-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JmXPGxWeug4SuVihs7hwVo+TNJazjarHRzy5WlPP9klq9OiS012bPFC+Z+ath1jk y9xadFhUQOeA5X2bf+JRJg== 0000912057-01-004227.txt : 20010208 0000912057-01-004227.hdr.sgml : 20010208 ACCESSION NUMBER: 0000912057-01-004227 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20010207 ITEM INFORMATION: ITEM INFORMATION: FILED AS OF DATE: 20010207 FILER: COMPANY DATA: COMPANY CONFORMED NAME: HARRAHS ENTERTAINMENT INC CENTRAL INDEX KEY: 0000858339 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-MISCELLANEOUS AMUSEMENT & RECREATION [7990] IRS NUMBER: 621411755 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K SEC ACT: SEC FILE NUMBER: 001-10410 FILM NUMBER: 1527616 BUSINESS ADDRESS: STREET 1: ONE HARRAHS COURT CITY: LAS VEGAS STATE: NV ZIP: 89119 BUSINESS PHONE: 9017628600 MAIL ADDRESS: STREET 1: 5100 W SAHARA BLVD CITY: LAS VEGAS STATE: NV ZIP: 89146 FORMER COMPANY: FORMER CONFORMED NAME: PROMUS COMPANIES INC DATE OF NAME CHANGE: 19920703 8-K 1 a2037425z8-k.txt 8-K UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 --------------------- FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Date of Report (Date of earliest event reported): February 7, 2001 (February 7, 2001) HARRAH'S ENTERTAINMENT, INC. (Exact name of registrant as specified in its charter) DELAWARE 1-10410 62-1411755 (State or other jurisdiction (Commission (I.R.S. Employer of incorporation) File Number) Identification No.) ONE HARRAH'S COURT LAS VEGAS, NEVADA 89119 (Address of Principal Executive Offices) (Zip Code) (702) 407-6000 ------------------------------------------------------------ (Registrant's telephone number, including area code) -------------------------------------------------------------- (Former name or former address, if changed since last report) ITEM 5. OTHER EVENTS On February 7, 2001, Harrah's Entertainment, Inc. issued a press release, a copy of which is attached hereto as Exhibit 99(1) and incorporated herein by reference. ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 99(1) Text of press release, dated February 7, 2001, of the Registrant. SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. HARRAH'S ENTERTAINMENT, INC. Date: February 7, 2001 By: /s/ Stephen H. Brammell ----------------------------------- Name: Stephen H. Brammell Title: Senior Vice President and General Counsel EX-99.1 2 a2037425zex-99_1.txt EXHIBIT 99.1 EXHIBIT 99(1) Harrah's Entertainment Reports 2000 Fourth-Quarter And Full-Year Results LAS VEGAS, Feb. 7, 2001 - Harrah's Entertainment, Inc. (NYSE:HET), the leading consumer marketing company in the gaming industry, today reported a loss per share of (10) cents for the year-ended December 31, 2000, compared with earnings of $1.62 per diluted share in the year-ago period. As previously reported, the company's 2000 results included the following restructuring and other special charges, which were recorded in the fourth quarter: o Reserves of $220 million related to the bankruptcy reorganization of JCC Holding Company, which is approximately 43 percent owned by Harrah's Entertainment. The impact of the reserves on the full year and fourth quarter 2000 operating results was approximately $(1.21) per share and $(1.25) per share after tax, respectively. o Reserves of approximately $39 million related to the bankruptcy reorganization of National Airlines, which is approximately 48 percent owned by Harrah's Entertainment. The impact of these reserves on Harrah's Entertainment's full year and fourth-quarter 2000 diluted earnings per share is (21) cents, after tax. In addition to these reserves, the company's full year 2000 results included $21.8 million in project opening costs and other nonrecurring items. In 1999, the company reported $4.2 million in project opening and other nonrecurring costs, as well as gains of $59.8 million from the sales of equity interests in two companies. Excluding the reserves, project opening costs and nonrecurring items and the gains on equity interests, the company's diluted earnings per share were $1.49 and $1.52 for full year 2000 and 1999, respectively, and 20 cents for fourth quarter 2000 compared with 29 cents for the fourth quarter of 1999. Harsh winter weather late in the year and a much lower than normal hold percentage on table games at the Rio offset strong performance at Harrah's brand casinos. For the full year 2000, the company reported record revenues of $3.5 billion, up 15 percent over the prior year, and record Property EBITDA of $887 million, up 12 percent. These results include the impact of the acquisition of Players International, Inc. since the March 22, 2000, date of acquisition. "I am encouraged that our fundamental results continue to be strong, though I am disappointed by the impact of the reserves and other charges we recorded in 2000," said Phil Satre, Chairman and Chief Executive Officer. "I am especially pleased that we achieved record revenues and Property EBITDA, even before considering the operating results of the Players properties we acquired in March 2000. "Virtually every Harrah's-brand property reported record revenues for 2000, exemplifying the continued strength and success of our Total Rewards player-loyalty program for customers who consolidate their play at Harrah's properties," Satre said. "Same-store gaming revenue at Harrah's-brand properties grew 12 percent for the year, and same-store Property EBITDA grew 21 percent." In addition to achieving record revenue and Property EBITDA, significant accomplishments in 2000 included: o Completion of the acquisition of Players International, Inc., and conversion of its St. Louis and Lake Charles properties to the Harrah's brand. Players Metropolis is expected to be converted by third quarter 2001. o Extension of management agreements with the Ak-Chin tribe near Phoenix, Arizona, and Cherokee tribe in North Carolina. o Receipt of several national awards honoring Harrah's excellence in the area of information technology; including the 2000 Data Warehousing Award in recognition of the success of the Total Rewards loyalty program. Shortly after year-end 2000, Harrah's also received the prestigious CIO Magazine Enterprise Value Award recognizing its superior use of information technology in building customer relationships. o Induction in June 2000 into the Gaming Hall of Fame in recognition of the company's leading role in promoting responsible gaming. o The successful launch of the Company's new web site, www.harrahs.com, offering state-of-the-art technology and customer interaction. o Harrah's won more than 150 "Best Of" awards by the readers of CASINO PLAYER magazine, more than any other gaming company. HARRAH'S WESTERN REGION REPORTS RECORD FOURTH QUARTER REVENUES AND PROPERTY EBITDA DESPITE LOWER RESULTS AT THE RIO Western Region Results (in millions)
2000 1999 Percent 2000 1999 Percent Fourth Fourth Increase Full Full Increase Quarter Quarter (Decrease) Year Year (Decrease) --------- --------- ---------- --------- --------- ---------- Rio Hotel & Casino Revenues $ 100.8 $ 114.1 -11.7% $ 398.1 $ 463.7 -14.1% Operating Profit -- 8.0 N/M (11.4) 65.3 N/M EBITDA 11.3 14.1 -19.9% 29.2 97.9 -70.2% Harrah's Southern Nevada Revenues $ 104.2 $ 92.7 12.4% $ 407.1 $ 369.7 10.1% Operating Profit 21.2 16.5 28.5% 78.5 63.5 23.6% EBITDA 29.8 24.3 22.6% 113.6 97.5 16.5% Harrah's Northern Nevada Revenues $ 79.4 $ 75.3 5.4% $ 336.5 $ 314.5 7.0% Operating Profit 9.1 11.4 -20.2% 60.8 53.5 13.6% EBITDA 14.8 16.5 -10.3% 83.3 75.0 11.1% Total Western Region Revenues $ 284.4 $ 282.1 0.8% $ 1,141.7 $ 1,147.9 -0.5% Operating Profit 30.3 35.9 -15.6% 127.9 182.3 -29.8% EBITDA 55.9 54.9 1.8% 226.1 270.4 -16.4%
Full-year revenues in the Western Region, which is comprised of the company's Nevada casinos, reached $1.1 billion, despite a low hold percentage at the Rio. "Record revenues at our Harrah's-brand properties in Nevada show the true success of Total Rewards in creating value for both our customers and our shareholders," said Satre. "Property enhancements at Reno and Lake Tahoe also helped propel our revenue, and both properties benefited from cross-market play." In the fourth quarter and full year, Western Region results were impacted by a low hold percentage on table games at the Rio. Harrah's estimates revenues were impacted by approximately $8 million in the fourth quarter 2000 and $52 million for the full year. Property EBITDA at the Rio was impacted by the lower hold percentage, as well as increased expenses, particularly entertainment-related costs. "We identified and addressed issues at the Rio, and we are implementing plans that we believe will lead to improved performance at the property for the year 2001," Satre said. HARRAH'S EASTERN REGION POSTS RECORD RESULTS FOR THE YEAR Eastern Region Results (in millions)
2000 1999 Percent 2000 1999 Percent Fourth Fourth Increase Full Full Increase Quarter Quarter (Decrease) Year Year (Decrease) --------- --------- ---------- --------- --------- ---------- Harrah's Atlantic City Revenues $ 97.7 $ 95.4 2.4% $ 428.2 $ 405.8 5.5% Operating Profit 22.2 21.3 4.2% 113.0 96.8 16.7% EBITDA 28.0 27.4 2.2% 137.2 120.9 13.5% Showboat Atlantic City Revenues $ 80.4 $ 85.5 -6.0% $ 363.6 $ 369.8 -1.7% Operating Profit 9.9 13.6 -27.2% 69.3 77.0 -10.0% EBITDA 16.2 18.0 -10.0% 93.7 98.5 -4.9% Total Eastern Region Revenues $ 178.1 $ 180.9 -1.5% $ 791.8 $ 775.6 2.1% Operating Profit 32.1 34.9 -8.0% 182.3 173.8 4.9% EBITDA 44.2 45.4 -2.6% 230.9 219.4 5.2%
Harrah's Atlantic City reported record revenues and Property EBITDA for both the fourth quarter and year 2000. Continued execution of the company's customer loyalty program produced strong growth for the Harrah's property. A 450-room, $110 million hotel tower addition is expected to open in the first quarter of 2002. Harrah's Showboat reported a decline in revenue and lower Property EBITDA for the fourth quarter and year 2000. The integration of the Total Rewards system at Showboat Atlantic City was completed in 2000. That integration, along with physical enhancements to the property anticipated to be completed by mid-year 2001, are expected to improve that property's performance this year. CENTRAL REGION POSTS RECORD REVENUES AND PROPERTY EBITDA Central Region Results (in millions)
2000 1999 Percent 2000 1999 Percent Fourth Fourth Increase Full Full Increase Quarter Quarter (Decrease) Year Year (Decrease) --------- --------- ---------- --------- --------- ---------- Central Region Revenues $ 373.3 $ 262.0 42.5% $ 1,453.9 $ 1,020.1 42.5% Operating Profit 69.6 51.6 34.9% 304.8 201.8 51.0% EBITDA 90.3 65.2 38.5% 383.3 254.6 50.5%
The Central Region's 2000 results benefited from record revenues and Property EBITDA at most Harrah's-brand properties, and the addition of the Players facilities in Maryland Heights, Mo., Metropolis, Ill., and Lake Charles, La., acquired on March 22, 2000. "Harrah's Chicagoland properties continue to show strength, reporting a 40 percent gain in Property EBITDA, with Joliet benefiting from its first full year of both dockside gaming and the luxury hotel that we opened there in November 1999," said Satre. "Harrah's East Chicago also will benefit in 2002 from a new 292-room, $45 million hotel expected to be completed by this year's end." "In Missouri, our properties' operating results grew as a result of the positive impact of Total Rewards and consolidation of the Players facility with our own in St. Louis. Combined revenues from the Missouri properties rose 34%, and combined Property EBITDA was up 42% percent from the prior year. "In Shreveport, Louisiana, Property EBITDA was down 15% from the prior year, impacted by construction underway on a $150 million hotel and shore-side amenities project," Satre said. "That project is expected to be completed by the end of the first quarter 2001." AGREEMENTS EXTENDED ON TWO MANAGED PROPERTIES; NEW AGREEMENT ENTERED TO MANAGE HARRAH'S RINCON IN SOUTHERN CALIFORNIA The three Indian-owned casinos managed by Harrah's, which also share the company's Total Rewards marketing capabilities, reported a strong 2000. Two of those casinos completed extensions of their management contracts with Harrah's in 2000. The Rincon Band of Luiseno Indians north of San Diego opened a temporary casino soon after year-end; Harrah's will manage the tribe's permanent facility that is expected to open in the first half of 2002. OTHER ITEMS The increase in project opening costs relates to the expansion of Harrah's Shreveport and to preparations for the re-branding and integration of Total Rewards into the Players properties. Interest expense was higher than in the previous year, due to higher debt levels associated with the Players acquisition and the company's stock repurchase program. The company repurchased 12.4 million shares during 2000 at an average price of $22.39 per share. Last year, the company reported a gain on a sale of equity investments in two companies, whereas this year Harrah's reported a loss associated with its investment in National Airlines. Other income was below prior year for both the fourth quarter and full year due to mark-to-market adjustments recorded in the fourth quarter 2000 for company-owned life insurance policies. The effective tax rate in 2000 was higher than in the prior year due to the impact of the reserves recorded for Harrah's New Orleans and National Airlines, and additional non-deductible amortization of goodwill. Harrah's Entertainment will host a conference call for investors and media today, Wednesday, Feb. 7, 2001 at 1 p.m. (Eastern Standard Time) to review its fourth-quarter and full-year 2000 financial results. For those interested in participating in the conference call, please dial (877) 282-1086, or 703-871-3017 for international callers, approximately 10 minutes prior to the call start time. A taped replay of the conference call can be accessed at 888-266-2081, or 703-925-2533 for international callers, beginning at 5:00 p.m. (EST) on Feb. 7. The replay will be available through 11:59 p.m. (EST) on Wednesday, Feb. 14, 2001. The passcode number for the replay is 4967738. Interested parties wishing to listen to the conference call on the Internet may do so on the company's web site, WWW.HARRAHS.COM, in the "Investor Relations" section behind the "About Us" tab. Founded more than 60 years ago, Harrah's Entertainment, Inc. is the most recognized and respected name in the casino entertainment industry operating 21 casinos in the United States under the Harrah's, Showboat and Rio brand names. With a combined database of more than 19 million players, Harrah's Entertainment is focused on building loyalty and value with its target 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. These forward-looking statements generally can be identified by phrases such as the company "believes," "expects," "anticipates," "foresees," "forecasts," "estimates" or other words or phrases of similar import. Similarly, such statements herein that describe the company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements. Such risks and uncertainties include, but are not limited to, economic, bank, equity and debt-market conditions, changes in laws or regulations, third-party relations and approvals, decisions of courts, regulators and government bodies, factors affecting leverage, including interest rates, abnormal gaming holds, and effects of competition. (More) HARRAH'S ENTERTAINMENT, INC. CONSOLIDATED SUMMARY OF OPERATIONS (UNAUDITED)
Fourth Quarter Ended Year Ended (In thousands, except per Dec. 31, Dec. 31, Dec. 31, Dec. 31, share amounts) 2000 1999 2000 1999 ----------- ----------- ----------- ----------- Revenues $ 854,930 $ 747,569 $ 3,471,150 $ 3,024,428 Operating expenses (660,051) (571,382) (2,584,636) (2,231,497) Depreciation and amortization (61,271) (45,027) (236,082) (193,599) ----------- ----------- ----------- ----------- Operating profit 133,608 131,160 650,432 599,332 Corporate expense (12,589) (9,431) (50,065) (42,748) Headquarters relocation and reorganization expenses -- (2,752) (3,390) (10,274) Equity in nonconsolidated affiliates: Losses before preopening costs (14,072) (13,712) (57,935) (25,782) Preopening costs -- (6,706) -- (17,685) Amortization of goodwill and trademarks (6,088) (4,157) (21,540) (17,617) Reserves for New Orleans casino (220,000) -- (220,000) -- Project opening costs and other nonrecurring items (10,662) (5,273) (14,764) (4,189) ----------- ----------- ----------- ----------- Income (loss) from operations (129,803) 89,129 282,738 481,037 Interest expense, net of interest capitalized (59,297) (45,658) (227,139) (193,407) (Loss) gain on equity interests in subsidiaries: National Airlines, Inc. (39,400) -- (39,400) -- Other (2,226) 43,524 (2,226) 59,824 Other (expense) income, including interest income (3,815) 6,203 3,866 12,129 ----------- ----------- ----------- ----------- Income (loss) before income taxes and minority interests (234,541) 93,198 17,839 359,583 Income tax (provision) benefit 75,514 (30,659) (15,415) (128,914) Minority interests (2,259) (3,348) (13,768) (11,166) ----------- ----------- ----------- ----------- Income (loss) before extraordinary losses (161,286) 59,191 (11,344) 219,503 Extraordinary losses, net of tax -- -- (716) (11,033) ----------- ----------- ----------- ----------- Net income (loss) $ (161,286) $ 59,191 $ (12,060) $ 208,470 =========== =========== =========== =========== Earnings (loss) per share - basic Before extraordinary losses $ (1.41) $ 0.47 (0.09) $ 1.74 Extraordinary losses, net of tax -- -- (0.01) (0.09) ----------- ----------- ----------- ----------- Net income (loss) $ (1.41) $ 0.47 $ (0.10) $ 1.65 =========== =========== =========== =========== Earnings (loss) per share - diluted Before extraordinary losses $ (1.41) $ 0.45 $ (0.09) $ 1.71 Extraordinary losses, net of tax -- -- (0.01) (0.09) ----------- ----------- ----------- ----------- Net income (loss) $ (1.41) $ 0.45 $ (0.10) $ 1.62 =========== =========== =========== =========== Weighted average common shares outstanding 114,049 126,407 117,190 126,072 =========== =========== =========== =========== Weighted average common and common equivalent shares outstanding 114,049 130,252 117,190 128,748 =========== =========== =========== ===========
HARRAH'S ENTERTAINMENT, INC. SUPPLEMENTAL OPERATING INFORMATION (UNAUDITED)
FOURTH QUARTER ENDED YEAR ENDED ----------------------- -------------------------- (In thousands) Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2000 1999 2000 1999 ---------- ---------- ----------- ----------- Revenues Western Region $ 284,431 $ 282,117 $ 1,141,669 $ 1,147,934 Eastern Region 178,123 180,890 791,797 775,628 Central Region 373,335 262,042 1,453,852 1,020,130 Managed 16,877 21,019 75,607 77,563 Other 2,164 1,501 8,225 3,173 ---------- ---------- ----------- ----------- Total Revenues $ 854,930 $ 747,569 $ 3,471,150 $ 3,024,428 ========== ========== =========== =========== Operating Profit Western Region $ 30,297 $ 35,914 $ 127,940 $ 182,355 Eastern Region 32,064 34,887 182,335 173,845 Central Region 69,636 51,557 304,757 201,777 Managed 13,545 17,866 64,861 66,604 Other (11,934) (9,064) (29,461) (25,249) ---------- ---------- ----------- ----------- Total Operating Profit $ 133,608 $ 131,160 $ 650,432 $ 599,332 ========== ========== =========== =========== Property EBITDA* Western Region $ 55,922 $ 54,896 $ 226,147 $ 270,390 Eastern Region 44,215 45,365 230,872 219,450 Central Region 90,253 65,196 383,343 254,578 Managed 14,068 17,989 67,023 67,034 Other (9,579) (7,259) (20,871) (18,521) ---------- ---------- ----------- ----------- Total Property EBITDA $ 194,879 $ 176,187 $ 886,514 $ 792,931 ========== ========== =========== =========== Project opening and other nonrecurring items Project opening costs $ (3,867) $ (1,696) $ (8,258) $ (2,276) Writedowns, reserves and recoveries (6,395) (3,502) (6,106) (2,235) Venture restructuring costs (400) (75) (400) 322 ---------- ---------- ----------- ----------- Total $ (10,662) $ (5,273) $ (14,764) $ (4,189) ========== ========== =========== ===========
* Property EBITDA (earnings before interest, income taxes, depreciation and amortization) consists of Operating Profit before depreciation and amortization expenses. 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 operations (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) Computation of diluted earnings per share excluding items not typically included in analyst estimates
FOURTH QUARTER ENDED YEAR ENDED ----------------------- ----------------------- (In thousands) Dec. 31, Dec. 31, Dec. 31, Dec. 31, 2000 1999 2000 1999 ---------- ---------- ---------- ---------- Income (loss) before taxes and minority interests $ (234,541) $ 93,198 $ 17,839 $ 359,583 Add/(deduct): Reserves for New Orleans casino 220,000 - 220,000 - Project opening costs and other nonrecurring items 10,662 5,273 14,764 4,189 Equity in nonconsolidated affiliates preopening costs - 6,706 - 17,685 Incremental riverboat depreciation 2,394 - 4,787 - Loss (gain)on equity interests: National Airlines, Inc. 39,400 - 39,400 - Other 2,226 (43,524) 2,226 (59,824) ---------- ----------- ---------- ----------- Adjusted income before taxes and minority interests 40,141 61,653 299,016 321,633 Provision for income taxes (14,300) (19,894) (107,681) (114,873) Minority interests (2,259) (3,348) (13,768) (11,166) ---------- ---------- ---------- ---------- Adjusted income before extraordinary losses $ 23,582 $ 38,411 $ 177,567 $ 195,594 ========== ========== ========== ========== Diluted earnings per share before extraordinary losses, as adjusted $ 0.20 $ 0.29 $ 1.49 $ 1.52 ========== ========== ========== ========== Weighted average common and common equivalent shares outstanding* 116,536 130,252 119,079 128,748 ========== ========== ========== ==========
* For purposes of this computation, the average shares amounts for fourth quarter and full year 2000 have been adjusted to include the impact of dilutive common stock equivalents. #### -----END PRIVACY-ENHANCED MESSAGE-----