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Riviera Reports Fourth Quarter 2000 Results

Net revenues for the quarter were $51.7 million, up 35% from net revenues of $38.3 million in the fourthquarter of 1999. EBITDA (Earnings Before Interest, Income Taxes, Depreciation, Amortization,pre-opening expenses, and other income and expense, net) for the quarter was $8.1 million, up 23% from EBITDA of $6.6 million in the fourth quarter of 1999.

The net loss increased to $2 million or ($0.53) per share in the fourth quarter of 2000 from $51,000 or ($0.01) per share in the fourth quarter of 1999.

For the year ended December 31, 2000, net revenues were $206.8 million, up 31% from net revenues of $158.2 million in 1999. EBITDA for 2000 was $35.9 million, up 40% from $25.7 million in 1999. The Company's net loss increased to $4.2 million or ($1.05) per share in 2000 from $2.9 million or ($0.58) per share in 1999.

Riviera Holdings Corporation had cash and short-term investments of $52 million, working capital of $29 million and shareholders' equity of $17 million at December 31, 2000.

Fourth Quarter Highlights

-- Riviera Las Vegas ADR (Average Daily Rate) up $2.47 or 4.1%

-- Riviera Las Vegas EBITDA of $6.3 million was flat for both quarters in both 1999 and 2000

-- Cash and short-term investments totaled $52 million

-- Riviera Black Hawk contributed $1.9 million in EBITDA, up 82% over the third quarter of 2000

-- Repurchased $6.6 million of Riviera Black Hawk, Inc.'s 13% bonds

-- Repurchased 143,000 shares of Riviera Holdings Corporation common stock

Riviera Las Vegas

Bob Vannucci, President of Riviera Las Vegas, said, ``Riviera Las Vegas had a good quarter, with EBITDA of $6.3 million for the quarter in both 1999 and 2000. EBITDA increased $4.6 million or 19% for the year. Net revenues increased by $2.1 million or 6% for the quarter and by $9.7 million or 6% for the year.''

Revenue increased in most departments driven by higher room revenues and increased covers in entertainment and food and beverage. Most significantly, ADR (Average Daily Rate) was up $2.47 or about 4% for the quarter and $5.16 or 10% for the year, while occupancy continued at an above-Strip average of approximately 93% for the quarter and 97% for the year. Cash room revenue increased by $531,000 or 5.5%. Our percentage of comp rooms decreased to 8.3% versus 10.1% in 1999. We continue to reap the benefits of having one of the largest convention centers in Las Vegas. Convention room nights increased from 23% in the fourth quarter of 1999 to 27% in the fourth quarter of 2000.

Food, beverage and entertainment revenues increased $1.9 million in the quarter and departmental results were up $540,000 or 26%. These gains were primarily in the banquet area and are associated with the convention center. Our award winning Splash show continues to gain momentum with ticket sales up 98% in the fourth quarter of 2000 while the show was closed between Thanksgiving and Christmas in 1999.

Gaming profitability continues to increase as our mix of slots to other games revenue grew to 78% and credit play in table games declined to less than 7% of table games drop during the quarter. Table games revenues increased $186,000, while departmental profits increased by $514,000 in the quarter. This was accomplished by reducing payroll and marketing costs in this labor- intensive area. In Las Vegas, non-gaming revenue represented 65% and 63% of net revenue for the three and 12-month periods, respectively.

In addition, as reported in a release on Friday, February 9, 2001, the Riviera Las Vegas dealers voted not to be represented by the Transport Workers Union. Mr. Vannucci stated that, ``We are obviously very pleased that our dealers chose not to be represented by the Transport Workers Union. We believe that what we have is a partnership between the Riviera and its dealers, and it would have been counterproductive to involve a third party in this partnership. The vote was a decisive pro-company one with the count standing at 107 for the company and 61 for the union,'' concluded Mr. Vannucci.

Riviera Black Hawk Fourth quarter EBITDA, before Management Fees, was $1.9 million, up $843,000 from the third quarter. ``Fourth quarter results reflect the continued momentum we have seen at Black Hawk since June,'' commented Ron Johnson, President of Riviera Black Hawk. ``Slot revenues increased 4.6% in the fourth quarter, resulting in a 14.5% increase in market share. The improvement in slot revenues, coupled with effective controls on marketing expenses contributed to an 82% increase in EBITDA over the third quarter of 2000.''

In the fourth quarter we continued to refine and add to measures initiated in June of 2000, in order to build market share and profitability. These actions included:

-- Aggressively advertising the unique features of our slot product;

-- Continuing to build and refine our direct mail marketing program. In December we registered our 100,000th slot club member;

-- We opened our new "World's Fare Buffet," offering an expanded selection of food items in a first-class environment;

-- We continued to expand our entertainment offerings, which included Las Vegas style revues, musical groups, comedians and boxing; and

-- We introduced a VIP program with additional amenities aimed at building $1 and $5 slot play.

``We continue to monitor marketing programs in the Black Hawk/Central City market, particularly the direct mail cash coupon programs, and their effect on margins. We have recently seen a reduction in the frequency and magnitude of such offers, which, if sustained, could have a positive effect on profits and margins going forward,'' Mr. Johnson said.

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