Harrah's Entertainment Reports Record Fourth-Quarter, Full-Year Results; Same-Store Sales Growth, Accretive Acquisition Drive Records

Harrah's Entertainment Reports Record Fourth-Quarter, Full-Year Results; Same-Store Sales Growth, Accretive Acquisition Drive Records

LAS VEGAS, Feb. 2 /PRNewswire-FirstCall/ -- Harrah's Entertainment, Inc. (NYSE:HET) today reported record fourth-quarter revenues of $1.19 billion, up 25.1 percent from revenues of $950.2 million in the 2003 fourth quarter.

(Logo: http://www.newscom.com/cgi-bin/prnh/20021220/LAF055LOGO )

Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) rose 31.3 percent in the fourth quarter to a record $288.7 million from Property EBITDA of $219.9 million in the year-earlier period. Fourth-quarter Adjusted Earnings Per Share increased to a record 72 cents, up 44.0 percent from the 50 cents achieved in 2003's fourth 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.

Fourth-quarter income from operations rose 33.4 percent to a record $165.0 million from $123.7 million in the year-earlier quarter. Fourth-quarter net income was a record $77.0 million, up 117.5 percent from $35.4 million in the 2003 fourth quarter. Diluted earnings per share for the 2004 fourth quarter was a record 68 cents, 112.5 percent higher than the 32 cents achieved in the 2003 fourth quarter.

Fourth-quarter results included contributions from the three Horseshoe casinos, acquired by Harrah's on July 1, 2004. Results for Harrah's East Chicago and Harrah's Tunica, which are contracted for sale to an affiliate of Colony Capital, LLC, have been reclassified to discontinued operations. Harrah's anticipates closing the sale transaction during the 2005 first quarter.

"Strong organic growth, an accretive acquisition and prudent capital spending propelled the company to yet another record quarter," said Gary Loveman, Harrah's Entertainment's chairman, president and chief executive officer. "We achieved these results despite a month-long strike at our Atlantic City properties. This robust performance also demonstrates the value of our unique customer-loyalty strategy and our geographic diversification, as often measured by same-store sales growth and cross-market play."

Fourth-quarter 2004 same-store revenues increased 7.5 percent over the year-ago period. Cross-market play -- gaming by customers at Harrah's properties other than their "home" casino -- rose 15.3 percent from the fourth quarter of 2003. Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 10.8 percent from the year-ago fourth quarter.

"Our acquisitions have received considerable attention, but they are only one part of Harrah's growth story," Loveman said. "Over the past six years we have contended with recession, a post-9/11 travel slump, new competitors in multiple markets and the longest strike in the history of the Atlantic City gaming industry. Despite this litany of challenges, our company has posted same-store sales growth in all but one of the last 24 quarters. This remarkable record of consistent organic growth is a tribute to the effectiveness of our marketing and technological capabilities and our focus on delivering superior customer service."

For the full year 2004, revenues rose 15.2 percent to a record $4.55 billion from $3.95 billion in 2003. Property EBITDA increased to a record $1.22 billion, up 16.0 percent from $1.05 billion in 2003. Adjusted EPS was a record $3.37, 15.8 percent higher than the $2.91 achieved in 2003.

Income from operations for the full year 2004 was a record $791.1 million, up 16.5 percent from $678.8 million in full year 2003. Net income was a record $367.7 million, up 25.7 percent from $292.6 million in 2003. Full-year 2004 diluted earnings per share was a record $3.26, up 23.0 percent from $2.65 in the year-ago period.

For the full year 2004, cross-market play rose 18.0 percent to $1.44 billion. Tracked play for the full year 2004 increased 11.9 percent, while same-store revenues rose 6.5 percent.

Poised For Long-Term Growth

"In 2004 we achieved record results in pursuit of our strategy to position Harrah's as the world's leading distributor of casino entertainment," Loveman said. "Our implementation of marketing and customer-service initiatives, such as Total Rewards 2, strategic capital investments in existing properties and the acquisition of Horseshoe Gaming Holding Corp. set the stage for sustainable long-term growth.

"Our pending acquisition of Caesars Entertainment, Inc. will take Harrah's to an even higher level, giving us both a premier luxury brand of international renown and an expanded property portfolio offering a presence in every major gaming market in this country," Loveman said. "Our integration strategy calls for us to maintain and enhance the Caesars brand as experienced by their players, while integrating the best tools, capabilities and personnel of both companies into the combined entity.

"We are in substantial compliance with the Federal Trade Commission's second request for information with regards to the Caesars acquisition, and we remain optimistic we will be able to complete this transaction in the second quarter," Loveman said.

"The Horseshoe acquisition continued to be accretive in the fourth quarter, adding an estimated four cents to Adjusted EPS," Loveman said. "The integration of Horseshoe continues to proceed smoothly, an experience that will serve us well as we prepare for the integration of Caesars.

"We will be ready for the Caesars acquisition," Loveman said. "Our existing operations provide strong momentum, fueled by robust organic growth, a history of successful acquisitions and high returns on capital investments. The recently announced increase in our bank-credit capacity will not only facilitate the Caesars transaction, but provide us with the financial flexibility to pursue other opportunities as they arise.

"On January 1, Phil Satre retired as chairman after a remarkable 25-year career with our company," Loveman said. "Phil is truly a gaming-industry legend. His leadership and vision transformed a small Nevada casino chain into one of the largest companies in the gaming industry. On behalf of Harrah's 48,000 employees, I would like to wish Phil a fond farewell, and extend to him the best wishes of all of my colleagues on the next challenges in his life."

Among the fourth-quarter highlights:
* Building on the acquisition of Horseshoe, Harrah's announced plans to
re-brand its Bluffs Run Casino to the Horseshoe brand as part of an
expansion and renovation of the Council Bluffs, Iowa, property. Upon
completion in the first quarter of 2006, Horseshoe Council Bluffs will
feature 69 percent more gaming space, 1,900 slot machines, 36 table
games and a 20-table poker room.

* Members of the UNITE-HERE Local 54 union in Atlantic City approved a
five-year contract in November, ending a month-long strike at Harrah's
Atlantic City and the Showboat.

* The National Indian Gaming Commission approved an agreement between the
Ak-Chin Indian Community and a Harrah's subsidiary that extends Harrah's
contract to manage Harrah's Phoenix Ak-Chin hotel and casino for an
additional five years, starting January 1, 2005. Harrah's has managed
the Arizona casino since its December 1994 opening.

* Harrah's 28 casinos received a record 580 awards, including 252
first-place finishes, in "Best of Slots," an annual poll of Strictly
Slots magazine readers. Harrah's Laughlin, Harrah's Lake Tahoe,
Harrah's New Orleans and Horseshoe Bossier City were named "Best Overall
Gaming Resort" in their markets, while Total Rewards was voted Best Slot
Club in 10 markets -- Atlantic City, Chicagoland, Iowa, Lake Tahoe, Las
Vegas Strip, Laughlin, Missouri, Native Midwest, Native West and New
Orleans.

* Harrah's announced the launch of the World Series of Poker Tournament
Circuit, a series of five poker tournaments preceding the 36th Annual
World Series of Poker in Las Vegas this summer. The first circuit
tournament was held in January at Harrah's Atlantic City; additional
events will be held at Harrah's Rincon, the Rio, Harveys Lake Tahoe and
Harrah's New Orleans.

* An expansion of Harrah's Rincon near San Diego opened in December. The
project added a 21-story, 459-room hotel tower, 14,000 square feet of
additional gaming space and a 7,500-square-foot spa.



Southern Nevada Propels West Region To Record Results

West Results
(in millions)
2004 2003 Percent 2004 2003 Percent
Fourth Fourth Increase Full Full Increase
Quarter Quarter (Decrease) Year Year (Decrease)
Southern Nevada
Total revenues $265.5 $226.0 17.5% $1,062.5 $899.5 18.1%
Income from
operations 58.4 39.3 48.6% 246.0 165.4 48.7%
Property EBITDA 75.5 57.9 30.4% 316.1 239.8 31.8%
Northern Nevada
Total revenues 99.8 99.0 0.8% 452.4 447.2 1.2%
Income from
operations 3.4 (2.3) N/M 60.0 55.4 8.3%
Property EBITDA 15.2 14.0 8.6% 103.1 100.8 2.3%
Total West Region
Total revenues 365.3 325.0 12.4% 1,514.9 1,346.7 12.5%
Income from
operations 61.8 37.0 67.0% 306.0 220.8 38.6%
Property EBITDA 90.7 71.9 26.1% 419.2 340.6 23.1%





Strong market conditions and robust cross-market play at Harrah's three Southern Nevada properties helped Harrah's West Region achieve record fourth-quarter and full-year results.

"Our cross-market strategy and capabilities helped our Southern Nevada properties post particularly strong results," said Tim Wilmott, Harrah's chief operating officer. "Our competitive advantage was especially evident at Harrah's Laughlin, which posted EBITDA gains of more than 42 percent."

East Region Reports Lower Results

East Results
(in millions)
2004 2003 Percent 2004 2003 Percent
Fourth Fourth Increase Full Full Increase
Quarter Quarter (Decrease) Year Year (Decrease)
Harrah's Atlantic City
Total revenues $96.0 $99.9 -3.9% $423.3 $433.5 -2.4%
Income from
operations 18.1 25.9 -30.1% 109.4 133.4 -18.0%
Property EBITDA 28.1 34.3 -18.1% 148.0 167.5 -11.6%
Showboat Atlantic City
Total revenues 82.0 82.4 -0.5% 357.6 347.8 2.8%
Income from
operations 15.5 17.0 -8.8% 90.4 83.9 7.7%
Property EBITDA 24.1 23.9 0.8% 123.5 110.8 11.5%
Total East Region
Total revenues 178.0 182.3 -2.4% 780.9 781.3 -0.1%
Income from
operations 33.6 42.9 -21.7% 199.8 217.3 -8.1%
Property EBITDA 52.2 58.2 -10.3% 271.5 278.3 -2.4%





A month-long strike at Harrah's two Atlantic City properties impacted fourth-quarter revenues, operating income and Property EBITDA from the Eastern Region.

"The strike presented a significant challenge to our Atlantic City operations, but we are pleased we were ultimately able to achieve our goal - a five-year contract that is fair and equitable to both union members and our shareholders," Wilmott said. "We're excited about the scheduled opening of the House of Blues club at the Showboat this summer. We believe it will provide a gaming and entertainment experience without rival in Atlantic City."

North Central Region Reports Record Results

North Central Results
(in millions)
2004 2003 Percent 2004 2003 Percent
Fourth Fourth Increase Full Full Increase
Quarter Quarter (Decrease) Year Year (Decrease)
Illinois/Indiana
Total revenues $187.2 $87.2 114.7% $587.8 $390.7 50.4%
Income from
operations 33.0 16.0 106.3% 103.0 74.5 38.3%
Property EBITDA 40.0 20.2 98.0% 126.2 91.1 38.5%
Iowa
Total revenues 64.6 59.1 9.3% 254.0 238.7 6.4%
Income from
operations 13.8 7.1 94.4% 68.1 32.1 112.1%
Property EBITDA 19.8 12.7 55.9% 75.7 52.5 44.2%
Missouri
Total revenues 119.7 109.5 9.3% 458.1 441.0 3.9%
Income from
operations 20.7 16.6 24.7% 78.2 83.0 -5.8%
Property EBITDA 34.0 26.9 26.4% 123.1 120.8 1.9%
Total North Central
Total revenues 371.5 255.8 45.2% 1,299.9 1,070.4 21.4%
Income from
operations 67.5 39.7 70.0% 249.3 189.6 31.5%
Property EBITDA 93.8 59.8 56.9% 325.0 264.4 22.9%






The addition of Horseshoe Hammond, a lower tax rate at Bluffs Run Casino and improved business from a recently completed expansion of Harrah's St. Louis all contributed to record fourth-quarter results for the company's North Central Region.

Due to the decision to sell the property, operating results from Harrah's East Chicago are reported as discontinued operations. The prior year results have been reclassified to conform to this presentation.

"Harrah's St. Louis, Harrah's Council Bluffs, Bluffs Run and Horseshoe Hammond all posted strong fourth-quarter performances," Wilmott said. "The completion of the expansion of Harrah's North Kansas City later this year, along with the renovation, expansion and rebranding of Bluffs Run, will reinforce our strong position in the Midwest."

South Central Region Also Posts Record Results

South Central Results
(in millions)
2004 2003 Percent 2004 2003 Percent
Fourth Fourth Increase Full Full Increase
Quarter Quarter (Decrease) Year Year (Decrease)
Louisiana
Total revenues $198.9 $165.5 20.2% $762.5 $659.9 15.5%
Income from
operations 21.3 22.2 -4.1% 97.3 92.3 5.4%
Property EBITDA 35.0 30.8 13.6% 148.6 136.3 9.0%
Mississippi
Total revenues 55.3 -- N/A 113.4 -- N/A
Income from
operations 11.2 -- N/A 25.8 -- N/A
Property EBITDA 15.8 -- N/A 33.4 -- N/A
Total South Central
Total revenues 254.2 165.5 53.6% 875.9 659.9 32.7%
Income from
operations 32.5 22.2 46.4% 123.1 92.3 33.4%
Property EBITDA 50.8 30.8 64.9% 182.0 136.3 33.5%





The South Central Region benefited from the addition of Horseshoe Bossier City and Horseshoe Tunica, as well as continued strong business trends at Harrah's New Orleans.

Due to the decision to sell the property, operating results from Harrah's Tunica are reported as discontinued operations. Prior year results have been reclassified to conform to this presentation.

"Strong cross-market play continues to drive outstanding growth at Harrah's New Orleans," Wilmott said. "We look forward to the addition of a 450-room hotel tower in early 2006 that will position Harrah's New Orleans to extend its strong results well into the future."

Managed Properties And Other Items

Fourth-quarter management-fee revenues were down 10.4 percent from the year-ago period due to lower fee schedules associated with contract extensions at tribal-owned properties.

Fourth-quarter development costs declined to $4.4 million from $10.2 million in the year-ago quarter. In the first quarter of 2005, Harrah's and Gala Group dissolved the joint venture formed in 2003 for the development of regional casinos in the United Kingdom in response to the government's proposal to restrict development of regional casinos. Harrah's will focus its UK efforts on opportunities to develop large-scale destination casino resorts with more than 50,000 square feet of gaming space, as well as hotel rooms, restaurants and entertainment venues.

Corporate expense increased 42.2 percent over the year-ago quarter due to on-going costs related to Sarbanes-Oxley compliance, increased depreciation and incentive-compensation costs. Interest expense was 29.8 percent higher than in the 2003 fourth quarter due to additional debt related to the Horseshoe acquisition. The company recorded $2.3 million in costs during the quarter related to integration planning for the Caesars acquisition.

The effective income tax rate after minority interest for the full year 2004 was 36.7 percent, compared to 37.3 percent for the year 2003. The tax rate for the fourth quarter of 2004 was 33.8 percent, the same as in the year-ago period.

Discontinued operations, which includes the operating results of Harrah's East Chicago and Harrah's Tunica, increased over the prior year due to the cessation of depreciation following the third-quarter 2004 agreement to sell the properties, lower income taxes and improved operating performance.

Harrah's Entertainment will host a conference call Wednesday, February 2, 2005, at 9:00 a.m. Eastern Standard Time to review its 2004 fourth-quarter and year-end results. Those interested in participating in the call should dial 1-888-399-2695, or 1-706-679-7646 for international callers, approximately 10 minutes before the call start time.

A taped replay of the conference call can be accessed at 1-800-642-1687, or 1-706-645-9291 for international callers, beginning at 10:00 a.m. EST Wednesday, February 2. The replay will be available through 11:59 p.m. EST on Tuesday, February 8. The passcode number for the replay is 3289511.

Interested parties wanting to listen to the live conference call on the Internet may do so on the company's web site -- www.harrahs.com -- in the Investor Relations section under the Investor News tab.

Various subsidiaries of Harrah's Entertainment, Inc. own or manage 28 casinos in the United States, primarily under the Harrah's and Horseshoe brand names. Founded 67 years ago, 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.

Additional information about Harrah's is available at 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, strategies, future performance, future financial results of Harrah's and Caesars Entertainment, Inc. and Harrah's anticipated acquisition of Caesars. 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 or results of Caesars and 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): financial community and rating agency perceptions of Harrah's and Caesars; the effects of economic, credit and capital market conditions on the economy in general, and on gaming and hotel companies in particular; construction factors, including delays, 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; the ability to timely and cost-effectively integrate into Harrah's operations the companies that it acquires, including with respect to its acquisition of Caesars; access to available and feasible financing, including financing for Harrah's acquisition of Caesars, on a timely basis; changes in laws (including increased tax rates), 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; our ability to recoup costs of capital investments through higher revenues; acts of war or terrorist incidents; abnormal gaming holds; 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 and Caesars disclaim 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.

Additional Information about the Acquisition and Where to Find It

In connection with Harrah's proposed acquisition of Caesars ("Acquisition"), on January 24, 2005, Harrah's filed definitive materials with the Securities and Exchange Commission (SEC), including a registration statement on Form S-4 that contains a definitive prospectus and joint proxy statement. INVESTORS AND SECURITY HOLDERS OF HARRAH'S AND CAESARS ARE URGED TO READ THE PROSPECTUS AND JOINT PROXY STATEMENT BECAUSE THEY CONTAIN IMPORTANT INFORMATION ABOUT HARRAH'S, CAESARS AND THE ACQUISITION. The definitive materials filed on January 24, 2005, the preliminary versions of these materials filed on October 20, 2004, December 20, 2004, and January 24, 2005 and other relevant materials, and any other documents filed by Harrah's or Caesars with the SEC, may be obtained free of charge at the SEC's web site at www.sec.gov. In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Harrah's by directing a written request to: Harrah's, One Harrah's Court, Las Vegas, Nevada 89119, Attention: Investor Relations or Caesars Entertainment, Inc., 3930 Howard Hughes Parkway, Las Vegas, Nevada 89109, Attention: Investor Relations. Investors and security holders are urged to read the proxy statement, prospectus and the other relevant materials before making any voting or investment decision with respect to the Acquisition.

Harrah's, Caesars and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Caesars and Harrah's in connection with the Acquisition. Information about those executive officers and directors of Harrah's and their ownership of Harrah's common stock is set forth in the Harrah's Form 10-K for the year ended December 31, 2003, which was filed with the SEC on March 5, 2004, and the proxy statement for Harrah's 2004 Annual Meeting of Stockholders, which was filed with the SEC on March 4, 2004. Information about the executive officers and directors of Caesars and their ownership of Caesars common stock is set forth in the proxy statement for Caesars' 2004 Annual Meeting of Stockholders, which was filed with the SEC on April 16, 2004. Investors and security holders may obtain additional information regarding the direct and indirect interests of Harrah's, Caesars and their respective executive officers and directors in the Acquisition by reading the proxy statement and prospectus regarding the Acquisition.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction. No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED SUMMARY OF OPERATIONS
(UNAUDITED)
Fourth Quarter Ended Year Ended
December 31, December 31,
(In thousands, except 2004 2003 2004 2003
per share amounts)

Revenues* $1,189,065 $950,221 $4,548,326 $3,948,865
Property operating
expenses (900,370) (730,272) (3,331,470) (2,899,527)
Depreciation and
amortization (89,047) (74,027) (327,188) (294,336)
Operating profit 199,648 145,922 889,668 755,002

Corporate expense (18,854) (13,260) (66,818) (52,602)
Caesars acquisition costs (2,331) -- (2,331) --
Losses on interests in
nonconsolidated affiliates (559) (389) (879) (999)
Amortization of intangible
assets (3,765) (1,200) (9,439) (4,798)
Project opening costs
and other items (9,180) (7,334) (19,093) (17,828)

Income from operations 164,959 123,739 791,108 678,775
Interest expense, net
of interest Capitalized (76,299) (58,781) (271,802) (234,419)
Loss on early
extinguishment of debt -- (15,938) -- (19,074)
Other income/(expense)
including interest income 4,114 (4,264) 9,483 2,913

Income before income
taxes and minority
interests 92,774 44,756 528,789 428,195
Provision for income
taxes (30,568) (14,329) (190,641) (155,568)
Minority interests (2,334) (2,334) (8,623) (11,563)
Income from continuing
operations 59,872 28,093 329,525 261,064
Discontinued operations,
net of tax Expense 17,084 7,283 38,184 31,559
Net income $76,956 $35,376 $367,709 $292,623

Earnings per share -
basic
Income from continuing
operations $0.54 $0.25 $2.97 $2.40
Discontinued operations,
net of tax 0.15 0.07 0.34 0.29
Net income $0.69 $0.32 $3.31 $2.69

Earnings per share -
diluted
Income from continuing
operations $0.53 $0.25 $2.92 $2.36
Discontinued operations,
net of tax 0.15 0.07 0.34 0.29
Net income $0.68 $0.32 $3.26 $2.65

Weighted average common
shares Outstanding 111,371 109,551 111,162 108,972
Weighted average common
and common equivalent
shares outstanding 113,706 111,259 112,867 110,403

*See note (a) on Supplemental Operating Information.



HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL OPERATING INFORMATION
(UNAUDITED)

(In thousands) Fourth Quarter Ended Year Ended
December 31, December 31,
2004 2003 2004 2003
Revenues (a)
West Region $365,276 $325,027 $1,514,927 $1,346,749
East Region 178,018 182,346 780,885 781,295
North Central Region 371,515 255,845 1,299,864 1,070,382
South Central Region 254,207 165,529 875,913 659,862
Managed 15,237 17,009 60,701 73,035
Other 4,812 4,465 16,036 17,542
Total Revenues $1,189,065 $950,221 $4,548,326 $3,948,865

Income from operations(a)
West Region $61,765 $36,993 $305,955 $220,806
East Region 33,592 42,903 199,849 217,285
North Central Region 67,499 39,670 249,316 189,595
South Central Region 32,544 22,151 123,106 92,277
Managed 12,664 14,582 51,752 64,372
Other (21,920) (19,300) (69,721) (52,958)
Corporate expense (18,854) (13,260) (66,818) (52,602)
Caesars acquisition costs (2,331) -- (2,331) --
Total Income from
operations $164,959 $123,739 $791,108 $678,775

Property EBITDA(a)(b)
West Region $90,692 $71,910 $419,155 $340,563
East Region 52,228 58,229 271,494 278,254
North Central Region 93,774 59,771 325,017 264,385
South Central Region 50,794 30,750 182,035 136,347
Managed 12,777 14,626 52,097 64,475
Other (11,570) (15,337) (32,942) (34,686)
Total Property EBITDA $288,695 $219,949 $1,216,856 $1,049,338

Project opening costs and
other items(a)
Project opening costs $(1,704) $(740) $(9,526) $(7,352)
Writedowns, reserves
and recoveries (7,476) (6,594) (9,567) (10,476)
Total $(9,180) $(7,334) $(19,093) $(17,828)

(a) In third quarter 2004, Harrah's Tunica and East Chicago were
classified as assets held-for-sale and their prior periods' results
were reclassified from Income from continuing operations to
Discontinued operations.

(b) 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, Caesars acquisition costs, losses
on interests in nonconsolidated affiliates 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

Fourth Quarter Ended Year Ended
December 31, December 31,
(In thousands, except 2004 2003 2004 2003
per share amounts)

Income before taxes and
minority interests $92,774 $44,756 $528,789 $428,195
Add/(deduct):
Project opening costs
and other items:
True-up of Bluffs Run
prior year's gaming
tax accrual -- -- (16,558) --
Contribution to the
Harrah's Foundation -- -- 10,000 --
Other 9,180 7,334 25,651 17,828
Loss on ownership interests -- -- -- 128
Loss on early
extinguishments of debt -- 15,938 -- 19,074
Insurance claim settlement -- 1,896 -- 1,896
Settlement of litigation -- 4,200 -- 4,200
Caesars acquisition costs 2,331 -- 2,331 --

Adjusted income before
taxes and minority
interests 104,285 74,124 550,213 471,321
Provision for income
taxes (34,459) (24,291) (198,493) (171,592)
Minority interests (2,334) (2,334) (8,623) (11,563)

Adjusted income before
discontinued operations 67,492 47,499 343,097 288,166
Discontinued operations,
net of tax 17,084 7,283 38,184 31,559
Add/(deduct):
Loss on sale of
Vicksburg assets,
net of tax -- 14 -- 474
Tax benefit from
realization of net
operating loss
carry-forwards arising
from disposition of
Harrah's Tunica (2,483) -- (2,483) --
Loss on sale of Harveys
Colorado assets,
net of tax -- -- -- 674
Project opening costs
and other items at
Harrah's Tunica and
East Chicago, net of tax 91 475 1,338 728

Adjusted net income $82,184 $55,271 $380,136 $321,601

Adjusted diluted earnings
per share $0.72 $0.50 $3.37 $2.91

Weighted average common
and common equivalent
shares outstanding 113,706 111,259 112,867 110,403



HARRAH'S ENTERTAINMENT, INC.
SUPPLEMENTAL INFORMATION
RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS
(UNAUDITED)
(In thousands)

Fourth Quarter Ended December 31, 2004
North
West East Central
Region Region Region

Revenues $365,276 $178,018 $371,515
Property operating
expenses (274,584) (125,790) (277,741)
Property EBITDA 90,692 52,228 93,774
Depreciation and
amortization (27,100) (18,065) (23,478)
Operating profit 63,592 34,163 70,296
Amortization of intangible
assets (181) -- (1,268)
Losses on interests in
nonconsolidated affiliates -- -- --
Project opening costs and
other items (1,646) (571) (1,529)
Corporate expense -- -- --
Caesars acquisition costs -- -- --
Income from operations $61,765 $33,592 $67,499



Fourth Quarter Ended December 31, 2004
South Managed
Central and
Region Other Total

Revenues $254,207 $20,049 $1,189,065
Property operating
expenses (203,413) (18,842) (900,370)
Property EBITDA 50,794 1,207 288,695
Depreciation and
amortization (15,606) (4,798) (89,047)
Operating profit 35,188 (3,591) 199,648
Amortization of intangible
assets (1,691) (625) (3,765)
Losses on interests in
nonconsolidated affiliates -- (559) (559)
Project opening costs and
other items (953) (4,481) (9,180)
Corporate expense -- (18,854) (18,854)
Caesars acquisition costs -- (2,331) (2,331)
Income from operations $32,544 $(30,441) $164,959*




*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.

Fourth Quarter Ended December 31, 2003
North
West East Central
Region Region Region

Revenues $325,027 $182,346 $255,845
Property operating
expenses (253,117) (124,117) (196,074)
Property EBITDA 71,910 58,229 59,771
Depreciation and
amortization (28,139) (15,393) (17,786)
Operating profit 43,771 42,836 41,985
Amortization of intangible
assets (181) -- (1,019)
Losses on interests in
nonconsolidated affiliates -- -- --
Project opening costs and
other items (6,597) 67 (1,296)
Corporate expense -- -- --
Income from operations $36,993 $42,903 $39,670



Fourth Quarter Ended December 31, 2003
South Managed
Central and
Region Other Total

Revenues $165,529 $21,474 $950,221
Property operating
expenses (134,779) (22,185) (730,272)
Property EBITDA 30,750 (711) 219,949
Depreciation and
amortization (8,941) (3,768) (74,027)
Operating profit 21,809 (4,479) 145,922
Amortization of intangible
assets -- -- (1,200)
Losses on interests in
nonconsolidated affiliates -- (389) (389)
Project opening costs and
other items 342 150 (7,334)
Corporate expense -- (13,260) (13,260)
Income from operations $22,151 $(17,978) $123,739*




*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
RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS
(UNAUDITED)

Year Ended December 31, 2004
North
West East Central
Region Region Region

Revenues $1,514,927 $780,885 $1,299,864
Property operating
expenses (1,095,772) (509,391) (974,847)
Property EBITDA 419,155 271,494 325,017
Depreciation and
amortization (106,014) (70,000) (83,194)
Operating profit 313,141 201,494 241,823
Amortization of
intangible assets (725) -- (4,739)
Losses on interests in
nonconsolidated
affiliates -- -- --
Project opening costs
and other items (6,461) (1,645) 12,232
Corporate expense -- -- --
Caesars acquisition costs -- -- --
Income from operations $305,955 $199,849 $249,316



Year Ended December 31, 2004
South Managed
Central and
Region Other Total

Revenues $875,913 $76,737 $4,548,326
Property operating
expenses (693,878) (57,582) (3,331,470)
Property EBITDA 182,035 19,155 1,216,856
Depreciation and
amortization (50,601) (17,379) (327,188)
Operating profit 131,434 1,776 889,668
Amortization of
intangible assets (2,725) (1,250) (9,439)
Losses on interests in
nonconsolidated
affiliates -- (879) (879)
Project opening costs
and other items (5,603) (17,616) (19,093)
Corporate expense -- (66,818) (66,818)
Caesars acquisition costs -- (2,331) (2,331)
Income from operations $123,106 $(87,118) $791,108*


*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.



Year Ended December 31, 2003
North
West East Central
Region Region Region

Revenues $1,346,749 $781,295 $1,070,382
Property operating
expenses (1,006,186) (503,041) (805,997)
Property EBITDA 340,563 278,254 264,385
Depreciation and
amortization (112,033) (59,733) (67,512)
Operating profit 228,530 218,521 196,873
Amortization of
intangible assets (725) -- (4,073)
Losses on interests in
nonconsolidated
affiliates -- -- --
Project opening costs
and other items (6,999) (1,236) (3,205)
Corporate expense -- -- --
Income from operations $220,806 $217,285 $189,595



Year Ended December 31, 2003
South Managed
Central and
Region Other Total

Revenues $659,862 $90,577 $3,948,865
Property operating
expenses (523,515) (60,788) (2,899,527)
Property EBITDA 136,347 29,789 1,049,338
Depreciation and
amortization (40,028) (15,030) (294,336)
Operating profit 96,319 14,759 755,002
Amortization of
intangible assets -- -- (4,798)
Losses on interests in
nonconsolidated
affiliates -- (999) (999)
Project opening costs
and other items (4,042) (2,346) (17,828)
Corporate expense -- (52,602) (52,602)
Income from operations $92,277 $(41,188) $678,775*




*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.

Photo: NewsCom: http://www.newscom.com/cgi-bin/prnh/20021220/LAF055LOGO
AP Archive: http://photoarchive.ap.org/
PRN Photo Desk, photodesk@prnewswire.com
Source: Harrah's Entertainment, Inc.

CONTACT: Brad Belhouse - Investors, +1-702-407-6367, or Gary Thompson -
Media, +1-702-407-6529, both of Harrah's Entertainment, Inc.

Web site: http://www.harrahs.com/


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