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Aladdin Turns a Profit in January

21 February 2003

by Richard N. Velotta

LAS VEGAS --Higher revenue and dramatically reduced interest expenses resulted in the Aladdin hotel-casino posting its most profitable month since the bankrupt resort opened in 2000.

Separately, a prospective buyer for the $1.2 billion Las Vegas Strip property announced today that it is not pursuing a bid.

In a quarterly earnings announcement, Las Vegas-based Pinnacle Entertainment Inc. -- which last fall was considering a "stalking horse" bid with Colony Capital LLC, Los Angeles, and Marriott International Inc., Bethesda, Md., to buy the 2,567-room Aladdin -- announced that it would instead pursue expansions at its Belterra property in Indiana and at a casino in Lake Charles, La.

Meanwhile, the Aladdin, in an operating report filed Thursday with the U.S. Bankruptcy Court in Las Vegas, reported a profit of $96,129 and cash flow of $5.3 million for January, a month that included strong convention traffic and the National Football League's Super Bowl game.

By comparison, the Aladdin had a loss of $12.8 million, but positive cash flow of $1.3 million in December and a net loss of $6.3 million and negative cash flow of $400,140 in January 2002.

January 2002 did not have a Super Bowl game because it was postponed until February because of the terrorist attacks.

Aladdin spokeswoman Tyri Squyres said the Aladdin benefitted from a 97 percent occupancy rate in January and an average room rate of $113, which she said was above the city average.

"All sectors of our business did well," Squyres said.

The company reported revenue of $21.5 million, compared with $18.3 million in December and $13.8 million in January 2002. The company also benefitted in January by making interest payments more in line with normal amounts. In December the company paid $8.7 million in interest expenses as a result of a court settlement with Northwind Aladdin LLC, which owns a utility plant that provides the resort with hot and cold water.

The settlement with Northwind Aladdin was important because it will enable the company to move forward with the sale of the resort.

The company also had reduced expenses for contract entertainment in January compared with December. In December, the resort's Theatre for the Performing Arts played host to entertainers Prince, the Blues Brothers and, for New Year's Eve, Alabama.

The company did not have as many headliners in the venue in January, paying $563,403 that month compared with $1.7 million in December.

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