Station Casinos reports 2Q fall in revenue

By Liz Benston

Monday, Aug. 11, 2008 | 5:13 p.m.

Station Casinos today reported worsening performance on the heels of declines reported by other casino operators in recent weeks, saying second quarter revenue fell 7 percent and earnings before interest, taxes, depreciation and amortization fell 11 percent.

Profit rose 23 percent on an accounting quirk having to do with the value of investment derivatives that have no bearing on performance or money earned by Station, which went private in a management-led buyout last year.

Also today, Station released restated earnings for 2007 and the first quarter of this year reflecting a new way of accounting for derivatives known as interest rate swaps. Gaming companies typically don’t report these swaps, which are used to hedge interest payments on loans with floating rates, on their income statement because they have no actual value.

Earnings before interest, taxes, depreciation and amortization -- a widely-used measure of casino profit -- fell 11 percent in the second quarter compared with a year ago at the company’s major casinos except for Green Valley Ranch, where similarly calculated earnings fell 22 percent. Green Valley Ranch is half owned by the Greenspun Corp., which owns the Las Vegas Sun.

Revenue in each major department -- casino, food and beverage and rooms -- fell in the second quarter from last year.