LAS VEGAS, Aug. 11 /PRNewswire/ -- Harrah's Entertainment, Inc. today
reported revised 2008 first and second quarter and first half revenues and
operating expenses for Harrah's Operating Company, Inc., (HOC), a wholly
owned subsidiary of the company. A substantial portion of the debt of
Harrah's Entertainment's consolidated group is issued by HOC. Therefore,
the company provides information pertaining solely to the results of
operations of HOC in its quarterly earnings releases.
(Logo: http://www.newscom.com/cgi-bin/prnh/20070718/HARRAHSLOGO)
The previously reported results for HOC included eliminations of
intercompany revenues and operating expenses in HOC's other group that
related to other subsidiaries of Harrah's Entertainment. The effect of the
inclusion of these eliminations in HOC's other group was to understate the
group's and HOC's reported revenues and operating expenses. The revised
results correct the revenues and operating expenses to exclude these
eliminations. The impact of the revisions on revenues and operating
expenses offset, and previously reported income from operations, net income
and EBITDA are not affected by these revisions.
The reported results of Harrah's Entertainment, and the prior year
results of HOC, are unaffected by these revisions.
Included with this release are updated tables reflecting the revised
results of HOC for the affected periods. Amounts revised from previously
reported results are underlined in the tables.
Harrah's Entertainment, Inc. is the world's largest provider of branded
casino entertainment. Since its beginning in Reno, Nevada, more than 70
years ago, Harrah's has grown through development of new properties,
expansions and acquisitions, and now operates casinos on four continents.
The company's properties operate primarily under the Harrah's(R),
Caesars(R) and Horseshoe(R) brand names; Harrah's also owns the London
Clubs International family of casinos and the World Series of Poker(R).
Harrah's Entertainment is focused on building loyalty and value with its
customers through a unique combination of great service, excellent
products, unsurpassed distribution, operational excellence and technology
leadership. For more information, please visit http://www.harrahs.com.
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. You can identify these statements by the
fact that they do not relate strictly to historical or current facts. These
statements contain words such as "may," "will," "project," "might,"
"expect," "believe," "anticipate," "intend," "could," "would," "estimate,"
"continue" or "pursue," or the negative or other variations thereof or
comparable terminology. In particular, they include statements relating to,
among other things, future actions, new projects, strategies, future
performance, the outcomes of contingencies and future financial results of
Harrah's. These forward-looking statements are based on current
expectations and projections about future events.
Investors are cautioned that forward-looking statements are not
guarantees of future performance or results and involve risks and
uncertainties that cannot be predicted or quantified and, consequently, the
actual performance of Harrah's may differ materially from those expressed
or implied by such forward-looking statements. Such risks and uncertainties
include, but are not limited to, the following factors, as well as other
factors described from time to time in our reports filed with the
Securities and Exchange Commission (including the sections entitled "Risk
Factors" and "Management's Discussion and Analysis of Financial Condition
and Results of Operations" contained therein): the outcome of any legal
proceedings that have been, or will be, instituted against the company
related to the acquisition of the company by affiliates of TPG Capital and
Apollo Management; the impact of the company's significant indebtedness;
the effects of local and national economic, credit and capital market
conditions on the economy in general, and on the gaming and hotel
industries in particular; construction factors, including delays, increased
costs for labor and materials, availability of labor and materials, zoning
issues, environmental restrictions, soil and water conditions, weather and
other hazards, site access matters and building permit issues; the effects
of environmental and structural building conditions relating to our
properties; access to available and reasonable financing on a timely basis;
the ability to timely and cost-effectively integrate acquisition into our
operations; changes in laws, including increased tax rates, smoking bans,
regulations or accounting standards, third-party relations and approvals,
and decisions of courts, regulators and governmental bodies; litigation
outcomes and judicial actions, including gaming legislative action,
referenda and taxation; the ability of our customer-tracking, customer
loyalty and yield-management programs to continue to increase customer
loyalty and same store sales or hotel sales; our ability to recoup costs of
capital investments through higher revenues; acts of war or terrorist
incidents or natural disasters; abnormal gaming holds; the potential
difficulties in employee retention as a result of the sale of the company
to affiliates of TPG Capital and Apollo Management; and the effects of
competition, including locations of competitors and operating and market
competition.
Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the
date made. Harrah's disclaims any obligation to update the forward-looking
statements. You are cautioned not to place undue reliance on these
forward-looking statements which speak only as of the date stated, or if no
date is stated, as of the date of this press release.
HARRAH'S OPERATING COMPANY
Overall
Successor Predecessor Percent
Second Quarter Increase/
(In millions) 2008 2007 (Decrease)
Total revenues $1,949.0 $2,023.0 (3.7)%
-------- --------
Property EBITDA 436.7 526.6 (17.1)%
Adjusted EBITDA (1) 424.2 534.2 (20.6)%
Successor Predecessor Combined Predecessor
Jan. 28, 2008 Jan. 1, 2008 Six Months Ended Percent
through Through June 30, Increase/
(In millions) June 30, 2008 Jan. 27, 2008 2008 2007 (Decrease)
Total revenues $3,339.4 $577.5 $3,916.9 $4,010.7 (2.3)%
-------- -------- --------
Property EBITDA 779.9 109.6 889.5 1,012.9 (12.2)%
Adjusted EBITDA (1) 725.5 143.0 868.5 1,020.5 (14.9)%
Successor Predecessor Combined Predecessor
Jan. 28, 2008 Jan. 1, 2008 Three Months Ended Percent
through Through Mar. 31, Increase/
(In millions) Mar. 31, 2008 Jan. 27, 2008 2008 2007 (Decrease)
Total revenues $1,382.9 $572.2 $1,955.1 $1,975.9 (1.1)%
-------- -------- --------
Property EBITDA 340.8 107.7 448.5 482.3 (7.0)%
Adjusted EBITDA (1) 303.2 141.1 444.3 486.3 (8.6)%
(1) Does not include the pro forma effect of yet-to-be realized cost
savings.
HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL INFORMATION
RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS
(UNAUDITED)
(In millions)
Successor
January 28, 2008 Through March 31, 2008
Las Atlantic Louisiana/ Iowa/
Vegas City Mississippi Missouri
Region Region Region Region
Revenues $260.5 $320.4 $274.5 $143.0
Property operating expenses (183.6) (246.3) (207.6) (102.3)
Property EBITDA 76.9 74.1 66.9 40.7
Depreciation and amortization (14.8) (25.1) (15.0) (9.7)
Operating profit 62.1 49.0 51.9 31.0
Amortization of intangible
assets (5.6) (2.5) (4.6) (0.2)
Income on interests in
nonconsolidated affiliates - - - -
Project opening costs and
other items - (1.5) 185.3 (0.1)
Corporate expense - - - -
Merger and integration costs - - - -
Income/(loss) from
operations* $56.5 $45.0 $232.6 $30.7
Illinois/ Other
Indiana Nevada
Region Region Other Total
Revenues $208.1 $75.7 $100.7 $1,382.9
-------- --------
Property operating expenses (171.6) (62.0) (68.7) (1,042.1)
-------- --------
Property EBITDA 36.5 13.7 32.0 340.8
Depreciation and amortization (8.4) (5.0) (15.4) (93.4)
Operating profit 28.1 8.7 16.6 247.4
Amortization of intangible
assets (0.4) (0.5) (6.9) (20.7)
Income on interests in
nonconsolidated affiliates - - 0.7 0.7
Project opening costs and
other items (0.5) - (18.1) 165.1
Corporate expense - - (41.5) (41.5)
Merger and integration costs - - (17.0) (17.0)
Income/(loss) from
operations* $27.2 $8.2 $(66.2) $334.0
(In millions)
Combined
Three Months Ended March 31, 2008
Las Atlantic Louisiana/ Iowa/
Vegas City Mississippi Missouri
Region Region Region Region
Revenues $379.0 $446.2 $380.6 $198.8
Property operating expenses (264.0) (350.2) (295.1) (145.1)
Property EBITDA 115.0 96.0 85.5 53.7
Depreciation and amortization (22.2) (37.0) (23.6) (14.8)
Operating profit 92.8 59.0 61.9 38.9
Amortization of intangible
assets (6.6) (4.4) (5.1) (0.4)
Income on interests in
nonconsolidated affiliates - - - -
Project opening costs and other
items - (1.6) 185.9 (0.1)
Corporate expense - - - -
Merger and integration costs - - - -
Income/(loss) from
operations* $86.2 $53.0 $242.7 $38.4
Illinois/ Other
Indiana Nevada
Region Region Other Total
Revenues $293.6 $102.5 $154.4 $1,955.1
-------- --------
Property operating expenses (243.5) (87.6) (121.1) (1,506.6)
-------- --------
Property EBITDA 50.1 14.9 33.3 448.5
Depreciation and amortization (12.7) (8.0) (22.3) (140.6)
Operating profit 37.4 6.9 11.0 307.9
Amortization of intangible
assets (1.0) (0.6) (8.1) (26.2)
Income on interests in
nonconsolidated affiliates - - 1.2 1.2
Project opening costs and
other items (0.5) - (19.5) 164.2
Corporate expense - - (15.3) (15.3)
Merger and integration costs - - (142.6) (142.6)
Income/(loss) from
operations* $35.9 $6.3 $(173.3) $289.2
* 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 OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL INFORMATION
RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS
(UNAUDITED)
(In millions)
Successor
Second Quarter Ended June 30, 2008
Las Atlantic Louisiana/ Iowa/
Vegas City Mississippi Missouri
Region Region Region Region
Revenues $380.9 $460.4 $368.2 $196.3
Property operating expenses (266.0) (365.4) (291.0) (142.5)
Property EBITDA 114.9 95.0 77.2 53.8
Depreciation and amortization (21.3) (39.3) (22.5) (13.6)
Operating profit 93.6 55.7 54.7 40.2
Amortization of intangible
assets (7.7) (3.0) (6.1) 0.2
Income on interests in
nonconsolidated affiliates - - - -
Project opening costs and
other items (2.1) (1.4) (2.5) (0.1)
Corporate expense - - - -
Merger and integration costs - - - -
Income/(loss) from
operations* $83.8 $51.3 $46.1 $40.3
Illinois/ Other
Indiana Nevada
Region Region Other Total
Revenues $294.5 $96.6 $152.1 $1,949.0
-------- --------
Property operating expenses (234.6) (84.1) (128.7) (1,512.3)
-------- --------
Property EBITDA 59.9 12.5 23.4 436.7
Depreciation and amortization (13.1) (7.0) (15.6) (132.4)
Operating profit 46.8 5.5 7.8 304.3
Amortization of intangible
assets (0.2) (0.6) (14.8) (32.2)
Income on interests in
nonconsolidated affiliates - - 0.5 0.5
Project opening costs and other
items (3.9) - (27.9) (37.9)
Corporate expense - - (28.8) (28.8)
Merger and integration costs - - (5.1) (5.1)
Income/(loss) from
operations* $42.7 $4.9 $(68.3) $200.8
(In millions)
Successor
January 28, 2008 Through June 30, 2008
Las Atlantic Louisiana/ Iowa/
Vegas City Mississippi Missouri
Region Region Region Region
Revenues $641.4 $780.9 $642.6 $339.3
Property operating expenses (449.4) (611.8) (498.5) (244.8)
Property EBITDA 192.0 169.1 144.1 94.5
Depreciation and amortization (36.2) (64.4) (37.4) (23.3)
Operating profit 155.8 104.7 106.7 71.2
Amortization of intangible
assets (13.4) (5.5) (10.7) -
Income on interests in
nonconsolidated affiliates - - - -
Project opening costs and
other items (2.1) (2.8) 182.8 (0.2)
Corporate expense - - - -
Merger and integration costs - - - -
Income/(loss) from
operations* $140.3 $96.4 $278.8 $71.0
Illinois/ Other
Indiana Nevada
Region Region Other Total
Revenues $502.6 $172.3 $260.3 $3,339.4
-------- --------
Property operating expenses (406.2) (146.1) (202.7) (2,559.5)
-------- --------
Property EBITDA 96.4 26.2 57.6 779.9
Depreciation and amortization (21.5) (12.1) (31.4) (226.3)
Operating profit 74.9 14.1 26.2 553.6
Amortization of intangible
assets (0.7) (1.0) (21.6) (52.9)
Income on interests in
nonconsolidated affiliates - - 1.3 1.3
Project opening costs and
other items (4.4) - (46.1) 127.2
Corporate expense - - (70.3) (70.3)
Merger and integration costs - - (22.1) (22.1)
Income/(loss) from
operations* $69.8 $13.1 $(132.6) $536.8
* 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.
HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL INFORMATION
RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS
(UNAUDITED)
(In millions)
Combined
Six Months Ended June 30, 2008
Las Atlantic Louisiana/ Iowa/
Vegas City Mississippi Missouri
Region Region Region Region
Revenues $759.9 $906.7 $748.7 $395.1
Property operating expenses (529.8) (715.7) (586.0) (287.6)
Property EBITDA 230.1 191.0 162.7 107.5
Depreciation and amortization (43.6) (76.3) (46.0) (28.4)
Operating profit 186.5 114.7 116.7 79.1
Amortization of intangible
assets (14.4) (7.4) (11.2) (0.2)
Income on interests in
nonconsolidated affiliates - - - -
Project opening costs and
other Items (2.1) (2.9) 183.4 (0.2)
Corporate expense - - - -
Merger and integration costs - - - -
Income/(loss) from
operations* $170.0 $104.4 $288.9 $78.7
Illinois/ Other
Indiana Nevada
Region Region Other Total
Revenues $588.1 $199.1 $319.3 $3,916.9
-------- --------
Property operating expenses (478.1) (171.7) (258.5) (3,027.4)
-------- --------
Property EBITDA 110.0 27.4 60.8 889.5
Depreciation and amortization (25.8) (15.1) (38.6) (273.8)
Operating profit 84.2 12.3 22.2 615.7
Amortization of intangible (1.3) (1.1) (22.8) (58.4)
Income on interests in assets
nonconsolidated affiliates - - 1.8 1.8
Project opening costs and
other Items (4.4) - (47.5) 126.3
Corporate expense - - (44.1) (44.1)
Merger and integration costs - - (147.7) (147.7)
Income/(loss) from
operations* $78.5 $11.2 $(238.1) $493.6
* 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 Operating Company, Inc. (Successor)
Unaudited Condensed Pro Forma Combined Statement of Operations
For the Three Months Ended
June 30, 2008
HET Parent and
Other Harrah's
Entertainment
Harrah's Subsidiaries and
(In millions) Entertainment (1) Accounts (2) HOC (3)
Revenues
Casino $2,057.5 $(429.3) $1,628.2
Food and beverage 431.3 (161.2) 270.1
Rooms 335.9 (142.7) 193.2
Management fees 17.1 - 17.1
Other 168.7 (33.1) 135.6
Less: casino promotional -------- --------
allowances (408.4) 113.2 (295.2)
Net revenues 2,602.1 (653.1) 1,949.0
Operating expenses -------- --------
Direct
Casino 1,131.0 (202.0) 929.0
Food and beverage 183.7 (78.4) 105.3
Rooms 64.1 (28.0) 36.1
Property general,
administrative and other 577.3 (135.4) 441.9
-------- --------
Depreciation and amortization 176.2 (43.8) 132.4
Write-downs, reserves and
recoveries 50.1 (18.9) 31.2
Project opening costs 7.2 (0.5) 6.7
Corporate expense 36.6 (7.8) 28.8
Merger and integration costs 5.1 - 5.1
Income on interests in
nonconsolidated
affiliates (0.5) - (0.5)
Amortization of intangible
assets 48.2 (16.0) 32.2
Total operating expenses 2,279.0 (530.8) 1,748.2
-------- --------
Income from operations 323.1 (122.3) 200.8
Interest expense, net of
interest capitalized (468.0) 73.1 (394.9)
Other income, including
interest income 3.8 4.1 7.9
(Loss)/income before income
taxes and minority
interests (141.1) (45.1) (186.2)
Benefit/(provision) for
income taxes 43.5 21.5 65.0
Minority interests (0.4) 1.8 1.4
(Loss)/income from
continuing operations $(98.0) $(21.8) $(119.8)
(1) Represents the financial information of Harrah's Entertainment.
(2) Represents the financial information of (i) all subsidiaries of
Harrah's Entertainment that are not a component of HOC, namely,
captive insurance companies and the CMBS properties, and (ii) accounts
at Harrah's Entertainment.
(3) Represents the financial information of HOC.
Unaudited Condensed Combined Statement of Operations
Harrah's Operating Company, Inc. (Successor)
For the Period from January 28, 2008
Through June 30, 2008
HET Parent and
Other Harrah's
Entertainment
Harrah's Subsidiaries and
(In millions) Entertainment (1) Accounts (2) HOC (3)
Revenues
Casino $3,523.1 $(727.9) $2,795.2
Food and beverage 732.6 (274.0) 458.6
Rooms 577.5 (246.6) 330.9
Management fees 29.2 - 29.2
Other 280.5 (50.7) 229.8
Less: casino promotional -------- --------
allowances (700.3) 196.0 (504.3)
Net revenues 4,442.6 (1,103.2) 3,339.4
-------- --------
Operating expenses
Direct
Casino 1,907.7 (339.6) 1,568.1
Food and beverage 308.0 (130.2) 177.8
Rooms 114.5 (52.1) 62.4
Property general,
administrative and other 987.2 (236.0) 751.2
Depreciation and -------- --------
amortization 300.4 (74.1) 226.3
Write-downs, reserves
and recoveries (108.7) (27.5) (136.2)
Project opening costs 10.0 (1.0) 9.0
Corporate expense 61.3 9.0 70.3
Merger and integration costs 22.1 - 22.1
Equity in income of
nonconsolidated
affiliates (1.3) - (1.3)
Amortization of intangible
assets 80.5 (27.6) 52.9
Total operating expenses 3,681.7 (879.1) 2,802.6
-------- --------
Income from operations 760.9 (224.1) 536.8
Interest expense, net of
interest capitalized (935.9) 162.3 (773.6)
Losses on early extinguishment
of debt (211.3) - (211.3)
Other income, including
interest income 11.5 - 11.5
(Loss)/income before income
taxes and minority interests (374.8) (61.8) (436.6)
Income tax benefit/(provision) 101.7 35.4 137.1
Minority interests 1.0 3.1 4.1
(Loss)/income from continuing
operations $(272.1) $(23.3) $(295.4)
(1) Represents the financial information of Harrah's Entertainment.
(2) Represents the financial information of (i) all subsidiaries of
Harrah's Entertainment that are not a component of HOC, namely,
captive insurance companies and the CMBS properties, and (ii) accounts
at Harrah's Entertainment.
(3) Represents the financial information of HOC.
Unaudited Condensed Combined Statement of Operations
Harrah's Operating Company, Inc. (Successor)
For the Period from January 28, 2008
Through March 31, 2008
HET Parent and
Other Harrah's
Historical Entertainment
Harrah's Subsidiaries and Harrah's
Entertainment (1) Accounts (2) Operating (3)
(In millions)
Revenues
Casino $1,465.7 $(339.6) $1,126.1
Food and beverage 301.3 (105.7) 195.6
Rooms 241.5 (86.1) 155.4
Management fees 12.1 - 12.1
Other 111.8 (134.8) (23.0)
Less: casino promotional
allowances (291.9) 96.6 (195.3)
Net revenues 1,840.5 (569.6) 1,270.9
Operating expenses
Direct
Casino 776.6 (158.7) 617.9
Food and beverage 124.3 (45.1) 79.2
Rooms 50.4 (18.5) 31.9
Property general,
administrative and other 409.9 (228.0) 181.9
Depreciation and
amortization 124.2 (33.7) 90.5
Write-downs, reserves and
recoveries (158.8) (8.6) (167.4)
Project opening costs 2.8 (0.5) 2.3
Corporate expense 24.7 22.9 47.6
Merger and integration
costs 17.0 - 17.0
Equity in income of
nonconsolidated
affiliates (0.7) 0.4 (0.3)
Amortization of intangible
assets 32.3 (9.2) 23.1
Total operating
expenses 1,402.7 (479.0) 923.7
Income from operations 437.8 (90.6) 347.2
Interest expense, net of
interest capitalized (467.9) 104.1 (363.8)
Loss on early extinguishment
of debt (211.3) - (211.3)
Other income, including
interest income 7.7 (1.5) 6.2
Loss before income taxes and
minority interests (233.7) 12.0 (221.7)
Income tax benefit/(loss) 58.1 2.6 60.7
Minority interests 1.4 1.3 2.7
Loss from continuing
operations $(174.2) $15.9 $(158.3)
Harrah's
Operating
for the
Post-Closing Post-Closing
CMBS CMBS
Transaction(4) Transaction
(In millions)
Revenues
Casino $35.2 $1,161.3
Food and beverage (8.0) 187.6
Rooms (18.4) 137.0
Management fees - 12.1
Other 116.8 93.8
-------- --------
Less: casino promotional allowances (13.6) (208.9)
Net revenues 112.0 1,382.9
-------- --------
Operating expenses
Direct
Casino 16.3 634.2
Food and beverage (7.0) 72.2
Rooms (5.8) 26.1
Property general, administrative
and other 127.7 309.6
-------- --------
Depreciation and amortization 2.9 93.4
Write-downs, reserves and recoveries - (167.4)
Project opening costs - 2.3
Corporate expense (6.1) 41.5
Merger and integration costs - 17.0
Equity in income of nonconsolidated
affiliates (0.4) (0.7)
Amortization of intangible assets (2.4) 20.7
Total operating expenses 125.2 1,048.9
-------- --------
Income from operations (13.2) 334.0
Interest expense, net of interest
capitalized (14.8) (378.6)
Loss on early extinguishment of debt - (211.3)
Other income, including interest income (2.8) 3.4
Loss before income taxes and minority
interests (30.8) (252.5)
Income tax benefit/(loss) 11.2 71.9
Minority interests - 2.7
Loss from continuing operations $(19.6) $(177.9)
(1) Represents the financial information of Harrah's Entertainment.
(2) Represents the financial information of (i) all subsidiaries of
Harrah's Entertainment that are not a component of HOC, namely,
captive insurance companies, South African interests and the CMBS
properties, pursuant to the CMBS Spin-Off; and (ii) accounts at
Harrah's Entertainment.
(3) Represents the financial information of HOC.
(4) Reflects the results of the Post-Closing CMBS spin-off, which is
subject to regulatory approval.
SOURCE Harrah's Entertainment, Inc.
 back to top
Related links:
http://www.harrahs.com
Photo Notes:http://www.newscom.com/cgi-bin/prnh/20070718/HARRAHSLOGO
AP Archive: http://photoarchive.ap.org
PRN Photo Desk, photodesk@prnewswire.com
CONTACT:
Media, Gary Thompson, +1-702-407-6529, or
Investors, Jonathan Halkyard, +1-702-407-6080, both of Harrah's
Entertainment, Inc.
|
