Las Vegas Sun

September 1, 2014

Currently: 104° — Complete forecast | Log in | Create an account

Vegas properties hit hard as Harrah’s reports wider 3Q loss

Updated Tuesday, Oct. 27, 2009 | 1:04 p.m.

Harrah's Entertainment Financial Information

  3Q 2009 3Q 2008 % Change 2Q 2009
Revenue $2.282 billion $2.645 billion -13.7% $2.271 billion
Net income* ($1.621 billion) ($123.2 million) N/A $2.272 billion
*From continuing operations

Harrah's Entertainment properties

Launch slideshow »

Still struggling with the recession, Harrah's Entertainment Inc. of Las Vegas today posted a $1.33 billion charge against earnings to write down the value of certain assets around the country, and overall posted a third quarter loss from continuing operations after taxes of $1.621 billion.

The loss, compared to a loss of $123.2 million a year earlier, was driven by the one-time writeoff as well as a 13.7 percent decline in quarterly revenue to $2.282 billion.

The Las Vegas market was hit especially hard, with revenue down 17.5 percent during the quarter ended Sept. 30 to $657.2 million.

Harrah's is a big operator on and near the Las Vegas Strip with properties such as Caesars Palace, the Rio, Paris, Bally's, Flamingo, Harrah's and the Imperial Palace -- and like other operators in town it's struggling with an oversupply of hotel rooms and gaming capacity as the economic downturn has reduced travel to the U.S. casino capital.

The world's largest casino operator said the charge of $1.33 billion for the impairment of goodwill and other intangible assets was mostly related to properties in the Las Vegas, Atlantic City and Illinois/Indiana regions. Such accounting charges reflect reductions in expected future profits from the affected assets.

With the recession reducing activity at its table games and slot machines and putting downward pressure on hotel room rates, the company also reported a big decline in the operating measure of earnings before interest, taxes, depreciation and amortization (EBITDA).

EBITDA companywide in the 2009 quarter of $539.2 million was down from $633.9 million in the year-ago quarter.

Harrah's said $875.8 million of the impairment charge related to certain of its Las Vegas Strip properties, which is on top of a $225.1 million charge for those properties in the second quarter. Harrah's said that without the impairment charges, income from operations would have been $278.4 million vs. $349.6 million in the year-ago quarter.

"While hotel occupancy remained strong at more than 90 percent, third-quarter and year-to-date revenues declined in the Las Vegas Region from the 2008 periods due to lower spend per visitor and weakness in the group-travel business, which led to lower average daily room rates," Harrah's said in its earnings report.

Elsewhere in Nevada, quarterly revenue tumbled 17 percent to $141.5 million for Harrah's properties in Laughlin, Reno and Lake Tahoe.

"The third quarter was challenging from an operations standpoint, as lower spending by consumers affected by the global recession continued to impact revenues," Chairman and Chief Executive Gary Loveman said in a statement.

"During the third quarter, we continued our focus on aligning expenses with revenues and addressing our capital structure to cope with the protracted economic slump," Loveman said in the statement.

Join the Discussion:

Check this out for a full explanation of our conversion to the LiveFyre commenting system and instructions on how to sign up for an account.

Full comments policy

Previous Discussion: comments so far…

Comments are moderated by Las Vegas Sun editors. Our goal is not to limit the discussion, but rather to elevate it. Comments should be relevant and contain no abusive language. Comments that are off-topic, vulgar, profane or include personal attacks will be removed. Full comments policy. Additionally, we now display comments from trusted commenters by default. Those wishing to become a trusted commenter need to verify their identity or sign in with Facebook Connect to tie their Facebook account to their Las Vegas Sun account. For more on this change, read our story about how it works and why we did it.

Only trusted comments are displayed on this page. Untrusted comments have expired from this story.

No trusted comments have been posted.