02/03/2011 11:58AM

Penn National loses $59.5M on Illinois casino charges

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Penn National Gaming Inc., the casino and racetrack operating company, lost $59.5 million in 2010, largely because of impairment charges it took in the fourth quarter on two casinos it owns in Illinois, according to financial statements released on Thursday.

The company, which owns 23 gambling facilities in 15 states and one Canadian province, wrote down the value of the two Illinois casinos by $193.2 million in the fourth quarter. In a statement, the company’s chief executive, Peter Carlino, said that the charges reflected a loss of goodwill and other intangible assets because of “the planned 2011 opening of Illinois’ tenth gaming facility and the continued challenging operating environment in the state.”

Net revenue for the year was $2.46 billion, a 3.7 percent increase over net revenue of $2.37 billion in 2009. Total operating expenses, including the impairment charges, was $2.31 billion, down 9.7 percent from total operating expenses of $2.56 billion in 2009, when the company took impairment charges of $532 million.

The company did not release a balance sheet with its 2010 financial statements on Thursday. At the end of the third quarter, the company had cash of $355 million, down from $713.1 million at the end of 2009, according to previous financial statements. Its long-term debt at the end of the third quarter of 2010 was $2.1 billion.

Penn National aggressively sought out racetrack properties in 2010 in an attempt to gain footholds in markets where slot machines have not yet been installed in racetracks. Early in 2010, the company bought a 49 percent stake in Laurel Park and Pimlico Race Course in Maryland, where it already operates a casino, but its efforts to steer a casino license to Laurel were unsuccessful. In addition, the company purchased Beulah Park in Ohio – where it already owns a harness track and is building two casinos.

In addition to its casinos, Penn owns Penn National racetrack in Pennsylvania, Zia Park in New Mexico, and Charles Town in West Virginia. All three tracks have casinos.