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   Harrah's Reports Net Profit of $90.2 million, Up from
$76.7 million in the Year Earlier 2nd Qtr

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LAS VEGAS, July 21, 2004 - 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, http://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."

West Region Again Posts Record Results

     West Results
     (in millions)
                                                   2004    2003
                       2004     2003    Percent    First   First    Percent
                      Second   Second   Increase    Six     Six    Increase
                     Quarter  Quarter (Decrease)  Months  Months (Decrease)
     Northern Nevada
      Total revenues $111.8   $106.3      5.2%    $217.3  $210.6      3.2%
      Income from
       operations      14.9     12.6     18.3%      23.6    24.5     -3.7%
      Property
       EBITDA          25.7     22.4     14.7%      44.2    43.7      1.1%
     Southern Nevada
      Total revenues  272.7    221.4     23.2%     531.3   449.5     18.2%
      Income from
       operations      66.0     42.7     54.6%     131.4    87.6     50.0%
      Property
       EBITDA          82.7     61.0     35.6%     164.9   124.7     32.2%
     Total West
      Total revenues  384.5    327.7     17.3%     748.6   660.1     13.4%
      Income from
       operations      80.9     55.3     46.3%     155.0   112.1     38.3%
      Property
       EBITDA         108.4     83.4     30.0%     209.1   168.4     24.2%

Continued strong cross-market play at Harrah's Las Vegas and the Rio and new entertainment attractions in Lake Tahoe propelled Harrah's West Region to record results.

Southern Nevada revenues rose 23.2 percent, income from operations gained 54.6 percent and Property EBITDA increased 35.6 percent from the 2003 second quarter.

Northern Nevada revenues rose 5.2 percent to a record level from the second quarter last year, while income from operations gained 18.3 percent and Property EBITDA was 14.7 percent higher.

"With each Southern Nevada property posting record results and Lake Tahoe performing well, we continue to be enthusiastic about the West Region outlook," said Tim Wilmott, Harrah's chief operating officer.

For the 2004 first half, West Region revenues were up 13.4 percent, income from operations rose 38.3 percent and Property EBITDA gained 24.2 percent from the first half of 2003.

East Region Results Decline

     East Results
     (in millions)
                                                   2004    2003
                       2004    2003    Percent    First   First    Percent
                      Second  Second   Increase    Six     Six    Increase
                      Quarter Quarter (Decrease)  Months  Months (Decrease)
     Harrah's
      Atlantic City
      Total revenues $104.5   $112.9     -7.4%    $204.9  $215.1     -4.7%
      Income from
       operations      28.0     37.7    -25.7%      54.1    67.6    -20.0%
      Property
       EBITDA          37.4     46.3    -19.2%      72.4    84.7    -14.5%
     Showboat
      Atlantic City
      Total revenues   89.4     93.1     -4.0%     170.8   169.3      0.9%
      Income from
       operations      24.1     25.3     -4.7%      42.6    39.0      9.2%
      Property
       EBITDA          32.3     32.4     -0.3%      58.5    52.4     11.6%
    Total East
     Total revenues   193.9    206.0     -5.9%     375.7   384.4     -2.3%
     Income from
      operations       52.1     63.0    -17.3%      96.7   106.6     -9.3%
     Property
      EBITDA           69.7     78.7    -11.4%     130.9   137.1     -4.5%
 

Results for Harrah's two Atlantic City properties fell due to competition from the city's first new hotel-casino in more than a decade.  Second-quarter revenues declined 5.9 percent, income from operations fell 17.3 percent and Property EBITDA decreased 11.4 percent from the year-earlier period.

"As the economy continues to improve and we reach the anniversary of the opening of the new competitor facility, we look forward to a return to growth in Atlantic City," Wilmott said.

For the first half, East Region revenues declined 2.3 percent, income from operations fell 9.3 percent and Property EBITDA was 4.5 percent lower than in the year-earlier period.

North Central Region Results Improve

     North Central Results
     (in millions)
                                                   2004    2003
                      2004     2003    Percent    First   First    Percent
                     Second   Second   Increase    Six     Six    Increase
                    Quarter  Quarter (Decrease)  Months  Months  (Decrease)
     Illinois/Indiana
      Total revenues $171.1   $174.8     -2.1%    $345.7  $353.3     -2.2%
      Income from
       operations      22.4     20.5      9.3%      46.5    55.6    -16.4%
      Property
       EBITDA          31.5     29.0      8.6%      64.3    73.3    -12.3%
     Iowa
      Total revenues   64.0     59.9      6.8%     124.7   118.6      5.1%
      Income from
       operations      33.1      9.1       N/M      41.0    17.5       N/M
      Property
       EBITDA          22.8     13.7     66.4%      36.4    26.6     36.8%
     Missouri
     Total revenues   109.7    108.7      0.9%     218.1   218.2      0.0%
     Income from
      operations       18.0     22.8    -21.1%      36.6    44.5    -17.8%
     Property
      EBITDA           28.6     31.8    -10.1%      56.4    62.0     -9.0%
     Total North
      Central
      Total revenues  344.8    343.4      0.4%     688.5   690.1     -0.2%
      Income from
       operations      73.5     52.4     40.3%     124.1   117.6      5.5%
     Property EBITDA   82.9     74.5     11.3%     157.1   161.9     -3.0%
     N/M = Not Meaningful

The North Central Region's second-quarter results benefited from legislation lowering the gaming-tax rate affecting the Bluffs Run racetrack casino in Iowa.  The company had been accruing gaming taxes at a higher rate as it awaited the resolution of the rate issue, and recorded a $3.7 million adjustment of the first-quarter accrual due to the reduction in the tax rate.  The company also adjusted its tax accrual for prior periods by $16.6 million, and recorded this component of the adjustment to the write-downs, reserves and recoveries account.  The prior-periods component is excluded from Adjusted EPS.

Second-quarter North Central Region revenues were flat, while income from operations rose 40.3 percent and Property EBITDA increased 11.3 percent.

Strong gains at Harrah's East Chicago and Metropolis facilities offset lower results stemming from the revised operations model implemented at Harrah's Joliet following last year's Illinois tax increase.  As a result, combined Illinois and Indiana second-quarter revenues fell 2.1 percent, but income from operations rose 9.3 percent, and Property EBITDA was 8.6 percent higher.

The company's two Iowa properties posted record second-quarter results, with revenues 6.8 percent higher than in the year-ago period.  Income from operations more than tripled and Property EBITDA increased 66.4 percent due in part to the tax-accrual adjustment.

Combined second-quarter revenues at Harrah's two Missouri properties were about level with the 2003 second quarter's, but income from operations declined 21.1 percent and Property EBITDA decreased 10.1 percent.  Improved results at St. Louis were more than offset by declines in Kansas City, which faced increased competition due to significant expansions by two of the three competitors in that market.

For the 2004 first half, North Central Region revenues were flat, income from operations was 5.5 percent higher and Property EBITDA was down 3.0 percent from the 2003 first half.

South Central Region Reports Higher Second-Quarter Results

     South Central Results
     (in millions)
                                                   2004    2003
                      2004     2003    Percent    First   First    Percent
                     Second   Second   Increase    Six     Six    Increase
                    Quarter  Quarter (Decrease)  Months  Months  (Decrease)
     Louisiana
      Total revenues $167.0   $159.3      4.8%    $347.8  $319.2      9.0%
      Income from
       operations      19.9     19.5      2.1%      47.2    46.7      1.1%
      Property
       EBITDA          32.6     32.6      0.0%      69.8    70.6     -1.1%
     Mississippi
      Total revenues   20.0     20.9     -4.3%      41.1    41.1     -0.0%
      Income from
       operations       3.5      3.4      2.9%       6.9     6.2     11.3%
      Property
       EBITDA           5.1      4.9      4.1%      10.1     9.4      7.4%
     Total South
      Central
      Total revenues  187.0    180.2      3.8%     388.9   360.3      7.9%
      Income from
       operations      23.4     22.9      2.2%      54.1    52.9      2.3%
      Property
       EBITDA          37.7     37.5      0.5%      79.9    80.0     -0.1%

At Harrah's Louisiana and Mississippi properties, revenues rose 3.8 percent, income from operations increased 2.2 percent and Property EBITDA was 0.5 percent higher than in the year-ago second quarter.

The 2004 second quarter included results from Harrah's Shreveport through May 19, when that property was sold to another operator, and from Louisiana Downs, where 900 slot machines were introduced in late May 2003; the total was increased to just over 1,400 in May 2004.

"Combined, our New Orleans and Lake Charles, Louisiana, properties posted double-digit gains in revenues and income from operations," Wilmott said.

First-half revenues for the South Central properties rose 7.9 percent, income from operations increased 2.3 percent and Property EBITDA was flat compared with the first half of 2003.

Managed Properties And Other Items

Second-quarter management-fee revenues were down 20.6 percent from the year-ago period due to lower fee schedules associated with contract extensions.

Second-quarter development costs rose to $6.1 million from $3.6 million in the 2003 second quarter.

Corporate expense was level with the 2003 second quarter.  Interest expense was 1.2 percent higher than in the 2003 second quarter.

During the second quarter, Harrah's Entertainment made a $10 million endowment to The Harrah's Foundation, a non-profit corporation that provides charitable contributions to qualifying organizations in communities served by Harrah's.  The $10 million expense resulting from this action is recorded in write-downs, reserves and recoveries.  Also included in write-downs, reserves and recoveries is the $16.6 million adjustment of the prior period gaming tax accruals for the Bluffs Run property resulting from the passage of legislation lowering the gaming-tax rate.

The effective income tax rate after minority interest for the 2004 second quarter was 37.1 percent, similar to the full year 2003 and the first quarter of 2004.

On July 1, the company's Horseshoe Gaming subsidiary called for redemption of all $535 million of its outstanding 8 5/8 percent Senior Subordinated Notes, due July 2009.  Noteholders will receive a redemption price equal to 104.313 percent of the principal amount of the notes, plus accrued and unpaid interest through the redemption date of August 2, 2004.
 
 

HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED SUMMARY OF OPERATIONS
(UNAUDITED)
    (In thousands,         Second Quarter Ended        Six Months Ended
     except per           June 30,     June 30,     June 30,     June 30,
     share amounts)         2004         2003         2004         2003

    Revenues            $1,129,006   $1,080,220   $2,238,172   $2,139,149
    Property operating expenses             (827,883)    (796,605)  (1,649,579)  (1,571,897)
    Depreciation and
     amortization          (81,976)     (79,010)    (160,048)    (157,538)
      Operating profit     219,147      204,605      428,545      409,714

    Corporate expense      (15,802)     (15,742)     (30,532)     (27,846)
    (Losses)/income on
     interests in
     nonconsolidated
     affiliates               (150)         (24)         284          (86) 
Amortization of intangible assets      (1,207)      (1,200)      (2,443)      (2,399) 
Project opening costs and other items           406       (4,327)      (5,428)      (5,645)
    Income from
     operations            202,394      183,312      390,426      373,738
    Interest expense,
     net of interest
     capitalized           (58,854)     (58,208)    (117,100)    (117,082)
    Loss on early
     extinguishment
     of debt                    --       (2,141)          --       (2,141)
    Other income,
     including
     interest income         1,857        4,810        4,098        5,495

    Income before income
     taxes and minority
     interests             145,397      127,773      277,424      260,010
    Provision for
     income taxes          (53,225)     (46,104)    (101,431)     (94,918)
    Minority interests      (1,935)      (3,735)      (4,025)      (6,895)
    Income from
     continuing
     operations             90,237       77,934      171,968      158,197
    Discontinued
     operations,
     net of tax                 --       (1,250)          --         (433)
        Net income         $90,237      $76,684     $171,968     $157,764

    Earnings per share
     - basic Income from continuing
       operations            $0.81        $0.72        $1.55        $1.45
      Discontinued
       operations,
       net of tax               --        (0.01)          --           --
        Net income           $0.81        $0.71        $1.55        $1.45

    Earnings per share
     - diluted Income from continuing
       operations            $0.79        $0.70        $1.52        $1.43
      Discontinued
       operations,
       net of tax               --        (0.01)          --           --
        Net income           $0.79        $0.69        $1.52        $1.43

    Weighted average
     common shares
     outstanding           111,683      108,786      111,156      108,641
    Weighted average
     common and common
     equivalent shares
     outstanding           113,573      110,373      112,967      110,168
 

                           HARRAH'S ENTERTAINMENT, INC.
                        SUPPLEMENTAL OPERATING INFORMATION
                                   (UNAUDITED)
                             Second Quarter Ended       Six Months Ended
    (In thousands)        June 30,     June 30,      June 30,     June 30,
                            2004         2003          2004         2003
    Revenues
      West Region         $384,468     $327,693     $748,599     $660,082
      East Region          193,893      205,973      375,670      384,422
      North Central
       Region              344,801      343,421      688,488      690,092
      South Central
       Region              186,992      180,243      388,872      360,317
      Managed               14,998       18,896       29,554       36,008
      Other                  3,854        3,994        6,989        8,228
        Total revenues  $1,129,006   $1,080,220   $2,238,172   $2,139,149

    Income from operations
      West Region          $80,901      $55,276     $154,990     $112,131
      East Region           52,149       62,990       96,722      106,622
      North Central
       Region               73,512       52,357      124,075      117,596
      South Central
       Region               23,362       22,895       54,058       52,867
      Managed               12,843       16,877       25,037       31,644
      Other                (24,571)     (11,341)     (33,924)     (19,276)
      Corporate expense    (15,802)     (15,742)     (30,532)     (27,846)
        Total income
         from operations  $202,394     $183,312     $390,426     $373,738
    Property EBITDA *
      West Region         $108,411      $83,432     $209,123     $168,405
      East Region           69,763       78,739      130,923      137,130
      North Central
       Region               82,855       74,485      157,054      161,851
      South Central
       Region               37,637       37,522       79,873       80,027
      Managed               12,923       16,896       25,173       31,683
      Other                (10,466)      (7,459)     (13,553)     (11,844)
        Total Property
         EBITDA           $301,123     $283,615     $588,593     $567,252
    Project opening costs
     and other items
      Project opening
       costs               $(4,133)     $(4,122)     $(6,568)     $(4,589) 
Writedowns, reserves and recoveries        4,539         (205)       1,140       (1,056)
        Total project
         opening costs
         and other items      $406      $(4,327)     $(5,428)     $(5,645)

    *  Property EBITDA (earnings before interest, taxes, depreciation and amortization) consists of Income from operations before depreciation and amortization, write-downs, reserves and recoveries, project opening costs, corporate expense, income/(losses) on interests in nonconsolidated affiliates, venture restructuring costs and amortization of intangible assets.  Property EBITDA is a supplemental financial measure used by management, as well as industry analysts, to evaluate our operations.  However, Property EBITDA should not be construed as an alternative to Income from operations (as an indicator of our operating performance) or to Cash flows from operating activities (as a measure of liquidity) as determined in accordance with generally accepted accounting principles.  All companies do not calculate EBITDA in the same manner.  As a result, Property EBITDA as presented by our Company may not be comparable to similarly titled measures presented by other companies.
 

                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                                   (UNAUDITED)
    Calculation of Adjusted Earnings Per Share
    (In thousands, except  Second Quarter Ended        Six Months Ended
     per share amounts)   June 30,     June 30,     June 30,      June 30,
                            2004         2003         2004          2003

    Income before income
     taxes and minority
     interests            $145,397     $127,773     $277,424     $260,010 
Add/(deduct):
      Project opening
       costs and other
       items
        True-up of
         Bluffs Run
         prior year's
         gaming tax
         accrual           (16,558)          --      (16,558)          --
        Contribution to
        the Harrah's
        Foundation          10,000           --       10,000           --
       Other                 6,152        4,327       11,986        5,645
      Loss on early
       extinguishments
       of debt                  --        2,141           --        2,141
    Adjusted income
     before income taxes
     and minority
     interests             144,991      134,241      282,852      267,796
    Provision for
     income taxes          (53,074)     (48,564)    (103,445)     (97,838)
    Minority interests      (1,935)      (3,735)      (4,025)      (6,895)

    Adjusted income from
     continuing operations  89,982       81,942      175,382      163,063
    Discontinued
     operations,
     net of tax                 --       (1,250)          --         (433)
    Add/(deduct):
      Write-down of
       assets at Vicksburg,
       net of tax               --          460           --          460
      Loss on sale of
       Harveys Colorado
       assets, net of tax       --          674           --          674
    Adjusted net income    $89,982      $81,826     $175,382     $163,764

    Diluted adjusted
     earnings per share      $0.79        $0.74        $1.55       $1.49
    Weighted average
     common and common
     equivalent shares
     outstanding           113,573      110,373      112,967      110,168
 

                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                                   (UNAUDITED)
    Reconciliation of Property EBITDA to Income from operations (In thousands)
    Second Quarter Ended June 30, 2004
                                                                  North
                                          West        East       Central
                                         Region      Region      Region

    Revenues                            $384,468    $193,893    $344,801
    Property operating expenses         (276,057)   (124,130)   (261,946)
      Property EBITDA                    108,411      69,763      82,855

    Depreciation and amortization        (26,179)    (17,434)    (22,754)
    Operating profit                      82,232      52,329      60,101
    Amortization of intangible assets       (181)         --      (1,018)
    Income/(losses) on interests in nonconsolidated affiliates            --          --          --
    Project opening costs and
     other items                          (1,150)       (180)     14,429
    Corporate expense                         --          --          --
      Income from operations             $80,901     $52,149     $73,512

    Second Quarter Ended June 30, 2004
                                         South       Managed
                                        Central        and
                                         Region       Other      Total

    Revenues                            $186,992     $18,852  $1,129,006
    Property operating expenses         (149,355)    (16,395)   (827,883)
      Property EBITDA                     37,637       2,457     301,123

    Depreciation and amortization        (11,508)     (4,101)    (81,976)
    Operating profit                      26,129      (1,644)    219,147
    Amortization of intangible assets         (8)         --      (1,207)
    Income/(losses) on interests in nonconsolidated affiliates 22        (172)       (150)
    Project opening costs and
     other items                          (2,781)     (9,912)        406
    Corporate expense                         --     (15,802)    (15,802)
      Income from operations             $23,362    $(27,530)   $202,394*
 

    Second Quarter Ended June 30, 2003
                                                                  North
                                         West         East       Central
                                        Region       Region      Region

    Revenues                            $327,693    $205,973    $343,421
    property operating expenses         (244,261)   (127,234)   (268,936)
      Property EBITDA                     83,432      78,739      74,485

    Depreciation and amortization        (27,600)    (14,580)    (20,667)
    Operating profit                      55,832      64,159      53,818
    Amortization of intangible assets       (181)         --      (1,019)
    Income/(losses) on interests in nonconsolidated affiliates  --          --          --
    Project opening costs and
     other items                            (375)     (1,169)       (442)
    Corporate expense                         --          --          --
      Income from operations             $55,276     $62,990     $52,357

    Second Quarter Ended June 30, 2003
                                          South      Managed
                                         Central       and
                                          Region       Other     Total

    Revenues                            $180,243     $22,890  $1,080,220
    property operating expenses         (142,721)    (13,453)   (796,605)
      Property EBITDA                     37,522       9,437     283,615

    Depreciation and amortization        (12,330)     (3,833)    (79,010)
    Operating profit                      25,192       5,604     204,605
    Amortization of intangible assets         --          --      (1,200)
    Income/(losses) on interests in nonconsolidated affiliates  18         (42)        (24)
    Project opening costs and
     other items                          (2,315)        (26)     (4,327)
    Corporate expense                         --     (15,742)    (15,742)
      Income from operations             $22,895    $(10,206)   $183,312*

    * Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS.  See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income and Earnings per share for the periods presented.
 

                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                                   (UNAUDITED)
    Reconciliation of Property EBITDA to Income from operations (In thousands)
    Six Months Ended June 30, 2004
                                                                  North
                                          West        East       Central
                                         Region      Region      Region

    Revenues                            $748,599    $375,670    $688,488
    Property operating expenses         (539,476)   (244,747)   (531,434)
      Property EBITDA                    209,123     130,923     157,054

    Depreciation and amortization        (51,765)    (34,014)    (44,681)
    Operating profit                     157,358      96,909     112,373
    Amortization of intangible assets       (362)         --      (2,036)
    (Losses)/income on interests in nonconsolidated affiliates            --          --          --
    Project opening costs and
     other items                          (2,006)       (187)     13,738
    Corporate expense                         --          --          --
      Income from operations            $154,990     $96,722    $124,075

    Six Months Ended June 30, 2004
                                          South      Managed
                                         Central       and
                                         Region       Other      Total

    Revenues                            $388,872     $36,543  $2,238,172
    Property operating expenses         (308,999)    (24,923) (1,649,579)
      Property EBITDA                     79,873      11,620     588,593

    Depreciation and amortization        (21,717)     (7,871)   (160,048)
    Operating profit                      58,156       3,749     428,545
    Amortization of intangible assets        (45)         --      (2,443)
    (Losses)/income on interests in
      nonconsolidated affiliates             (83)        367         284
    Project opening costs and
     other items                          (3,970)    (13,003)     (5,428)
    Corporate expense                         --     (30,532)    (30,532)
      Income from operations             $54,058    $(39,419)   $390,426*
 

    Six Months Ended June 30, 2003
                                                                 North
                                          West        East      Central
    Region                               Region      Region      Region

    Revenues                            $660,082    $384,422    $690,092

    Property operating expenses         (491,677)   (247,292)   (528,241)
      Property EBITDA                    168,405     137,130     161,851

    Depreciation and amortization        (55,604)    (29,265)    (41,246)
    Operating profit                     112,801     107,865     120,605
    Amortization of intangible assets       (363)         --      (2,036)
    (Losses)/income on interests
    in nonconsolidated
    affiliates                                --          --          --
    Project opening costs and
     other items                            (307)     (1,243)       (973)
    Corporate expense                         --          --          --
      Income from operations            $112,131    $106,622    $117,596

    Six Months Ended June 30, 2003
                                         South       Managed
                                        Central        and
                                         Region       Other      Total

    Revenues                            $360,317     $44,236  $2,139,149
    Property operating expenses         (280,290)    (24,397) (1,571,897)
      Property EBITDA                     80,027      19,839     567,252

    Depreciation and amortization        (23,939)     (7,484)   (157,538)
    Operating profit                      56,088      12,355     409,714
    Amortization of intangible assets         --          --      (2,399)
    (Losses)/income on interests in nonconsolidated affiliates          (125)         39         (86)
    Project opening costs and
     other items                          (3,096)        (26)     (5,645)
    Corporate expense                         --     (27,846)    (27,846)
    Income from operations               $52,867    $(15,478)   $373,738*

    * Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS.  See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income and Earnings per share for the periods presented.

Founded 66 years ago, Harrah's Entertainment, Inc. owns or manages through various subsidiaries 28 casinos in the United States, primarily under the Harrah's brand name.  Harrah's Entertainment is focused on building loyalty and value with its valued customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership.

This release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. 

 

 
Contact:
Harrah's Entertainment, Inc.
http://www.harrahs.com
Also See: Harrah's Buying its Rival Caesars For Cash and Stock Deal Valued at $9.44 billion; Combined, Harrah's and Caesars Will Be Largest Casino Operator in the World / July 2004
Harrah's Reports 1st Quarter Net Income of $81.7 million Slightly Better than the $81.1 million Recorded in 2003; Southern Nevada Properties Particularly Strong / April 2004


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