Trump Entertainment Lost $198M in 2007
- Mar 05, 2008
Trump Entertainment Resorts Inc. today announced a net loss of $198.2 million ($6.38 per share) for all of 2007 on revenues of $988.2 million. By comparison, the company recorded a net loss of $18.5 million on revenues of $1 billion for 2006. For the fourth quarter of 2007, the company lost $183.2 million on revenues of $228.6 million. The 2006 fourth quarter numbers show a loss of $9.7 million on $244.2 million in revenues. Attributed to the recent introduction of gaming in Pennsylvania, a partial smoking ban in Atlantic City, and weakness in both the economy and credit markets, Trump Entertainment’s losses come as the company prepares to open a new 782-room hotel tower at the Taj Mahal in Atlantic City. The direct causes of the loss for the 2007 fiscal year and for the fourth quarter were a non-cash charge of $238.7 million in goodwill and other asset impairment charges, a $4.1 million charge related to the refinancing of the company’s credit facility, and a $57.6 million decline in gaming revenues on the year, including an $18.6 million drop in the fourth quarter. Accountants levy asset impairment charges when an asset recording normal, scheduled depreciation and amortization charges suffers a sudden decline in value. In this case, the company claimed goodwill and intangible asset impairment charges of $30.4 million against the Taj Mahal (pictured), $53.1 million against the Trump Plaza, and $63.9 million related to the Trump Marina. In addition, the company recorded an asset impairment charge of $91.3 million against long-lived assets of Trump Marina.