<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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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): April 21, 1999
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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 or organization) File Number) Identification No.)
1023 CHERRY ROAD
MEMPHIS, TENNESSEE 38117
(Address of Principal Executive Offices) (Zip Code)
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(901) 762-8600
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(Registrant's telephone number, including area code)
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(Former Name or Former Address, if Changed Since Last Report.)
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ITEM 5. OTHER EVENTS
On April 21, 1999, the Registrant reported its first quarter
operating results for the quarter ending March 31, 1999. A copy of the
earnings press release is attached hereto as Exhibit 99(1).
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
99(1) Text of press release, dated April 21, 1999, of the Registrant.
2
<PAGE>
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: April 23, 1999 By: /s/ STEPHEN H. BRAMMELL
--------------------------------
Name: Stephen H. Brammell
Title: Vice President and
Associate General Counsel
3
<PAGE>
NEWS RELEASE [HARRAHS LOGO]
Josh Hirshberg
(901) 537-3316
Release #HET 04-99-0147
HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS
MEMPHIS, April 21, 1999 -- Harrah's Entertainment, Inc. (NYSE:HET) today
reported results for first quarter 1999, including record revenues, EBITDA,
income before extraordinary losses and net income. Diluted earnings per
share before extraordinary losses were 30 cents for the period versus 25
cents for the prior year. Diluted earnings per share were 27 cents compared
with 23 cents in the first quarter 1998.
EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization)
before project opening costs was $167.2 million, a 75% increase over the
$95.4 million reported for first quarter 1998.
Harrah's Entertainment's revenues in first quarter 1999 increased 72%
over prior year to $711.7 million due to the addition of the Rio Hotel &
Casino in Las Vegas and Showboat, Inc. as well as revenue growth in Harrah's
existing casino operations. Income from operations increased 94% and net
income rose 47% over the period year period.
"Showboat and Rio have been terrific additions, but even without them,
Harrah's experienced a 10% increase in revenues and a 9% increase in EBITDA
over prior year," explained Harrah's Entertainment Chairman and C.E.O. Phil
Satre. "This was due to the continued successful execution of our customer
loyalty strategy. Our Harrah's brand performed at a higher level than ever
before and benefited from both local repeat business and cross-market
customer visits generated through out Total Gold and other marketing
programs."
- more -
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 2
LAS VEGAS AND LAUGHLIN LEAD WESTERN REGION WITH RECORD REVENUES AND
EBITDA IN FIRST QUARTER 1999
RIO REPORTS STRONG FIRST QUARTER
WESTERN REGION RESULTS
<TABLE>
<CAPTION>
<S> <C> <C>
- -------------------------------------------------------------------
(in millions) 1999 1998
First Quarter First Quarter
- -------------------------------------------------------------------
RIO HOTEL & CASINO
- -------------------------------------------------------------------
Revenues $120.7 --
- -------------------------------------------------------------------
Operating profit 22.1 --
- -------------------------------------------------------------------
EBITDA 30.0 --
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HARRAH'S SOUTHERN NEVADA
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Revenues $ 92.9 $ 85.0
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Operating profit 16.6 13.5
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EBITDA 24.8 21.5
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HARRAH'S NORTHERN NEVADA
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Revenues $ 68.8 $ 61.5
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Operating profit 6.2 4.0
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EBITDA 10.7 9.2
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TOTAL WESTERN REGION
- -------------------------------------------------------------------
Revenues $282.4 $146.5
- -------------------------------------------------------------------
Operating profit 44.9 17.5
- -------------------------------------------------------------------
EBITDA 65.5 30.7
- -------------------------------------------------------------------
</TABLE>
The addition of Rio plus record first quarter revenues at Harrah's Las
Vegas and Harrah's Laughlin led the Western region to post revenue and EBITDA
increases of 93% and 137%, respectively, over first quarter 1998.
- more -
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 3
Rio reported record first quarter revenue, up 25% compared to the
revenue it reported as a separate company in first quarter 1998. EBITDA at
Rio was also a record for the property, up 19% over EBITDA reported by RIo
for first quarter 1998 and surpassing previously reported EBITDA for any
quarter.
Satre said, "Rio's first quarter results are outstanding with all
outlets experiencing increases. Room revenue, food and beverage revenue
and gaming revenue were at all-time high levels."
In Southern Nevada, EBITDA at Harrah's Las Vegas was up 18% from prior
as a result of more effective marketing to bring more target customers into
the hotel. Harrah's Laughlin recorded a 17% increase in EBITDA.
Northern Nevada had a strong first quarter 1999. Harrah's Lake Tahoe
benefited from innovative marketing programs and fewer weather-related access
issues compared to first quarter 1998, leading to a 21% increase in EBITDA.
Harrah's Reno saw a 15% increase in EBITDA over prior year.
"We are especially pleased with the increases in revenues in the Western
region because of the dynamics in those markets," Satre said. "Particularly
impressive is the strength in revenue growth at Harrah's and Rio in Las Vegas
at a time when that market is adjusting to considerable new competitive
supply. Our Laughlin, Lake Tahoe and Reno properties also posted good
results in markets that have been flat or declining in recent years. In
particular, records at Harrah's Laughlin ran counter to conventional wisdom
about that market.
"Harrah's Lake Tahoe has uniquely benefited from our ability to market
that one-of-a-kind resort to high-end customers from Rio and Showboat,"
explained Satre.
- more -
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 4
HARRAH'S ATLANTIC CITY REPORTS RECORD REVENUE AND EBITDA
EASTERN REGION RESULTS
<TABLE>
<CAPTION>
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(in millions) 1999 1998
FIRST QUARTER FIRST QUARTER
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<S> <C> <C>
HARRAH'S ATLANTIC CITY
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Revenue $92.1 $86.5
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Operating profit 17.9 17.1
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EBITDA 23.9 22.4
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SHOWBOAT ATLANTIC CITY
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Revenue $86.9 --
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Operating profit 18.2 --
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EBITDA 23.6 --
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TOTAL EASTERN REGION
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Revenue $179.0 $86.5
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Operating Profit 36.1 17.1
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EBITDA 47.5 22.4
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</TABLE>
Harrah's Atlantic City achieved a first quarter revenue record, running
counter to the market overall, and the property had its highest ever first
quarter EBITDA. 1999 Eastern region results include Showboat Atlantic City
which was acquired in June 1998.
"Harrah's Atlantic City continues its marketing leadership in the
market," said Satre, "and, Showboat Atlantic City is a strong Boardwalk
competitor. We're very pleased with the success of our strategy in this
market and look forward to more success as we continue the marketing and
back-of-house integration of Showboat."
-more-
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 5
OUTSTANDING PERFORMANCE IN MISSOURI DRIVES RECORD REVENUES FOR CENTRAL REGION
CENTRAL REGION RESULTS
<TABLE>
<CAPTION>
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(in millions) 1999 1998
FIRST QUARTER FIRST QUARTER
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<S> <C> <C>
CENTRAL REGION
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Revenues $233.0 $170.3
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Operating profit 41.2 35.6
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EBITDA 53.4 45.8
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</TABLE>
Strong performances in Harrah's Central region casinos lead by record
revenues in North Kansas City and St. Louis, plus the addition of East
Chicago, resulted in significant revenue and EBITDA growth overall for the
region in the first quarter of 1999. EBITDA for St. Louis alone topped first
quarter 1998 by 105%.
Harrah's continued to solidify its market leadership in both North
Kansas City and St. Louis. Each property achieved the market-share leadership
in its respective competitive market.
First quarter 1999 is the first quarter East Chicago results are
consolidated with the Central region casinos. Rebranding to a Harrah's Casino
helped drive very strong month of March results for the former Showboat East
Chicago casino, despite construction in the pavilion.
Satre stated, "We're delighted with the success of this property. All
indications are that the deployment of additional capital in East Chicago was
a good strategic decision and we expect Harrah's East Chicago to be a strong
performer for our company. It's a quality business in a very important market
that complements our strategy. Across Chicagoland, in Illinois, Harrah's
Joliet recorded a solid revenue increase and increased market share, and we
look forward to the opening of our upscale 204-room hotel by year-end."
-more-
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 6
Satre said, "Business at our Missippi casinos improved over first
quarter 1998 with Vicksburg and Tunica recording higher revenues and EBITDA.
Harrah's Shreveport continued to be impacted by the substantial investments by
competitors in that market resulting in expected declines in revenue and
EBITDA. We're addressing our competitive position with development of an
upscale 514-room hotel and conference center. Groundbreaking is May 10, and
it is scheduled to open by fourth quarter 2000."
CASINOS ON NATIVE AMERICAN LANDS CONTINUE STRONG PERFORMANCE
MANAGED AND OTHER RESULTS
<TABLE>
<CAPTION>
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(in millions) 1999 1998
FIRST QUARTER FIRST QUARTER
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<S> <C> <C>
MANAGED AND OTHER
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Revenues $16.7 $10.3
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Operating profit 14.3 8.5
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EBITDA 14.8 8.6
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</TABLE>
Harrah's Ak Chin, Harrah's Cherokee and Harrah's Prairie Band all
continued strong performances in first quarter 1999.
"We're very pleased to see what productive properties these Native
American casinos have become under the Harrah's brand for the tribal
communities," Satre said.
On April 15, Harrah's Entertainment announced its intent to sell its
interests in the Star City Casino in Sydney, Australia. The transaction is
expected to close in the latter half of 1999.
OTHER ITEMS AFFECTING INCOME
Project opening costs in the first quarter of 1999 were associated with
expansions, remodeling and conversions at the Harrah's Joliet and East
Chicago properties.
-more-
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HARRAH'S ENTERTAINMENT REPORTS FIRST QUARTER 1999 RESULTS PAGE 7
Relocation of corporate office expenses are primarily related to
separation agreements for executives and other employees who will not
continue with the company after the move of the headquarters to Las Vegas
this year.
First quarter 1999 included $4.6 million for amortization of goodwill
and trademarks in connection with the Showboat acquisition that occurred in
June 1998 and the Rio merger on January 1, 1999. Increases in debt arising
from the Showboat and Rio transactions resulted in higher interest expense in
first quarter 1999. Refinancing various company debt on more favorable terms
in first quarter 1999 resulted in extraordinary losses of $3.2 million.
The increase in the number of shares outstanding in first quarter 1999
as compared to the prior year is primarily the result of shares issued in the
Rio merger on January 1, 1999.
Harrah's Entertainment, Inc. is the most recognized and respected name
in the casino industry operating 18 casinos in the United States under the
Harrah's, Showboat and Rio brand names, and the Star City casino in Sydney,
Australia. Founded more than 60 years ago, Harrah's is focused on building
loyalty and value with its targeted customers through a unique combination of
great service, excellent products, unsurpassed distribution, operational
excellence and technology leadership.
Statements in this press release concerning future events, future
performance and business prospects are forward-looking and are subject to
certain risks and uncertainties. These include, but are not limited to,
political, economic, bank, equity and debt market conditions, changes in laws
or regulations, third party relations and approvals, decisions of courts,
regulators and governmental bodies, factors affecting leverage, including
interest rates, and effects of competition. These risks and uncertainties
could significantly affect anticipated results or events in the future and
actual results may differ materially from any forward-looking statements. For
additional information, refer to the material discussing the Private
Securities Litigation Reform Act in Part I of the company's Form 10-K filed
with the Securities and Exchange Commission for the period ended December 31,
1998.
####
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED SUMMARY OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FIRST QUARTER ENDED
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(In thousands, except MAR 31, MAR 31,
per share amounts) 1999 1998
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<S> <C> <C>
Revenues $711,668 $414,447
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Operating profit before project opening costs,
corporate expense, headquarters relocation expense,
equity in earnings (losses) of nonconsolidated
affiliates, amortization of goodwill and venture
restructuring costs $134,719 $ 71,547
Project opening costs (352) (2,654)
Corporate expense (7,931) (6,650)
Headquarters relocation expenses (3,070) --
Equity in nonconsolidated affiliates:
Earnings (losses) before preopening costs (4,712) (2,791)
Preopening costs (1,956) --
Amortization of goodwill and trademarks (4,612) (460)
Venture restructuring costs 397 (926)
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Income from operations 112,483 58,066
Interest, net of interest capitalized (50,895) (19,326)
Other income, including interest income 2,166 4,130
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Income before income taxes and minority interests 63,754 42,870
Provision for income taxes (24,638) (15,921)
Minority interests (1,771) (2,046)
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Income before extraordinary losses 37,345 24,903
Extraordinary losses, net of tax (3,248) (1,667)
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Net income $ 34,097 $ 23,236
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Earnings per share -- basic
Before extraordinary losses $ 0.30 $ 0.25
Extraordinary losses, net of tax (0.03) (0.02)
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Net income $ 0.27 $ 0.23
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Earnings per share -- assuming dilution
Before extraordinary losses $ 0.30 $ 0.25
Extraordinary losses, net of tax (0.03) (0.02)
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Net income $ 0.27 $ 0.23
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Weighted average common shares outstanding 125,502 100,133
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Weighted average common and common equivalent
shares outstanding 126,733 101,200
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</TABLE>
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL OPERATING INFORMATION
(UNAUDITED)
<TABLE>
<CAPTION>
First Quarter Ended
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Mar. 31, Mar. 31,
(In thousands) 1999 1998
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<S> <C> <C>
Revenues
Western Region $282,839 $146,499
Eastern Region 179,016 86,456
Cental Region 233,034 170,257
Managed and Other 16,662 10,272
Other 567 963
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$711,668 $414,447
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Operating profit
Western Region $ 44,920 $ 17,455
Eastern Region 36,089 17,119
Central Region 41,224 35,606
Managed and Other 14,250 8,506
Other (1,764) (7,139)
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$134,719 $ 71,547
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EBITDA*
Western Region $ 65,538 $ 30,664
Eastern Region 47,518 22,413
Central Region 53,391 45,828
Managed and Other 14,849 8,620
Other (14,061) (12,100)
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$167,235 $ 95,425
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</TABLE>
* Earnings before interest, income taxes, depreciation, amortization and
project opening costs.
