Harrah's Entertainment Results Up for Q2

21 Jul 2004

LAS VEGAS – (PRESS RELEASE) -- Harrah's Entertainment, Inc. (NYSE: HET) today reported record second-quarter revenues of $1.13 billion, up 4.5 percent from revenues of $1.08 billion in the 2003 second quarter.

Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) rose 6.2 percent to a second-quarter record of $301.1 million from Property EBITDA of $283.6 million in the year-earlier period. Second-quarter Adjusted Earnings Per Share increased to a record 79 cents, up 6.8 percent from the 74 cents achieved in 2003's second-quarter.

Property EBITDA and Adjusted EPS are not Generally Accepted Accounting Principles (GAAP) measurements but are commonly used in the gaming industry as measures of performance and as a basis for valuation of gaming companies. In addition, analysts' per-share earnings estimates for gaming companies are comparable to Adjusted EPS. Reconciliations of Adjusted EPS to GAAP EPS and Property EBITDA to income from operations are attached to this release.

Second-quarter income from operations rose 10.4 percent to a record $202.4 million from $183.3 million in the year-earlier quarter. Second- quarter net income was a record $90.2 million, up 17.6 percent from $76.7 million in the 2003 second quarter. Diluted earnings per share from continuing operations for the 2004 second quarter was 79 cents, 14.5 percent higher than the 69 cents achieved in the 2003 second quarter.

Strong Demand, Diversification Drive Growth

"The second quarter proved the effectiveness of our unique loyalty strategy, which is focused on the delivery of superior service and recognition to more customers in more markets than any other casino operator," said Gary Loveman, Harrah's Entertainment's president and chief executive officer. "The marketing and technological capabilities we use to promote customer loyalty helped boost cross-market play that benefited our Southern Nevada operations in particular, leading to another quarter of same-store sales growth. We plan to apply these same capabilities to the properties we will add to our portfolio when we close on the Caesars transaction."

On July 15, Harrah's signed a definitive agreement to acquire Caesars Entertainment, Inc., which operates 28 casinos, including 17 in the United States. Caesars has a significant presence in Las Vegas, Atlantic City and Mississippi. The transaction is expected to take about a year to complete.

Second-quarter 2004 same-store revenues increased 4.6 percent over the year-ago period. Cross-market play -- gaming by customers at Harrah's properties other than their "home" casino -- rose 11.9 percent from the second quarter of 2003. Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 8.5 percent from the year-ago second quarter.

For the 2004 first half, revenues rose 4.6 percent to $2.24 billion from $2.14 billion in the year-ago period. Property EBITDA increased to $588.6 million, up 3.8 percent from $567.3 million in the 2003 first half. Adjusted EPS was $1.55, 4.0 percent higher than the $1.49 achieved in the first six months of 2003.

First-half income from operations was $390.4 million, up 4.5 percent from $373.7 million in the 2003 first half. Net income rose 9.0 percent to $172.0 million from $157.8 million in the first six months of 2003. First- half diluted earnings per share was $1.52, up 6.3 percent from $1.43 in the 2003 first half.

Among second-quarter highlights:

-- The company sold $750 million of unsecured 5.50 percent Senior Notes, due July 2010, in a private-placement transaction. Net proceeds were used to reduce outstanding debt and for general corporate purposes. As part of the transaction, Harrah's became the first major casino company to include a minority investment-banking firm in a debt offering.

-- Harrah's also reduced the interest rate, extended the maturity date and increased the borrowing capacity of its bank credit facilities to $2.5 billion from $1.9625 billion; the agreement also allows an increase in the total borrowing capacity up to $3 billion if Harrah's and its bank lenders agree.

-- Harrah's hosted the largest World Series of Poker ever, attracting more than 13,000 players who generated a total prize pool of nearly $50 million, more than double the 2003 total. On July 6, ESPN began airing an unprecedented 22 hours of original 2004 World Series programming that is expected to be repeated throughout the year.

-- The new permanent casino at Louisiana Downs opened, raising the total number of slot machines at the facility to more than 1,400 and adding significantly enhanced non-gaming amenities for customers.

-- Construction began on a $142 million, 450-room luxury hotel tower at Harrah's New Orleans. The 26-story tower is expected to open in early 2006.

-- Harrah's received Pennsylvania regulatory approval to buy a 50 percent ownership interest in Chester Downs & Marina, L.L.C., which is licensed to develop a harness-racing facility near Philadelphia. Early in the third quarter, the Pennsylvania Legislature passed and the governor signed a bill allowing up to 3,000 slot machines at each of eight race tracks and four stand-alone slot parlors, with the potential for adding 2,000 more slots at each of those locations.

-- The Rhode Island Legislature approved a November referendum on development of a Harrah's-owned casino venture with the Narragansett Tribe in West Warwick. The governor subsequently vetoed the bill, and Harrah's is awaiting further legislative developments.

-- The National Indian Gaming Commission approved a seven-year extension of Harrah's management contract for Harrah's Cherokee, which is owned by the Eastern Band of Cherokee Indians.

-- Market Metrix, LLC named Harrah's the top-ranked casino operator in the measurement firm's latest quarterly customer-satisfaction survey of 35,000 American consumers. The company's Web site, www.harrahs.com, also received the No. 1 ranking in the Hotel Reservations Web Site category.

On July 1, just after the end of the second quarter, Harrah's completed its approximately $1.45 billion acquisition of Horseshoe Gaming Holding Corp., which operates casino-entertainment facilities in Hammond, Indiana; Tunica, Mississippi; and Bossier City, Louisiana. The transaction raised Harrah's U.S. portfolio of owned or managed properties to 28.

"Our second-quarter operating results were highlighted by stellar performances at several properties and a continuation of the positive same- store momentum that has gained steam since late last year," Loveman said. "Those gains were driven by the successful execution of the customer-loyalty strategy that distinguishes Harrah's from other operators.

"In particular, continued refinements to our Total Rewards player-card program contributed to the increases in cross-market and tracked play," Loveman said. "And by the end of the second quarter, we'd completed conversions on almost 90 percent of the slot machines we plan to change to Fast Cash, the coinless slot system that has proven so popular with our players.

"There were also several recent developments that position us better than ever to deliver sustainable long-term earnings growth through a variety of means," Loveman said. "The Horseshoe Gaming acquisition enhances our position as the leading distributor of casino entertainment in the United States -- a position that will benefit the customers of both enterprises.

"We were delighted to welcome the more than 7,300 Horseshoe employees to the Harrah's family," Loveman said. "They've done a terrific job of delivering on the promises the Horseshoe brand makes to its customers, and we look forward to working with and learning from them.

"During the second quarter, our industry-leading financial strength and investment-grade credit rating enabled us to sell $750 million of senior notes and increase our bank borrowing capacity," Loveman said.

"We are continuing to grow our existing properties," he said. "During the second quarter, for example, we opened our permanent casino at Louisiana Downs and began construction on a 450-room luxury hotel at Harrah's New Orleans. And we are scheduled to open a 200-room hotel at Harrah's St. Louis later this quarter, adding to the substantially expanded food and beverage facilities that opened in the second quarter. Finally, Harrah's North Kansas City is developing a 206-room hotel tower and casino expansion that will include four new restaurants and a second parking garage.

"We're extremely excited about the Caesars transaction, which will solidify our position as the preeminent distributor of casino entertainment," Loveman said. "We will gain first-class assets in three major markets -- Las Vegas, Atlantic City and Mississippi -- that have stable tax environments and casino-entertainment clusters that draw customers from other areas.

"We will combine into one company three of the most storied brands in gaming -- Caesars, Horseshoe and Harrah's, all with a great tradition of success," Loveman said. "And we'll strengthen our reputation for customer- service excellence by uniting the best management and employee teams in the gaming industry.

"We believe there is a big opportunity for us to apply our capabilities to enhance the value of the Caesars assets, deliver long-term gains to shareholders and provide rewarding careers to employees," Loveman said. "Our employees have enjoyed great successes using those tools, and we believe the Caesars team will be equally successful.

"We admire what Caesars' management and employees have accomplished without having access to the industry-leading marketing and technological capabilities that have driven strong same-store sales gains at Harrah's over the past three years," Loveman said. "We're confident they'll find our capabilities will help them achieve similar results.

"In the past three months, we have recorded continued same-store revenue growth, increased earnings, seen a number of potential development projects enter the pipeline, added three premier casinos to our portfolio and announced an acquisition that would double our size and provide superior growth opportunities," Loveman said. "I believe our future has never looked brighter."

Language: English Location: Currency: > edit my preferences Home Online Slots Live Dealer Games Online Casinos Online Poker Online Bingo Games Lotteries Sports & Racebooks Fantasy Sports Forex Betting Exchanges Spread Betting Binary Options Exclusive Bonuses Weekly Newsletter Online Gaming News Payment Methods Gaming Software Gaming Site Owners Gaming Jurisdictions		Bonuses! New games! Gossip! And all the player news you can handle. Sign up NOW! View the current issue
	Harrah's Entertainment Results Up for Q2 21 Jul 2004 <a href='https://ad.casinocity.com/adclick.php?n=a21efcd1'><img src='https://ad.casinocity.com/adview.php?what=-site:vendors/width:250/RON&n=a21efcd1' border='0' alt='' /></a> LAS VEGAS – (PRESS RELEASE) -- Harrah's Entertainment, Inc. (NYSE: HET) today reported record second-quarter revenues of $1.13 billion, up 4.5 percent from revenues of $1.08 billion in the 2003 second quarter. Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) rose 6.2 percent to a second-quarter record of $301.1 million from Property EBITDA of $283.6 million in the year-earlier period. Second-quarter Adjusted Earnings Per Share increased to a record 79 cents, up 6.8 percent from the 74 cents achieved in 2003's second-quarter. Property EBITDA and Adjusted EPS are not Generally Accepted Accounting Principles (GAAP) measurements but are commonly used in the gaming industry as measures of performance and as a basis for valuation of gaming companies. In addition, analysts' per-share earnings estimates for gaming companies are comparable to Adjusted EPS. Reconciliations of Adjusted EPS to GAAP EPS and Property EBITDA to income from operations are attached to this release. Second-quarter income from operations rose 10.4 percent to a record $202.4 million from $183.3 million in the year-earlier quarter. Second- quarter net income was a record $90.2 million, up 17.6 percent from $76.7 million in the 2003 second quarter. Diluted earnings per share from continuing operations for the 2004 second quarter was 79 cents, 14.5 percent higher than the 69 cents achieved in the 2003 second quarter. Strong Demand, Diversification Drive Growth "The second quarter proved the effectiveness of our unique loyalty strategy, which is focused on the delivery of superior service and recognition to more customers in more markets than any other casino operator," said Gary Loveman, Harrah's Entertainment's president and chief executive officer. "The marketing and technological capabilities we use to promote customer loyalty helped boost cross-market play that benefited our Southern Nevada operations in particular, leading to another quarter of same-store sales growth. We plan to apply these same capabilities to the properties we will add to our portfolio when we close on the Caesars transaction." On July 15, Harrah's signed a definitive agreement to acquire Caesars Entertainment, Inc., which operates 28 casinos, including 17 in the United States. Caesars has a significant presence in Las Vegas, Atlantic City and Mississippi. The transaction is expected to take about a year to complete. Second-quarter 2004 same-store revenues increased 4.6 percent over the year-ago period. Cross-market play -- gaming by customers at Harrah's properties other than their "home" casino -- rose 11.9 percent from the second quarter of 2003. Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 8.5 percent from the year-ago second quarter. For the 2004 first half, revenues rose 4.6 percent to $2.24 billion from $2.14 billion in the year-ago period. Property EBITDA increased to $588.6 million, up 3.8 percent from $567.3 million in the 2003 first half. Adjusted EPS was $1.55, 4.0 percent higher than the $1.49 achieved in the first six months of 2003. First-half income from operations was $390.4 million, up 4.5 percent from $373.7 million in the 2003 first half. Net income rose 9.0 percent to $172.0 million from $157.8 million in the first six months of 2003. First- half diluted earnings per share was $1.52, up 6.3 percent from $1.43 in the 2003 first half. Among second-quarter highlights: -- The company sold $750 million of unsecured 5.50 percent Senior Notes, due July 2010, in a private-placement transaction. Net proceeds were used to reduce outstanding debt and for general corporate purposes. As part of the transaction, Harrah's became the first major casino company to include a minority investment-banking firm in a debt offering. -- Harrah's also reduced the interest rate, extended the maturity date and increased the borrowing capacity of its bank credit facilities to $2.5 billion from $1.9625 billion; the agreement also allows an increase in the total borrowing capacity up to $3 billion if Harrah's and its bank lenders agree. -- Harrah's hosted the largest World Series of Poker ever, attracting more than 13,000 players who generated a total prize pool of nearly $50 million, more than double the 2003 total. On July 6, ESPN began airing an unprecedented 22 hours of original 2004 World Series programming that is expected to be repeated throughout the year. -- The new permanent casino at Louisiana Downs opened, raising the total number of slot machines at the facility to more than 1,400 and adding significantly enhanced non-gaming amenities for customers. -- Construction began on a $142 million, 450-room luxury hotel tower at Harrah's New Orleans. The 26-story tower is expected to open in early 2006. -- Harrah's received Pennsylvania regulatory approval to buy a 50 percent ownership interest in Chester Downs & Marina, L.L.C., which is licensed to develop a harness-racing facility near Philadelphia. Early in the third quarter, the Pennsylvania Legislature passed and the governor signed a bill allowing up to 3,000 slot machines at each of eight race tracks and four stand-alone slot parlors, with the potential for adding 2,000 more slots at each of those locations. -- The Rhode Island Legislature approved a November referendum on development of a Harrah's-owned casino venture with the Narragansett Tribe in West Warwick. The governor subsequently vetoed the bill, and Harrah's is awaiting further legislative developments. -- The National Indian Gaming Commission approved a seven-year extension of Harrah's management contract for Harrah's Cherokee, which is owned by the Eastern Band of Cherokee Indians. -- Market Metrix, LLC named Harrah's the top-ranked casino operator in the measurement firm's latest quarterly customer-satisfaction survey of 35,000 American consumers. The company's Web site, www.harrahs.com, also received the No. 1 ranking in the Hotel Reservations Web Site category. On July 1, just after the end of the second quarter, Harrah's completed its approximately $1.45 billion acquisition of Horseshoe Gaming Holding Corp., which operates casino-entertainment facilities in Hammond, Indiana; Tunica, Mississippi; and Bossier City, Louisiana. The transaction raised Harrah's U.S. portfolio of owned or managed properties to 28. "Our second-quarter operating results were highlighted by stellar performances at several properties and a continuation of the positive same- store momentum that has gained steam since late last year," Loveman said. "Those gains were driven by the successful execution of the customer-loyalty strategy that distinguishes Harrah's from other operators. "In particular, continued refinements to our Total Rewards player-card program contributed to the increases in cross-market and tracked play," Loveman said. "And by the end of the second quarter, we'd completed conversions on almost 90 percent of the slot machines we plan to change to Fast Cash, the coinless slot system that has proven so popular with our players. "There were also several recent developments that position us better than ever to deliver sustainable long-term earnings growth through a variety of means," Loveman said. "The Horseshoe Gaming acquisition enhances our position as the leading distributor of casino entertainment in the United States -- a position that will benefit the customers of both enterprises. "We were delighted to welcome the more than 7,300 Horseshoe employees to the Harrah's family," Loveman said. "They've done a terrific job of delivering on the promises the Horseshoe brand makes to its customers, and we look forward to working with and learning from them. "During the second quarter, our industry-leading financial strength and investment-grade credit rating enabled us to sell $750 million of senior notes and increase our bank borrowing capacity," Loveman said. "We are continuing to grow our existing properties," he said. "During the second quarter, for example, we opened our permanent casino at Louisiana Downs and began construction on a 450-room luxury hotel at Harrah's New Orleans. And we are scheduled to open a 200-room hotel at Harrah's St. Louis later this quarter, adding to the substantially expanded food and beverage facilities that opened in the second quarter. Finally, Harrah's North Kansas City is developing a 206-room hotel tower and casino expansion that will include four new restaurants and a second parking garage. "We're extremely excited about the Caesars transaction, which will solidify our position as the preeminent distributor of casino entertainment," Loveman said. "We will gain first-class assets in three major markets -- Las Vegas, Atlantic City and Mississippi -- that have stable tax environments and casino-entertainment clusters that draw customers from other areas. "We will combine into one company three of the most storied brands in gaming -- Caesars, Horseshoe and Harrah's, all with a great tradition of success," Loveman said. "And we'll strengthen our reputation for customer- service excellence by uniting the best management and employee teams in the gaming industry. "We believe there is a big opportunity for us to apply our capabilities to enhance the value of the Caesars assets, deliver long-term gains to shareholders and provide rewarding careers to employees," Loveman said. "Our employees have enjoyed great successes using those tools, and we believe the Caesars team will be equally successful. "We admire what Caesars' management and employees have accomplished without having access to the industry-leading marketing and technological capabilities that have driven strong same-store sales gains at Harrah's over the past three years," Loveman said. "We're confident they'll find our capabilities will help them achieve similar results. "In the past three months, we have recorded continued same-store revenue growth, increased earnings, seen a number of potential development projects enter the pipeline, added three premier casinos to our portfolio and announced an acquisition that would double our size and provide superior growth opportunities," Loveman said. "I believe our future has never looked brighter."