Riviera Holdings Reports $3.5 Million Net Loss

Riviera Holdings Corporation reported net revenues for the third quarter of 2008 were $40.2 million, a decrease of $12.2 million, or 23 percent, from $52.4 million for the comparable period in the prior year.

Net revenues decreased due to a 20 percent net revenue reduction at Riviera Las Vegas and a 31 percent net revenue reduction at Riviera Black Hawk. Income from operations for the third quarter of 2008 was $200,000, a decrease of $6.5 million, or 97 percent, from $6.7 million for the comparable period in the prior year.

Income from operations decreased as a result of a 95 percent operating income reduction at Riviera Las Vegas and a 66 percent operating income reduction at Riviera Black Hawk.

Decreases in Riviera Las Vegas and Riviera Black Hawk net revenues and operating results are described in detail below. Income from operations for the third quarter of 2008 included $1 million in corporate payroll and related expenses, $200,000 in equity compensations costs and $100,000 in mergers, acquisitions and development costs. These corporate costs and expenses were slightly less than the same quarter last year.

Adjusted EBITDA for the third quarter of 2008 was $4.4 million, a decrease of $5.9 million, or 58 percent, from $10.3 million for the comparable period in the prior year. Adjusted EBITDA consists of earnings before interest, income taxes, depreciation, amortization, equity-based compensation, asset impairment loss on extinguishments of debt, the effects of the accounting for our interest rate swap agreement and mergers, acquisitions and development costs.