA reclassified certain payments to the Company as
distributions on partnership interests, the Company has reclassified such
payments by TCA as distributions, rather than as "Revenue - 25% of
relinquishment payments - Trading Cove Associates," on its statement of
income.

     The effect of the restatement to TCA is to change the timing of the
recognition of certain revenues and certain liabilities of TCA, owed to its
partners and their affiliates, and not to change the amount of such revenues or
such liabilities or the amounts paid to its partners or their affiliates. As a
result of the restatement by TCA, the Company has restated its financial

<Page>

information included in each Form 10-K and Form 10-Q filed by the Company
since 2000 in this Form 10-K/A. The Company has not amended its Annual
Reports on Form 10-K or Quarterly Reports on Form 10-Q for periods affected
by the restatement that ended prior to January 1, 2000, and the financial
statements and related financial information contained in such reports should
no longer be relied upon.

     The restatement does not result in a change of the cash flows from
operating, investing or financing activities that would have been available
for paying interest, principal and premium on the Company's outstanding
9-1/2% Senior Notes due 2010 (the "9.50% SENIOR NOTES"). Based on the
Company's restated financial statements, if TCA had made the changes
described above at the beginning of the period covered by the restated
financial statements, it would change neither the timing nor amount of the
9.50% Senior Notes redeemed from Company Excess Cash, as defined in the
indenture governing the 9.50% Senior Notes (the "INDENTURE"), nor the release
of collateral or the interpretation of any covenant contained in the
Indenture during such period. Moreover, if TCA had made the changes described
above at the beginning of the period covered by the restated financial
statements, no default or event of default under the Indenture would have
occurred during any of the affected periods.

     As noted above, TCA has changed how it has historically accounted for
certain contractual liabilities it owed to its partners and their affiliates
for services performed under contract. TCA has restated its financial
statements to record a liability for certain previously provided services
pursuant to SFAS 5 when it became probable that such liability had been
incurred and when it became reasonably estimable rather than when payment was
certain. As a result of this change, some payments have been recorded as
liabilities and expenses on TCA's financial statements several years before
they were, or will become, due and payable. Previously, these payments were
recorded as liabilities only when such liability became payable. These
payments are related to amounts due under (a) the third, fourth, fifth,
seventh, eighth, ninth and eleventh priority distributions described in the
Amended and Restated Omnibus Financing Agreement and (b) the third and fourth
priority distributions described in the Amended and Restated Omnibus
Termination Agreement. For a description of the Amended and Restated Omnibus
Termination Agreement, see "Business - Trading Cove Associates Material
Agreements - Amended and Restated Omnibus Termination Agreement."

     One effect of the change described in the preceding paragraph is that
TCA has restated its financial statements to recognize an additional loss on
the Development Agreement between it and the Authority, which is accounted
for in accordance with Statement of Position 81-1. This has resulted in a
corresponding reduction on the Company's balance sheet as of December 31,
2002 in "Trading Cove Associates - equity investment" of $4,496,500 and an
increase in members' deficiency of $4,496,500. Through December 31, 2002 TCA
had recorded a cumulative loss of $7,007,000. After the restatement, it
recorded a cumulative loss of $16,000,000 at December 31, 2002. As a result,
TCA recorded an additional development loss of $1,200,000 during 2002 and
reduced its loss provision during 2000 by $2,007,000 to give effect to a
$10,000,000 development loss at December 31, 1999. The Company's 50% share of
the difference is $4,496,500 at December 31, 2002 and $3,496,500 at December
31, 2001 and 2000. Prior to making the change described in the preceding
paragraph, TCA would have recorded this loss in the second quarter of 2003,
when the related amount would have become payable.

<Page>

     Also as noted above, TCA has restated its historical financial
statements to reclassify certain payments to its partners as distributions on
TCA's partnership interests. The payments, the classification of which has
changed, are payments TCA has historically made under the fifth and seventh
priorities under the Amended and Restated Omnibus Termination Agreement, as
described in paragraphs (e) and (g) of the section below titled "Business -
Trading Cove Associates Material Agreements - Amended and Restated Omnibus
Termination Agreement" for the periods commencing January 1, 2000. This
reclassification by TCA results in the reclassification by the Company of
certain income it received from TCA as "Equity in income (loss) of Trading
Cove Associates" on its statement of income. Prior to the restatement, the
Company had classified such payments on its statement of operations as
"Revenue - 25% of relinquishment payments - Trading Cove Associates". Such
reclassification does not change or affect the Company's aggregate net income
or loss for the period covered by the restated financial statements. These
payments are considered a distribution to the Company on its partnership
interests, rather than revenue from TCA. Accordingly, at December 31, 2002
and 2001, the restated balance sheets of the Company show $0 as due from TCA,
and "Trading Cove Associates - equity investment" has been increased by
$11,021,500 and $8,357,604 at December 31, 2002 and 2001, respectively, which
was the amount previously recorded as an amount due from TCA prior to making
the change described in this paragraph. The change in the development loss
described above and the reclassification account for the change in equity
investment on the consolidated balance sheet.

     Also as described above, TCA has changed its historical method of
accruing junior relinquishment payments it receives from the Authority
pursuant to the Relinquishment Agreement. TCA has restated its historical
financial statements to accrue for such payments in each quarter as they are
earned. Prior to the restatement, TCA recognized such payments as revenue as
they became payable every six months. The restatement requires the Company to
restate its historical financial statements to record its investment in TCA
with a portion of each junior relinquishment payment being accrued each
quarter. There is no impact on TCA's annual relinquishment fee revenues.

     As a result of the restatement, net income or loss of the Company, which
principally consists of equity income of TCA, varies considerably on a year to
year basis from prior reported amounts for the period 1997 through 2000. For
2001, net income has remained unchanged at approximately $6.6 million. In 2002,
net income has been decreased from approximately $13.0 million to approximately
$12.0 million. As noted above, the restatement does not change cash that would
have been available for redeeming or for paying interest, principal or premium
on the 9.50% Senior Notes.

     This 10-K/A amends and restates in its entirety Item 1 (Business), Item 3
(Legal Proceedings), Item 6 (Selected Financial Data), Item 7 (Management's
Discussion and Analysis of Financial Condition and Results of Operations), Item
8 (Financial Statements and Supplementary Data), and Item 13 (Certain
Relationships and Related Transactions) of the Form 10-K filed by the Company on
March 26, 2003. It also includes in Item 6 (Selected Financial Data) restated
selected financial data for the years ended 1998, 1999, 2000, 2001, and 2002 and
in Item 8 (Financial Statements and Supplementary Data) restated financial
statements of the Company and TCA and related footnotes thereto for the fiscal
years ended December 31, 2000, 2001 and 2002.

<Page>

                            WATERFORD GAMING, L.L.C.
                               INDEX TO FORM 10-K

<Table>
<Caption>
                                                                                                                 PAGE
<S>                                                                                                                <C>
PART I

ITEM 1.     BUSINESS................................................................................................2
ITEM 2.     PROPERTIES.............................................................................................20
ITEM 3.     LEGAL PROCEEDINGS......................................................................................21
ITEM 4.     SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................................22

PART II

ITEM 5.     MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS.................................22
ITEM 6.     SELECTED FINANCIAL DATA................................................................................22
ITEM 7.     MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS..................23
ITEM 7A.    QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.............................................40
ITEM 8.     FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA............................................................41
ITEM 9.     CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE...................41

PART III

ITEM 10.    DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.....................................................41
ITEM 11.    EXECUTIVE COMPENSATION.................................................................................42
ITEM 12.    SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS.........43
ITEM 13.    CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.........................................................44

PART IV

ITEM 14.    CONTROL PROCEDURES.....................................................................................46
ITEM 15.    EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K........................................46

Signatures.........................................................................................................53
Certifications.
</Table>

<Page>

                       CERTAIN FORWARD LOOKING STATEMENTS

This annual report on Form 10-K/A contains "forward-looking statements" within
the meaning of Section 27A of the Securities Act of 1933, as amended (the
"SECURITIES ACT") and Section 21E of the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), including, in particular, the statements about the
Company's, TCA's and the Mohegan Sun Casino's (the "MOHEGAN SUN") plans,
strategies and prospects. Although the Company believes that such statements are
based on reasonable assumptions, these forward-looking statements are subject to
numerous factors, risks and uncertainties that could cause actual outcomes and
results to be materially different from those projected. These factors, risks
and uncertainties include, among others, the risk factors described below under
the heading "Management's Discussion and Analysis of Financial Condition and
Results of Operations - Risk Factors" and the following:

     a)   the financial performance of the Mohegan Sun;
     b)   changes in laws or regulations (including, without limitation, gaming
          laws or regulations);
     c)   the effects of new competition; and
     d)   general domestic and global economic conditions.

     The Company's, TCA's and Mohegan Sun's actual results, performance or
achievements could differ materially from those expressed in, or implied by, the
forward-looking statements contained herein. The Company can give no assurances
that any of the events anticipated by the forward-looking statements will occur
or, if any of them do, what impact they will have on its results of operations
and financial condition. You are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this annual
report on Form 10-K/A.

                                     PART I

Item 1.   BUSINESS

     THIS ITEM 1 HAS BEEN REVISED (a) TO REFLECT THE RESTATEMENT AND CERTAIN
DEVELOPMENTS OCCURRING SUBSEQUENT TO THE FILING OF THE ORIGINAL FORM 10-K, (b)
TO UPDATE DISCLOSURE CONCERNING THE 9.50% SENIOR NOTES, (c) TO INCLUDE
DESCRIPTIONS OF CERTAIN MATERIAL CONTRACTS OF THE COMPANY AND TCA CONTAINED IN
PRIOR FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION (THE "COMMISSION"),
AND (d) TO INCORPORATE CERTAIN CONFORMING CHANGES.

A.   THE COMPANY

     The Company was formed solely for the purpose of holding its partnership
interest in Trading Cove Associates, a Connecticut general partnership. Trading
Cove is the former manager and original developer of the Mohegan Sun located in
Uncasville, Connecticut, a casino owned by the Mohegan Tribe of Indians of
Connecticut (the "MOHEGAN TRIBE" or the "TRIBE"). The Company's interest in TCA
is its principal asset and source of income and cash flow.

                                        2
<Page>

     Trading Cove developed the Mohegan Sun and managed the property from its
opening in 1996 until December 31, 1999. On January 1, 2000, Trading Cove turned
over management of the Mohegan Sun to the Authority. TCA and the Company's
principals assisted the Mohegan Tribe in obtaining federal recognition,
negotiating the tribal-state compact with the State of Connecticut, obtaining
numerous governmental approvals, raising debt financing for the initial
construction and development of the Mohegan Sun, and developing the Project
Sunburst expansion (the "PROJECT SUNBURST EXPANSION"), an approximately $1.0
billion expansion at the Mohegan Sun, the final phase of which opened in June
2002.

     The Company is a wholly owned subsidiary of Waterford Group, L.L.C.
("WATERFORD GROUP"). The Limited Liability Company Agreement of the Company (the
"LLC AGREEMENT") is effective until September 30, 2020 and may be terminated by
the Company's sole member or upon the occurrence of certain events as stated in
the LLC Agreement.

     The LLC Agreement provides for the property, affairs and business of the
Company to be managed by a four-member Board of Directors (the "BOARD OF
DIRECTORS"), which consists of two directors appointed by Slavik Suites, Inc.
("SLAVIK") and two directors appointed by LMW Investments, Inc. ("LMW"). A
quorum for the Board of Directors requires all four members. LMW and Slavik
initially contributed capital to the Company consisting of all of their
respective interests in Trading Cove.

     Prior to the offering of the Company's 12.75% Senior Notes (the "12.75%
SENIOR NOTES"), Slavik and LMW were partners of Trading Cove. In connection with
the formation of the Company, Slavik and LMW each contributed to the Company its
interests in Trading Cove in exchange for a 66-2/3% and 33-1/3% ownership
interest, respectively, of the Company. Upon consummation of the offering of the
12.75% Senior Notes, (i) $6.7 million of the proceeds of such offering were
distributed directly to Slavik for the purpose of redeeming certain ownership
interests in Slavik, and (ii) $3.3 million of the proceeds were distributed to
LMW, which in turn loaned such proceeds to Len and Mark Wolman, as individuals,
who used such funds to purchase certain interests in Slavik. The Company used
$10.6 million of the proceeds from the offering of the 12.75% Senior Notes to
purchase RJH Development Corp.'s ownership interest in Trading Cove. As a result
of these transactions (collectively the "REORGANIZATION"), Slavik and LMW owned
67.7967% and 32.2033% of the Company, respectively. The Company is a managing
general partner of Trading Cove. As a result of the Reorganization, the only two
partners of Trading Cove are the Company and Kerzner Investments Connecticut,
Inc. ("KERZNER INVESTMENTS"), formerly Sun Cove Limited.

     In connection with the issuance on March 17, 1999 of the 9.50% Senior
Notes, each of Slavik and LMW contributed their respective interests in the
Company concurrently to Waterford Group. Waterford Group is now the sole member
of the Company. Slavik and LMW own Waterford Group in the same respective
interest as they had in the Company, which are as follows:

<Table>
          <S>                                        <C>
          Slavik Suites, Inc.                         67.7967%
          LMW Investments, Inc.                       32.2033%
                                                    -----------
                                                     100.0000%
                                                    ===========
</Table>

                                        3
<Page>

     Additional capital contributions may be made to the Company by its member,
Waterford Group. If it is determined that the Company requires additional funds,
such funds may be loaned to the Company by its member pursuant to the terms set
forth in the LLC Agreement; however, the Indenture governing the 9.50% Senior
Notes, prohibits the Company from incurring additional indebtedness. The LLC
Agreement also provides that any disputes which arise under the Agreement and
which remain unresolved after 30 days will be settled through arbitration.

     LMW, one of the two members of Waterford Group, is a development firm based
in southeastern Connecticut. LMW is owned by Len Wolman and Mark Wolman. The
other member of Waterford Group, Slavik, is based in Detroit, Michigan. The
directors of Slavik are Del J. Lauria, Len Wolman, Mark Wolman and Stephan F.
Slavik.

     As of December 31, 2002, the Company employed one full-time employee and no
part-time employees. The Company's employee is not covered by a collective
bargaining agreement.

B.   THE 9.50% SENIOR NOTES

     On March 17, 1999, the Company and its wholly owned subsidiary, Waterford
Gaming Finance Corp. ("FINANCE"), issued the 9.50% Senior Notes. Payment of the
principal of, and interest on, the 9.50% Senior Notes is pari passu in right of
payment with all of the Company's and Finance's senior debt, and effectively
subordinate in right of payment to all of the Company's and Finance's existing
and future secured and subordinated debts.

     Upon the consummation of the offering of the Company's 9.50% Senior Notes,
(i) all of the Company's 12.75% Senior Notes were redeemed, (ii) a distribution
of $37,050,000 was made by the Company to its sole member Waterford Group, and
(iii) $2.0 million was paid to a former partner of Trading Cove, Leisure Resort
Technology, Inc. ("LEISURE"), in satisfaction of a contractual obligation.

     The 9.50% Senior Notes bear interest at a rate of 9.50% per annum, payable
semi-annually in arrears on March 15 and September 15. The principal amount due
on the 9.50% Senior Notes is payable on March 15, 2010.

     The Company and Finance may elect to redeem all or any of the 9.50% Senior
Notes at any time on or after March 15, 2004 at a redemption price equal to a
percentage of the principal amount of notes being redeemed plus accrued
interest. Such percentage is set forth in the following table:

<Table>
<Caption>
          If notes are redeemed                                                      Percentage
          ---------------------                                                      ----------
          <S>                                                                         <C>
          after March 14, 2004 but
          on or before March 14, 2005.............................................    105.182%

          after March 14, 2005 but
          on or before March 14, 2006.............................................    104.318%

          after March 14, 2006
          but on or before March 14, 2007.........................................    103.455%

          after March 14, 2007 but
          on or before March 14, 2008.............................................    102.591%
</Table>

                                        4
<Page>

<Table>
          <S>                                                                         <C>
          after March 14, 2008
          but on or before March 14, 2009.........................................    101.727%

          after March 14, 2009
          but on or before March 14, 2010.........................................    100.864%

          after March 14, 2010....................................................    100.000%
</Table>

     The 9.50% Senior Notes provide that upon the occurrence of a Change of
Control (as defined in the Indenture), the holders thereof will have the option
to require the redemption of the 9.50% Senior Notes at a redemption price equal
to 101% of the principal amount thereof plus accrued interest.

     Pursuant to the terms of the Indenture, if the Company and Finance have any
Company Excess Cash, as defined in the Indenture, on February 1 or August 1 of
any year, they must use such Company Excess Cash to redeem 9.50% Senior Notes on
the March 15 or September 15 following such dates. Any such redemption will be
made at a price equal to a percentage of the principal amount of 9.50% Notes
being redeemed. Such percentage is set forth in the following table:

<Table>
<Caption>
                                                                              Redemption price
                                                                              (expressed as a
                                                                              percentage of principal
          If notes are redeemed with company excess cash                      amount being redeemed)
          ----------------------------------------------                      -----------------------
          <S>                                                                         <C>
          after March 14, 1999 but
          on or before March 14, 2000.......................................          109.500%

          after March 14, 2000 but
          on or before March 14, 2001.......................................          108.636%

          after March 14, 2001 but
          on or before March 14, 2002.......................................          107.773%

          after March 14, 2002 but
          on or before March 14, 2003.......................................          106.909%

          after March 14, 2003 but
          on or before March 14, 2004.......................................          106.045%

          after March 14, 2004 but
          on or before March 14, 2005.......................................          105.182%

          after March 14, 2005 but
          on or before March 14, 2006.......................................          104.318%

          after March 14, 2006
          but on or before March 14, 2007...................................          103.455%

          after March 14, 2007 but
          on or before March 14, 2008.......................................          102.591%
</Table>

                                        5
<Page>

<Table>
          <S>                                                                         <C>
          after March 14, 2008
          but on or before March 14, 2009...................................          101.727%

          after March 14, 2009
          but on or before March 14, 2010...................................          100.864%

          after March 14, 2010..............................................          100.000%
</Table>

     The Company and Finance have periodically redeemed portions of the 9.50%
Senior Notes with Company Excess Cash pursuant to the terms of the Indenture.
The table below summarizes (a) the amount of Company Excess Cash that the
Company and Finance have determined was available for the mandatory
redemption of the 9.50% Senior Notes on February 1st and August 1st of each
applicable year pursuant to the terms of the Indenture, (b) the aggregate
principal amount of 9.50% Senior Notes redeemed with such Company Excess
Cash, (c) the date on which such redemption was consummated, and (d) the
redemption price at which such redemption was made.

<Table>
<Caption>
                                                                                                REDEMPTION PRICE
                                                                                                (EXPRESSED AS A
                                                                                                PERCENTAGE OF
                         COMPANY EXCESS CASH      PRINCIPAL AMOUNT OF                           PRINCIPAL AMOUNT
DATE                     (APPROXIMATELY)          NOTES REDEEMED         DATE OF REDEMPTION     REDEEMED)
<S>                          <C>                      <C>                <C>                        <C>
August 1, 1999               $  8,983,000             $ 2,841,000        September 15, 1999         109.500%

February 1, 2000             $  8,276,000             $ 2,277,000        March 15, 2000             108.636%

August 1, 2000               $  5,902,000             $   191,000        September 15, 2000         108.636%

February 1, 2001             $  6,173,000             $   452,000        March 15, 2001             107.773%

August 1, 2001               $  9,765,000             $ 3,805,000        September 15, 2001         107.773%

February 1, 2002             $  9,793,000             $ 4,031,000        March 15, 2002             106.909%

August 1, 2002               $  8,923,000             $ 3,396,000        September 15, 2002         106.909%

February 1, 2003             $ 11,131,000             $ 5,658,000        March 15, 2003             106.045%
</Table>

     In certain circumstances, if either the Company or Kerzner Investments, the
Company's partner in TCA, exercises the option to buy or sell partnership
interests in TCA, the Company and Finance must redeem the 9.50% Senior Notes.

     The Indenture contains certain affirmative and negative covenants
customarily contained in such agreements, including without limitation,
covenants that restrict, subject to specified exceptions, the Company's and
Finance's ability to (i) borrow money, (ii) make distributions on its equity
interests or certain other restricted payments, (iii) use assets as security in
other transactions, (iv) make investments, (v) sell other assets or merge with
other companies, and (vi) engage in any business except as currently conducted
or contemplated or amend their relationship with TCA. The Indenture also
provides for customary events of default and the establishment of a restricted
investment account with a trustee for interest reserves.

                                        6
<Page>

     The fair market value of the Company's long term debt at December 31, 2002
and 2001 is estimated to be approximately $111,787,000 and $118,897,000,
respectively, based on the quoted market price for the 9.50% Senior Notes.

     On April 15, 2003, the Company and Finance commenced an offer to repurchase
all of the 9.50% Senior Notes prior to maturity and a solicitation of consents
to amend the Indenture and terminate the Security and Control Agreement (the
"SECURITY AGREEMENT") granting a security interest in the interest reserve
account to the trustee as securities intermediary. Such amendments would have
the effect of eliminating substantially all of the restrictive covenants and
security provisions, including termination of the Security Agreement, relating
to the 9.50% Senior Notes. The tender offer, amendment of the Indenture and
termination of the Security Agreement are conditioned upon, among other things,
the consummation of financing providing proceeds sufficient to pay the total
costs of the tender offer and consent solicitation.

     On May 15, 2003, the Company and Finance announced the extension of their
tender offer for all of the outstanding $125 Million Senior Notes and related
consent solicitation. The tender offer will now expire at 12:00 midnight, New
York City time, on Wednesday, June 11, 2003, unless further extended or
terminated. The consent solicitation expired at 5:00 p.m., New York City
time, on Thursday, May 28, 2003, and holders of $125 Million Senior Notes had
the right to withdraw their previous tenders and consents prior to the
expiration of the consent solicitation. Currently, the Company and Finance
have received duly executed tenders from holders of $102,349,000 in principal
amount of the $125 Million Senior Notes, representing 100% of the aggregate
principal amount of the issued and outstanding $125 Million Senior Notes.

     The Indenture is filed as an exhibit to the Company's Quarterly Report on
Form 10-Q for the period ended March 31, 1999 (Commission File No. 333-17795) as
accepted by the Commission on May 17, 1999 and declared effective on May 15,
1997, and is incorporated herein by reference.

C.   TRADING COVE ASSOCIATES

     TCA was organized on July 27, 1993.  The primary purpose of TCA has been,

     -    to assist the Tribe and the Authority in obtaining federal
          recognition,
     -    to negotiate the tribal-state compact with the State of Connecticut on
          behalf of the Tribe,
     -    to obtain financing for the development of the Mohegan Sun,
     -    to negotiate the Amended and Restated Gaming Facility Management
          Agreement (the "MANAGEMENT AGREEMENT"),
     -    to oversee all operations of the Mohegan Sun pursuant to the terms of
          the Management Agreement until midnight December 31, 1999, and
     -    to participate in the design and development of the Mohegan Sun.

     The Mohegan Sun commenced operations on October 12, 1996. From the opening
of the casino until midnight December 31, 1999, TCA oversaw the Mohegan Sun's
day-to-day operations.

                                        7
<Page>

     TCA's partnership agreement (the "TCA PARTNERSHIP AGREEMENT") will
terminate on December 31, 2040, or earlier, in accordance with its terms. The
Company has a 50% partnership interest in TCA. The remaining 50% interest is
owned by Kerzner Investments, an affiliate of Kerzner International Limited
("KERZNER INTERNATIONAL").

     TCA's sole source of revenue is payment under the Relinquishment Agreement
and Development Agreement, each as described below.

D.   TRADING COVE ASSOCIATES MATERIAL AGREEMENTS

1 -  RELINQUISHMENT AGREEMENT

     On February 7, 1998, TCA and the Authority entered into the Relinquishment
Agreement (the "RELINQUISHMENT AGREEMENT"). Under the terms of the
Relinquishment Agreement, TCA continued to manage the Mohegan Sun under the
Management Agreement (described below) until midnight December 31, 1999, and on
January 1, 2000, the Management Agreement terminated and the Tribe assumed
day-to-day management of the Mohegan Sun.

     Under the Relinquishment Agreement, to compensate TCA for terminating its
rights under the Management Agreement and the Hotel/Resort Management Agreement,
the Authority agreed to pay to TCA a fee (the "RELINQUISHMENT FEES") equal to 5%
of Revenues, as defined in the Relinquishment Agreement, generated by the
Mohegan Sun during the 15-year period commencing on January 1, 2000, including
revenue generated by the Project Sunburst expansion.

     The Relinquishment Fees are divided into senior relinquishment payments and
junior relinquishment payments, each of which equals 2.5% of "Revenues."
Revenues are defined in the Relinquishment Agreement as gross gaming revenues
(other than Class II gaming revenue, i.e. bingo) and all other facility
revenues. Such revenue includes hotel revenues, food and beverage sales, parking
revenues, ticket revenues and other fees or receipts from the convention/events
center in the Project Sunburst expansion and all rental or other receipts from
lessees, licensees and concessionaires operating in the facility, but not the
gross receipts of such lessees, licensees and concessionaires. Such revenues
exclude revenues generated by any other expansion of the Mohegan Sun.

     Senior relinquishment payments are payable quarterly in arrears commencing
on April 25, 2000 for the quarter ended March 31, 2000, and the junior
relinquishment payments are payable semi-annually in arrears commencing on July
25, 2000 for the six months ended June 30, 2000, assuming sufficient funds are
available after satisfaction of the Tribe's senior obligations, as defined in
the Relinquishment Agreement. See section below titled "Risk Factors -
Subordination - Trading Cove's right to receive the relinquishment payments from
the Authority is junior to certain payments by the Authority to the Mohegan
Tribe and holders of its indebtedness."

                                        8
<Page>

     A summary of relinquishment payments received by TCA is as follows:

<Table>
<Caption>
                DATE                        SENIOR          JUNIOR          TOTAL
-------------------------------------   -------------   -------------   -------------
<S>                                     <C>             <C>             <C>
April 25, 2002                          $   6,228,559   $          --   $   6,228,559
July 25, 2002                               7,104,939      13,333,500      20,438,439
October 25, 2002                            8,171,882              --       8,171,882
January 27, 2003                            7,748,971      15,920,852      23,669,823
                                        -------------   -------------   -------------
Relinquishment Fees for the year
 ended December 31, 2002                $  29,254,351   $  29,254,352   $  58,508,703
                                        =============   =============   =============

April 25, 2001                          $   5,090,622   $          --   $   5,090,622
July 25, 2001                               5,472,900      10,563,521      16,036,421
September 7, 2001                              68,233          68,234         136,467
October 25, 2001                            5,765,232              --       5,765,232
January 25, 2002                            6,460,672      12,225,904      18,686,576
                                        -------------   -------------   -------------
Relinquishment Fees for the year
 ended December 31, 2001                $  22,857,659   $  22,857,659   $  45,715,318
                                        =============   =============   =============

April 25, 2000                          $   4,947,458   $          --   $   4,947,458
July 26, 2000                               5,039,048       9,986,506      15,025,554
October 25, 2000                            5,457,627              --       5,457,627
January 25, 2001                            5,057,792      10,515,418      15,573,210
                                        -------------   -------------   -------------
Relinquishment Fees for the year
 ended December 31, 2000                $  20,501,925   $  20,501,924   $  41,003,849
                                        =============   =============   =============
</Table>

     The amount of Relinquishment Fees reported in this annual report on Form
10-K/A are based upon amounts reported to TCA by the Authority.

     The senior and junior relinquishment payments rank behind the Authority's
obligation to pay an annual minimum priority distribution to the Mohegan Tribe
and all of the Authority's existing and future senior secured indebtedness,
including the Authority's new bank credit facility under which the Authority has
the ability to incur up to $500.0 million of indebtedness. As a result, upon any
distribution by the Authority to its creditors in a bankruptcy, liquidation,
reorganization or similar proceeding relating to the Authority or its property,
the priority distributions owed to the Mohegan Tribe and the holders of the
Authority's senior secured indebtedness will be entitled to be paid in full and
in cash before any senior or junior relinquishment payments may be made to
Trading Cove. In addition, the junior relinquishment payments rank behind all of
the Authority's existing and future senior indebtedness. As a result, in any
such proceedings, the holders of the Authority's senior indebtedness will be
entitled to be paid in full and in cash before any junior relinquishment
payments may be made to Trading Cove.

                                        9
<Page>

     In the event of a bankruptcy, liquidation, reorganization or similar
proceeding relating to the Authority, Trading Cove will receive distributions
(if at all) on a pari passu basis with all other holders of the Authority's
senior unsecured indebtedness with respect to the senior relinquishment payments
from the assets remaining after the Authority has paid all of its senior secured
indebtedness and with all other holders of subordinated indebtedness with
respect to the junior relinquishment payments from the assets remaining after
the Authority has paid all of its senior indebtedness. However, the
Relinquishment Agreement requires that amounts otherwise payable to Trading Cove
in a bankruptcy or similar proceeding of the Authority be paid to holders of
senior secured indebtedness until they are paid in full, with respect to the
senior relinquishment payments, and to holders of senior secured indebtedness,
with respect to junior relinquishment payments, instead of to Trading Cove. For
that reason Trading Cove may receive less, ratably, than holders of senior
indebtedness of the Authority in any such proceeding. In any of these cases, the
Authority may not have sufficient funds to pay all of its creditors and Trading
Cove may receive less, ratably, than the holders of the Authority's senior
indebtedness.

     In the event of an acceleration of any indebtedness of the Authority, the
senior and junior relinquishment payments that are not yet due under the
Relinquishment Agreement would be effectively subordinated to the Authority's
indebtedness since the payment obligations under the Relinquishment Agreement
cannot be accelerated by their terms and have no blockage rights as designated
senior debt of the Authority.

     If Trading Cove becomes the debtor in a bankruptcy or similar proceeding,
the Company would have the status of an equity holder, not a creditor, and would
not be entitled to receive any distributions until all of Trading Cove's
creditors were paid in full.

     If the Authority became the debtor in a bankruptcy or similar proceeding,
Trading Cove's rights and recovery would depend on numerous factors, including
the type and outcome of the proceeding. If the Authority ceased operations and
liquidated, under chapter 7 of the Bankruptcy Code or otherwise, Trading Cove's
claim would likely be limited to the amount of unpaid Relinquishment Fees as of
the time of liquidation. If the Authority reorganized under chapter 11 of the
Bankruptcy Code, Trading Cove's claim would likely be based on an estimate of
the Mohegan Sun's future revenues for the term of the Relinquishment Agreement.
In any event, any recovery by Trading Cove on its claims for senior or junior
Relinquishment Fees would be subject to the prior payment in full of all
indebtedness senior thereto.

     As a result, there is no assurance that, in the event of bankruptcy or
financial difficulty of either Trading Cove or the Authority, the Company would
ultimately recover sufficient (or any) funds to pay amounts outstanding under
the 9.50% Senior Notes.

     Under the Relinquishment Agreement, the Authority makes certain covenants
for the benefit of Trading Cove, including the following:

     (1)  PAYMENTS TO THE MOHEGAN TRIBE. Except for payments of the minimum
          priority distributions and reasonable charges for utilities or other
          governmental services supplied by the Mohegan Tribe to the Authority,
          the Authority may not make any

                                       10
<Page>

          distributions to the Mohegan Tribe or its members at any time any
          relinquishment payments are outstanding.

     (2)  AFFILIATE TRANSACTIONS. Except for payments of the minimum priority
          distributions and reasonable charges for utilities or other
          governmental services supplied by the Mohegan Tribe to the Authority,
          the Authority agrees to abide by certain restrictions on transactions
          with the Mohegan Tribe and its members, all as set forth in the
          Relinquishment Agreement.

     (3)  REPLACEMENT/RESTORATION OF THE MOHEGAN SUN. If any portion of the
          Mohegan Sun facilities is damaged by fire or other casualty, the
          Authority shall replace or restore such facilities to substantially
          the same condition as prior to such casualty, but only to the extent
          insurance proceeds are available to do so. If sufficient insurance
          proceeds are not available, the Authority will use reasonable efforts
          to obtain the required financing, on commercially reasonable terms, to
          undertake and complete such replacement or restoration.

     (4)  BUSINESS PURPOSE. The Authority has agreed that during the term of the
          Relinquishment Agreement it will engage only in the casino gaming and
          resort business (and any incidental business or activity) and will
          continue to operate the Mohegan Sun as currently operated.

     Under the Relinquishment Agreement, the Authority and Trading Cove have
each agreed not to solicit any employee of the other party or any affiliate of
the other party for five years.

     With certain limitations set forth in the Relinquishment Agreement, both
the Mohegan Tribe and the Authority waive immunity from uncontested suit for
certain enforcement rights of Trading Cove arising under the Relinquishment
Agreement.

     The Company's right to receive a portion of the relinquishment payments
from Trading Cove is governed by the Amended and Restated Omnibus Termination
Agreement discussed below.

     The Relinquishment Agreement is filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1998
(Commission File No. 333-17795), as accepted by the Commission on November 13,
1998, and is incorporated herein by reference.

2 -  DEVELOPMENT AGREEMENT AND RELATED AGREEMENTS

     On February 7, 1998, TCA and the Authority entered into the Development
Services Agreement (the "DEVELOPMENT AGREEMENT"). Pursuant to the Development
Agreement, TCA agreed to oversee the design, construction, furnishing, equipping
and staffing of the Project Sunburst expansion for a $14.0 million development
fee (the "DEVELOPMENT FEE").

     On May 24, 2000, TCA and the Authority agreed that TCA had performed and
completed all its obligations relating to the staffing of the Project Sunburst
expansion and that TCA has no further obligations relating to the staffing of
the Project Sunburst expansion.

     The first phase of the Project Sunburst expansion, including the Casino of
the Sky, The Shops at Mohegan Sun, and the 10,000-seat Mohegan Sun Arena opened
in September 2001. In

                                       11
<Page>

April 2002, 734 of the 1,200-hotel rooms in the 34-story luxury hotel as well as
the meeting and convention space and spa opened. The balance of the 1,200-hotel
rooms opened during June 2002. At December 31, 2002 the Project Sunburst
expansion was substantially completed.

     Pursuant to the Development Agreement, the Authority agreed to pay the
Development Fee to TCA quarterly beginning on January 15, 2000, based on
incremental completion of the Project Sunburst expansion as of each payment
date. The last payment of the Development Fee is to be paid on the Completion
Date, as defined in the Development Agreement, of the Project Sunburst
expansion. A summary of the quarterly Development Fee payments received by TCA
in accordance with the terms of the Development Agreement is as follows:

<Table>
             <S>                                           <C>
             January 15, 2000                              $   1,372,000
             April 20, 2000                                      896,000
             July 17, 2000                                     1,260,000
             October 13, 2000                                  1,372,000
             January 23, 2001                                    588,000
             April 16, 2001                                    1,582,000
             July 20, 2001                                     2,212,000
             October 17, 2001                                  1,974,000
             January 25, 2002                                  1,260,000
             April 22, 2002                                      413,000
             July 19, 2002                                       581,000
             October 18, 2002                                    238,000
             January 24, 2003                                     84,000
                                                           -------------
                                                           $  13,832,000
                                                           =============
</Table>

     The Development Agreement terminates after the earlier of the completion of
the Project Sunburst expansion or 10 years. In addition, each party has the
right to terminate the Development Agreement if there is a default or failure to
perform by the other party. The parties must submit disputes arising under the
Development Agreement to arbitration and each has agreed that punitive damages
may not be awarded to either party by an arbitrator. The Authority has waived
sovereign immunity for the purpose of permitting, compelling or enforcing
arbitration and has agreed to be sued by TCA in any court of competent
jurisdiction for the purposes of compelling arbitration or enforcing any
arbitration or judicial award arising out of the Development Agreement.

     On February 9, 1998, TCA and Kerzner International Management Limited
("KIML"), an affiliate of Kerzner Investments, the Company's partner in TCA,
entered into the Agreement Relating to Development Services (the "DEVELOPMENT
SERVICES AGREEMENT PHASE II"). Pursuant to the Development Services Agreement
Phase II, TCA subcontracted with KIML, who agreed to perform those services
assigned to KIML by TCA in order to facilitate TCA's fulfillment of its duties
and obligations to the Authority under the Development Agreement. KIML assigned
the Development Services Agreement Phase II to Kerzner Investments.

     Pursuant to the Development Services Agreement Phase II, TCA pays to
Kerzner Investments a fee, as subcontractor (the "DEVELOPMENT SERVICES FEE PHASE
II"), equal to 3% of the development costs of the Project Sunburst expansion,
excluding capitalized interest, less all

                                       12
<Page>

costs incurred by TCA in connection with the Project Sunburst expansion. The
Development Services Fee Phase II is paid in three installments - on
December 31, 1999, December 31, 2000 and on the Completion Date, as defined
in the Development Agreement - with the final payment being made when the
actual development costs of the Project Sunburst expansion are known. TCA
pays the Development Services Fee Phase II from available cash flow, if any,
in accordance with the Amended and Restated Omnibus Termination Agreement
described below. The total of the Development Services Fee Phase II and TCA's
costs related to the development of the Project Sunburst expansion will
exceed the related revenue received by TCA under the Development Agreement by
approximately $16 million.

     Before KIML assigned the Development Services Agreement Phase II to Kerzner
Investments, it entered into the Local Construction Services Agreement (the
"LOCAL CONSTRUCTION SERVICES AGREEMENT") with Wolman Construction, L.L.C.
("CONSTRUCTION"), an affiliate of the Company, pursuant to which Construction
agreed to provide certain of those services assigned to KIML by TCA pursuant to
the Development Services Agreement Phase II. KIML assigned the Local
Construction Services Agreement to Kerzner Investments.

     Pursuant to the Local Construction Services Agreement, Kerzner Investments
agreed to pay to Construction a fee equal to 20.83% of the Development Services
Fee Phase II as and when Kerzner Investments receives payment from TCA pursuant
to the Development Services Agreement Phase II.

     Pursuant to a Letter Agreement, Construction has subcontracted with The
Slavik Company, an affiliate of the Company, to provide certain services under
the Local Construction Services Agreement. In exchange for providing such
services, Construction agreed that The Slavik Company would be paid a fee equal
to 14.30% of its fee under the Local Construction Services Agreement.

     On April 26, 2000, July 26, 2000 and January 26, 2001 TCA paid $3,095,000,
$1,238,000 and $6,474,000, respectively, as partial payment of the Development
Services Fee Phase II. Construction received $644,688, $257,875 and $1,348,534,
respectively, and Construction paid The Slavik Company $92,190, $36,876 and
$192,840 on April 26, 2000, July 26, 2000 and January 26, 2001, respectively.

     At December 31, 2002 TCA's accrued liability to Kerzner Investments with
respect to such fee was approximately $10.2 million pursuant to the
Development Service Agreement Phase II.

     The Development Services Agreement is filed as an exhibit to the Company's
Quarterly Report on Form 10-Q for the period ended September 30, 1998
(Commission File No. 333-17795), as accepted by the Commission on November 13,
1998, and is incorporated herein by reference.

3 -  TCA PARTNERSHIP AGREEMENT

     In September 1994, Kerzner Investments, RJH Development Corp., a New York
corporation, Leisure, Slavik and LMW entered into an amended and restated
partnership agreement to, among other things: (i) admit Kerzner Investments as a
partner to the Trading Cove partnership; (ii) act as the exclusive agent of the
Mohegan Tribe to manage and develop an entertainment and gaming facility on the
Mohegan Tribal Reservation; and (iii) engage in any other activities incidental
or related to the foregoing.

                                       13
<Page>

     In February 1995, the parties entered into an acknowledgment and release
agreement whereby Leisure withdrew from Trading Cove for all purposes, except
that Leisure retained a 5% "beneficial interest" in Trading Cove. Leisure's
beneficial interest is defined as the right to receive certain distributions of
excess cash and the organizational and administrative fee on the earlier to
occur of (i) 14 years from the date of commencement of the management agreement
and (ii) the termination of the Management Agreement.

     On January 6, 1998, pursuant to the Settlement and Release Agreement
described in Item 3 (Legal Proceedings) the Company paid $5.0 million to Leisure
and, among other things, Leisure gave up (a) its beneficial interest in 5% of
certain fees and excess cash flows, as defined, of Trading Cove and (b) any
other claims it may have had against the Company, Kerzner Investments and
Trading Cove's partners and former partner.

     As a result of (i) a First Amendment to the Amended and Restated
Partnership Agreement of Trading Cove, dated October 22, 1996 and (ii) an
Agreement for Purchase and Sale of Partnership Interest, dated September 12,
1996 whereby RJH Development Corp. agreed to sell and the Company agreed to buy
RJH Development Corp.'s partnership interest for $10.6 million, the Company and
Kerzner Investments are the only partners in Trading Cove.

     Pursuant to the TCA Partnership Agreement, Trading Cove will continue to
exist until the first to occur of: (i) December 31, 2040; (ii) a final
disposition of Trading Cove's interest in the Mohegan Sun (or any alternative
facility that may be developed or acquired pursuant to the terms of the TCA
Partnership Agreement); (iii) the decision of the managing partners to terminate
Trading Cove; and (iv) any other event which results in dissolution of Trading
Cove.

     In connection with its entry into the partnership, Kerzner Investments made
a capital contribution in an amount sufficient to equal a 50% partnership
interest. The TCA Partnership Agreement provides for additional capital
contributions. In the event that Trading Cove requires additional funds, and
subject to unanimous approval by the partners, the partners may make loans on a
PRO RATA basis, based on their respective partnership interests. Such loans are
non-recourse and unsecured and bear interest at an annual rate of 2% above the
prime rate.

     In the event that the Company and Kerzner Investments determine that
additional capital is required to fund TCA's obligations, either may make a
capital call. In the event that a capital call is made and Kerzner Investments
does not make the requested additional capital contribution within 30 days,
generally Kerzner Investments is automatically deemed to have withdrawn from
Trading Cove. In such event, Kerzner Investments is not entitled to any return
of any of its previous capital contributions or additional contributions, but it
is generally entitled to receive repayment of any loans.

     In the event that a capital is made and the Company elects not to make the
requested capital contribution, Kerzner Investments may, at its election, pay
such contributions, which payment shall be deemed, at the election of Kerzner
Investments, to be either (i) a loan to the Company or (ii) a capital
contribution by Kerzner Investments, thereby increasing Kerzner Investments'
partnership interest and diluting the Company's partnership interest. The
Indenture limits the Company's ability to make further capital contributions to
TCA.

                                       14
<Page>

     No partner is obligated to restore a capital account deficit.

     The partners are required to bring to the attention of the partnership all
opportunities to manage or operate (1) any gaming activities on Native American
reservations and involving Native Americans or (2) any other gaming activity
within 100 miles of the Mohegan Sun. Any such opportunities will be pursued by
an affiliate of Trading Cove, in which the Company will not have any economic
interest. The Company and Kerzner Investments are the managing partners of
Trading Cove, and as such, have the full, exclusive and absolute right, power
and authority to manage and control the partnership and the property, assets and
business thereof. All decisions relating to the management of Trading Cove
require unanimous agreement between the Company and Kerzner Investments.

     The TCA Partnership Agreement provides that Howard Kerzner will serve as
the designated representative of Kerzner Investments in its capacity as managing
partner. In the absence of Mr. Kerzner, John Allison will serve as Kerzner
Investments' designated representative. Each designated representative has the
right, power and authority to act for and on behalf of and to bind Kerzner
Investments with respect to all matters relating to the partnership. The TCA
Partnership Agreement grants Mr. Kerzner the right to appoint a proxy upon
written notice to the Company. Len Wolman serves as the designated
representative of the Company.

     In the event that a dispute arises under the TCA Partnership Agreement,
upon notice by one disputing party to the other, the parties have ten days to
resolve the dispute. If the dispute is not resolved in such ten-day period then,
in accordance with specific notice procedures set forth in the TCA Partnership
Agreement, either party has the right to deliver a buy-out notice to the other
to require such party to elect to either (i) sell their partnership interest to
the party delivering the notice (at a price and under the terms set forth in
such buy-out notice), or (ii) have the other party or its designee purchase the
interest of the party giving notice at the buy-out price. In the event that the
party receiving the buy-out notice fails to respond, such party is deemed to
have agreed to sell its partnership interest to the party delivering such notice
at the buy-out price specified therein. See "Risk Factors--Risks Associated with
the Buy/Sell Option Under Trading Cove Partnership Agreement."

     Subject to the following exceptions, Kerzner Investments is generally
prohibited from assigning its partnership interest. Kerzner Investments may
assign its interest to (1) certain of its affiliates and (2) to any party making
a bona fide written offer to purchase any or all of Kerzner Investments'
partnership interest if, after offering its interest to the Company at the same
price and on the same terms and conditions as set forth in such written offer,
the Company elects not to purchase Kerzner Investments' partnership interest.

     The Company is generally prohibited from assigning its partnership
interest. The Company may not assign its interest except (1) to an affiliate of
the Company, (2) to any party making a bona fide written offer to purchase all,
but not less than all, of the Company's partnership interest if, after offering
its interest to Kerzner Investments at the same price and on the same terms and
conditions as set forth in such written offer, Kerzner Investments elects not to
purchase the Company's partnership interest.

                                       15
<Page>

     Except as otherwise permitted by the TCA Partnership Agreement, no partner
may withdraw from the partnership without the consent of the remaining partners.
In the event that a partner withdraws from the partnership in violation of the
TCA Partnership Agreement, such partner will be liable to the remaining partners
for all damages caused by such withdrawal and shall immediately cease to have
any rights (including rights to receive any monies) in the partnership.

     The Amended and Restated Partnership Agreement of Trading Cove Associates,
dated as of September 21, 1994, among Sun Cove Limited (now, Kerzner Investments
Connecticut, Inc.), RJH Development Corp., Leisure Resort Technology, Inc.,
Slavik Suites, Inc., and LMW Investments, Inc., and the First Amendment to
Amended and Restated Partnership Agreement of Trading Cove Associates, dated as
of October 22, 1996, among Sun Cove Limited (now, Kerzner Investments
Connecticut, Inc.), Slavik Suites, Inc., RJH Development Corp., LMW Investments,
Inc. and Waterford Gaming, L.L.C. are filed as exhibits to the Company's
Registration Statement on Form S-4, filed with Securities and Exchange
Commission (File No. 333-17795) and declared effective on May 15, 1997, and each
is incorporated herein by reference.

4 -  MANAGEMENT AGREEMENT

     On August 30, 1995, TCA and the Tribe entered into the Management
Agreement. After entering into the Management Agreement, the Tribe assigned it
to the Authority.

     Until midnight December 31, 1999, TCA was the exclusive manager of the
Mohegan Sun. Under the Management Agreement, the Tribe had granted to TCA the
exclusive right and obligation to develop, manage, operate and maintain the
Mohegan Sun and all other related facilities that are owned by the Tribe or any
of its instrumentalities, including the Authority and to train members of the
Tribe and others in the management of the Mohegan Sun.

     Until January 1, 2000 TCA's primary source of revenue was management fees
under the Management Agreement (the "MANAGEMENT Fees"). The Management Fees were
paid monthly and were calculated in three tiers based upon Net Revenues, as
defined in the Management Agreement, of the Mohegan Sun set forth below (in
thousands):

<Table>
<Caption>
                              I                        II                    III
                   -------------------------   ------------------   ---------------------
                                               Revenues in Tier I   Revenues in Tiers I &
                                                 plus 35% of Net      II plus 30% of Net
                   40% of Net Revenues up to    Revenues between       Revenues above
                   -------------------------   ------------------   ---------------------
<S>                  <C>                       <C>                    <C>
Year 1               $  50,546                 $50,547-$63,183        $  63,183
Year 2               $  73,115                 $73,116-$91,394        $  91,394
Year 3               $  91,798                 $91,799-$114,747       $  114,747
Year 4               $  95,693                 $95,694-$119,616       $  119,616
</Table>

     In addition, TCA was required to fund $1.2 million per year ($100,000 per
month) from its Management Fees into a capital replacement reserve. The capital
replacement reserve is the property of the Authority.

                                       16
<Page>

     The Management Agreement is filed as an exhibit to the Company's
Registration Statement on Form S-4, filed with Securities and Exchange
Commission (File No. 333-17795) and declared effective on May 15, 1997, and is
incorporated herein by reference.

5 -  AMENDED AND RESTATED OMNIBUS TERMINATION AGREEMENT

     Effective March 18, 1999, the Amended and Restated Omnibus Termination
Agreement (the "AMENDED AND RESTATED OMNIBUS TERMINATION AGREEMENT") was entered
into by TCA, Kerzner International, the Company, KIML, LMW, Kerzner Investments,
Slavik and Construction. The Amended and Restated Omnibus Termination Agreement
(i) terminated the Memorandum of Understanding, dated February 7, 1998; and (ii)
effective January 1, 2000 terminated a) the Amended and Restated Omnibus
Financing Agreement, b) Completion Guarantee and Investment Banking and
Financing Arrangement Fee Agreement (the "FINANCING ARRANGEMENT AGREEMENT"); c)
the Management Services Agreement; d) the Organizational and Administrative
Services Agreement; e) the Marketing Services Agreement; and f) a Letter
Agreement relating to expenses, dated October 19, 1996.

     In consideration for the termination of such agreements, TCA agreed to use
its cash to pay the following obligations in the priority set forth below:

     (a)  First, to pay all unpaid amounts which may be due under the terminated
          letter agreement and to pay certain affiliates of the Company and to
          Kerzner Investments a percentage of an annual fee of $2.0 million less
          the actual expenses incurred by TCA during such year. Such annual fee
          is payable in equal quarterly installments beginning March 31, 2000
          and ending December 31, 2014. For the years ended December 31, 2002
          and 2001, $0 and $1,712,791 ($856,396 to Kerzner Investments and
          $856,395 to affiliates of the Company, respectively, had been paid and
          incurred by TCA in terms of this first priority).

     (b)  Second, to return all capital contributions made by the partners of
          TCA after September 29, 1995. TCA anticipates making capital calls to
          fund expenses related to the development of the Project Sunburst
          expansion, and these capital calls will be repaid, based on cash flow,
          in the quarter following the quarter in which the capital call was
          made. From January 1, 2000 to December 31, 2002, these capital
          contributions aggregated $7,100,000. From January 1, 2000 to December
          31, 2002, $6,700,000 had been repaid to the partners of TCA, 50% to
          the Company and 50% to Kerzner Investments.

          As of December 31, 2002, $400,000 in capital contributions remained
          outstanding. On January 28, 2003 a cash distribution of $200,000 was
          made to each partner.

     (c)  Third, to pay any accrued amounts for obligations performed prior to
          January 1, 2000 under the Financing Arrangement Agreement. All such
          required payments were made during 2000.

                                       17
<Page>

     (d)  Fourth, to make the payments set forth in the agreements relating to
          the Development Services Agreement Phase II and the Local Construction
          Services Agreement. No such payments are required or due at December
          31, 2002. The accrued liability to Kerzner Investments with respect to
          such fee at December 31, 2002 was approximately $10,216,000.

     (e)  Fifth, to pay Kerzner Investments an annual fee of $5.0 million
          payable in equal quarterly installments of $1.25 million beginning
          March 31, 2000 and ending December 31, 2006. On January 28, 2003 and
          January 28, 2002, $1,250,000 was distributed in terms of the fifth
          priority.

     (f)  Sixth, to pay any accrued amounts for obligations performed with
          respect to periods prior to January 1, 2000 under the Management
          Services Agreement, the Organizational and Administrative Services
          Agreement and the Marketing Services Agreement. The final required
          payments under this sixth priority were made during 2001.

     (g)  Seventh, for the period beginning March 31, 2000 and ending December
          31, 2014, to pay each of Kerzner Investments and the Company
          twenty-five percent (25%)of the relinquishment payments as
          distributions. On January 28, 2003 and January 28, 2002, $22,043,000
          ($11,021,500 to each of Kerzner Investments and the Company) and
          $16,715,209 ($8,357,605 to Kerzner Investments and $8,357,604 to the
          Company), respectively, was distributed by TCA in terms of this
          seventh priority.

     (h)  Eighth, to distribute all excess cash.

     In addition, TCA will not make any distributions pursuant to the Amended
and Restated Omnibus Termination Agreement until it has annually distributed to
its partners pro rata, the amounts related to its partners tax obligations as
described in Section 3.03a(1) of the TCA Partnership Agreement less twice the
amount of all other funds paid or distributed to the Company during such year
pursuant to the Amended and Restated Omnibus Termination Agreement.

     To the extent TCA does not have adequate cash to make the payments pursuant
to the Amended and Restated Omnibus Termination Agreement, such amount due shall
be deferred without the accrual of interest until TCA has sufficient cash to pay
them.

     The Amended and Restated Omnibus Termination Agreement is filed as an
exhibit to the Company's Quarterly Report on Form 10-Q for the period ended
March 31, 2001 (Commission File No. 333-17795) as accepted by the Commission on
May 14, 2001, and is incorporated herein by reference.

                                       18
<Page>

6 -  AMENDED AND RESTATED OMNIBUS FINANCING AGREEMENT

     Until January 1, 2000 TCA's primary source of revenue was Management Fees.
Those fees were utilized by TCA pursuant to the Amended and Restated Omnibus
Financing Agreement which was terminated effective January 1, 2000.

     The Amended and Restated Omnibus Financing Agreement is filed as an exhibit
to the Company's Registrant's Quarterly Report on Form 10-Q for the period ended
September 30, 1997 (Commission File No. 333-17795), as accepted by the
Commission on November 14, 1997, and is incorporated herein by reference.

E.   THE MOHEGAN TRIBAL GAMING AUTHORITY

     The Tribe is a federally recognized Indian tribe with an approximately
405-acre reservation located in southeastern Connecticut. The Tribe established
the Authority on July 15, 1995 with the exclusive power to conduct and regulate
gaming activities for the Tribe. Under the Indian Gaming Regulatory Act of 1988,
as amended ("IGRA"), federally recognized Indian tribes are permitted to conduct
full-scale casino gaming operations on tribal-land, subject to, among other
things, the negotiation of a tribal state compact with the affected state. The
Tribe and the State of Connecticut have entered into such a compact (the
"MOHEGAN COMPACT") that has been approved by the U.S. Secretary of the Interior.
The Authority is governed by a management board (the "MANAGEMENT BOARD"), which
consists of the nine members of the Tribal Council (the governing body of the
Tribe).

     Under the terms of the Relinquishment Agreement, at midnight December 31,
1999, the Management Agreement terminated, and on January 1, 2000 the Tribe
assumed day-to-day management of the Mohegan Sun.

     The Tribe and the Authority have entered into a land lease ("LEASE")
pursuant to which the Tribe is leasing to the Authority the land on which the
Mohegan Sun is located (the "SITE"). The Site is part of the Tribe's
approximately 405-acre reservation which was acquired and is held in trust for
the Tribe by the United States of America with the Tribe retaining perpetual
rights to the use of the Site.

F.   THE MOHEGAN SUN

     The Authority owns and operates the Mohegan Sun, an approximately 3.0
million square foot full-service gaming and entertainment complex on a 240-acre
site overlooking the Thames River on the Tribe's reservation in southeastern
Connecticut. The Mohegan Sun is located approximately one mile from the
interchange of Interstate 395 and Route 2A in Uncasville, Connecticut. The
Authority constructed a four-lane access road and entrance/exit ramps off of
Route 2A, providing guests direct access to Interstate 395 and Interstate 95,
the main highways connecting Boston, Providence and New York City. The Mohegan
Sun opened in October 1996 and recently the Authority substantially completed
the Project Sunburst expansion. The Mohegan Sun is one of two legally authorized
gaming operations in New England offering both traditional slot machines and
table games.

     The full-service gaming and entertainment complex includes the following:

                                       19
<Page>

     CASINO OF THE EARTH. The Casino of the Earth, the original casino at the
Mohegan Sun, has approximately 176,500 square feet of gaming space and offers
approximately 3,640 slot machines, 170 table games (including blackjack,
roulette, craps and baccarat) and 36 poker tables. Food and beverage amenities,
include three full-service themed fine dining restaurants with a fourth area
featuring cuisine from all three themes, a 610-seat buffet, a New York style
delicatessen, a 24-hour coffee shop, a ten-station food court featuring
international and domestic cuisine and multiple service bars for a total of
approximately 1,800 restaurant seats. An approximately 10,000 square foot,
440-seat lounge features live entertainment seven days a week. There is an
approximately 9,000 square foot simulcasting race book facility, an
approximately 3,000 square foot, 50-seat Keno lounge and three retail shops
providing shopping opportunities ranging from Mohegan Sun logo souvenirs to
clothing to cigars.

     CASINO OF THE SKY. The Casino of the Sky has approximately 119,000 square
feet of gaming space and offers approximately 2,560 slot machine and 90 table
games (including blackjack, roulette, craps and baccarat). Food and beverage
amenities, include two full-service restaurants, two quick-service restaurants,
a 24-hour coffee shop with room service, a 350-seat buffet, a six station food
court featuring international and domestic cuisine and five lounges and bars
operated by the Mohegan Sun, as well as four full-service and three
quick-service restaurants and one lounge operated by third-parties, for a total
of approximately 2,200 restaurant seats, the Mohegan Sun Arena with seating for
up to 10,000, a 300-seat cabaret, a child care facility and an arcade-style
recreation area, The Shops at Mohegan Sun containing approximately 30 different
retail shops, six of which are owned by the Authority, an approximately
1,200-room luxury hotel, a 20,000 square foot spa and approximately 100,000
square feet of convention space.

     As of September 30, 2002, Mohegan Sun had parking spaces for approximately
13,000 guests and 3,100 employees. In addition, the Authority operates an
approximately 4,000 square foot, 20-pump gasoline station and convenience center
located adjacent to the Mohegan Sun.

     The information concerning Kerzner International, the Tribe and the
Authority has been derived from publicly filed information.

G.   CONTACT INFORMATION; INTERNET ADDRESS

     The principal executive offices of the Company is located at 914 Hartford
Turnpike, Waterford, Connecticut 06385 and its telephone number is (860)
442-4559. The Company's internet address is http://www.waterfordgroup.net. In
light of the limited trading market for the Company's securities, the Company
does not currently make its periodic and current reports available, free of
charge, on its website. The Company's periodic and current reports are
available, however, free of charge, on the Commission's website, at www.sec.gov.
The Company will provide electronic or paper copies of its filings free of
charge upon request.

Item 2.   PROPERTIES

     The Company does not own or lease any real property.

                                       20
<Page>

Item 3.   LEGAL PROCEEDINGS

     THIS ITEM 3 HAS BEEN UPDATED FOR EVENTS AND DEVELOPMENTS OCCURRING
SUBSEQUENT TO THE FILING OF THE ORIGINAL FORM 10-K. IN ADDITION, THIS ITEM 3 HAS
BEEN REVISED TO INCORPORATE CERTAIN CONFORMING CHANGES.

     On January 6, 1998, Leisure Resort Technology, Inc. and defendants
Waterford Gaming, L.L.C., Trading Cove Associates, LMW Investments, Inc., and
Slavik Suites, Inc. settled a prior lawsuit brought by Leisure. In connection
with this settlement, Leisure, TCA, the Company, LMW Investments, Inc., and
Slavik Suites, Inc. entered into a settlement and release agreement. Pursuant to
this settlement and release agreement, the Company bought Leisure's beneficial
interest in TCA.

     By complaint dated January 7, 2000, as amended February 4, 2000, Leisure
filed a four count complaint naming as defendants Waterford Gaming, L.L.C.,
Trading Cove Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford
Group, L.L.C., Len Wolman and Mark Wolman (collectively, the "DEFENDANTS"). The
matter has been transferred to the complex litigation docket and is pending
in state court in Waterbury, Connecticut. The complaint alleged breach of
fiduciary duties, fraudulent non-disclosure, violation of Connecticut
Statutes Section 42-110a, et seq. and unjust enrichment in connection with
the negotiation by certain of the Defendants of the settlement and release
agreement. The complaint also brought a claim for an accounting. The
complaint seeks unspecified legal and equitable damages.

     On February 29, 2000, Defendants filed a Motion to Strike and a Motion for
Summary Judgment, each with respect to all claims. The Court granted Defendants'
Motion to Strike in part and denied Defendants' Motion for Summary Judgment, on
October 13, 2000. The Court's order dismissed the claim for an accounting and
the claim under Connecticut Statutes Section 42-110a, et seq. The Court also
struck the alter ego allegations in the complaint against LMW Investments, Inc.,
Slavik Suites, Inc., Len Wolman and Mark Wolman. In a decision dated August 6,
2001, the Court dismissed all claims against LMW Investments, Inc., Slavik
Suites, Inc., Len Wolman and Mark Wolman.

     On November 15, 2000, the Company and its co-defendants answered the
complaint. In addition, the Company and Trading Cove Associates asserted
counterclaims for breach of the settlement and release agreement and breach of
the implied covenant of good faith against Leisure and its president, Lee Tyrol.
In a decision dated June 6, 2001, the Court dismissed the counterclaims against
Lee Tyrol. Leisure has moved for summary judgment seeking dismissal of the
counter claims in full. This motion for summary judgment was denied on April
14, 2003.

     Discovery has commenced. Pursuant to the current scheduling order, all
depositions are to be completed by June 30, 2003. A trial date has not been set.

     The Company believes that it has meritorious defenses and intends
vigorously to contest the claims in this action and to assert all available
defenses. At the present time, the Company is unable to express an opinion on
the likelihood of an unfavorable outcome or to give an estimate of the amount or
range of possible loss to the Company as a result of this litigation due to the

                                       21
<Page>

disputed issues of law and/or facts on which the outcome of this litigation
depends and due to the infancy of both the action and discovery in the action.

Item 4.   SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

     No matters were submitted to the Company's security holders for a vote for
the fiscal year ended December 31, 2002.

                                     PART II

Item 5.   MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDERS MATTERS

     Not applicable.

Item 6.   SELECTED FINANCIAL DATA

     ITEM 6 HAS BEEN REVISED TO REFLECT THE RESTATEMENT.

<Table>
<Caption>
                                                                 FOR THE YEAR ENDED
                      -------------------------------------------------------------------------------------------------------
                        PREVIOUSLY                    PREVIOUSLY                    PREVIOUSLY                    PREVIOUSLY
                         REPORTED       RESTATED       REPORTED       RESTATED       REPORTED       RESTATED       REPORTED
                           2002           2002           2001           2001           2000           2000           1999
                      -------------  -------------  -------------  -------------  -------------  -------------  -------------
<S>                   <C>            <C>            <C>            <C>            <C>            <C>            <C>
Revenue
 Organizational and
   administrative
   fee income-
   Trading Cove
   Associates         $          --  $          --  $  11,810,877  $          --  $  11,649,600  $          --  $  14,252,209
 25% of
   relinquishment
   payments-
   Trading Cove
   Associates            25,382,500             --      9,728,580             --             --             --             --
 Interest and
   dividend income          534,012             --      1,330,711             --      1,894,738             --      6,144,502
 Subordinated notes
   fee income-
   Trading Cove
   Associates                    --             --             --             --        692,782             --      3,731,806
 Management
   services income-
   Trading Cove
   Associates                    --             --             --             --             --             --      1,664,699
 Completion
   guarantee notes
   fee income-
   Trading Cove
   Associates                    --             --             --             --        215,625             --        903,438
                      -------------  -------------  -------------  -------------  -------------  -------------  -------------
 Total revenue           25,916,512             --     22,870,168             --     14,452,745             --     26,696,654

Total expenses          (13,102,082)   (13,102,082)   (13,579,600)   (13,579,600)   (13,490,367)   (13,490,367)   (24,789,253)

Interest and
dividend income                  --        534,012             --      1,330,711             --      1,894,738             --
Equity in income
(loss) of Trading
Cove Associates             218,880     24,601,380     (2,715,996)    18,823,461       (574,002)    14,068,067      6,115,300
                      -------------  -------------  -------------  -------------  -------------  -------------  -------------
Net income            $  13,033,310  $  12,033,310  $   6,574,572  $   6,574,572  $     388,376  $   2,472,438  $   8,022,701
                      =============  =============  =============  =============  =============  =============  =============

OTHER DATA
 Interest expense     $  11,080,139  $  11,080,139  $  11,560,994  $  11,560,994  $  11,641,049  $  11,641,049  $  19,045,076
 Net increase
   (decrease) in
   cash and cash
   equivalents            1,087,653      1,087,653       (453,072)      (453,072)   (56,313,596)   (56,313,596)    57,554,273

<Caption>
                                    FOR THE YEAR ENDED
                       -----------------------------------------

                          RESTATED     PREVIOUSLY    RESTATED
                            1999        REPORTED       1998
                        (UNAUDITED)       1998      (UNAUDITED)
                       -------------  ------------  ------------
<S>                    <C>            <C>           <C>
Revenue
 Organizational and
   administrative
   fee income-
   Trading Cove
   Associates          $  15,431,038  $  4,231,768  $ 11,755,241
 25% of
   relinquishment
   payments-
   Trading Cove
   Associates                     --            --            --
 Interest and
   dividend income                --     4,873,323            --
 Subordinated notes
   fee income-
   Trading Cove
   Associates              4,424,588     3,229,253     3,229,253
 Management
   services income-
   Trading Cove
   Associates              1,664,699     3,584,313     3,584,313
 Completion
   guarantee notes
   fee income-
   Trading Cove
   Associates              1,119,063       467,500       467,500
                       -------------  ------------  ------------
 Total revenue            22,639,388    16,386,157    19,036,307

Total expenses           (24,789,253)   (9,576,278)   (9,576,278)

Interest and
dividend income            6,144,502            --     4,873,323
Equity in income
(loss) of Trading
Cove Associates           (1,552,494)     (482,869)   (5,496,183)
                       -------------  ------------  ------------
Net income             $   2,442,143  $  6,327,010  $  8,837,169
                       =============  ============  ============

OTHER DATA
 Interest expense      $  19,045,076  $  7,837,552  $  7,837,552
 Net increase
   (decrease) in
   cash and cash
   equivalents            57,554,273     2,550,585     2,550,585
</Table>

                                       22
<Page>

<Table>
<Caption>
                                                                FOR THE YEAR ENDED
                      -----------------------------------------------------------------------------------------
                        PREVIOUSLY                    PREVIOUSLY                    PREVIOUSLY
                         REPORTED       RESTATED       REPORTED       RESTATED       REPORTED       RESTATED
                           2002           2002           2001           2001           2000           2000
                      -------------  -------------  -------------  -------------  -------------  -------------
<S>                   <C>            <C>            <C>            <C>            <C>            <C>
YEAR-END STATUS
Total current assets  $  26,032,197  $  15,010,697  $  38,127,059  $  29,769,455  $  34,708,598  $  46,519,473
 Trading Cove
   Associates-equity
   investment             5,447,338     11,972,338      5,778,458     10,639,562      7,944,454     (7,362,921)
 Beneficial
   Interest-Leisure
   Resort
   Technology, Inc.       4,540,039      4,540,039      4,918,029      4,918,029      5,296,019      5,296,019
 Investment in 15%
   subordinated
   notes receivable              --             --             --             --             --             --
 Investment in
   completion
   guarantee
   subordinated
   notes receivable              --             --             --             --             --             --
 Deferred financing
   costs net of
   accumulated
   amortization           2,643,338      2,643,338      3,010,202      3,010,202      3,377,066      3,377,066
 Fixed assets, net
   of accumulated
   depreciation              11,696         11,696         22,476         22,476         33,256         33,256
                      -------------  -------------  -------------  -------------  -------------  -------------
Total assets          $  38,674,608  $  34,178,108  $  51,856,224  $  48,359,724  $  51,359,393  $  47,862,893
                      =============  =============  =============  =============  =============  =============
 Total current
   liabilities        $   3,133,192  $   3,133,192  $   3,400,556  $   3,400,556  $   3,481,637  $   3,481,637
 12-3/4% senior
   notes payable                 --             --             --             --             --             --
 9-1/2% senior
   notes payable        108,007,000    108,007,000    115,434,000    115,434,000    119,691,000    119,691,000
                      -------------  -------------  -------------  -------------  -------------  -------------
 Total liabilities      111,140,192    111,140,192    118,834,556    118,834,556    123,172,637    123,172,637
                      -------------  -------------  -------------  -------------  -------------  -------------
 Member's
   deficiency         $ (72,465,584) $ (76,962,084) $ (66,978,332) $ (70,474,832) $ (71,813,244) $ (75,309,744)
                      =============  =============  =============  =============  =============  =============

<Caption>
                                   FOR THE YEAR ENDED
                      --------------------------------------------------------
                         PREVIOUSLY                   PREVIOUSLY
                          REPORTED       RESTATED      REPORTED      RESTATED
                            1999           1999          1998          1998
                                        (UNAUDITED)                 (UNAUDITED)
                       -------------  -------------  ------------  ------------
<S>                    <C>            <C>            <C>           <C>
YEAR-END STATUS
Total current assets   $  72,724,437  $  97,093,319  $  6,459,361  $ 28,741,011
 Trading Cove
   Associates-equity
   investment              9,041,568    (20,907,876)    8,662,198   (13,619,452)
 Beneficial
   Interest-Leisure
   Resort
   Technology, Inc.        5,674,009      5,674,009     4,191,909     4,191,909
 Investment in 15%
   subordinated
   notes receivable               --             --    32,059,517    32,059,517
 Investment in
   completion
   guarantee
   subordinated
   notes receivable               --             --     5,075,000     5,075,000
 Deferred financing
   costs net of
   accumulated
   amortization            3,781,051      3,781,051     3,339,780     3,339,780
 Fixed assets, net
   of accumulated
   depreciation               44,036         44,036            --            --
                       -------------  -------------  ------------  ------------
Total assets           $  91,265,101  $  85,684,539  $ 59,787,765  $ 59,787,765
                       =============  =============  ============  ============

 Total current
   liabilities         $   3,576,539  $   3,576,539  $  1,037,887  $  1,037,887
 12-3/4% senior
   notes payable                  --             --    61,471,000    61,471,000
 9-1/2% senior
   notes payable         122,159,000    122,159,000            --            --
                       -------------  -------------  ------------  ------------
 Total liabilities       125,735,539    125,735,539    62,508,887    62,508,887
                       -------------  -------------  ------------  ------------
 Members'
   deficiency          $ (34,470,438) $ (40,051,000) $ (2,721,122) $ (2,721,122)
                       =============  =============  ============  ============
</Table>

Item 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
          RESULTS OF OPERATIONS

     THE MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS SET FORTH IN THIS ITEM 7 HAS BEEN REVISED (a) TO REFLECT THE
RESTATEMENT, (b) TO ADD A DISCUSSION OF THE RESULTS OF OPERATIONS FOR THE
PERIODS BEING RESTATED, (c) TO ADD CERTAIN RISK FACTORS, (d) TO REFLECT CERTAIN
EVENTS OCCURRING SUBSEQUENT TO THE FILING OF THE ORIGINAL FORM 10-K, AND (e) TO
INCORPORATE CERTAIN CONFORMING CHANGES.

     The following discussion should be read in conjunction with, and is
qualified in its entirety by, the Company's condensed financial statements and
the notes thereto included elsewhere herein.

A - DEVELOPMENT AND OPERATIONAL ACTIVITIES

     The Company was formed solely for the purpose of holding its partnership
interest in Trading Cove. Trading Cove is the former manager and original
developer of the Mohegan Sun. The Company's interest in Trading Cove is its
principal asset and source of income and cash flow.

                                       23
<Page>

B - CERTAIN RISK FACTORS

1 - LACK OF OPERATIONS; DEPENDENCE ON THE MOHEGAN SUN - The Company is entirely
dependent upon the performance of the Mohegan Sun to meet its debt service
obligations.

     The Company does not conduct any business operations other than in
connection with its role as a general partner of Trading Cove and activities
incidental to the issuance of the 9.50% Senior Notes and the making of
restricted and temporary investments. The Company is prohibited by the terms of
the Indenture from engaging in any other business activities. The Company
intends to fund its operating debt service and capital needs from cash flows
from Trading Cove and from cash flows (dividend and interest) from temporary
investments.

     Trading Cove's only material source of revenue and cash flows is the
Relinquishment Fees it receives from the Authority. There can be no assurance
that the Mohegan Sun will continue to generate sufficient revenues for the
Authority to be profitable or to service its debt obligations, or to pay
Relinquishment Fees. The Company's ability to meet its obligations under the
9.50% Senior Notes is entirely dependent upon the performance of the Mohegan
Sun, which is subject to matters over which Trading Cove and the Company have no
control, including, without limitation, general economic conditions, effects of
competition, political, regulatory and other factors, the actual number of
gaming customers and the amount wagered.

     In addition, Trading Cove has entered into subcontracts with Kerzner
Investments (who has further subcontracted with certain of our affiliates) in
connection with the development and construction of the Project Sunburst
expansion. Under the subcontracts, Trading Cove has agreed to pay a development
fee equal to 3% of the total costs of the Project Sunburst expansion, excluding
capitalized interest, which is estimated to be $1.0 billion, less Trading Cove's
actual costs relating to the Project Sunburst expansion. The Company expects
Trading Cove will pay Kerzner Investments and our affiliates a development fee
of approximately $20 million pursuant to these subcontracts. Pursuant to the
Amended and Restated Omnibus Termination Agreement, Trading Cove is required to
pay the development fee prior to making any distribution to its partners,
including the Company. To date, Trading Cove has paid approximately $10.8
million to Kerzner Investments and the Company's affiliates under the
Development Services Agreement and expects to pay the remaining approximately
$9.2 million in July 2003. Any payment of the development fee reduces amounts
available to be distributed to the Company.

     The Company cannot assure you that its future operating cash flow will be
sufficient to cover its expenses, including interest on the 9.50% Senior Notes.

2 - LEVERAGE - The Company's and the Authority's substantial indebtedness could
adversely affect the Company's ability to fulfill its obligations under the
9.50% Senior Notes.

     As of March 31, 2003, the Company has an aggregate long-term senior
indebtedness of $102,349,000, consisting of the 9.50% Senior Notes. At
December 31, 2002, the Company had an aggregate long-term senior indebtedness
of $108,007,000. On March 15, 2003, $5,658,000 of principal amount of 9.50%
Senior Notes was redeemed at the redemption price of 106.045%. The Authority
is also highly leveraged. As of March 31, 2003, the Authority had a total of
approximately $1.13 billion of indebtedness outstanding. On March 25, 2003, the

                                       24
<Page>

Authority closed a new $391.0 million bank credit facility. At March 31, 2003
the Authority has approximately $170 million available for borrowing under the
bank credit facility. Pursuant to the terms of the bank credit facility, the
Authority may incur additional indebtedness, including senior secured
indebtedness. Substantially all of the Authority's assets secure its bank credit
facility.

     The Company's agreements with the Authority do not prohibit the Authority
from incurring indebtedness. In addition to its bank credit facility, the
Authority had the following indebtedness outstanding:

     a)   $200.0 million of 8.125% senior notes due 2006;

     b)   $300.0 million of 8.75% senior subordinated notes due 2009;

     c)   $150.0 million of 8.375% senior subordinated notes due 2011; and

     d)   $250.0 million of 8.0% senior subordinated notes due 2012.

     The degree to which the Authority is leveraged could have significant
consequences for the holders of the 9.50% Senior Notes, including, without
limitation, the following:

     a)   making it more difficult for the Authority to pay the fees owed to
          Trading Cove under the Relinquishment Agreement; and

     b)   the Authority's high degree of leverage may make it vulnerable to an
          economic downturn, which may hamper the Mohegan Sun's ability to meet
          expected operating results.

3 - SUBORDINATION - Trading Cove's right to receive the relinquishment payments
from the Authority is junior to certain payments by the Authority to the Mohegan
Tribe and holders of its indebtedness.

     The senior and junior relinquishment payments from the Authority to Trading
Cove rank behind all of the Authority's obligations to pay the minimum priority
distributions to the Mohegan Tribe and all of the Authority's existing and
future senior secured indebtedness, including the Authority's new bank credit
facility.

     As a result, upon any distribution by the Authority to its creditors in a
bankruptcy, liquidation, reorganization or similar proceeding relating to the
Authority or its property, the priority distributions owed to the Mohegan Tribe
and the holders of the Authority's senior secured indebtedness will be entitled
to be paid in full and in cash before any senior or junior relinquishment
payments may be made to Trading Cove. In addition, the junior relinquishment
payments rank behind all of the Authority's existing and future senior
indebtedness. As a result, in any such proceedings, the holders of the
Authority's senior indebtedness will be entitled to be paid in full and in cash
before any junior relinquishment payments may be made to Trading Cove.

                                       25
<Page>

     In addition, all relinquishment payments will be blocked in the event of a
payment default on senior secured indebtedness of the Authority, and all junior
relinquishment payments will be blocked in the event of a payment default on
senior indebtedness of the Authority and, in each case, may be blocked for up to
179 of 360 consecutive days in the event of certain non-payment defaults on
senior secured indebtedness or senior indebtedness of the Authority, as
applicable.

     In the event of a bankruptcy, liquidation, reorganization or similar
proceeding relating to the Authority, Trading Cove will receive distributions
(if at all) on a pari passu basis with all other holders of the Authority's
senior unsecured indebtedness with respect to the senior relinquishment payments
from the assets remaining after the Authority has paid all of its senior secured
indebtedness and with all other holders of subordinated indebtedness with
respect to the junior relinquishment payments from the assets remaining after
the Authority has paid all of its senior indebtedness. However, the
Relinquishment Agreement requires that amounts otherwise payable to Trading Cove
in a bankruptcy or similar proceeding of the Authority be paid to holders of
senior secured indebtedness, with respect to the senior relinquishment payments,
and to holders of senior indebtedness until they are paid in full, with respect
to junior relinquishment payments, instead of to Trading Cove. For that reason,
Trading Cove may receive less, ratably, than holders of senior unsecured
indebtedness of the Authority in any such proceeding. In any of these cases, the
Authority may not have sufficient funds to pay all of its creditors and Trading
Cove may receive less, ratably, than the holders of the Authority's senior
indebtedness.

     As of March 31, 2003, the senior relinquishment payments are subordinated
to $221.0 million of senior secured indebtedness of the Authority and the junior
relinquishment payments are subordinated to $421.0 million of senior
indebtedness of the Authority. In addition, at March 31, 2003, the Authority has
approximately $170 million available for borrowing under its bank credit
facility. For the year ending September 30, 2002, the annual minimum priority
distribution to the Mohegan Tribe was $15.1 million. The minimum priority
distribution is adjusted annually to reflect the cumulative increase in the
consumer price index. The Authority will be permitted to borrow substantial
additional indebtedness, including senior secured indebtedness, in the future.

4 - RISKS ASSOCIATED WITH TRADING COVE AND THE TRADING COVE PARTNERSHIP
AGREEMENT - The Company would not be a creditor of Trading Cove and it has no
rights to the assets of the Authority in the event of a bankruptcy or similar
proceeding against either. The Company does not have the power under the TCA
Partnership Agreement to cause Trading Cove to make any distributions to the
Company.

     If Trading Cove becomes the debtor in a bankruptcy or similar proceeding,
the Company would have the status of an equity holder, not a creditor, and would
not be entitled to receive any distributions until all of Trading Cove's
creditors were paid in full.

     If the Authority became the debtor in a bankruptcy or similar proceeding,
Trading Cove's rights and recovery would depend on numerous factors, including
the type and outcome of the proceeding. If the Authority ceased operations and
liquidated, under chapter 7 of the Bankruptcy Code or otherwise, Trading Cove's
claim would likely be limited to the amount of unpaid Relinquishment Fees as of
the time of liquidation. If the Authority reorganized under chapter 11

                                       26
<Page>

of the Bankruptcy Code, Trading Cove's claim would likely be based on an
estimate of the Mohegan Sun's future revenues for the term of the Relinquishment
Agreement. In any event, any recovery by Trading Cove on its claims for senior
or junior relinquishment fees would be subject to the prior payment in full of
all indebtedness senior thereto.

     As a result, the Company cannot give any assurance that, in the event of
bankruptcy or financial difficulty of either Trading Cove or the Authority, it
would ultimately recover sufficient (or any) funds to pay amounts outstanding
under the 9.50% Senior Notes.

     The 9.50% Senior Notes are not secured by a pledge of the Company's
partnership interest in Trading Cove. Accordingly, in the event of an
acceleration under the Indenture, the trustee under the Indenture will not be
able to foreclose upon the equity in Trading Cove.

     The TCA Partnership Agreement requires consent by both partners in order to
take any action. Accordingly, neither the Company nor Kerzner Investments has
the authority to cause Trading Cove to make any distributions, and Kerzner
Investments has the ability to block any action taken by Trading Cove. Although
the TCA Partnership Agreement requires Trading Cove to make distributions of
excess cash, the distributions are reduced by certain undefined, discretionary
amounts, including foreseeable needs of cash, obligations to third parties,
adequate working capital and reserves and the amount needed by the partnership
to conduct its business and carry out its purposes. A dispute between the
partners as to the appropriate amount of such reductions could result in no or
limited distributions by Trading Cove, which could have a material adverse
effect on the Company's ability to make required payments of interest, principal
and premium on the 9.50% Senior Notes.

     Under the TCA Partnership Agreement and certain other existing agreements,
Trading Cove must pay expenses and make certain payments and priority
distributions prior to making distributions to the Company. Such expenses,
payments and priority distributions include,

     (1)  operating expenses and to the extent operating expenses are less than
          $2.0 million annually, payment of the difference to each of Kerzner
          Investments and the principals of the Company;

     (2)  the development fee to be paid to Kerzner Investments, Construction,
          and The Slavik Company and related development expenses equal to 3% of
          the total cost of the Project Sunburst expansion, excluding
          capitalized interest, less Trading Cove's actual costs relating to the
          Project Sunburst expansion (the remaining development fee payment,
          expected to be approximately $9.2 million, is expected to be made in
          July 2003), and

     (3)  a $5.0 million annual payment to Kerzner Investments, payable
          quarterly until December 31, 2006.

     All of these amounts reduce the amounts distributable to the Company.
Finally, the Company and Trading Cove are party to litigation with a former
partner of Trading Cove, which, if adversely determined, could materially and
adversely affect its future distributions from Trading Cove.

                                       27
<Page>

5 - RISKS ASSOCIATED WITH THE BUY/SELL OPTION UNDER TRADING COVE PARTNERSHIP
AGREEMENT - If a dispute occurs between the Company and Kerzner Investments, the
buy/sell provision of the TCA Partnership Agreement could be invoked. If the
buy/sell provision is invoked, the Company cannot assure you that it would have
sufficient funds to buy out Kerzner Investments or, if the Company agreed to
sell to Kerzner Investments, that the selling price would be sufficient to pay
all amounts due on the 9.50% Senior Notes.

     In the event of any dispute between the partners in Trading Cove, either
partner could invoke the buy/sell provision contained in the TCA Partnership
Agreement. Pursuant to the buy/sell provision, the party invoking the buy/sell
provision would deliver a notice to the other party requiring it to sell its
interest or buy the invoking party's interest, in each case at the price set
forth in such notice. The party receiving the notice must make the election
within 45 days of receipt of the notice or be deemed to have accepted the offer
to sell. If the offer to buy is elected, the party must close the purchase
within 75 days of the end of the 45-day period. Any party may terminate the
option at any time prior to closing by accepting the position of the other
party. In the event Kerzner Investments were to invoke the buy/sell provision,
the Company could:

     a)   buy Kerzner Investments' interest;

     b)   sell its interest; or

     c)   agree with Kerzner Investments on the point of dispute.

     The Company may transfer it right to buy under the buy/sell provision of
the TCA Partnership Agreement to the Waterford Group or the Waterford Group may
fund the purchase of Kerzner Investment' partnership interest. If the Company
were to elect to buy Kerzner Investments' partnership interest other than with
funds provided by the Waterford Group, the Indenture requires the Company to
redeem the 9.50% Senior Notes; however the Company cannot assure you that it
would be able to raise funds sufficient for us to redeem the 9.50% Senior Notes
on satisfactory terms, or at all.

     If the Company were to sell its partnership interest in Trading Cove, it is
possible that the amount we receive would be insufficient to pay all amounts due
on the 9.50% Senior Notes. If the Company were to concur with Kerzner
Investments with respect to the point of dispute, it cannot assure you that
Kerzner Investments' position would not have a material adverse effect on the
Company's ability to pay principal, interest and premium on the 9.50% Senior
Notes.

6 - DIFFICULTIES IN ENFORCING OBLIGATIONS AGAINST THE AUTHORITY - The ability to
enforce obligations against the Authority and the Mohegan Tribe is limited by
the Mohegan Tribe's sovereign immunity.

     Although the Mohegan Tribe and the Authority have sovereign immunity and
may not be sued without their consent, both the Mohegan Tribe and the Authority
have granted a limited waiver of sovereign immunity and consent to suit in
connection with the Relinquishment Agreement, including suits against the
Authority to enforce the obligation to pay fees due under the Relinquishment
Agreement. In the event that such waiver of sovereign immunity is held to be
ineffective, Trading Cove could be precluded from judicially enforcing its
rights and

                                       28
<Page>

remedies. Generally, waivers of sovereign immunity have been held to be
enforceable against Indian tribes such as the Mohegan Tribe. In addition, the
Company has no standing to enforce the Relinquishment Agreement and therefore
would have to rely on Trading Cove to enforce such agreements.

     The Relinquishment Agreement provides that disputes shall be resolved in
any court of competent jurisdiction including the Gaming Disputes Court of the
Mohegan Tribe, which was established under the Mohegan Tribe's constitution to
rule on disputes with respect to the Mohegan Sun. Appeals of the decisions of
the Trial Division are heard by the Appellate Branch of the Gaming Disputes
Court. Matters as to which applicable federal or state courts have jurisdiction
may be brought in such courts. However, the federal courts may not have
jurisdiction over disputes not arising under federal law, and the state courts
may not have jurisdiction over any disputes arising on the Mohegan reservation.
Moreover, the federal and state courts, under the doctrines of comity and
exhaustion of tribal remedies, may be required to (1) defer to the jurisdiction
of the Gaming Disputes Court or (2) require that any plaintiff exhaust its
remedies in the Gaming Disputes Court before bringing any action in the federal
or state court. Thus, there may be no federal or state court forum with respect
to a dispute with the Authority or the Mohegan Tribe relating to the
Relinquishment Agreement. In addition, the Authority may not be subject to the
federal bankruptcy laws. Thus, no assurance can be given that, if an event of
default occurs, any forum will be available other than an arbitration panel of
the Gaming Disputes Court. In the Gaming Disputes Court, there are few guiding
precedents for the interpretation of Mohegan Tribal law. Any execution of a
judgment of the Gaming Disputes Court will require the cooperation of the
Mohegan Tribe's officials in the exercise of their police powers. Thus, to the
extent that a judgment of the Gaming Disputes Court must be executed on Mohegan
Tribal lands, the practical realization of any benefit of such a judgment will
be dependent upon the willingness and ability of the Mohegan Tribal officials to
carry out such judgment. In addition, the land under the Mohegan Sun is owned by
the United States in trust for the Mohegan Tribe, and creditors of the Authority
or the Mohegan Tribe may not force or obtain title to the land.

     The Mohegan Tribe is permitted to amend the provisions of its constitution
that establish the Authority and the Gaming Disputes Court with the approval of
two-thirds of the members of the Tribal Council and a ratifying vote of a
two-thirds majority of all of the members of the Mohegan Tribe, with at least
40% of the registered voters of the Mohegan Tribe voting. However, prior to the
enactment of any such amendment by the Tribal Council, any non-tribal party will
have the opportunity to seek a ruling from the Appellate Branch of the Gaming
Disputes Court that the proposed amendment would constitute an impermissible
impairment of contract. Further, the Mohegan Tribe's constitution prohibits the
Mohegan Tribe from enacting any law that would impair the obligations of
contracts entered into in furtherance of the development, construction,
operation and promotion of gaming on Mohegan Tribal lands. Amendments to this
provision of the Mohegan Tribe's constitution require the affirmative vote of
75% of all registered voters of the Mohegan Tribe. As of September 30, 2002, the
Mohegan Tribe had approximately 934 registered voters. Amendment to any of such
provisions of the Mohegan Tribe's constitution could adversely affect the
ability of Trading Cove to enforce the obligations of the Authority, which, in
turn would adversely affect the Company's ability to pay principal, interest and
premium on the 9.50% Senior Notes.

                                       29
<Page>

7 - FUTURE EXPANSION OF THE MOHEGAN SUN - In the event that the Mohegan Tribe
decides to expand the Mohegan Sun, Trading Cove has no rights associated with
such expansion.

     The Mohegan Tribe may in the future decide to expand the Mohegan Sun. Under
the terms of the Relinquishment Agreement, Trading Cove is entitled to 5% of all
revenues derived directly or indirectly from the Mohegan Sun, including the
Project Sunburst expansion but excluding revenues derived from any future
expansions and from Class II gaming activities (including bingo). If the Mohegan
Sun is further expanded, Trading Cove, under the terms of the Relinquishment
Agreement will not be entitled to any of the revenues generated by the
incremental expansion. The Relinquishment Agreement does not describe how the
Authority would allocate which revenues were covered by the Relinquishment
Agreement and which revenues were not. In addition, Trading Cove has no rights
to act as developer of any such expansion. The Company cannot assure you that
any future expansion of the Mohegan Sun will not have a material adverse affect
on the Authority, including by disrupting the current operations of the Mohegan
Sun thereby affecting revenues and the Authority's ability to pay Relinquishment
Fees to Trading Cove. In addition, the Company cannot assure you that any future
expansion will not draw guests to those portions of the Mohegan Sun from which
Trading Cove is not entitled to a percentage of revenues, thereby impacting the
Relinquishment Fees. If the Mohegan Tribe were to take any action that would
prejudice or have a material adverse effect on the rights of Trading Cove under
the Relinquishment Agreement, Trading Cove could sue the Mohegan Tribe for
breach of contract. The Company cannot assure you that any such lawsuit would be
successful. See "Difficulties in Enforcing Obligations Against the Authority."

8 - COMPETITION FROM OTHER GAMING OPERATIONS - The Mohegan Sun may face
significant competition from other persons who may receive approval to engage in
gaming in the region.

     The gaming industry is highly competitive. The Mohegan Sun currently
competes primarily with the Foxwoods Resort Casino and, to a lesser extent, with
casinos in Atlantic City, New Jersey and upstate New York. Foxwoods, which is
located approximately 10 miles from the Mohegan Sun, recently announced its
intention to build a $99 million casino expansion. With the completion of the
Project Sunburst expansion of the Mohegan Sun, the two facilities are comparable
in gaming space as well as in amenities such as hotel accommodations and
non-gaming entertainment.

     Currently, other than Atlantic City, New Jersey, casino gaming in the
Northeastern United States is conducted only by federally recognized Indian
tribes operating under federal Indian gaming law. The New York State legislature
authorized certain limited machine gaming at several racetracks in the state but
not full-scale casino gaming. To date, none of the racetracks have installed
these machines. The legislature also authorized three Indian casinos in the
Catskills region of New York (Sullivan and Ulster counties) and three casinos to
be operated by the Seneca Nation of Indians in the Niagara/Buffalo area. The
Seneca Nation opened a facility in Niagara Falls in late December 2002. The
validity of the New York State statute is currently being litigated in state
court.

     The Oneida Indian Nation operates Turning Stone Casino Resort in Verona,
New York, approximately 270 miles from the Mohegan Sun. The St. Regis Mohawk
Tribe in Hogansburg,

                                       30
<Page>

New York has entered into a gaming compact with the State of New York to conduct
gaming on its reservation near the Canadian border. There are several proposals
to develop casinos in the Catskills region of New York. To date, only three
tribes, the St. Regis Mohawk Tribe, the Cayuga Tribe and the Stockbridge-Munsee
Community, Band of Mohican Indians (the "STOCKBRIDGE-MUNSEE TRIBE"), have
submitted Land into Trust Applications to the United States Department of the
Interior. In addition, public reports indicate that several other tribes have
expressed interest in developing a casino in the Catskills region. The St. Regis
Mohawk Tribe recently signed a memorandum of understanding with the State of New
York to conduct full scale gaming in the Catskills region. Federal and state
approvals are still needed for all projects in the Catskills region.

     In addition, several other federally recognized tribes in New England are
seeking to establish gaming operations, including the Historic Eastern Pequot
Tribe of Connecticut (whose status is being challenged), the Narragansett Tribe
of Rhode Island, the Aquinnah Wampanoag Tribe of Massachusetts and all four of
the tribes in the State of Maine: the Penobscot, Passamaquoddy, Houlton Band and
Micmac Tribes.

     There are several other groups in New England seeking federal recognition
as tribes. If successful, these groups will most likely seek to establish casino
operations. In Connecticut, these include the Schaghticoke Nation and the Golden
Hill Paugussett Tribe; in Massachusetts, the groups include the Mashpee
Wampanoag and the two Nipmuck Bands that border on the State of Connecticut -
the Hassanamisco Band and the Chaubunagungamaug Band. Both the Golden Hill and
the Schaghticoke groups have received proposed negative determinations and are
in the 180-day response period after which the Department of the Interior will
issue its final determination. The Nipmuck Bands both received proposed negative
findings and are awaiting final determinations from the Department of the
Interior; the Mashpee is awaiting a proposed finding.

     A number of states in the region are projecting budget shortfalls and are
considering permitting forms of gaming to provide state revenues. In an effort
to address its state budget shortfalls, the Governor of Massachusetts and other
leaders in that state have indicated interest in both Indian gaming and
non-Indian commercial gaming.

     The Mohegan Sun also competes with other forms of gaming, including
on-track and off-track wagering, state lotteries and Internet gaming, as well as
with non-gaming leisure activities.

9 - EFFECT OF GENERAL ECONOMIC CONDITIONS - The U.S. economy is experiencing a
downturn, which could have an adverse impact on the financial performance of the
Mohegan Sun.

     The Mohegan Sun is affected by general economic conditions. The events of
September 11th and the war in Iraq further exacerbated difficult conditions in
the U.S. economy and the gaming industry generally. The effects of these events
have included a decline in vacation travel and tourism due to, among other
factors, fears regarding additional acts of terrorism. The magnitude and
duration of these effects or any future acts of terrorism is unknown and cannot
be predicted. In addition, the recent outbreak of severe acute respiratory
syndrome (SARS) has affected international air travel. Worsening economic
conditions or a prolonged recession could hamper the Mohegan Sun's ability to
meet expected operating results.

                                       31
<Page>

10 - DEPENDENCE ON KEY PERSONNEL; SIGNIFICANT CHANGE IN TRIBAL MANAGEMENT - The
loss of any key management member or any significant change in the makeup of the
Tribal Council could have a material adverse effect on the Mohegan Sun.

     The Mohegan Sun's success depends in large part on the continued service of
certain key management personnel, particularly William Velardo, the Authority's
President and Chief Executive Officer, Mitchell Etess, the Authority's Executive
Vice President of Marketing, and Jeffrey Hartmann, the Authority's Executive
Vice President, Finance and Chief Financial Officer. The loss of the services of
one or more of these individuals or other key personnel could have a material
adverse effect on the Authority's business, operating results and financial
condition which, in turn, would have a material adverse effect on the Company's
ability to meet its obligations under the 9.50% Senior Notes.

     Additionally, Mark F. Brown serves as Chairman of the Tribal Council of the
Mohegan Tribe and Chairman of the Management Board of the Authority. The Members
of the Tribal Council, including the Chairman, are elected by the Mohegan Tribe
every five years. The next election is in October 2005. The loss of Mr. Brown's
services, as well as a significant change in the composition of the Tribal
Council, could have a material adverse effect on the Authority which, in turn,
would have a material adverse effect on the Company's ability to meet its
obligations under the 9.50% Senior Notes.

11 - HIGHLY REGULATED INDUSTRY - Changes in the law could have a material
adverse effect on the Authority's ability to conduct gaming.

     Gaming on the Mohegan Tribe's reservation is extensively regulated by
federal, state and tribal regulatory bodies, including the National Indian
Gaming Commission and agencies of the State of Connecticut (for example, the
Division of Special Revenue, the State Police and the Department of Liquor
Control). As is the case with any casino, changes in applicable laws and
regulations could limit or materially affect the types of gaming that the
Authority can conduct and the revenues they realize. Congress has regulatory
authority over Indian affairs and can establish and change the terms upon which
Indian tribes may conduct gaming. Currently, the operation of all gaming on
Indian lands is subject to the Indian Gaming Regulatory Act of 1988. For the
past several years, legislation has been introduced in Congress with the intent
of modifying a variety of perceived problems with the Indian Gaming Regulatory
Act. Certain bills have also been proposed which would have the effect of
repealing many of the key provisions of the Indian Gaming Regulatory Act and
prohibiting the continued operation of certain classes of gaming on certain
Indian reservations in states where such gaming is not otherwise allowed on a
commercial basis. However, none of the substantive proposed amendments to the
Indian Gaming Regulatory Act have proceeded out of committee hearings to a vote
by either the House or the Senate.

     In the event that Congress passes prohibitory legislation that does not
include any grandfathering exemption for existing tribal gaming operations, and
if such legislation is sustained in the courts against tribal challenge, the
Authority's ability to meet its obligations to creditors, such as Trading Cove
under the Relinquishment Agreement, would be doubtful. If the Authority were
unable to meet its obligations, it would have a material adverse effect on the

                                       32
<Page>

Company's ability to make payments of principal, interest and premiums on the
9.50% Senior Notes.

     Under federal law, gaming on Indian land is dependent on the permissibility
under state law of certain forms of gaming or similar activities. If the State
of Connecticut were to make various forms of gaming illegal or against public
policy, such action may have an adverse effect on the ability of the Authority
to conduct gaming. In fact, the State of Connecticut repealed the Las Vegas
Casino Nights statute earlier this year, but the state attorney general has
opined that this will not affect the two existing Indian gaming compacts.

12 - POSSIBLE ENVIRONMENTAL LIABILITIES - Risks of material environmental
liability may exist as a result of possibly incomplete remediation of known
environmental hazards and the existence of unknown environmental hazards.

     The site on which the Mohegan Sun is located was formerly occupied by
United Nuclear Corporation, a naval products manufacturer of, among other
things, nuclear reactor fuel components. Prior to the decommissioning of United
Nuclear Corporation facilities on the site, extensive remediation of
contaminated soils and additional investigations were completed. The site
currently meets federal and state remediation requirements. Notwithstanding the
foregoing, the Company cannot assure you that:

     a)   the various environmental reports or any other existing environmental
          studies revealed all environmental liabilities;

     b)   any prior owners or tenants did not create any material environmental
          condition not known to the Company;

     c)   future laws, ordinances or regulations will not impose any material
          environmental liability; or

     d)   a material environmental condition does not otherwise exist on the
          site.

13 - TAXATION OF INDIAN GAMING - A change in the Authority's current
tax-exempt status could have a material adverse effect on the Authority's
ability to make capital improvements and repay its indebtedness.

     Based on current interpretations of the Internal Revenue Code of 1986,
as amended (the "Code"), neither the Mohegan Tribe nor the Authority is a
taxable entity for purposes of federal income taxation. There can be no
assurance that Congress will not reverse or modify the exemption for Indian
tribes from federal income taxation.

     Efforts were made in Congress in the mid-1990s to amend the Code to
provide for taxation of the net income of tribal business entities. These
have included a House bill which would have taxed gaming income earned by
Indian tribes as unrelated business income subject to corporate tax rates.
Although this legislation was not enacted, future legislation in this area
could materially and adversely affect the Authority's ability to make capital
improvements and repay its indebtedness which, in turn, would have a material
adverse effect on the Company's ability to meet its obligations under the
9.50% Senior Notes.

C - SIGNIFICANT ACCOUNTING POLICIES

     The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the amounts of assets
and liabilities at the date of the financial statements, as well as the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.

     In the opinion of management, the Company does not have any individual
accounting policy that is critical in the preparation of its financial
statements. This is due to the definitive nature of the business in which the
Company is engaged. Also, in many cases, the Company must use an accounting
policy or method because it is the only policy or method permitted under
accounting principles generally accepted in the United States of America.

                                       33
<Page>

     The following is a review of the more significant accounting policies and
methods used by the Company:

     1 - CONCENTRATION OF CREDIT RISK - The Company's interest in TCA is its
principal asset and source of income and cash flow. The Company anticipates
regular distributions from TCA based upon the operating results of the Authority
and the related Relinquishment Fees, and Development Fee, paid and to be paid by
the Authority.

     2 - EQUITY INVESTMENTS - The Company's equity investment in TCA is
accounted for utilizing the equity method. Included in the investment is the
purchase price paid to a corporation for its 12.5% interest in TCA. This amount
is amortized over the terms of the related agreement. The Company receives
distributions from TCA in accordance with an Amended and Restated Omnibus
Termination Agreement. The amount of distributions relies upon the fees earned
by TCA pursuant to the Relinquishment Agreement and the Development Agreement
with the Authority. Distributions are recorded when received.

D - TABLE OF CONTRACTUAL OBLIGATIONS

     The following table provides an overview of the Company's aggregate
contractual obligations as of the latest fiscal year end balance sheet date.

<Table>
<Caption>
CONTRACTUAL OBLIGATIONS                                              PAYMENTS DUE BY PERIOD
-----------------------                                              ----------------------
                                                          LESS THAN 1                                     MORE THAN
                                             TOTAL           YEAR          1-3 YEARS       3-5 YEARS       5 YEARS
                                            -------      -------------    -----------     -----------   -------------
<S>                                          <C>              <C>             <C>             <C>             <C>
Long-Term Debt
    Obligations(1).................          (1)              (1)             (1)             (1)             (1)
Capital Lease
    Obligations....................           0                0               0               0               0
Operating Lease
     Obligations ..................           0                0               0               0               0
Purchase Obligations ..............           0                0               0               0               0
Other Long-Term
    Liabilities on the
      Registrant's Balance
        Sheet under GAAP ..........           0                0               0               0               0
Total..............................          (1)              (1)             (1)             (1)             (1)
</Table>

     (1)  As of March 31, 2003, the Company's long-term debt
          consists of obligations under its 9.50% Senior Notes. $102,349,000 in
          aggregate principal amount of 9.50% Senior Notes is currently
          outstanding. At December 31, 2002, the Company had an aggregate
          long-term senior indebtedness of $108,007,000. On March 15, 2003,
          $5,658,000 of principal amount of 9.50% Senior Notes was redeemed at
          the redemption price of 106.045%. Interest on the outstanding
          principal amount of 9.50% Senior Notes is payable by the Company
          semi-annually in arrears on March 15 and September 15 at a rate of
          9.50% per annum. The outstanding principal amount of 9.50% Senior
          Notes is due and payable in full on March 15, 2010. In addition to
          making payments of principal and interest as described in the
          preceding sentences, on March 15 and September 15 of each

                                       34
<Page>

          year, the Company and Finance must redeem their 9.50% Senior Notes
          with any "Company Excess Cash" (as defined in the Indenture) at a
          redemption price expressed as a percentage of the principal amount
          of notes being redeemed. Such redemption price declines annually from
          109.50% for redemptions made between March 15, 1999 and May 14, 2000,
          to 100% for redemptions made after March 14, 2010. Any reduction in
          principal amount of the 9.50% Senior Notes with Company Excess Cash
          will lower the interest payments payable by the Company in
          subsequent periods.

E - OVERVIEW OF CURRENT AND FUTURE CASH FLOWS

     The Company expects to fund its operating, debt service and capital needs
from cash flows from the Company's distributions from TCA, and from the
Company's available cash. Based upon the Company's anticipated future
operations, management believes that available cash flow will be sufficient to
meet the Company's anticipated requirements for future operating expenses,
future scheduled payments of principal and interest on the 9.50% Million Senior
Notes and additional investments in TCA that may be required in connection with
the Project Sunburst expansion. No assurance, however, can be given that the
operating cash flow will be sufficient for that purpose.

1 - SOURCES OF INCOME AND CASH FLOWS

     The Company has one primary source of income and cash flow: equity income
and distributions from TCA. The Company anticipates regular payments from TCA
based on the results of the Mohegan Sun and Relinquishment Fees and Development
Fee payments by the Authority to TCA.

2 - PAYMENTS OF DISTRIBUTIONS ON THE COMPANY'S PARTNERSHIP INTEREST IN TCA

     On April 26, 2002, July 26, 2002, October 28, 2002 and January 28, 2003,
the Company received $1,821,000, $9,790,000, $3,550,000 and $11,221,500,
respectively, from TCA as distributions, which represents the Company's share
under the Amended and Restated Omnibus Termination Agreement of approximately
(a) $58,509,000 in Relinquishment Fees earned by TCA pursuant to the
Relinquishment Agreement for the year January 1 through December 31, 2002, and
(b) $1,316,000 in Development Fees earned by TCA pursuant to the Development
Agreement for the same period. On April 26, 2001, July 26, 2001, October 26,
2001 and January 28, 2002, the Company received $2,470,000, $8,249,158,
$3,062,694 and $9,107,605, respectively, from TCA as payment for prior services
under subcontract and distributions, which represented the Company's share under
the Amended and Restated Omnibus Termination Agreement of approximately (a)
$45,715,000 in Relinquishment Fees earned by TCA pursuant to the Relinquishment
Agreement for the year January 1 through December 31, 2001 and (b) $7,028,000 in
Development Fee earned by TCA pursuant to the Development Agreement for the same
period.

                                       35
<Page>

F - RESULTS OF OPERATIONS

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED

DECEMBER 31, 2002 AND 2001

     Total expenses for the twelve months ended December 31, 2002 was
$13,102,082, compared with $13,579,600 for the twelve months ended December 31,
2001. Interest expense decreased by $480,855 due primarily to (a) the redemption
of the 9.50% Senior Notes in the principal amounts of $4,031,000 and $3,396,000
on March 15, 2002 and September 15, 2002, respectively, (b) salaries - related
parties increased by $127,933 due to the increase in revenues of the Mohegan Sun
and (c) general and administrative costs decreased by $124,596 (primarily
attributable to a decrease in legal and other expenses related to the defense of
the Leisure litigation, as described in Item 3, totaling approximately $156,000,
and offset by (1) an increase in insurance expense of approximately $17,600, (2)
an increase in miscellaneous expense of approximately $6,400 and (3) an increase
in accounting fees of approximately $8,300).

     Equity in income of Trading Cove Associates for the year ended December 31,
2002 was $24,601,380 compared with $18,823,461 for the year ended December 31,
2001. The Company has included amortization of purchased interests of $440,028
in each year's annual equity income. The Company's share of TCA's results
fluctuates based upon revenues earned by TCA under the Relinquishment Agreement
and the Development Agreement. In addition, interest and dividend income
decreased by $796,699.

     As a result of the foregoing factors the Company experienced net income of
$12,033,310 for the twelve months ended December 31, 2002, compared with net
income of $6,574,572 for the twelve months ended December 31, 2001.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED
DECEMBER 31, 2001 AND 2000

     Total expenses for the twelve months ended December 31, 2001 was
$13,579,600 compared with $13,490,367 for the twelve months ended December 31,
2000. Interest expense decreased by $80,055 due primarily to (a) the redemption
of the 9.50% Senior Notes in the principal amounts of $452,000 and $3,805,000 on
March 15, 2001 and September 15, 2001, respectively, (b) salaries-related
parties increased by $47,116 due to the increase in revenues of the Mohegan Sun
and (c) general and administrative costs increased by $29,293 (primarily
attributable to an increase in bank sweep fees of approximately $15,800 and by
an increase in rating services expense of approximately $19,600 and offset by
(1) a decrease in insurance expense of approximately $2,500 and (2) a decrease
in legal and other expenses related to the defense of the Leisure litigation, as
described in Item 3, totaling approximately $3,000). In addition at December 31,
1999 12.75% Senior Notes tender expense was over accrued by $90,000.

     Equity in income of Trading Cove Associates for the year ended December
31, 2001 was $18,823,461, compared with $14,068,064 for the year ended
December 31, 2000. The Company has included amortization of purchased
interests of $440,028 in each year's equity income. The Company's share of
TCA's results fluctuates based upon revenues earned by TCA under the

                                       36
<Page>

Relinquishment Agreement and the Development Agreement. In addition, interest
and dividend income decreased by $564,027.

     As a result of the foregoing factors the Company experienced net income of
$6,574,572 for the year ended December 31, 2001, compared with net income of
$2,472,435 for the year ended December 31, 2000.

LIQUIDITY AND CAPITAL RESOURCES

     The initial capital of the Company consists of the partnership interests in
TCA contributed by Slavik and LMW in forming the Company. In connection with the
offering of the $65 Million Senior Notes, the Company used approximately $25.1
million to purchase from Kerzner International $19.2 million in principal amount
of Authority subordinated notes plus accrued and unpaid interest and
subordinated notes fee amounts. In addition, TCA distributed approximately
$850,000 in principal amount of Authority subordinated notes to the Company. In
addition, the Company used approximately $10.6 million of the proceeds from the
12.75% Senior Notes to purchase RJH Development Corp.'s interests in TCA.

     During September 1997 and on October 12, 1998 and 1999, the Company
purchased from Kerzner International $2.5 million Authority subordinated notes
plus accrued and unpaid interest and completion guarantee fee amounts (total
cost approximately $2.8 million for each transaction).

     On January 6, 1998 the Company paid $5,000,000 to Leisure whereby Leisure
gave up its beneficial interest in 5% of the organizational and administrative
fee and excess cash of TCA and any other claims it may have had against the
Company, TCA and TCA's partners and former partner.

     In connection with the offering of the 9.50% Senior Notes, the Company used
approximately $72 million to repurchase its $65 Million Senior Notes,
distributed approximately $37 million to its new parent, Waterford Group, and
paid the final $2 million to Leisure.

     On December 30, 1999, the Authority paid to the holders of the Authority
subordinated notes, an amount to satisfy all obligations of such Authority
subordinated notes. The Company received $44,403,517 from the Authority.

     On December 30, 1999, TCA distributed $10,536,543 to its partners. The
Company received $5,268,272.

     On January 4, 2000 in accordance with the terms of the Indenture and the
Security and Control Agreement dated as of March 17, 1999 between the Company
and Finance and State Street Bank and Trust Company, $15,000,000 was transferred
to restricted investments ("INTEREST RESERVE ACCOUNT").

     On January 4, 2000 also in accordance with the terms of the Indenture, the
Company distributed $34,671,789 to its member Waterford Group.

                                       37
<Page>

     During 1999 and 2000, on January 11, 2001, on April 12, 2001, on June 11,
2001, on December 19, 2001, on January 11, 2002, on June 10, 2002, on September
10, 2002, on December 26, 2002 and on January 13, 2003, the Company distributed
$886,285, $3,059,393, $339,356, $30,104, $1,206,200, $164,000, $1,416,900,
$1,925,862, $27,300, $150,500 and $1,290,900, respectively, to Waterford Group
as tax distributions, in accordance with the terms of the Indenture.

     On November 1, 2002 the Company distributed $15,000,000 to Waterford Group,
as a Permitted Dividend, in accordance with the terms of the Indenture.

     Accordingly, after taking into consideration net income (loss) since
inception, the Company has a member's deficit of approximately $76,962,000 and
$70,475,000 at December 31, 2002 and 2001, respectively.

     For the twelve months ended December 31, 2002 and 2001, net cash provided
by operating activities (as shown in the Statements of Cash Flows) was
$10,639,911 and $5,394,941, respectively.

     Current assets decreased from $29,769,455 at December 31, 2001 to
$15,010,697 at December 31, 2002. The decrease was caused primarily by the
distribution to Waterford Group on November 1, 2002, in the amount of
$15,000,000, by the scheduled semi-annual payment of interest on March 15, 2002
and September 15, 2002 on the 9.50% Senior Notes in the amounts of approximately
$5,483,000 and $5,292,000, respectively, by the redemption on March 15, 2002 and
September 15, 2002 of 9.50% Senior Notes in the principal amounts of $4,031,000
and $3,396,000, respectively, and offset by approximately $10,640,000 of cash
provided by operations and by the distributions by TCA in terms of the Amended
and Restated Omnibus Termination Agreement

     Current liabilities decreased from $3,400,556 at December 31, 2001 to
$3,133,192 at December 31, 2002. The decrease was primarily attributable to a
decrease in accrued interest on senior notes payable of approximately $208,000
(attributable to the redemption on March 15, 2002 and September 15, 2002 of
9.50% Senior Notes in the principal amounts of $4,031,000 and $3,396,000,
respectively) and by a decrease in accrued expenses and accounts payable of
approximately $59,600 (primarily attributable to a decrease in the amount due
for legal and other expenses related to the defense of the Leisure litigation,
as detailed under Part I: Item 3 Legal Proceedings, of approximately $67,500, by
a decrease in the amount due for accounting services of approximately $2,000, by
a decrease in the amount due for miscellaneous expenses of approximately $2,300
and offset by an increase in the amount due for salaries-related parties of
approximately $5,000 and by an increase in the amount due for other legal
expenses of approximately $7,000).

     For the years ended December 31, 2002 and 2001 net cash provided by
investing activities (as shown in the Statement of Cash Flows) was $16,395,304
and $148,647, respectively. The net cash provided by investing activities in
2002 was primarily the result of sales and (purchases) of restricted
investments-net of approximately $15,845,000, distributions from TCA of
$1,550,000 and offset by contributions to TCA of $1,000,000 (to fund certain of
TCA's development expenses in connection with the Project Sunburst expansion at
the Mohegan

                                       38
<Page>

Sun). The net cash provided by investing activities in 2001 was primarily the
result of sales and (purchases) of restricted investments-net of approximately
$699,000, distributions from TCA of $800,000 and offset by contributions to TCA
of $1,350,000 (to fund certain of TCA's development expenses in connection with
the Project Sunburst expansion at the Mohegan Sun).

     The Company anticipates that up to $550,000 in additional contributions may
have to be made by the Company to TCA (to fund certain of TCA's development
expenses in connection with the Project Sunburst expansion at the Mohegan Sun).
As of December 31, 2002 $4,550,000 had been contributed by the Company to TCA to
fund certain of TCA's development expenses in connection with the Project
Sunburst expansion at the Mohegan Sun.

     For the twelve months ended December 31, 2002 and 2001, net cash used in
financing activities (as shown in the Statements of Cash Flows) was $25,947,562
and $5,996,660, respectively. The net cash used in financing activities in 2002
was primarily the result of the redemption of the 9.50% Senior Notes in the
principal amounts of $4,031,000 and $3,396,000 on March 15, 2002 and September
15, 2002, respectively, and by distributions to the Company's member Waterford
Group of approximately $18,521,000. The net cash used in financing activities in
2001 was primarily the result of the redemption of the 9.50% Senior Notes in the
principal amounts of $452,000 and $3,805,000 on March 15, 2001 and September 15,
2001, respectively, and tax distributions to the Company's member Waterford
Group of approximately $1,740,000.

     The Company and Finance have periodically redeemed 9.50% Senior Notes with
Company Excess Cash, as defined, pursuant to the terms of the Indenture. The
table below summarizes (a) the amount of Company Excess Cash that the Company
and Finance determined was available for the mandatory redemption of the 9.50%
Senior Notes on February 1st and August 1st of each applicable year pursuant to
the terms of the Indenture, (b) the aggregate principal amount of 9.50% Senior
Notes redeemed with such Company Excess Cash, (c) the date on which such
redemption was consummated, and (d) the redemption price at which such
redemption was made.

<Table>
<Caption>
                                                                                                REDEMPTION PRICE
                                                                                                (EXPRESSED AS
                         COMPANY EXCESS CASH      PRINCIPAL AMOUNT OF                           PERCENTAGE AMOUNT OF
DATE                     (APPROXIMATELY)          NOTES REDEEMED         DATE OF REDEMPTION     NOTES REDEEMED)
<S>                         <C>                       <C>                <C>                          <C>
August 1, 1999              $  8,983,000              $ 2,841,000        September 15, 1999           109.500%

February 1, 2000            $  8,276,000              $ 2,277,000        March 15, 2000               108.636%

August 1, 2000              $  5,902,000              $   191,000        September 15, 2000           108.636%

February 1, 2001            $  6,173,000              $   452,000        March 15, 2001               107.773%

August 1, 2001              $  9,765,000              $ 3,805,000        September 15, 2001           107.773%

February 1, 2002            $  9,793,000              $ 4,031,000        March 15, 2002               106.909%

August 1, 2002              $  8,923,000              $ 3,396,000        September 15, 2002           106.909%

February 1, 2003            $ 11,131,000              $ 5,658,000        March 15, 2003               106.045%
</Table>

                                       39
<Page>

     The Company expects to fund its operating, debt service and capital needs
from cash flows from the Company's share of payments from TCA, and from the
Company's available cash. Based upon the Company's anticipated future
operations, management believes that available cash flow will be sufficient to
meet the Company's anticipated requirements for future operating expenses,
future scheduled payments of principal and interest on the 9.50% Senior Notes
and additional investments in TCA that may be required in connection with the
Project Sunburst expansion at the Mohegan Sun. No assurance, however, can be
given that the operating cash flow will be sufficient for that purpose.

Item 7a.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

     Market risk represents the risk of changes in value of a financial
instrument, derivative or non-derivative, caused by fluctuations in interest
rates, foreign exchange rates and equity prices. Changes in these factors could
cause fluctuations in earnings and cash flows.

     For fixed rate debt, changes in interest rates generally affect the fair
market value of the debt instrument, but not earnings or cash flows. Therefore,
interest rate risk and changes in the fair market value of fixed rate debt
should not have a significant impact on earnings or cash flows until such debt
is refinanced, if necessary. For variable rate debt, changes in interest rates
generally do not impact the fair market value of the debt instrument, but do
affect future earnings and cash flows. The Company did not have any variable
rate debt outstanding at December 31, 2002 and 2001. The fair market value of
the Company's long-term debt at December 31, 2002 and 2001 is estimated to be
approximately $111,787,000 and $118,897,000, respectively, based on the quoted
market price for the same issue.

     The Company is exposed to market risks from fluctuations in interest rates
and the effects of those fluctuations on market values of the Company's cash
equivalents and restricted investments. Cash equivalents generally consist of
overnight investments while the restricted investments at December 31, 2002 are
principally comprised of an investment in a Federal Home Loan Bank Discount Note
which was purchased at a discount of 1.64% and matured March 7, 2003 and an
investment in the Federated Treasury Obligations Fund. These investments are not
significantly exposed to interest rate risk, except to the extent that changes
in interest rates will ultimately affect the amount of interest income earned
and cash flow from these investments.

     The Company does not currently have any derivative financial instruments in
place to manage interest costs, but that does not mean that the Company will not
use them as a means to manage interest rate risk in the future.

     The Company does not use foreign currency exchange forward contracts or
commodity contracts and does not have foreign currency exposure in its
operations.

                                       40
<Page>

Item 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

     THE RESTATED FINANCIAL STATEMENTS OF THE COMPANY AND TCA AND
SUPPLEMENTARY DATA, INCLUDING THE NOTES TO THE RESTATED FINANCIAL STATEMENTS,
SET FORTH IN THIS ITEM 8 HAVE BEEN REVISED TO REFLECT THE RESTATEMENT.

     See Restated Financial Statements starting on Page 51.

Item 9.   CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
          FINANCIAL DISCLOSURE

     None.

                                    PART III

Item 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

     The following tables set forth certain information with respect to persons
who are members of the Board of Directors of the Company or who are Executive
Officers of the Company.

<Table>
<Caption>
NAME                       AGE                     POSITION
----                       ---                     --------
<S>                        <C>         <C>
                                       Chairman of the Board and Chief Executive
Len Wolman                 48          Officer
Alan Angel                 46          Chief Financial Officer
Del J. Lauria              54          Director and Secretary
Mark Wolman                45          Director
Stephan F. Slavik          56          Director
Richard Slavik             52          Vice President
</Table>

     LEN WOLMAN. Mr. Len Wolman has been the Chairman of the Board of Directors
and the Chief Executive of Waterford since its formation. Since 1986, Mr. Len
Wolman has been the Chairman of the Board of Directors and the Chief Executive
Officer of the Waterford Hotel Group, Inc. Mr. Len Wolman is a managing partner
of Trading Cove. Mr. Len Wolman was instrumental in the formation of the
relationship between Trading Cove and the Mohegan Tribe and had been actively
working with the Mohegan Tribe in connection with obtaining federal recognition,
acquiring the site for the Mohegan Sun and obtaining the financing to construct
the Mohegan Sun. Mr. Len Wolman was actively involved in the development,
construction and operation of the Mohegan Sun. Mr. Len Wolman has served as
President and Chief Executive Officer of Waterford Finance since its inception.
Mr. Len Wolman is a Director and Officer of Slavik, one of the Waterford Group's
members. Mr. Len Wolman is the brother of Mr. Mark Wolman. Mr. Len Wolman's wife
and Mr. Angel's wife are sisters.

     ALAN ANGEL. Mr. Angel became Chief Financial Officer of Waterford in
January 1999. Since 1997, Mr. Angel has been the Chief Financial Officer of
Mystic Suites, L.L.C. Mystic Suites, L.L.C. is a commercial development firm
based in Eastern Connecticut which currently holds an ownership interest in a
number of hotels managed by the Waterford Hotel Group, Inc.

                                       41
<Page>

Prior to joining Mystic Suites, L.L.C., Mr. Angel resided in South Africa and
served as Chief Financial Officer of Rowan & Angel cc. Mr. Angel is a certified
public accountant and a chartered accountant. Mr. Angel has over 20 years of
accounting experience. Mr. Angel's wife and Mr. Len Wolman's wife are sisters.

     DEL J. LAURIA. Mr. Lauria became a Director, Chief Financial Officer and
Secretary of Waterford upon its formation. Mr. Lauria was succeeded as Chief
Financial Officer in January 1999 by Mr. Alan Angel. Mr. Lauria is also an
Officer and Director of the Waterford Hotel Group, Inc. and is Executive Vice
President and Director of Slavik. Mr. Lauria first joined the Slavik
Organization in 1980 as the Chief Financial Officer of its real estate property
management division. The Slavik Organization is an affiliated group of full
service real estate companies first established in Michigan in the early 1950s.
Mr. Lauria rapidly advanced at the Slavik Organization and currently holds
various key managerial positions within the enterprise. Prior to joining the
Slavik Organization, Mr. Lauria was associated with the accounting firm now
known as Deloitte & Touche and is a certified public accountant. Mr. Lauria has
served as Treasurer and Secretary of Waterford Finance since its inception.

     MARK WOLMAN. Mr. Mark Wolman became a Director of Waterford upon its
formation. Mr. Mark Wolman is the president of Wolman Construction. Wolman
Construction is a commercial development and construction firm based in Eastern
Connecticut. Mr. Mark Wolman has been working with the Mohegan Tribe since 1992
and had been instrumental in assisting the Mohegan Tribe in obtaining a number
of governmental approvals in connection with the development and construction of
the Mohegan Sun. Mr. Mark Wolman is a Director of Slavik. Mr. Mark Wolman is the
brother of Mr. Len Wolman.

     STEPHAN F. SLAVIK. Mr. Slavik was appointed a Director of Waterford on
April 9, 2001. Mr. Slavik is the President of Michigan based Slavik Builders.
Mr. Slavik has over 30 years of experience with all phases of land planning,
product design, estimating and site construction in single family, multiple and
commercial design/build developments. Mr. Slavik is a Director and Vice
President of Slavik. Mr. Slavik is the brother of Mr. Richard Slavik.

     MR. RICHARD SLAVIK. Mr. Richard Slavik was appointed a Vice President of
Waterford on April 9, 2001. Mr. Richard Slavik is Chief Operating Officer of the
Fourmidable Group, Inc., a Michigan based real estate management firm. Mr.
Richard Slavik has over 20 years of constructing and operating commercial
residential real estate experience. Mr. Richard Slavik is President of Slavik.
Mr. Richard Slavik is the brother of Mr. Stephan F. Slavik.

Item 11.  EXECUTIVE COMPENSATION

     The following table summarizes the compensation paid to the Directors and
the named Executive Officers of the Company.

<Table>
<Caption>
NAME                      YEAR ENDED                SALARY
----                      ----------                ------
<S>                          <C>                <C>
Len Wolman(1)                2002               $  835,086
                             2001               $  707,153
                             2000               $  660,037
</Table>

                                       42
<Page>

<Table>
<S>                          <C>                <C>
Del Lauria                   2002               $        -
                             2001               $        -
                             2000               $        -

Stephan F. Slavik            2002               $        -
                             2001               $        -
                             2000               $        -

Mark Wolman                  2002               $        -
                             2001               $        -
                             2000               $        -
</Table>

     (1)  As detailed in Item 13, Mr. Len Wolman has an employment contract with
          the Company. For the years ended December 31, 2002, 2001, and 2000,
          $835,086, $707,153 and $660,037, respectively, was paid to Mr. Len
          Wolman pursuant to the employment contract.

     From January 1, 2000, the Company's Directors have also received
compensation as part of the operating expenses of TCA as detailed under point a)
of the table set forth above under "Amended and Restated Omnibus Termination
Agreement" and until January 1, 2000 the Company's Directors received
compensation as part of the operating expenses and management services fee of
TCA. The Company does not have a compensation committee, and all compensation
decisions are made by the Board of Directors.

Item 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
          RELATED STOCKHOLDER MATTERS

     The Company's sole member is Waterford Group, L.L.C.

     The following table sets forth the beneficial ownership interest in
Waterford Group, L.L.C.

<Table>
<Caption>
      NAME OF                                                               % OWNERSHIP
      BENEFICIAL OWNER                                                    IN THE COMPANY
      ----------------                                                    --------------
      <S>                                                                    <C>
      LMW Investments, Inc.(1)..................................              32.2033%
      Slavik Suites, Inc.(2)....................................              67.7967%
                                                                           --------------
                                                                             100.0000%
                                                                           ==============
</Table>

     (1)  LMW Investments, Inc. is owned 50% by Mr. Len Wolman and 50% by Mr.
          Mark Wolman. The address for LMW Investments, Inc. is 914 Hartford
          Turnpike, P.O. Box 715, Waterford, Connecticut 06385.

     (2)  Messrs. Len and Mark Wolman each own approximately 11.875% of the
          outstanding shares of Slavik Suites, Inc. Messrs. Stephan F. Slavik
          and Richard Slavik each own approximately 14.35% of the outstanding
          shares of Slavik

                                       43
<Page>

          Suites, Inc. The address for Slavik Suites, Inc. is 32605 West 12 Mile
          Road, Suite 350, Farmington Hills, Michigan 48334.

     The Company does not currently have in place any equity compensation plans.

Item 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

     THIS ITEM 13 HAS BEEN REVISED TO REFLECT CERTAIN EVENTS OCCURRING
SUBSEQUENT TO THE FILING OF THE ORIGINAL FORM 10-K.

     DEVELOPMENT SERVICES AGREEMENT PHASE II AND RELATED AGREEMENTS AND PAYMENTS

     As noted in the section above entitled "Business - Trading Cove Associates
Material Agreements - Development Agreement and Related Agreements," on February
9, 1998, TCA and KIML, an affiliate of Kerzner Investments, the Company's
partner in TCA, entered into the Development Services Agreement Phase II.
Pursuant to the Development Services Agreement Phase II, TCA subcontracted with
KIML, who agreed to perform those services assigned to KIML by TCA in order to
facilitate TCA's fulfillment of its duties and obligations to the Authority
under the Development Agreement. KIML assigned the Development Services
Agreement Phase II to Kerzner Investments.

     Pursuant to the Development Services Agreement Phase II, TCA pays to
Kerzner Investments the Development Services Fee Phase II, which equals to 3% of
the development costs of the Project Sunburst expansion, excluding capitalized
interest, less all costs incurred by TCA in connection with the Project Sunburst
expansion. The Development Services Fee Phase II is paid in three installments -
on December 31, 1999, December 31, 2000 and on the Completion Date, as
defined in the Development Agreement - with the final payment being made when
the actual development costs of the Project Sunburst expansion are known. TCA
pays the Development Services Fee Phase II from available cash flow, if any,
in accordance with the Amended and Restated Omnibus Termination Agreement. The
total of the Development Services Fee Phase II and TCA's costs related to the
development of the Project Sunburst expansion will exceed the related revenue
received by TCA under the Development Agreement by approximately $16 million.

     Before KIML assigned the Development Services Agreement Phase II to Kerzner
Investments, it entered into the Local Construction Services Agreement with
Construction, an affiliate of the Company, pursuant to which Construction agreed
to provide certain of those services assigned to KIML by TCA pursuant to the
Development Services Agreement Phase II. KIML assigned the Local Construction
Services Agreement to Kerzner Investments.

     Pursuant to the Local Construction Services Agreement, Kerzner Investments
agreed to pay to Construction a fee equal to 20.83% of the Development Services
Fee Phase II as and when Kerzner Investments receives payment from TCA in
accordance with the Development Services Agreement Phase II.

     Pursuant to a letter agreement, Construction has subcontracted with The
Slavik Company, an affiliate of the Company, to provide certain services under
the Local Construction Services Agreement. In exchange for providing such
services, Construction agreed that The Slavik Company would be paid a fee equal
to 14.30% of its fee under the Local Construction Services Agreement.

                                       44
<Page>

     On April 26, 2000, July 26, 2000 and January 26, 2001 TCA paid $3,095,000,
$1,238,000 and $6,474,000, respectively, as partial payment of the Development
Services Fee Phase II. Construction received $644,688, $257,875 and $1,348,534,
respectively, and Construction paid The Slavik Company $92,190, $36,876 and
$192,840 on April 26, 2000, July 26, 2000 and January 26, 2001, respectively.

     At December 31, 2002 TCA owed Kerzner Investments approximately $10.2
million pursuant to the Development Services Agreement Phase II.

     The Development Services Agreement Phase II and the Local Construction
Services Agreement are each filed as an exhibit to the Company's, Quarterly
Report on Form 10-Q for the period ended March 31, 1999 (Commission File No.
333-17795) as accepted by the Commission on May 17, 1999, and each is
incorporated herein by reference.

     EMPLOYMENT AGREEMENT WITH MR. LEN WOLMAN

     Len Wolman, the Company's Chairman of the Board of Directors and Chief
Executive Officer, is the Company's designated representative to TCA under the
TCA Partnership Agreement.

     On September 28, 1998, the Company entered into an employment agreement
with Len Wolman. The employment agreement provides for a base annual salary of
$250,000 reduced by any amounts Mr. Wolman receives as a salary from TCA for
such period. In addition, pursuant to the employment agreement, the Company
agreed pay to Mr. Wolman an amount equal to 0.05% of the revenues of the Mohegan
Sun including the Project Sunburst expansion to the extent Mr. Wolman has not
received such amounts from TCA. On and after January 1, 2004, the Company agreed
pay to Mr. Wolman incentive compensation based on the revenues of the Mohegan
Sun, including the Project Sunburst expansion, as a percentage (ranging from
..00% to .10%) to be determined using a formula attached to the employment
agreement, which compares actual revenues to predetermined revenue targets. For
the years ended December 31, 2002, 2001 and 2000, the Company paid and incurred
$835,086, $707,153 and $660,037, respectively, as an expense pursuant to Len
Wolman's employment agreement.

     OTHER RELATED PARTY TRANSACTIONS

     For the years ended December 31, 2002, 2001, and 2000 approximately
$46,000, $46,000 and $51,000, respectively, was paid and incurred by TCA to the
principals and affiliates of the Company as part of TCA's operating expenses. In
addition, in 2002, 2001 and 2000, TCA paid and incurred $0, approximately
$856,000 and approximately $925,000, respectively, to the principals of the
Company in connection with the first priority payments set forth under the
section "Business - Trading Cove Associates Material Agreements - Amended and
Restated Omnibus Termination Agreement".

     In 1999, the Company renovated Len Wolman's office space at a cost of
$32,413, of which $30,000 was paid to Wolman Homes Inc., an affiliate of the
Company. Cost of the improvement is being depreciated over five years. Expense
for each of the years ended December 31, 2002, 2001 and 2000 was $6,480.

                                       45
<Page>

     Waterford Group, Slavik Suites, Inc. and the other principals of the
Company and Waterford Group have interests in and may acquire interests in
hotels in southeastern Connecticut which have or may have arrangements with the
Mohegan Sun to reserve and provide hotel rooms to patrons of the Mohegan Sun.

                                     PART IV

Item 14.  CONTROL PROCEDURES

          (a)  Evaluation of Disclosure Controls and Procedures

     The Company maintains disclosure controls and procedures that are designed
to ensure that information required to be disclosed in the Company's reports
filed with, or furnished to, the Securities and Exchange Commission, or the
Commission, pursuant to the Securities Exchange Act of 1934 is recorded,
processed, summarized and reported within the time periods specified in the
Commission's rules and forms, and that such information is accumulated and
communicated to the Company's management, including its Chief Executive Officer
and Chief Financial Officer, as appropriate, to allow timely decisions regarding
required disclosure based on the definition of "disclosure controls and
procedures" in Rule 13a-14(c) and 15d-14(c) of the Securities Exchange Act of
1934.

     Within 90 days prior to the date of this report, the Company carried out an
evaluation, under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures. Based on the foregoing evaluation,
the Company's Chief Executive Officer and Chief Financial Officer concluded that
the Company's disclosure controls and procedures were effective.

          (b)  Changes in Internal Controls

     There were no significant changes in the Company's internal controls or in
other factors that could significantly affect these controls subsequent to the
date of the evaluation of those controls by the Chief Executive Officer and
Chief Financial Officer, including any corrective actions with regard to any
significant deficiencies and material weaknesses. The Company believes that its
internal controls and procedures are effective.

Item 15.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

          (a)  EXHIBITS

<Table>
<Caption>
               EXHIBIT NO.               DESCRIPTION
               -----------               -----------
               <S>              <C>
               3.1              Certificate of Formation, as amended, of
                                Waterford Gaming, LLC(i)

               3.2              Certificate of Incorporation of Waterford Gaming
                                Finance Corp.(i)
</Table>

                                       46
<Page>

<Table>
               <S>              <C>
               3.3              Bylaws of Waterford Gaming Finance Corp.(i)

               4.1              Indenture, dated as of November 8, 1996, between
                                Waterford Gaming, L.L.C. and Waterford Gaming
                                Finance Corp., the issuers, and Fleet National
                                Bank, as trustee, relating to $65,000,000 12.75%
                                Senior Notes due 2003.(i)

               4.1.1            First Supplemental Indenture, dated as of March
                                4, 1999, among Waterford Gaming, L.L.C. and
                                Waterford Gaming Finance, Corp., as issuers, and
                                State Street Bank and Trust Company, as trustee,
                                relating to $65,000,000 12.75% Senior Notes due
                                2003.(vi)

               4.2              Indenture, dated as of March 17, 1999, among
                                Waterford Gaming, L.L.C. and Waterford Gaming
                                Finance Corp., as issuers, and State Street Bank
                                and Trust Company, as trustee, relating to
                                $125,000,000 9-1/2% Senior Notes due 2010.(vi)

               4.3              Security and Control Agreement, dated as of
                                March 17, 1999, among Waterford Gaming, L.L.C.
                                and Waterford Gaming Finance Corp., as pledgors
                                and State Street Bank and Trust Company, as
                                securities intermediary.(vi)

               4.4              Specimen Form of 9-1/2% Senior Notes due 2010
                                (included in Exhibit 4.2).(vi)

               10.1             Omnibus Financing Agreement, dated as of
                                September 21, 1995, between Trading Cove
                                Associates and Sun International Hotels Limited.
                                (i)

               10.2             First Amendment to the Omnibus Financing
                                Agreement, dated as of October 19, 1996, among
                                Trading Cove Associates, Sun International
                                Hotels Limited and Waterford Gaming, L.L.C.(i)

               10.2.1           Amended and Restated Omnibus Financing Agreement
                                dated September 10, 1997(ii)

               10.2.2           Omnibus Termination Agreement, dated as of March
                                18, 1999, among Sun International Hotels
                                Limited, Trading Cove Associates, Waterford
                                Gaming, L.L.C., Sun International Management
                                Limited, LMW Investments, Inc., Sun Cove Limited
                                (now Kerzner Investments Connecticut,
</Table>

                                       47
<Page>

<Table>
<Caption>
               <S>              <C>
                                Inc.), Slavik Suites, Inc., and Wolman
                                Construction, L.L.C.(vi)

               10.2.3           Amended and Restated Omnibus Termination
                                Agreement, dated as of January 1, 2000 and
                                effective as of March 18, 1999, among Sun
                                International Hotels Limited, Trading Cove
                                Associates, Waterford Gaming, L.L.C., Sun
                                International Management Limited, LMW
                                Investments, Inc., Sun Cove Limited (now Kerzner
                                Investments Connecticut, Inc.), Slavik Suites,
                                Inc., and Wolman Construction, L.L.C.(vii)

               10.3             Amended and Restated Partnership Agreement of
                                Trading Cove Associates, dated as of September
                                21, 1994, among Sun Cove Limited (now Kerzner
                                Investments Connecticut, Inc.), RJH Development
                                Corp., Leisure Resort Technology, Inc., Slavik
                                Suites , Inc., and LMW Investments, Inc.(i)

               10.4             First Amendment to Amended and Restated
                                Partnership Agreement of Trading Cove
                                Associates, dated as of October 22, 1996, among
                                Sun Cove Limited (now Kerzner Investments
                                Connecticut, Inc.), Slavik Suites, Inc., RJH
                                Development Corp., LMW Investments, Inc. and
                                Waterford Gaming, L.L.C.(i)

               10.5             Purchase Agreement, dated as of March 10, 1999,
                                among Waterford Gaming, L.L.C., Waterford Gaming
                                Finance Corp., Bear, Stearns & Co., Inc.,
                                Merrill Lynch, Pierce, Fenner and Smith Inc. and
                                Salomon Smith Barney.(vi)

               10.5.1           Agreement with Respect to Redemption or
                                Repurchase of Subordinated Notes, dated
                                September 10, 1997(ii)

               10.6             Amended and Restated Limited Liability Company
                                Agreement of Waterford Gaming, L.L.C., dated as
                                of March 17, 1999 by Waterford Group, L.L.C.(vi)

               10.7             Note Purchase Agreement, dated as of October 19,
                                1996, among Sun International Hotels Limited,
                                Waterford Gaming, L.L.C. and Trading Cove
                                Associates.(i)
</Table>

                                       48
<Page>

<Table>
               <S>              <C>
               10.8             Note Purchase Agreement, dated as of September
                                29, 1995, between the Mohegan Tribal Gaming
                                Authority and Sun International Hotels Limited
                                relating to the Subordinated Notes.(i)

               10.9             Management Agreement, dated as of July 28, 1994,
                                between the Mohegan Tribe of Indians of
                                Connecticut and Trading Cove Associates.(i)

               10.10            Management Services Agreement, dated September
                                10, 1997.(ii)

               10.11            Development Services Agreement, dated September
                                10, 1997.(ii)

               10.12            Subdevelopment Services Agreement, dated
                                September 10, 1997.(ii)

               10.13            Completion Guarantee and Investment Banking and
                                Financing Arrangement Fee Agreement, dated
                                September 10, 1997.(ii)

               10.14            Settlement and Release Agreement, dated January
                                6, 1998, by and among Leisure Resort Technology,
                                Inc., Lee R. Tyrol, Trading Cove Associates,
                                Slavik Suites, Inc., LMW Investments, Inc., RJH
                                Development Corp., Waterford Gaming, L.L.C. and
                                Sun Cove Limited (now Kerzner Investments
                                Connecticut, Inc.).(iii)

               10.15            Waiver and Acknowledgment of Noteholder.(iv)

               10.16            Relinquishment Agreement, dated February 7,
                                1998, between the Mohegan Tribal Gaming
                                Authority and Trading Cove Associates.(v)

               10.17            Development Services Agreement, dated February
                                7, 1998, between the Mohegan Tribal Gaming
                                Authority and Trading Cove Associates.(v)

               10.18            Agreement, dated September 28, 1998, by and
                                among, Waterford Gaming, L.L.C., Slavik Suites,
                                Inc., LMW Investments, Inc., Len Wolman, Mark
                                Wolman, Stephan F. Slavik, Sr. and Del J. Lauria
                                (Len Wolman's Employment Agreement).(v)

               10.19            Agreement Relating to Development Services,
                                dated as of February 9, 1998, between Trading
</Table>

                                       49
<Page>

<Table>
               <S>              <C>
                                Cove Associates and Sun International Management
                                Limited.(vi)

               10.20            Local Construction Services Agreement, dated as
                                of February 9, 1998 between Sun International
                                Management Limited and Wolman Construction,
                                L.L.C.(vi)

               10.21            Escrow Deposit Agreement, dated as of the 3rd
                                day of March 1999, by and among the Mohegan
                                Tribal Gaming Authority and First Union National
                                Bank, as Defeasance Agent.(vi)

               21.1             Subsidiaries of Waterford Gaming, L.L.C.(i)

               21.2             Subsidiaries of Waterford Gaming Finance Corp.
                                (i)
</Table>

     (i)    Incorporated by reference to the Registrant's Registration Statement
            on Form S-4, Securities and Exchange Commission File No. 333-17795,
            declared effective on May 15, 1997.

     (ii)   Incorporated by reference to the Registrant's Quarterly Report on
            Form 10-Q for the period ended September 30, 1997, Commission File
            No. 333-17795, as accepted by the Commission on November 14, 1997.

     (iii)  Incorporated by reference to the Registrant's Annual Report on Form
            10-K for the fiscal year ended December 31, 1997, Commission File
            No. 333-17795, as accepted by the Commission on March 30, 1998.

     (iv)   Incorporated by reference to the Registrant's Quarterly Report on
            Form 10-Q for the period ended March 31, 1998, Commission File No.
            333-17795, as accepted by the Commission on May 14, 1998.

     (v)    Incorporated by reference to the Registrant's Quarterly Report on
            Form 10-Q for the period ended September 30, 1998, Commission File
            No. 333-17795, as accepted by the Commission on November 13, 1998.

     (vi)   Incorporated by reference to the Registrant's Quarterly Report on
            Form 10-Q for the period ended March 31, 1999, Commission File No.
            333-17795 as accepted by the Commission on May 17, 1999.

     (vii)  Incorporated by reference to the Registrant's Quarterly Report on
            Form 10-Q for the period ended March 31, 2001, Commission File No.
            333-17795 as accepted by the Commission on May 14, 2001.

                                       50
<Page>

          (b)  FINANCIAL STATEMENT SCHEDULES

INDEX TO FINANCIAL STATEMENTS

<Table>
        <S>                                                             <C>
        WATERFORD GAMING, L.L.C.
        Report of Independent Accountants                               F-1
        Financial Statements:
        Balance Sheets as of December 31, 2002 and 2001                 F-2
        Statements of Income for the years ended
                December 31, 2002, 2001 and 2000                        F-3
        Statements of Changes in Member's Deficiency for the
                years ended December 31, 2002, 2001 and 2000            F-4
        Statements of Cash Flows for the years ended
                December 31, 2002, 2001 and 2000                        F-5
        Notes to Financial Statements                                   F-6

        TRADING COVE ASSOCIATES
        Report of Independent Accountants                               F-23
        Balance Sheets as of December 31, 2002 and 2001                 F-24
        Statements of Operations for the years ended
                December 31, 2002, 2001 and 2000                        F-25
        Statements of Changes in Partner's Capital
                (Deficiency) for the years ended
                December 31, 2002, 2001 and 2000                        F-26
        Statements of Cash Flows for the years ended
                December 31, 2002, 2001 and 2000                        F-27
        Notes to Financial Statements                                   F-28
</Table>

                                        51



<Page>

                        REPORT OF INDEPENDENT ACCOUNTANTS


TO THE MEMBER OF
WATERFORD GAMING, L.L.C.


In our opinion, the accompanying balance sheets and the related statements of
income, changes in member's deficiency and of cash flows present fairly, in
all material respects, the financial position of Waterford Gaming, L.L.C.
(the "Company") at December 31, 2002 and 2001 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2002 in conformity with accounting principles generally accepted
in the United States of America. These financial statements are the
responsibility of the Company's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted
our audits of these statements in accordance with auditing standards
generally accepted in the United States of America which require that we plan
and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements, assessing the accounting principles used and
significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

As discussed in Note 8, the Company has restated its financial statements to
give effect to the restatment by its equity investee, Trading Cove Associates.


PricewaterhouseCoopers, LLP


March 18, 2003, except Notes 1 through 5 and 8 as to which the date is May 30,
2003.

                                       F-1
<Page>

                            Waterford Gaming, L.L.C.

                                 Balance Sheets

                           December 31, 2002 and 2001


<Table>
<Caption>
                                                                                       2002                     2001
                                                                               (Restated see Note 8)    (Restated see Note 8)
                                                                                  ---------------          ---------------
<S>                                                                               <C>                      <C>
                                 ASSETS

Current assets
     Cash and cash equivalents                                                    $    4,658,602           $    3,570,949
     Restricted investments                                                           10,344,130               26,189,434
     Other current assets                                                                  7,965                    9,072
                                                                                  ---------------          ---------------

        Total current assets                                                          15,010,697               29,769,455
                                                                                  ---------------          ---------------

Trading Cove Associates - equity investment                                           11,972,338               10,639,562
Beneficial interest - Leisure Resort Technology, Inc.                                  4,540,039                4,918,029
Deferred financing costs, net of accumulated amortization of $1,391,838
        and $1,024,974 at December 31, 2002 and 2001, respectively                     2,643,338                3,010,202
Fixed assets, net of accumulated depreciation of $42,222 and $31,442 at
        December 31, 2002 and 2001, respectively                                          11,696                   22,476
                                                                                  ---------------          ---------------

        Total assets                                                              $   34,178,108           $  48,359,724
                                                                                  ===============          ===============

                  LIABILITIES AND MEMBER'S DEFICIENCY

Current liabilities
     Accrued expenses and accounts payable                                        $      111,996           $      171,610
     Accrued interest on senior notes payable                                          3,021,196                3,228,946
                                                                                  ---------------          ---------------

        Total current liabilities                                                      3,133,192                3,400,556
                                                                                  ---------------          ---------------

9-1/2% senior notes payable                                                          108,007,000              115,434,000
                                                                                  ---------------          ---------------

        Total liabilities                                                            111,140,192              118,834,556
                                                                                  ---------------          ---------------

Contingencies

Member's deficiency                                                                  (76,962,084)             (70,474,832)
                                                                                  ---------------          ---------------

        Total liabilities and member's deficiency                                 $   34,178,108           $   48,359,724
                                                                                  ===============          ===============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-2
<Page>

                            Waterford Gaming, L.L.C.

                              Statements of Income

              For the years ended December 31, 2002, 2001 and 2000


<Table>
<Caption>
                                                                        2002                  2001                 2000
                                                                (Restated see Note 8) (Restated see Note 8) (Restated see Note 8)
                                                                   ---------------       ---------------      ---------------
     <S>                                                           <C>                   <C>                  <C>
     Expenses
          Interest expense                                         $   11,080,139        $   11,560,994       $   11,641,049
          Salaries - related parties                                      835,086               707,153              660,037
          General and administrative                                      431,223               555,819              526,526
          12-3/4% senior notes tender expense                                 ---                   ---              (90,000)
          Amortization of beneficial interest -
             Leisure Resort Technology, Inc.                              377,990               377,990              377,990
          Amortization on deferred financing costs                        366,864               366,864              363,985
          Depreciation                                                     10,780                10,780               10,780
                                                                   ---------------       ---------------     ----------------

                  Total expenses                                       13,102,082            13,579,600           13,490,367
                                                                   ---------------       ---------------     ----------------


          Interest and dividend income                                    534,012             1,330,711            1,894,738
          Equity in income of
             Trading Cove Associates                                   24,601,380            18,823,461           14,068,067
                                                                   ---------------       ---------------     ----------------

                  Net income                                       $   12,033,310        $    6,574,572       $    2,472,438
                                                                   ===============       ===============     ================
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-3
<Page>

                            Waterford Gaming, L.L.C.

                  Statements of Changes in Member's Deficiency

              For the years ended December 31, 2002, 2001 and 2000

<Table>
     <S>                                                         <C>
     Balance, January 1, 2000 (Restated see Note 8)              $ (40,051,000)

     Distributions                                                 (37,731,182)

     Net income                                                      2,472,438
                                                              -----------------

     Balance, December 31, 2000 (Restated see Note 8)              (75,309,744)

     Distributions                                                  (1,739,660)

     Net income                                                      6,574,572
                                                              -----------------

     Balance, December 31, 2001 (Restated see Note 8)              (70,474,832)

     Distributions                                                 (18,520,562)

     Net income                                                     12,033,310
                                                              -----------------

     Balance, December 31, 2002 (Restated see Note 8)            $ (76,962,084)
                                                              =================
</Table>

The accompanying notes are an integral part of these financial statements.

                                       F-4
<Page>

                            Waterford Gaming, L.L.C.

                            Statements of Cash Flows

              For the years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                                                        2002                  2001                 2000
                                                                (Restated see Note 8) (Restated see Note 8) (Restated see Note 8)
                                                                   ---------------       ---------------      ---------------
     <S>                                                           <C>                   <C>                  <C>
     Cash flows from operating activities
        Net income                                                 $   12,033,310        $   6,574,572        $   2,472,438
                                                                  ---------------       ---------------      ---------------

        Adjustments to reconcile net income
           to net cash provided by (used in) operating activities
              Amortization                                                744,854              744,854              741,975
              Depreciation                                                 10,780               10,780               10,780
              Equity in income of Trading Cove Associates             (24,601,380)         (18,823,461)         (14,068,067)
              Operating distributions from Trading Cove Associates     22,718,604            1,370,975                  ---
              Changes in operating assets and liabilities
                 Decrease in due from Trading Cove Associates                 ---           15,580,878            9,280,914
                 Decrease in other current assets                           1,107               17,424               60,325
                 (Decrease) increase in accrued expenses
                  and accounts payable                                    (59,614)              37,996               14,134
                 Decrease in accrued interest on senior notes payable    (207,750)            (119,077)             (69,036)
                                                                  ---------------       ---------------      ---------------
                         Total adjustments                             (1,393,399)          (1,179,631)          (4,028,975)
                                                                  ---------------       ---------------      ---------------

                         Net cash provided by (used in)
                              operating activities                    10,639,911             5,394,941           (1,556,537)
                                                                  ---------------       ---------------      ---------------

     Cash flows from investing activities
        Contributions to Trading Cove Associates                      (1,000,000)           (1,350,000)          (1,200,000)
        Distributions from Trading Cove Associates                     1,550,000               800,000            1,723,112
        Sales and (purchases) of restricted investments - net         15,845,304               698,647          (15,080,989)
                                                                  ---------------       ---------------      ---------------
                         Net cash provided by (used in)
                              investing activities                    16,395,304               148,647          (14,557,877)
                                                                  ---------------       ---------------      ---------------

     Cash flows from financing activities
        Distributions to members                                     (18,520,562)           (1,739,660)         (37,731,182)
        Redemption of  9-1/2% senior notes                            (7,427,000)           (4,257,000)          (2,468,000)
                                                                  ---------------       ---------------      ---------------
                         Net cash used in
                              financing activities                   (25,947,562)           (5,996,660)         (40,199,182)
                                                                  ---------------       ---------------      ---------------

     Net increase (decrease) in cash and cash equivalents              1,087,653              (453,072)         (56,313,596)

     Cash and cash equivalents at beginning of year                    3,570,949              4,024,021          60,337,617

                                                                  ---------------       ---------------      ---------------
     Cash and cash equivalents at end of year                     $    4,658,602         $    3,570,949       $    4,024,021
                                                                  ===============       ===============      ===============

     Supplemental disclosure of cash flow information:
        Cash paid during the year for interest                    $   11,287,889         $   11,680,071       $   11,710,084
                                                                  ===============       ===============      ===============

     Supplemental disclosure of non-cash financing activities:
        Deferred financing costs overaccrued through accrued
            expenses and accounts payable                         $          ---         $          ---       $      (40,000)
                                                                  ===============       ===============      ===============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-5
<Page>

                            WATERFORD GAMING, L.L.C.

                          NOTES TO FINANCIAL STATEMENTS

ORGANIZATION, MEMBERSHIP AGREEMENT, CHANGE OF OWNERSHIP AND MEMBER ALLOCATIONS:

Waterford Gaming, L.L.C. (the "Company"), a Delaware limited liability company,
was formed on September 30, 1996. The Company initially acquired and owns a
partnership interest in Trading Cove Associates ("TCA"), a Connecticut general
partnership, and invested in certain notes issued by the Mohegan Tribal Gaming
Authority (the "Authority"). The Company is governed by a Board of Directors
pursuant to the limited liability company agreement (the "Agreement"). In
connection with the issuance by the Company and the Company's wholly-owned
subsidiary, Waterford Gaming Finance Corp. ("Finance"), of $125 million of
9-1/2% senior notes, which mature March 15, 2010 (the "$125 Million Senior
Notes"), each of Slavik Suites, Inc. ("Slavik") and LMW Investments, Inc.
("LMW") contributed their respective interests in the Company as of March 17,
1999 to a Delaware limited liability company, Waterford Group, L.L.C.
("Waterford Group"). Waterford Group is now the sole member of the Company.
Slavik and LMW own Waterford Group in the same respective interest as they had
in the Company which are as follows:

<Table>
          <S>                                    <C>
          Slavik Suites, Inc.                     67.7967%
          LMW Investments, Inc.                   32.2033%
                                                 ---------
                                                 100.0000%
                                                 =========
</Table>

The Agreement is effective until September 30, 2020 and may be terminated by the
member or any other event as stated in the Agreement.

As contemplated in the $125 Million Senior Notes offering, the Company
distributed $37,050,000 during March 1999. During December 1999, the Company
received a payment on notes it held due from the Authority and a distribution
from TCA. In connection with such offering the Company also distributed
approximately $34,672,000 to Waterford Group during January 2000. On November
1, 2002 the Company distributed $15,000,000 to Waterford Group in accordance
with the terms of the indenture relating to the $125 Million Senior Notes
(the "Indenture"). In addition tax distributions totaling approximately
$9,206,000 were made by the Company during 2002, 2001, 2000 and 1999. On
January 13, 2003 the Company distributed $1,290,900 to Waterford Group as a
tax distribution, in accordance with the terms of the Indenture.

1.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Accounting Method

The accrual method of accounting is used in the preparation of the financial
statements.

Cash and Cash Equivalents

Cash and cash equivalents represent cash and short-term, highly liquid
investments with original maturities of three months or less.

Restricted Investments

Restricted investments at December 31,2002 are principally comprised of an
investment in a Home Loan Bank Discount Note, which was purchased at a discount
of 1.64% and matured March 7, 2003, and an investment in the Federated Treasury
Obligations Fund, and at December 31, 2001 are principally comprised of an
investment in a Federal National Mortgage Association Discount Note, which was
purchased at a discount of 3.65% and matured March 6, 2002. The investments
represent a restricted investment fund that has been established with a trustee
in terms of the Indenture and is reported at cost plus accrued interest, which
approximates market.

Trading Cove Associates - Equity Investment

The Company's equity investment in TCA is accounted for utilizing the equity
method. Included in the investment is the purchase price of $10,600,000 paid
to a corporation for their 12.5% interest in TCA. This amount was initially
amortized on a straight-line basis over a 7-year term, which represents the
term of the management agreement between TCA and the Authority. Then
beginning in March 1999, as a result of the Relinquishment Agreement, as
defined, becoming effective the remaining balance is being amortized over 189
months beginning April 1999.

The Company receives distributions from TCA in accordance with an Amended and
Restated Omnibus Termination Agreement. The amount of distributions received
relies on the fees earned by TCA pursuant to its Relinquishment Agreement and
Development Agreement with the Authority. Distributions are recorded when
received.

Deferred Financing Costs

All costs incurred with the issuance of the Company's and Finance's $125 Million
Senior Notes, were capitalized and are amortized on a straight-line basis over
the 11-year term of the $125 Million Senior Notes.

Fixed Assets

Fixed Assets are stated at cost. Depreciation is charged against income over the
estimated life of the fixed assets. The estimated life is five years for
furniture and fixtures and leasehold improvements.

Income Taxes

The Company, as a wholly owned subsidiary of Waterford Group, does not file
federal or state income tax returns. As a result, no provision for federal and
state income taxes has been made in the accompanying financial statements.

Concentration of Credit Risk

The Company's interest in TCA is its principal asset and source of income and
cash flow. The Company anticipates regular distributions from TCA based upon the
operating results of the Authority and payments of the related Relinquishment
Fees, as defined, and Development Fee, as defined, by the Authority. Financial
instruments, which potentially subject the Company to a concentration of credit
risk, principally consist of cash in excess of the financial institutions'
insurance limits. The Company invests available cash with high credit quality
institutions.

Fair Value of Financial Instruments

Fair values generally represent estimates of amounts at which a financial
instrument could be exchanged between willing parties in a current transaction
other than forced liquidation.

Fair value estimates are subjective and are dependent on a number of significant
assumptions, based on management's judgment regarding future expected loss
experience, current economic conditions, risk characteristics of various
financial instruments, and other factors. In addition, technical pronouncements
allow a wide range of valuation techniques, therefore, comparisons between
entities, however similar, may be difficult.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles in the United States of America requires management to
make estimates and assumptions that affect the reported amounts of assets and
liabilities and disclosure of contingent assets and liabilities at the date of
the financial statements, as well as the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.

                                       F-6
<Page>

2. TRADING COVE ASSOCIATES:

TCA was organized on July 27, 1993. The primary purpose of TCA has been,

     a)   to assist the Mohegan Tribe of Indians of Connecticut (the "Tribe")
          and the Authority, in obtaining federal recognition,

     b)   to negotiate the tribal-state compact with the State of Connecticut on
          behalf of the Tribe,

     c)   to obtain financing for the development of the Mohegan Sun Casino (the
          "Mohegan Sun"),

     d)   to negotiate the Amended and Restated Gaming Facility Management
          Agreement (the "Management Agreement"),

     e)   to oversee all operations of the Mohegan Sun pursuant to the terms of
          the Management Agreement until midnight December 31, 1999, and

     f)   to participate in the design and development of the Mohegan Sun.

The Mohegan Sun commenced operations on October 12, 1996. From the opening of
Mohegan Sun until January 1, 2000, TCA oversaw the Mohegan Sun's day-to-day
operations.

TCA's Partnership Agreement (the "TCA Partnership Agreement") will terminate on
December 31, 2040, or earlier, in accordance with its terms. The Company has a
50% partnership interest in TCA. The remaining 50% interest is owned by Kerzner
Investments Connecticut, Inc. ("Kerzner Investments"), formerly Sun Cove
Limited, an affiliate of Kerzner International Limited ("Kerzner
International").

As of December 31, 2002, 2001 and 2000 the following summary information relates
to TCA. Total revenues and net income are for the years ended December 31, 2002,
2001 and 2000.

<Table>
<Caption>
                                                 2002             2001             2000
                                            (As restated)    (As restated)    (As restated)
                                            -------------    -------------    -------------
<S>                                         <C>              <C>              <C>
Total current assets                        $ 24,501,961     $ 20,628,646     $ 18,463,719
                                            ============     ============     ============

Total assets                                $ 27,166,723     $ 23,522,567     $ 21,590,381
Total liabilities                            (10,521,195)     (10,422,645)     (45,375,486)
                                            ------------     ------------     ------------
Partners' capital (deficiency)              $ 16,645,528     $ 13,099,922     $(23,785,105)
                                            ============     ============     ============

Total revenue                               $ 59,065,491     $ 46,969,145     $ 44,516,005
                                            ============     ============     ============

Net income                                  $ 55,082,815     $ 43,526,978     $ 34,016,184
                                            ============     ============     ============

As of December 31, 2002, 2001 and 2000, the following summarizes the Company's
investment in TCA.

Company's interest:
  Trading Cove Associates -
   equity investment, beginning
   of year                                  $ 10,639,562     $ (7,362,924)    $(20,907,876)
  Contributions                                1,000,000        1,350,000        1,200,000
  Distributions                              (24,268,604)      (2,170,975)      (1,723,112)
                                            ------------     ------------     ------------

                                             (12,629,042)      (8,183,899)     (21,430,988)
                                            ------------     ------------     ------------
Income from Trading Cove
  Associates                                  25,041,408       19,263,489       14,508,095
Amortization of interests
  purchased                                     (440,028)        (440,028)        (440,028)
                                            ------------     ------------     ------------
Equity in income of
  Trading Cove Associates                     24,601,380       18,823,461       14,068,067
                                            ------------     ------------     ------------
Trading Cove Associates -
  equity investment, end of year            $ 11,972,338     $ 10,639,562     $ (7,362,921)
                                            ============     ============     ============
</Table>

TRADING COVE ASSOCIATES - MATERIAL AGREEMENTS

                                       F-7
<Page>

RELINQUISHMENT AGREEMENT

On February 7, 1998, TCA and the Authority entered into the Relinquishment
Agreement (the "Relinquishment Agreement"). Under the terms of the
Relinquishment Agreement, TCA continued to manage the Mohegan Sun under the
Management Agreement until midnight December 31, 1999, and on January 1, 2000,
the Management Agreement terminated and the Tribe assumed day-to-day management
of the Mohegan Sun.

Under the Relinquishment Agreement, to compensate TCA for terminating its rights
under the Management Agreement and the Hotel/Resort Management Agreement, the
Authority agreed to pay to TCA a fee (the "Relinquishment Fees") equal to 5% of
Revenues, as defined in the Relinquishment Agreement, generated by the Mohegan
Sun during the 15-year period commencing on January 1, 2000, including revenue
generated by the Project Sunburst expansion project (the "Project Sunburst
expansion").

The Relinquishment Fees are divided into senior relinquishment payments and
junior relinquishment payments, each of which equals 2.5% of "Revenues".
Revenues are defined in the Relinquishment Agreement as gross gaming revenues
(other than Class II gaming revenue, i.e. bingo) and all other facility
revenues. Such revenue includes hotel revenues, food and beverage sales, parking
revenues, ticket revenues and other fees or receipts from the convention/events
center in the Project Sunburst expansion and all rental or other receipts from
lessees, licensees and concessionaires operating in the facility, but not the
gross receipts of such lessees, licensees and concessionaires. Such revenues
exclude revenues generated by any other expansion of the Mohegan Sun.

Senior relinquishment payments are payable quarterly in arrears commencing on
April 25, 2000 for the quarter ended March 31, 2000, and the junior
relinquishment payments are payable semi-annually in arrears commencing on July
25, 2000 for the six months ended June 30, 2000, assuming sufficient funds are
available after satisfaction of the Tribe's senior obligations, as defined in
the Relinquishment Agreement.

For the years ended December 31, 2002, 2001 and 2000 the Relinquishment Fees
earned were $58,508,703, $45,715,318 and $41,003,849, respectively. The amount
of Relinquishment Fees reported are based upon amounts reported to TCA by the
Authority.

DEVELOPMENT AGREEMENT AND OTHER RELATED AGREEMENTS

On February 7, 1998, TCA and the Authority entered into the Development Services
Agreement (the "Development Agreement"). Pursuant to the Development Agreement,
TCA agreed to oversee the design, construction, furnishing, equipping and
staffing of the Project Sunburst expansion for a $14.0 million development fee
(the "Development Fee").

On May 24, 2000, TCA and the Authority agreed that TCA had performed and
completed all its obligations relating to the staffing of the Project Sunburst
expansion and that TCA has no further obligations relating to the staffing of
the Project Sunburst expansion.

The first phase of the Project Sunburst expansion, including the Casino of the
Sky, The Shops at Mohegan Sun, and the 10,000-seat Mohegan Sun Arena opened in
September 2001. In April 2002, 734 of the 1,200-hotel rooms in the 34-story
luxury hotel as well as the meeting and convention space and spa opened. The
balance of the 1,200-hotel rooms opened during June 2002. At December 31, 2002
the Project Sunburst expansion was substantially completed.

Pursuant to the Development Agreement, the Authority agreed to pay the
Development Fee to TCA quarterly beginning on January 15, 2000, based on
incremental completion of the Project Sunburst expansion as of each payment
date. The last payment of the Development Fee is to be paid on the Completion
Date, as defined in the Development Agreement, of the Project Sunburst
expansion. A summary of the quarterly Development Fee payments received by TCA
in accordance with the terms of the Development Agreement is as follows:

<Table>
<Caption>
          Date Received by TCA        Relinquishment Fee Received
           <S>                              <C>
           January 15, 2000                 $  1,372,000
           April 20, 2000                        896,000
           July 17, 2000                       1,260,000
           October 13, 2000                    1,372,000
           January 23, 2001                      588,000
           April 16, 2001                      1,582,000
           July 20, 2001                       2,212,000
           October 17, 2001                    1,974,000
           January 25, 2002                    1,260,000
           April 22, 2002                        413,000
           July 19, 2002                         581,000
           October 18, 2002                      238,000
           January 24, 2003                       84,000
                                            ------------
                                            $ 13,832,000
                                            ============
</Table>

                                       F-8
<Page>

The Development Agreement terminates after the earlier of the completion of the
Project Sunburst expansion or 10 years. In addition, each party has the right to
terminate the Development Agreement if there is a default or failure to perform
by the other party. The parties must submit disputes arising under the
Development Agreement to arbitration and each has agreed that punitive damages
may not be awarded to either party by an arbitrator. The Authority has waived
sovereign immunity for the purpose of permitting, compelling or enforcing
arbitration and has agreed to be sued by TCA in any court of competent
jurisdiction for the purposes of compelling arbitration or enforcing any
arbitration or judicial award arising out of the Development Agreement.

On February 9, 1998, TCA and Kerzner International Management Limited ("KIML),
an affiliate of Kerzner Investments, entered into the Agreement Relating to
Development Services (the "Development Services Agreement Phase II"). Pursuant
to the Development Services Agreement Phase II, TCA subcontracted with KIML, who
agreed to perform, those services assigned to KIML by TCA, in order to
facilitate TCA's fulfillment of its duties and obligations to the Authority
under the Development Agreement. KIML assigned the Development Services
Agreement Phase II to Kerzner Investments.

Pursuant to the Development Services Agreement Phase II, TCA pays to Kerzner
Investments a fee, as subcontractor (the "Development Services Fee Phase II"),
equal to 3% of the development costs of the Project Sunburst expansion,
excluding capitalized interest, less all costs incurred by TCA in connection
with the Project Sunburst expansion. The Development Services Fee Phase II is
paid on December 31, 1999, December 31, 2000 and on the Completion Date, as
defined in the Development Agreement with the final payment being made when the
actual development costs of the Project Sunburst expansion are known. TCA pays
the Development Services Fee Phase II from available cash flow, if any, in
accordance with an Amended and Restated Omnibus Termination Agreement. The total
of the Development Services Fee Phase II and TCA's costs related to the
development of Project Sunburst expansion will exceed the related revenue
received by TCA under the Development Agreement by approximately $16 million. At
December 31, 2002, approximately $10.2 million was payable by TCA to Kerzner
Investments pursuant to the Development Services Agreement Phase II.

Before KIML assigned the Development Services Agreement Phase II to Kerzner
Investments, it entered into the Local Construction Services Agreement (the
"Local Construction Services Agreement") with Wolman Construction, L.L.C.
("Construction"), pursuant to which Construction agreed to provide certain of
those services assigned to KIML by TCA pursuant to the Development Services
Agreement Phase II. KIML assigned the Local Construction Services Agreement to
Kerzner Investments. Pursuant to the Local Construction Services Agreement,
Kerzner Investments agreed to pay to Construction a fee equal to 20.83% of the
Development Services Fee Phase II as and when Kernzer Investments receives
payment from TCA in accordance with the Development Services Agreement Phase II.
Pursuant to a Letter Agreement, Construction has subcontracted with The Slavik
Company to provide certain services under the Local Construction Services
Agreement. In exchange for providing such services, Construction agreed that The
Slavik Company would be paid a fee equal to 14.30% of its fee under the Local
Construction Services Agreement.

MANAGEMENT AGREEMENT

On August 30, 1995 TCA and the Tribe entered into the Management Agreement.
After entering into the Management Agreement, the Tribe assigned it to the
Authority.

Until midnight December 31, 1999, TCA was the exclusive manager of the Mohegan
Sun and earned a management fee from the Authority pursuant to the Management
Agreement (the "Management Fees"). The Management Fees were paid monthly (the
final payment was received by TCA from the Authority on January 25, 2000) and
were calculated in three tiers based upon net revenues of the Mohegan Sun.

                                       F-9
<Page>

AMENDED AND RESTATED OMNIBUS TERMINATION  AGREEMENT

Effective March 18, 1999, the Amended and Restated Omnibus Termination Agreement
(the " Amended and Restated Omnibus Termination Agreement") was entered into by
TCA, Kerzner International, the Company, KIML, LMW, Kerzner Investments, Slavik
and Construction. The Amended and Restated Omnibus Termination Agreement (i)
terminated the memorandum of understanding dated February 7, 1998; and (ii)
effective January 1, 2000 terminated a) the Amended and Restated Omnibus
Financing Agreement, b) completion guarantee and investment banking and
financing arrangement fee agreement (the "Financing Arrangement Agreement"); c)
the Management Services Agreement; d) the Organizational and Administrative
Services Agreement; e) the Marketing Services Agreement; and f) a Letter
Agreement relating to expenses dated October 19, 1996.

In consideration for the termination of such agreements, TCA agreed to use its
cash to pay the following obligations in the priority set forth below:

     (a)  First, to pay all unpaid amounts which may be due under the terminated
          Letter Agreement and to pay certain affiliates of the Company and to
          Kerzner Investments a percentage of an annual fee of $2.0 million less
          the actual expenses incurred by TCA during such year. Such annual fee
          is payable in equal quarterly installments beginning March 31, 2000
          and ending December 31, 2014. For the years ended December 31, 2002
          and 2001, $0 and $1,712,791,($856,396 to Kerzner Investments and
          $856,395 to affiliates of the Company), respectively, have been paid
          and incurred by TCA in terms of the first priority.

     (b)  Second, to return all capital contributions made by the partners of
          TCA after September 29, 1995. TCA anticipates making capital calls to
          fund expenses related to the development of the Project Sunburst
          expansion, and these capital calls will be repaid, based on cash flow,
          in the quarter following the quarter in which the capital call was
          made. From January 1, 2000 to December 31, 2002 these capital
          contributions aggregated $7,100,000. From January 1, 2000 to December
          31, 2002 $6,700,000 has been repaid to the partners of TCA, 50% to the
          Company and 50% to Kerzner Investments.

          As of December 31, 2002, $400,000 in capital contributions remained
          outstanding. On January 28, 2003 a cash distribution of $200,000 was
          made to each partner.

     (c)  Third, to pay any accrued amounts for obligations performed prior to
          January 1, 2000 under the Financing Arrangement Agreement. All such
          required payments were made during 2000.

     (d)  Fourth, to make the payments set forth in the agreements relating to
          the Development Services Agreement Phase II and the Local Construction
          Services Agreement. No such payments are required or due at December
          31, 2002. The accrued liability to Kerzner Investments with respect to
          such fee at December 31, 2002 was approximately $10,216,000.

     (e)  Fifth, to pay Kerzner Investments an annual fee of $5.0 million
          payable in equal quarterly installments of $1.25 million beginning
          March 31, 2000 and ending December 31, 2006. On January 28, 2003 and
          January 28, 2002, $1,250,000 was distributed in terms of the fifth
          priority.

     (f)  Sixth, to pay any accrued amounts for obligations performed with
          respect to periods prior to January 1, 2000 under the Management
          Services Agreement, the Organizational and Administrative Services
          Agreement and the Marketing Services Agreement. The final required
          payments under this priority were made during 2001.

     (g)  Seventh, for the period beginning March 31, 2000 and ending December
          31, 2014, to pay each of Kerzner Investments and the Company
          twenty-five percent (25%)of the relinquishment payments as
          distributions. On January 28, 2003 and January 28, 2002, $22,043,000
          ($11,021,500 to Kerzner Investments and $11,021,500 to the Company)
          and $16,715,209 ($8,357,605 to Kerzner Investments and $8,357,604 to
          the Company), respectively, was distributed by TCA in terms of the
          seventh priority.

     (h)  Eighth, to distribute all excess cash.

In addition, TCA shall not make any distributions pursuant to the Amended and
Restated Omnibus Termination Agreement until it has annually distributed to its
partners pro rata, the amounts related to its partners tax obligations as
described in Section 3.03a(1) of the TCA Partnership Agreement less twice the
amount of all other funds paid or distributed to the Company during such year
pursuant to the Amended and Restated Omnibus Termination Agreement.

To the extent TCA does not have adequate cash to make the payments pursuant to
the Amended and Restated Omnibus Termination Agreement, such amount due shall be
deferred without the accrual of interest until TCA has sufficient cash to pay
them.

AMENDED AND RESTATED OMNIBUS FINANCING AGREEMENT

Until January 1, 2000 TCA's primary source of revenue was Management Fees. Those
fees were utilized by TCA to make subcontract payments to partners and
affiliates pursuant to the Amended and Restated Omnibus Financing Agreement
which was terminated effective January 1, 2000.

                                      F-10
<Page>

3. BENEFICIAL INTEREST - LEISURE RESORT TECHNOLOGY, INC.:

On January 6, 1998, pursuant to the settlement and release agreement described
in Note 6 below, the Company paid $5,000,000 to Leisure Resort Technology, Inc.
("Leisure") and, among other things, Leisure gave up (a) its beneficial interest
in 5% of certain fees and excess cash flows, as defined, of TCA and (b) any
other claims it may have had against the Company, TCA and TCA's partners and
former partner. On August 6, 1997, Leisure, a former partner of TCA, filed a
lawsuit against TCA, Kerzner Investments, RJH Development Corp. (a former
partner of TCA), the Company and its owners, claiming breach of contract, breach
of fiduciary duties and other matters in connection with the development of the
Mohegan Sun by TCA. In connection with the settlement of all matters related to
such suit, pursuant to a settlement and release agreement, the Company agreed to
acquire Leisure's interests in TCA. As a result of this acquisition, Leisure no
longer has the right to 5% of the Organizational and Administrative fee, as
defined in the Organizational and Administrative Services Agreement, and 5% of
TCA's Excess Cash as defined in TCA's partnership agreement, and the Company is
now entitled to such fees and such cash.

On March 17, 1999, the $65 Million Senior Notes were retired, and on March 18,
1999, the Company paid an additional $2,000,000 to Leisure pursuant to the
settlement and release agreement. On January 7, 2000, Leisure filed a complaint
against the Company and certain other defendants relating to the settlement and
release agreement. For a description of the complaint, see Note 6 to these
financial statements.

Until March 17, 1999, the payments made to Leisure pursuant to the settlement
and release agreement and associated costs were amortized on a straight-line
basis over the remaining term of the Management Agreement. As a result of the
Relinquishment Agreement becoming effective, the remaining balance will be
amortized over 189 months beginning March 18, 1999. Accumulated amortization at
December 31, 2002 and 2001, amounts to $2,517,172 and $2,139,182, respectively.

4. $125 MILLION 9-1/2% SENIOR NOTES PAYABLE:

On March 17, 1999, the Company and Finance issued the $125 Million Senior Notes.
Payment of the principal of, and interest on, the $125 Million Senior Notes is
pari passu in right of payment with all of the Company's and Finance's senior
debt, and effectively subordinate in right of payment to all of the Company's
and Finance's existing and future secured and subordinated debts.

The $125 Million Senior Notes bear interest at a rate of 9.50% per annum,
payable semi-annually in arrears on March 15 and September 15. The principal
amount of the $125 Million Senior Notes is payable on March 15, 2010.

The Company and Finance may elect to redeem all or any of the $125 Million
Senior Notes at any time on or after March 15, 2004 at a redemption price equal
to a percentage of the principal amount of notes being redeemed plus accrued
interest. Such percentage is set forth in the following table:

<Table>
<Caption>
If notes are redeemed                                Percentage
---------------------                                ----------
<S>                                                  <C>
after March 14, 2004 but
on or before March 14, 2005                          105.182%

after March 14, 2005 but
on or before March 14, 2006                          104.318%

after March 14, 2006
but on or before March 14, 2007                      103.455%

after March 14, 2007 but
on or before March 14, 2008                          102.591%

after March 14, 2008
but on or before March 14, 2009                      101.727%

after March 14, 2009
but on or before March 14, 2010                      100.864%

after March 14, 2010                                     100%
</Table>

The $125 Million Senior Notes provide that upon the occurrence of a Change of
Control (as defined in the Indenture), the holders thereof will have the option
to require the redemption of the $125 Million Senior Notes at a redemption price
equal to 101% of the principal amount thereof plus accrued interest.

                                      F-11
<Page>

Pursuant to the terms of the Indenture, if the Company and Finance have any
Company Excess Cash, as defined in the Indenture, on February 1 or August 1 of
any year, they must use such Company Excess Cash to redeem the $125 Million
Senior Notes on the March 15 and September 15 following such dates. Any such
redemption will be made at a price equal to a percentage of the principal amount
being redeemed. Such percentage is set forth in the following table:

<Table>
<Caption>
If notes are redeemed with                Redemption price (expressed as a
Company Excess Cash              percentage of  principal amount being redeemed)
-------------------------        -----------------------------------------------
<S>                                                  <C>
after March 14, 1999 but
on or before March 14, 2000                          109.500%

after March 14, 2000 but
on or before March 14, 2001                          108.636%

after March 14, 2001 but
on or before March 14, 2002                          107.773%

after March 14, 2002 but
on or before March 14, 2003                          106.909%

after March 14, 2003 but
on or before March 14, 2004                          106.045%

after March 14, 2004 but
on or before March 14, 2005                          105.182%

after March 14, 2005 but
on or before March 14, 2006                          104.318%

after March 14, 2006
but on or before March 14, 2007                      103.455%

after March 14, 2007 but
on or before March 14, 2008                          102.591%

after March 14, 2008
but on or before March 14, 2009                      101.727%

after March 14, 2009
but on or before March 14, 2010                      100.864%

after March 14, 2010                                     100%
</Table>

The Company and Finance have periodically redeemed portions of the $125
Million Senior Notes with Company Excess Cash, as defined, pursuant to the
terms of the Indenture. The table below summarizes (a) the amount of Company
Excess Cash that the Company and Finance have determined was available for
the mandatory redemption of the $125 Million Senior Notes on February 1st and
August 1st of each applicable year pursuant to the terms of the Indenture,
(b) the aggregate principal amount of $125 Million Notes redeemed with such
Company Excess Cash, (c) the date on which such redemption was consummated,
and (d) the redemption price at which such redemption was made.

<Table>
<Caption>
                                                                                                         Redemption price
                          Company Excess Cash      Principal amount of                            (expressed as a percentage of
Date                        (approximately)          notes redeemed        Date of Redemption     principal amount being redeemed)
----------------          -------------------      -------------------     ------------------     --------------------------------
<S>                       <C>                      <C>                     <C>                                <C>
August 1, 1999            $  8,983,000             $ 2,841,000             September 15, 1999                 109.500%

February 1, 2000          $  8,276,000             $ 2,277,000             March 15, 2000                     108.636%

August 1, 2000            $  5,902,000             $   191,000             September 15, 2000                 108.636%

February 1, 2001          $  6,173,000             $   452,000             March  15,  2001                   107.773%

August 1, 2001            $  9,765,000             $ 3,805,000             September  15, 2001                107.773%

February 1, 2002          $  9,793,000             $ 4,031,000             March 15, 2002                     106.909%

August 1, 2002            $  8,923,000             $ 3,396,000             September 15, 2002                 106.909%

February 1, 2003          $ 11,131,000             $ 5,658,000             March 15, 2003                     106.045%
</Table>

                                      F-12
<Page>

In certain circumstances, if either the Company or Kerzner Investments, its
partner in TCA, exercises the option to buy or sell partnership interests in
TCA, the Company and Finance must redeem the $125 Million Senior Notes.

The Indenture contains certain affirmative and negative covenants customarily
contained in such agreements, including without limitation, covenants that
restrict, subject to specified exceptions the Company's and Finance's ability to
(i) borrow money, (ii) make distributions on its equity interests or certain
other restricted payments, (iii) use assets as security in other transactions,
(iv) make investments, (v) sell other assets or merge with other companies, and
(vi) engage in any business except as currently conducted or contemplated or
amend their relationship with TCA. The Indenture also provides for customary
events of default and the establishment of a restricted investment account with
a trustee for interest reserves.

The fair market value of the Company's long term debt at December 31, 2002 and
2001 is estimated to be approximately $111,787,000 and $118,897,000
respectively, based on the quoted market price for the $125 Million Senior
Notes.

On April 15, 2003, the Company and Finance commenced an offer to repurchase all
of the $125 Million Senior Notes prior to maturity and a solicitation of
consents to amend the Indenture and terminate the Security and Control Agreement
(the "Security Agreement") granting a security interest in the interest reserve
account to the trustee as securities intermediary. Such amendments would have
the effect of eliminating substantially all of the restrictive covenants and
security provisions, including termination of the Security Agreement, relating
to the $125 Million Senior Notes. The tender offer, amendment of the Indenture
and termination of the Security Agreement are conditioned upon, among other
things, the consummation of financing providing proceeds sufficient to pay the
total costs of the tender offer and consent solicitation.

On May 15, 2003, the Company and Finance announced the extension of their
tender offer for all of the outstanding $125 Million Senior Notes and related
consent solicitation. The tender offer will now expire at 12:00 midnight, New
York City time, on Wednesday, June 11, 2003, unless further extended or
terminated. The consent solicitation expired at 5:00 p.m., New York City
time, on Thursday, May 28, 2003, and holders of $125 Million Senior Notes had
the right to withdraw their previous tenders and consents prior to the
expiration of the consent solicitation. Currently, the Company and Finance
have received duly executed tenders from holders of $102,349,000 in principal
amount of the $125 Million Senior Notes, representing 100% of the aggregate
principal amount of the issued and outstanding $125 Million Senior Notes.
                                      F-13
<Page>

5. RECONCILIATION OF FINANCIAL STATEMENT AND TAX INFORMATION:

The following is a reconciliation of net income for financial statement purposes
to net income for federal income tax purposes for the years ended December 31,
2002, 2001 and 2000.

<Table>
<Caption>
                                           For the            For the               For the
                                          Year Ended         Year Ended           Year Ended
                                      December 31, 2002   December 31, 2001    December 31, 2000
                                      -----------------   -----------------    -----------------
<S>                                   <C>                 <C>                  <C>
Financial Statement
 net income, as restated              $      12,033,310   $       6,574,572    $       2,472,438
Financial statement equity in
 (income) loss of Trading Cove
   Associates over tax basis equity
     in (income) loss of Trading
       Cove Associates                          562,075            (394,380)            (899,671)
Other                                             7,263               6,188                4,679
                                      -----------------   -----------------    -----------------
Federal income tax basis
 net income                           $      12,602,648   $       6,186,380    $       1,577,446
                                      =================   =================    =================
</Table>

The following is a reconciliation of member's deficiency for financial statement
purposes to member's deficiency for federal income tax purposes as of December
31, 2002, 2001 and 2000.

<Table>
<Caption>
                                           2002              2001              2000
                                      --------------    --------------    --------------
<S>                                   <C>               <C>               <C>
Financial statement member's
 deficiency, as restated              $  (76,962,084)   $  (70,474,832)   $  (75,309,744)
Adjustment for cumulative
 difference between tax basis
 of Trading Cove Associates-
 equity investment and GAAP
 basis of Trading Cove
 Associates-equity investment              4,764,291         5,152,483         6,047,475
Current year financial
 statement net income (over)
 under federal income tax
 basis net income                            569,338          (388,192)         (894,992)
                                      --------------    --------------    --------------
Federal income tax basis
 member's deficiency                  $  (71,628,455)   $  (65,710,541)   $  (70,157,261)
                                      ==============    ==============    ==============
</Table>

                                      F-14
<Page>

6. CONTINGENCIES:

LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology, Inc. and defendants Waterford
Gaming, L.L.C., Trading Cove Associates, LMW Investments, Inc., and Slavik
Suites, Inc. settled a prior lawsuit brought by Leisure. In connection with this
settlement, Leisure, TCA, the Company, LMW Investments, Inc., and Slavik Suites,
Inc. entered into a settlement and release agreement. Pursuant to this
settlement and release agreement, the Company bought Leisure's beneficial
interest in TCA.

By complaint dated January 7, 2000, as amended February 4, 2000, Leisure filed a
four count complaint naming as defendants Waterford Gaming, L.L.C., Trading Cove
Associates, LMW Investments, Inc., Slavik Suites, Inc., Waterford Group, L.L.C.,
Len Wolman and Mark Wolman (collectively, the "Defendants"). The matter has been
transferred to the complex litigation docket and is pending in Waterbury,
Connecticut. The complaint alleged breach of fiduciary duties, fraudulent
non-disclosure, violation of Connecticut Statutes Section 42-110a, et seq. and
unjust enrichment in connection with the negotiation by certain of the
Defendants of the settlement and release agreement. The complaint also brought a
claim for an accounting. The complaint seeks unspecified legal and equitable
damages. On February 29, 2000, Defendants filed a Motion to Strike and a Motion
for Summary Judgment, each with respect to all claims. The Court granted
Defendants' Motion to Strike in part and denied Defendants' Motion for Summary
Judgment, on October 13, 2000. The Court's order dismissed the claim for an
accounting and the claim under Connecticut Statutes Section 42-110a, et seq. The
Court also struck the alter ego allegations in the complaint against LMW
Investments, Inc., Slavik Suites, Inc., Len Wolman and Mark Wolman. In a
decision dated August 6, 2001, the Court dismissed all claims against LMW
Investments, Inc., Slavik Suites, Inc., Len Wolman and Mark Wolman.

On November 15, 2000, the Company and its co-defendants answered the complaint.
In addition, the Company and Trading Cove Associates asserted counterclaims for
breach of the settlement and release agreement and breach of the implied
covenant of good faith against Leisure and its president, Lee Tyrol. In a
decision dated June 6, 2001, the Court dismissed the counterclaims against Lee
Tyrol. Leisure has moved for summary judgment seeking dismissal of the counter
claims in full. This motion for summary judgment was denied.

Discovery has commenced. Pursuant to the current scheduling order, all
depositions are to be completed by June 30, 2003. A trial date has not been set.

The Company believes that it has meritorious defenses and intends to vigorously
contest the claims in this action and to assert all available defenses. At the
present time, the Company is unable to express an opinion on the likelihood of
an unfavorable outcome or to give an estimate of the amount or range of possible
loss to the Company as a result of this litigation due to the disputed issues of
law and/or facts on which the outcome of this litigation depends and due to the
infancy of both the action and discovery in the action.

                                      F-15
<Page>

7. CERTAIN RELATIONSHIPS and RELATED TRANSACTIONS:

DEVELOPMENT SERVICES AGREEMENT PHASE II AND RELATED AGREEMENTS AND PAYMENTS

On February 9, 1998, TCA and KIML, an affiliate of Kerzner Investments, the
Company's partner in TCA, entered into the Development Services Agreement Phase
II. Pursuant to the Development Services Agreement Phase II, TCA subcontracted
with KIML who agreed to perform those services assigned to KIML by TCA in order
to facilitate TCA's fulfillment of its duties and obligations to the Authority
under the Development Agreement. KIML assigned the Development Services
Agreement Phase II to Kerzner Investments.

Pursuant to the Development Services Agreement Phase II, TCA pays to Kerzner
Investments a fee, as subcontractor, equal to 3% of the development costs of the
Project Sunburst expansion, excluding capitalized interest, less all costs
incurred by TCA in connection with the Project Sunburst expansion. The
Development Services Fee Phase II is paid in installments on December 31, 1999,
December 31, 2000 and on the Completion Date, as defined in the Development
Agreement, with the final payment being made when the actual development costs
of the Project Sunburst expansion are known. TCA pays the Development Services
Fee Phase II from available cash flow, if any, in accordance with the Amended
and Restated Omnibus Termination Agreement.

Before KIML assigned the Development Services Agreement Phase II to Kerzner
Investments, it entered into the Local Construction Services Agreement with
Construction, an affiliate of the Company, pursuant to which Construction agreed
to provide certain of those services assigned to KIML by TCA pursuant to the
Development Services Agreement Phase II. KIML assigned the Local Construction
Services Agreement to Kerzner Investments. Pursuant to the Local Construction
Service Agreement, Kerzner Investments agreed to pay to Construction a fee equal
to 20.83% of the Development Services Fee Phase II as and when Kerzner
Investments receives payment from TCA in accordance with the Development
Services Agreement Phase II.

Pursuant to a Letter Agreement, Construction has subcontracted with The Slavik
Company, an affiliate of the Company, to provide certain services under the
Local Construction Services Agreement. In exchange for providing such services,
Construction agreed that The Slavik Company would be paid a fee equal to 14.30%
of its fee under the Local Construction Services Agreement.

On April 26, 2000, July 26, 2000 and January 26, 2001 TCA paid $3,095,000,
$1,238,000 and $6,474,000, respectively, as partial payment of the Development
Services Fee Phase II. Construction received $644,688, $257,875 and $1,348,534,
respectively, and Construction paid The Slavik Company $92,190, $36,876 and
$192,840 on April 26, 2000, July 26, 2000 and January 26, 2001, respectively.

At December 31, 2002 TCA has accrued a liability to Kerzner Investments of
approximately $10.2 million pursuant to the Development Service Agreement
Phase II.

EMPLOYMENT AGREEMENT WITH MR. LEN WOLMAN

Len Wolman, the Company's Chairman of the Board of Directors and Chief Executive
Officer, is the Company's designated representative to TCA under the TCA
Partnership Agreement.

On September 28, 1998, the Company entered into an employment agreement with Len
Wolman. The employment agreement provides for a base annual salary of $250,000
reduced by any amounts Mr. Wolman receives as a salary from TCA for such period.
In addition, pursuant to the employment agreement, the Company agreed pay to Mr.
Wolman an amount equal to 0.05% of the revenues of the Mohegan Sun including the
Project Sunburst expansion to the extent Mr. Wolman has not received such
amounts from TCA. On and after January 1, 2004, the Company agreed pay to Mr.
Wolman incentive compensation based on the revenues of the Mohegan Sun,
including the Project Sunburst expansion, as a percentage (ranging from .00% to
..10%) to be determined using a formula attached to the employment agreement
which compares actual revenues to predetermined revenue targets. For the years
ended December 31, 2002, 2001 and 2000 the Company paid and incurred $835,086,
$707,153 and $660,037, respectively, as an expense pursuant to Len Wolman's
employment agreement.

OTHER RELATED PARTY TRANSACTIONS

For the years ended December 31, 2002, 2001 and 2000, approximately $46,000,
$46,000 and $51,000, respectively, was paid and incurred to the principals and
affiliates of the Company as part of TCA's operating expenses. In addition in
2002, 2001 and 2000 TCA paid $0, approximately $856,000 and approximately
$925,000, respectively, to the principals of the Company in connection with the
first priority payments set forth under the section "Trading Cove Associates
Material Agreements - Amended and Restated Omnibus Termination Agreement".

In 1999, the Company renovated Len Wolman's office space at a cost of $32,413,
of which $30,000 was paid to Wolman Homes Inc., an affiliate of the Company.
Cost of the improvement is being depreciated over five years. Expense for each
of the years ended December 31, 2002, 2001 and 2000 was $6,480.

Waterford Group, Slavik and the other principals of the Company and Waterford
Group have interests in and may acquire interests in hotels in southeastern
Connecticut which have or may have arrangements with the Mohegan Sun to reserve
and provide hotel rooms to patrons of the Mohegan Sun.

                                      F-16
<Page>

8. RESTATEMENT, RECLASSIFICATION AND SUBSEQUENT EVENTS

The Company has restated its financial statements for each of the fiscal years
1996 through 2002.

The Company is a general partner of TCA and its investment in TCA is accounted
for under the equity method. TCA has restated its financial statements as
described below. As the Company accounts for its investment in TCA under the
equity method, the Company's financial statements have been restated to reflect
the changes recorded by TCA. The effect of TCA's restatement on the Company's
financial statements is described below and included in the tables which follows
this note.

The restatement is the result of a change by TCA in the way it has historically
recorded certain contractual liabilities to its partners and their affiliates,
recognized certain revenue, and classified certain distributions to its
partners. As described in more detail below, TCA has restated its historical
financial statements to:

i)   recognize as an expense certain contractual liabilities owed its partners
     and their affiliates for prior services performed under contract when their
     payment became probable pursuant to Statement of Financial Accounting
     Standard No. 5 ("SFAS 5"), as opposed to when such expenses were paid or
     payable (these expenses were previously disclosed as contingent
     obligations);

ii)  recognize as revenue junior relinquishment fees from the Authority pursuant
     to the Relinquishment Agreement in the quarter in which such fees are
     earned, as opposed to at the end of every six months, when such fees became
     payable; and

iii) reclassify certain payments by TCA to its partners as distributions on its
     partnership interests which were previously classified as expenses in the
     statement of operations.

The Company's interest in TCA is its principal asset and source of income and
cash flows.

To the extent these changes affected TCA's reported net income, the Company's
net income was affected by its proportionate share of TCA's income recorded
under the equity method. To the extent these changes cause TCA to recognize
income from relinquishment fees earlier than it previously had, the Company's
equity income of TCA was increased by its proportionate share of such income. To
the extent TCA reclassified certain payments to the Company as distributions on
partnership interests, the Company has reclassified such payments by TCA as
distributions, rather than as "Revenue - 25% of relinquishment payments -
Trading Cove Associates" on its statement of income.

The effect of the restatement to TCA is to change the timing of the recognition
of certain revenues and certain liabilities of TCA, owed to its partners and
their affiliates, and not to change the amount of such revenues or such
liabilities or the amounts paid to its partners or their affiliates. As a result
of the restatement by TCA, the Company has restated its financial information
included in each Form 10-K and Form 10-Q filed by the Company since 2000.

The restatement has not changed cash flows from operating, investing or
financing activities that would have been available for paying interest,
principal and premium on the outstanding $125 Million Senior Notes. Moreover, if
TCA had made the changes described above at the beginning of the period covered
by the restated financial statements, no default or event of default under the
Indenture would have occurred during any of the affected periods.

As noted above, TCA has changed how it accounts for certain contractual
liabilities it owes to its partners and their affiliates for services
performed under contract. TCA has restated its financial statements to record
a liability for certain previously provided services pursuant to SFAS 5 when
it became probable that such liability had been incurred and when it became
reasonably estimable rather than when such liability became payable. As a
result of this change, some payments have been recorded as liabilities and
expenses on TCA's financial statements several years before they were, or
will become, due and payable. Previously, these payments were recorded as
liabilities only when such liability became payable. These payments are
related to amounts due under (a) the third, fourth, fifth, seventh, eighth,
ninth and eleventh priority distributions described in the Amended and
Restated Omnibus Financing Agreement and (b) the third and fourth priority
distributions described in the Amended and Restated Omnibus Termination
Agreement.

One effect of the change described in the preceding paragraph is that TCA has
recognized an additional loss on the Development Agreement between it and the


Authority, which is accounted for in accordance with Statement of Position
81-1. This has resulted in a corresponding reduction on the Company's balance
sheet as of December 31, 2002 in "Trading Cove Associates - equity
investment" of $4,496,500 and an increase in member's deficiency of
$4,496,500. Through December 31, 2002 TCA had recorded a cumulative loss of
$7,007,000. After the restatement, it has recorded a cumulative loss of
$16,000,000 at December 31, 2002. As a result, TCA recorded an additional
development loss of $1,200,000 during 2002 and reduced its loss provision
during 2000 by $2,007,000 to give effect to a $10,000,000 development loss at
December 31, 1999. The Company's 50% share of the difference is $4,496,500 at
December 31, 2002 and $3,496,500 at December 31, 2001 and 2000.
Prior to making the change described in the preceding paragraph, TCA would
have recorded this loss in the second quarter of 2003, when the related
amount would have been payable.

Also as noted above, TCA has restated its historical financial statements to
reclassify certain payments to its partners as distributions on TCA's
partnership interests. The payments, the classification of which have
changed, are payments TCA has historically made under the fifth and seventh
priorities under the Amended and Restated Omnibus Termination Agreement, for
the periods commencing January 1, 2000. This reclassification by TCA results
in the reclassification by the Company of certain income it received from TCA
as "Equity in income (loss) of Trading Cove Associates" on its statement of
income. Prior to the restatement, the Company had classified such payments on
its statement of operations as "Revenue - 25% of relinquishment payments
-Trading Cove Associates". Such reclassification does not change or affect
the Company's aggregate net income or loss for the period covered by the
restated financial statements. These payments are considered a distribution
to the Company on its partnership interests, rather than revenue from TCA.
Accordingly, at December 31, 2002 and 2001, the restated balance sheets of
the Company shows $0 as due from TCA, and "Trading Cove Associates - equity
investment" has been increased by $11,021,500 and $8,357,604 at December 31,
2002 and 2001, respectively, which was the amount previously recorded as an
amount due from TCA prior to making the change described in this paragraph.
The change in the development loss described above and the reclassification
account for the change in equity investment on the consolidated balance sheet.

Also as described above, TCA has changed its historical method of accruing
junior relinquishment payments it receives from the Authority pursuant to the
Relinquishment Agreement. TCA now accrues for such payments in each quarter as
they are earned. Prior to the restatement, TCA recognized such payments as
revenue as they became payable every six months. The restatement has required
the Company to record its investment in TCA with a portion of each junior
relinquishment payment being accrued each quarter. There is no impact on TCA's
annual Relinquishment Fee revenues.

The following tables show: (1) the effect of TCA's restatement on the Company's
Balance Sheets at December 31, 2002 and 2001 and the Statements of Operations,
Statements of Changes in Member's Deficiency and Statements of Cash Flows for
the years ended December 31, 2002, 2001 and 2000 and (2) selected financial data
for each of the quarters ended September 30, June 30 and March 31, 2002, 2001
and 2000. The restatement adjustments do not impact total cash flows of the
Company or its reported cash balances.

                                      F-17
<Page>

                            Waterford Gaming, L.L.C.

                                 Balance Sheets

                           December 31, 2002 and 2001

<Table>
<Caption>
                                                                     Previously                  Previously
                                                                      reported      Restated      reported      Restated
                                                                        2002          2002          2001          2001
                                                                   -------------- ------------- ------------- -------------
<S>                                                                <C>            <C>           <C>           <C>
                            ASSETS

Current assets
    Cash and cash equivalents                                      $   4,658,602  $  4,658,602  $  3,570,949  $  3,570,949
    Restricted investments                                            10,344,130    10,344,130    26,189,434    26,189,434
    Due from Trading Cove Associates                                  11,021,500           ---     8,357,604           ---
    Other current assets                                                   7,965         7,965         9,072         9,072
                                                                   -------------- ------------- ------------- -------------

       Total current assets                                           26,032,197    15,010,697    38,127,059    29,769,455
                                                                   -------------- ------------- ------------- -------------

Trading Cove Associates - equity investment                            5,447,338    11,972,338     5,778,458    10,639,562
Beneficial interest - Leisure Resort Technology, Inc.                  4,540,039     4,540,039     4,918,029     4,918,029
Deferred financing costs, net of accumulated
       amortization of $1,391,838 and
        $1,024,974 at December 31, 2002 and 2001, respectively         2,643,338     2,643,338     3,010,202     3,010,202
Fixed assets, net of accumulated depreciation of $42,222
       and $31,442 at December 31, 2002
        and 2001, respectively                                            11,696        11,696        22,476        22,476
                                                                   -------------- ------------- ------------- -------------

       Total assets                                                $  38,674,608  $ 34,178,108  $ 51,856,224  $ 48,359,724
                                                                   ============== ============= ============= =============

              LIABILITIES AND MEMBER'S DEFICIENCY

Current liabilities
    Accrued expenses and accounts payable                          $     111,996  $    111,996  $    171,610  $    171,610
    Accrued interest on senior notes payable                           3,021,196     3,021,196     3,228,946     3,228,946
                                                                   -------------- ------------- ------------- -------------

       Total current liabilities                                       3,133,192     3,133,192     3,400,556     3,400,556
                                                                   -------------- ------------- ------------- -------------

9-1/2% senior notes payable                                          108,007,000   108,007,000   115,434,000   115,434,000
                                                                   -------------- ------------- ------------- -------------

       Total liabilities                                             111,140,192   111,140,192   118,834,556   118,834,556
                                                                   -------------- ------------- ------------- -------------

Contingencies

Member's deficiency                                                  (72,465,584)  (76,962,084)  (66,978,332)  (70,474,832)
                                                                   -------------- ------------- ------------- -------------

       Total liabilities and member's deficiency                   $  38,674,608  $ 34,178,108  $ 51,856,224  $ 48,359,724
                                                                   ============== ============= ============= =============
</Table>

                                      F-18
<Page>

                            Waterford Gaming, L.L.C.

                              Statements of Income

              For the years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                           Previously                  Previously                  Previously
                                            reported      Restated      reported      Restated      reported       Restated
                                              2002          2002          2001          2001          2000           2000
                                          ------------  ------------  ------------  ------------  ------------   ------------
<S>                                       <C>           <C>           <C>           <C>           <C>            <C>
Revenue
     25% of relinquishment payments -
           Trading Cove Associates        $ 25,382,500  $        ---  $  9,728,580  $        ---  $        ---   $        ---
     Organizational and administrative
           fee income - Trading Cove
             Associates                            ---           ---    11,810,877           ---    11,649,600            ---
     Interest and dividend income              534,012           ---     1,330,711           ---     1,894,738            ---
     Subordinated notes fee income -
           Trading Cove Associates                 ---           ---           ---           ---       692,782            ---
     Completion guarantee notes fee
           income - Trading Cove
             Associates                            ---           ---           ---           ---       215,625            ---
                                          ------------  ------------  ------------  ------------  ------------   ------------

             Total revenue                  25,916,512           ---    22,870,168           ---    14,452,745            ---
                                          ------------  ------------  ------------  ------------  ------------   ------------

Expenses
     Interest expense                       11,080,139    11,080,139    11,560,994    11,560,994    11,641,049     11,641,049
     Salaries - related parties                835,086       835,086       707,153       707,153       660,037        660,037
     General and administrative                431,223       431,223       555,819       555,819       526,526        526,526
     12-3/4% senior notes tender expense           ---           ---           ---           ---       (90,000)       (90,000)
     Amortization of beneficial
           interest - Leisure Resort
             Technology, Inc.                  377,990       377,990       377,990       377,990       377,990        377,990
     Amortization on deferred
           financing cost                      366,864       366,864       366,864       366,864       363,985        363,985
     Depreciation                               10,780        10,780        10,780        10,780        10,780         10,780
                                          ------------  ------------  ------------  ------------  ------------   ------------

             Total expenses                 13,102,082    13,102,082    13,579,600    13,579,600    13,490,367     13,490,367
                                          ------------  ------------  ------------  ------------  ------------   ------------


     Interest and dividend income                  ---       534,012           ---     1,330,711           ---      1,894,738
     Equity in income (loss) of
        Trading Cove Associates                218,880    24,601,380    (2,715,996)   18,823,461      (574,002)    14,068,067
                                          ------------  ------------  ------------  ------------  ------------   ------------

             Net income                   $ 13,033,310  $ 12,033,310  $  6,574,572  $  6,574,572  $    388,376   $  2,472,438
                                          ============  ============  ============  ============  ============   ============
</Table>

                                      F-19
<Page>

                            Waterford Gaming, L.L.C.

                  Statements of Changes in Members' Deficiency

              For the years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                           Previously
                                            reported            Restated
                                         --------------     --------------
<S>                                      <C>                <C>
Balance, January 1, 2000                 $ (34,470,438)     $ (40,051,000)

Distributions                              (37,731,182)       (37,731,182)

Net income                                     388,376          2,472,438
                                         --------------     --------------

Balance, December 31, 2000                 (71,813,244)       (75,309,744)

Distributions                               (1,739,660)        (1,739,660)

Net income                                   6,574,572          6,574,572
                                         --------------     --------------

Balance, December 31, 2001                 (66,978,332)       (70,474,832)

Distributions                              (18,520,562)       (18,520,562)

Net income                                  13,033,310         12,033,310
                                         --------------     --------------

Balance, December 31, 2002               $ (72,465,584)     $ (76,962,084)
                                         ==============     ==============
</Table>

                                      F-20
<Page>

                            Waterford Gaming, L.L.C.

                            Statements of Cash Flows

              For the years ended December 31, 2002, 2001 and 2000

<Table>
<Caption>
                                               Previously                   Previously                   Previously
                                                reported       Restated      reported      Restated       reported       Restated
                                                  2002           2002          2001          2001           2000           2000
                                              ------------   ------------  ------------  ------------  -------------   ------------
<S>                                           <C>            <C>           <C>           <C>           <C>             <C>
Cash flows from operating activities
    Net income                                $ 13,033,310   $ 12,033,310  $  6,574,572  $  6,574,572  $     388,376   $  2,472,438
                                              ------------   ------------  ------------  ------------  -------------   ------------
    Adjustments to reconcile net income
      to net cash provided by (used in)
          operating activities
        Amortization                               744,854        744,854       744,854       744,854        741,975        741,975
        Depreciation                                10,780         10,780        10,780        10,780         10,780         10,780
        Equity in (income) loss of
             Trading Cove Associates              (218,880)   (24,601,380)    2,715,996   (18,823,461)       574,002    (14,068,067)
        Operating distributions from
             Trading Cove Associates                   ---     22,718,604           ---     1,370,975            ---            ---
        Changes in operating assets
               and liabilities
          (Increase) decrease in due from
               Trading Cove Associates          (2,663,896)           ---    (4,587,604)   15,580,878     (3,277,093)     9,280,914
          Decrease in other current assets           1,107          1,107        17,424        17,424         60,325         60,325
          (Decrease) increase in accrued
                expenses and accounts payable      (59,614)       (59,614)       37,996        37,996         14,134         14,134
          Decrease in accrued interest on
                senior notes payable              (207,750)      (207,750)     (119,077)     (119,077)       (69,036)       (69,036)
                                              ------------   ------------  ------------  ------------  -------------   ------------
                Total adjustments               (2,393,399)    (1,393,399)   (1,179,631)   (1,179,631)    (1,944,913)    (4,028,975)
                                              ------------   ------------  ------------  ------------  -------------   ------------
                Net cash provided by
                     (used in)operating
                        activities              10,639,911     10,639,911     5,394,941     5,394,941     (1,556,537)    (1,556,537)
                                              ------------   ------------  ------------  ------------  -------------   ------------

Cash flows from investing activities
    Contributions to Trading Cove
        Associates                              (1,000,000)    (1,000,000)   (1,350,000)   (1,350,000)    (1,200,000)    (1,200,000)
    Distributions from Trading Cove
        Associates                               1,550,000      1,550,000       800,000       800,000      1,723,112      1,723,112
    Sales and (purchases) of restricted
        investments - net                       15,845,304     15,845,304       698,647       698,647    (15,080,989)   (15,080,989)
                                              ------------   ------------  ------------  ------------  -------------   ------------
                Net cash provided
                   by (used in)
                     investing activities       16,395,304     16,395,304       148,647       148,647    (14,557,877)   (14,557,877)
                                              ------------   ------------  ------------  ------------  -------------   ------------

Cash flows from financing activities
    Distributions to members                   (18,520,562)   (18,520,562)   (1,739,660)   (1,739,660)   (37,731,182)   (37,731,182)
    Redemption of 9-1/2% senior notes           (7,427,000)    (7,427,000)   (4,257,000)   (4,257,000)    (2,468,000)    (2,468,000)
                                              ------------   ------------  ------------  ------------  -------------   ------------
                Net cash used in
                   financing activities        (25,947,562)   (25,947,562)   (5,996,660)   (5,996,660)   (40,199,182)   (40,199,182)
                                              ------------   ------------  ------------  ------------  -------------   ------------

Net increase (decrease) in cash
    and cash equivalents                         1,087,653      1,087,653      (453,072)     (453,072)   (56,313,596)   (56,313,596)

Cash and cash equivalents at
    beginning of year                            3,570,949      3,570,949     4,024,021     4,024,021     60,337,617     60,337,617

                                              ------------   ------------  ------------  ------------  -------------   ------------
Cash and cash equivalents at end of year      $  4,658,602   $  4,658,602  $  3,570,949  $  3,570,949  $   4,024,021   $  4,024,021
                                              ============   ============  ============  ============  =============   ============

Supplemental disclosure of cash
     flow information:
    Cash paid during the year for interest    $ 11,287,889   $ 11,287,889  $ 11,680,071  $ 11,680,071  $  11,710,084   $ 11,710,084
                                              ============   ============  ============  ============  =============   ============

Supplemental disclosure
      of non-cash financing activities:
    Deferred financing costs overaccrued
          through accrued
        expenses and accounts payable         $        ---   $        ---  $        ---  $        ---  $     (40,000)  $    (40,000)
                                              ============   ============  ============  ============  =============   ============
</Table>

                                      F-21
<Page>

                            Waterford Gaming, L.L.C.

                         Condensed Quarterly Information

   For the Quarters Ended March 31, June 30 and September 30, 2002, 2001 and
2000

<Table>
<Caption>
                                                                     For the Quarter Ended

                                  Previously                       Previously                          Previously
                                   reported       Restated          reported         Restated           reported        Restated
                                September 30,   September 30,       June 30,         June 30,           March 31,       March 31,
                                   2002(i)          2002            2002(ii)           2002             2002(iii)         2002
                                -------------   -------------     -------------    -------------     -------------    -------------
<S>                             <C>             <C>               <C>              <C>               <C>              <C>
Revenue
   Organizatonal and
    administrative fee
    income - Trading Cove
    Trading Cove                $         ---   $         ---     $         ---    $         ---     $         ---    $         ---
   25% of relinquishment
    payments - Trading Cove
    Associates                      3,350,000             ---         9,390,000              ---         1,621,000              ---
   Interest and dividend              134,573             ---           131,820              ---           194,727              ---
    income
   Subordinated notes
    fee income - Trading Cove
    Associates                            ---             ---               ---              ---               ---              ---
   Completion guarantee
    notes fee income -
    Trading Cove Associates               ---             ---               ---              ---               ---              ---
                                -------------   -------------     -------------    -------------     -------------    -------------
   Total revenue                    3,484,573             ---         9,521,820              ---         1,815,727              ---

Total expenses                     (3,341,605)     (3,341,605)       (3,170,187)      (3,170,187)       (3,492,071)      (3,492,071)

Interest and dividend income              ---         134,573               ---          131,820               ---          194,727
Equity in income (loss)
 of Trading Cove Associates           (56,393)      7,379,548          (855,335)       5,420,387           696,500        4,831,778
                                -------------   -------------     -------------    -------------     -------------    -------------
Net income                      $      86,575   $   4,172,516     $   5,496,298    $   2,382,020     $    (979,844)   $   1,534,434
                                =============   =============     =============    =============     =============    =============

OTHER DATA
   Interest expense             $   2,866,112   $   2,866,112     $   2,645,821    $   2,645,821     $   3,003,040    $   3,003,040
   Net increase(decrease) in
    cash and cash equivalent          944,107         944,107          (818,575)        (818,575)       (1,917,419)      (1,917,419)

QUARTER-END STATUS
   Total current assets         $  30,442,305   $  27,092,305     $  36,019,845    $  26,629,845     $  28,944,939    $  27,323,939
   Trading Cove Associates-
    equity investment               5,013,230       8,352,671         5,269,623       10,563,123         5,924,958        6,563,736
   Beneficial interest-
    Leisure Resort
    Technology, Inc.                4,635,313       4,635,313         4,730,587        4,730,587         4,824,826        4,824,826
   Deferred financing costs
    net of accumulated
    amortization                    2,735,054       2,735,054         2,826,770        2,826,770         2,918,486        2,918,486
   Fixed assets, net of
    accumulated depreciation           14,391          14,391            17,086           17,086            19,781           19,781
                                -------------   -------------     -------------    -------------     -------------    -------------
   Total assets                 $  42,840,293   $  42,829,734     $  48,863,911    $  44,767,411     $  42,632,990    $  41,650,768
                                =============   =============     =============    =============     =============    =============

   Total current liabilities    $     578,658   $     578,658     $   3,265,551    $   3,265,551     $     605,066    $     605,066
   12-3/4% senior
     notes payable                        ---             ---               ---              ---               ---              ---
   9-1/2% senior
     notes payable                108,007,000     108,007,000       111,403,000      111,403,000       111,403,000      111,403,000
                                -------------   -------------     -------------    -------------     -------------    -------------
   Total liabilities              108,585,658     108,585,658       114,668,551      114,668,551       112,008,066      112,008,066
                                -------------   -------------     -------------    -------------     -------------    -------------
   Member's deficiency          $ (65,745,365)  $ (65,755,924)    $ (65,804,640)   $ (69,901,140)    $ (69,375,076)   $ (70,357,298)
                                -------------   -------------     -------------    -------------     -------------    -------------
</Table>

<Table>
<Caption>
                                                                     For the Quarter Ended

                                 Previously                        Previously                       Previously
                                  reported        Restated          reported          Restated       reported           Restated
                                September 30,   September 30,        June 30,         June 30,       March 31,          March 31,
                                  2001(i)           2001            2001(ii)           2001          2001(iii)            2001
                                -------------   -------------    --------------    -------------   -------------      -------------
<S>                             <C>             <C>              <C>               <C>             <C>                <C>
Revenue
   Organizatonal and
    administrative fee
    income - Trading Cove
    Trading Cove                $   1,491,719   $         ---    $    8,049,158    $         ---   $   2,270,000      $         ---
   25% of relinquishment
    payments - Trading Cove
    Associates                      1,370,975             ---               ---              ---             ---                ---
   Interest and dividend
    income                            321,683             ---           330,972              ---         471,476                ---
   Subordinated notes
    fee income - Trading Cove
    Associates                            ---             ---               ---              ---             ---                ---
   Completion guarantee
    notes fee income -
    Trading Cove Associates               ---             ---               ---              ---             ---                ---
                                -------------   -------------    --------------    -------------   -------------      -------------
   Total revenue                    3,184,377             ---         8,380,130              ---       2,741,476                ---

Total expenses                     (3,656,388)     (3,656,388)       (3,338,211)      (3,338,211)     (3,311,450)        (3,311.450)

Interest and dividend income              ---         321,683               ---          330,972             ---            471,476
Equity in income (loss)
 of Trading Cove Associates          (954,137)      4,820,881        (1,040,981)       4,462,866        (729,237)         4,086,075
                                -------------   -------------    --------------    -------------   -------------      -------------
Net income                      $  (1,426,148)  $   1,486,176    $    4,000,938    $   1,455,627   $  (1,299,211)     $   1,246,101
                                =============   =============    ==============    =============   =============      =============

OTHER DATA
   Interest expense             $   3,111,623   $   3,111,623    $    2,831,926    $   2,831,926   $   2,875,887      $   2,875,887
   Net increase (decrease) in
    cash and cash equivalent       (1,395,901)     (1,395,901)          855,431          855,431      (2,116,899)        (2,116,899)

QUARTER-END STATUS
   Total current assets         $  30,271,614   $  28,900,637    $   37,572,827    $  39,064,544   $  30,654,410      $  40,195,285
   Trading Cove Associates-
    equity investment               5,570,099       6,356,898         6,174,236        1,186,017       7,215,217         (3,276,849)
   Beneficial interest-
    Leisure Resort
    Technology, Inc.                5,013,303       5,013,303         5,108,577        5,108,577       5,202,816          5,202,816
   Deferred financing costs
    net of accumulated
    amortization                    3,101,918       3,101,918         3,193,634        3,193,634       3,285,350          3,285,350
   Fixed assets, net of
    accumulated depreciation           25,171          25,171            27,866           27,866          30,561             30,561
                                -------------   -------------    --------------    -------------   -------------      -------------
   Total assets                 $  43,982,105   $  43,397,927    $   52,077,140    $  48,580,638   $  46,388,354      $  45,437,163
                                =============   =============    ==============    =============   =============      =============

   Total current liabilities    $     661,430   $     661,430    $    3,525,317    $   3,525,317   $     601,165      $     601,165
   12-3/4% senior
     notes payable                        ---             ---               ---              ---             ---                ---
   9-1/2% senior
     notes payable                115,434,000     115,434,000       119,239,000      119,239,000     119,239,000        119,239,000
                                -------------   -------------    --------------    -------------   -------------      -------------
   Total liabilities              116,095,430     116,095,430       122,764,317      122,764,317     119,840,165        119,840,165
                                -------------   -------------    --------------    -------------   -------------      -------------
   Member's deficiency          $ (72,113,325)  $ (72,697,503)   $  (70,687,177)   $ (74,183,679)  $ (73,451,811)     $ (74,403,002)
                                -------------   -------------    --------------    -------------   -------------      -------------
</Table>

<Table>
<Caption>
                                                                     For the Quarter Ended

                               Previously                        Previously                         Previously
                                reported       Restated           reported         Restated          reported           Restated
                              September 30,   September 30,       June 30,         June 30,          March 31,          March 31,
                                 2000(i)          2000            2000(ii)           2000            2000(iii)             2000
                              -------------   -------------    --------------    -------------     -------------      -------------
<S>                           <C>             <C>              <C>               <C>               <C>                <C>
Revenue
   Organizatonal and
    administrative fee
    income - Trading Cove
    Trading Cove              $   2,166,500   $         ---    $    5,713,100    $         ---     $         ---      $         ---
   25% of relinquishment
    payments - Trading Cove
    Associates                          ---             ---               ---              ---               ---                ---
   Interest and dividend
    income                          490,450             ---           421,767              ---           503,730                ---
   Subordinated notes
    fee income - Trading Cove
    Associates                          ---             ---               ---              ---           692,782                ---
   Completion guarantee
    notes fee income -
    Trading Cove Associates             ---             ---               ---              ---           215,625                ---
                              -------------   -------------    --------------    -------------     -------------      -------------
   Total revenue                  2,656,950             ---         6,134,867              ---         1,412,137                ---

Total expenses                   (3,245,757)     (3,245,757)       (3,251,991)      (3,251,991)       (3,654,761)        (3,654,761)

Interest and dividend income            ---         490,450               ---          421,767               ---            503,730
Equity in income (loss)
 of Trading Cove Associates        (443,588)      4,451,726          (454,065)       4,029,306           551,698          3,936,893
                              -------------   -------------    --------------    -------------     -------------      -------------
Net income                    $  (1,032,395)  $   1,696,419    $    2,428,811    $   1,199,082     $  (1,690,926)     $     785,862
                              =============   =============    ==============    =============     =============      =============

OTHER DATA
   Interest expense           $   2,862,885   $   2,862,885    $    2,847,198    $   2,847,198     $   3,088,304      $   3,088,304
   Net increase (decrease) in
    cash and cash equivalent        352,532         352,532          (531,266)        (531,266)      (58,280,077)       (58,280,077)

QUARTER-END STATUS
   Total current assets       $  30,537,831   $  46,118,706    $   34,149,916    $  51,897,291     $  28,959,540      $  52,420,015
   Trading Cove Associates-
    equity investment             8,372,501      (8,813,063)        8,716,089      (13,364,789)        9,070,154        (17,494,095)
   Beneficial interest-
    Leisure Resort
    Technology, Inc.              5,391,293       5,391,293         5,486,567        5,486,567         5,580,806          5,580,806
   Deferred financing costs
    net of accumulated
    amortization                  3,468,782       3,468,782         3,560,498        3,560,498         3,688,426          3,688,426
   Fixed assets, net of
    accumulated depreciation         35,951          35,951            38,646           38,646            41,341             41,341
                              -------------   -------------    --------------    -------------     -------------      -------------
   Total assets               $  47,806,358   $  46,201,669    $   51,951,716    $  47,618,213     $  47,340,267      $  44,236,493
                              =============   =============    ==============    =============     =============      =============

   Total current liabilities  $     572,909   $     572,909    $    3,494,872    $   3,494,872     $     848,965      $     848,965
   12-3/4% senior
     notes payable                      ---             ---               ---              ---               ---                ---
   9-1/2% senior
     notes payable              119,691,000     119,691,000       119,882,000      119,882,000       119,882,000        119,882,000
                              -------------   -------------    --------------    -------------     -------------      -------------
   Total liabilities            120,263,909     120,263,909       123,376,872      123,376,872       120,730,965        120,730,965
                              -------------   -------------    --------------    -------------     -------------      -------------
   Member's deficiency        $ (72,457,551)  $ (74,062,240)    $ (71,425,156)   $ (75,758,659)    $ (73,390,698)     $ (76,494,472)
                              -------------   -------------    --------------    -------------     -------------      -------------
</Table>

(i)     Previously reported in Form 10-Q filed by the Company on November 6,
        2002
(ii)    Previously reported in Form 10-Q filed by the Company on August 8, 2002
(iii)   Previously reported in Form 10-Q filed by the Company on May 14, 2002
(iv)    Previously reported in Form 10-Q filed by the Company on November 7,
        2001
(v)     Previously reported in Form 10-Q filed by the Company on August 13, 2001
(vi)    Previously reported in Form 10-Q filed by the Company on May 14, 2001
(vii)   Previously reported in Form 10-Q filed by the Company on November 13,
        2000
(viii)  Previously reported in Form 10-Q filed by the Company on August 9, 2000
(ix)    Previously reported in Form 10-Q filed by the Company on May 11, 2000

                                      F-22

<Page>

                        REPORT OF INDEPENDENT ACCOUNTANTS

To the Partners of
Trading Cove Associates

In our opinion, the accompanying balance sheets and the related statements of
operations, changes in partners' capital (deficiency) and of cash flows present
fairly, in all material respects, the financial position of Trading Cove
Associates (the "Partnership") at December 31, 2002 and 2001, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 2002, in conformity with accounting principles generally
accepted in the United States of America. These financial statements are the
responsibility of the Partnership's management; our responsibility is to express
an opinion on these financial statements based on our audits. We conducted our
audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our opinion.

As discussed in Note 8 to the financial statements, the Partnership has
restated its financial statements for each of its fiscal years to reflect the
timing of the recognition of certain liabilities and the classification of
certain payments to its partners.

March 18, 2003, except for Notes 3, 6 and 8 as to which
the date is May 30, 2003

                                       F-23
<Page>

TRADING COVE ASSOCIATES
BALANCE SHEETS
DECEMBER 31, 2002 AND 2001

<Table>
<Caption>
                                                                        2002                2001
                                                                 (RESTATED - NOTE 8) (RESTATED - NOTE 8)
                                                                 ------------------- -------------------
<S>                                                                 <C>                 <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                           $    744,138        $    682,070
Relinquishment fee receivable                                         23,669,823          18,686,576
Development fee receivable                                                84,000           1,260,000
Other current assets                                                       4,000                   -
                                                                    ------------        ------------
     Total current assets                                             24,501,961          20,628,646
                                                                    ------------        ------------

Deferred costs, net of accumulated amortization of $2,838,909 and
 $2,617,391 at December 31, 2002 and 2001, respectively                2,660,032           2,881,550
Property and equipment, net of accumulated depreciation of
 $48,473 and $40,832 at December 31, 2002 and 2001, respectively           4,730              12,371
                                                                    ------------        ------------
     Total assets                                                   $ 27,166,723        $ 23,522,567
                                                                    ============        ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES
Accounts payable and accrued expenses                               $    114,856        $    179,093
Subcontracted services payable                                                 -             430,791
Development contract loss provision                                    5,639,684           5,805,318
Amounts billed in excess of development costs and estimated losses     4,766,655           4,007,443
                                                                    ------------        ------------
     Total current liabilities                                        10,521,195          10,422,645
                                                                    ------------        ------------

Commitments and contingencies

Partners' capital                                                     16,645,528          13,099,922
                                                                    ------------        ------------
     Total liabilities and partners' capital                        $ 27,166,723        $ 23,522,567
                                                                    ============        ============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-24
<Page>

TRADING COVE ASSOCIATES
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>
                                                                        2002                2001                2000
                                                                 (RESTATED - NOTE 8) (RESTATED - NOTE 8) (RESTATED - NOTE 8)
                                                                 ------------------- ------------------- -------------------
<S>                                                                 <C>                 <C>                 <C>
REVENUE
  Relinquishment fee                                                $ 58,508,703        $ 45,715,318        $ 41,003,849
  Development services revenue                                           556,788           1,253,827           3,512,156
                                                                    ------------        ------------        ------------
     Total revenue                                                    59,065,491          46,969,145          44,516,005
                                                                    ------------        ------------        ------------
EXPENSES
  Subcontract payments to partners and their affiliates                        -           1,712,791           1,849,506
  Cost of development services revenue                                 1,756,788           1,253,827           8,312,156
  Amortization and depreciation                                          221,818             221,717             222,124
  General and administrative                                           2,017,350             287,209             150,495
                                                                    ------------        ------------        ------------

     Total expenses                                                    3,995,956           3,475,544          10,534,281
                                                                    ------------        ------------        ------------

  Interest and dividend income                                            13,280              33,377              34,460
                                                                    ------------        ------------        ------------

     Net income                                                     $ 55,082,815        $ 43,526,978        $ 34,016,184
                                                                    ============        ============        ============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-25
<Page>

TRADING COVE ASSOCIATES
STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIENCY)
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>
                                                                         KERZNER
                                                                        INVESTMENTS     WATERFORD
                                                                     CONNECTICUT, INC. GAMING L.L.C.      TOTAL
<S>                                                                    <C>             <C>             <C>
Partners' capital (deficiency), January 1, 2000 (RESTATED - NOTE 8)    $(26,502,532)   $(26,502,533)   $(53,005,065)

Net income                                                               19,508,092      14,508,092      34,016,184

Contributions                                                             1,200,000       1,200,000       2,400,000

Distributions                                                            (5,473,112)     (1,723,112)     (7,196,224)
                                                                       ------------    ------------    ------------
Partners' capital (deficiency), December 31, 2000 (RESTATED - NOTE 8)   (11,267,552)    (12,517,553)    (23,785,105)

Net income                                                               24,263,489      19,263,489      43,526,978

Contributions                                                             1,350,000       1,350,000       2,700,000

Distributions                                                            (7,170,976)     (2,170,975)     (9,341,951)
                                                                       ------------    ------------    ------------
Partners' capital, December 31, 2001 (RESTATED - NOTE 8)                  7,174,961       5,924,961      13,099,922

Net income                                                               30,041,407      25,041,408      55,082,815

Contributions                                                             1,000,000       1,000,000       2,000,000

Distributions                                                           (29,268,604)    (24,268,605)    (53,537,209)
                                                                       ------------    ------------    ------------
Partners' capital, December 31, 2002 (RESTATED - NOTE 8)               $  8,947,764    $  7,697,764    $ 16,645,528
                                                                       ============    ============    ============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-26
<Page>

TRADING COVE ASSOCIATES
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2002, 2001 AND 2000

<Table>
<Caption>
                                                                        2002                2001                2000
                                                                 (RESTATED - NOTE 8) (RESTATED - NOTE 8) (RESTATED - NOTE 8)
                                                                 ------------------- ------------------- -------------------

<S>                                                                 <C>                 <C>                 <C>
CASH FLOWS FROM OPERATING ACTIVITIES
 Net income                                                         $ 55,082,815        $ 43,526,978        $ 34,016,184
                                                                    ------------        ------------        ------------
 Adjustments to reconcile net income to net cash provided
  by operating activities
   Amortization                                                          221,518             221,517             222,124
   Depreciation                                                            7,641              12,708              14,036
   Decrease in development contract loss provision                      (165,634)         (1,325,476)           (195,939)
   Change in assets and liabilities
     Increase in relinquishment fee receivable                        (4,983,247)         (3,113,366)        (15,573,210)
     Decrease (increase) in development fee receivable                 1,176,000            (672,000)           (588,000)
     Decrease in management fee receivable                                     -                   -           2,930,329
     Decrease in development costs and estimated losses
       in excess of amounts billed                                             -           1,766,730           1,975,844
     (Increase) decrease in other current assets                          (4,000)              1,868               2,451
     (Decrease) increase in accounts payable and accrued expenses        (64,237)             38,911            (138,863)
     (Decrease) increase in subcontracted services payable              (430,791)        (14,051,965)         13,020,782
     Increase in amounts billed in excess of development
       costs and estimated losses                                        759,212           4,007,443                   -
     Decrease in accrued obligations - affiliates                              -         (23,621,754)        (30,610,132)
                                                                    ------------        ------------        ------------
        Total adjustments                                             (3,483,538)        (36,735,384)        (28,940,578)
                                                                    ------------        ------------        ------------

        Net cash provided by operating activities                     51,599,277           6,791,594           5,075,606
                                                                    ------------        ------------        ------------
CASH FLOWS FROM INVESTING ACTIVITIES
 Purchase of property and equipment                                            -              (1,484)             (2,744)
                                                                    ------------        ------------        ------------
        Net cash used in investing activities                                  -              (1,484)             (2,744)
                                                                    ------------        ------------        ------------
CASH FLOWS FROM FINANCING ACTIVITIES
 Partners' contributions                                               2,000,000           2,700,000           2,400,000
 Distributions                                                       (53,537,209)         (9,341,951)         (7,196,224)
                                                                    ------------        ------------        ------------
        Net cash used in financing activities                        (51,537,209)         (6,641,951)         (4,796,224)
                                                                    ------------        ------------        ------------

Net increase in cash and cash equivalents                                 62,068             148,159             276,638

Cash and cash equivalents at beginning of year                           682,070             533,911             257,273
                                                                    ------------        ------------        ------------

Cash and cash equivalents at end of year                            $    744,138        $    682,070        $    533,911
                                                                    ============        ============        ============
</Table>

   The accompanying notes are an integral part of these financial statements.

                                       F-27
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

1.   ORGANIZATION, PARTNERSHIP AGREEMENT AND OTHER MATERIAL AGREEMENTS

     i) ORGANIZATION AND PARTNERSHIP AGREEMENT

     Trading Cove Associates (the "Partnership"), a Connecticut general
     partnership, was organized on July 27, 1993. The primary purpose of the
     Partnership has been:

     a)   to assist the Mohegan Tribe of Indians of Connecticut (the "Tribe")
          and the Mohegan Tribal Gaming Authority (the "Authority") in obtaining
          federal recognition,
     b)   to negotiate the tribal-state compact with the State of Connecticut on
          behalf of the Tribe, c) to obtain financing for the development of the
          Mohegan Sun Casino (the "Mohegan Sun"), d) to negotiate the Amended
          and Restated Gaming Facility Management Agreement (the "Management
          Agreement"),
     e)   to oversee all operations of the Mohegan Sun pursuant to the terms of
          the Management agreement until December 31, 1999, and
     f)   to participate in the design and development of the Mohegan Sun.

     The Mohegan Sun commenced operations on October 12, 1996. From the opening
     of the Mohegan Sun, and until January 1, 2000, the Partnership oversaw the
     Mohegan Sun's day-to-day operations.

     The Partnership will terminate on December 31, 2040, or earlier, in
     accordance with the terms of the partnership agreement (the "Partnership
     Agreement").

     The original partners of the Partnership were RJH Development Corp.
     ("RJH"), a New York corporation, Leisure Resort Technology, Inc.
     ("Leisure"), a Connecticut corporation, Slavik Suites, Inc. ("Slavik"), a
     Michigan corporation and LMW Investments, Inc. ("LMW"), a Connecticut
     corporation. On September 21, 1994, the Partnership Agreement was amended
     and restated to admit Kerzner Investments Connecticut, Inc. ("Kerzner
     Investments"), a Connecticut corporation, formerly Sun Cove Limited, as a
     partner.

     On February 3, 1995, Leisure entered into an acknowledgement and release
     agreement to withdraw as a partner of the Partnership and hold its interest
     in the Partnership as a beneficial interest. On August 6, 1997, Leisure
     filed a lawsuit against the Partnership, Kerzner Investments, RJH and
     Waterford Gaming, L.L.C. ("Waterford Gaming") and its owners, claiming
     breach of contract, breach of fiduciary duties and other matters in
     connection with the development of the Mohegan Sun. On January 6, 1998,
     pursuant to the settlement and release agreement described in Note 7.
     below, Waterford Gaming paid $5,000,000 to Leisure and, among other things
     Leisure gave up, (a) its beneficial interest in 5% of certain fees and
     excess cash flows, as defined, of the Partnership and (b) any other claims
     it may have had against the Partnership, Kerzner Investments, RJH,
     Waterford Gaming and its owners. In connection with the settlement of all
     matters related to such suit, pursuant to the settlement and release
     agreement, Waterford Gaming agreed to acquire Leisure's interests in the
     Partnership. As a result of this acquisition, Leisure no longer has the
     right to 5% of the Organizational and Administrative fee, as defined in the
     Organizational and Administrative Services Agreement, and 5% of the
     Partnership's Excess Cash as defined in the Partnership Agreement, and
     Waterford Gaming is now entitled to such fees and cash. During March 1999,
     Waterford Gaming's $65,000,000 senior notes were retired and, on March 18,
     1999, Waterford Gaming paid an additional $2,000,000 to Leisure pursuant
     to the settlement and release agreement. On January 7, 2000, Leisure filed
     a complaint against the Partnership and certain other defendants. For a
     description of the complaint, see Note 7 to these financial statements.

                                       F-28
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     On November 8, 1996, Slavik, LMW and RJH withdrew from the Partnership and,
     concurrently, consented to the admission of Waterford Gaming to the
     Partnership. Waterford Gaming, simultaneously, purchased RJH's interest in
     the Partnership. Waterford Gaming is owned by Waterford Group, LLC.
     Waterford Group, LLC is owned by Slavik and LMW.

     The partners' percentage interest in the Partnership as of November 8, 1996
     was as follows:

<Table>
<Caption>
                                         PERCENTAGE
               PARTNER                    INTEREST
               <S>                          <C>
               Kerzner Investments          50.0%
               Waterford Gaming             50.0%
</Table>

     ii) OTHER MATERIAL AGREEMENTS

     RELINQUISHMENT AGREEMENT
     On February 7, 1998, the Partnership and the Authority entered into the
     Relinquishment Agreement (the "Relinquishment Agreement"). Under the terms
     of the Relinquishment Agreement the Partnership continued to manage the
     Mohegan Sun under the Management Agreement until midnight December 31,
     1999, and on January 1, 2000, the Management Agreement terminated and the
     Tribe assumed day-to-day management of the Mohegan Sun.

     Under the Relinquishment Agreement, to compensate the Partnership for
     terminating its rights under the Management Agreement and the Hotel/Resort
     Management Agreement the Authority agreed to pay to the Partnership a fee
     (the "Relinquishment Fees") equal to 5% of Revenues, as defined in the
     Relinquishment Agreement, generated by the Mohegan Sun during the 15-year
     period commencing on January 1, 2000, including revenue generated by the
     Project Sunburst expansion (the "Project Sunburst expansion").

     The Relinquishment Fees are divided into senior relinquishment payments and
     junior relinquishment payments, each of which equals 2.5% of "Revenues".
     Revenues are defined as gross gaming revenues (other than Class II gaming
     revenue, ie bingo) and all other facility revenues. Such revenue includes
     hotel revenues, food and beverage sales, parking revenues, ticket revenues
     and other fees or receipts from the convention/events center in the Project
     Sunburst expansion and all rental or other receipts from lessees, licensees
     and concessionaires operating in the facility, but not the gross receipts
     of such lessees, licensees and concessionaires. Such revenues exclude
     revenues generated by any other expansion of the Mohegan Sun.

                                       F-29
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     Senior relinquishment payments are payable quarterly in arrears commencing
     on April 25, 2000, for the quarter ended March 31, 2000 and the junior
     relinquishment payments are payable semi-annually in arrears commencing on
     July 25, 2000, for the six months ended June 30, 2000, assuming sufficient
     funds are available after satisfaction of the Tribe's senior obligations,
     as defined in the Relinquishment Agreement.

     DEVELOPMENT AGREEMENT
     On February 7, 1998 the Partnership and the Authority entered into the
     Development Services Agreement (the "Development Agreement"), which made
     the Partnership the exclusive developer of the Project Sunburst expansion.
     Pursuant to the Development Agreement, the Partnership agreed to oversee
     the planning, design, construction, furnishing, equipping and staffing of
     the Project Sunburst expansion for a $14.0 million development fee (the
     "Development Fee").

     On May 24, 2000, the Partnership and the Authority agreed that the
     Partnership had performed and completed all its obligations relating to the
     staffing of the Project Sunburst expansion and that the Partnership has no
     further obligations relating to the staffing of the Project Sunburst
     expansion.

     The first phase of the Project Sunburst expansion, including the Casino of
     the Sky, The Shops at Mohegan Sun, and the 10,000-seat Mohegan Sun Arena
     opened in September 2001. In April 2002, 734 of the 1,200-hotel rooms in
     the 34-story luxury hotel as well as the meeting and convention space and
     spa opened. The balance of the 1,200-hotel rooms opened during June 2002.
     At December 31, 2002, the Project Sunburst expansion was substantially
     completed.

     Pursuant to the Development Agreement, the Authority agreed to pay the
     Development Fee to the Partnership quarterly beginning on January 15, 2000
     based on the incremental completion of the Project Sunburst expansion as of
     the previous calendar quarter and thereafter within fifteen (15) days
     following the end of each calendar quarter. The last payment of the
     Development Fee is to be paid on the Completion Date, as defined in the
     Development Agreement, of the Project Sunburst expansion.

     The Development Agreement terminates after the earlier of the completion of
     the Project Sunburst expansion or 10 years. In addition, each party has the
     right to terminate the Development Agreement if there is a default or
     failure to perform by the other party.

     MANAGEMENT AGREEMENT
     The Partnership entered into the Management Agreement with the Tribe
     pursuant to which the Tribe granted to the Partnership the exclusive right
     and obligation to develop, manage, operate and maintain the Mohegan Sun.
     The Management Agreement was amended and restated effective September 29,
     1995 (the "Effective Management Agreement Date"). The Partnership's
     obligations under this agreement began five days after the Effective
     Management Agreement Date and were originally intended to end on October
     11, 2003, seven years from the opening of the Mohegan Sun. Pursuant to the
     Management Agreement the Partnership received a management fee (the
     "Management Fees") that was calculated in three tiers based upon the Net
     Revenues, as defined in the Management Agreement, of the Mohegan Sun. The
     Management Agreement terminated at midnight on December 31, 1999. The final
     management fee was received by the Partnership from the Authority on
     January 25, 2000.

                                       F-30
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     AGREEMENTS WITH PARTNERS AND/OR THEIR AFFILIATES

     AGREEMENT RELATING TO DEVELOPMENT SERVICES

     On February 9, 1998, the Partnership and Kerzner International Management
     Limited ("KIML"), entered into the Agreement Relating to Development
     Services (the "Development Services Agreement Phase II"). Pursuant to the
     Development Services Agreement Phase II, the Partnership subcontracted with
     KIML who agreed to perform those services assigned to KIML by the
     Partnership in order to facilitate the Partnership's fulfillment of its
     duties and obligations to the Authority under the Development Agreement.
     KIML subsequently assigned the Development Services Agreement Phase II to
     Kerzner Investments.

     Pursuant to the Development Services Agreement Phase II, the Partnership
     pays to Kerzner Investments a fee, as subcontractor (the "Development
     Services Fee Phase II"), equal to 3% of the development costs of the
     Project Sunburst expansion, excluding capitalized interest, less all costs
     incurred by the Partnership in connection with the Project Sunburst
     expansion. The Development Services Fee Phase II shall be paid in
     installments due on December 31, 1999 and 2000 and on the Completion Date,
     as defined in the Development Agreement, with a final payment being made
     when the actual development costs of the Project Sunburst expansion are
     known. The Partnership pays the Development Services Fee Phase II, from
     available cash flow, if any, in accordance with the Amended and Restated
     Omnibus Termination Agreement. At December 31, 2002, the total of the
     Development Services Fee Phase II and the Partnership's costs related to
     the development of the Project Sunburst expansion will exceed the
     development services revenue from the Tribe by approximately $16,000,000 as
     discussed in Note 3.

     Before KIML assigned the Development Services Agreement Phase II to Kerzner
     Investments, it entered into the Local Construction Services Agreement (the
     "Local Construction Services Agreement") with Wolman Construction, LLC
     ("Construction") pursuant to which Construction agreed to provide certain
     of those services assigned to KIML by the Partnership pursuant to the
     Development Services Agreement Phase II. KIML assigned the Local
     Construction Services Agreement to Kerzner Investments. Pursuant to the
     Local Construction Services Agreement, Kerzner Investments agreed to pay to
     Construction a fee equal to 20.83% of the Development Services Fee Phase II
     as and when Kerzner Investments receives payment from the Partnership in
     accordance with the Development Services Agreement Phase II.

     Construction has subcontracted with The Slavik Company to provide certain
     services under the Local Construction Services Agreement. In connection
     with this, Construction agreed that The Slavik Company would be paid a fee
     equal to 14.30% of its fee under the Local Construction Services Agreement.

     AMENDED AND RESTATED OMNIBUS TERMINATION AGREEMENT
     Effective March 18, 1999, the Amended and Restated Omnibus Termination
     Agreement (the "Amended and Restated Omnibus Termination Agreement") was
     entered into by the Partnership, Kerzner International Limited ("Kerzner
     International"), Waterford Gaming, KIML, LMW, Kerzner Investments, Slavik
     and Construction. The Amended and Restated Omnibus Termination Agreement
     (i) terminated the memorandum of understanding dated February 7, 1998; and
     (ii) effective January 1, 2000, terminated a) the Amended and Restated
     Omnibus Financing Agreement; b) the Completion Guarantee and Investment
     Banking and Financing Arrangement Fee Agreement (the "Financing Arrangement
     Agreement"); c) the Management Services Agreement; d) the Organizational
     and Administrative Services Agreement; e) the Marketing Services Agreement;
     and f) a Letter Agreement relating to expenses dated October 19, 1996.

                                       F-31
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     In consideration for the termination of such agreements, the Partnership
     will use its cash to pay the following obligations in the priority set
     forth below:

     (i)   First, to pay all unpaid amounts which may be due under the
           terminated Letter Agreement and to pay to certain affiliates of
           Waterford Gaming and to Kerzner Investments a percentage of an annual
           fee of $2.0 million less the actual expenses incurred by the
           Partnership during such year. Such annual fee shall be payable in
           equal quarterly installments beginning March 31, 2000 and ending
           December 31, 2014. For the years ended December 31, 2002, 2001 and
           2000, $0, $1,712,791 and $1,849,506, respectively, have been paid and
           incurred by the Partnership in terms of the first priority;

     (ii)  Second, to return all capital contributions made by the partners of
           the Partnership after September 29, 1995. The Partnership anticipates
           making capital calls to fund expenses related to the development of
           the Project Sunburst expansion, and these capital calls will be
           repaid, based on cash flow, in the quarter following the quarter in
           which the capital call was made. From January 1, 2000 to December 31,
           2002 these contributions aggregated $7,100,000. From January 1, 2000
           to December 31, 2002 $6,700,000 has been repaid to the partners of
           the Partnership.

           As of December 31, 2002, $400,000 in capital contributions remained
           outstanding. On January 28, 2003, a cash distribution of $200,000 was
           made to each partner;

     (iii) Third, to pay any accrued amounts for obligations performed prior to
           January 1, 2000 under the Financing Arrangement Agreement. All such
           required payments were made during 2000;

     (iv)  Fourth, to make the payments set forth in the agreements relating to
           the Development Services Agreement Phase II and the Local
           Construction Services Agreement as detailed under a) above. No such
           payments are required or due at December 31, 2002. The accrued
           liability to Kerzner Investments with respect to such fee at
           December 31, 2002 was approximately $10,216,000;

     (v)   Fifth, to pay Kerzner Investments an annual fee of $5.0 million
           payable in equal quarterly installments of $1.25 million beginning
           March 31, 2000 and ending December 31, 2006. On January 28, 2003 and
           January 28, 2002, $1,250,000 was distributed in terms of the fifth
           priority;

     (vi)  Sixth, to pay any accrued amounts for obligations performed with
           respect to periods prior to January 1, 2000 under the Management
           Services Agreement, the Organizational and Administrative Services
           Agreement and the Marketing Services Agreement. The final required
           payments under this priority were made during 2001;

     (vii) Seventh, for the period beginning March 31, 2000 and ending December
           31, 2014, to pay each of Kerzner Investments and Waterford Gaming
           twenty-five percent (25%) of the relinquishment payments as
           distributions. On January 28, 2003 and January 28, 2002, $22,043,000
           ($11,221,500 to each of Kerzner Investments and Waterford Gaming) and
           $16,715,209 ($8,357,605 to Kerzner Investments and $8,357,604 to
           Waterford Gaming), respectively, was distributed by the Partnership
           in terms of the seventh priority; and

     (viii) Eighth, to distribute all excess cash.

                                      F-32
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     In addition, the Partnership shall not make any distributions pursuant to
     the Amended and Restated Omnibus Termination Agreement until it has
     annually distributed to its partners, pro rata, the amounts related to the
     partners tax obligations as described in Section 3.03a(1) of the
     Partnership Agreement less twice the amount of all other funds paid or
     distributed to Waterford Gaming during such year pursuant to the Amended
     and Restated Omnibus Termination Agreement.

     To the extent the Partnership does not have adequate cash to make the
     payments pursuant to the Amended and Restated Omnibus Termination
     Agreement, such amounts due shall be deferred without the accrual of
     interest until the Partnership has sufficient cash to pay them.

     AMENDED AND RESTATED OMNIBUS FINANCING AGREEMENT

     Until January 1, 2000, the Partnership's primary source of revenue and cash
     flow was Management Fees. Those fees were utilized by the Partnership to
     make subcontract payments to partners and affiliates pursuant to the
     Amended and Restated Omnibus Financing Agreement, which was terminated
     effective January 1, 2000.

2.   SIGNIFICANT ACCOUNTING POLICIES

     CASH AND CASH EQUIVALENTS
     Cash and cash equivalents represent cash and short-term, highly liquid
     investments with original maturities of three months or less.

     RELINQUISHMENT FEE
     Revenue is generated in accordance with terms of the Relinquishment
     Agreement and recognized quarterly based upon the revenues of the
     Authority.

     DEVELOPMENT SERVICES REVENUE AND COST RECOGNITION
     Revenue generated from services performed in accordance with the terms of
     the Development Agreement are recognized on the percentage-of-completion
     basis, determined by the percentage of costs incurred to date to estimated
     total costs for the contract. This method is used because management
     considers cost incurred to be the best available measure of progress on the
     contract.

     Costs of development services revenue performed include all direct labor
     costs and those indirect costs related to services such as subcontractors,
     consultants, supplies, depreciation and other costs. Changes in
     performance, requirements and estimated profitability may result in
     revisions to costs and income and will be recognized in the period in which
     the revisions are determined. Provisions for estimated losses on
     uncompleted contracts are made in the period in which such losses are
     determined.

     The asset, "development costs and estimated losses in excess of amounts
     billed", represents revenues recognized in excess of amounts billed. The
     liability, "amounts billed in excess of costs and estimated losses",
     represents billings in excess of revenues recognized.

                                      F-33
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     DEFERRED COSTS
     Costs associated with acquiring the Management Agreement were amortized on
     a straight-line basis over the 84-month period of the Management Agreement
     through March 3, 1999. As a result of the Relinquishment Agreement becoming
     effective, the remaining balance will be amortized over 189 months
     beginning March 4, 1999.

     PROPERTY AND EQUIPMENT
     Office equipment, computer equipment and furniture and fixtures are stated
     at cost. Depreciation is charged against income over a 3-year estimated
     life of the office and computer equipment and over a 5-year estimated life
     of furniture and fixtures. Depreciation expense for the years ended
     December 31, 2002, 2001 and 2000 amounted to $7,641, $12,708 and $14,036 of
     which $7,341, $12,508 and $14,036 were included in cost of development
     services revenue, respectively.

     INCOME TAXES
     No income tax provision or benefit is recorded on the books of the
     Partnership, as the respective share of taxable income or loss is
     reportable by the partners on their individual tax returns.

     CONCENTRATION OF CREDIT RISK
     Financial instruments, which potentially subject the Partnership to a
     concentration of credit risk, principally consist of cash in excess of the
     financial institutions' insurance limits. The Partnership invests available
     cash with high credit quality institutions.

     USE OF ESTIMATES
     The preparation of financial statements in conformity with accounting
     principles generally accepted in the United States of America requires
     management to make estimates and assumptions that affect the reported
     amounts of assets and liabilities and disclosure of contingent assets and
     liabilities at the date of the financial statements, as well as the
     reported amounts of revenues and expenses during the reporting period.
     Actual results could differ from those estimates.

     PAYMENTS TO PARTNERS AND THEIR AFFILIATES
     Payments are made to the partners and/or their affiliates in accordance
     with the terms of the Amended and Restated Omnibus Termination Agreement
     for certain subcontracted services rendered and are accounted for as
     expenses of the Partnership.

                                      F-34
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

3.   DEVELOPMENT CONTRACT

     The Partnership entered into a Development Agreement with the Authority,
     which entitles the Partnership to receive a development fee totaling $14
     million. A summary of the quarterly Development Fee payments received by
     the Partnership in accordance with the terms of the Development Agreement
     is as follows:

<Table>
<Caption>
               DATE OF PAYMENT                                         AMOUNT
               <S>                                                  <C>
               January 15, 2000                                     $  1,372,000
               April 20, 2000                                            896,000
               July 17, 2000                                           1,260,000
               October 13, 2000                                        1,372,000
               January 23, 2001                                          588,000
               April 16, 2001                                          1,582,000
               July 20, 2001                                           2,212,000
               October 17, 2001                                        1,974,000
               January 25, 2002                                        1,260,000
               April 22, 2002                                            413,000
               July 19, 2002                                             581,000
               October 18, 2002                                          238,000
               January 24, 2003                                           84,000
                                                                    ------------
                                                                    $ 13,832,000
                                                                    ============
</Table>

     Information relative to the development contract in progress is as follows:

<Table>
<Caption>
                                                                   2002            2001
          <S>                                                  <C>             <C>
          Development costs incurred                           $ 25,065,345    $ 23,308,557
          Estimated loss                                        (16,000,000)    (14,800,000)
                                                               ------------    ------------
                                                                  9,065,345       8,508,557
          Less: billings to date                                (13,832,000)    (12,516,000)
                                                               ------------    ------------
          Amounts billed in excess of development costs and
            estimated losses                                   $ (4,766,655)   $ (4,007,443)
                                                               ============    ============
</Table>

     The balance sheets include a related loss provision of $5,639,684 and
     $5,805,318 representing an accrual for additional contract costs exceeding
     cumulative revenues earned and cumulative costs incurred at
     December 31, 2002 and 2001, respectively.

                                      F-35
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

4.   DEFERRED COSTS

     Certain costs incurred by the Partnership in connection with obtaining the
     Management Agreement and the opening of the Mohegan Sun totaling $5,498,941
     were capitalized. Amortization commenced upon the opening of the Mohegan
     Sun. Amortization expense for years ended December 31, 2002, 2001 and 2000
     was $221,518, $221,517 and $222,124, respectively.

5.   RELINQUISHMENT FEE

     The Partnership entered into a Relinquishment Agreement with the Authority,
     which entitles the Partnership to receive a relinquishment fee of 5% of the
     Revenues generated by the Mohegan Sun including revenue generated by the
     Project Sunburst expansion.

     For the years ended December 31, 2002, 2001 and 2000, total relinquishment
     fees earned were $58,508,703, $45,715,318 and $41,003,849, respectively.
     The amount of Relinquishment Fees reported in these financial statements
     are based upon Revenues reported to the Partnership by the Authority. These
     amounts were paid by the Authority as follows:

<Table>
<Caption>
         DATE RECEIVED BY THE PARTNERSHIP                         AMOUNT
         <S>                                                  <C>
         April 25, 2002                                       $  6,228,559
         July 25, 2002                                          20,438,439
         October 25, 2002                                        8,171,882
         January 27, 2003                                       23,669,823
                                                              ------------
         Relinqishment Fees earned 2002                       $ 58,508,703
                                                              ============

         April 25, 2001                                       $  5,090,622
         July 25, 2001                                          16,036,421
         September 7, 2001                                         136,467
         October 25, 2001                                        5,765,232
         January 25, 2002                                       18,686,576
                                                              ------------
         Relinquishment Fees earned 2001                      $ 45,715,318
                                                              ============

         April 25, 2000                                       $  4,947,458
         July 26, 2000                                          15,025,554
         October 25, 2000                                        5,457,627
         January 25, 2001                                       15,573,210
                                                              ------------
         Relinquishment Fees earned 2000                      $ 41,003,849
                                                              ============
</Table>

                                      F-36
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

6.   RECONCILIATION OF FINANCIAL STATEMENTS AND TAX INFORMATION

<Table>
<Caption>
                                                                        2002            2001             2000
<S>                                                                 <C>             <C>             <C>
     Financial statement net income                                 $ 55,082,815    $ 43,526,978    $ 34,016,184

     Guaranteed payments to partners                                 (55,765,000)    (36,268,038)    (17,558,007)

     Subcontract payments to affiliates previously
       recorded for financial statement purposes                               -     (11,810,876)    (13,719,125)

     Financial statement depreciation and amortization greater
       than tax basis depreciation and amortization                        1,560           4,172           1,812

     Conversion from accrual basis to cash basis
       method of accounting                                                    -          14,660          14,660

     Percentage of completion accounting differences                     991,712        (923,794)       (556,767)

     Other                                                                50,093          34,156          13,117
                                                                    ------------    ------------    ------------

     Federal income tax basis net income (loss)                     $    361,180    $(5,422,742)    $  2,211,874
                                                                    ============    ============    ============
</Table>

     For the year ended December 31, 1998, the Partnership was required to
     change its method of accounting for tax purposes from the cash method to
     the accrual method, in accordance with Internal Revenue Code Section 448.
     The cumulative difference of $58,640 is amortized equally over four years
     at $14,660 per year.

7.   COMMITMENTS AND CONTINGENCIES

     LITIGATION
     On January 6, 1998, Leisure and defendants Waterford Gaming, the
     Partnership, LMW and Slavik settled a prior lawsuit brought by Leisure. In
     connection with this settlement, Leisure, the Partnership, Waterford
     Gaming, LMW and Slavik entered into a settlement and release agreement.
     Pursuant to this settlement and release agreement, Waterford Gaming bought
     out Leisure's beneficial interest in the Partnership.

     By complaint dated January 7, 2000, as amended February 4, 2000, Leisure
     filed a four count complaint naming as defendants Waterford Gaming, the
     Partnership, LMW, Slavik, Waterford Group, LLC, Len Wolman and Mark Wolman
     (collectively, the "Defendants"). The matter has been transferred to the
     complex litigation docket and is pending in Waterbury, Connecticut. The
     complaint alleged breach of fiduciary duties, fraudulent non-disclosure,
     violation of Connecticut Statutes Section 42-110a, et seq. and unjust
     enrichment in connection with the negotiation by certain of the Defendants
     of the settlement and release agreement. The complaint also brought a claim
     for an accounting. The complaint seeks unspecified legal and equitable
     damages. On February 29, 2000 Defendants filed a Motion to Strike and a
     Motion for Summary Judgement, each with respect to all claims. The Court
     granted Defendants' Motion to Strike in part and denied Defendants' Motion
     for Summary Judgement, on October 13, 2000. The Court's order dismissed the
     claim for an accounting and the claim under Connecticut Statutes Section
     42-110a, et seq. The Court also struck the alter ego allegations in the
     complaint against LMW, Slavik, Len Woman, and Mark Wolman. In a decision
     dated August 6, 2001, the Court dismissed all claims against LMW, Slavik,
     Len Wolman and Mark Wolman.

                                      F-37
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     On November 15, 2000, the Partnership and its co-defendants answered the
     complaint. In addition, the Partnership and Waterford Gaming asserted
     counterclaims for breach of the settlement and release agreement and breach
     of the implied covenant of good faith against Leisure and its president,
     Lee Tyrol. In a decision dated June 6, 2001, the Court dismissed the
     counterclaims against Lee Tyrol. Leisure has moved for summary judgment
     seeking dismissal of the counterclaims in full. This motion for summary
     judgment was denied.

     Discovery has commenced. Pursuant to the current scheduling order all
     depositions are to be completed by June 30, 2003. A trial date has not been
     set.

     The Partnership believes that it has meritorious defenses and intends to
     vigorously contest the claims in this action and to assert all available
     defenses. At the present time, the Partnership is unable to express an
     opinion on the likelihood of an unfavorable outcome or to give an estimate
     of the amount or range of possible loss to the Partnership as a result of
     this litigation due to the disputed issues of law and/or facts on which the
     outcome of this litigation depends and due to the infancy of both the
     action and discovery in the action.

     In addition, the Partnership is a defendant in certain litigation incurred
     in the normal course of business. In the opinion of the Partnership's
     management, based on the advice of counsel, the aggregate liability, if
     any, arising from such litigation will not have a material adverse effect
     on the Partnership's financial condition or results of operations.

8.   RESTATEMENT AND RECLASSIFICATIONS

     The Partnership has restated its financial statements for each of the
     fiscal years 1996 through 2002.

     The restatement is the result of a change by the Partnership in the way it
     has historically recorded certain contractual liabilities to its partners
     and their affiliates, recognized certain revenue, and classified certain
     distributions to its partners. As described in more detail below, the
     Partnership has restated its historical financial statements to:

     i)    recognize as an expense certain contractual liabilities owed its
           partners and their affiliates for prior services performed under
           contract when their payment became probable pursuant to Statement of
           Financial Accounting Standard No. 5 ("SFAS 5"), as opposed to when
           such expenses were paid or payable (these expenses were previously
           disclosed as contingent obligations);

     ii)   recognize as revenue junior relinquishment fees from the Authority
           pursuant to the Relinquishment Agreement in the quarter in which such
           fees are earned, as opposed to at the end of every six months, when
           such fees became payable; and

     iii)  reclassify certain payments by the Partnership to its partners as
           distributions on partnership interests which were previously
           classified as expenses in the statement of operations.

     The effect of the restatement is to change the timing of the recognition of
     certain revenues and certain liabilities of the Partnership, owed to
     partners and their affiliates, and not to change the amount of such
     revenues or such liabilities or the amounts paid to partners or their
     affiliates.

                                      F-38
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

     As noted above, the Partnership changed how it has accounted for certain
     contractual liabilities it owed to its partners and their affiliates for
     services performed under contract. The Partnership has recorded a liability
     for previously provided services pursuant to SFAS 5 when it became probable
     that it had been incurred rather than when such payments became payable. As
     a result of this change, some payments will be recorded as liabilities and
     expenses on the Partnership's financial statements several years before
     they are due and payable. Previously, these payments were recorded as
     liabilities only when payment was certain. These payments are related to
     amounts due under (a) the third, fourth, fifth, seventh, eighth, ninth and
     eleventh priority distributions described in the Amended and Restated
     Omnibus Financing Agreement and (b) the third and fourth priority
     distributions described in the Amended and Restated Omnibus Termination
     Agreement.

     One effect of the change described in the preceding paragraph is that
     the Partnership will recognize an additional loss on the Development
     Agreement between it and the Authority, which is accounted for in
     accordance with Statement of Position 81-1. Through December 31, 2002
     the Partnership had recorded a cumulative loss of $7,007,000 and
     disclosed a contingent obligation of approximately $10.2 million. After
     the restatement, it has recorded a cumulative loss of $16,000,000 as of
     December 31, 2002. As a result, an additional development loss of
     $1,200,000 was accrued during 2002 and a development loss in 2000 was
     reduced by $2,207,000 to give effect to a $10,000,000 development loss at
     December 31, 1999. Prior to making the change described in the preceding
     paragraph, the Partnership would have recorded this loss in the second
     quarter of 2003, when the related amount would have been payable.

     As described above, the Partnership changed its historical method of
     accruing junior relinquishment payments it receives from the Authority
     pursuant to the Relinquishment Agreement. The Partnership will now accrue
     for such payments in each quarter as they are earned. Prior to the
     restatement, the Partnership recognized such payments as revenue as they
     became payable every six months. There is no impact on annual
     Relinquishment Fee revenues.

     Also as noted above, the Partnership reclassified certain subcontract
     payments to its partners as distributions on partnership interests. The
     payments, the classification of which changed, are payments the
     Partnership has historically made under the fifth and seventh priorities
     under the Amended and Restated Omnibus Termination Agreement, for the
     periods commencing January 1, 2000.

     The following tables show the effect of the restatement on the
     Partnership's Balance Sheets as of December 31, 2002 and 2001, as well as
     the Statements of Operations, Statements of Changes in Partners' Capital
     (Deficiency), and Statements of Cash Flows for the years ended December 31,
     2002, 2001 and 2000. The restatement adjustments do not impact total cash
     flows of the Partnership or its reported cash balances.

                                      F-39
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

BALANCE SHEETS

<Table>
<Caption>
                                                                     PREVIOUSLY                    PREVIOUSLY
                                                                      REPORTED       RESTATED       REPORTED      RESTATED
                                                                        2002           2002           2001           2001
<S>                                                                 <C>            <C>            <C>            <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents                                           $    744,138   $    744,138   $    682,070   $    682,070
Relinquishment fee receivable                                         23,669,823     23,669,823     18,686,576     18,686,576
Development fee receivable                                                84,000         84,000      1,260,000      1,260,000
Other current assets                                                       4,000          4,000            ---            ---
                                                                    ------------   ------------   ------------   ------------
     Total current assets                                             24,501,961     24,501,961     20,628,646     20,628,646
                                                                    ------------   ------------   ------------   ------------

Deferred costs, net of accumulated amortization of $2,838,909 and
  $2,617,391 at December 31, 2002 and 2001, respectively               2,660,032      2,660,032      2,881,550      2,881,550
Property and equipment, net of accumulated depreciation of $48,473
 and $40,832 at December 31, 2002 and 2001, respectively                   4,730          4,730         12,371         12,371
                                                                    ------------   ------------   ------------   ------------
     Total assets                                                   $ 27,166,723   $ 27,166,723   $ 23,522,567   $ 23,522,567
                                                                    ============   ============   ============   ============
LIABILITIES AND PARTNERS' CAPITAL
CURRENT LIABILITIES

Accounts payable and accrued expenses                               $    114,856   $    114,856   $    179,093   $    179,093
Subcontracted services payable                                        23,293,000            ---     18,396,000        430,791
Development contract loss provision                                          ---      5,639,684            ---      5,805,318
Amounts billed in excess of development costs and estimated loss       1,413,339      4,766,655      2,819,761      4,007,443
                                                                    ------------   ------------   ------------   ------------
     Total current liabilities                                        24,821,195     10,521,195     21,394,854     10,422,645
                                                                    ------------   ------------   ------------   ------------

Commitments and contingencies

Partners' capital                                                      2,345,528     16,645,528      2,127,713     13,099,922
                                                                    ------------   ------------   ------------   ------------
     Total liabilities and partners' capital                        $ 27,166,723   $ 27,166,723   $ 23,522,567   $ 23,522,567
                                                                    ============   ============   ============   ============
</Table>

                                      F-40

<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

STATEMENTS OF OPERATIONS

<Table>
<Caption>
                                          PREVIOUSLY                    PREVIOUSLY                     PREVIOUSLY
                                           REPORTED       RESTATED       REPORTED        RESTATED       REPORTED       RESTATED
                                            2002            2002           2001            2001           2000           2000
<S>                                      <C>            <C>            <C>             <C>            <C>             <C>
REVENUE
  Relinquishment fee                     $ 58,508,703   $ 58,508,703   $ 45,715,318    $ 45,715,318   $ 41,003,849    $ 41,003,849
  Development services revenue              2,722,422        556,788      2,579,303       1,253,827      5,034,095       3,512,156
                                         ------------   ------------   ------------    ------------   ------------    ------------

     Total revenue                         61,231,125     59,065,491     48,294,621      46,969,145     46,037,944      44,516,005
                                         ------------   ------------   ------------    ------------   ------------    ------------

EXPENSES
  Subcontract payments to partners
   and their affiliates                    55,765,000            ---     49,791,705       1,712,791     33,126,638       1,849,506
  Cost of development services revenue      1,922,422      1,756,788      2,579,303       1,253,827     12,841,095       8,312,156
  Amortization and depreciation               221,818        221,818        221,717         221,717        222,124         222,124
  General and administrative                2,017,350      2,017,350        287,209         287,209        150,495         150,495
                                         ------------   ------------   ------------    ------------   ------------    ------------

     Total expenses                        59,926,590      3,995,956     52,879,934       3,475,544     46,340,352      10,534,281
                                         ------------   ------------   ------------    ------------   ------------    ------------

Interest and dividend income                   13,280         13,280         33,377          33,377         34,460          34,460
                                         ------------   ------------   ------------    ------------   ------------    ------------

   Net income (loss)                     $  1,317,815   $ 55,082,815   $ (4,551,936)   $ 43,526,978   $   (267,948)   $ 34,016,184
                                         ============   ============   ============    ============   ============    ============
</Table>

                                      F-41
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

STATEMENTS OF CHANGES IN PARTNERS' CAPITAL (DEFICIENCY)

<Table>
<Caption>
                                                                   PREVIOUSLY REPORTED
                                                   ---------------------------------------------------
                                                   KERZNER INVESTMENTS     WATERFORD
                                                     CONNECTICUT INC.    GAMING, L.L.C.     TOTAL
                                                   -------------------   -------------- --------------
<S>                                                  <C>                 <C>             <C>
Partners' capital (deficiency), January 1, 2000      $  3,446,911        $  3,446,910   $   6,893,821

Net income (loss)                                        (133,974)           (133,974)       (267,948)

Contributions                                           1,200,000           1,200,000       2,400,000

Distributions                                          (1,723,112)         (1,723,112)     (3,446,224)
                                                     ------------        ------------    ------------
Partners' capital (deficiency), December 31, 2000       2,789,825           2,789,824       5,579,649

Net income (loss)                                      (2,275,968)         (2,275,968)     (4,551,936)

Contributions                                           1,350,000           1,350,000       2,700,000

Distributions                                            (800,000)           (800,000)     (1,600,000)
                                                     ------------        ------------   -------------
Partners' capital, December 31, 2001                    1,063,857           1,063,856       2,127,713

Net income                                                658,907             658,908       1,317,815

Contributions                                           1,000,000           1,000,000       2,000,000

Distributions                                          (1,550,000)         (1,550,000)     (3,100,000)
                                                     ------------        ------------   -------------
Partners' capital, December 31, 2002                 $  1,172,764        $  1,172,764   $   2,345,528
                                                     =============       ============   =============

<Caption>
                                                                         RESTATED
                                                  ------------------------------------------------------
                                                   KERZNER INVESTMENTS     WATERFORD
                                                     CONNECTICUT INC.    GAMING, L.L.C.       TOTAL
                                                  --------------------   --------------   --------------
<S>                                                  <C>                 <C>               <C>
Partners' capital (deficiency), January 1, 2000      $ (26,502,532)      $ (26,502,533)   $  53,005,065)

Net income (loss)                                       19,508,092          14,508,092       34,016,184

Contributions                                            1,200,000           1,200,000        2,400,000

Distributions                                           (5,473,112)         (1,723,112)      (7,196,224)
                                                     -------------       -------------    -------------
Partners' capital (deficiency), December 31, 2000      (11,267,552)        (12,517,553)     (23,785,105)

Net income (loss)                                       24,263,489          19,263,489       43,526,978

Contributions                                            1,350,000           1,350,000        2,700,000

Distributions                                           (7,170,976)         (2,170,975)      (9,341,951)
                                                     -------------       -------------    -------------
Partners' capital, December 31, 2001                     7,174,961           5,924,961       13,099,922

Net income                                              30,041,407          25,041,408       55,082,815

Contributions                                            1,000,000           1,000,000        2,000,000

Distributions                                          (29,268,604)        (24,268,605)     (53,537,209)
                                                     -------------       -------------    -------------
Partners' capital, December 31, 2002                 $   8,947,764       $   7,697,764    $  16,645,528
                                                     =============       =============    =============
</Table>

                                      F-42
<Page>

TRADING COVE ASSOCIATES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2002, 2001 AND 2000

STATEMENTS OF CASH FLOWS

<Table>
<Caption>
                                                                           PREVIOUSLY                          PREVIOUSLY
                                                                            REPORTED          RESTATED          REPORTED
                                                                              2002              2002              2001
                                                                         --------------    --------------    --------------
<S>                                                                      <C>               <C>               <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                      $    1,317,815    $   55,082,815    $   (4,551,936)
                                                                         --------------    --------------    --------------

  Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating activities
    Amortization                                                                221,518           221,518           221,517
    Depreciation                                                                  7,641             7,641            12,708
    Change in assets and liabilities
      Increase in relinquishment fee receivable                              (4,983,247)       (4,983,247)       (3,113,366)
      Decrease (increase) in development fee receivable                       1,176,000         1,176,000          (672,000)
      Decrease in management fee receivable                                         ---               ---               ---
      Decrease in development costs and estimated
        loss in excess of amounts billed                                            ---               ---         1,628,936
      (Increase) decrease in other current assets                                (4,000)           (4,000)            1,868
      (Decrease) increase in accounts payable and accrued expenses              (64,237)          (64,237)           38,911
      Increase (decrease) in subcontracted services payable                   4,897,000          (430,791)        2,663,244
      Decrease in development loss provision                                        ---          (165,634)              ---
      (Decrease) increase in amounts billed in excess of development
        costs and estimated loss                                             (1,406,422)          759,212         2,819,761
      Decrease in accrued obligations                                               ---               ---               ---
                                                                         --------------    --------------    --------------
          Total adjustments                                                    (155,747)       (3,483,538)        3,601,579
                                                                         --------------    --------------    --------------

          Net cash provided by (used in) operating activities                 1,162,068        51,599,277          (950,357)
                                                                         --------------    --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                                ---               ---            (1,484)
                                                                         --------------    --------------    --------------
          Net cash used in investing activities                                     ---               ---            (1,484)
                                                                         --------------    --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Partners' contributions                                                     2,000,000         2,000,000         2,700,000
  Distributions                                                              (3,100,000)      (53,537,209)       (1,600,000)
                                                                         --------------    --------------    --------------
          Net cash (used in) provided by financing activities                (1,100,000)      (51,537,209)        1,100,000
                                                                         --------------    --------------    --------------

Net increase in cash and cash equivalents                                        62,068            62,068           148,159

Cash and cash equivalents at beginning of year                                  682,070           682,070           533,911
                                                                         --------------    --------------    --------------

Cash and cash equivalents at end of year                                 $      744,138    $      744,138    $      682,070
                                                                         ==============    ==============    ==============

<Caption>
                                                                                             PREVIOUSLY
                                                                            RESTATED          REPORTED          RESTATED
                                                                              2001              2000              2000
                                                                         --------------    --------------    --------------
<S>                                                                      <C>               <C>                <C>
CASH FLOWS FROM OPERATING ACTIVITIES
  Net income (loss)                                                      $   43,526,978    $     (267,948)    $  34,016,184
                                                                         --------------    --------------    --------------

  Adjustments to reconcile net income (loss)
    to net cash provided by (used in) operating activities
    Amortization                                                                221,517           222,124           222,124
    Depreciation                                                                 12,708            14,036            14,036
    Change in assets and liabilities
      Increase in relinquishment fee receivable                              (3,113,366)      (15,573,210)      (15,573,210)
      Decrease (increase) in development fee receivable                        (672,000)         (588,000)         (588,000)
      Decrease in management fee receivable                                         ---         2,930,329         2,930,329
      Decrease in development costs and estimated
        loss in excess of amounts billed                                      1,766,730           453,905         1,975,844
      (Increase) decrease in other current assets                                 1,868             2,451             2,451
      (Decrease) increase in accounts payable and accrued expenses               38,911          (138,863)         (138,863)
      Increase (decrease) in subcontracted services payable                 (14,051,965)       14,270,782        13,020,782
      Decrease in development loss provision                                 (1,325,476)              ---          (195,939)
      (Decrease) increase in amounts billed in excess of development
        costs and estimated loss                                              4,007,443               ---               ---
      Decrease in accrued obligations                                       (23,621,754)              ---       (30,610,132)
                                                                         --------------    --------------    --------------
          Total adjustments                                                 (36,735,384)        1,593,554       (28,940,578)
                                                                         --------------    --------------    --------------

          Net cash provided by (used in) operating activities                 6,791,594         1,325,606         5,075,606
                                                                         --------------    --------------    --------------

CASH FLOWS FROM INVESTING ACTIVITIES
  Purchase of property and equipment                                             (1,484)           (2,744)           (2,744)
                                                                         --------------    --------------    --------------
          Net cash used in investing activities                                  (1,484)           (2,744)           (2,744)
                                                                         --------------    --------------    --------------

CASH FLOWS FROM FINANCING ACTIVITIES
  Partners' contributions                                                     2,700,000         2,400,000         2,400,000
  Distributions                                                              (9,341,951)       (3,446,224)       (7,196,224)
                                                                         --------------    --------------    --------------
          Net cash (used in) provided by financing activities                (6,641,951)       (1,046,224)       (4,796,224)
                                                                         --------------    --------------    --------------

Net increase in cash and cash equivalents                                       148,159           276,638           276,638

Cash and cash equivalents at beginning of year                                  533,911           257,273           257,273
                                                                         --------------    --------------    --------------

Cash and cash equivalents at end of year                                 $      682,070    $      533,911    $      533,911
                                                                         ==============    ==============    ==============
</Table>

                                      F-43

<Page>

          (c)  REPORTS ON FORM 8-K

               (i)    Form 8-K filled on November 13, 2002

ITEM 5.

The Mohegan Tribal Gaming Authority (the "Authority)" filed:

     (i) Form 10-Q/A for the quarter ended December 31, 2000, (ii) Form 10-Q/A
for the quarter ended March 31, 2001, (iii) Form 10-Q/A for the quarter ended
June 30, 2001, (iv) Form 10-K/A for the quarter ended September 30, 2001, and
(v) Form 10-Q/A for the quarter ended December 31, 2001, (vi) Form 10-Q/A for
the quarter ended March 31, 2002 (vii) Form 10-Q/A for the quarter ended June
30, 2002 a copy of each of which has been filed as an exhibit to this report and
is incorporated by reference to the Authority's electronic filing of such
reports on Form 10-Q/A and Form 10-K/A, Securities and Exchange Commission file
reference no. 033-80655.

Date of Report: November 12, 2002

               (ii)   Form 8-k filed on December 6, 2002

ITEM 5.

On December 5, 2002, the Mohegan Tribal Gaming Authority (the "Authority") filed
a press release report on Form 8-K for the fourth quarter and fiscal year ended
September 30, 2002, a copy of which has been filed as an exhibit to this report
and is incorporated by reference to the Authority's electronic filing of such
report on Form 8-K, Securities and Exchange Commission file reference no.
033-80655.

Date of Report: December 5, 2002

               (iii)  Form 8-K filed on December 20, 2002

ITEM 5.

On December 19, 2002, the Mohegan Tribal Gaming Authority (the "Authority")
filed its annual report on Form 10-K for the year ended September 30, 2002, a
copy of which has been filed as an exhibit to this report and is incorporated by
reference to the Authority's electronic filing of such report on Form 10-K,
Securities and Exchange Commission file reference no. 033-80655.

Date of Report: December 19, 2002

                                       52

<Page>

Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, as amended, the registrant has duly caused this report to
be signed on its behalf by the undersigned thereunto duly authorized.

                            WATERFORD GAMING, L.L.C.

Date:  June 4, 2003                     By: /s/ Len Wolman
                                            ----------------------------------
                                            Len Wolman, Chairman of the Board of
                                            Directors, Chief Executive Officer


Date:  June 4, 2003                     By: /s/ Alan Angel
                                            ----------------------------------
                                            Alan Angel, Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended,
this report has been signed by the following persons on behalf of the registrant
and in the capacities indicated on June 4, 2003.


SIGNATURE                                    TITLE


/s/ Len Wolman                               Chairman of the Board of Directors,
---------------------------
Len Wolman                                   Chief Executive Officer


/s/Del J. Lauria                             Member of the Board of Directors,
---------------------------
Del J. Lauria                                Secretary


/s/ Mark Wolman                              Member of the Board of Directors
---------------------------
Mark Wolman


/s/ Stephen F. Slavik                        Member of the Board of Directors
---------------------------
Stephen F. Slavik

                                       53
<Page>

                                 CERTIFICATIONS

I, Len Wolman, certify that:

1. I have reviewed this annual report on Form 10-K/A of Waterford Gaming,
   L.L.C.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "EVALUATION DATE"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and


<Page>

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: June 4, 2003
     -------------

/s/ Len Wolman
---------------------------
Len Wolman
Chief Executive Officer


<Page>

I,  Alan Angel, certify that:

1. I have reviewed this annual report on Form 10-K/A of Waterford Gaming,
   L.L.C.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this annual report;

4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

a) designed such disclosure controls and procedures to ensure that material
information relating to the registrant, including its consolidated subsidiaries,
is made known to us by others within those entities, particularly during the
period in which this annual report is being prepared;

b) evaluated the effectiveness of the registrant's disclosure controls and
procedures as of a date within 90 days prior to the filing date of this annual
report (the "EVALUATION DATE"); and

c) presented in this annual report our conclusions about the effectiveness of
the disclosure controls and procedures based on our evaluation as of the
Evaluation Date;

5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation, to the registrant's auditors and the audit committee of
registrant's board of directors (or persons performing the equivalent
functions):

a) all significant deficiencies in the design or operation of internal controls
which could adversely affect the registrant's ability to record, process,
summarize and report financial data and have identified for the registrant's
auditors any material weaknesses in internal controls; and

b) any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal controls; and


<Page>

6. The registrant's other certifying officer and I have indicated in this annual
report whether there were significant changes in internal controls or in other
factors that could significantly affect internal controls subsequent to the date
of our most recent evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.

Date: June 4, 2003
     -------------

/s/ Alan Angel
---------------------------
Alan Angel
Chief Financial Officer