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Aladdin Pleased With Progress Despite Loss

28 February 2002

by David Strow

LAS VEGAS --Despite a loss in January, officials at the Aladdin hotel-casino say the bankrupt Strip property is continuing to operate ahead of expectations.

That will make a favorable outcome of the bankruptcy case more likely, as the sale or reorganization of the property won't have to be rushed, Aladdin officials said.

The Aladdin reported a loss of $6.3 million for January on revenues of $13.8 million. Cash flow -- measured by excluding depreciation and reorganization costs from net income -- was negative $400,000 for the month.

But this is still ahead of expectations, Aladdin officials said, and the resort is performing well in February.

As an example, officials point to the $50 million credit line the company received from its bankers when it filed for bankruptcy, a credit line meant to keep the property operating through the bankruptcy process.

The Aladdin only borrowed $5.8 million under this credit line, court documents indicate, and it paid off the last of this balance Tuesday. By this time, the Aladdin had projected it would have borrowed as much as $17 million under the credit line, Chief Financial Officer Tom Lettero said.

"Things are coming back in Las Vegas, and we're running pretty close to 90 percent (occupancy) on the month (February)," said Bill Timmins, the property's president. "Looking forward into March and April, we'll be in the 90s, as far as occupancy is concerned.

"The property is performing better than expected, much better than the projections put to the court."

Since its September bankruptcy, the Aladdin has lost $32.9 million, the property's monthly financial report said. The majority of this loss -- $24.8 million -- came from bankruptcy-related expenses, much of them non-cash charges.

Once reorganization costs and depreciation are factored out, the Aladdin posted positive cash flow of $2.1 million through Jan. 31.

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