Harrah’s posts nationwide growth in gross revenue
Harrah’s Lake Tahoe showed slim growth in 1998 while its parent company, Harrah’s Entertainment, Inc., reported record upon record in a 1998 financial report released Thursday.
“1998 was a clean sweep no matter how you look at it,” said Phil Satre, Harrah’s Entertainment chairman and chief operating officer. “In a challenging year for the industry, we saw record results in all categories, experienced same store (individual property) revenue growth in almost every market and established Harrah’s Entertainment as a consolidator in the gaming industry.”
The corporation tallied record revenues for the year at $2 billion, a 23.8 percent increase over 1997. In the fourth quarter, ending Dec. 31, 1998, revenue was up 31.8 percent with $524.7 million.
Harrah’s Entertainment operates 18 casinos in the United States under the Harrah’s, Showboat and Rio brand names, plus the Star City casino in Sydney, Australia.
The financial report also showed record growth in EBITDA (earnings before interest, taxes, depreciation and amortization), operating profit, income from continuing operation, net income and earnings per share.
Harrah’s Northern Nevada properties at Stateline and Reno also showed increases, but those lagged behind the corporation because of El Nino-enhanced winter storms early in the year.
Revenue for Reno-Tahoe increased by 2.95 percent at $296.3 million. Fourth quarter revenue increased by 1 percent over 1997 at $66.3 million.
“We had a rough beginning to the year with February snowfall,” said Pat Dennehy, general manager of Harrah’s Lake Tahoe. “And our senior management team was mostly new to the area.”
Dennehy considered the year a time of “coming together.”
“We made a lot of progress this (past) year,” he said.
With the progress made and a better weather outlook, Dennehy expects a better year in 1999.
“Things started really well this year and we hope it keeps going.”
He also expects growing benefit from Harrah’s Entertainment’s Total Gold program. The corporate program, which encourages customer loyalty to the Harrah’s brand, received an extra push in promotions in 1998.
“Total Gold delivered some new customers to Lake Tahoe (last year),” Dennehy said.
Satre also named the Total Gold program as one of the reasons for Harrah’s Entertainment’s record year. Other factors included the addition of new properties – Prairie Band in Topeka, Kan. and Cherokee in North Caroline – the acquisition of Showboat, Inc. plus a “terrific” performance in St. Louis. The latter went from fourth in the market in terms of revenue to No. 1, Satre said.
“All (those factors) contributed to record revenues for the year, moving us over the $2 billion mark for the first time,” Satre said.
Other numbers in the 1998 report include:
n Operating profits, at $362.3 million, increased 24.9 percent for the year. The quarter was up 31.5 percent at $76.9 million.
n Income before extraordinary losses in 1998 was $121.7 million, up 13.2 percent. For the quarter, it was $15.5 million, up 28.1 percent.
n Net income was $102 million, up 2.7 percent for the year and up 16.5 percent for the quarter at $14.1 million.
n Harrah’s Southern Nevada properties earned $346.3 million in revenues in 1998 for an increase of 20.1 percent.
n In Atlantic City, which included seven months for newly acquired Showboat Atlantic City, revenue totaled $590.8 million, a 69 percent increase.
n Harrah’s Riverboat Casinos earned $702.7 percent for a 7.08 percent increase.
n Tribal casinos managed by Harrah’s earned the company $68 million in revenues for an 81.3 percent increase.
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