Analyst: Expect Expensive Debut for Borgata

"In what may be the first detailed Wall Street projection of Borgata's early performance, Lawrence Klatzkin of Jefferies & Co. on Tuesday predicted that the casino hotel will report fourth-quarter 2003 net revenue of $117.6 million.

"By comparison, similarly large Bally's Atlantic City last year generated fourth-quarter net revenue of $124 million.

"Borgata, however, faces steep opening costs that will reduce its cash flow - as measured by earnings before interest, taxes, depreciation and amortization - to $11.8 million, Klatzkin projected.

"Bally's cash flow last quarter was $36 million.

"…`In the first 12 months I'd be really pleased if Borgata did $150 million (in cash flow)and probably it will do less. Around $120 million to $125 million is probably a reasonable number,' he said.

"…Klatzkin's fourth-quarter 2003 Borgata projections include net casino revenue of $97.2 million, net food and beverage revenue of $6.4 million, net hotel room revenue of $7.6 million with 75 percent of its 2,010 rooms occupied, and net revenue from entertainment, retail and other sources of $6.4 million.

"The $1 billion Borgata is scheduled to open in summer 2003. Klatzkin assumed an early September 2003 opening to make partial third-quarter projections: Net revenue of $35.3 million and cash flow of $1.2 million…"

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