SOURCE: Harrah's Entertainment

Harrah's Entertainment

October 27, 2009 05:00 ET

Harrah's Entertainment Reports Results for 2009 Third Quarter, First Nine Months

-- Revenues decline 13.7 percent from 2008 third quarter

-- Third-Quarter Property EBITDA declines 12.2 percent

-- Impairment charge on intangible assets impacts results

LAS VEGAS, NV--(Marketwire - October 27, 2009) - Harrah's Entertainment, Inc. today reported the following financial results for the 2009 third quarter and first nine months:

HARRAH'S ENTERTAINMENT, INC.

Company-wide Results
                                           Successor
                                   Three Months Ended Sept 30,  Percent
                                    ------------------------   Increase/
(In millions)                           2009         2008     (Decrease)
                                    -----------  -----------  ----------
Net revenues                        $   2,282.2  $   2,645.9       (13.7)%
(Loss)/income from operations          (1,050.2)       349.6         N/M©
Loss from continuing operations, net
 of tax (a)                            (1,621.0)      (123.2)        N/M
Property EBITDA                           563.7        641.7       (12.2)%
Adjusted EBITDA (b)                       539.2        633.9       (14.9)%

(a) Due to the January 1, 2009, adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.

(b) Does not include the pro forma effect of yet-to-be-realized cost
    savings from our profitability program.

(c) "N/M" is used to reference a variance compared to a prior period that
    is Not Meaningful. This reference is used in several tables throughout
    this document.



                            Successor     Predecessor
                                Jan. 28,    Jan. 1,   Combined
                    Nine Months   2008       2008    Nine Months
                       Ended    Through     Through     Ended
                     Sept. 30,  Sept. 30,   Jan. 27,  Sept. 30,  Increase/
(In millions)          2009        2008       2008       2008   (Decrease)
                     ---------  ---------  ---------  ---------  --------
Net revenues         $ 6,808.3  $ 7,088.5  $   760.1  $ 7,848.6     (13.3)%
(Loss)/income from
 operations             (758.5)   1,110.5      (36.8)   1,073.7       N/M
Income/(loss) from
 continuing
 operations, net of
 tax (a)                 548.4     (396.4)     (99.4)    (495.8)      N/M
Property EBITDA        1,710.5    1,766.9      171.2    1,938.1     (11.7)%
Adjusted EBITDA (b)    1,652.1    1,722.2      172.0    1,894.2     (12.8)%

(a) Due to the January 1, 2009, adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.

(b) Does not include the pro forma effect of yet-to-be-realized cost
    savings from our profitability program.

On January 28, 2008, Harrah's Entertainment was acquired by affiliates of Apollo Global Management, LLC and TPG Capital, LP. Accordingly, we have separated our 2008 historical financial results in the presentations included herein between the Successor period from January 28, 2008 through September 30, 2008, and the Predecessor period from January 1, 2008 through January 27, 2008. However, we have also combined the Successor and Predecessor periods' results for the nine months ended September 30, 2008 because company management believes doing so provides a meaningful presentation and a more appropriate comparison to 2009 results.

Property earnings before interest, taxes, depreciation and amortization (Property EBITDA) and Adjusted EBITDA are measurements not in accordance with Generally Accepted Accounting Principles (GAAP) but are commonly used in the gaming industry as measures of performance and as bases for valuation of gaming companies and, in the case of Adjusted EBITDA, as a measure of compliance with certain debt covenants. Reconciliations of Property EBITDA to Income/(loss) from operations and Income/(loss) from continuing operations to Last Twelve Months (LTM) Adjusted EBITDA are attached to this release.

The company's 2009 third-quarter results declined due primarily to the impact of the recession on customers' discretionary spending. Revenues fell to $2.28 billion from $2.65 billion in the 2008 third quarter. The loss from operations was $1.05 billion, compared with income from operations of $349.6 million in the 2008 third quarter. Included in the third quarter 2009 loss from operations was a charge of $1.33 billion for impairments of goodwill and non-amortizing intangible assets. Excluding the impairment charges, income from operations would have been $278.4 million, compared with income from operations of $349.6 million in the 2008 third quarter. The loss from continuing operations, net of tax, for the 2009 third quarter was $1.62 billion, compared with a loss of $123.2 million in the year-ago quarter.

Revenues for the first nine months of 2009 declined 13.3 percent to $6.81 billion from $7.85 billion in the first nine months of 2008. The loss from operations was $758.5 million in the 2009 first nine months, compared with income from operations of $1.07 billion in the prior-year period. Income from continuing operations, net of tax, for the first nine months of 2009 was $548.4 million, compared with a net loss of $495.8 million in the first nine months of 2008. Income from continuing operations, net of tax, for the nine months ended September 30, 2009, includes i) an impairment charge for goodwill and non-amortizing intangible assets totaling $1.63 billion ($1.56 billion net of taxes); and ii) a pre-tax gain of $4.28 billion ($2.59 billion net of taxes) related to the early extinguishment of debt, primarily in the 2009 second quarter.

During the 2009 third quarter, Harrah's wholly owned subsidiary Harrah's Operating Company, Inc. (HOC) issued $720 million aggregate principal amount of senior-secured notes due 2017, with net proceeds used to repay a portion of Harrah's existing term-loan and revolving-credit indebtedness under HOC's senior-secured credit facilities.

During the 2009 third quarter, HOC also announced both a cash tender offer for up to $160 million of its outstanding senior notes maturing in 2010 and 2011 and the placement of a new $1.0 billion term loan tranche for its credit facilities. The tender offer expired on October 21, 2009, and approximately $45 million of notes were tendered. The term loan was drawn on October 15, 2009, with the proceeds used to repay most of Harrah's revolving-credit indebtedness under HOC's senior-secured credit facilities and to provide additional liquidity.

"During the third quarter, we continued our focus on aligning expenses with revenues and addressing our capital structure to cope with the protracted economic slump," said Gary Loveman, Harrah's chairman, president and chief executive officer.

"We conducted another round of financing activities to shore up our balance sheet and enhance our financial flexibility, which has enabled us to take advantage of some exciting growth opportunities," Loveman said. "We increased our ownership of Harrah's Chester to approximately 95 percent and announced an agreement to purchase the Thistledown racetrack in Cleveland.

"In addition, we agreed to a seven-year contract extension with ESPN to televise the World Series of Poker," Loveman said. "We're looking forward to ESPN's telecast of the November 9, 2009 WSOP Main Event finale, when nine players will split more than $27 million in prize money, including a first-place prize of $8.5 million.

"The third quarter was challenging from an operations standpoint, as lower spending by consumers affected by the global recession continued to impact revenues," Loveman said.

"After 38 years of great accomplishment, Eastern Division President Carlos Tolosa will retire from Harrah's Entertainment at the end of the year, concluding one of the longest and most distinguished careers in the history of our company," Loveman said. "Carlos' retirement will complete an 11-year professional collaboration with me during which he earned my admiration, gratitude and unyielding respect for him as a friend and colleague. On behalf of all of the Harrah's employees, I thank him sincerely and wish him well."

A substantial portion of the debt of Harrah's Entertainment's consolidated group is issued by HOC. Therefore, the company believes it is meaningful to also provide information pertaining to the results of operations of HOC. The information for HOC assumes that a post-January 2008 swap of certain properties between HOC and Harrah's Entertainment that was consummated during the 2008 second quarter actually occurred on January 1, 2008.

HARRAH'S OPERATING COMPANY

                                             Successor
                                    Three Months Ended Sept 30,  Percent
                                     ------------------------   Increase/
(In millions)                           2009         2008      (Decrease)
                                     -----------  -----------  ----------
Net revenues                         $   1,759.5  $   2,025.5       (13.1)%
(Loss)/income from operations             (909.7)       258.8         N/M
Loss from continuing operations, net
 of tax (a)                             (1,453.1)      (114.7)        N/M
Property EBITDA                            418.3        464.4        (9.9)%
Adjusted EBITDA (b)                        404.2        454.4       (11.0)%

(a) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.

(b) Does not include the pro forma effect of yet-to-be-realized cost
    savings from our profitability program.



                           Successor     Predecessor
                               Jan. 28,    Jan. 1,   Combined
                  Nine Months    2008       2008    Nine Months
                      Ended     Through    Through     Ended      Percent
                     Sept. 30,  Sept. 30,  Jan. 27,   Sept. 30,  Increase/
(In millions)          2009       2008       2008       2008    (Decrease)
                     ---------  ---------  ---------  ---------  --------
Net revenues         $ 5,241.7  $ 5,364.9  $   577.5  $ 5,942.4     (11.8)%
(Loss)/Income from
 operations             (494.1)     795.6      (43.2)     752.4       N/M
Income/(loss) from
 continuing
 operations, net of
 tax (a)                 733.9     (414.3)    (106.2)    (520.5)      N/M
Property EBITDA        1,264.5    1,244.3      109.6    1,353.9      (6.6)%
Adjusted EBITDA (b)    1,233.4    1,179.9      143.0    1,322.9      (6.8)%

(a) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.

(b) Does not include the pro forma effect of yet-to-be-realized cost
    savings from our profitability program.

Summaries of results by region follow:

Las Vegas Region

While hotel occupancy remained strong at more than 90 percent, third-quarter and year-to-date revenues declined in the Las Vegas Region from the 2008 periods due to lower spend per visitor and weakness in the group-travel business, which led to lower average daily room rates. The 2009 third-quarter and year-to-date income from operations declined compared with respective 2008 results due to lower visitor spend, as well as impairment charges of $875.8 million and $255.1 million recorded in the third quarter and second quarter 2009, respectively, related to impairment of goodwill for certain of the Las Vegas strip properties.

HARRAH'S ENTERTAINMENT, INC.

Las Vegas Region
                                           Successor
                                      Three Months Ended
                                           Sept 30,             Percent
                                   -------------------------    Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   ------------  ----------
Net revenues                       $     657.2   $      796.8       (17.5)%
Loss/(income) from operations           (778.8)         155.4         N/M
Property EBITDA                          173.0          230.0       (24.8)%


                       Successor                     Combined
                   Nine     Jan. 28,    Predecessor    Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended     Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,   Increase/
(In millions)       2009       2008         2008       2008     (Decrease)
                 ---------  ---------- ------------ ---------- ----------
Net revenues     $ 2,048.8  $  2,279.2 $      253.6 $  2,532.8      (19.1)%
(Loss)/income
 from operations    (778.3)      497.3         51.9      549.2        N/M
Property EBITDA      582.2       715.7         76.0      791.7      (26.5)%

Las Vegas Region properties include Harrah's Las Vegas, Rio, Bally's Las
Vegas, Paris, Flamingo Las Vegas, Caesars Palace, Imperial Palace and
Bill's Gamblin' Hall & Saloon.





HARRAH'S OPERATING COMPANY

Las Vegas Region

                                           Successor
                                      Three Months Ended
                                           Sept 30,             Percent
                                   -------------------------   Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   ------------  ----------
Net revenues                       $     295.8   $      355.1       (16.7)%
(Loss)/income from operations           (630.4)          66.8         N/M
Property EBITDA                           74.1           96.5       (23.2)%


                        Successor                    Combined
                    Nine     Jan. 28,   Predecessor    Nine
                    Months     2008     Jan. 1, 2008  Months     Percent
                    Ended     Through     Through      Ended    Increase/
                  Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,
(In millions)       2009       2008         2008       2008    (Decrease)
                  ---------  ---------- ------------ --------- ----------
Net revenues      $   907.6  $    996.5 $      118.5 $ 1,115.0      (18.6)%
(Loss)/income
 from operations     (530.2)      207.1         29.7     236.8        N/M
Property EBITDA       234.9       288.5         38.1     326.6      (28.1)%

Las Vegas Region properties include Bally's Las Vegas, Caesars Palace,
Imperial Palace and Bill's Gamblin' Hall & Saloon.

Atlantic City Region

Competition from gaming operations in Pennsylvania and the weak economy led to reduced visitation and customer spend per trip that unfavorably impacted Atlantic City Region results during both the three and nine months ended September 30, 2009. Included in third-quarter 2009 income from operations was a $178.7 million charge for impairment of goodwill of certain Atlantic City properties.

HARRAH'S ENTERTAINMENT, INC.

Atlantic City Region

                                           Successor
                                     Three Months Ended
                                           Sept 30,              Percent
                                   -------------------------    Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   ------------  ----------
Net revenues                       $     558.4   $      655.1       (14.8)%
(Loss)/income from operations            (98.5)         123.5         N/M
Property EBITDA                          132.5          164.5       (19.5)%


                         Successor                   Combined
                      Nine    Jan. 28,   Predecessor   Nine
                     Months     2008    Jan. 1, 2008  Months
                      Ended   Through     Through      Ended    Percent
                    Sept. 30, Sept. 30,   Jan. 27,   Sept. 30,  Increase/
(In millions)         2009      2008        2008       2008    (Decrease)
                    --------- --------- ------------ --------- ----------
Total revenues      $ 1,558.5 $ 1,663.2 $      160.8 $ 1,824.0      (14.6)%
Income from
 operations               6.0     254.0         18.7     272.7      (97.8)%
Property EBITDA         333.2     397.3         36.4     433.7      (23.2)%

Atlantic City Region properties include Harrah's Atlantic City, Showboat
Atlantic City, Caesars Atlantic City, Bally's Atlantic City and Harrah's
Chester.



HARRAH'S OPERATING COMPANY

Atlantic City Region

                                           Successor
                                     Three Months Ended
                                           Sept 30,              Percent
                                   --------------------------   Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   ------------  ----------
Net revenues                       $     415.4   $      495.1       (16.1)%
(Loss)/income from operations           (125.3)          88.1         N/M
Property EBITDA                           90.1          118.0       (23.6)%


                       Successor                     Combined
                   Nine     Jan. 28,    Predecessor   Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended     Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,  Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------  ---------- ------------ ---------- ----------
Net revenues     $ 1,176.0  $  1,276.0 $      125.8 $  1,401.8      (16.1)%
(Loss)/income
 from operations     (51.3)      184.5          8.0      192.5        N/M
Property EBITDA      231.2       287.1         21.9      309.0      (25.2)%

Atlantic City Region properties include Showboat Atlantic City, Caesars
Atlantic City, Bally's Atlantic City and Harrah's Chester.

Louisiana/Mississippi Region

Reduced visitation led to lower 2009 third-quarter and nine-month results despite improved margins. Included in third-quarter 2009 income from operations was a $6.0 million charge for impairment of goodwill of certain of the Louisiana/Mississippi properties. The 2008 first nine months were also impacted by construction disruptions related to the re-branding and remodeling of Harrah's Tunica. Also included in income from operations for the nine months ended September 30, 2008 were insurance proceeds of $185.4 million representing final settlement of claims related to 2005 hurricane damages.

HARRAH'S ENTERTAINMENT, INC.

Louisiana/Mississippi Region

                                           Successor
                                     Three Months Ended
                                           Sept 30,              Percent
                                   --------------------------   Increase/
(In millions)                          2009          2008      (Decrease)
                                   ------------  ------------  ----------
Net revenues                       $      310.4  $      368.2       (15.7)%
Income from operations                     39.4          49.2       (19.9)%
Property EBITDA                            71.4          73.8        (3.3)%


                       Successor                     Combined
                   Nine     Jan. 28,   Predecessor     Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended     Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,  Increase/
In millions)       2009       2008         2008       2008     (Decrease)
                 ---------- ---------- ------------ ---------- ----------
Net revenues     $    959.8 $  1,010.8 $      106.1 $  1,116.9      (14.1)%
Income from
 operations           150.8      327.9         10.1      338.0      (55.4)%
Property EBITDA       236.7      217.9         18.6      236.5        0.1%

Louisiana/Mississippi Region properties include Harrah's New Orleans,
Horseshoe Bossier City, Louisiana Downs, Horseshoe Tunica, Harrah's Tunica,
Sheraton Tunica and Grand Casino Biloxi.

Iowa/Missouri Region

Cost-saving initiatives at all our properties in the Iowa/Missouri Region more than offset the 2009 third-quarter and year-to-date revenue declines, which were due to the weak economy that continued to impact guest visitation.

HARRAH'S ENTERTAINMENT, INC.

Iowa/Missouri Region

                                           Successor
                                      Three Months Ended
                                            Sept 30,             Percent
                                   --------------------------   Increase/
(In millions)                          2009          2008      (Decrease)
                                   ------------  ------------  ----------
Net revenues                       $      192.9  $      198.0        (2.6)%
Income from operations                     48.5          41.8        16.0%
Property EBITDA                            61.1          53.5        14.2%

                      Successor                      Combined
                   Nine     Jan. 28,    Predecessor    Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended      Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,   Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------- ---------- ------------ ---------- ----------
Net revenues     $    577.1 $    537.3 $       55.8 $    593.1       (2.7)%
Income from
 operations           146.1      112.8          7.7      120.5       21.2%
Property EBITDA       184.1      148.0         13.0      161.0       14.3%

Iowa/Missouri/Kansas Region properties include Harrah's St. Louis, Harrah's
Council Bluffs, Horseshoe Council Bluffs and Harrah's North Kansas City.

Illinois/Indiana Region

Despite a strong performance at the expanded Horseshoe Hammond, third-quarter revenues and Property EBITDA declined from the 2008 third quarter due to effects of the weak economy. Income from operations for the 2009 third-quarter was lower than in 2008 due to a $180.7 million charge for impairments of goodwill and non-amortizing intangible assets at certain of the region's properties. Year-to-date 2009 revenues and Property EBITDA improved from the 2008 results as a result of the expansion at Horseshoe Hammond and the benefits of cost reductions at other properties.

HARRAH'S ENTERTAINMENT, INC.

Illinois/Indiana Region

                                           Successor
                                      Three Months Ended        Percent
                                           Sept 30,             Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   ------------  ----------
Net revenues                       $     284.7   $      301.9        (5.7)%
(Loss)/income from operations           (153.3)          21.5         N/M
Property EBITDA                           49.1           54.3        (9.6)%


                        Successor                   Combined
                   Nine     Jan. 28,    Predecessor   Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended      Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,   Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------  ---------- ------------ ---------- -----------
Net revenues     $   901.1  $    804.5 $       85.5 $    890.0         1.2%
(Loss)/income
 from operations     (65.3)       91.3          8.7      100.0         N/M
Property EBITDA      188.7       150.7         13.6      164.3        14.9%

Illinois/Indiana properties include Horseshoe Hammond, Harrah's Joliet,
Harrah's Metropolis and Horseshoe Southern Indiana.

Other Nevada Region

While hotel occupancy rates were about even with the 2008 third quarter, results for the Other Nevada Region declined in the 2009 third-quarter due to lower visitor spend per trip, although cost-saving initiatives partially offset the revenue declines.

HARRAH'S ENTERTAINMENT, INC.

Other Nevada

                                           Successor
                                      Three Months Ended
                                            Sept 30,             Percent
                                   --------------------------   Increase/
(In millions)                          2009          2008      (Decrease)
                                   ------------  ------------  ----------
Net revenues                       $      141.5  $      170.4       (17.0)%
Income from operations                     29.4          33.7       (12.8)%
Property EBITDA                            41.4          45.4        (8.8)%



                       Successor                     Combined
                   Nine     Jan. 28,   Predecessor     Nine
                   Months     2008     Jan. 1, 2008   Months
                   Ended     Through     Through      Ended      Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,   Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------- ---------- ------------ ---------- ----------
Net revenues     $    370.6 $    419.0 $       38.9 $    457.9      (19.1)%
Income from
 operations            48.5       59.7          0.5       60.2      (19.4)%
Property EBITDA        86.8       93.0          4.5       97.5      (11.0)%

Other Nevada properties include Harrah's Reno, Harrah's Lake Tahoe,
Harvey's Lake Tahoe, Bill's Casino and Harrah's Laughlin.




HARRAH'S OPERATING COMPANY

Other Nevada

                                           Successor
                                      Three Months Ended
                                           Sept 30,             Percent
                                   --------------------------  Increase/
(In millions)                          2009          2008      (Decrease)
                                   ------------  ------------  ----------
Net revenues                       $      104.7  $      127.5       (17.9)%
Income from operations                     23.1          27.4       (15.7)%
Property EBITDA                            30.3          34.1       (11.1)%



                      Successor       Predecessor   Combined
                   Nine     Jan. 28,     Jan. 1,      Nine
                   Months     2008         2008       Months
                   Ended     Through     Through      Ended     Percent
                 Sept. 30,  Sept. 30,    Jan. 27,   Sept. 30,  Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------- ---------- -----------  ---------- ----------
Net revenues     $    261.6 $    299.8 $      26.8  $    326.6      (19.9)%
Income/(loss)
 from operations       29.8       40.5        (1.9)       38.6      (22.8)%
Property EBITDA        53.1       60.3         1.2        61.5      (13.7)%

Other Nevada properties include Harrah's Reno, Harrah's Lake Tahoe,
Harvey's Lake Tahoe and Bill's Casino.

Managed/International/Other

Revenues declined in the 2009 third quarter and year-to-date, largely as result of adverse movements in exchange rates. Improved Property EBITDA for the 2009 third quarter and year to date was due largely to increased revenues at the company's London Clubs International properties and improved cost management at all of the company's international and managed properties. In the second and third quarters of 2009, the company recognized impairments of $42.0 million and $87.5 million, respectively, of certain non-amortizing intangible assets that contributed to the losses from operations.

HARRAH'S ENTERTAINMENT, INC.

Managed/International/Other

                                           Successor
                                      Three Months Ended
                                           Sept 30,              Percent
                                   -------------------------    Increase/
(In millions)                          2009          2008      (Decrease)
                                   -----------   -----------   ----------
Net revenues                       $     137.1   $     155.5        (11.8)%
Loss from operations                     (97.2)        (39.8)         N/M
Property EBITDA                           35.2          20.2         74.3%


                      Successor        Predecessor  Combined
                   Nine     Jan. 28,     Jan. 1,      Nine
                   Months     2008         2008       Months
                   Ended     Through     Through      Ended     Percent
                 Sept 30,   Sept 30,     Jan. 27,   Sept 30,   Increase/
(In millions)      2009       2008         2008       2008     (Decrease)
                 ---------  ---------  -----------  ---------  ----------
Net revenues     $   392.4  $   374.5  $      59.4  $   433.9        (9.6)%
Loss from
 operations         (154.3)    (113.5)        (0.3)    (113.8)      (35.6)%
Property EBITDA       98.8       44.3          9.1       53.4        85.0%

Managed/International/Other results include income from our managed
properties, results of our international properties and certain marketing
and administrative expenses, including development costs, and income from
our non-consolidated subsidiaries.

Other items

During the third quarter 2009, we recorded a total charge of $1.33 billion for the impairment of goodwill and other intangible assets, the majority of which related to properties in the Las Vegas, Atlantic City, and Illinois/Indiana regions. Total impairment charges for goodwill and other intangible assets were $1.63 billion for the nine months ended September 30, 2009.

Interest expense decreased in the 2009 third-quarter and year-to-date periods compared with 2008 due to lower debt levels resulting from HOC debt exchanges completed in December 2008 and April 2009 and repurchases of debt in open-market transactions.

As a result of exchange offers and open-market purchases during the second quarter, pre-tax gains of $4.3 billion on early extinguishment of debt were recognized and are included in the year-to-date results.

For the 2009 third quarter, the Company recorded a tax provision of $128.9 million on a pre-tax loss from continuing operations of $1.492 billion, compared to a tax benefit of $46.0 million on a pre-tax loss from continuing operations of $169.2 million in the comparable period of 2008. For the nine months ended September 30, 2009, the Company recognized a tax provision of $1.591 billion on pre-tax income from continuing operations of $2.139 billion, which equates to an effective tax rate of 74.4%. The primary difference between the Company's year-to date recorded provision and the provision that would have resulted from applying the U.S. statutory tax rate of 35% to the Company's pre-tax income from continuing operations is primarily attributable to non-deductible impairments of goodwill and adjustments to uncertain tax positions.

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®, Caesars® and Horseshoe® brand names. Harrah's also owns the World Series of Poker® and a majority interest in the London Clubs International family of casinos. 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 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 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 acquisitions 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; 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 ENTERTAINMENT, INC.
                    CONSOLIDATED SUMMARY OF OPERATIONS
                                (UNAUDITED)


                                                Successor
                                ------------------------------------------
                                                                  Jan. 28,
                                                     Nine Months   2008
                                 Three Months Ended     Ended     Through
                                      Sept. 30,       Sept. 30,  Sept. 30,
                                --------------------  ---------  ---------
(In millions)                     2009       2008       2009       2008
                                ---------  ---------  ---------  ---------

Revenues                        $ 2,282.2  $ 2,645.9  $ 6,808.3  $ 7,088.5
Property operating expenses      (1,718.5)  (2,004.2)  (5,097.8)  (5,321.6)
Depreciation and amortization      (175.6)    (152.0)    (516.8)    (452.4)
                                ---------  ---------  ---------  ---------
  Operating profit                  388.1      489.7    1,193.7    1,314.5

Project opening costs and other
 items                              (24.6)     (63.1)     (81.5)      35.5
Impairment of intangible assets  (1,328.6)         -   (1,625.7)         -
 (Losses)/income on interests
 in non-consolidated affiliates      (1.2)      (2.5)      (1.3)      (1.3)
Corporate expense                   (39.7)     (34.7)    (111.7)     (95.9)
Merger and integration costs            -       (1.0)      (0.3)     (23.1)
Amortization of intangible
 assets                             (44.2)     (38.8)    (131.7)    (119.2)
                                ---------  ---------  ---------  ---------

(Loss)/income from operations    (1,050.2)     349.6     (758.5)   1,110.5
Interest expense, net of
 interest capitalized              (444.5)    (533.4)  (1,404.7)  (1,469.4)
(Losses)/gains on early
 extinguishments of debt             (1.5)       7.4    4,279.2     (203.9)
Other income, including
 interest income                      4.1        7.2       23.2       18.7
                                ---------  ---------  ---------  ---------

(Loss)/income before income
 taxes                           (1,492.1)    (169.2)   2,139.2     (544.1)
Income tax (provision)/benefit     (128.9)      46.0   (1,590.8)     147.7
                                ---------  ---------  ---------  ---------

(Loss)/income from continuing
 operations, net of tax (a)      (1,621.0)    (123.2)     548.4     (396.4)
Discontinued operations, net of
 tax                                 (0.1)       0.7       (0.3)      88.4
                                ---------  ---------  ---------  ---------
    Net (loss)/income (a)        (1,621.1)    (122.5)     548.1     (308.0)
Less: net income attributable
 to non-controlling
 interests                           (3.2)      (7.2)     (16.1)      (6.2)
                                ---------  ---------  ---------  ---------
Net (loss)/income attributable
 to Harrah's Entertainment,
 Inc.                           $(1,624.3) $  (129.7) $   532.0  $  (314.2)
                                =========  =========  =========  =========


                               Predecessor  Combined
                                ---------  ---------
                                 Jan. 1,
                                  2008    Nine Months
                                 Through     Ended
                                 Jan. 27,  Sept. 30,
                                  2008       2008
                                ---------  ---------
(In millions)                     2008       2008
                                ---------  ---------

Revenues                        $   760.1  $ 7,848.6
Property operating expenses        (588.9)  (5,910.5)
Depreciation and amortization       (63.5)    (515.9)
                                ---------  ---------
  Operating profit                  107.7    1,422.2

Project opening costs and other
 items                               (5.4)      30.1
Impairment of intangible assets         -          -
 (Losses)/income on interests
 in non-consolidated affiliates       0.5       (0.8)
Corporate expense                    (8.5)    (104.4)
Merger and integration costs       (125.6)    (148.7)
Amortization of intangible
 assets                              (5.5)    (124.7)
                                ---------  ---------

(Loss)/income from operations       (36.8)   1,073.7
Interest expense, net of
 interest capitalized               (89.7)  (1,559.1)
(Losses)/gains on early
 extinguishments of debt                -     (203.9)
Other income, including
 interest income                      1.1       19.8
                                ---------  ---------

(Loss)/income before income
 taxes                             (125.4)    (669.5)
Income tax (provision)/benefit       26.0      173.7
                                ---------  ---------

(Loss)/income from continuing
 operations, net of tax (a)         (99.4)    (495.8)
Discontinued operations, net of
 tax                                  0.1       88.5
                                ---------  ---------
    Net (loss)/income (a)           (99.3)    (407.3)
Less: net income attributable
 to non-controlling
 interests                           (1.6)      (7.8)
                                ---------  ---------
Net (loss)/income attributable
 to Harrah's Entertainment,
 Inc.                           $  (100.9) $  (415.1)
                                =========  =========

(a) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentations.







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



                                                Successor
                                ------------------------------------------
                                                                  Jan. 28,
                                                     Nine Months   2008
                                 Three Months Ended     Ended     Through
                                      Sept. 30,       Sept. 30,  Sept. 30,
                                --------------------  ---------  ---------
                                  2009       2008       2009       2008
                                ---------  ---------  ---------  ---------
Revenues
  Las Vegas Region              $   657.2  $   796.8  $ 2,048.8  $ 2,279.2
  Atlantic City Region              558.4      655.1    1,558.5    1,663.2
  Louisiana/Mississippi Region      310.4      368.2      959.8    1,010.8
  Iowa/Missouri Region              192.9      198.0      577.1      537.3
  Illinois/Indiana Region           284.7      301.9      901.1      804.5
  Other Nevada Region               141.5      170.4      370.6      419.0
  Managed/International/Other       137.1      155.5      392.4      374.5
                                ---------  ---------  ---------  ---------
    Net Revenues                $ 2,282.2  $ 2,645.9  $ 6,808.3  $ 7,088.5
                                =========  =========  =========  =========

(Loss)/Income from operations
  Las Vegas Region              $  (778.8) $   155.4  $  (778.3) $   497.3
  Atlantic City Region              (98.5)     123.5        6.0      254.0
  Louisiana/Mississippi Region       39.4       49.2      150.8      327.9
  Iowa/Missouri Region               48.5       41.8      146.1      112.8
  Illinois/Indiana Region          (153.3)      21.5      (65.3)      91.3
  Other Nevada Region                29.4       33.7       48.5       59.7
  Managed/International/Other       (97.2)     (39.8)    (154.3)    (113.5)
  Corporate Expense                 (39.7)     (34.7)    (111.7)     (95.9)
  Merger and integration costs          -       (1.0)      (0.3)     (23.1)
                                ---------  ---------  ---------  ---------
    Total (loss)/income from
     operations                 $(1,050.2) $   349.6  $  (758.5) $ 1,110.5
                                =========  =========  =========  =========

Property EBITDA (a)
  Las Vegas Region              $   173.0  $   230.0  $   582.2  $   715.7
  Atlantic City Region              132.5      164.5      333.2      397.3
  Louisiana/Mississippi Region       71.4       73.8      236.7      217.9
  Iowa/Missouri Region               61.1       53.5      184.1      148.0
  Illinois/Indiana Region            49.1       54.3      188.7      150.7
  Other Nevada Region                41.4       45.4       86.8       93.0
  Managed/International/Other        35.2       20.2       98.8       44.3
                                ---------  ---------  ---------  ---------
    Total Property EBITDA       $   563.7  $   641.7  $ 1,710.5  $ 1,766.9
                                =========  =========  =========  =========

Project opening costs and other
 items
  Project opening costs         $    (0.3) $   (16.3) $    (2.9) $   (26.3)
  Insurance proceeds for
   hurricane losses                     -          -          -      185.4
  Impairment of intangible
   assets                        (1,328.6)         -   (1,625.7)         -
  Other write-downs, reserves
   and recoveries                   (24.3)     (46.8)     (78.6)    (123.6)
                                ---------  ---------  ---------  ---------
    Total Project opening costs
     and other items            $(1,353.2) $   (63.1) $(1,707.2) $    35.5
                                =========  =========  =========  =========




                               Predecessor  Combined
                                ---------  ---------
                                 Jan. 1,
                                  2008    Nine Months
                                 Through     Ended
                                 Jan. 27,  Sept. 30,
(In millions)                     2008       2008
                                ---------  ---------
                                  2008       2008
                                ---------  ---------
Revenues
  Las Vegas Region              $   253.6  $ 2,532.8
  Atlantic City Region              160.8    1,824.0
  Louisiana/Mississippi Region      106.1    1,116.9
  Iowa/Missouri Region               55.8      593.1
  Illinois/Indiana Region            85.5      890.0
  Other Nevada Region                38.9      457.9
  Managed/International/Other        59.4      433.9
                                ---------  ---------
    Net Revenues                $   760.1  $ 7,848.6
                                =========  =========

(Loss)/Income from operations
  Las Vegas Region              $    51.9  $   549.2
  Atlantic City Region               18.7      272.7
  Louisiana/Mississippi Region       10.1      338.0
  Iowa/Missouri Region                7.7      120.5
  Illinois/Indiana Region             8.7      100.0
  Other Nevada Region                 0.5       60.2
  Managed/International/Other        (0.3)    (113.8)
  Corporate Expense                  (8.5)    (104.4)
  Merger and integration costs     (125.6)    (148.7)
                                ---------  ---------
    Total (loss)/income from
     operations                 $   (36.8) $ 1,073.7
                                =========  =========

Property EBITDA (a)
  Las Vegas Region              $    76.0  $   791.7
  Atlantic City Region               36.4      433.7
  Louisiana/Mississippi Region       18.6      236.5
  Iowa/Missouri Region               13.0      161.0
  Illinois/Indiana Region            13.6      164.3
  Other Nevada Region                 4.5       97.5
  Managed/International/Other         9.1       53.4
                                ---------  ---------
    Total Property EBITDA       $   171.2  $ 1,938.1
                                =========  =========

Project opening costs and other
 items
  Project opening costs         $    (0.7) $   (27.0)
  Insurance proceeds for
   hurricane losses                     -      185.4
  Impairment of intangible
   assets                               -          -
  Other write-downs, reserves
   and recoveries                    (4.7)    (128.3)
                                ---------  ---------
    Total Project opening costs
     and other items            $    (5.4) $    30.1
                                =========  =========

(a) Property EBITDA (earnings before interest, taxes, depreciation and
    amortization) consists of loss from operations before depreciation and
    amortization, write-downs, reserves and recoveries, project opening
    costs, corporate expense, merger and integration costs, income/(losses)
    on interests in non-consolidated 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 loss 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
    RECONCILIATION OF PROPERTY EBITDA TO INCOME/(LOSS) FROM OPERATIONS
                                (UNAUDITED)



                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2009
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In Millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     657.2  $     558.4  $     310.4  $     192.9
Property operating
 expenses                    (484.2)      (425.9)      (239.0)      (131.8)
                        -----------  -----------  -----------  -----------
Property EBITDA               173.0        132.5         71.4         61.1
Depreciation and
 amortization                 (46.2)       (48.1)       (20.4)       (12.6)
                        -----------  -----------  -----------  -----------
Operating profit              126.8         84.4         51.0         48.5
Project opening costs
 and other items              (10.8)        (0.5)        (0.2)           -
Impairment of
 intangible assets           (875.8)      (178.6)        (6.0)           -
Income/(losses) on
 interests in
 nonconsolidated
 affiliates                       -            -          0.1            -
Corporate expense                 -            -            -            -
Amortization of
 intangible assets            (19.0)        (3.8)        (5.5)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $    (778.8) $     (98.5) $      39.4  $      48.5
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2009
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In Millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     284.7  $     141.5  $     137.1  $   2,282.2
Property operating
 expenses                    (235.6)      (100.1)      (101.9)    (1,718.5)
                        -----------  -----------  -----------  -----------
Property EBITDA                49.1         41.4         35.2        563.7
Depreciation and
 amortization                 (21.5)        (8.5)       (18.3)      (175.6)
                        -----------  -----------  -----------  -----------
Operating profit               27.6         32.9         16.9        388.1
Project opening costs
 and other items                0.1         (0.1)       (13.1)       (24.6)
Impairment of
 intangible assets           (180.7)           -        (87.5)    (1,328.6)
Income/(losses) on
 interests in
 nonconsolidated
 affiliates                       -            -         (1.3)        (1.2)
Corporate expense                 -            -        (39.7)       (39.7)
Amortization of
 intangible assets             (0.3)        (3.4)       (12.2)       (44.2)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $    (153.3) $      29.4  $    (136.9) $  (1,050.2)
                        ===========  ===========  ===========  ===========






                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In Millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     796.8  $     655.1  $     368.2  $     198.0
Property operating
 expenses                    (566.8)      (490.6)      (294.4)      (144.5)
                        -----------  -----------  -----------  -----------
Property EBITDA               230.0        164.5         73.8         53.5
Depreciation and
 amortization                 (40.7)       (40.5)       (16.4)       (11.6)
                        -----------  -----------  -----------  -----------
Operating profit              189.3        124.0         57.4         41.9
Project opening costs
 and other items              (14.7)        (0.6)        (4.4)        (0.1)
Losses on interests in
 non-consolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (19.2)         0.1         (4.0)           -
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $     155.4  $     123.5  $      49.2  $      41.8
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In Millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     301.9  $     170.4  $     155.5  $   2,645.9
Property operating
 expenses                    (247.6)      (125.0)      (135.3)    (2,004.2)
                        -----------  -----------  -----------  -----------
Property EBITDA                54.3         45.4         20.2        641.7
Depreciation and
 amortization                 (18.5)        (8.4)       (15.9)      (152.0)
                        -----------  -----------  -----------  -----------
Operating profit               35.8         37.0          4.3        489.7
Project opening costs
 and other items              (14.1)           -        (29.2)       (63.1)
Losses on interests in
 non-consolidated
 affiliates                       -            -         (2.7)        (2.5)
Corporate expense                 -            -        (34.7)       (34.7)
Merger and integration
 costs                            -            -         (1.0)        (1.0)
Amortization of
 intangible assets             (0.2)        (3.3)       (12.2)       (38.8)
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $      21.5  $      33.7  $     (75.5) $     349.6
                        ===========  ===========  ===========  ===========

* Total (loss)/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 (loss)/income attributable to Harrah's
  Entertainment, Inc.







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

                                            Successor
                        --------------------------------------------------
                               Nine Months Ended September 30, 2009
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $   2,048.8  $   1,558.5  $     959.8  $     577.1
Property operating
 expenses                  (1,466.6)    (1,225.3)      (723.1)      (393.0)
                        -----------  -----------  -----------  -----------
Property EBITDA               582.2        333.2        236.7        184.1
Depreciation and
 amortization                (139.2)      (133.4)       (61.2)       (37.8)
                        -----------  -----------  -----------  -----------
Operating profit              443.0        199.8        175.5        146.3
Project opening costs
 and other items              (33.4)        (3.8)        (2.9)        (0.2)
Impairment of
 intangible assets         (1,130.9)      (178.6)        (6.0)           -
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -          0.6            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (57.0)       (11.4)       (16.4)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $    (778.3) $       6.0  $     150.8  $     146.1
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                               Nine Months Ended September 30, 2009
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     901.1  $     370.6  $     392.4  $   6,808.3
Property operating
 expenses                    (712.4)      (283.8)      (293.6)    (5,097.8)
                        -----------  -----------  -----------  -----------
Property EBITDA               188.7         86.8         98.8      1,710.5
Depreciation and
 amortization                 (64.0)       (26.4)       (54.8)      (516.8)
                        -----------  -----------  -----------  -----------
Operating profit              124.7         60.4         44.0      1,193.7
Project opening costs
 and other items               (8.3)        (1.5)       (31.4)       (81.5)
Impairment of
 intangible assets           (180.7)           -       (129.5)    (1,625.7)
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -         (1.9)        (1.3)
Corporate expense                 -            -       (111.7)      (111.7)
Merger and integration
 costs                            -            -         (0.3)        (0.3)
Amortization of
 intangible assets             (1.0)       (10.4)       (35.5)      (131.7)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $     (65.3) $      48.5  $    (266.3) $    (758.5)
                        ===========  ===========  ===========  ===========





                                             Combined
                        --------------------------------------------------
                               Nine Months Ended September 30, 2008
                        --------------------------------------------------
                            Las       Atlantic    Louisiana/      Iowa/
                           Vegas        City      Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $   2,532.8  $   1,824.0  $   1,116.9  $     593.1
Property operating
 expenses                  (1,741.1)    (1,390.3)      (880.4)      (432.1)
                        -----------  -----------  -----------  -----------
Property EBITDA               791.7        433.7        236.5        161.0
Depreciation and
 amortization                (142.5)      (144.1)       (62.4)       (40.0)
                        -----------  -----------  -----------  -----------
Operating profit              649.2        289.6        174.1        121.0
Project opening costs
 and other items              (48.4)        (5.0)       178.9         (0.3)
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (51.6)       (11.9)       (15.2)        (0.2)
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $     549.2  $     272.7  $     338.0  $     120.5
                        ===========  ===========  ===========  ===========


                                             Combined
                        --------------------------------------------------
                               Nine Months Ended September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     890.0  $     457.9  $     433.9  $   7,848.6
Property operating
 expenses                    (725.7)      (360.4)      (380.5)    (5,910.5)
                        -----------  -----------  -----------  -----------
Property EBITDA               164.3         97.5         53.4      1,938.1
Depreciation and
 amortization                 (44.3)       (28.0)       (54.6)      (515.9)
                        -----------  -----------  -----------  -----------
Operating profit              120.0         69.5         (1.2)     1,422.2
Project opening costs
 and other items              (18.5)           -        (76.6)        30.1
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -         (1.0)        (0.8)
Corporate expense                 -            -       (104.4)      (104.4)
Merger and integration
 costs                            -            -       (148.7)      (148.7)
Amortization of
 intangible assets             (1.5)        (9.3)       (35.0)      (124.7)
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $     100.0  $      60.2  $    (366.9) $   1,073.7
                        ===========  ===========  ===========  ===========

* Total (loss)/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 (loss)/income attributable to Harrah's
  Entertainment, Inc.







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



                                            Successor
                        --------------------------------------------------
                             Jan. 28, 2008 Through September 30, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $   2,279.2  $   1,663.2  $   1,010.8  $     537.3
Property operating
 expenses                  (1,563.5)    (1,265.9)      (792.9)      (389.3)
                        -----------  -----------  -----------  -----------
Property EBITDA               715.7        397.3        217.9        148.0
Depreciation and
 amortization                (123.8)      (128.4)       (53.8)       (34.9)
                        -----------  -----------  -----------  -----------
Operating profit              591.9        268.9        164.1        113.1
Project opening costs
 and other items              (44.0)        (4.9)       178.3         (0.3)
Income/(losses) on
 interests in
 nonconsolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (50.6)       (10.0)       (14.7)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $     497.3  $     254.0  $     327.9  $     112.8
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                             Jan. 28, 2008 Through September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     804.5  $     419.0  $     374.5  $   7,088.5
Property operating
 expenses                    (653.8)      (326.0)      (330.2)    (5,321.6)
                        -----------  -----------  -----------  -----------
Property EBITDA               150.7         93.0         44.3      1,766.9
Depreciation and
 amortization                 (40.0)       (24.1)       (47.4)      (452.4)
                        -----------  -----------  -----------  -----------
Operating profit              110.7         68.9         (3.1)     1,314.5
Project opening costs
 and other items              (18.5)           -        (75.1)        35.5
Income/(losses) on
 interests in
 nonconsolidated
 affiliates                       -            -         (1.5)        (1.3)
Corporate expense                 -            -        (95.9)       (95.9)
Merger and integration
 costs                            -            -        (23.1)       (23.1)
Amortization of
 intangible assets             (0.9)        (9.2)       (33.8)      (119.2)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      91.3  $      59.7  $    (232.5) $   1,110.5
                        ===========  ===========  ===========  ===========






                                           Predecessor
                        --------------------------------------------------
                                Jan. 1, 2008 Through Jan. 27, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     253.6  $     160.8  $     106.1  $      55.8
Property operating
 expenses                    (177.6)      (124.4)       (87.5)       (42.8)
                        -----------  -----------  -----------  -----------
Property EBITDA                76.0         36.4         18.6         13.0
Depreciation and
 amortization                 (18.7)       (15.7)        (8.6)        (5.1)
                        -----------  -----------  -----------  -----------
Operating profit               57.3         20.7         10.0          7.9
Project opening costs
 and other items               (4.4)        (0.1)         0.6            -
Income on interests in
 non-consolidated
 affiliates                       -            -            -            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets             (1.0)        (1.9)        (0.5)        (0.2)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      51.9  $      18.7  $      10.1  $       7.7
                        ===========  ===========  ===========  ===========


                                           Predecessor
                        --------------------------------------------------
                                Jan. 1, 2008 Through Jan. 27, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $      85.5  $      38.9  $      59.4  $     760.1
Property operating
 expenses                     (71.9)       (34.4)       (50.3)      (588.9)
                        -----------  -----------  -----------  -----------
Property EBITDA                13.6          4.5          9.1        171.2
Depreciation and
 amortization                  (4.3)        (3.9)        (7.2)       (63.5)
                        -----------  -----------  -----------  -----------
Operating profit                9.3          0.6          1.9        107.7
Project opening costs
 and other items                  -            -         (1.5)        (5.4)
Income on interests in
 non-consolidated
 affiliates                       -            -          0.5          0.5
Corporate expense                 -            -         (8.5)        (8.5)
Merger and integration
 costs                            -            -       (125.6)      (125.6)
Amortization of
 intangible assets             (0.6)        (0.1)        (1.2)        (5.5)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $       8.7  $       0.5  $    (134.4) $     (36.8)
                        ===========  ===========  ===========  ===========

* Total (loss)/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 (loss)/income attributable to Harrah's
  Entertainment, Inc.



             HARRAH'S ENTERTAINMENT, INC.SUPPLEMENTAL INFORMATION
          RECONCILIATION OF INCOME/(LOSS) FROM CONTINUING OPERATIONS
                            TO LTM ADJUSTED EBITDA
                                  (UNAUDITED)

Last twelve months (LTM) Adjusted EBITDA is defined as EBITDA further adjusted to exclude unusual items and other adjustments required or permitted in calculating covenant compliance under the indenture governing the senior notes, first lien notes, second lien notes and/or our senior secured credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting LTM Adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future. Because not all companies use identical calculations, our presentation of LTM Adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

The following table reconciles Income/(loss) from continuing operations, net of tax and LTM Adjusted EBITDA of Harrah's Entertainment, Inc. for the Successor period for the nine months ended September 30, 2009, the Predecessor period from January 1, 2008 through January 27, 2008, the Successor period from January 28, 2008 through September 30, 2008 and the Successor period from January 28, 2008 through December 31, 2008.


                   (1)
                ----------  ----------  ----------
                Successor   Predecessor  Successor
                ----------  ----------  ----------
                   Nine       Jan. 1,    Jan. 28,
                  Months       2008        2008
                  Ended       Through     Through
                Sept. 30,    Jan. 27,   Sept 30.,
(In millions)      2009        2008        2008
                ----------  ----------  ----------
Income/(loss)
 from
 continuing
 operations,
 net of tax     $    548.4  $    (99.4) $   (396.4)
Net loss
 attributable
 to
 non-controlling
 interests           (16.1)       (1.6)       (6.2)
Interest
 expense, net      1,381.5        89.7     1,451.2
Provision/
(benefit) for
 income taxes      1,590.8       (26.0)     (147.7)
Depreciation
 and
 amortization        658.8        72.7       583.5
                ----------  ----------  ----------
  EBITDA           4,163.4        35.4     1,484.4
Project opening
 costs,
 abandoned
 projects and
 development
 costs (a)             2.8         0.9        28.7
Merger and
 integration
 costs                 0.3       125.6        23.1
(Gain)/losses
 on early
 extinguishment
 of debt (b)      (4,279.2)          -       203.9
Net income
 attributable
 to
 non-
 controlling
 interests,
 net of
 distributions
 (c)                   0.2         1.0        (3.6)
Impairment of
 goodwill and
 other
 intangible
 assets            1,625.7           -           -
Non-cash
 expense for
 stock
 compensation
 benefits (d)         12.5         2.4        12.3
Income from
 insurance
 claims for
 hurricane
 losses (e)              -           -      (185.5)
Other
 non-recurring
 or non-cash
 items (f)           126.4         6.7       158.9
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (g)
  LTM adjusted
   EBITDA




                   (2)                                 (3)
                ---------  -----------  ----------  ----------
                Combined   Predecessor  Successor    Combined
                ----------  ----------  ----------  ----------
                  Jan. 1,     Jan. 1,    Jan. 28,     Jan. 1,
                   2008        2008        2008        2008
                  Through     Through     Through     Through
                Sept 30.,    Jan. 27,    Dec. 31,    Dec. 31,   (1)-(2)+(3)
(In millions)      2008        2008        2008        2008        LTM
                ----------  ----------  ----------  ---------- -----------
Income/(loss)
 from
 continuing
 operations,
 net of tax     $   (495.8) $    (99.4) $ (5,174.7) $ (5,274.1) $ (4,229.9)
Net loss
 attributable
 to
 non-controlling
 interests            (7.8)       (1.6)      (12.0)      (13.6)      (21.9)
Interest
 expense, net      1,540.9        89.7     2,041.2     2,130.9     1,971.5
Provision/
 (benefit) for
 income taxes       (173.7)      (26.0)     (360.4)     (386.4)    1,378.1
Depreciation
 and
 amortization        656.2        72.7       805.2       877.9       880.5
                ----------  ----------  ----------  ---------- -----------
  EBITDA           1,519.8        35.4    (2,700.7)   (2,665.3)      (21.7)
Project opening
 costs,
 abandoned
 projects and
 development
 costs (a)            29.6         0.9        31.6        32.5         5.7
Merger and
 integration
 costs               148.7       125.6        24.0       149.6         1.2
(Gain)/losses
 on early
 extinguishment
 of debt (b)         203.9           -      (742.1)     (742.1)   (5,225.2)
Net income
 attributable
 to
 non-
 controlling
 interests,
 net of
 distributions
 (c)                  (2.6)        1.0        (7.4)       (6.4)       (3.6)
Impairment of
 goodwill and
 other
 intangible
 assets                  -           -     5,489.6     5,489.6     7,115.3
Non-cash
 expense for
 stock
 compensation
 benefits (d)         14.7         2.4        16.3        18.7        16.5
Income from
 insurance
 claims for
 hurricane
 losses (e)         (185.5)          -      (185.4)     (185.4)        0.1
Other
 non-recurring
 or non-cash
 items (f)           165.6         6.7       249.9       256.6       217.4
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (g)                                                         186.7
                                                                ----------
  LTM adjusted
   EBITDA                                                       $  2,292.4
                                                                ==========


(a) Represents (i) project opening costs incurred in connection with
    expansion and renovation projects at various properties; (ii) write-off
    of abandoned development projects; and (iii) non-recurring strategic
    planning and restructuring costs.

(b) Represents (i) the difference between the net book value and cash paid
    for notes exchanged and retired for cash; (ii) the difference between
    the net book value of the old notes and the fair market value of new
    notes issued; and (iii) the write-off of historical unamortized
    deferred financing costs and unamortized market value
    premiums/discounts.

(c) Represents minority owners' share of income from our majority-owned
    subsidiaries, net of cash distributions to minority owners.

(d) Represents non-cash compensation expense related to stock options.

(e) Represents non-recurring insurance recoveries related to Hurricane
    Katrina.

(f) Represents the elimination of other non-recurring or non-cash items
    such as litigation awards and settlements, severance and relocation
    costs, excess gaming taxes, gains and losses from disposal of
    assets, equity in non-consolidated subsidiaries (net of distributions)
    and one-time costs relating to new state gaming legislation.

(g) Represents the cost savings yet-to-be-realized from our previously
    announced profitability improvement program.




      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
                         SUPPLEMENTAL INFORMATION
    RECONCILIATION OF PROPERTY EBITDA TO (LOSS)/INCOME FROM OPERATIONS
                                (UNAUDITED)

                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2009
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     295.8  $     415.4  $     310.4  $     192.9
Property operating
 expenses                    (221.7)      (325.3)      (239.0)      (131.8)
                        -----------  -----------  -----------  -----------
Property EBITDA                74.1         90.1         71.4         61.1
Depreciation and
 amortization                 (21.1)       (34.4)       (20.4)       (12.6)
                        -----------  -----------  -----------  -----------
Operating profit               53.0         55.7         51.0         48.5
Project opening costs
 and other items               (3.5)        (0.4)        (0.2)           -
Impairment of
 intangible assets           (671.8)      (178.7)        (6.0)           -
Income on interests in
 non-consolidated
 affiliates                       -          0.8          0.1            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets             (8.1)        (2.7)        (5.5)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $    (630.4) $    (125.3) $      39.4  $      48.5
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2009
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     284.7  $     104.7  $     155.6  $   1,759.5
Property operating
 expenses                    (235.6)       (74.4)      (113.4)    (1,341.2)
                        -----------  -----------  -----------  -----------
Property EBITDA                49.1         30.3         42.2        418.3
Depreciation and
 amortization                 (21.5)        (6.5)       (17.2)      (133.7)
                        -----------  -----------  -----------  -----------
Operating profit               27.6         23.8         25.0        284.6
Project opening costs
 and other items                0.1         (0.1)       (13.2)       (17.3)
Impairment of
 intangible assets           (180.7)           -        (87.4)    (1,124.6)
Income on interests in
 non-consolidated
 affiliates                       -            -         (1.4)        (0.5)
Corporate expense                 -            -        (22.6)       (22.6)
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets             (0.3)        (0.6)       (12.1)       (29.3)
                        -----------  -----------  -----------  -----------
    (Loss)/income from
     operations*        $    (153.3) $      23.1  $    (111.7) $    (909.7)
                        ===========  ===========  ===========  ===========






                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     355.1  $     495.1  $     368.2  $     198.0
Property operating
 expenses                    (258.6)      (377.1)      (294.4)      (144.5)
                        -----------  -----------  -----------  -----------
Property EBITDA                96.5        118.0         73.8         53.5
Depreciation and
 amortization                 (17.5)       (27.8)       (16.4)       (11.6)
                        -----------  -----------  -----------  -----------
Operating profit               79.0         90.2         57.4         41.9
Project opening costs
 and other items               (4.1)        (0.4)        (4.4)        (0.1)
Income on interests in
 non-consolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets             (8.1)        (1.7)        (4.0)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      66.8  $      88.1  $      49.2  $      41.8
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                              Three Months Ended September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     301.9  $     127.5  $     179.7  $   2,025.5
Property operating
 expenses                    (247.6)       (93.4)      (145.5)    (1,561.1)
                        -----------  -----------  -----------  -----------
Property EBITDA                54.3         34.1         34.2        464.4
Depreciation and
 amortization                 (18.5)        (6.3)       (16.0)      (114.1)
                        -----------  -----------  -----------  -----------
Operating profit               35.8         27.8         18.2        350.3
Project opening costs
 and other items              (14.1)           -        (20.1)       (43.2)
Income on interests in
 non-consolidated
 affiliates                       -            -         (2.6)        (2.4)
Corporate expense                 -            -        (18.3)       (18.3)
Merger and integration
 costs                            -            -         (1.0)        (1.0)
Amortization of
 intangible assets             (0.2)        (0.4)       (12.2)       (26.6)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      21.5  $      27.4  $     (36.0) $     258.8
                        ===========  ===========  ===========  ===========

* Total (loss)/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 (loss)/income attributable to Harrah's Operating
  Company, Inc.







      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
                         SUPPLEMENTAL INFORMATION
    RECONCILIATION OF PROPERTY EBITDA TO (LOSS)/INCOME FROM OPERATIONS
                                (UNAUDITED)



                                            Successor
                        --------------------------------------------------
                              Nine Months Ended September 30, 2009
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     907.6  $   1,176.0  $     959.8  $     577.1
Property operating
 expenses                    (672.7)      (944.8)      (723.1)      (393.0)
                        -----------  -----------  -----------  -----------
Property EBITDA               234.9        231.2        236.7        184.1
Depreciation and
 amortization                 (63.0)       (95.2)       (61.2)       (37.8)
                        -----------  -----------  -----------  -----------
Operating profit              171.9        136.0        175.5        146.3
Project opening costs
 and other items               (6.1)        (2.6)        (2.9)        (0.2)
Impairments of
 intangible assets           (671.8)      (178.7)        (6.0)           -
Income on interests in
 non-consolidated
 affiliates                       -          2.2          0.6            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (24.2)        (8.2)       (16.4)           -
                        -----------  -----------  -----------  -----------
  Loss/(income) from
   operations*          $    (530.2) $     (51.3) $     150.8  $     146.1
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                              Nine Months Ended September 30, 2009
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     901.1  $     261.6  $     458.5  $   5,241.7
Property operating
 expenses                    (712.4)      (208.5)      (322.7)    (3,977.2)
                        -----------  -----------  -----------  -----------
Property EBITDA               188.7         53.1        135.8      1,264.5
Depreciation and
 amortization                 (64.0)       (20.2)       (54.9)      (396.3)
                        -----------  -----------  -----------  -----------
Operating profit              124.7         32.9         80.9        868.2
Project opening costs
 and other items               (8.3)        (1.4)       (31.5)       (53.0)
Impairments of
 intangible assets           (180.7)           -       (129.4)    (1,166.6)
Income on interests in
 non-consolidated
 affiliates                       -            -         (1.9)         0.9
Corporate expense                 -            -        (56.3)       (56.3)
Merger and integration
 costs                            -            -         (0.3)        (0.3)
Amortization of
 intangible assets             (1.0)        (1.7)       (35.5)       (87.0)
                        -----------  -----------  -----------  -----------
  Loss/(income) from
   operations*          $     (65.3) $      29.8  $    (174.0) $    (494.1)
                        ===========  ===========  ===========  ===========





                                             Combined
                        --------------------------------------------------
                              Nine Months Ended September 30, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $   1,115.0  $   1,401.8  $   1,116.9  $     593.1
Property operating
 expenses                    (788.4)    (1,092.8)      (880.4)      (432.1)
                        -----------  -----------  -----------  -----------
Property EBITDA               326.6        309.0        236.5        161.0
Depreciation and
 amortization                 (61.1)      (104.1)       (62.4)       (40.0)
                        -----------  -----------  -----------  -----------
Operating profit              265.5        204.9        174.1        121.0
Project opening costs
 and other items               (6.2)        (3.3)       178.9         (0.3)
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (22.5)        (9.1)       (15.2)        (0.2)
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $     236.8  $     192.5  $     338.0  $     120.5
                        ===========  ===========  ===========  ===========


                                             Combined
                        --------------------------------------------------
                              Nine Months Ended September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     890.0  $     326.6  $     499.0  $   5,942.4
Property operating
 expenses                    (725.7)      (265.1)      (404.0)    (4,588.5)
                        -----------  -----------  -----------  -----------
Property EBITDA               164.3         61.5         95.0      1,353.9
Depreciation and
 amortization                 (44.3)       (21.4)       (54.6)      (387.9)
                        -----------  -----------  -----------  -----------
Operating profit              120.0         40.1         40.4        966.0
Project opening costs
 and other items              (18.5)           -        (67.6)        83.0
Income/(losses) on
 interests in
 non-consolidated
 affiliates                       -            -         (0.9)        (0.7)
Corporate expense                 -            -        (62.3)       (62.3)
Merger and integration
 costs                            -            -       (148.7)      (148.7)
Amortization of
 intangible assets             (1.5)        (1.5)       (34.9)       (84.9)
                        -----------  -----------  -----------  -----------
  Income/(loss) from
   operations*          $     100.0  $      38.6  $    (274.0) $     752.4
                        ===========  ===========  ===========  ===========

* Total (loss)/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/(loss) attributable to Harrah's Operating
  Company, Inc.







      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
                         SUPPLEMENTAL INFORMATION
    RECONCILIATION OF PROPERTY EBITDA TO (LOSS)/INCOME FROM OPERATIONS
                                (UNAUDITED)



                                            Successor
                        --------------------------------------------------
                           January 28, 2008 Through September 30, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     996.5  $   1,276.0  $   1,010.8  $     537.3
Property operating
 expenses                    (708.0)      (988.9)      (792.9)      (389.3)
                        -----------  -----------  -----------  -----------
Property EBITDA               288.5        287.1        217.9        148.0
Depreciation and
 amortization                 (53.7)       (92.2)       (53.8)       (34.9)
                        -----------  -----------  -----------  -----------
Operating profit              234.8        194.9        164.1        113.1
Project opening costs
 and other items               (6.2)        (3.2)       178.3         (0.3)
Income on interests in
 non-consolidated
 affiliates                       -            -          0.2            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets            (21.5)        (7.2)       (14.7)           -
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $     207.1  $     184.5  $     327.9  $     112.8
                        ===========  ===========  ===========  ===========


                                            Successor
                        --------------------------------------------------
                           January 28, 2008 Through September 30, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $     804.5  $     299.8  $     440.0  $   5,364.9
Property operating
 expenses                    (653.8)      (239.5)      (348.2)    (4,120.6)
                        -----------  -----------  -----------  -----------
Property EBITDA               150.7         60.3         91.8      1,244.3
Depreciation and
 amortization                 (40.0)       (18.4)       (47.4)      (340.4)
                        -----------  -----------  -----------  -----------
Operating profit              110.7         41.9         44.4        903.9
Project opening costs
 and other items              (18.5)           -        (66.2)        83.9
Income on interests in
 non-consolidated
 affiliates                       -            -         (1.4)        (1.2)
Corporate expense                 -            -        (88.5)       (88.5)
Merger and integration
 costs                            -            -        (23.1)       (23.1)
Amortization of
 intangible assets             (0.9)        (1.4)       (33.7)       (79.4)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      91.3  $      40.5  $    (168.5) $     795.6
                        ===========  ===========  ===========  ===========






                                           Predecessor
                        --------------------------------------------------
                            January 1, 2008 Through January 27, 2008
                        --------------------------------------------------
                            Las        Atlantic   Louisiana/      Iowa/
                           Vegas         City     Mississippi    Missouri
(In millions)             Region       Region       Region       Region
                        -----------  -----------  -----------  -----------
Revenues                $     118.5  $     125.8  $     106.1  $      55.8
Property operating
 expenses                     (80.4)      (103.9)       (87.5)       (42.8)
                        -----------  -----------  -----------  -----------
Property EBITDA                38.1         21.9         18.6         13.0
Depreciation and
 amortization                  (7.4)       (11.9)        (8.6)        (5.1)
                        -----------  -----------  -----------  -----------
Operating profit               30.7         10.0         10.0          7.9
Project opening costs
 and other items                  -         (0.1)         0.6            -
Income on interests in
 non-consolidated
 affiliates                       -            -            -            -
Corporate expense                 -            -            -            -
Merger and integration
 costs                            -            -            -            -
Amortization of
 intangible assets             (1.0)        (1.9)        (0.5)        (0.2)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $      29.7  $       8.0  $      10.1  $       7.7
                        ===========  ===========  ===========  ===========


                                           Predecessor
                        --------------------------------------------------
                            January 1, 2008 Through January 27, 2008
                        --------------------------------------------------
                         Illinois/      Other
                          Indiana      Nevada
(In millions)             Region       Region        Other        Total
                        -----------  -----------  -----------  -----------
Revenues                $      85.5  $      26.8  $      59.0  $     577.5
Property operating
 expenses                     (71.9)       (25.6)       (55.8)      (467.9)
                        -----------  -----------  -----------  -----------
Property EBITDA                13.6          1.2          3.2        109.6
Depreciation and
 amortization                  (4.3)        (3.0)        (7.2)       (47.5)
                        -----------  -----------  -----------  -----------
Operating profit                9.3         (1.8)        (4.0)        62.1
Project opening costs
 and other items                  -            -         (1.4)        (0.9)
Income on interests in
 non-consolidated
 affiliates                       -            -          0.5          0.5
Corporate expense                 -            -         26.2         26.2
Merger and integration
 costs                            -            -       (125.6)      (125.6)
Amortization of
 intangible assets             (0.6)        (0.1)        (1.2)        (5.5)
                        -----------  -----------  -----------  -----------
  (Loss)/income from
   operations*          $       8.7  $      (1.9) $    (105.5) $     (43.2)
                        ===========  ===========  ===========  ===========

* Total (loss)/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/(loss) attributable to
  Harrah's Operating Company, Inc.

          HARRAH'S OPERATING COMPANY, A WHOLLY OWNED SUBSIDIARY OF
                        HARRAH'S ENTERTAINMENT, INC.
                         SUPPLEMENTAL INFORMATION
        RECONCILIATION OF INCOME/(LOSS) FROM CONTINUING OPERATIONS TO
                           LTM ADJUSTED EBITDA
                                (UNAUDITED)

Adjusted EBITDA and last twelve months (LTM) adjusted EBITDA are defined as EBITDA further adjusted to exclude unusual items and other adjustments required or permitted in calculating covenant compliance under the indenture governing the senior notes, first lien notes, second lien notes and/or our senior secured credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA and LTM adjusted EBITDA are appropriate to provide additional information to investors about certain material non-cash items and about unusual items that we do not expect to continue at the same level in the future. Because not all companies use identical calculations, our presentation of Adjusted EBITDA and LTM adjusted EBITDA may not be comparable to other similarly titled measures of other companies.

In connection with the acquisition of the Company by affiliates of Apollo Global Management, LLC and TPG Capital, LP, eight of our properties and their related operating assets were spun off from Harrah's Operating Company to Harrah's Entertainment through a series of distributions, liquidations, transfers and contributions, collectively referred to as the "the CMBS Spin-Off." The eight properties, as of the closing, are Harrah's Las Vegas, Rio, Flamingo Las Vegas, Harrah's Atlantic City, Showboat Atlantic City, Harrah's Lake Tahoe, Harvey's Lake Tahoe and Bill's Lake Tahoe. Subsequent to the closing, Paris Las Vegas and Harrah's Laughlin and their related operating assets were spun off from Harrah's Operating Company and its subsidiaries to Harrah's Entertainment, and Harrah's Lake Tahoe, Harvey's Lake Tahoe, Bill's Lake Tahoe and Showboat Atlantic City and their related operating assets were transferred to subsidiaries of Harrah's Operating Company from Harrah's Entertainment (the "Post-Close CMBS Transaction"). The properties spun off from Harrah's Operating Company and owned by Harrah's Entertainment, whether at closing or after the subsequent transfer, are collectively referred to as "the CMBS properties." We refer to the CMBS Spin-Off and the Post-Closing CMBS Transaction as the "CMBS Transactions."

Also in connection with the acquisition by affiliates of Apollo and TPG, London Clubs International Limited ("London Clubs") and its subsidiaries, with the exception of the subsidiaries related to the South Africa operations, became subsidiaries of Harrah's Operating Company ("the London Clubs Transfer"). London Clubs and its subsidiaries were previously subsidiaries of Harrah Entertainment.

The following table reconciles Income/(loss) from continuing operations, net of tax and LTM Adjusted EBITDA of Harrah's Operating for the Successor period for the nine months ended September 30, 2009; the Predecessor period from January 1, 2008 through January 27, 2008 and Successor period from January 28, 2008 through September 30, 2008, which includes the South Africa operations; and the Predecessor period from January 1, 2008 through January 27, 2008 and Successor period from January 28, 2008 through December 31, 2008:

          HARRAH'S OPERATING COMPANY, A WHOLLY OWNED SUBSIDIARY OF
                        HARRAH'S ENTERTAINMENT, INC.
                         SUPPLEMENTAL INFORMATION
        RECONCILIATION OF INCOME/(LOSS) FROM CONTINUING OPERATIONS TO
                           LTM ADJUSTED EBITDA
                                (UNAUDITED)

                   (1)
                ----------  ----------  ----------

                Successor   Predecessor  Successor
                ----------  ----------  ----------
                              Jan. 1,    Jan. 28,
                   Nine        2008        2008
                  Months      Through     Through
                Ended Sept   Jan. 27,    Sept 30,
(In millions)    30, 2009      2008        2008
                ----------  ----------  ----------
Income/(loss)
 from
 continuing
 operations,
 net of tax     $    733.9  $   (106.2) $   (414.3)
Net
 (income)/loss
 attributable
 to
 non-controlling
 interests           (11.7)       (1.4)       (1.6)
Interest
 expense, net      1,222.6        85.7     1,193.2
Provision/
 (benefit) for
 income taxes      1,480.8       (21.6)     (186.7)
Depreciation
 and
 amortization        493.6        56.7       431.7
                ----------  ----------  ----------
  EBITDA           3,919.2        13.2     1,022.3
Project opening
 costs,
 abandoned
 projects and
 development
 costs (b)             2.7         0.9        27.1
Merger and
 integration
 costs                 0.3       125.6        23.1
(Gain)/losses
 on early
 extinguishment
 of debt (c)      (3,931.4)          -       203.9
Net income
 attributable
 to
 non-
 controlling
 interests,
 net of
 distributions
 (d)                  (0.2)        0.8        (3.9)
Impairment of
 goodwill and
 other
 intangible
 assets            1,166.6           -           -
Non-cash
 expense for
 stock
 compensation
 benefits (e)          9.3         1.7         9.2
Income from
 insurance
 claims for
 hurricane
 losses (f)              -           -      (185.5)
Other
 non-recurring
 or non-cash
 items (g)            66.9         0.8        83.7
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (h)
  LTM adjusted
   EBITDA




                   (2)                                 (3)
                ----------  ----------  ----------  ----------
                 Combined   Predecessor  Successor   Combined
                ----------  ----------  ----------  ----------
                  Jan. 1,     Jan. 1,    Jan. 28,     Jan. 1,
                   2008        2008        2008        2008
                  Through     Through     Through     Through
                 Sept 30,    Jan. 27,    Dec. 31,    Dec, 31,  (1)-(2)+(3)
(In millions)      2008      2008 (a)    2008 (a)      2008        LTM
                ----------  ----------  ----------  ---------- -----------
Income/(loss)
 from
 continuing
 operations,
 net of tax     $   (520.5) $   (106.2) $ (3,390.5) $ (3,496.7) $ (2,242.3)
Net
 (income)/loss
 attributable
 to
 non-controlling
 interests            (3.0)       (1.4)       (6.4)       (7.8)      (16.5)
Interest
 expense, net      1,278.9        85.7     1,675.4     1,761.1     1,704.8
Provision/
 (benefit) for
 income taxes       (208.3)      (21.6)     (378.5)     (400.1)    1,289.0
Depreciation
 and
 amortization        488.4        56.7       597.2       653.9       659.1
                ----------  ----------  ----------  ---------- -----------
  EBITDA           1,035.5        13.2    (1,502.8)   (1,489.6)    1,394.1
Project opening
 costs,
 abandoned
 projects and
 development
 costs (b)            28.0         0.9        30.0        30.9         5.6
Merger and
 integration
 costs               148.7       125.6        24.0       149.6         1.2
(Gain)/losses
 on early
 extinguishment
 of debt (c)         203.9           -      (742.1)     (742.1)   (4,877.4)
Net income
 attributable
 to
 non-
 controlling
 interests,
 net of
 distributions
 (d)                  (3.1)        0.8        (7.2)       (6.4)       (3.5)
Impairment of
 goodwill and
 other
 intangible
 assets                  -           -     3,745.2     3,745.2     4,911.8
Non-cash
 expense for
 stock
 compensation
 benefits (e)         10.9         1.7        12.1        13.8        12.2
Income from
 insurance
 claims for
 hurricane
 losses (f)         (185.5)          -      (185.4)     (185.4)        0.1
Other
 non-recurring
 or non-cash
 items (g)            84.5         0.8       130.1       130.9       113.3
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (h)                                                         134.4
                                                                ----------
  LTM adjusted
   EBITDA                                                       $  1,691.8
                                                                ==========


(a) Includes operating results of South Africa.

(b) Represents (i) project opening costs incurred in connection with
    expansion and renovation projects at various properties;
    (ii) write-off of abandoned development projects; and
    (iii) non-recurring strategic planning and restructuring costs.

(c) Represents (i) the difference between the net book value and cash
    paid for notes exchanged and retired for cash; (ii) the difference
    between the net book value of the old notes and the fair market
    value of new notes issued; and (iii) the write-off of historical
    unamortized deferred financing costs and unamortized market value
    premiums/discounts.

(d) Represents minority owners' share of income from our majority-owned
    subsidiaries, net of cash distributions to minority owners.

(e) Represents non-cash compensation expense related to stock options.

(f) Represents non-recurring insurance recoveries related to Hurricane
    Katrina.

(g) Represents the elimination of other non-recurring or non-cash items
    such as litigation awards and settlements, severance and relocation
    costs, excess gaming taxes, gains and losses from disposal of assets,
    equity in non-consolidated subsidiaries (net of distributions) and
    one-time costs relating to new state gaming legislation.

(h) Represents the cost savings yet-to-be realized from our previously
    announced profitability improvement program.

The following tables present the condensed combined statement of operations
of Harrah's Operating Company, Inc. for the quarter and nine months ended
September 30, 2009, the quarter ended September 30, 2008, the Successor
period from January 28, 2008 through September 30, 2008, and the
Predecessor period from January 1, 2008 through January 27, 2008, taking
into consideration the CMBS Transactions and the London Clubs Transfer:

     HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                        HARRAH'S ENTERTAINMENT, INC.
                  CONDENSED COMBINED STATEMENT OF OPERATIONS
                                (SUCCESSOR)
                 FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2009
                                (UNAUDITED)

                                           HET Parent
                                           and Other
                                            Harrah's
                                         Entertainment
                                          Subsidiaries
                          Harrah's            and
(In millions)         Entertainment(a)     Accounts(b)          HOC(c)
                      ----------------  ----------------  ----------------

Revenues              $        2,282.2  $         (522.7) $        1,759.5
Property operating
 expenses                     (1,718.5)            377.3          (1,341.2)
Depreciation and
 amortization                   (175.6)             41.9            (133.7)
                      ----------------  ----------------  ----------------
  Operating profit               388.1            (103.5)            284.6

Project opening costs
 and other items                 (24.6)              7.3             (17.3)
Impairment of
 intangible assets            (1,328.6)            204.0          (1,124.6)
Income on interests
 in non-consolidated
 affiliates                       (1.2)              0.7              (0.5)
Corporate expense                (39.7)             17.1             (22.6)
Merger and
 integration costs                   -                 -                 -
Amortization of
 intangible assets               (44.2)             14.9             (29.3)
                      ----------------  ----------------  ----------------

Loss from operations          (1,050.2)            140.5            (909.7)
Interest expense, net
 of interest
 capitalized                    (444.5)             45.0            (399.5)
Losses on early
 extinguishment of
 debt                             (1.5)                -              (1.5)
Other income,
 including interest
 income                            4.1              (0.3)              3.8
                      ----------------  ----------------  ----------------

Loss before income
 taxes                        (1,492.1)            185.2          (1,306.9)
Income tax
 (provision)/benefit            (128.9)            (17.3)           (146.2)
                      ----------------  ----------------  ----------------
Loss from continuing
 operations, net of
 tax                          (1,621.0)            167.9          (1,453.1)
Discontinued
 operations, net of
 tax                              (0.1)                -              (0.1)
                      ----------------  ----------------  ----------------
Net loss                      (1,621.1)            167.9          (1,453.2)
Less: net income
 attributable to
 non-controlling
 interests                        (3.2)              1.3              (1.9)
                      ----------------  ----------------  ----------------
  Net loss
   attributable to
   Harrah's Operating
   Company, Inc.      $       (1,624.3) $          169.2  $       (1,455.1)
                      ================  ================  ================

(a) Represents the financial information of Harrah's Entertainment.

(b) Represents the removal of (i) the financial information of all
    subsidiaries of Harrah's Entertainment that are not a component of HOC,
    primarily, captive insurance companies and the CMBS properties; and
    (ii) accounts at Harrah's Entertainment.

(c) Represents the financial information of HOC.







      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
           CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                                (SUCCESSOR)
              FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2008
                                (UNAUDITED)

                                           HET Parent
                                           and Other
                                            Harrah's
                                         Entertainment
                                          Subsidiaries
                          Harrah's            and
(In millions)         Entertainment(a)     Accounts(b)          HOC(c)
                      ----------------  ----------------  ----------------

Revenues              $        2,645.9  $         (620.4) $        2,025.5
Property operating
 expenses                     (2,004.2)            443.1          (1,561.1)
Depreciation and
 amortization                   (152.0)             37.9            (114.1)
                      ----------------  ----------------  ----------------
  Operating profit               489.7            (139.4)            350.3

Project opening costs
 and other items                 (63.1)             19.9             (43.2)
Loss on interests in
 non-consolidated
 affiliates                       (2.5)              0.1              (2.4)
Corporate expense                (34.7)             16.4             (18.3)
Merger and
 integration costs                (1.0)                -              (1.0)
Amortization of
 intangible assets               (38.8)             12.2             (26.6)
                      ----------------  ----------------  ----------------

Income from
 operations                      349.6             (90.8)            258.8
Interest expense, net
 of interest
 capitalized                    (533.4)             98.9            (434.5)
Gain on early
 extinguishment of
 debt                              7.4                 -               7.4
Other income,
 including interest
 income                            7.2              (3.2)              4.0
                      ----------------  ----------------  ----------------

Loss before income
 taxes                          (169.2)              4.9            (164.3)
Income tax
 benefit/(provision)              46.0               3.6              49.6
                      ----------------  ----------------  ----------------
Loss from continuing
 operations,
 net of tax (d)                 (123.2)              8.5            (114.7)
Discontinued
 operations, net of
 tax                               0.7                 -               0.7
                      ----------------  ----------------  ----------------
Net loss (d)                    (122.5)              8.5            (114.0)
Less: net income
 attributable to
 non-controlling
 interests                        (7.2)              1.5              (5.7)
                      ----------------  ----------------  ----------------
  Net loss
   attributable to
   Harrah's Operating
   Company, Inc.      $         (129.7) $           10.0  $         (119.7)
                      ================  ================  ================

(a) Represents the financial information of Harrah's Entertainment.

(b) 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.

(c) Represents the financial information of HOC.

(d) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.








      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
                CONDENSED COMBINED STATEMENT OF OPERATIONS
                                (SUCCESSOR)
               FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2009
                                (UNAUDITED)

                                           HET Parent
                                           and Other
                                            Harrah's
                                         Entertainment
                                          Subsidiaries
                          Harrah's            and
(In millions)         Entertainment(a)     Accounts(b)          HOC(c)
                      ----------------  ----------------  ----------------

Revenues              $        6,808.3  $       (1,566.6) $        5,241.7
Property operating
 expenses                     (5,097.8)          1,120.6          (3,977.2)
Depreciation and
 amortization                   (516.8)            120.5            (396.3)
                      ----------------  ----------------  ----------------
  Operating profit             1,193.7            (325.5)            868.2

Project opening costs
 and other items                 (81.5)             28.5             (53.0)
Impairment of
 intangible assets            (1,625.7)            459.1          (1,166.6)
Income on interests
 in non-consolidated
 affiliates                       (1.3)              2.2               0.9
Corporate expense               (111.7)             55.4             (56.3)
Merger and
 integration costs                (0.3)                -              (0.3)
Amortization of
 intangible assets              (131.7)             44.7             (87.0)
                      ----------------  ----------------  ----------------

Loss from operations            (758.5)            264.4            (494.1)
Interest expense, net
 of interest
 capitalized                  (1,404.7)            159.7          (1,245.0)
Gains on early
 extinguishment of
 debt                          4,279.2            (347.8)          3,931.4
Other income,
 including interest
 income                           23.2              (0.8)             22.4
                      ----------------  ----------------  ----------------

Income/(loss) before
 income taxes                  2,139.2              75.5           2,214.7
Income tax
 (provision)/benefit          (1,590.8)            110.0          (1,480.8)
                      ----------------  ----------------  ----------------
Income/(loss) from
 continuing
 operations,
 net of tax                      548.4             185.5             733.9
Discontinued
 operations, net of
 tax                              (0.3)                -              (0.3)
                      ----------------  ----------------  ----------------
Net income/(loss)                548.1             185.5             733.6
Less: net income
 attributable to
 non-controlling
 interests                       (16.1)              4.4             (11.7)
                      ----------------  ----------------  ----------------
  Net income/(loss)
   attributable to
   Harrah's Operating
   Company, Inc.      $          532.0  $          189.9  $          721.9
                      ================  ================  ================

(a) Represents the financial information of Harrah's Entertainment.

(b) Represents the financial information of (i) all subsidiaries of
    Harrah's Entertainment that are not a component of HOC, primarily,
    captive insurance companies and the CMBS properties, and (ii) accounts
    at Harrah's Entertainment.

(c) Represents the financial information of HOC.








      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
           CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                                (SUCCESSOR)
      FOR THE PERIOD FROM JANUARY 28, 2008 THROUGH SEPTEMBER 30, 2008
                                (UNAUDITED)

                                           HET Parent
                                           and Other
                                            Harrah's
                                         Entertainment
                                          Subsidiaries
                          Harrah's            and
(In millions)         Entertainment(a)     Accounts(b)          HOC(c)
                      ----------------  ----------------  ----------------

Revenues              $        7,088.5  $       (1,723.6) $        5,364.9
Property operating
 expenses                     (5,321.6)          1,201.0          (4,120.6)
Depreciation and
 amortization                   (452.4)            112.0            (340.4)
                      ----------------  ----------------  ----------------
 Operating profit              1,314.5            (410.6)            903.9

Project opening costs
 and other items                  35.5              48.4              83.9
Loss on interests in
 non-consolidated
 affiliates                       (1.3)              0.1              (1.2)
Corporate expense                (95.9)              7.4             (88.5)
Merger and
 integration costs               (23.1)                -             (23.1)
Amortization of
 intangible assets              (119.2)             39.8             (79.4)
                      ----------------  ----------------  ----------------

Income from
 operations                    1,110.5            (314.9)            795.6
Interest expense, net
 of interest
 capitalized                  (1,469.4)            261.2          (1,208.2)
Loss on early
 extinguishment of
 debt                           (203.9)                -            (203.9)
Other income,
 including interest
 income                           18.7              (3.2)             15.5
                      ----------------  ----------------  ----------------

(Loss)/income before
 income taxes                   (544.1)            (56.9)           (601.0)
Income tax
 benefit/(provision)             147.7              39.0             186.7
                      ----------------  ----------------  ----------------

(Loss)/income from
 continuing
 operations,
 net of tax (d)                 (396.4)            (17.9)           (414.3)
Discontinued
 operations, net of
 tax                              88.4                 -              88.4
                      ----------------  ----------------  ----------------
Net (loss)/income(d)            (308.0)            (17.9)           (325.9)
Less: net income
 attributable to
 non-controlling
 interests                        (6.2)              4.6              (1.6)
                      ----------------  ----------------  ----------------
  Net (loss)/income
   attributable to
   Harrah's Operating
   Company, Inc.      $         (314.2) $          (13.3) $         (327.5)
                      ================  ================  ================

(a) Represents the financial information of Harrah's Entertainment.

(b) Represents the removal of (i) financial information of all subsidiaries
    of Harrah's Entertainment that are not a component of HOC, namely,
    captive insurance companies, the CMBS properties and South Africa
    interests; and (ii) accounts at Harrah's Entertainment.

(c) Represents the financial information of HOC.

(d) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentation.







      HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                       HARRAH'S ENTERTAINMENT, INC.
           CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                              (PREDECESSOR)
       FOR THE PERIOD FROM JANUARY 1, 2008 THROUGH JANUARY 27, 2008
                                (UNAUDITED)



                       HET Parent and
                       Other Harrah's
                       Entertainment                     London
              Harrah's  Subsidiaries            CMBS      Clubs     HOC
              Entertain-    and     Historical  Trans-    Trans-  Restruc-
(In millions)   ment(a)  Accounts(b)  HOC(c)  actions(d)  fer(e)   tured
                --------  --------  --------  --------  --------  --------
Revenues        $  760.1  $  (34.3) $  725.8  $ (182.3) $   34.0  $  577.5
Property
 operating
 expenses         (588.9)     28.5    (560.4)    126.5     (34.0)   (467.9)
Depreciation
 and
 amortization      (63.5)      1.6     (61.9)     16.0      (1.6)    (47.5)
                --------  --------  --------  --------  --------  --------
  Operating
   profit/(loss)   107.7      (4.2)    103.5     (39.8)     (1.6)     62.1

Project opening
 costs and
 other items        (5.4)      0.7      (4.7)      4.5      (0.7)     (0.9)
Income on
 interests in
 non-
 consolidated
 affiliates          0.5         -       0.5         -         -       0.5
Corporate
 expense            (8.5)        -      (8.5)     34.7         -      26.2
Merger and
 integration
 costs            (125.6)        -    (125.6)        -         -    (125.6)
Amortization of
 intangible
 assets             (5.5)      0.2      (5.3)        -      (0.2)     (5.5)
                --------  --------  --------  --------  --------  --------

(Loss)/income
 from
 operations        (36.8)     (3.3)    (40.1)     (0.6)     (2.5)    (43.2)
Interest
 expense, net
 of interest
 capitalized       (89.7)        -     (89.7)        -         -     (89.7)
Other
 income/(expense)
 including
 interest
 income              1.1      (3.3)     (2.2)      4.0       3.3       5.1
                --------  --------  --------  --------  --------  --------
(Loss)/income
 before income
 taxes            (125.4)     (6.6)   (132.0)      3.4       0.8    (127.8)
Income tax
 benefit/
 (provision)        26.0      (4.1)     21.9      (1.2)      0.9      21.6
                --------  --------  --------  --------  --------  --------
(Loss)/income
 from
 continuing
 operations,
 net of tax (f)    (99.4)    (10.7)   (110.1)      2.2       1.7    (106.2)
Discontinued
 operations,
 net of tax          0.1         -       0.1         -         -       0.1
                --------  --------  --------  --------  --------  --------
Net
 (loss)/
 income(f)         (99.3)    (10.7)   (110.0)      2.2       1.7    (106.1)
Less: net
 income
 attributable
 to
 non-
 controlling
 interests          (1.6)      0.9      (0.7)      0.2      (0.9)     (1.4)
                --------  --------  --------  --------  --------  --------
  Net
  (loss)/
  income
  attributable
  to Harrah's
  Operating
  Company, Inc. $ (100.9) $   (9.8) $ (110.7) $    2.4  $    0.8  $ (107.5)
                ========  ========  ========  ========  ========  ========

(a) Represents the financial information of Harrah's Entertainment.

(b) Represents the removal of (i) the financial information of all
    subsidiaries of Harrah's Entertainment that are not a component of HOC,
    namely, captive insurance companies and London Clubs and its
    subsidiaries; and (ii) accounts at Harrah's Entertainment.

(c) Represents the historical financial information of HOC.

(d) Reflects the removal of the operating results of the CMBS properties,
    pursuant to the CMBS Transactions in which certain properties and
    operations of HOC were spun-off into a separate borrowing structure and
    held side-by-side with HOC under Harrah's Entertainment. The operating
    expenses of HOC include unallocated costs attributable to services that
    have been performed by HOC on behalf of the CMBS properties. These
    costs are primarily related to corporate functions such as accounting,
    tax, treasury, payroll and benefits administration, risk management,
    legal, and information management and technology. The CMBS spin-off
    reflects the push-down of corporate expense of $34.7 million that was
    unallocated at January 27, 2008.  Following the Acquisition, many of
    these services will continue to be provided by HOC pursuant to a shared
    services agreement with the CMBS properties.

(e) Reflects the inclusion of the London Clubs operating results pursuant
    to the London Clubs Transfer, in which London Clubs and its
    subsidiaries became subsidiaries of HOC.

(f) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been recast to conform to the
    2009 presentations.

Contact Information

  • Contact:

    Jacqueline Peterson
    Media
    Harrah's Entertainment, Inc.
    (702) 494-4829

    Jonathan Halkyard
    Investors
    Harrah's Entertainment, Inc.
    (702) 407-6080