FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
REPORT OF FOREIGN ISSUER PURSUANT TO RULE 13a-16 or
15d-16 under the securities exchange act of 1934
For the month of October 2000
SUN INTERNATIONAL HOTELS LIMITED
(Translation of registrant's name into English)
Coral Towers, Paradise Island, The Bahamas
(address of principal executive offices)
Indicate by check mark whether the registrant files or will file annual reports
under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.
Yes No X
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If "yes" is marked, indicate below this file number assigned to the registrant
in connection with Rule 12g-3-2(b): N/A
Page 1 of 9
Exhibit Index is on Page 3
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Date: October 31, 2000
SUN INTERNATIONAL HOTELS LIMITED
By: /s/Charles D. Adamo
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Name: Charles D. Adamo
Title: Executive Vice President
Corporate Development & General Counsel
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9
EXHIBIT LIST
Exhibit Description Sequential Page No.
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1. Press Release dated October 31, 2000 4
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Sun International
FROM: Sun International
The Bahamas
Contact: John Allison
Tel: 1.242.363.6016
FOR IMMEDIATE RELEASE
SUN INTERNATIONAL ANNOUNCES THIRD QUARTER EARNINGS AND
DEFINITIVE AGREEMENT TO SELL RESORTS CASINO HOTEL
PARADISE ISLAND, The Bahamas, October 31, 2000 - Sun International Hotels
Limited (NYSE: SIH) reported net income for the third quarter, excluding the
effects of pre-opening costs and sales of real estate at its Paradise Island
operations, of $9.2 million, equal to the same period last year. Earnings per
share for the period, excluding pre-opening costs and real estate sales, were
$0.31 compared to $0.27 for the same period last year.
Including pre-opening costs and real estate sales, the Company generated net
income, for the third quarter of $12.4 million, compared to $4.9 million for the
same period last year. Earnings per share for the quarter were $0.42 compared to
$0.14, for the same period last year. The pre-opening costs in the third quarter
related to the expansion of the Company's deluxe Ocean Club hotel on Paradise
Island, while the pre-opening costs in the comparable quarter last year related
to the renovation of Resorts Casino Hotel in Atlantic City.
Growth in operating earnings for the quarter was achieved compared to the same
period last year, despite a lower comparative contribution from the Mohegan Sun
Casino primarily due to the termination of the management agreement between the
Mohegan Sun and Trading Cove Associates, a partnership in which the Company
holds a 50% interest. Interest income declined during the quarter due to the
repayment in December 1999 by the Mohegan Tribe of $94.1 million of Subordinated
Notes held by the Company. Growth in operating earnings was attributable to
increases from both the Paradise Island and Atlantic City operations.
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Paradise Island
The Company's flagship Paradise Island operations generated EBITDA of $23.2
million, a 13.7% increase over the same period last year. Atlantis achieved an
average occupancy of 84% for the quarter, and recorded an average room rate of
$211, an increase of 8% over the same period last year.
The Ocean Club, the Company's 59-room boutique hotel on Paradise Island,
achieved an average occupancy of 78% for the quarter at an average rate of $405,
which rate was similar to the same period in the prior year. This was achieved
despite the adverse effects of construction of additional rooms and suites at
the property, which was completed during October 2000.
The redevelopment of the new Tom Weiskopf golf course and club is nearing
completion and it is expected that it will be open for play by the end of the
year in time for the PGA "Father and Son" golf tournament. During the quarter an
additional 8 luxury homesites around the golf course were sold for net proceeds
of $7.7 million. The Company has also recently opened the expanded Ocean Club.
The extension to the hotel included the addition of 50 luxurious rooms including
10 deluxe suites, as well as a new beachfront restaurant, Dune, operated by
well-known restauranteur Jean-Georges.
Atlantic City
Resorts Atlantic City generated EBITDA of $11.5 million for the quarter,
compared to $9.3 million for the same period last year. Gaming revenues for the
quarter of $69.1 million were approximately 8% ahead of the same quarter of last
year.
Table games performed well during the quarter with table drop increasing by 26%
over 1998, although drop was 9% below the previous year which had experienced
extremely strong volumes as a result of the opening events surrounding the
re-launch of the property in July 1999. Slots revenues have begun to show a
reversal from the significant negative trends experienced in the prior three
quarters. Management has made several changes in this area including offering
customers a more competitive slot product as well as improvements to the
property's slots club. Slots win decreased by only 0.4% from 1998 levels
compared to the 18% and 5% declines experienced during the first and second
quarters, respectively.
During the quarter, the Atlantic City gaming market showed growth in total
gaming revenues of 4% over the previous year. Slot win for the quarter increased
by 5% over the same period last year.
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Connecticut
The Mohegan Sun Casino generated gross operating revenues of $219.8 million, an
8% increase over the same period last year. The Company's share of Mohegan Sun
income was $5.0 million for the quarter compared to $7.3 million in the prior
year.
Through December 31, 1999, the Mohegan Sun Casino was managed by Trading Cove
Associates. In exchange for relinquishing its rights under its then existing
agreements, effective January 1, 2000, Trading Cove Associates began to receive
payments of 5% of gross revenues of the Mohegan Sun. These relinquishment
payments are currently contributing less income than was previously earned under
the prior management contracts. However, the relinquishment payments continue
for a period of 15 years, whereas the management contract was to expire in 2003.
The property is currently undergoing a significant expansion which will include
115,000 additional square feet of gaming space, a 1,200-room luxury hotel, a
100,000-square foot convention center, a 10,000-seat events center and
additional retail and restaurant facilities. This expansion is proceeding well.
It is anticipated that the new casino will open in the fall of 2001 with the
hotel opening in the spring of 2002. The relinquishment payments will be based
on gross revenues of the expanded Mohegan Sun Complex.
On December 30, 1999 the Mohegan Tribe repaid $94.1 million of outstanding
Subordinated Notes held by the Company. These notes had been funded at the time
of the construction of the facility and were repaid in connection with the
termination of the management contracts. During the third quarter of 1999, the
Company earned interest income of $2.5 million on such notes.
Other Matters
The Company has entered into a definitive agreement to sell its Resorts Casino
Hotel to an affiliate of Colony Capital LLC for a purchase price of $140
million, such purchase price to accrue interest at an annual rate of 6% until
closing. In addition, Colony has a two-year option to acquire the undeveloped
real estate adjacent to the Resorts Casino Hotel for a purchase price of $40
million, which option can be extended for an additional two years under certain
circumstances. The sale is subject to certain customary conditions, including
approval by the New Jersey Casino Control Commission, and is also subject to
Colony receiving certain financing in order to consummate the transaction. The
parties expect to close the transaction early next year.
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Inquiries should be directed to John Allison, Executive Vice President - Chief
Financial Officer, of Sun International Hotels Limited at 1.242.363.6016
This press release contains forward-looking statements, which are made pursuant
to the safe harbor provisions of the Private Securities Litigation Reform Act of
1995. These forward-looking statements involve risks and uncertainties that
could cause actual results to differ materially from the forward-looking
statements.
(Condensed Consolidated Statements of Operations and Summary Segment Data are
attached)
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<TABLE>
Sun International Hotels Limited
Condensed Consolidated Statements of Operations
(In Thousands of Dollars Except Per Share Data)
(Unaudited)
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Revenues:
Casino and resort revenues $ 186,736 $ 169,515 $ 585,999 $ 539,511
Less: promotional allowances (11,721) (12,762) (40,466) (37,977)
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175,015 156,753 545,533 501,534
Tour operations 8,058 7,611 23,984 21,584
Management and other fees 8,031 10,414 24,701 33,780
Real estate related 9,413 - 105,504 -
Insurance recovery - 2,200 - 2,200
Other 773 729 2,231 2,141
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201,290 177,707 701,953 561,239
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Expenses:
Casino and resort expenses 114,581 107,685 342,995 321,347
Tour operations 6,997 7,384 21,444 21,441
Selling, general and administrative 27,004 22,349 78,059 63,431
Real estate related 4,845 - 30,739 -
Corporate expenses 6,444 4,814 18,636 15,575
Depreciation and amortization 15,056 15,006 44,334 42,933
Write-off of Desert Inn costs - - 11,202 -
Transactions costs - - 7,014 -
Pre-opening expenses 1,397 4,335 2,087 5,398
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176,324 161,573 556,510 470,125
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Operating income 24,966 16,134 145,443 91,114
Other income and expenses:
Interest income 826 3,068 2,798 9,494
Interest expense, net of capitalization (10,361) (12,325) (33,681) (37,186)
Equity in earnings (loss) of associated companies 753 365 1,767 1,700
Other, net (707) 159 (707) 865
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Income before income taxes 15,477 7,401 115,620 65,987
Provision for income taxes (3,103) (2,528) (5,436) (7,477)
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Net income $ 12,374 $ 4,873 $ 110,184 $ 58,510
========= ========= ========= =========
Diluted earnings per share $ 0.42 $ 0.14 $ 3.45 $ 1.71
Weighted average number of shares outstanding (1) 29,664 34,148 31,957 34,269
(1) Includes the effect of outstanding stock options.
</TABLE>
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<TABLE>
Sun International Hotels Limited
Summary Segment Data
(In Millions)
(Unaudited)
<CAPTION>
For the Three Months For the Nine Months
Ended September 30, Ended September 30,
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2000 1999 2000 1999
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<S> <C> <C> <C> <C>
Paradise Island Operations
Gross revenues (1) $ 104.3 $ 91.2 $ 366.9 $ 333.8
Casino 26.8 24.1 101.4 101.8
Hotel (2) 77.5 67.1 265.5 232.0
EBITDA (3) $ 23.2 $ 20.4 $ 107.4 $ 104.3
Atlantis
Occupancy rate 84% 79% 87% 84%
Average room rate $ 211 $ 196 $ 246 $ 213
Resorts Casino Hotel
Gross revenues $ 82.4 $ 78.4 $ 219.1 $ 205.8
Casino 69.1 63.8 182.6 168.7
Hotel 13.3 14.6 36.5 37.1
EBITDA (4) $ 11.5 $ 9.3 $ 20.7 $ 15.4
</TABLE>
(1) The third quarter and first three quarters of 2000 exclude revenues of $9.4
million and $105.5 million, respectively, from Ocean Club Estates lot
sales.
(2) Excludes results of the Company's wholly owned tour operator.
(3) The third quarter and first three quarters of 2000 exclude a gain of $4.6
million and $74.8 million, respectively, from Ocean Club Estates lot sales;
and exclude pre-opening expense of $1.4 million and $2.1 million,
respectively, of pre-opening expense.
(4) The first three quarters of 1999 excludes pre-opening expense of $5.4
million.
