SOURCE: Harrah's Entertainment

Harrah's Entertainment

April 28, 2009 01:19 ET

Harrah's Entertainment Reports 2009 First-Quarter Results

-- Revenues Decline 13.3 Percent From 2008 First Quarter

-- First-Quarter Property EBITDA Declines 13.7 Percent From Prior Year

-- Harrah's Operating Company Exchange Offer Reduces Debt, Lowers Interest Expense

LAS VEGAS, NV--(Marketwire - April 28, 2009) - Harrah's Entertainment, Inc. today reported the following financial results for the 2009 first quarter:


HARRAH'S ENTERTAINMENT, INC.

Company-Wide Results

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended     Through    Through      Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------  ---------  ---------  ---------  --------
Total revenues       $ 2,254.7  $ 1,840.5  $   760.1  $ 2,600.6     (13.3)%
Income/(loss) from
 operations              285.4      437.8      (36.8)     401.0     (28.8)%
Loss from continuing
 operations, net of
 tax(a)                 (127.4)    (175.6)     (99.4)    (275.0)    (53.7)%
Property EBITDA          561.3      479.3      171.2      650.5     (13.7)%
Adjusted EBITDA (b)      547.3      454.0      172.0      626.0     (12.6)%


(a) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been restated 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. In accordance with Generally Accepted Accounting Principles (GAAP), we have separated our 2008 historical financial results in the presentations included herein between the Successor period from January 28, 2008 through March 31, 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 quarter ended March 31, 2008, because company management believes doing so provides a meaningful presentation and comparison of results.

Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) and Adjusted EBITDA are not GAAP measurements 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 Loss from continuing operations to LTM Adjusted EBITDA are attached to this release.

The company's first-quarter income from operations was $285.4 million, compared with income from operations of $401.0 million in the 2008 first quarter. The loss from continuing operations net of tax for the 2009 first quarter was $127.4 million, compared with a loss of $275.0 million in the year-ago quarter.

During the 2009 first quarter, Harrah's Operating Company, Inc., (HOC), a wholly owned subsidiary of Harrah's Entertainment, announced offers to exchange new 10 percent second-priority senior secured notes due 2018 for outstanding debt with maturity dates ranging from 2010 to 2018. In addition, HOC asked holders of certain of the old notes to eliminate or waive substantially all restrictive covenants and certain events of default contained in those notes. In conjunction with the HOC offer, Harrah's BC, Inc., another wholly owned subsidiary of Harrah's Entertainment, made a cash tender offer for certain notes of HOC due in 2015, 2016 and 2017.

On April 15, 2009, the exchange offers and tender offers described above were closed, and about $5.4 billion aggregate principal amount of old notes and interim bridge loans were exchanged for approximately $3.6 billion face value of new notes. As a result, HOC was able to reduce its overall debt by approximately $1.8 billion principal amount and decrease its annual cash interest expense by $73 million. HOC also received consent by a majority of holders of 10.75 percent Senior Notes due 2016 and 10.75 percent/11.5 percent Senior Toggle Notes due 2018 to eliminate or waive restrictive covenants and certain events of default contained in those notes. Additionally, Harrah's BC, Inc. purchased approximately $523 million principal amount of HOC's old notes, which, in conjunction with the HOC exchange and tender offers, reduced the consolidated debt of Harrah's Entertainment by approximately $2.3 billion principal amount and consolidated cash interest expense by approximately $104 million annually.

"Our first-quarter results continued to be impacted by the economic slump that has reduced consumer spending, but the improvement in our operating margins over those of the past few quarters indicates our expense-reduction efforts are paying off," said Gary Loveman, Harrah's chairman, president and chief executive officer. "The reduction of our overall debt and reduction of our interest expense resulting from exchange offers completed this month and at the end of last year were also important developments."

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 solely 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

Overall Results

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------  ---------  ---------  ---------  --------
Total revenues       $ 1,752.5  $ 1,382.9  $   572.2  $ 1,955.1     (10.4)%
Income/(loss) from
 operations              218.2      334.0      (44.8)     289.2     (24.6)%
Loss from continuing
 operations, net of
 tax(a)                 (128.8)    (180.6)    (107.7)    (288.3)    (55.3)%
Property EBITDA          418.4      340.8      107.7      448.5      (6.7)%
Adjusted EBITDA (b)      407.3      303.2      141.1      444.3      (8.3)%


(a) Due to the January 1, 2009 adoption of a recent accounting
    pronouncement, certain 2008 amounts have been restated 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 was strong at over 90 percent, first-quarter revenues and income from operations in the Las Vegas Region were lower than in the 2008 first quarter due to lower spend per visitor and weakness in the group-travel business, which led to lower average daily room rates. Cost-reduction efforts helped partially offset the impact of these factors on Property EBITDA.


HARRAH'S ENTERTAINMENT, INC.

Las Vegas Region

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    686.4 $    609.4 $    253.6 $    863.0    (20.5)%
Income from
 operations               123.8      142.9       51.9      194.8    (36.4)%
Property EBITDA           198.6      199.3       76.0      275.3    (27.9)%


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  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    305.2 $    260.5 $    118.5 $    379.0    (19.5)%
Income from
 operations                48.8       56.5       29.7       86.2    (43.4)%
Property EBITDA            78.6       76.9       38.1      115.0    (31.7)%


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


Atlantic City Region

The same factors that impacted results in the last three quarters of 2008 -- competition from gaming operations in Pennsylvania and smoking restrictions -- led to reduced visitation and customer spend per trip, resulting in declines in the Atlantic City Region during the 2009 first quarter from the year-earlier quarter.


HARRAH'S ENTERTAINMENT, INC.

Atlantic City Region

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    483.9 $    408.2 $    160.8 $    569.0    (15.0)%
Income from
 operations                37.1       59.2       18.7       77.9    (52.4)%
Property EBITDA            86.2       99.7       36.4      136.1    (36.7)%


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  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    369.8 $    320.4 $    125.8 $    446.2    (17.1)%
Income from
 operations                25.3       45.0        8.0       53.0    (52.3)%
Property EBITDA            60.0       74.1       21.9       96.0    (37.5)%


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


Louisiana/Mississippi Region

The weak economy led to lower guest volumes and revenue declines in the Louisiana/Mississippi Region, though cost-saving initiatives led to significant margin improvements and Property EBITDA approximately equal to that in the year-ago quarter. Included in first quarter 2008 income from operations 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  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    334.5 $    274.5 $    106.1 $    380.6    (12.1)%
Income from
 operations                58.3      232.6       10.1      242.7    (76.0)%
Property EBITDA            85.3       66.9       18.6       85.5     (0.2)%


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

Reduced marketing expenses and labor costs at all our properties in the Iowa/Missouri Region more than offset the first-quarter revenue decline, which was due in part to competition from a new facility in the St. Louis market.


HARRAH'S ENTERTAINMENT, INC.

Iowa/Missouri Region

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    193.6 $    143.0 $     55.8 $    198.8     (2.6)%
Income from
 operations                47.8       30.7        7.7       38.4     24.5 %
Property EBITDA            60.9       40.7       13.0       53.7     13.4 %


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

The opening of a major renovation and expansion at Horseshoe Hammond on August 8, 2008, and cost reductions at the other properties in the region led to improved Property EBITDA relative to the 2008 first-quarter results.


HARRAH'S ENTERTAINMENT, INC.

Illinois/Indiana Region

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- ---------
Total revenues       $    303.3 $    208.1 $     85.5 $    293.6       3.3%
Income from
 operations                36.4       27.2        8.7       35.9       1.4%
Property EBITDA            67.2       36.5       13.6       50.1      34.1%


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


Other Nevada Region

First-quarter results for the Other Nevada Region declined from the year-ago period due to lower spend per trip and higher promotional costs in the Reno, Lake Tahoe and Laughlin markets.


HARRAH'S ENTERTAINMENT, INC.

Other Nevada

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------- ---------- --------
Total revenues       $    114.6 $    107.7 $     38.9 $    146.6    (21.8)%
Income from
 operations                 7.6       14.1        0.5       14.6    (47.9)%
Property EBITDA            20.8       23.2        4.5       27.7    (24.9)%


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




HARRAH'S OPERATING COMPANY

Other Nevada

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------- ---------  ---------- --------
Total revenues       $     78.1 $     75.7 $    26.8  $    102.5    (23.8)%
Income/(loss) from
 operations                 1.1        8.2      (1.9)        6.3    (82.5)%
Property EBITDA             9.3       13.7       1.2        14.9    (37.6)%


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


Managed/International/Other

Improved first-quarter results were due largely to improved cost management at the company's London Clubs International properties, a strong performance at Conrad Punta del Este Resort & Casino and lower development and administrative expenses, which helped offset the impact of lower management fees arising from the effect of the economy on our managed properties.


HARRAH'S ENTERTAINMENT, INC.

Managed/International/Other

                    Successor  Successor  Predecessor
                      Period     Period     Period    Combined
                      Three     Jan. 28,    Jan. 1,     Three
                      Months      2008       2008       Months
                      Ended      Through    Through     Ended
                     Mar. 31,     Mar.     Jan. 27,   Mar. 31,   Increase/
(In millions)          2009     31, 2008     2008       2008    (Decrease)
                     ---------- ---------  ---------  ---------  --------
Total revenues       $    138.4 $    89.6  $    59.4  $   149.0      (7.1)%
Income/(loss) from
 operations                 4.9     (27.2)      (0.3)     (27.5)      N/M
Property EBITDA            42.3      13.0        9.1       22.1      91.4 %


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

Interest expense decreased in the 2009 first quarter due to lower debt levels as a result of HOC's debt exchange that was completed in December 2008 and lower rates on variable-rate debt.

For first quarter 2008, losses on extinguishments of $211.3 million related to debt retired in connection with the acquisition of the company.

For the 2009 first quarter, tax benefits were generated by operating losses at an effective rate after non-controlling interests of 35.9 percent, whereas in the year-ago quarter operating losses resulted in tax benefits at an effective rate after non-controlling interests of 23.4 percent.

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 London Clubs International family of casinos and the World Series of Poker®. 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 outcome of any legal proceedings that have been, or will be, instituted against the company related to the acquisition of the company by affiliates of TPG Capital and Apollo Management; 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; the potential difficulties in employee retention as a result of the sale of the company to affiliates of TPG Capital and Apollo Management; 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   Successor  Predecessor  Combined
                            ----------  ----------  ----------  ----------
                              Three      Jan. 28,     Jan. 1,     Jan. 1,
                              Months       2008        2008        2008
                              Ended       Through     Through     Through
                             Mar. 31,    Mar. 31,    Jan. 27,    Mar. 31,
(In millions)                  2009        2008        2008        2008
                            ----------  ----------  ----------  ----------

Revenues                    $  2,254.7  $  1,840.5  $    760.1  $  2,600.6
Property operating expenses   (1,693.4)   (1,361.2)     (588.9)   (1,950.1)
Depreciation and
 amortization                   (172.4)     (124.2)      (63.5)     (187.7)
                            ----------  ----------  ----------  ----------
  Operating profit               388.9       355.1       107.7       462.8

Corporate expense                (30.3)      (24.7)       (8.5)      (33.2)
Merger and integration
 costs                            (0.2)      (17.0)     (125.6)     (142.6)
Income on interests in
 nonconsolidated affiliates        0.2         0.7         0.5         1.2
Amortization of intangible
 assets                          (43.8)      (32.3)       (5.5)      (37.8)
Project opening costs and
 other items                     (29.4)      156.0        (5.4)      150.6
                            ----------  ----------  ----------  ----------

Income/(loss) from
 operations                      285.4       437.8       (36.8)      401.0
Interest expense, net of
 interest capitalized           (496.8)     (467.9)      (89.7)     (557.6)
Gain/(loss) on early
 extinguishments of debt           1.2      (211.3)          -      (211.3)
Other income, including
 interest income                   8.5         7.7         1.1         8.8
                            ----------  ----------  ----------  ----------

Loss from continuing
 operations, before income
 taxes                          (201.7)     (233.7)     (125.4)     (359.1)
Income tax benefit                74.3        58.1        26.0        84.1
                            ----------  ----------  ----------  ----------

Loss from continuing
 operations, net of tax (a)     (127.4)     (175.6)      (99.4)     (275.0)
Discontinued operations,
 net of tax                       (0.1)       87.3         0.1        87.4
                            ----------  ----------  ----------  ----------
  Net loss (a)                  (127.5)      (88.3)      (99.3)     (187.6)
Less: net (income)/loss
 attributable to
 non-controlling interests        (5.2)        1.4        (1.6)       (0.2)
                            ----------  ----------  ----------  ----------
Net loss attributable to
 Harrah's Entertainment,
 Inc.                       $   (132.7) $    (86.9) $   (100.9) $   (187.8)
                            ==========  ==========  ==========  ==========

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




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


                             Successor   Successor  Predecessor  Combined
                            ----------  ----------  ----------  ----------
                              Three      Jan. 28,     Jan. 1,     Jan. 1,
                              Months       2008        2008        2008
                              Ended       Through     Through     Through
                             Mar. 31,    Mar. 31,    Jan. 27,    Mar. 31,
(In millions)                  2009        2008        2008        2008
                            ----------  ----------  ----------  ----------
Revenues
  Las Vegas Region          $    686.4  $    609.4  $    253.6  $    863.0
  Atlantic City Region           483.9       408.2       160.8       569.0
  Louisiana/Mississippi
   Region                        334.5       274.5       106.1       380.6
  Iowa/Missouri Region           193.6       143.0        55.8       198.8
  Illinois/Indiana Region        303.3       208.1        85.5       293.6
  Other Nevada Region            114.6       107.7        38.9       146.6
  Managed/International/
   Other                         138.4        89.6        59.4       149.0
                            ----------  ----------  ----------  ----------
    Total Revenues          $  2,254.7  $  1,840.5  $    760.1  $  2,600.6
                            ==========  ==========  ==========  ==========

Income/(loss) from
 operations
  Las Vegas Region          $    123.8  $    142.9  $     51.9  $    194.8
  Atlantic City Region            37.1        59.2        18.7        77.9
  Louisiana/Mississippi
   Region                         58.3       232.6        10.1       242.7
  Iowa/Missouri Region            47.8        30.7         7.7        38.4
  Illinois/Indiana Region         36.4        27.2         8.7        35.9
  Other Nevada Region              7.6        14.1         0.5        14.6
  Managed/International/
   Other                           4.9       (27.2)       (0.3)      (27.5)
  Corporate Expense              (30.3)      (24.7)       (8.5)      (33.2)
  Merger and integration
   costs                          (0.2)      (17.0)     (125.6)     (142.6)
                            ----------  ----------  ----------  ----------
    Total Income/(loss)
     from operations        $    285.4  $    437.8  $    (36.8) $    401.0
                            ==========  ==========  ==========  ==========

Property EBITDA (a)
  Las Vegas Region          $    198.6  $    199.3  $     76.0  $    275.3
  Atlantic City Region            86.2        99.7        36.4       136.1
  Louisiana/Mississippi
   Region                         85.3        66.9        18.6        85.5
  Iowa/Missouri Region            60.9        40.7        13.0        53.7
  Illinois/Indiana Region         67.2        36.5        13.6        50.1
  Other Nevada Region             20.8        23.2         4.5        27.7
  Managed/International/
   Other                          42.3        13.0         9.1        22.1
                            ----------  ----------  ----------  ----------
    Total Property EBITDA   $    561.3  $    479.3  $    171.2  $    650.5
                            ==========  ==========  ==========  ==========

Project opening costs and
 other items
  Project opening costs     $     (2.0) $     (2.8) $     (0.7) $     (3.5)
  Insurance proceeds for
   hurricane losses                  -       185.4           -       185.4
  Other write-downs,
   reserves and recoveries       (27.4)      (26.6)       (4.7)      (31.3)
                            ----------  ----------  ----------  ----------
    Total Project opening
     costs and other items  $    (29.4) $    156.0  $     (5.4) $    150.6
                            ==========  ==========  ==========  ==========


(a) Property EBITDA (earnings before interest, taxes, depreciation and
    amortization) consists of Income from operations before depreciation
    and amortization, write-downs, reserves and recoveries, project opening
    costs, corporate expense, 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 Income from operations (as an indicator of our operating
    performance) or to Cash flows from operating activities (as a measure
    of liquidity) as determined in accordance with generally accepted
    accounting principles. All companies do not calculate EBITDA in the
    same manner. As a result, Property EBITDA as presented by our Company
    may not be comparable to similarly titled measures presented by other
    companies.




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


                                          Successor
                    ------------------------------------------------------
                               Three Months Ended Mar. 31, 2009
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      686.4  $      483.9  $      334.5  $      193.6
Property operating
 expenses                 (487.8)       (397.7)       (249.2)       (132.7)
                    ------------  ------------  ------------  ------------
Property EBITDA            198.6          86.2          85.3          60.9
Depreciation and
 amortization              (45.8)        (42.9)        (20.3)        (12.9)
                    ------------  ------------  ------------  ------------
Operating profit           152.8          43.3          65.0          48.0
Amortization of
 intangible assets         (19.0)         (3.8)         (5.4)            -
Income on interests
 in nonconsolidated
 affiliates                    -             -           0.2             -
Project opening
 costs and other
 items                     (10.0)         (2.4)         (1.5)         (0.2)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $      123.8  $       37.1  $       58.3  $       47.8
                    ============  ============  ============  ============


                                          Successor
                    ------------------------------------------------------
                               Three Months Ended Mar. 31, 2009
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      303.3  $      114.6  $      138.4  $    2,254.7
Property operating
 expenses                 (236.1)        (93.8)        (96.1)     (1,693.4)
                    ------------  ------------  ------------  ------------
Property EBITDA             67.2          20.8          42.3         561.3
Depreciation and
 amortization              (22.5)         (9.4)        (18.6)       (172.4)
                    ------------  ------------  ------------  ------------
Operating profit            44.7          11.4          23.7         388.9
Amortization of
 intangible assets          (0.4)         (3.5)        (11.7)        (43.8)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -           0.2
Project opening
 costs and other
 items                      (7.9)         (0.3)         (7.1)        (29.4)
Corporate expense              -             -         (30.3)        (30.3)
Merger and
 integration costs             -             -          (0.2)         (0.2)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       36.4  $        7.6  $      (25.6) $      285.4
                    ============  ============  ============  ============




                                         Combined
                    ------------------------------------------------------
                              Jan. 1, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      863.0  $      569.0  $      380.6  $      198.8
Property operating
 expenses                 (587.7)       (432.9)       (295.1)       (145.1)
                    ------------  ------------  ------------  ------------
Property EBITDA            275.3         136.1          85.5          53.7
Depreciation and
 amortization              (53.3)        (49.7)        (23.6)        (14.8)
                    ------------  ------------  ------------  ------------
Operating profit           222.0          86.4          61.9          38.9
Amortization of
 intangible assets         (14.2)         (6.4)         (5.1)         (0.4)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                     (13.0)         (2.1)        185.9          (0.1)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $      194.8  $       77.9  $      242.7  $       38.4
                    ============  ============  ============  ============


                                           Combined
                    ------------------------------------------------------
                              Jan. 1, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      293.6  $      146.6  $      149.0  $    2,600.6
Property operating
 expenses                 (243.5)       (118.9)       (126.9)     (1,950.1)
                    ------------  ------------  ------------  ------------
Property EBITDA             50.1          27.7          22.1         650.5
Depreciation and
 amortization              (12.7)        (10.5)        (23.1)       (187.7)
                    ------------  ------------  ------------  ------------
Operating profit            37.4          17.2          (1.0)        462.8
Amortization of
 intangible assets          (1.0)         (2.6)         (8.1)        (37.8)
Income on interests
 in nonconsolidated
 affiliates                    -             -           1.2           1.2
Project opening
 costs and other
 items                      (0.5)            -         (19.6)        150.6
Corporate expense              -             -         (33.2)        (33.2)
Merger and
 integration costs             -             -        (142.6)       (142.6)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       35.9  $       14.6  $     (203.3) $      401.0
                    ============  ============  ============  ============


* Total Income from operations as reported on this schedule corresponds
  with the amounts reported for the respective periods on our CONSOLIDATED
  SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the
  additional income and expenses recorded in the determination of Net loss
  attributable to Harrah's Entertainment, Inc.




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

                                          Successor
                    ------------------------------------------------------
                              Jan. 28, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      609.4  $      408.2  $      274.5  $      143.0
Property operating
 expenses                 (410.1)       (308.5)       (207.6)       (102.3)
                    ------------  ------------  ------------  ------------
Property EBITDA            199.3          99.7          66.9          40.7
Depreciation and
 amortization              (34.6)        (34.0)        (15.0)         (9.7)
                    ------------  ------------  ------------  ------------
Operating profit           164.7          65.7          51.9          31.0
Amortization of
 intangible assets         (13.2)         (4.5)         (4.6)         (0.2)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                      (8.6)         (2.0)        185.3          (0.1)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $      142.9  $       59.2  $      232.6  $       30.7
                    ============  ============  ============  ============


                                          Successor
                    ------------------------------------------------------
                              Jan. 28, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      208.1  $      107.7  $       89.6  $    1,840.5
Property operating
 expenses                 (171.6)        (84.5)        (76.6)     (1,361.2)
                    ------------  ------------  ------------  ------------
Property EBITDA             36.5          23.2          13.0         479.3
Depreciation and
 amortization               (8.4)         (6.6)        (15.9)       (124.2)
                    ------------  ------------  ------------  ------------
Operating profit            28.1          16.6          (2.9)        355.1
Amortization of
 intangible assets          (0.4)         (2.5)         (6.9)        (32.3)
Income on interests
 in nonconsolidated
 affiliates                    -             -           0.7           0.7
Project opening
 costs and other
 items                      (0.5)            -         (18.1)        156.0
Corporate expense              -             -         (24.7)        (24.7)
Merger and
 integration costs             -             -         (17.0)        (17.0)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       27.2  $       14.1  $      (68.9) $      437.8
                    ============  ============  ============  ============




                                         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
Amortization of
 intangible assets          (1.0)         (1.9)         (0.5)         (0.2)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                      (4.4)         (0.1)          0.6             -
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   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
Amortization of
 intangible assets          (0.6)         (0.1)         (1.2)         (5.5)
Income on interests
 in nonconsolidated
 affiliates                    -             -           0.5           0.5
Project opening
 costs and other
 items                         -             -          (1.5)         (5.4)
Corporate expense              -             -          (8.5)         (8.5)
Merger and
 integration costs             -             -        (125.6)       (125.6)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $        8.7  $        0.5  $     (134.4) $      (36.8)
                    ============  ============  ============  ============


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




                     HARRAH'S ENTERTAINMENT, INC.
                    SUPPLEMENTAL INFORMATION
         RECONCILIATION OF 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 and senior toggle notes, the interim
loan agreement and/or our new senior 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 Loss from continuing operations, net of
tax and LTM Adjusted EBITDA of Harrah's Entertainment, Inc. for the
Successor period for the three months ended March 31, 2009, the
Predecessor period from January 1, 2008 through January 27, 2008, the
Successor period from January 28, 2008 through March 31, 2008 and the
Successor period from January 28, 2008 through December 31, 2008.


                     (1)                                          (2)
                -------------  -------------  -------------  -------------
                  Successor     Predecessor     Successor      Combined
                -------------  -------------  -------------  -------------
                Three Months   Jan. 1, 2008   Jan. 28, 2008  Jan. 1, 2008
                  Ended Mar.    Through Jan.   Through Mar.   Through Mar.
(In millions)     31, 2009       27, 2008       31, 2008       31, 2008
                -------------  -------------  -------------  -------------
Loss from
 continuing
 operations,
 net of tax     $      (127.4) $       (99.4) $      (175.6) $      (275.0)
Net
 (income)/loss
 attributable
 to
 non-controlling
 interests               (5.2)          (1.6)           1.4           (0.2)
Interest
 expense, net           488.3           89.7          460.8          550.5
Benefit for
 income taxes           (74.3)         (26.0)         (58.1)         (84.1)
Depreciation
 and
 amortization           219.6           72.7          159.9          232.6
                -------------  -------------  -------------  -------------
  EBITDA                501.0           35.4          388.4          423.8
Project opening
 costs,
 abandoned
 projects and
 development
 costs (b)                2.0            0.9            2.7            3.6
Merger and
 integration
 costs                    0.2          125.6           17.0          142.6
(Gain)/losses
 on early
 extinguishment
 of debt (c)             (1.2)             -          211.3          211.3
Net income
 attributable
 to
 non-controlling
 interests,
 net of
 distributions
 (d)                      2.3            1.0           (2.2)          (1.2)
Impairment of
 goodwill,
 intangible
 assets and
 investment
 securities                 -              -              -              -
Non-cash
 expense for
 stock
 compensation
 benefits (e)             4.1            2.4            1.6            4.0
Income from
 insurance
 claims for
 hurricane
 losses (f)                 -              -         (185.4)        (185.4)
Other
 non-recurring
 or non-cash
 items (g)               38.9            6.7           20.6           27.3
Pro forma
 adjustment for
 acquired, new
 or disposed
 properties (h)
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (i)
  LTM adjusted
   EBITDA


                                                   (3)
                -------------  -------------  -------------
                 Predecessor     Successor      Combined
                -------------  -------------  -------------
                Jan. 1, 2008   Jan. 28, 2008  Jan. 1, 2008
                Through Jan.   Through Dec.   Through Dec.    (1)-(2)+(3)
(In millions)     27, 2008     31, 2008 (a)   31, 2008 (a)        LTM
                -------------  -------------  -------------  -------------
Loss from
 continuing
 operations,
 net of tax     $       (99.4) $    (5,174.7) $    (5,274.1) $    (5,126.5)
Net
 (income)/loss
 attributable
 to
 non-controlling
 interests               (1.6)         (12.0)         (13.6)         (18.6)
Interest
 expense, net            89.7        2,041.2        2,130.9        2,068.7
Benefit for
 income taxes           (26.0)        (360.4)        (386.4)        (376.6)
Depreciation
 and
 amortization            72.7          805.2          877.9          864.9
                -------------  -------------  -------------  -------------
  EBITDA                 35.4       (2,700.7)      (2,665.3)      (2,588.1)
Project opening
 costs,
 abandoned
 projects and
 development
 costs (b)                0.9           31.6           32.5           30.9
Merger and
 integration
 costs                  125.6           24.0          149.6            7.2
(Gain)/losses
 on early
 extinguishment
 of debt (c)                -         (742.1)        (742.1)        (954.6)
Net income
 attributable
 to
 non-controlling
 interests,
 net of
 distributions
 (d)                      1.0           (7.4)          (6.4)          (2.9)
Impairment of
 goodwill,
 intangible
 assets and
 investment
 securities                 -        5,489.6        5,489.6        5,489.6
Non-cash
 expense for
 stock
 compensation
 benefits (e)             2.4           16.3           18.7           18.8
Income from
 insurance
 claims for
 hurricane
 losses (f)                 -         (185.4)        (185.4)             -
Other
 non-recurring
 or non-cash
 items (g)                6.7          249.9          256.6          268.2
Pro forma
 adjustment for
 acquired, new
 or disposed
 properties (h)                                                        5.0
Pro forma
 adjustment for
 yet-to-be
 realized cost
 savings (i)                                                         428.8
                                                             -------------
  LTM adjusted
   EBITDA                                                    $     2,702.9
                                                             =============


(a)  2008 includes the impairment of goodwill and intangible assets.

(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 and 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 full period estimated impact of newly completed
     construction projects.

(i)  Represents the cost savings 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 INCOME FROM OPERATIONS
                              (UNAUDITED)


                                          Successor
                    ------------------------------------------------------
                               Three Months Ended Mar. 31, 2009
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      305.2  $      369.8  $      334.5  $      193.6
Property operating
 expenses                 (226.6)       (309.8)       (249.2)       (132.7)
                    ------------  ------------  ------------  ------------
Property EBITDA             78.6          60.0          85.3          60.9
Depreciation and
 amortization              (20.6)        (31.1)        (20.3)        (12.9)
                    ------------  ------------  ------------  ------------
Operating profit            58.0          28.9          65.0          48.0
Amortization of
 intangible assets          (8.1)         (2.7)         (5.4)            -
Income on interests
 in nonconsolidated
 affiliates                    -           0.7           0.2             -
Project opening
 costs and other
 items                      (1.1)         (1.6)         (1.5)         (0.2)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income from
   operations*      $       48.8  $       25.3  $       58.3  $       47.8
                    ============  ============  ============  ============


                                          Successor
                    ------------------------------------------------------
                               Three Months Ended Mar. 31, 2009
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      303.3  $       78.1  $      168.0  $    1,752.5
Property operating
 expenses                 (236.1)        (68.8)       (110.9)     (1,334.1)
                    ------------  ------------  ------------  ------------
Property EBITDA             67.2           9.3          57.1         418.4
Depreciation and
 amortization              (22.5)         (7.3)        (19.3)       (134.0)
                    ------------  ------------  ------------  ------------
Operating profit            44.7           2.0          37.8         284.4
Amortization of
 intangible assets          (0.4)         (0.6)        (11.7)        (28.9)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -           0.9
Project opening
 costs and other
 items                      (7.9)         (0.3)         (7.1)        (19.7)
Corporate expense              -             -         (18.3)        (18.3)
Merger and
 integration costs             -             -          (0.2)         (0.2)
                    ------------  ------------  ------------  ------------
  Income from
   operations*      $       36.4  $        1.1  $        0.5  $      218.2
                    ============  ============  ============  ============




                                           Combined
                    ------------------------------------------------------
                              Jan. 1, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      379.0  $      446.2  $      380.6  $      198.8
Property operating
 expenses                 (264.0)       (350.2)       (295.1)       (145.1)
                    ------------  ------------  ------------  ------------
Property EBITDA            115.0          96.0          85.5          53.7
Depreciation and
 amortization              (22.2)        (37.0)        (23.6)        (14.8)
                    ------------  ------------  ------------  ------------
Operating profit            92.8          59.0          61.9          38.9
Amortization of
 intangible assets          (6.6)         (4.4)         (5.1)         (0.4)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                         -          (1.6)        185.9          (0.1)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       86.2  $       53.0  $      242.7  $       38.4
                    ============  ============  ============  ============


                                           Combined
                    ------------------------------------------------------
                              Jan. 1, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      293.6  $      102.5  $      154.4  $    1,955.1
Property operating
 expenses                 (243.5)        (87.6)       (121.1)     (1,506.6)
                    ------------  ------------  ------------  ------------
Property EBITDA             50.1          14.9          33.3         448.5
Depreciation and
 amortization              (12.7)         (8.0)        (22.3)       (140.6)
                    ------------  ------------  ------------  ------------
Operating profit            37.4           6.9          11.0         307.9
Amortization of
 intangible assets          (1.0)         (0.6)         (8.1)        (26.2)
Income on interests
 in nonconsolidated
 affiliates                    -             -           1.2           1.2
Project opening
 costs and other
 items                      (0.5)            -         (19.5)        164.2
Corporate expense              -             -         (15.3)        (15.3)
Merger and
 integration costs             -             -        (142.6)       (142.6)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       35.9  $        6.3  $     (173.3) $      289.2
                    ============  ============  ============  ============


* Total Income from operations as reported on this schedule corresponds
  with the amounts reported for the respective periods on our CONSOLIDATED
  SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for
  the additional income and expenses recorded in the determination of Net
  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 INCOME FROM OPERATIONS
                              (UNAUDITED)


                                          Successor
                    ------------------------------------------------------
                              Jan. 28, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                        Las         Atlantic     Louisiana/       Iowa/
                        Vegas         City      Mississippi     Missouri
(In millions)          Region        Region        Region        Region
                    ------------  ------------  ------------  ------------
Revenues            $      260.5  $      320.4  $      274.5  $      143.0
Property operating
 expenses                 (183.6)       (246.3)       (207.6)       (102.3)
                    ------------  ------------  ------------  ------------
Property EBITDA             76.9          74.1          66.9          40.7
Depreciation and
 amortization              (14.8)        (25.1)        (15.0)         (9.7)
                    ------------  ------------  ------------  ------------
Operating profit            62.1          49.0          51.9          31.0
Amortization of
 intangible assets          (5.6)         (2.5)         (4.6)         (0.2)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                         -          (1.5)        185.3          (0.1)
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       56.5  $       45.0  $      232.6  $       30.7
                    ============  ============  ============  ============


                                          Successor
                    ------------------------------------------------------
                              Jan. 28, 2008 Through Mar. 31, 2008
                    ------------------------------------------------------
                      Illinois/       Other
                      Indiana        Nevada
(In millions)          Region        Region         Other         Total
                    ------------  ------------  ------------  ------------
Revenues            $      208.1  $       75.7  $      100.7  $    1,382.9
Property operating
 expenses                 (171.6)        (62.0)        (68.7)     (1,042.1)
                    ------------  ------------  ------------  ------------
Property EBITDA             36.5          13.7          32.0         340.8
Depreciation and
 amortization               (8.4)         (5.0)        (15.4)        (93.4)
                    ------------  ------------  ------------  ------------
Operating profit            28.1           8.7          16.6         247.4
Amortization of
 intangible assets          (0.4)         (0.5)         (6.9)        (20.7)
Income on interests
 in nonconsolidated
 affiliates                    -             -           0.7           0.7
Project opening
 costs and other
 items                      (0.5)            -         (18.1)        165.1
Corporate expense              -             -         (41.5)        (41.5)
Merger and
 integration costs             -             -         (17.0)        (17.0)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       27.2  $        8.2  $      (66.2) $      334.0
                    ============  ============  ============  ============




                                          Predecessor
                    ------------------------------------------------------
                              Jan. 1, 2008 Through Jan. 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
Amortization of
 intangible assets          (1.0)         (1.9)         (0.5)         (0.2)
Income on interests
 in nonconsolidated
 affiliates                    -             -             -             -
Project opening
 costs and other
 items                         -          (0.1)          0.6             -
Corporate expense              -             -             -             -
Merger and
 integration costs             -             -             -             -
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $       29.7  $        8.0  $       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  $       26.8  $       53.7  $      572.2
Property operating
 expenses                  (71.9)        (25.6)        (52.4)       (464.5)
                    ------------  ------------  ------------  ------------
Property EBITDA             13.6           1.2           1.3         107.7
Depreciation and
 amortization               (4.3)         (3.0)         (6.9)        (47.2)
                    ------------  ------------  ------------  ------------
Operating profit             9.3          (1.8)         (5.6)         60.5
Amortization of
 intangible assets          (0.6)         (0.1)         (1.2)         (5.5)
Income on interests
 in nonconsolidated
 affiliates                    -             -           0.5           0.5
Project opening
 costs and other
 items                         -             -          (1.4)         (0.9)
Corporate expense              -             -          26.2          26.2
Merger and
 integration costs             -             -        (125.6)       (125.6)
                    ------------  ------------  ------------  ------------
  Income/(loss)
   from operations* $        8.7  $       (1.9) $     (107.1) $      (44.8)
                    ============  ============  ============  ============


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




        HARRAH'S OPERATING COMPANY, A WHOLLY OWNED SUBSIDIARY OF
                   HARRAH'S ENTERTAINMENT, INC.
                     SUPPLEMENTAL INFORMATION
                  CALCULATION OF ADJUSTED EBITDA
                            (UNAUDITED)

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 and senior toggle notes, the interim loan agreement and/or our new senior credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting 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 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, Harveys Lake Tahoe and Bill's Lake Tahoe. Subsequent to the closing and subject to regulatory approval, Paris Las Vegas and Harrah's Laughlin and their related operating assets will be spun off from Harrah's Operating Company and its subsidiaries to Harrah's Entertainment, and Harrah's Lake Tahoe, Harveys Lake Tahoe, Bill's Lake Tahoe and Showboat Atlantic City and their related operating assets will be 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, will collectively be 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.

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 and senior toggle notes, the interim loan agreement and/or our new senior 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 Loss from continuing operations, net of tax and LTM Adjusted EBITDA of Harrah's Operating for the Successor period for the three months ended March 31, 2009; the Predecessor period from January 1, 2008 through January 27, 2008 and Successor period from January 28, 2008 through March 31, 2008, which excludes 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, which includes the South Africa operations:



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


                        (1)                                       (2)
                    ------------  ------------  ------------  ------------
                      Successor   Predecessor     Successor     Combined
                    ------------  ------------  ------------  ------------
                                                  Jan. 28,
                    Three months  Jan. 1, 2008  2008 Through  Jan. 1, 2008
                     ended Mar.   Through Jan.    Mar. 31,    Through Mar.
(In millions)         31, 2009      27, 2008        2008        31, 2008
                    ------------  ------------  ------------  ------------
Loss from
 continuing
 operations, net of
 tax                $     (128.8) $     (107.7) $     (180.6) $     (288.3)
Net (income)/loss
 attributable to
 non-controlling
 interests                  (3.9)         (1.4)          2.7           1.3
Interest expense,
 net                       422.1          85.7         375.8         461.5
Benefit for income
 taxes                     (73.9)        (21.7)        (71.9)        (93.6)
Depreciation and
 amortization              166.3          56.4         117.5         173.9
                    ------------  ------------  ------------  ------------
  EBITDA                   381.8          11.3         243.5         254.8
Project opening
 costs, abandoned
 projects and
 development costs
 (c)                         1.8           0.9           2.2           3.1

Merger and
 integration costs           0.2         125.6          17.0         142.6

(Gain)/losses on
 early
 extinguishment of
 debt (d)                   (1.2)            -         211.3         211.3
Net income
 attributable to
 non-controlling
 interests, net of
 distributions (e)           1.7           0.8          (2.7)         (1.9)
Impairment of
 goodwill,
 intangible assets
 and investment
 securities                    -             -             -             -
Non-cash expense
 for stock
 compensation
 benefits (f)                3.1           1.7           1.1           2.8
Income from
 insurance claims
 for hurricane
 losses (g)                    -             -        (185.4)       (185.4)
Other non-recurring
 or non-cash items
 (h)                        19.9           0.8          16.2          17.0
Pro forma
 adjustment for
 acquired, new or
 disposed
 properties (i)
Pro forma
 adjustment for
 yet-to-be realized
 cost savings (j)
  LTM adjusted
   EBITDA


                                                    (3)
                    ------------  ------------  ------------
                    Predecessor     Successor     Combined
                    ------------  ------------  ------------
                                    Jan. 28,
                    Jan. 1, 2008  2008 Through  Jan. 1, 2008
                    Through Jan.    Dec. 31,    Through Dec.   (1)-(2)+(3)
(In millions)       27, 2008 (j)  2008 (a) (b)  31, 2008 (b)      LTM
                    ------------  ------------  ------------  ------------
Loss from
 continuing
 operations, net of
 tax                $     (106.2) $   (3,390.5) $   (3,496.7) $   (3,337.2)
Net (income)/loss
 attributable to
 non-controlling
 interests                  (1.4)         (6.4)         (7.8)        (13.0)
Interest expense,
 net                        85.7       1,675.4       1,761.1       1,721.7
Benefit for income
 taxes                     (21.6)       (378.5)       (400.1)       (380.4)
Depreciation and
 amortization               56.7         597.2         653.9         646.3
                    ------------  ------------  ------------  ------------
  EBITDA                    13.2      (1,502.8)     (1,489.6)     (1,362.6)
Project opening
 costs, abandoned
 projects and
 development costs
 (c)                         0.9          30.0          30.9          29.6

Merger and
 integration costs         125.6          24.0         149.6           7.2

(Gain)/losses on
 early
 extinguishment of
 debt (d)                      -        (742.1)       (742.1)       (954.6)
Net income
 attributable to
 non-controlling
 interests, net of
 distributions (e)           0.8          (7.2)         (6.4)         (2.8)
Impairment of
 goodwill,
 intangible assets
 and investment
 securities                    -       3,745.2       3,745.2       3,745.2
Non-cash expense
 for stock
 compensation
 benefits (f)                1.7          12.1          13.8          14.1
Income from
 insurance claims
 for hurricane
 losses (g)                    -        (185.4)       (185.4)            -
Other non-recurring
 or non-cash items
 (h)                         0.8         130.1         130.9         133.8
Pro forma
 adjustment for
 acquired, new or
 disposed
 properties (i)                                                        5.0
Pro forma
 adjustment for
 yet-to-be realized
 cost savings (j)                                                    308.7
                                                              ------------
  LTM adjusted
   EBITDA                                                     $    1,923.6
                                                              ============


(a)  Includes operating results of South Africa.

(b)  2008 includes the impairment of goodwill and intangible assets.

(c)  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.

(d)  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.

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

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

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

(h)  Represents the elimination of other non-recurring and 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.

(i)  Represents the full period estimated impact of newly completed
     construction projects.

(j)  Represents the cost savings 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 three months
ended March 31, 2009, the Successor period from January 28, 2008
through March 28, 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 MAR. 31, 2009
                                (UNAUDITED)


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

Revenues                       $     2,254.7  $      (502.2) $     1,752.5
Property operating expenses         (1,693.4)         359.3       (1,334.1)
Depreciation and amortization         (172.4)          38.4         (134.0)
                               -------------  -------------  -------------
 Operating profit                      388.9         (104.5)         284.4

Corporate expense                      (30.3)          12.0          (18.3)
Merger and integration costs            (0.2)             -           (0.2)
Income on interests in
 nonconsolidated affiliates              0.2            0.7            0.9
Amortization of intangible
 assets                                (43.8)          14.9          (28.9)
Project opening costs and
 other items                           (29.4)           9.7          (19.7)
                               -------------  -------------  -------------

Income from operations                 285.4          (67.2)         218.2
Interest expense, net of
 interest capitalized                 (496.8)          66.5         (430.3)
Gain on early extinguishment
 of debt                                 1.2              -            1.2
Other income, including
 interest income                         8.5           (0.3)           8.2
                               -------------  -------------  -------------

(Loss)/income before income
 taxes                                (201.7)          (1.0)        (202.7)
Income tax benefit                      74.3           (0.4)          73.9
                               -------------  -------------  -------------
(Loss)/income from continuing
 operations, net of tax               (127.4)          (1.4)        (128.8)
Discontinued operations, net
 of tax                                 (0.1)             -           (0.1)
                               -------------  -------------  -------------
Net (loss)/income                     (127.5)          (1.4)        (128.9)
Less: net income attributable
 to non-controlling interests           (5.2)           1.3           (3.9)
                               -------------  -------------  -------------
  Net loss attributable to
   Harrah's Operating Company,
   Inc                         $      (132.7) $        (0.1) $      (132.8)
                               =============  =============  =============


(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 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 COMBINED STATEMENT OF OPERATIONS
                                 (SUCCESSOR)
           FOR THE PERIOD FROM JAN. 28, 2008 THROUGH MAR. 31, 2008
                                 (UNAUDITED)


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

Revenues                       $     1,840.5  $      (457.6) $     1,382.9
Property operating expenses         (1,361.2)         319.1       (1,042.1)
Depreciation and amortization         (124.2)          30.8          (93.4)
                               -------------  -------------  -------------
 Operating profit                      355.1         (107.7)         247.4

Corporate expense                      (24.7)         (16.8)         (41.5)
Merger and integration costs           (17.0)             -          (17.0)
Loss on interests in
 nonconsolidated affiliates              0.7              -            0.7
Amortization of intangible
 assets                                (32.3)          11.6          (20.7)
Project opening costs and
 other items                           156.0            9.1          165.1
                               -------------  -------------  -------------

Income from operations                 437.8         (103.8)         334.0
Interest expense, net of
 interest capitalized                 (467.9)          89.3         (378.6)
Losses on early extinguishment
 of debt                              (211.3)             -         (211.3)
Other income, including
 interest income                         7.7           (4.3)           3.4
                               -------------  -------------  -------------

(Loss)/income before income
 taxes                                (233.7)         (18.8)        (252.5)
Income tax benefit/(provision)          58.1           13.8           71.9
                               -------------  -------------  -------------
(Loss)/income from continuing
 operations, net of   tax (d)         (175.6)          (5.0)        (180.6)
Discontinued operations, net
 of tax                                 87.3              -           87.3
                               -------------  -------------  -------------
Net (loss)/income (d)                  (88.3)          (5.0)         (93.3)
Less: net loss/(income)
 attributable to
 non-controlling interests               1.4            1.3            2.7
                               -------------  -------------  -------------
  Net (loss)/income
   attributable to Harrah's
   Operating Company, Inc      $       (86.9) $        (3.7) $       (90.6)
                               =============  =============  =============


(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 restated 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
                        (PREDECESSOR)
           FOR THE PERIOD FROM JAN. 1, 2008 THROUGH JAN. 27, 2008
                         (UNAUDITED)


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

Revenues                       $       760.1  $       (34.3) $       725.8
Property operating expenses           (588.9)          28.5         (560.4)
Depreciation and amortization          (63.5)           1.6          (61.9)
                               -------------  -------------  -------------
  Operating profit/(loss)              107.7           (4.2)         103.5

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

(Loss)/income from operations          (36.8)          (3.3)         (40.1)
Interest expense, net of
 interest capitalized                  (89.7)             -          (89.7)
Other income/(expense)
 including interest income               1.1           (3.3)          (2.2)
                               -------------  -------------  -------------
(Loss)/income before income
 taxes                                (125.4)          (6.6)        (132.0)
Income tax benefit                      26.0           (4.1)          21.9
                               -------------  -------------  -------------
(Loss)/income from continuing
 operations, net of tax (f)            (99.4)         (10.7)        (110.1)
Discontinued operations, net
 of tax                                  0.1              -            0.1
                               -------------  -------------  -------------
Net (loss)/income(f)                   (99.3)         (10.7)        (110.0)
Less: net income attributable
 to non-controlling interests           (1.6)           0.9           (0.7)
                               -------------  -------------  -------------
  Net (loss)/income
   attributable to Harrah's
   Operating Company, Inc.     $      (100.9) $        (9.8) $      (110.7)
                               =============  =============  =============


                                   CMBS
                               Transactions   London Clubs        HOC
(In millions)                       (d)        Transfer(e)   Restructured
                               -------------  -------------  -------------

Revenues                       $      (182.3) $        28.7  $       572.2
Property operating expenses            126.5          (30.6)        (464.5)
Depreciation and amortization           16.0           (1.3)         (47.2)
                               -------------  -------------  -------------
  Operating profit/(loss)              (39.8)          (3.2)          60.5

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

(Loss)/income from operations           (0.6)          (4.1)         (44.8)
Interest expense, net of
 interest capitalized                      -            0.2          (89.5)
Other income/(expense)
 including interest income               4.0            3.1            4.9
                               -------------  -------------  -------------
(Loss)/income before income
 taxes                                   3.4           (0.8)        (129.4)
Income tax benefit                      (1.2)           1.0           21.7
                               -------------  -------------  -------------
(Loss)/income from continuing
 operations, net of tax (f)              2.2            0.2         (107.7)
Discontinued operations, net
 of tax                                    -              -            0.1
                               -------------  -------------  -------------
Net (loss)/income(f)                     2.2            0.2         (107.6)
Less: net income attributable
 to non-controlling interests            0.2           (0.9)          (1.4)
                               -------------  -------------  -------------
  Net (loss)/income
   attributable to Harrah's
   Operating Company, Inc      $         2.4  $        (0.7) $      (109.0)
                               =============  =============  =============


(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 restated to conform to
    the 2009 presentations.

Contact Information

  • Contact:

    Gary Thompson
    Media
    Harrah's Entertainment, Inc.
    (702) 407-6529

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