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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K

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

For the fiscal year ended December 31, 2001

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:

Title of each class Name of each exchange on which registered
NONE


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

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.

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

PART I. PAGE

Item 1. Business 1
Item 2. Properties 8
Item 3. Legal Proceedings 8
Item 4. Submission of Matters to a Vote of Security Holders 8

PART II.

Item 5. Market for Registrant's Common Equity and
Related Stockholder Matters 9
Item 6. Selected Financial Data 9
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
Item 7a. Quantitative and Qualitative Disclosures about
Market Risk 14
Item 8. Financial Statements and Supplementary Data 14
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure 14

PART III.

Item 10. Directors and Executive Officers of the Registrant 15
Item 11. Executive Compensation 16
Item 12. Security Ownership of Certain Beneficial Owners and
Management 16
Item 13. Certain Relationships and Related Transactions 17

PART IV.

Item 14. Exhibits, Financial Statement Schedules and
Reports on Form 8-K 18


PART I

Certain Forward Looking Statements
- ----------------------------------

Certain information included in this Form 10-K and other materials filed or to
be filed by Waterford Gaming, L.L.C. (the "Company") with the Securities and
Exchange Commission (the "Commission") (as well as information included in oral
statements or other written statements made or to be made by the Company)
contains forward-looking statements, within the meaning of Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities Exchange
Act of 1934, as amended. Such statements include, but are not limited to,
information relating to the Mohegan Sun Casino (the "Mohegan Sun") including
plans for future expansion and other business development activities, financing
sources, the effects of regulation (including gaming and tax regulation) and
competition. Any forward-looking statements included herein do not purport to be
predictions of future events or circumstances. Forward-looking statements can be
identified by, among other things, the use of forward-looking terminology such
as "believes", "expects", "may", "will", "should", "seeks", "pro forma",
"anticipates", "intends", or the negative of any thereof or other variations
thereon or comparable terminology. Such forward-looking information involves
important risks and uncertainties that could significantly affect anticipated
results in the future and, accordingly, such results may differ from those
expressed in any forward-looking statements made by or on behalf of the Company.


ITEM 1. BUSINESS

A. GENERAL

The Company is a special purpose company, formed solely for the purpose of
holding its partnership in Trading Cove Associates ("TCA"), a Connecticut
general partnership and the manager (until January 1, 2000) and developer of the
Mohegan Sun. The Company also invested in certain financial instruments issued
by the Mohegan Tribal Gaming Authority (the "Authority"). The Company is a
Delaware limited liability company formed on September 30, 1996. Waterford
Gaming Finance Corp. ("Finance"), a Delaware corporation, is a wholly owned
subsidiary of the Company. The principal executive offices of the Company and
Finance are located at 914 Hartford Turnpike, Waterford, Connecticut 06385 and
their telephone number is (860) 442-4559.



The Limited Liability Company Agreement of the Company (the "Agreement") is
effective until September 30, 2020 and may be terminated by unanimous decision
of the members or upon the occurrence of events as stated in the Agreement. The
Agreement provides for the property, affairs and business of the Company to be
managed by a four-member Board of Directors which consists of two directors
appointed by Slavik Suites, Inc. ("Slavik") and two directors appointed by LMW
Investments, Inc. ("LMW") (the "Board of Directors"). 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 TCA.
Prior to the offering of the Company's and Finance's 12-3/4% senior notes due
November 15, 2003 of which $65,000,000 in aggregate principal amount was issued
on November 8, 1996 (the "$65 Million Senior Notes"), Slavik and LMW were
partners of TCA. In connection with the formation of the Company, Slavik and LMW
each contributed to the Company their interests in TCA in exchange for a 66-2/3%
and 33-1/3% ownership interest, respectively, of the Company. Upon consummation
of the offering of the $65 Million Senior Notes, (i) $6,666,667 of the proceeds
were distributed directly to Slavik for the purpose of redeeming certain
ownership interests in Slavik, and (ii) $3,333,333 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 $65 Million
Senior Notes to purchase RJH Development Corp.'s ownership interest in TCA. As a
result of these transactions (collectively the "Reorganization"), each of Slavik
and LMW owned 67.7967% and 32.2033% of the Company, respectively. The Company is
a managing general partner of TCA. As a result of the Reorganization, the only
two partners of TCA are the Company and Sun Cove Limited ("Sun Cove").

In connection with the Company's and Finance's issuance on March 17, 1999 of
$125 Million 9-1/2% senior notes payable which mature March 15, 2010 (the "$125
Million Senior Notes"), each of Slavik and LMW have contributed their respective
interests in the Company concurrently to a Delaware limited liability company,
Waterford Group, L.L.C. (the "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 and are as follows:


Slavik Suites, Inc. 67.7967%
LMW Investments, Inc. 32.2033%
---------
100.0000%
=========

Upon consummation of the offering of the $125 Million Senior Notes, (i) the $65
Million 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 TCA, Leisure Resort Technology, Inc. ("Leisure"), in
satisfaction of a contractual obligation.

Additional capital contributions may be made to the Company by its member. 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
Agreement; however, the indenture, between the Company and Finance, as the
Issuers, and State Street Bank and Trust Company, as Trustee, relating to $125
Million Senior Notes (the "Indenture"), prohibits the Company from incurring
additional indebtedness. The Agreement also provides that any disputes which
arise under the Agreement and which remain unresolved after 30 days will be
settled through arbitration.

1

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.

The $125 Million Senior Notes bear interest at a rate of 9-1/2% per annum,
payable semi-annually in arrears on March 15 and September 15 which commenced on
September 15, 1999.

The principal amount of the $125 Million Senior Notes is payable on March 15,
2010. The Company and Finance may elect to redeem the $125 Million Senior Notes
at any time on or after March 15, 2004 at a redemption price equal to a
percentage (105.182% after March 14, 2004, and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008, 100.864% after March 14, 2009, and to 100% after March 14,
2010) of the principal amount thereof plus accrued interest. The $125 Million
Senior Notes provide that upon the occurrence of a Change of Control (as
defined), 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.

If the Company and Finance have any Company Excess Cash, as defined, they must
redeem the $125 Million Senior Notes (on a semi-annual basis on March 15 and
September 15) equal to a percentage (109.500% after March 15, 1999 and declining
to 108.636% after March 14, 2000, 107.773% after March 14, 2001, 106.909% after
March 14, 2002, 106.045% after March 14, 2003, 105.182% after March 14, 2004,
104.318% after March 14, 2005, 103.455% after March 14, 2006, 102.591% after
March 14, 2007, 101.727% after March 14, 2008, 100.864% after March 14, 2009,
and to 100.000% after March 14, 2010). In certain circumstances, if either the
Company or 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 relating to the $125 Million Senior Notes contains certain
affirmative and negative covenants customarily contained in agreements of this
type, including without limitation, covenants that restrict, subject to
specified exceptions the Company's and Finance's ability to (i) borrow money,
(ii) pay dividends on stock or make 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 fund with a trustee for interest reserves.

The Company has one primary source of revenue and cash flow: payments from TCA.

Trading Cove Associates
- -----------------------

TCA was organized on July 27, 1993. The primary purpose of TCA has been to
assist the Mohegan Tribe of Indians of Connecticut (the "Tribe") and the
Authority, an instrumentality of the Tribe, in obtaining federal recognition,
negotiate the tribal-state compact with the State of Connecticut, obtain
financing for the development of the Mohegan Sun located on certain Tribal land
in Uncasville, Connecticut, negotiate the Amended and Restated Gaming Facility
Management Agreement (the "Management Agreement") and participate in the design
and development of the Mohegan Sun which commenced operations on October 12,
1996. Since the opening of the Mohegan Sun and until January 1, 2000, TCA had
overseen the Mohegan Sun's day-to-day operations. The TCA partnership will
terminate on December 31, 2040, or earlier, in accordance with the terms of the
partnership agreement. The Company has a 50% voting and profits interest in TCA.
The remaining 50% interest is owned by Sun Cove, an affiliate of Sun
International Hotels Limited ("Sun International").

Trading Cove Associates - Material Agreements
- ---------------------------------------------

On February 7, 1998, TCA, the Tribe and the Authority finalized contract
negotiations and are moving forward with a significant expansion project at the
Mohegan Sun (the "Project"). As a result, TCA and the Authority have terminated
the Management Agreement effective January 1, 2000.

Under the terms of an agreement (the "Relinquishment Agreement") TCA continued
to manage the Mohegan Sun under the Management Agreement until January 1, 2000.
On December 31, 1999 the Management Agreement terminated and the Tribe assumed
day-to-day management of the Mohegan Sun. Under this Relinquishment Agreement to
compensate TCA for terminating its rights under the Management Agreement and the
Hotel/Resort Management Agreement, the Authority has agreed to pay to TCA 5% of
Revenues, as defined, (the "Relinquishment Fees") generated by the Mohegan Sun
during the 15-year period commencing on January 1, 2000.


2

Relinquishment Agreement
- ------------------------

The payments under the Relinquishment Agreement will be divided into senior
relinquishment payments and junior relinquishment payments, each of which will
be 2.5% of "Revenues". Revenues are defined as gross gaming revenues (other than
Class II gaming revenue, i.e. bingo) and all other facility revenues (including,
without limitation, hotel revenues, food and beverage sales, parking revenues,
ticket revenues and other fees or receipts from the convention/events center in
the 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). Revenues exclude revenues generated by
any future expansion of the Mohegan Sun, after completion of the Project. Senior
relinquishment payments will be payable quarterly in arrears commencing on April
25, 2000 for the quarter ended March 31, 2000, and the junior relinquishment
payments will be payable semi-annually in arrears commencing on July 25, 2000
for the six months ended June 30, 2000.



A summary of relinquishment payments received is as follows:

Senior Junior Total
----------- ----------- -----------
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
=========== =========== ===========

The Relinquishment Agreement provides that each of the senior and junior
relinquishment payments are subordinated in right of payment to payment of
senior secured obligations including the Authority's bank credit facility, and
that the junior relinquishment payments are further subordinated to payment of
all other senior obligations including the Authority's 8-1/8% Senior Notes due
2006. The Relinquishment Agreement also provides that all relinquishment
payments are subordinated in right of payment to an annual minimum priority
distribution to the Tribe from the operations of the Mohegan Sun.

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

(1) Payments to the Tribe. Except for payments of the minimum priority
distributions and reasonable charges for utilities or other governmental
services supplied by the Tribe to the Authority, the Authority may not make any
distributions to the 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 Tribe to the Authority, the Authority agrees to abide
by certain restrictions on transactions with the 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's 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 only engage 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 TCA agreed that it will
not solicit any employee of the other party or any affiliate of the other party
for five years.

TCA has granted to the Authority an exclusive and perpetual license with respect
to trademarks and other similar rights, including the "Mohegan Sun" name, used
at or developed for the Mohegan Sun. The Authority has agreed, however, that it
will only use the word "Sun" in conjunction with the Mohegan Sun and together
with "Mohegan" or "Mohegan Tribe".

With certain limitations set forth in the Relinquishment Agreement, both the
Tribe and the Authority have waived immunity from unconsented suit for certain
enforcement rights of TCA arising under the Relinquishment Agreement.


3

Development Agreement
- ---------------------

TCA and the Authority entered into a development services agreement on February
7, 1998. Under this "Development Agreement", TCA agreed to oversee the design,
construction, furnishing, equipping and staffing of the Project 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 and that TCA has no further obligations
relating to the staffing of the Project. The first phase of the Project,
the Casino of the Sky, opened on September 25, 2001.

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


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
-----------
$12,516,000
===========

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and Sun International Management Limited ("SIML"). Pursuant to the
Development Services Agreement Phase II, TCA subcontracted with SIML and SIML
agreed to perform those services assigned to SIML by TCA in order to facilitate
TCA's fulfillment of its duties and obligations to the Authority under the
Development Agreement. The Development Services Agreement Phase II was
subsequently assigned to Sun Cove. TCA shall pay to Sun Cove a fee, as
subcontractor (the "Development Services Fee Phase II") equal to 3% of the
development costs of the Project, less all costs incurred by TCA in connection
with the Project. 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 are known. The fee is to be paid from
available cash flow of TCA, if any, subordinate to certain other fees as
described below under the heading "Amended and Restated Omnibus Termination
Agreement".

SIML has further subcontracted with Wolman Construction LLC ("Construction")
(the "Local Construction Services Agreement") to provide certain of those
services assigned to SIML by TCA. This agreement was also assigned to Sun Cove.
Sun Cove shall pay 20.83% of the Development Services Fee Phase II as and when
Sun Cove receives payment from TCA. Construction has subcontracted with The
Slavik Company for 14.30% of its fee.

During the design phase, TCA will assist the Authority in the engagement of the
architect and the construction manager, the preparation of design, construction,
and furnishings budgets, preliminary program evaluation, design development and
the approval of final detailed plans and specifications prepared by the
architect. The Authority has agreed to assign to TCA its responsibilities under
any architectural and/or engineering agreements to allow TCA to supervise and
administer directly the duties of the architect and/or engineer thereunder.

The Development Agreement provides that the design and construction of the
Project must comply with all federal and Connecticut statutes and regulations
that otherwise would apply if the Project were located outside the
jurisdictional boundaries of the Tribe's land.

During the construction phase, TCA will be responsible for the administration
and supervision of the construction manager and the entire construction process.
TCA will act as the Authority's representative in connection with construction
contracts that are approved by the Authority. Specifically, TCA will be
responsible for overseeing all persons performing work on the Project site,
inspecting the progress of construction, determining completion dates and
reviewing contractor payment requests submitted to the Authority. The
Development Agreement specifically gives TCA the right to include provisions in
construction contracts that impose liquidated damage payments in the event of
failure to meet construction schedules.

As permitted by the Development Agreement, the Authority has elected to engage a
retail consultant to oversee the design and construction of the retail
facilities in the Project. This work will be under the overall supervision of
TCA, which will integrate the design and construction of the retail facilities
with that of the other components of the Project.

The Development Agreement requires TCA to implement procedures described in the
Tribal Employment Rights Ordinance. In effect, this requires TCA to give
preference to business entities or persons which have been approved by the
Authority in the selection of all contractors, vendors and suppliers engaged in
the development of the Project. In addition to the staffing of the operations of
the Project, the Development Agreement requires that TCA give preference to
qualified members of the Tribe (and their spouses and children) and thereafter
to enrolled members of other federally recognized Indian tribes.

The Authority will purchase equipment, furniture and furnishings required to
operate the expanded facilities from vendors selected by TCA or lease such
equipment, furniture and furnishings on terms arranged by TCA and approved by
the Authority.

The Development Agreement terminates after the earlier of completion of the
Project 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 agreement to
arbitration and have agreed that punitive damages may not be awarded to either
party by any arbitrator. The Authority has also waived sovereign immunity for
the purposes 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.


4


Management Agreement
- --------------------

The Management Agreement between TCA and the Tribe was entered into on August
30, 1995. The Tribe had assigned its rights and obligations in this agreement to
the Authority. The Authority and TCA had consented to this assignment.

Until January 1, 2000, 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 (the final payment was received by TCA from the Authority on January 25,
2000) 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):

I II III
--------------- ------------------ -----------------
40% of Net Revenues in Tier I Revenues in
Revenues up to plus 35% of Net Tiers I & II plus
Revenues between 30% of Net
Revenues above
--------------- ------------------ -----------------

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



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.

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, Sun International, the Company, SIML, LMW, Sun Cove, Slavik and
Construction; which (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 will 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 Sun Cove a percentage of an annual fee of $2.0 million
less the actual expenses incurred by TCA. 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, 2001 and
2000, $1,712,791 ($856,396 to Sun Cove and $856,395 to affiliates of
the Company)and $1,849,506 ($924,753 to Sun Cove and $924,753 to
affiliates of the Company), respectively, had 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, 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, 2001 these capital contributions aggregated
$5,100,000. $3,600,000 has been repaid to the partners of TCA, 50% to
the Company and 50% to Sun Cove.

As of December 31, 2001, $1,500,000 in capital contributions remained
outstanding. On January 28, 2002, a cash distribution of $750,000 was
made to each partner and on March 8, 2002 a cash contribution of
$200,000 was made by each partner.

(c) Third, to pay any accrued amounts for obligations performed prior
to January 1, 2000 under the Financing Arrangement Agreement. For the
year ended December 31, 2000 $2,977,932 ($2,069,525 to Sun
International and $908,407 to the Company) had been paid by TCA in
terms of the third priority. All required payments were made during
2000.

(d) Fourth, to make the payments set forth in the agreements relating
to Development Services Agreement Phase II and the Local Construction
Services Agreement. For the year ended December 31, 2000 $10,807,000
($8,555,902 to Sun Cove, $1,929,191 to Construction and $321,907 to
The Slavik Company) had been paid and incurred by TCA in terms of the
fourth priority. No payments are required or due at December 31, 2001.
The contingent obligation at December 31, 2001 was approximately
$8,255,000.


5


(e ) Fifth, to pay Sun Cove 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. For the years ended December 31, 2001
and 2000 $5.0 million had been paid and incurred by TCA 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. For the years ended
December 31, 2001 and 2000, $23,621,754 ($11,810,877 to SIML and
$11,810,877 to the Company) and $23,299,200 ($11,649,600 to SIML and
$11,649,600 to the Company), respectively, had been paid and incurred
by TCA in terms of the sixth priority. The final required payments
were made during 2001.

(g) Seventh, for the period beginning March 31, 2000 and ending
December 31, 2014, to pay each of Sun Cove and the Company twenty-five
percent (25%) of the relinquishment payments. For the years ended
December 31, 2001 and 2000, $19,457,160 ($9,728,580 to Sun Cove and
$9,728,580 to the Company) and $0, respectively, had been paid and
incurred by TCA in terms of the seventh priority. The contingent
obligation at December 31, 2001 was approximately $23,902,000.

(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 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 amounts 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 utlitized by TCA pursuant to the Amended and Restated Omnibus
Financing Agreement which was termintated effective January 1, 2000.

The Mohegan Tribal Gaming Authority
- -----------------------------------

The Tribe is a federally recognized Indian tribe with an approximately 390-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 on 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 390-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.



The Mohegan Sun
- ---------------

The Authority owns and operates the Mohegan Sun, a 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 opened in
October 1996 at a cost of approximately $303.0 million and is currently
undergoing a $960.0 million expansion. The Mohegan Sun is one of two legally
authorized gaming operations in New England offering both traditional slot
machines and table games.

The Mohegan Sun currently operates in a 1.9 million square foot facility which
coveys a historical northeastern Indian theme through architectural features and
the use of natural design elements such as timber, stone and water. The original
casino ("Casino of the Earth") is comprised of four quadrants, each of which has
its own unique entrance and reflects a separate seasonal theme - winter, spring,
summer and fall - emphasizing the importance of the seasonal changes to Mohegan
Tribal life. On September 25, 2001, the Authority opened the first phase of the
Project ("Casino of the Sky"). The Casino of the Sky includes the world's
largest planetarium dome, which projects changing displays of constellations,
sun cycles and clouds. Wombi Rock, a three-story crystal mountain built inside
the Casino of the Sky, is crafted from more than 12,000 individual plates of
onyx and alabaster fused to glass. The Casino of the Sky also includes an
85-foot-high waterfall, which pays tribute to the journey of the Tribe from
upstate New York.


6


The Casino of the Earth includes 176,500 square feet of gaming space with 3,655
slot machines, 158 table games, 42 poker tables and a 9,000 square foot
simulcasting race book facility. On April 18, 2001, the Hall of the Lost Tribes
smoke-free gaming venue opened featuring 637 slot machines, quick-service food
and beverage concessions, and a new cocktail bar with video poker. Food and
beverage amenities include a 680-seat buffet, three full-service themed fine
dining restaurants, a 24-hour coffee shop, a New York style delicatessen, a ten
station food court featuring international and domestic cuisine, and multiple
service bars for a total of 1,888 restaurant seats. The 350-seat, 10,000 square
foot Wolf Den Lounge located in the center of the Casino of the Earth hosts live
musical entertainment seven days a week. Three retail shops are located within
the Casino of the Earth and provide shopping opportunities ranging from Mohegan
Sun souvenirs to clothing to cigars.

The Casino of the Sky includes 119,000 square feet of gaming space with 2,564
slot machines, 82 table games, the Shops at Mohegan Sun, the 10,000-seat Mohegan
Sun Arena and a 300-seat cabaret. Wombi Rock serves as a three-level lounge and
bar. Food and beverage amenities include Jasper White's Summer Shack, Todd
English's Tuscany, Michael Jordan's Steakhouse and 23 Sportcafe, Rain, the
Rising Moon Gallery of Eateries and a 350-seat Sunburst Buffet. The Shops at
Mohegan Sun located in the Casino of the Sky contain 32 different retail shops,
five of which are owned and operated by the Authority. The remaining 27 are
tenants of the Authority and include, but are not limited to, Boccelli,
Discovery Channel, Godiva, Swarovski and Lux, Bond & Green. For non-gaming
entertainment, the Casino of the Sky offers an arcade-style recreation area and
a child care facility operated by New Horizon Kids Quest, Inc.

The Authority also operates a 4,000 square foot, 16-pump gasoline service
station and convenience center located adjacent to the Mohegan Sun.

The Authority believes ease of access is one of the important factors that
differentiate the Mohegan Sun from its local competition. 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 currently has parking spaces for
8,265 guests and 3,075 employees. The gaming industry in Connecticut experiences
seasonal fluctuations, with the heaviest gaming activity at the Mohegan Sun
occuring during the period from July through October.




The Mohegan Sun Expansion
-------------------------

In order to capitalize on the strong demand for gaming opportunities in the
northeastern United States and the Mohegan Sun's popularity, the Authority
decided in 1998 to expand the casino significantly and to add a hotel,
convention facilities, an entertainment arena and additional retail
establishments. The first phase of the Project, the Casino of the Sky, opened on
September 25, 2001. The remaining components, including the majority of a 1,200
room luxury hotel and approximately 100,000 square feet of convention space, are
expected to open in April 2002 and full completion of construction is expected
in June 2002.

The following is a summary of some of the attributes of the Mohegan Sun before
and after the expansion:




Casino Retail Convention Guest
Space Slot Table Poker Restaurant Hotel Space Event Space Parking
(sq. ft.) Machines Games Tables Seats Rooms (sq.ft.) Seating (sq. ft.) Spaces
--------- -------- ----- ------ ---------- ----- ------- ------- --------- -------
Resort before expansion
(prior to September 25,
2001) (1).............. 176,500 3,655 158 42 1,888 0 5,476 5,015 0 8,265

Resort after expansion
(estimated) (2)......... 295,500 6,219 240 42 2,976 1,200 135,476 10,350 100,000 12,865
__________________________


(1) These figures include the effect of the establishment of the 4,665-seat
Uncas Pavillion (a temporary entertainment structure for special events)
and the effect of the opening of the Hall of the Lost Tribes smoke-free
gaming venue which added an additional 637 slot machines as if both had
occured prior to the expansion. The Uncas Pavillion has been replaced by
the 10,000-seat Mohegan Sun Arena and is no longer being used.

(2) These figures include 2,700 additional parking spaces associated with
the construction of the Indian Summer Parking Garage which is projected to
be opened in the summer of 2002, an additional 1,700 space parking garage
projected to be opened in the spring of 2002 and 200 additional valet
parking spaces available in the spring of 2002.



The information concerning Sun International, the Tribe and the Authority has
been derived from pubicly filed information.


7



Item 2. PROPERTIES

The Company does not have an interest in real property.

Item 3. LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology, Inc. ("Leisure") 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 and Trading Cove Associates, Waterford Gaming,
L.L.C., LMW Investments, Inc. and Slavik Suites, Inc. entered into a settlement
and release agreement. Pursuant to this settlement and release agreement,
Waterford Gaming, L.L.C. bought out Leisure's beneficial interest in Trading
Cove Associates.

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 through 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
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.

Discovery has commenced. In a scheduling order dated August 9, 2001, the Court
directed the parties to report to the Court no later than March 29, 2002
regarding the feasibility of settlement, the estimated length of jury selection
and the estimated length of trial. 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
potential 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.

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, 2001.



8


PART II

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

Not applicable.

Item 6. SELECTED FINANCIAL DATA


For the Year Ended
------------------



2001 2000 1999 1998 1997
-------------- -------------- -------------- -------------- --------------


OPERATING RESULTS
Organizational and
administrative fee income-
Trading Cove Associates $ 11,810,877 $ 11,649,600 $ 14,252,209 $ 4,231,768 ---
25% of relinquishment
payments-Trading Cove
Associates 9,728,580 --- --- --- ---
Interest and dividend
income 1,330,711 1,894,738 6,144,502 4,873,323 4,592,208
Subordinated notes fee
income-Trading Cove
Associates --- 692,782 3,731,806 3,229,253 2,732,530
Completion guarantee notes
fee income-Trading Cove
Associates --- 215,625 903,438 467,500 ---
Management services income-
Trading Cove Associates --- --- 1,664,699 3,584,313 ---
-------------- -------------- -------------- -------------- --------------
Total revenue 22,870,168 14,452,745 26,696,654 16,386,157 7,324,738
-------------- -------------- -------------- -------------- --------------

Total expenses (13,579,600) (13,490,367) (24,789,253) (9,576,278) (9,340,510)

Equity in income (loss)
of Trading Cove Associates (2,715,996) (574,002) 6,115,300 (482,869) 834,643
-------------- -------------- -------------- -------------- --------------
Net income (loss) $ 6,574,572 $ 388,376 $ 8,022,701 $ 6,327,010 $ (1,181,129)
============== ============== ============== ============== ==============
OTHER DATA:
Interest expense $ 11,560,994 $ 11,641,049 $ 19,045,076 $ 7,837,552 $ 8,687,704
Net cash used in
operating activities --- 1,556,537 --- --- 5,835,475
Net cash provided by
operating activities 5,394,941 --- 21,753,116 2,561,515 ---
Net cash used in
investing activities --- 14,557,877 --- --- ---
Net cash provided by
investing activities 148,647 --- 18,920,350 1,020,625 9,043,282
Net cash used in
financing activities 5,996,660 40,199,182 --- 1,031,555 3,816,560
Net cash provided by
financing activities --- --- 16,880,807 --- ---

YEAR-END STATUS:
Total current assets $ 38,127,059 $ 34,708,598 $ 72,724,437 $ 6,459,361 $ 9,980,267
Trading Cove Associates-
equity investment 5,778,458 7,944,454 9,041,568 8,662,198 10,384,292
Beneficial interest-Leisure
Resort Technology, Inc. 4,918,029 5,296,019 5,674,009 4,191,909 ---
Investment in 15%
subordinated notes
receivable --- --- --- 32,059,517 27,742,146
Investment in completion
guarantee subordinated
notes receivable --- --- --- 5,075,000 2,548,162
Deferred financing costs net
of accumulated amortization 3,010,202 3,377,066 3,781,051 3,339,780 2,702,744
Fixed assets net of
accumulated depreciation 22,476 33,256 44,036 --- ---
-------------- -------------- -------------- -------------- --------------
Total assets $ 51,856,224 $ 51,359,393 $ 91,265,101 $ 59,787,765 $ 53,357,611
============== ============== ============== ============== ==============

Total current liabilities $ 3,400,556 $ 3,481,637 $ 3,576,539 $ 1,037,887 $ 1,081,043
12-3/4% senior notes
payable --- --- --- 61,471,000 61,471,000
9-1/2% senior notes
payable 115,434,000 119,691,000 122,159,000 --- ---
-------------- -------------- -------------- -------------- --------------
Total liabilities $ 118,834,556 $ 123,172,637 $ 125,735,539 $ 62,508,887 $ 62,552,043
============== ============== ============== ============== ==============



9



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


Certain Risk Factors
- --------------------

Lack of Operations; Dependence on the Mohegan Sun

The Company does not conduct any business operations other than in connection
with its role as a managing general partner of TCA and activities incidental to
the issuance of the $125 Million 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 primarily from cash flows from TCA and
from cash flows (dividend and interest) from restricted and temporary
investments.

TCA has two current sources of revenue and cash flows, Relinquishment Fees and
Development Fee. 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 and Development Fee. The
Company is entirely dependent upon the performance of the Mohegan Sun, which is
subject to matters over which TCA and the Company have no control including,
without limitation, general economic conditions, effects of competition,
political, regulatory and other factors, and the actual number of gaming
customers and the amount wagered.

Although TCA is entitled to a $14.0 million Development Fee under the
Development Agreement, it has entered into a subcontract with Sun Cove who has
subcontracted with affiliates of the Company to provide certain of the services
required by such agreement and is to pay such subcontractors a Development
Services Fee Phase II and incur expenses equal to 3% of the total cost of the
Project. On October 13, 2000 the Tribe approved a $160 million increase to the
original budget (excluding capitalized interest) of $800 million for the
Project. The final budget for the Project is $960 million. Based upon the final
budgeted cost of the Project of $960 million, such Development Services Fee
Phase II and expenses are expected to be approximately $28.8 million. Such
Development Services Fee Phase II is only payable to the extent of available
cash flow. Thus, ultimately TCA may pay more in Development Services Fee Phase
II to its subcontractors and expenses than it will receive under the Development
Agreement. Although the Tribe has passed a resolution that the total costs of
the Project cannot exceed $960 million, excluding capitalized interest, the
actual costs of the Project may exceed such amount. If the total costs of the
Project increase, then the total Development Services Fee Phase II and expenses
paid by TCA will increase proportionately, which reduces the cash flow
distributable to the Company.

While the Company expects its future operating cash flows will be sufficient to
cover its expenses, including interest costs, the Company cannot give any
assurance that it will be able to do so.

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 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 $125 Million Senior Notes
and additional investments in TCA that may be required in connection with the
Project. No assurance, however, can be given that the operating cash flow will
be sufficient for that purpose.

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


Sources of Revenues
- -------------------

The Company has one primary source of revenue: payments 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.


Distributions on the Company's partnership interest in TCA
- ----------------------------------------------------------

For the year ended December 31, 2001, the Company received $13,781,853 from TCA
and $8,357,604 was due from TCA which represents the Company's share under the
Amended and Restated Omnibus Termination Agreement of approximately $45,715,000
in Relinquishment Fees earned by TCA pursuant to the Relinquishment Agreement
for the same period and $7,028,000 in Development Fee earned by TCA pursuant to
the Development Agreement for the same period. For the year ended December 31,
2000, the Company received $9,788,007 from TCA and $3,770,000 was due from TCA
which represents the Company's share under the Amended and Restated Omnibus
Termination Agreement of approximately $41,004,000 in Relinquishment Fees earned
by TCA pursuant to the Relinquishment Agreement for the same period and
$5,488,000 in Development Fee earned by TCA pursuant to the Development
Agreement for the same period.


10


Results of Operations
- ---------------------

Comparison of Operating Results for the Years Ended
- ---------------------------------------------------
December 31, 2001 and 2000
- --------------------------

Total revenue for the twelve months ended December 31, 2001 was $22,870,168
compared with $14,452,745 for the twelve months ended December 31, 2000. This
increase was primarily attributable to an increase in revenues of the Mohegan
Sun which resulted in greater Relinquishment Fees payments to TCA, by an
increase in Development Fee payments to TCA and by the timing of payments
pursuant to the Amended and Restated Omnibus Termination Agreement.
Organizational and administrative fee income - Trading Cove Associates, as
detailed under point (f) of the table set forth above under "Amended and
Restated Omnibus Termination Agreement" increased by $161,277, 25% of
relinquishment payments - Trading Cove Associates, as detailed under point (g)
of the table set forth above under "Amended and Restated Omnibus Termination
Agreement" increased by $9,728,580, subordinated notes fee income - Trading Cove
Assoicates and completion guarantee notes fee income - Trading Cove Associates,
as detailed under point (c) of the table set forth above under "Amended and
Restated Omnibus Termination Agreement", decreased by $692,782 and $215,625,
respectively. In addition, interest and dividend income decreased by $564,027.

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 the redemption of the
$125 Million Senior Notes in the principal amounts of $452,000 and $3,805,000 on
March 15, 2001 and September 15, 2001, respectively, salaries - related parties
increased by $47,116 due to the increase in Revenues of the Mohegan Sun and
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 a decrease in
insurance expense of approximately $2,500 and by a decrease in legal and other
expenses related to the defense of the Leisure litigation, as detailed under
Part I: Item 3 Legal Proceedings, totaling approximately $3,000). In addition at
December 31, 1999 12-3/4% senior notes tender expense was over accrued by
$90,000.

Equity in loss of Trading Cove Associates for the year ended December 31, 2001
was $2,715,996 compared with $574,002 for the year ended December 31, 2000 as a
result of the increase in the loss from Trading Cove Associates of approximately
$2,142,000 due to payments pursant to the Amended and Restated Omnibus
Termination Agreement exceeding revenues during the period.

As a result of the foregoing factors the Company experienced net income of
$6,574,572 for the twelve months ended December 31, 2001 compared with net
income of $388,376 for the twelve months ended December 31, 2000.


Comparison of Operating Results for the Years Ended
- ---------------------------------------------------
December 31, 2000 and 1999
- --------------------------

Total revenue for the twelve months ended December 31, 2000 was $14,452,745
compared with $26,696,654 for the twelve months ended December 31, 1999. This
decrease was primarily attributable to the termination of the Management
Agreement and the commencement of the Relinquishment Agreement and payment under
the Development Agreement, and by the termination of the Amended and Restated
Omnibus Financing Agreement and the commencement of the Amended and Restated
Omnibus Termination Agreement on January 1, 2000. Subordinated notes fee income
- - Trading Cove Associates decreased by $3,039,024, completion guarantee notes
fee income - Trading Cove Associates decreased by $687,813, management services
income - Trading Cove Associates decreased by $1,664,699 and organizational and
administrative fee income - Trading Cove Associates decreased by $2,602,609 as a
result of the termination of the Management Agreement and the commencement of
the Relinquishment Agreement and payment under the Development Agreement, and by
the termination of the Amended and Restated Omnibus Financing Agreement and the
commencement of the Amended and Restated Omnibus Termination Agreement on
January 1, 2000 as detailed above under "Trading Cove Associates - Material
Agreements". In addition, interest and dividend income decreased by $4,249,764
primarily attributable to the repayment on December 30, 1999 by the Authority of
the Authority subordinated notes.

Total expenses for the twelve months ended December 31, 2000 was $13,490,367
compared with $24,789,253 for the twelve months ended December 31, 1999.
Interest expense decreased by $7,404,027 and amortization on deferred financing
costs decreased by $3,269,920 due primarily to the redemption of the $65 Million
Senior Notes and the issuance of the $125 Million Senior Notes, general and
administrative costs increased by $216,522 (primarily attributable to an
increase in legal and other expenses related to the defense of the Leisure
litigation, as detailed under Part I: Item 3 Legal Proceedings, totaling
approximately $395,200, an increase in rating services expense of approximately
$12,500, and partially offset by a decrease in SEC filing expense of
approximately $14,200, by a decrease in other legal fees of approximately
$62,000, by a decrease in federal and state payroll taxes of approximately
$15,700 and by a decrease in accounting fees of approximately $90,900 (during
the years ended December 31, 2000 and 1999 the Company paid accounting fees to
an affiliate totalling $0 and $95,000, respectively)), 12-3/4% senior notes
tender expense decreased by $702,486 due to the redemption of the $65 Million
Senior Notes and to an over accrual of $90,000 at December 31, 1999 and a
decrease in amortization of beneficial interest Leisure Resort Technology, Inc.
of $139,910 due to the increase in the period over which the asset is amortized.

Equity in (loss) income of Trading Cove Associates for the twelve months ended
December 31, 2000 was $(574,002) compared with $6,115,300 for the twelve months
ended December 31, 1999, as a result of the decrease in income from Trading Cove
Associates of approximately $6,962,600 due to the timing of payments pursuant to
the Amended and Restated Omnibus Termination Agreement and the Amended and
Restated Omnibus Financing Agreement and by a decrease in amortization of
interests purchased of approximately $273,100 due to the increase in the period
over which the interests purchased is amortized.

As a result of the foregoing factors, the Company experienced net income of
$388,376 for the twelve months ended December 31, 2000 compared with net income
of $8,022,701 for the twelve months ended December 31, 1999.


11


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 Sun 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. During
September 1997 and on October 12, 1998 and 1999, the Company purchased from Sun
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 $125 Million 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 sole member Waterford Group.

During 2000, on January 11, 2001, on April 12, 2001, on June 11, 2001, on
December 19, 2001 and on January 10, 2002, the company distributed a total of
$3,059,393, $339,356, $30,104, $1,206,200, $164,000 and $1,416,900,
respectively, to Waterford Group as tax distributions, in accordance with the
terms of the Indenture.

Accordingly, after taking into consideration net income (loss) since inception,
the Company has a members' deficit of approximately $67,000,000 and $71,800,000
at December 31, 2001 and 2000, respectively.

For the twelve months ended December 31, 2001 and 2000, net cash provided by
(used in) operating activities (as shown in the Statements of Cash Flows) was
$5,394,941 and $(1,556,537), respectively.

Current assets increased from $34,708,598 at December 31, 2000 to $38,127,059 at
December 31, 2001. The increase was caused primarily by approximately $5,395,000
of cash provided by operations and by the payment of fees and distributions by
TCA in terms of the Amended and Restated Omnibus Termination Agreement and
offset by the redemption on March 15, 2001 and September 15, 2001 of $125
Million Senior Notes in the principal amounts of $452,000 and $3,805,000,
respectively, and by the scheduled semi-annual payment of interest on March 15,
2001 and September 15, 2001 on the $125 Million Senior Notes in the amounts of
approximately $5,685,000 and $5,664,000, respectively.

Current liabilities decreased from $3,481,637 at December 31, 2000 to $3,400,556
at December 31, 2001. The decrease was primarily attributable to a decrease in
accrued interest on senior notes payable of approximately $119,000 (attributable
to the redemtion on March 15, 2001 and September 15, 2001 of $125 Million Senior
Notes in the principal amounts of $452,000 and $3,805,000, respectively) and
offset by an increase in accrued expenses and accounts payable of approximately
$38,000 (primarily attributable to an increase 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 $29,200 and by an
increase in the amount due for salaries-related parties of approximately
$10,6000).

For the years ended December 31, 2001 and 2000 net cash provided by (used in)
investing activities (as shown in the Statement of Cash Flows) was $148,647 and
$(14,557,877), respectively. 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 at the Mohegan Sun). The net
cash used in investing activities in 2000 was primarily the result of
contributions to TCA of $1,200,000 (to fund certain of TCA's development
expenses in connection with the Project at the Mohegan Sun), the sales and
(purchases) of restricted investments-net of approximately
$(15,081,000)(principally due to the funding of the Interest Reserve Account in
the amount of approximately $15 million on January 4, 2000) and offset by
distributions from TCA of approximately $1,723,000.


12

The Company anticipates that up to $1,950,000 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 at the Mohegan Sun). As of December 31,
2001, $3,550,000 had been contributed by the Company to TCA and on March 8,
2002, the Company contributed an additional $200,000 to TCA to fund certain of
TCA's development expenses in connection with the Project at the Mohegan Sun.

For the twelve months ended December 31, 2001 and 2000, net cash used in
financing activities (as shown in the Statements of Cash Flows) was $5,996,660
and $40,199,182, respectively. The net cash used in financing activities in 2001
was primarily the result of the redemption of the $125 Million 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 sole member
Waterford Group of approximately $1,740,000. The net cash used in financing
activities in 2000 was primarily the result of the redemption of the $125
Million Senior Notes in the principal amounts of $2,277,000 and $191,000 on
March 15, 2000 and September 15, 2000, respectively, and by distributions to the
Company's sole member Waterford Group of approximately $37,731,000, as described
above.

The Company and Finance are required to make a mandatory redemption on September
15 and March 15, of each year, which began September 15, 1999, of $125 Million
Senior Notes using Company Excess Cash, as defined in the Indenture, which the
Company and Finance may have as of the preceding August 1 and February 1. On
August 1, 1999 the Company and Finance had Company Excess Cash, as defined in
the Indenture, available for mandatory redemption of the $125 Million Senior
Notes totaling approximately $8,983,000, and accordingly on September 15, 1999
the Company and Finance made a mandatory redemption of $125 Million Senior Notes
in the principal amount of $2,841,000 at the redemption price of 109.50%. On
February 1, 2000 the Company and Finance had Company Excess Cash, as defined in
the Indenture, available for mandatory redemption of the $125 Million Senior
Notes totaling approximately $8,276,000, and accordingly on March 15, 2000 the
Company and Finance made a mandatory redemption of $125 Million Senior Notes in
the principal amount of $2,277,000 at the redemption price of 108.636%. On
August 1, 2000 the Company and Finance had Company Excess Cash, as defined,
available for mandatory redemption of the $125 Million Senior Notes, totaling
approximately $5,902,000, and accordingly on September 15, 2000 the Company and
Finance made a mandatory redemption of $125 Million Senior Notes in the
principal amount of $191,000 at the redemption price of 108.636%. On February 1,
2001 the Company and Finance had Company Excess Cash, as defined, available for
mandatory redemption of the $125 Million Senior Notes totaling approximately
$6,173,000 and accordingly on March 15, 2001 the Company and Finance made a
mandatory redemption of the $125 Million Senior Notes in the principal amount of
$452,000 at the redemption price of 107.773%. On August 1, 2001 the Company and
Finance had Company Excess Cash, as defined, available for mandatory redemption
of the $125 Million Senior Notes totaling approximately $9,765,000, and
accordingly on September 15, 2001 the Company and Finance made a mandatory
redemption of the $125 Million Senior Notes in the principal amount of
$3,805,000 at the redemption price of 107.773%. On February 1, 2002 the Company
and Finance had Company Excess Cash, as defined, available for mandatory
redemption of the $125 Million Senior Notes totaling approximately $9,793,000,
and accordingly on March 15, 2002 the Company and Finance will make a mandatory
redemption of the $125 Million Senior Notes in the principal amount of
$4,031,000, at the redemption price of 106.909%.

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 $125 Million Senior Notes
and additional investments in TCA that may be required in connection with the
Project at the Mohegan Sun. No assurance, however, can be given that the
operating cash flow will be sufficient for that purpose.


13


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, 2001 and 2000. The fair market value of
the Company's long-term debt at December 31, 2001 and 2000 is estimated to be
approximately $118,897,000 and $118,494,000, 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, 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 matures
March 6, 2002 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.



Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

See Index to Financial Statements on Page 20

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

None.


14


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.

Name Age Position

Len Wolman 47 Chairman of the Board and Chief
Executive Officer
Alan Angel 45 Chief Financial Officer
Del J. Lauria 53 Director and Secretary
Mark Wolman 44 Director
Stephan F. Slavik 55 Director
Richard Slavik 51 Vice President

Len Wolman. Mr. Wolman has been the Chairman of the Board of Directors and the
Chief Executive of the Company since its formation. Mr. Wolman is a managing
partner of TCA. Since 1986, Mr. Wolman has been the Chairman of the Board of
Directors and the Chief Executive Officer of the Waterford Hotel Group, Inc.
Under Mr. Wolman, Waterford Hotel Group, Inc. has grown from one hotel
management contract to twenty-seven properties in ten states. Mr. Wolman was
actively involved in the development, construction and operation of the Mohegan
Sun and is actively involved in the development and construction of the
expansion to the Mohegan Sun. Mr. Wolman was instrumental in the formation of
the relationship of TCA and the Tribe and had been actively working with the
Tribe in connection with obtaining federal recognition, acquiring the site for
the Mohegan Sun and obtaining the financing to construct the Mohegan Sun. Mr.
Wolman has served as President and Chief Executive Officer of Finance since its
inception. Mr. Wolman is a Director and Officer of Slavik Suites, Inc., one of
Waterford Group's members. Mr. Wolman is the brother of Mark Wolman. Mr.
Wolman's wife and Mr. Angel's wife are sisters.

Alan Angel. Mr. Angel became Chief Financial Officer of the Company 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. 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 of the Company, Chief Financial
Officer and Secretary 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 Suites, Inc. 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 Finance since its inception.

Mark Wolman. Mr. Mark Wolman became a Director of the Company upon its
formation. Mr. Wolman is the president of Wolman Homes, Inc. d/b/a Wolman
Construction. Wolman Homes, Inc. 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 Suites, Inc. Mr. Mark Wolman is the brother of Mr. Len Wolman.

Stephan F. Slavik. Mr. Slavik, was appointed a Director of the Company 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 Suites, Inc. Mr. Slavik is the brother of Mr. Richard
Slavik.

Mr. Richard Slavik. Mr. Richard Slavik was appointed a Vice President of the
Company 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
Suites, Inc. Mr. Richard Slavik is the brother of Mr. Stephan F. Slavik.


15

Item 11. EXECUTIVE COMPENSATION

The following table summarizes the compensation paid to the Directors of
the Company.

Name Year Ended Salary
------ ------------ --------

Len Wolman (1) 2001 $707,153
2000 $660,037
1999 $165,000

Del Lauria 2001 $ ---
2000 $ ---
1999 $165,000


Stephan F. Slavik 2001 $ ---
2000 $ ---
1999 $ ---


Mark Wolman 2001 $ ---
2000 $ ---
1999 $165,000


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.

(1) As detailed in Item 13, Mr. Len Wolman has an employment contract with
the Company. For the years ended December 31, 2001 and 2000, $707,153 and
$660,037, respectively, was paid to Mr. Len Wolman pursuant to the
employment contract. For the year ended December 31, 1999 no compensation
was paid to Mr. Len Wolman pursuant to the employment contract.



Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

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.

Name of % Ownership
Beneficial Owner in the Company
- ---------------- --------------

LMW Investments, Inc. (1) 32.2033%
Slavik Suites, Inc. (2) 67.7967%
---------
100.0000%
=========

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


16


Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Mr. Len Wolman, the Company's Chairman of the Board of Directors and Chief
Executive Officer is a managing partner of TCA.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and SIML. Pursuant to the Development Services Agreement Phase II,
TCA subcontracted with SIML and SIML agreed to perform those services assigned
to SIML by TCA in order to facilitate TCA's fulfillment of its duties and
obligations to the Authority under the Development Agreement. The Development
Services Agreement Phase II was subsequently assigned to Sun Cove. TCA shall pay
to Sun Cove a fee, as subcontractor (the "Development Services Fee Phase II")
equal to 3% of the development costs of the Project exclusive of capitalized
interest, less all costs incurred by TCA in connection with the Project. 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 are known. The payment of the Development Services Fee Phase II will
be made from available cash flow, if any, in accordance with the Amended and
Restated Omnibus Termination Agreement. SIML has further subcontracted with
Construction to provide certain of those services assigned to SIML by TCA. This
Local Construction Services Agreement was also assigned to Sun Cove. The fee
payable to Sun Cove to Construction as and when Sun Cove receives payment from
TCA is 20.83% of the Development Services Fee Phase II. Construction has
subcontracted with The Slavik Company for 14.30% of its fee. 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 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.

Construction is owned 50% by Len Wolman (the Company's Chief Executive Officer
and Chairman of the Board of Director) and 50% by Mark Wolman ( a member of the
Company's Board of Directors). Del J. Lauria (the Company's Secretary and a
member of the Company's Board of Directors), Stephan F. Slavik (a member of the
Company's Board of Directors) and Richard Slavik (Vice President of the Company)
have a financial interest in The Slavik Company.

The Company paid amounts to an affiliate for accounting services totaling, $0,
$0, and $95,200, respectively, during the years ended December 31, 2001, 2000
and 1999.

On September 28, 1998, the Company entered into an employment agreement with Mr.
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. Pursuant to such employment agreement, the Company shall pay to Mr.
Wolman an amount equal to 0.05% of the Revenues of the Mohegan Sun including the
expansion to the extent Mr. Wolman has not received such amounts from TCA. On
and after January 1, 2004, the Company shall pay to Mr. Wolman incentive
compensation based on the Revenues of the Mohegan Sun, including the 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, 2001 and 2000,
the Company paid and incurred $707,153 and $660,037, respectively, pursuant to
the employment agreement. No payments were made pursuant to the employment
agreement during 1999.

In 2001 and 2000, approximately $903,000 and $976,000, respectively was paid to
the principals and affiliates of the Company as part of TCA's operating
expenses. In 1999 approximately $756,000 was paid to the principals and
affiliates of the Company as part of TCA's operating expenses, including the
payment of Mr. Len Wolman's salary and bonus. In addition, for the year ended
December 31, 1999 $6,219,147 ($3,109,573 to SIML, $1,444,875 to the Directors of
the Company and $1,664,699 to the Company) had been incurred by TCA in monthly
management services fees.

For the year ended December 31, 1999, the Company paid the Directors of the
Company $660,000 as salaries for various services provided to the Company.

In 1999, the Company renovated Mr. Len Wolman's office space at a cost of
$32,413, of which $30,000 was paid to Wolman Homes, Inc. a related party. Cost
of the improvement is being depreciated over five years. Expense for the years
ended December 31, 2001, 2000 and 1999 was $6,480, $6,480 and $5,940,
respectively.

Waterford Group, Slavik and the other principals of 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.


17


Part IV

Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K

(a) Exhibits
--------

Exhibit No. Description
3.1 Certificate of Formation, as amended, of Waterford
Gaming, LLC (i)
3.2 Certificate of Incorporation of Waterford Gaming
Finance Corp. (i)
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 12-3/4%
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 12-3/4% 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, 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, Slavik Suites,Inc.,
and Wolman Construction, L.L.C. (vii)


18

10.3 Amended and Restated Partnership Agreement of
Trading Cove Associates, dated as of September 21,
1994, among Sun Cove Limited, 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, 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)
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. (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 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)


(i) Incorporated by reference to the Registrant's Registration Statement
on Form S-4, Securities and Exchange Commission (the "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.


19

(b) Financial Statement Schedules
-----------------------------

INDEX TO FINANCIAL STATEMENTS

Report of Independent Accountants F-1
Financial Statements:
Balance Sheets as of December 31, 2001 and 2000 F-2
Statements of Operations for the years ended
December 31, 2001, 2000 and 1999 F-3
Statements of Changes in Member's Deficiency for the
years ended December 31, 2001, 2000 and 1999 F-4
Statements of Cash Flows for the years ended
December 31, 2001, 2000 and 1999 F-5
Notes to Financial Statements F-6



20


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
operations, 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, 2001 and December 31, 2000 and the results of its
operations and its cash flows for each of the three years in the period ended
December 31, 2001 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.


PricewaterhouseCoopers LLP



March 20, 2002

F-1

Waterford Gaming, L.L.C.

Balance Sheets

December 31, 2001 and 2000
-------------------------


2001 2000
------------ ------------


ASSETS

Current assets
Cash and cash equivalents $ 3,570,949 $ 4,024,021
Restricted investments 26,189,434 26,888,081
Due from Trading Cove Associates 8,357,604 3,770,000
Other assets 9,072 26,496
------------ ------------
Total current assets 38,127,059 34,708,598
------------ ------------

Trading Cove Associates-equity
investment 5,778,458 7,944,454
Beneficial interest-Leisure Resort
Technology, Inc. 4,918,029 5,296,019
Deferred financing costs,
net of accumulated amortization of
$1,024,974 and $658,110 at December 31,
2001 and 2000, respectively 3,010,202 3,377,066
Fixed assets, net of accumulated
depreciation of $31,442 and $20,662 at
December 31, 2001 and 2000, respectively 22,476 33,256
------------ ------------
Total assets $ 51,856,224 $ 51,359,393
============ ============


LIABILITIES AND MEMBERS' DEFICIENCY

Current liabilities
Accrued expenses and accounts payable $ 171,610 $ 133,614
Accrued interest on senior notes
payable 3,228,946 3,348,023
------------ ------------

Total current liabilities 3,400,556 3,481,637
------------ ------------

9-1/2% senior notes payable 115,434,000 119,691,000
------------ ------------

Total liabilities 118,834,556 123,172,637
------------ ------------

Contingencies --- ---

Members' deficiency (66,978,332) (71,813,244)
------------ ------------
Total liabilities
and members' deficiency $ 51,856,224 $ 51,359,393
============ ============


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

F-2



Waterford Gaming, L.L.C.

Statements of Operations

For the Years Ended December 31, 2001, 2000 and 1999
--------------------------



2001 2000 1999
------------ ------------ ------------

Revenue
Organizational and administrative
fee income-Trading Cove
Associates $11,810,877 $11,649,600 $14,252,209
25% of relinquishment payments-
Trading Cove Assoicates 9,728,580 --- ---
Interest and dividend income 1,330,711 1,894,738 6,144,502
Subordinated notes fee income-
Trading Cove Associates --- 692,782 3,731,806
Completion guarantee notes fee
income-Trading Cove Associates --- 215,625 903,438
Management services income-
Trading Cove Associates --- --- 1,664,699

------------ ------------ ------------
Total revenue 22,870,168 14,452,745 26,696,654
------------ ------------ ------------
Expenses
Interest expense 11,560,994 11,641,049 19,045,076
Salaries-related parties 707,153 660,037 660,000
General and administrative 555,819 526,526 310,004
12-3/4% senior notes tender expense --- (90,000) 612,486
Amortization of beneficial interest-
Leisure Resort Technology, Inc. 377,990 377,990 517,900
Amortization on deferred financing
costs 366,864 363,985 3,633,905
Depreciation 10,780 10,780 9,882
------------ ------------ ------------
Total expenses 13,579,600 13,490,367 24,789,253
------------ ------------ ------------
9,290,568 962,378 1,907,401
Equity in income (loss)income of
Trading Cove Associates (2,715,996) (574,002) 6,115,300
------------ ------------ ------------
Net income $ 6,574,572 $ 388,376 $ 8,022,701
============ ============ ============

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



F-3



Waterford Gaming, L.L.C.

Statements of Changes in Members' Deficiency

For the Years Ended December 31, 2001, 2000 and 1999
--------------------------






Slavik Suites,Inc. LMW Investments,Inc. Waterford Group,L.L.C. Total
------------------ ------------------- --------------------- --------------

Balance, January 1,1999 $(1,765,936) $ (955,186) $ (2,721,122)

Contributions,
January 1 - March 17 33,220 15,780 49,000

Distributions,
January 1 - March 17 (1,277,787) (606,945) (1,884,732)

Net loss,
January 1 - March 17 (5,043,441) (2,395,625) (7,439,066)

Transfer of interest 8,053,944 3,941,976 $(11,995,920) 0

Distributions,
March 17- December 31 --- --- (37,936,285) (37,936,285)

Net income,
March 17 - December 31 --- --- 15,461,767 15,461,767
-------------- -------------- -------------- ------------

Balance, December 31, 1999 --- --- (34,470,438) (34,470,438)

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

Net income --- --- 388,376 388,376
-------------- -------------- -------------- ------------

Balance, December 31, 2000 --- --- (71,813,244) (71,813,244)

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

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

Balance, December 31, 2001 $ --- $ --- $(66,978,332) $(66,978,332)
============== ============== ============== ============

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



F-4




Waterford Gaming, L.L.C.

Statements of Cash Flows

For the Years ended December 31, 2001, 2000 and 1999

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



2001 2000 1999
------------ ------------ ------------

Cash flows from operating activities
Net income $ 6,574,572 $ 388,376 $ 8,022,701
------------ ------------ ------------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities
Amortization 744,854 741,975 4,151,805
Depreciation 10,780 10,780 9,882
Equity in (income)loss of Trading
Cove Associates 2,715,996 574,002 (6,115,300)
Changes in operating assets
and liabilities
Decrease in accrued
interest receivable-15%
subordinated notes receivable --- --- 12,059,517
Decrease in accrued
interest receivable-completion
guarantee subordinated notes
receivable --- --- 75,000
(Increase) decrease in due from
Trading Cove Associates (4,587,604) (3,277,093) 1,118,381
Decrease (increase) in other
assets 17,424 60,325 (67,522)
Increase in accrued
expenses and accounts payable 37,996 14,134 84,308
(Decrease) increase in accrued
interest on senior notes
payable (119,077) (69,036) 2,414,344
------------ ------------ ------------
Total adjustments (1,179,631) (1,944,913) 13,730,415
------------ ------------ ------------

Net cash provided by
(used in)operating
activities 5,394,941 (1,556,537) 21,753,116
------------ ------------ ------------

Cash flows from investing activities
Contributions to Trading Cove
Associates (1,350,000) (1,200,000) (600,000)
Distributions from Trading Cove
Associates 800,000 1,723,112 6,335,930
(Purchases) and sales of
restricted investments-net 698,647 (15,080,989) (11,807,092)
Beneficial interest-Leisure
Resort Technology, Inc. --- --- (2,000,000)
Sales and (purchases) of
temporary investments-net --- --- 2,045,430
Purchase of completion
guarantee subordinated note
receivable --- --- (2,798,125)
Return on investment in completion
guarantee subordinated notes
receivable --- --- 298,125
Redemption of completion guarantee
subordinated notes receivable --- --- 7,500,000
Redemption of 15% subordinated notes
receivable --- --- 20,000,000
Fixed assets --- --- (53,918)
------------ ------------ ------------

Net cash provided by (used in)
investing activities 148,647 (14,557,877) 18,920,350
------------ ------------ ------------

Cash flows from financing activities
Contributions by members --- --- 49,000
Distributions to member (1,739,660) (37,731,182) (39,821,017)
Redemption of 9-1/2% senior notes (4,257,000) (2,468,000) (2,841,000)
Proceeds from 9-1/2% senior notes
issuance --- --- 125,000,000
Redemption of 12-3/4% senior
notes --- --- (61,471,000)
Deferred financing costs --- --- (4,035,176)
------------ ------------ ------------
Net cash (used in)
provided by
financing activities (5,996,660) (40,199,182) 16,880,807
------------ ------------ ------------

Net (decrease) increase in cash
and cash equivalents (453,072) (56,313,596) 57,554,273

Cash and cash equivalents at
beginning of year 4,024,021 60,337,617 2,783,344
------------ ------------ ------------
Cash and cash equivalents at
end of year $ 3,570,949 $ 4,024,021 $ 60,337,617
============ ============ ============
Supplemental disclosure of cash
flow information:
Cash paid during the year
for interest $ 11,680,071 $ 11,710,084 $ 16,630,732
============ ============ ============
Supplemental disclosure of
non-cash financing activities:
Deferred financing costs (overaccrued)
funded through accrued expenses $ --- $ (40,000) $ 40,000
============ ============ ============

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




F-5

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 an
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 managers pursuant to the
limited liability company agreement (the "Agreement"). In connection with the
Company's and the Company's wholly-owned subsidiary Waterford Gaming Finance
Corp. ("Finance") issuance of $125 million 9-1/2% senior notes payable which
mature March 15, 2010 (the "$125 Million Senior Notes"), each of Slavik Suites,
Inc. ("Slavik") and LMW Investments, Inc. ("LMW") have contributed their
respective interests in the Company as of March 17, 1999 to a Delaware limited
liability company, Waterford Group, L.L.C. (the "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 and are generally as
follows:

Slavik Suites, Inc. 67.7967%
LMW Investments, Inc. 32.2033%
---------
100.0000%
=========

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

During December 1999, the Company received a payment on notes it held due from
the Authority and a distribution from TCA. As contemplated in the $125 Million
Senior Notes offering (the "Offering"), the Company distributed approximately
$34,672,000 to Waterford Group during January 2000. In connection with the
Offering the Company distributed $37,050,000 to Waterford Group during March
1999. In addition tax distributions totaling approximately $5,685,000 were made
by the Company during 2001, 2000 and 1999.

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:

Accounting Method

The accrual method of accounting is used in the preparation of the
financial statements and the partnership income tax returns.

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 31,2001 are principally comprised
of an investment in a Federal National Mortgage Association Discount
Note which was purchased at a discount of 3.65% and matures March 6,
2002 and an investment in the Federated Treasury Obilgations Fund and
at December 31, 2000 are principally comprised of an investment in a
Federal National Mortgage Association Discount Note which was
purchased at a discount of 6.30% and matured March 8,2001. The
investments represent a restricted investment fund that has been
established with a trustee in terms of the $125 Million Senior Notes
indenture and is reported at cost plus accrued interest, which
approximates market.

Trading Cove Associates - Equity Investment

The Trading Cove Associates - equity investment is accounted for
utilizing the equity method. Included in the investment is $10,600,000
which represents the purchase price 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, through March
1999. As a result of the Relinquishment Agreement, as defined,
becoming effective the remaining balance will be amortized over 189
months beginning April 1999.

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 limited liability company, files federal and state
partnership income tax returns which indicate the member's share of
taxable income or loss to be reported on the member's tax return. 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 has one primary source of revenue: payments from TCA. The
Company anticipates regular payments from TCA based upon the operating
results of the Authority and the related Relinquishment Fees, as
defined, and Development Fees, as defined, paid and to be paid 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. However, in many
instances, current exchange prices are not available for certain of
the Company's financial instruments, since no active market generally
exists for such financial instruments.

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 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

2. TRADING COVE ASSOCIATES - EQUITY INVESTMENT:

TCA was organized on July 27, 1993. The primary purpose of TCA has been to
assist the Mohegan Tribe of Indians of Connecticut (the "Tribe") and the
Authority, an instrumentality of the Tribe, in obtaining federal
recognition, negotiate the tribal-state compact with the State of
Connecticut, obtain financing for the development of the Mohegan Sun Casino
(the "Mohegan Sun") located on certain Tribal land in Uncasville,
Connecticut, negotiated the Amended and Restated Gaming Facility Management
Agreement (the "Management Agreement") and participated in the design,
development and construction of the Mohegan Sun, which commenced operations
on October 12, 1996. Since the opening of the Mohegan Sun, and until
January 1, 2000 TCA had overseen the Mohegan Sun's day-to-day operations.

TCA will terminate on December 31, 2040, or earlier, in accordance with the
terms of the partnership agreement. On November 8, 1996, certain partners
of TCA withdrew and, concurrently, consented to the admission of the
Company as a partner to TCA. Also, on November 8, 1996, the Company
acquired an additional interest (12.5%) in TCA from a corporation for
$10,600,000. The Company has a 50% voting and profits interest in TCA. The
remaining 50% interest is owned by Sun Cove Limited ("Sun Cove"), an
affiliate of Sun International Hotels Limited ("Sun International").

As of December 31, 2001, 2000 and 1999 the following summary information
relates to Trading Cove Associates. Total revenues and net income are for
the years ended December 31, 2001, 2000 and 1999.




2001 2000 1999
------------ ------------ ------------

Total assets $ 23,522,567 $ 21,452,587 $ 8,634,840
Total liabilities (21,394,854) (15,872,938) (1,741,019)
------------ ------------ ------------
Partners' capital $ 2,127,713 $ 5,579,649 $ 6,893,821
============ ============ ============

Total revenue $ 48,327,998 $ 46,072,404 $72,179,041
============ ============ ============

Net income (loss) $ (4,551,936) $ (267,948) $13,656,908
============ ============ ============



2001 2000 1999
------------ ------------ ------------
Company's interest:
Trading Cove Associates -
equity investment, beginning
of year $ 7,944,454 $ 9,041,568 $ 8,662,198
Contributions 1,350,000 1,200,000 600,000
Distributions (800,000) (1,723,112) (6,335,930)
------------ ------------ ------------

8,494,454 8,518,456 2,926,268
------------ ------------ ------------
Income (loss)from Trading Cove
Associates (2,275,968) (133,974) 6,828,454
Amortization of interests
purchased (440,028) (440,028) (713,154)
------------ ------------ ------------
Equity in income (loss)of
Trading Cove Associates (2,715,996) (574,002) 6,115,300
------------ ------------ ------------
Trading Cove Associates -
equity investment, end of year $ 5,778,458 $ 7,944,454 $ 9,041,568
============ ============ ============




Trading Cove Associates - Material Agreements
- ---------------------------------------------

On February 7, 1998, TCA, the Tribe and the Authority finalized contract
negotiations and are moving forward with a significant expansion project at the
Mohegan Sun (the "Project"). As a result, TCA and the Authority have terminated
the Management Agreement effective January 1, 2000.

Under the terms of an agreement (the "Relinquishment Agreement") TCA continued
to manage the Mohegan Sun under the Management Agreement until January 1, 2000.
On December 31, 1999 the Management Agreement terminated and the Tribe assumed
day-to-day management of the Mohegan Sun. Under this Relinquishment Agreement to
compensate TCA for terminating its rights under the Management Agreement and the
Hotel/Resort Management Agreement, the Authority has agreed to pay to TCA 5% of
Revenues, as defined, (the "Relinquishment Fees") generated by the Mohegan Sun
during the 15-year period commencing on January 1, 2000.

F-7

Relinquishment Agreement
- ------------------------

The payments under the Relinquishment Agreement will be divided into senior
relinquishment payments and junior relinquishment payments, each of which will
be 2.5% of Revenues. Revenues are defined as gross gaming revenues (other than
Class II gaming revenue, i.e. bingo) and all other facility revenues (including,
without limitation, hotel revenues, food and beverage sales, parking revenues,
ticket revenues and other fees or receipts from the convention/events center in
the 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). Revenues exclude revenues generated by
any other expansion of the Mohegan Sun. Senior relinquishment payments will be
payable quarterly in arrears commencing on April 25, 2000 for the quarter ended
March 31, 2000, and the junior relinquishment payments will be 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.

For the years ended December 31, 2001 and 2000 the Relinquishment Fees earned
were $45,715,318 and $41,003,849, respectively, based upon Revenues reported to
TCA by the Authority.


Development Agreement
- ---------------------

TCA and the Authority entered into a development services agreement on February
7, 1998. Under this "Development Agreement", TCA agreed to oversee the design,
construction, furnishing, equipping and staffing of the Project 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 and that TCA has no further obligations
relating to the staffing of the Project. The first phase of the Project, the
Casino of the Sky, opened on September 25, 2001.

The Authority will pay the Development Fee to TCA quarterly beginning on January
15, 2000 until the Completion Date, as defined in the Development Agreement, of
the Project based on incremental completion of the Project as of each payment
date. As of December 31, 2001 total Development Fee earned was $12,516,000 of
which $11,256,000 had been paid by the Authority. $1,260,000 was paid by the
Authority on January 24, 2002.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and Sun International Management Limited ("SIML"). Pursuant to the
Development Services Agreement Phase II, TCA subcontracted with SIML and SIML
agreed to perform those services assigned to SIML by TCA in order to facilitate
TCA's fulfillment of its duties and obligations to the Authority under the
Development Agreement. The Development Services Agreement Phase II was
subsequarterly assigned to Sun Cove. TCA shall pay to Sun Cove as subcontractor
a Development Services Fee Phase II equal to 3% of the development costs of the
Project, less all costs incurred by TCA in connection with the Project. 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 are known. The fee is to be paid from available cash flow of TCA, if
any, subordinate to certain other fees as described below under the heading
"Amended and Restated Omnibus Termination Agreement".

SIML has further subcontracted with Wolman Construction L.L.C. ("Construction")
(the "Local Construction Services Agreement") to provide certain of those
services assigned to SIML by TCA. This agreement was also assigned to Sun Cove.
Sun Cove shall pay 20.83% of the Development Services Fee Phase II as and when
Sun Cove receives payment from TCA. Construction has subcontracted with The
Slavik Company for 14.30% of its fee.

F-8

Management Agreement
- --------------------

The Management Agreement between TCA and the Tribe was entered into on August
30, 1995. The Tribe had assigned its rights and obligations in this agreement to
the Authority. The Authority and TCA had consented to this assignment.


Until January 1, 2000, 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 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 set forth below (in thousands):

I II III

-------------- ------------------ -----------------
40% of Net Revenues in Tier I Revenues in
Revenues up to plus 35% of Net Tiers I & II plus
Revenues between 30% of Net
Revenues above
-------------- ---------------- -----------------
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


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.


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, Sun International, the Company, SIML, LMW, Sun Cove, Slavik and
Construction; which (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 will use its cash
(primarily cash from payments from the Authority for Relinquishment Fees and
Development Fee) to pay the following obligations in the priority set forth
below:

F-9



(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 Sun Cove a percentage of an annual fee of $2.0 million
less the actual expenses incurred by TCA. 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, 2001 and
2000, $1,712,791 ($856,396 to Sun Cove and $856,395 to affiliates of
the Company) and $1,849,506 ($924,753 to Sun Cove and $924,753 to
affiliates of the Company), respectively, had 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, 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, 2001 these capital contributions aggregated
$5,100,000. $3,600,000 has been repaid to the partners of TCA, 50% to
the Company and 50% to Sun Cove.

As of December 31, 2001, $1,500,000 in capital contributions remained
outstanding. On January 28, 2002, a cash distribution of $750,000 was
made to each partner and on March 8, 2002, a cash contribution of
$200,000 was made by each partner.

(c) Third, to pay any accrued amounts for obligations performed prior to
January 1, 2000 under the Financing Arrangement Agreement. For the
year ended December 31, 2000 $2,977,932 ($2,069,525 to Sun
International and $908,407 to the Company) had been paid by TCA in
terms of the third priority. All required payments were made during
2000.

(d) Fourth, to make the payments set forth in the agreement relating
to Development Services Agreement Phase II and the Local Construction
Services Agreement. For the year ended December 31, 2000 $10,807,000
($8,555,902 to Sun Cove, $1,929,191 to Construction and $321,907 to
The Slavik Company) had been paid and incurred by TCA in terms of the
fourth priority. No payments are required or due at December 31, 2001.
The contingent obligation at December 31, 2001 was approximately
$8,255,000.


(e) Fifth, to pay Sun Cove 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. For the years ended December 31, 2001
and 2000, $5.0 million had been paid and incurred by TCA 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. For the years ended
December 31, 2001 and 2000, $23,621,754 ($11,810,877 to SIML and
$11,810,877 to the Company) and $23,299,200 ($11,649,600 to SIML and
$11,649,600 to the Company), respectively, had been paid and incurred
by TCA in terms of the sixth priority. The final required payments
were made during 2001.

(g) Seventh, for the period beginning March 31, 2000 and ending
December 31, 2014, to pay each of Sun Cove and the Company twenty-five
percent (25%) of the relinquishment payments. For the years ended
December 31, 2001 and 2000, $19,457,160 ($9,728,580 to Sun Cove and
$9,728,580 to the Company) and $0, respectively, had been paid and
incurred by TCA in terms of the seventh priority. The contingent
obligation at December 31, 2001, was approximately $23,902,000.

(h) Eighth, to distribute all excess cash.


In addition, TCA shall not make any distributions pursuant to the Ammended 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 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 amounts due shall
be deferred without the accrual of interest until TCA has sufficient cash, if
any, 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 pursuant to the Amended and Restated Omnibus Financing
Agreement which was terminated effective January 1, 2000.

F-10

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

On January 6, 1998, the Company paid $5,000,000 to Leisure Resort Technology,
Inc. ("Leisure") whereby Leisure gave up its beneficial interest in 5% of
certain fees and excess cash flows, as defined, of TCA and 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, had filed a lawsuit against
TCA, Sun Cove, former partner of TCA RJH Development Corp. and 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. The
Company agreed to acquire Leisure's contractual rights and settle all matters.
The Company no longer has the obligation to pay to Leisure 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. The Company is now entitled to such cash flow. On
March 17, 1999, the Company and Finances' $65 million 12-3/4% senior note
payable (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.

The Leisure payments plus associated costs were amortized on a straight-line
basis over the remaining term of TCA's Management Agreement through March 17,
1999. As a result of the Relinquishment Agreement becoming effective, the
remaining balance will be amortized over 189 months which began March 18, 1999.
Accumulated amortization at December 31, 2001 and 2000 amounts to $2,139,182 and
$1,761,192, respectively.


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

On March 17, 1999, the Company and Finance, issued $125 Million Senior Notes.
Payment of the principal of, and interest on, the $125 Million Senior Notes is
subordinate in right of payment to all of their existing and future secured
debts.

Interest is payable semi-annually in arrears on March 15 and September 15 at a
rate of 9-1/2% per annum which commenced on September 15, 1999.

The principal amount of the $125 Million Senior Notes is payable on March 15,
2010. The Company and Finance may elect to redeem the $125 Million Senior Notes
at any time on or after March 15, 2004 at a redemption price equal to a
percentage (105.182% after March 14, 2004 and declining to 104.318% after March
14, 2005, 103.455% after March 14, 2006, 102.591% after March 14, 2007, 101.727%
after March 14, 2008, 100.864% after March 14, 2009, and to 100% after March 14,
2010) of the principal amount thereof plus accrued interest. The $125 Million
Senior Notes provide that upon the occurrence of a Change of Control (as
defined), 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.



If the Company and Finance have any Company Excess Cash, as defined, they must
redeem the $125 Million Senior Notes (on a semi-annual basis on March 15 and
September 15) equal to a percentage (109.500% after March 15, 1999 and declining
to 108.636% after March 14, 2000, 107.773% after March 14, 2001, 106.909% after
March 14, 2002, 106.045% after March 14, 2003, 105.182% after March 14, 2004,
104.318% after March 14, 2005, 103.455% after March 14, 2006, 102.591% after
March 14, 2007, 101.727% after March 14, 2008, 100.864% after March 14, 2009,
and to 100.000% after March 14, 2010). On August 1, 1999 the Company and Finance
had Company Excess Cash, as defined, available for mandatory redemption of the
$125 Million Senior Notes totaling approximately $8,983,000,and accordingly on
September 15, 1999 the Company and Finance made a mandatory redemption of $125
Million Senior Notes in the principal amount of $2,841,000 at the redemption
price of 109.50%. On February 1,2000 the Company and Finance had Company Excess
Cash, as defined, available for mandatory redemption of the $125 Million Senior
Notes totaling approximately $8,276,000 and accordingly the Company and Finance
made a mandatory redemption of $125 Million Senior Notes in the principal amount
of $2,277,000 at the redemption price of 108.636% on March 15, 2000. On August
1, 2000 the Company and Finance had Company Excess Cash, as defined, available
for mandatory redemption of the $125 Million Senior Notes totaling aproximately
$5,902,000, and accordingly on September 15, 2000 the Company and Finance made a
mandatory redemption of $125 Million Senior Notes in the principal amount of
$191,000 at the redemption price of 108.636%. On February 1, 2001 the Company
and Finance had Company Excess Cash, as defined, available for mandatory
redemption of the $125 Million Senior Notes totaling approximately $6,173,000,
and accordingly on March 15, 2001 the Company and Finance made a mandatory
redemption of $125 Million Senior Notes in the principal amount of $452,000 at
the redemption price of 107.773%. On August 1, 2001 the Company and Finance had
Company Excess Cash, as defined, available for mandatory redemption of the $125
Million Senior Notes totaling approximately $9,765,000, and accordingly on
September 15, 2001 the Company and Finance made a mandatory redemption of the
$125 Million Senior Notes in the principal amount of $3,805,000 at the
redemption price of 107.773%. On February 1, 2002 the Company and Finance had
Company Excess Cash, as defined, available for mandatory redemtion of the $125
Million Senior Notes totaling approximately $9,793,000 , and accordingly on
March 15, 2002 the Company and Finance made a mandatory redemption of the $125
Million Senior Notes in the principal amount of $4,031,000, at the redemption
price of 106.909%. In certain circumstances, if either the Company or 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 relating to the $125 Million Senior Notes (the "Indenture")
contains certain affirmative and negative covenants customarily contained in
agreements of this type, including without limitation, covenants that restrict,
subject to specified exceptions the Company's and Finance's ability to (i)
borrow money, (ii) pay dividends on stock or make 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 fund with a trustee for
interest reserves.

The fair value of the Company's long term debt at December 31, 2001 and 2000 is
estimated to be approximately $118,897,000 And $118,494,000, respectively, based
on the quoted market price for the same issue.

F-11

5. RECONCILIATION OF FINANCIAL STATEMENT AND TAX INFORMATION:

The following is a reconciliation of net income for financial statement purposes
to net income (loss) for federal income tax purposes for the years ended
December 31, 2001, 2000 and 1999.




For the For the For the
Year Ended Year Ended Year Ended
December 31, 2001 December 31, 2000 December 31, 1999
----------------- ----------------- -----------------

Financial Statement
net income $6,574,572 $ 388,376 $8,022,701
Financial statement
equity in (income) loss
of Trading Cove Associates
over tax basis equity in
(income) loss of Trading
Cove Associates (394,380) 1,184,388 176,879
Other 6,188 4,682 (6,603)
---------------- ----------------- -----------------
Federal income tax basis
net income $6,186,380 $1,577,446 $8,192,977
================ ================= =================







The following is a reconciliation of members' deficiency for financial statement
purposes to members' deficiency for federal income tax purposes as of December
31, 2001, 2000 and 1999.




2001 2000 1999
------------ ------------ -----------

Financial statement members'
deficiency $(66,978,332) $(71,813,244) $(34,470,438)
Adjustment for cumulative
difference between tax basis
of Trading Cove Associates-
equity investment and GAAP
basis of Trading Cove
Associates-equity investment 1,655,983 466,913 296,637
Current year financial
statement net income over
(under) federal income tax
basis net income (388,192) 1,189,070 170,276
------------ ------------ ------------
Federal income tax basis
members' deficiency $(65,710,541) $(70,157,261) $(34,003,525)
============ ============ ============





6. CONTINGENCIES:

LEGAL PROCEEDINGS

On January 6, 1998, Leisure Resort Technology, Inc. ("Leisure") 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 and Trading Cove Associates, Waterford Gaming,
L.L.C., LMW Investments, Inc., and Slavik Suites, Inc. entered into a settlement
and release agreement. Pursuant to this settlement and release agreement,
Waterford Gaming, L.L.C. bought out Leisure's beneficial interest in Trading
Cove Associates.

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
transfered through 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
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.

Discovery has commenced. In a scheduling order dated August 9, 2001, the Court
directed the parties to report to the Court no later than March 29, 2002
regarding the feasibility of settlement, the estimated length of jury selection
and the estimated length of trial. 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
potential 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-12

7. RELATED PARTY AGREEMENT AND TRANSACTIONS:

Len Wolman, the Company's Chairman of the Board of Directors and Chief Executive
Officer, is a managing partner of TCA.

On February 9, 1998 the Development Services Agreement Phase II was entered into
between TCA and SIML. Pursuant to the Development Services Agreement Phase II,
TCA subcontracted with SIML and SIML agreed to perform those services assigned
to SIML by TCA in order to facilitate TCA's fulfillment of its duties and
obligations to the Authority under the Development Agreement. The Development
Services Agreement Phase II was subsequently assigned to Sun Cove. TCA shall pay
to Sun Cove, as subcontractor, the Development Services Fee Phase II equal to 3%
of the development costs of the Project, less all costs incurred by TCA in
connection with the Project. 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 are known. The payment of the
Development Services Fee Phase II will be made from available cash flow if any,
in accordance with the Amended and Restated Omnibus Termination Agreement. SIML
has further subcontracted with Construction to provide certain of those sevices
assigned to SIML by TCA. This Local Construction Services Agreement was also
assigned to Sun Cove. The fee payable by Sun Cove to Construction as and when
Sun Cove receives payment from TCA is 20.83% of the Development Services Fee
Phase II. Construction has subcontracted with The Slavik Company for 14.30% of
its fee. 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
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.

Construction is owned 50% by Len Wolman (the Company's chief Executive Officer
and Chairman of the Board of Director) and 50% by Mark Wolman ( a member of the
Company's Board of Directors). Del J. Lauria (the Company's Secretary and a
member of the Company's Board of Directors), Stephan F. Slavik ( a member of the
Company's Board of Directors) and Richard Slavik (Vice President of the Company)
have a financial interest in The Slavik Company.

The Company paid amounts to an affiliate for accounting services totaling $0, $0
and $95,200, respectively, during the years ended December 31, 2001, 2000, and
1999.

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.
Pursuant to such employment agreement, the Company shall pay to Mr. Wolman an
amount equal to 0.05% of the revenues of the Mohegan Sun including the expansion
to the extent Mr. Wolman has not received such amounts from TCA. On and after
January 1, 2004, the Company shall pay to Mr. Wolman incentive compensation
based on the revenues of the Mohegan Sun, including the 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, 2001 and 2000 the Company paid
and incurred $707,153 and $660,037, respectively, pursuant to the employment
agreement. No payments were made pursuant to the employment agreement during
1999.

In 2001 and 2000, approximately $903,000 and $976,000, respectively, was paid to
the principals and affiliates of the Company as part of TCA's operating
expenses. In 1999 approximately $756,000 was paid to the principals and
affiliates of the Company as part of TCA's operating expenses, including the
payment of Mr. Len Wolman's salary and bonus. In addition, for the year ended
December 31, 1999 $6,219,147 ($3,109,573 to SIML, $1,444,875 to the Directors of
the Company and $1,664,699 to the Company) had been incurred by TCA in monthly
management services fees.

For the year ended December 31, 1999, the Company paid the Directors of the
Company $660,000 as salaries for various services provided to the Company.

In 1999, the Company renovated Mr. Wolman's office space at a cost of $32,413,
of which $30,000 was paid to Wolman, Homes Inc., a related party. Cost of the
improvement is being depreciated over five years . Expense for the years ended
December 31, 2001, 2000 and 1999 was $6,480, $6,480 and $5,940, respectively.

Waterford Group, Slavik and the other principals of 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-13


(c) Reports on Form 8-K
-------------------

(i) Form 8-K filed on December 28, 2001

Item 5.

The Mohegan Tribal Gaming Authority (the "Authority") has
filed its annual report on Form 10-K for the year ended
September 30, 2001, 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 17, 2001

(ii) Form 8-K filed on February 15, 2002

Item 5.

The Mohegan Tribal Gaming Authority (the "Authority") has
filed its quarterly report on Form 10-Q for the quarter
ended December 31, 2001, 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-Q, Securities and Exchange Commission file reference no.
033-80655.

On February 12, 2002, the Mohegan Tribal Gaming Authority
(the "Authority") has filed a copy of an amendment to its
senior secured credit facility on Form 8-K, 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: February 8, 2002


21


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: March 28, 2002 By: /s/ Len Wolman
Len Wolman, Chairman of the Board of Directors,
Chief Executive Officer


Date: March 28, 2002 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 capacities indicated on March 28, 2002.

SIGNATURE TITLE



/s/ Len Wolman Chairman of the Board of Directors,
- ------------------- Chief Executive Officer
Len Wolman




/s/ Del J. Lauria Member of the Board of Directors,
- -------------------- Secretary
Del J. Lauria




/s/ Mark Wolman Member of the Board of Directors
- --------------------
Mark Wolman




/s/ Stephan F. Slavik Member of the Board of Directors
- ---------------------
Stephan F. Slavik


22