James Beam-
Respectfully- you are not understanding the situation correctly. What the poster pointed out were expenses from last year- not the actual debt. That added expense is caused by the debt, but does not represent 20% of the actual debt as you state. You are mixing balance sheet items (debt) with income statement items (expenses). If you take a close look at the financial statements, you will see that in general, even in AC, the properties make money- specifically look at the property EBITDA statistics- Earnings Before Interest, Taxes, Depreciation and Amortization. Las Vegas is actually doing pretty well, but AC is hurting them from an operations standpoint. But in a highly leveraged company, expenses are created by more than just operations.
I have no love for Gary Loveman, but operationally the company is not doing too bad- it is the debt load and the expenses related to that that is causing the problems Part of that $3 billion expense appears to be from them writing down the value of their AC assets- again, caused by the over-payment during the buyout, not from ongoing operations. The LBO was done at the top of the market- they thought the revenue streams could pay the interest expense and pay down the debt. Bad timing. Why do you think Loveman still has a job in a company that is loosing so much money? Because the Board knows he is dealing with a difficult situation fairly well. Don't you think they would get rid of him in a heartbeat if they could find someone better to do the job? Yes- politics plays a part- he helped then get through the buyout, which has earned him some goodwill, but ultimately it is the bottom line that matters.
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Just my .02- Lee.
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