Magna losses at $105M

Magna Entertainment Corp. lost $105.1 million in 2003, the company reported on Tuesday, largely because of a $134.9 million non-cash charge to reflect the declining value of its racetracks.

The net loss, which compared with a net loss of $14.4 million in 2002, was on revenue of $708.9 million. Revenue was up 29.1 percent from the 2002 figure, which was $549.2 million. Expenses, however, were up 28.8 percent to $737.5 million, excluding the non-cash charge.

Magna had previously announced the write-down in early February, but put the figure at $82 million. That amount was net of a $52.8 million tax benefit to the company related to the write-down.

The write-down affected the values of Gulfstream Park, Pimlico Racecourse, Laurel Park, Bay Meadows, Portland Meadows, Multnomah Park, Remington Park, and Thistledown, Magna reported. Only five of Magna's tracks were not affected by the write-down.

Magna's results in 2002 did not include full-year revenues from Laurel Park, Pimlico, and Lone Star Park, which were all bought late that year. The 2003 results did include those tracks, accounting for almost all of the revenue growth.

Magna has struggled throughout its five-year existence to turn a profit. This year, the company has been dogged by poor performance at two of its marquee tracks, Gulfstream Park and Santa Anita Park. Both tracks have posted disappointing handle and attendance figures throughout their 2004 meets, although the figures have improved over the last several weeks.

According to Magna, cash generated from operating activities for 2003 was $200,000, compared with $19.7 million in 2002. Magna officials have said that they intend to cut $5 million in expenses in 2004 to shore up their operations.

Magna's stock was down 7 cents on Tuesday to $4.85. The 2003 results were announced after the market closed Tuesday.

Increasingly, Magna has been attempting to get legislation passed that would allow expanded gambling in states where it owns tracks. Legislative efforts in some form or another are pending in Maryland, home of Pimlico and Laurel; Pennsylvania, home of Magna's Ladbrokes at The Meadows; Michigan, home of Great Lakes Downs; and Oklahoma, home of Remington Park.