SOURCE: Harrah's Entertainment

Harrah's Entertainment

February 25, 2010 07:00 ET

Harrah's Entertainment Reports Results for 2009 Fourth Quarter, Full-Year

-- Revenues Decline 7.9 Percent From 2008 Fourth Quarter

-- Fourth-Quarter Property EBITDA Declines 7.3 Percent

LAS VEGAS, NV--(Marketwire - February 25, 2010) - Harrah's Entertainment, Inc. today reported the following financial results for the 2009 fourth quarter and full year:


HARRAH'S ENTERTAINMENT, INC.

Company-wide Results

                                         Fourth Quarter         Percent
                                    ========================   Increase/
(In millions)                           2009         2008     (Decrease)
                                    ===========  ===========  ==========
Net revenues                        $   2,099.1  $   2,278.4        (7.9)%
Income/(loss) from operations             150.7     (5,348.0)        N/M(c)
Impairment of goodwill and other
 non-amortizing intangible assets         (12.3)    (5,489.6)        N/M
Income from operations, before
 impairment                               163.0        141.6        15.1 %
Income/(loss) from continuing
 operations, net of tax (a)               298.3     (4,778.2)        N/M
Property EBITDA                           443.1        478.0        (7.3)%
Adjusted EBITDA (b)                       418.6        453.6        (7.7)%


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


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


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



                    Successor         Predecessor
            ========================  ===========
                           Jan. 28,     Jan. 1,
                             2008         2008
                            Through      Through     Combined
(In           Full Year     Dec. 31,     Jan. 27,   Full Year  Increase/
 millions)      2009         2008         2008         2008     (Decrease)
            ===========  ===========  ===========  ===========  =========
Net
 revenues   $   8,907.4  $   9,366.9  $     760.1  $  10,127.0      (12.0)%
Loss from
 operations      (607.8)    (4,237.5)       (36.8)    (4,274.3)      85.8%
Impairment
 of
 goodwill
 and other
 non-
 amortizing
 intangible
 assets        (1,638.0)    (5,489.6)           -     (5,489.6)       N/M
Income/
 (loss) from
 operations
 before
 impairment     1,030.2      1,252.1        (36.8)     1,215.3      (15.2)%
Income/
 (loss) from
 continuing
 operations,
 net of
 tax              846.4     (5,174.7)       (99.4)    (5,274.1)       N/M
Property
 EBITDA         2,153.6      2,244.9        171.2      2,416.1      (10.9)%
Adjusted
 EBITDA (a)     2,070.7      2,183.8        172.0      2,355.8      (12.1)%

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


On January 28, 2008, Harrah's Entertainment was acquired by affiliates of Apollo Global Management, LLC and TPG Capital, LP. Accordingly, we have separated our 2008 historical financial results in the presentations included herein between the Successor period from January 28, 2008, through December 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 year ended December 31, 2008, because company management believes doing so provides a meaningful presentation and a more appropriate comparison to 2009 results.

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

The company's 2009 fourth-quarter revenues fell 7.9 percent to $2,099.1 million from $2,278.4 million in the 2008 fourth quarter, primarily due to the impact of the recession on customers' discretionary spending and reduced aggregate demand, which impacted average daily room rates. Income from operations was $150.7 million, compared with a loss from operations of $5,348.0 million in the 2008 fourth quarter. Included in the fourth-quarter 2009 income from operations was a charge of $12.3 million for impairment of non-amortizing intangible assets. Included in the fourth-quarter 2008 loss from operations were $5,489.6 million of charges for impairments of goodwill and other non-amortizing intangible assets. The income from continuing operations, net of tax, for the 2009 fourth quarter was $298.3 million, compared with a loss of $4,778.2 million in the year-ago quarter.

Revenues for the full year of 2009 declined 12.0 percent to $8,907.4 million from $10,127.0 million in the full year of 2008. The loss from operations was $607.8 million in the 2009 full year, compared with a loss from operations of $4,274.3 million in 2008. Income from continuing operations, net of tax, for the full year of 2009 was $846.4 million, compared with loss from continuing operations, net of tax, of $5,274.1 million in 2008. Income from continuing operations, net of tax, for the full year 2009, includes i) impairment charges for goodwill and non-amortizing intangible assets totaling $1,638.0 million ($1,559.6 million net of taxes); and ii) gains related to the early extinguishment of debt of $4,965.5 million ($3,006.5 million net of taxes). Loss from continuing operations, net of tax, for the full year 2008, included impairment charges for goodwill and non-amortizing intangible assets totaling $5,489.6 million ($5,025.6 million net of taxes).

During the 2009 fourth quarter, Harrah's wholly owned subsidiary Harrah's Operating Company, Inc. (HOC) borrowed $1 billion in incremental term loans under its senior secured credit facilities and used a majority of the net proceeds to repay a portion of indebtedness under the Company's secured credit facilities. Also during the 2009 fourth quarter, Harrah's Entertainment purchased $948 million face value of outstanding debt related to our real estate loans for approximately $237 million, recognizing a pre-tax gain on this transaction of $688.1 million, net of transaction costs.

On January 16, 2010, Harrah's assumed management of the 2,500-room hotel at the Planet Hollywood Resort & Casino on the Las Vegas Strip. On February 18, 2010, the Nevada Gaming Commission granted final approval for Harrah's to assume ownership and management of the resort's casino and related facilities; the transaction closed February 19. Harrah's pursued the Planet Hollywood deal because of the property's proximity to Harrah's other Strip resorts, its recent upgrades and its strong brand name.

"The Planet Hollywood transaction added a new brand to our product offering in Las Vegas on attractive terms," said Gary Loveman, Harrah's chairman, president and chief executive officer. "We believe implementation of our operations-management and guest-service systems and Total Rewards customer-loyalty program will enable us to improve the resort's performance. The financing activities that boosted our liquidity during 2009 have allowed us to complete this transaction and consider others that we believe offer significant long-term growth potential.

"The impact of the economy on consumers' willingness to spend continued to affect our results throughout 2009," Loveman said. "The cost-reduction programs implemented at the end of 2008 helped mitigate the economy's impact on our operating margins last year."

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



HARRAH'S OPERATING COMPANY, INC.

                                         Fourth Quarter         Percent
                                    ========================   Increase/
(In millions)                           2009         2008     (Decrease)
                                    ===========  ===========  ==========
Net revenues                        $   1,631.5  $   1,752.8        (6.9)%
Income/(loss) from operations             124.5     (3,632.0)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets         (12.3)    (3,745.2)        N/M
Income from operations before
 impairment                               136.8        113.2        20.8%
Loss from continuing operations,
 net of tax                              (107.3)    (2,976.1)       96.4 %
Property EBITDA                           332.7        346.1        (3.9)%
Adjusted EBITDA (a)                       317.2        324.0        (2.1)%

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




                     Successor         Predecessor
             ========================  ===========
                            Jan. 28,     Jan. 1,
                              2008         2008
                            Through      Through     Combined     Percent
(In           Full Year     Dec. 31,     Jan. 27,    Full Year   Increase/
 millions)       2009         2008         2008         2008     (Decrease)
             ===========  ===========  ===========  ===========  ========
Net revenues $   6,873.2  $   7,117.7  $     577.5  $   7,695.2     (10.7)%
Income/
 (loss) from
 operations       (369.6)    (2,836.4)       (43.2)    (2,879.6)     87.2%
Impairment
 of goodwill
 and other
 non-
 amortizing
 intangible
 assets         (1,178.9)    (3,745.2)           -     (3,745.2)      N/M
Income/
 (loss) from
 operations
 before
 impairment        809.3        908.8        (43.2)       865.6      (6.5)%
Income/
 (loss) from
 continuing
 operations,
 net of tax        626.3     (3,390.5)      (106.2)    (3,496.7)      N/M
Property
 EBITDA          1,597.2      1,590.4        109.6      1,700.0      (6.0)%
Adjusted
 EBITDA (a)      1,550.6      1,511.9        143.0      1,654.9      (6.3)%

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


Summaries of results by region follow:

Las Vegas Region

While hotel occupancy remained strong at approximately 90 percent, 2009 fourth-quarter and full-year revenues declined in the Las Vegas Region from the 2008 periods due to weakness in the group travel business, lower spend per visitor and lower average daily room rates. The 2009 fourth-quarter and full-year Income/(loss) from operations improved compared with respective 2008 results due in part to reduced impairment charges in 2009. Prior to consideration of impairment charges, 2009 fourth-quarter income from operations improved slightly from the 2008 fourth quarter due to cost-saving initiatives, while full-year income from operations declined from 2008 due to lower visitor spend and lower average daily room rates.


HARRAH'S ENTERTAINMENT, INC.

Las Vegas Region

                                          Fourth Quarter        Percent
                                     ========================   Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      649.2 $     721.4       (10.0)%
Income/(loss) from operations                97.3    (2,485.3)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -    (2,579.4)        N/M
Income from operations before
 impairment                                  97.3        94.1         3.4%
Property EBITDA                             174.6       189.6        (7.9)%



                      Successor         Predecessor
                ======================  ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                              Through     Through    Combined    Percent
                Full Year    Dec. 31,    Jan. 27,   Full Year   Increase/
(In millions)      2009        2008        2008        2008    (Decrease)
                ==========  ==========  =========== ==========  =========
Net revenues    $  2,698.0  $  3,000.6  $     253.6 $  3,254.2      (17.1)%
(Loss)/income
 from
 operations         (681.0)   (1,988.0)        51.9   (1,936.1)      64.8%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets           (1,130.9)   (2,579.4)           -   (2,579.4)       N/M
Income from
 operations
 before
 impairment          449.9       591.4         51.9      643.3      (30.1)%
Property EBITDA      756.8       905.4         76.0      981.4      (22.9)%

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



HARRAH'S OPERATING COMPANY, INC.

Las Vegas Region
                                          Fourth Quarter        Percent
                                     ========================   Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      307.5 $     322.4        (4.6)%
Income/(loss) from operations                49.2    (1,076.4)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -    (1,121.4)        N/M
Income from operations before
 impairment                                  49.2        45.0         9.3%
Property EBITDA                              82.2        76.1         8.0%




                      Successor         Predecessor
                ======================  ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                              Through     Through    Combined     Percent
                Full Year     Dec. 31,    Jan. 27,   Full Year   Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                ==========  ==========  =========== ==========  =========
Net revenues    $  1,215.1  $  1,318.9  $     118.5 $  1,437.4      (15.5)%
(Loss)/income
 from
 operations         (481.1)     (869.3)        29.7     (839.6)      42.7%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets             (671.8)   (1,121.4)           -   (1,121.4)       N/M
 Income from
  operations
  before
  impairment         190.7       252.1         29.7      281.8      (32.3)%
Property EBITDA      317.1       364.6         38.1      402.7      (21.3)%
                ==========  ==========  =========== ==========  =========

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


Atlantic City Region

Reduced visitation and customer spend per trip unfavorably impacted Atlantic City Region revenues during both the 2009 fourth quarter and full year. For the fourth-quarter and full year of 2009, income from operations before impairment charges was lower than the prior year as cost-saving initiatives were unable to offset reduced revenues and increased marketing expenses, which also contributed to the 2009 fourth-quarter and full-year Property EBITDA declines.


HARRAH'S ENTERTAINMENT, INC.

Atlantic City Region

                                          Fourth Quarter        Percent
                                     ========================   Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      467.4 $     492.8        (5.2)%
Income/(loss) from operations                22.3      (669.4)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -      (699.9)        N/M
Income from operations before
 impairment                                  22.3        30.5       (26.9)%
Property EBITDA                              67.1        86.7       (22.6)%




                      Successor         Predecessor
                ======================  ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                              Through     Through   Combined     Percent
                Full Year     Dec. 31,    Jan. 27,   Full Year   Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                ==========  ==========  =========== ==========  =========
Net revenues    $  2,025.9  $  2,156.0  $     160.8 $  2,316.8      (12.6)%
Income/(loss)
 from
 operations           28.3      (415.4)        18.7     (396.7)       N/M
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets             (178.7)     (699.9)           -     (699.9)       N/M
Income from
 operations
 before
 impairment          207.0       284.5         18.7      303.2      (31.7)%
Property EBITDA      400.3       484.0         36.4      520.4      (23.1)%

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



HARRAH'S OPERATING COMPANY, INC.

Atlantic City Region

                                          Fourth Quarter         Percent
                                     =========================  Increase/ 
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      352.1 $     374.8        (6.1)%
Income/(loss) from operations                14.2      (493.1)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -      (514.5)        N/M
Income from operations before
 impairment                                  14.2        21.4       (33.6)%
Property EBITDA                              44.8        61.7       (27.4)%






                          Successor        Predecessor
                     ====================  ===========
                                Jan. 28,    Jan. 1,
                                  2008       2008
                                 Through    Through   Combined   Percent
                     Full Year  Dec. 31,   Jan. 27,  Full Year  Increase/
(In millions)          2009       2008       2008       2008    (Decrease)
                     =========  =========  ========== =========  ========
Net revenues         $ 1,528.1  $ 1,650.8  $    125.8 $ 1,776.6     (14.0)%
(Loss)/income from
 operations              (37.2)    (308.7)        8.0    (300.7)     87.6 %
Impairment of
 goodwill and other
 non-amortizing
 intangible assets      (178.7)    (514.5)          -    (514.5)      N/M
Income from
 operations before
 impairment              141.5      205.8         8.0     213.8     (33.8)%
Property EBITDA          276.0      348.8        21.9     370.7     (25.5)%

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


Louisiana/Mississippi Region

Reduced visitation led to declines in 2009 fourth-quarter and full-year revenues. The 2008 full year was impacted by construction disruptions related to the re-branding and remodeling of Harrah's Tunica. Also included in income from operations for the full year 2008 were insurance proceeds of $185.4 million representing final settlement of claims related to 2005 hurricane damages. Prior to consideration of the impairment charges for both years and the insurance proceeds, income from operations improved slightly year over year due to cost-saving initiatives.


HARRAH'S ENTERTAINMENT, INC./HARRAH'S OPERATING COMPANY, INC.

Louisiana/Mississippi Region


                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      285.4 $     329.9       (13.5)%
Income/(loss) from operations                30.6      (299.7)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -      (328.9)        N/M
Income from operations before
 impairment                                  30.6        29.2         4.8 %
Property EBITDA                              55.9        58.3        (4.1)%




                      Successor         Predecessor
                ======================  ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                              Through     Through   Combined     Percent
                 Full Year    Dec. 31,    Jan. 27,  Full Year   Increase/
(In millions)      2009        2008        2008        2008    (Decrease)
                ==========  ==========  =========== ==========  =========
Net revenues    $  1,245.2  $  1,340.8  $     106.1 $  1,446.9      (13.9)%
Income from
 operations          181.4        28.3         10.1       38.4        N/M
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets               (6.0)     (328.9)           -     (328.9)       N/M
Income from
 operations
 before
 impairment          187.4       357.2         10.1      367.3      (49.0)%
Property EBITDA      292.6       276.2         18.6      294.8       (0.7)%

Louisiana/Mississippi Region properties include Grand Casino Biloxi,
Harrah's New Orleans, Harrah's Tunica, Horseshoe Bossier City, Horseshoe
Tunica, Louisiana Downs and Tunica Roadhouse (formerly known as Sheraton
Tunica).


Iowa/Missouri Region

Fourth-quarter and full-year 2009 revenues declined from 2008 as the weak economy continued to adversely impact guest visitation. Fourth-quarter 2009 revenues and income from operations were also impacted by severe winter storms. However, income from operations before impairments for the full-year 2009 increased because of cost-saving initiatives.



HARRAH'S ENTERTAINMENT, INC./HARRAH'S OPERATING COMPANY, INC.

Iowa/Missouri Region

                                          Fourth Quarter         Percent
                                     =========================  Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      179.5 $     189.6        (5.3)%
Income/(loss) from operations                41.4        (4.6)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -       (49.0)        N/M
Income from operations before
 impairment                                  41.4        44.4        (6.8)%
Property EBITDA                              54.3        58.1        (6.5)%



                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $     756.6 $    727.0  $      55.8 $    782.8       (3.3)%
Income from
 operations           187.5      108.2          7.7      115.9       61.8%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets                   -      (49.0)           -      (49.0)       N/M
Income from
 operations
 before
 impairment           187.5      157.2          7.7      164.9       13.7%
Property EBITDA       238.4      206.1         13.0      219.1        8.8%

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


Illinois/Indiana Region

Revenues in the region declined in the fourth quarter of 2009 from the 2008 fourth quarter, due to the continuing impact of the weak economy and severe winter weather. For the full year 2009, revenues were relatively unchanged, due to increased revenues related to the 2008 expansion of the Horseshoe Hammond property, which offset the revenue declines at other properties in the region. Income from operations before impairment charges improved in the fourth quarter 2009 from the year-earlier period due to cost-saving initiatives, combined with the 2008 impact of a property tax expense adjustment. Full-year income from operations before impairment charges improved in 2009 from 2008 due to cost-saving initiatives.



HARRAH'S ENTERTAINMENT, INC./HARRAH'S OPERATING COMPANY, INC.

Illinois/Indiana Region

                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      271.2 $     294.3        (7.8)%
Income/(loss) from operations                29.9      (597.2)        N/M
Impairment of goodwill and other
 non-amortizing intangible assets               -      (617.1)        N/M
Income from operations before
 impairment                                  29.9        19.9        50.3%
Property EBITDA                              51.8        44.7        15.9%




                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $  1,172.3  $  1,098.7  $      85.5 $  1,184.2       (1.0)%
Income/(loss)
 from
 operations          (35.4)     (505.9)         8.7     (497.2)      92.9%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets             (180.7)     (617.1)           -     (617.1)       N/M
Income from
 operations
 before
 impairment          145.3       111.2          8.7      119.9       21.2%
Property EBITDA      240.5       195.4         13.6      209.0       15.1%

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


Other Nevada Region

Revenues for the Other Nevada Region declined in the 2009 fourth quarter and full year from the respective periods of 2008 due to lower guest visitation and lower visitor spend per trip. For the 2009 fourth quarter and full year, cost-saving initiatives implemented throughout 2009 partially offset the earnings impact of the revenue declines. During the 2009 fourth quarter, we announced the closure of Bill's Casino in Lake Tahoe effective January 2010.



HARRAH'S ENTERTAINMENT, INC.

Other Nevada
                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $     102.0  $     115.0       (11.3)%
Income/(loss) from operations               (1.2)      (315.6)       99.6 %
Impairment of goodwill and other
 non-amortizing intangible assets           (4.0)      (318.5)        N/M
Income from operations before
 impairment                                  2.8          2.9        (3.4)%
Property EBITDA                             14.9         16.0        (6.9)%




                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $    472.6  $    534.0  $      38.9 $    572.9      (17.5)%
Income/(loss)
 from
 operations           47.3      (255.9)         0.5     (255.4)       N/M
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets               (4.0)     (318.5)           -     (318.5)       N/M
Income from
 operations
 before
 impairment           51.3        62.6          0.5       63.1      (18.7)%
Property EBITDA      101.7       109.0          4.5      113.5      (10.4)%

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


HARRAH'S OPERATING COMPANY, INC.

Other Nevada

                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $      70.9  $      79.7       (11.0)%
Income/(loss) from operations               (3.6)      (219.0)       98.4%
Impairment of goodwill and other
 non-amortizing intangible assets           (4.0)      (217.5)        N/M
Income/(loss) from operations before
 impairment                                  0.4         (1.5)        N/M
Property EBITDA                              7.6          6.4        18.8%


                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $    332.5  $    379.5  $     26.8  $    406.3      (18.2)%
Income/(loss)
 from
 operations           26.3      (178.5)       (1.9)     (180.4)       N/M
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets               (4.0)     (217.5)          -      (217.5)       N/M
Income/(loss)
 from
 operations
 before
 impairment           30.3        39.0        (1.9)       37.1      (18.3)%
Property EBITDA       60.7        66.7         1.2        67.9      (10.6)%

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


Managed/International/Other

Revenues rose in the 2009 fourth quarter due to increased visitation combined with higher customer spend per trip at our international properties. Revenues for the 2009 full year declined from 2008 as result of adverse movements in exchange rates. Loss from operations before impairment charges for the 2009 fourth quarter improved from 2008 due to increased revenues and improved cost management. For the full year 2009, the loss from operations before impairment charges improved from 2008 as the impact of adverse foreign exchange rates was more than offset by increased revenues at the company's international properties and improved cost management at all of the company's international and managed properties.


HARRAH'S ENTERTAINMENT, INC.      

Managed/International/Other

                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $     144.4  $     135.4         6.6%
Loss from operations                       (30.6)      (939.4)       96.7%
Impairment of goodwill and other
 non-amortizing intangible assets           (8.3)      (896.8)        N/M
Loss from operations before
 impairment                                (22.3)       (42.6)       47.7 %
Property EBITDA                             24.5         24.6        (0.4)%



                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $    536.8  $    509.8  $     59.4  $    569.2       (5.7)%
Loss from
 operations         (184.9)   (1,053.0)       (0.3)   (1,053.3)      82.4%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets             (137.7)     (896.8)          -      (896.8)       N/M
Loss from
 operations
 before
 impairment          (47.2)     (156.2)       (0.3)     (156.5)      69.8%
Property EBITDA      123.3        68.8         9.1        77.9       58.3%

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.


HARRAH'S OPERATING COMPANY, INC.

Managed/International/Other
                                          Fourth Quarter        Percent
                                     ========================= Increase/
(In millions)                            2009         2008     (Decrease)
                                     ============ ===========  ==========
Net revenues                         $     164.9  $     162.1         1.7%
Loss from operations                       (19.0)      (923.3)       97.9%
Impairment of goodwill and other
 non-amortizing intangible assets           (8.3)      (896.8)        N/M
Loss from operations before
 impairment                                (10.7)       (26.5)       59.6%
Property EBITDA                             36.1         40.8       (11.5)%




                      Successor         Predecessor
                ======================= ===========
                             Jan. 28,     Jan. 1,
                               2008        2008
                             Through     Through    Combined     Percent
                 Full Year   Dec. 31,    Jan. 27,   Full Year    Increase/
(In millions)      2009        2008        2008        2008     (Decrease)
                =========== ==========  =========== ==========  =========
Net revenues    $    623.4  $    602.0  $     59.0  $    661.0       (5.7)%
Loss from
 operations         (136.3)     (980.2)       (6.1)     (986.3)      86.2%
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets             (137.7)     (896.8)          -      (896.8)       N/M
Loss from
 operations
 before
 impairment            1.4       (83.4)       (6.1)      (89.5)       N/M
Property EBITDA      171.9       132.6         3.2       135.8       26.6%

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


Other items

During the fourth quarter 2009, we recorded a total charge of $12.3 million for the impairment of non-amortizing intangible assets. Total impairment charges in 2009 for goodwill and other non-amortizing intangible assets were $1,638.0 million, compared to the prior year charge of $5,489.6 million, all booked in the fourth quarter of 2008.

Interest expense decreased by $117.8 million in the 2009 fourth-quarter and by $272.1 million for the 2009 full-year from the respective periods of 2008 due to lower debt levels resulting from HOC debt exchanges completed in December 2008 and April 2009, and repurchases of debt in open-market transactions.

As a result of debt exchange offers, real estate debt purchases and open-market debt purchases during the year, pre-tax gains of $686.3 million and $4,965.5 million on early extinguishments of debt were recognized in the 2009 fourth quarter and full-year periods, respectively. During the fourth quarter and full year of 2008 we recognized pre-tax gains on the early extinguishment of debt of $946.0 million and $742.1 million, respectively.

For the 2009 fourth quarter, we recorded a tax provision of $61.0 million on pre-tax income from continuing operations of $359.3 million, compared with a tax benefit of $212.8 million on a pre-tax loss from continuing operations of $4,991.0 million in the comparable period of 2008. For the full year 2009, we recognized a tax provision of $1,651.8 million on pre-tax income from continuing operations of $2,498.2 million, which equates to an effective tax rate of 66.1 percent. The primary differences between the Company's full-year recorded provision and the provision that would have resulted from applying the U.S. statutory tax rate of 35 percent to the Company's pre-tax income from continuing operations are the effects of non-deductible impairments of goodwill, acquisition costs, state income tax expense and other adjustments.

Harrah's Entertainment, Inc. is the world's largest provider of branded casino entertainment. Since its beginning in Reno, Nevada, more than 70 years ago, Harrah's has grown through development of new properties, expansions and acquisitions, and now operates casinos on four continents. The company's properties operate primarily under the Harrah's®, Caesars® and Horseshoe® brand names. Harrah's also owns the World Series of Poker® and a majority interest in the London Clubs International family of casinos. Harrah's Entertainment is focused on building loyalty and value with its customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. For more information, please visit www.harrahs.com.

This release includes "forward-looking statements" intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. You can identify these statements by the fact that they do not relate strictly to historical or current facts. These statements contain words such as "may," "will," "project," "might," "expect," "believe," "anticipate," "intend," "could," "would," "estimate," "continue" or "pursue," or the negative or other variations thereof or comparable terminology. In particular, they include statements relating to, among other things, future actions, new projects, strategies, future performance, the outcomes of contingencies and future financial results of Harrah's. These forward-looking statements are based on current expectations and projections about future events.

Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance of Harrah's may differ materially from those expressed or implied by such forward-looking statements. Such risks and uncertainties include, but are not limited to, the following factors, as well as other factors described from time to time in our reports filed with the Securities and Exchange Commission (including the sections entitled "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained therein):

--  the impact of the company's significant indebtedness;

--  the effects of local and national economic, credit and capital market
    conditions on the economy in general, and on the gaming and hotel
    industries in particular;

--  construction factors, including delays, increased costs for labor and
    materials, availability of labor and materials, zoning issues,
    environmental restrictions, soil and water conditions, weather and
    other hazards, site access matters and building permit issues;

--  the effects of environmental and structural building conditions
    relating to our properties; access to available and reasonable
    financing on a timely basis;

--  the ability to timely and cost-effectively integrate acquisitions into
    our operations;

--  changes in laws, including increased tax rates, smoking bans,
    regulations or accounting standards, third-party relations and
    approvals, and decisions of courts, regulators and governmental bodies;

--  litigation outcomes and judicial actions, including gaming legislative
    action, referenda and taxation;

--  the ability of our customer-tracking, customer loyalty and
    yield-management programs to continue to increase customer loyalty and
    same store sales or hotel sales;

--  our ability to recoup costs of capital investments through higher
    revenues;

--  acts of war or terrorist incidents, severe weather conditions or
    natural disasters;

--  abnormal gaming holds; and

--  the effects of competition, including locations of competitors and
    operating and market competition.

Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Harrah's disclaims any obligation to update the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date stated, or if no date is stated, as of the date of this press release.


                      HARRAH'S ENTERTAINMENT, INC.
                   CONSOLIDATED SUMMARY OF OPERATIONS
                             (UNAUDITED)

                                                        Prede-
                             Successor                  cessor   Combined
               ----------------------------  --------  --------  --------
                                     Full    Jan. 28,   Jan. 1,    Full
                 Fourth Quarter      Year      2008      2008      Year
                      Ended         Ended    Through   Through    Ended
                     Dec. 31,      Dec. 31,  Dec. 31,  Jan. 27,  Dec. 31,
               ------------------  --------  --------  --------  --------
(In millions)    2009      2008      2009      2008      2008      2008
               --------  --------  --------  --------  --------  --------

Revenues       $2,099.1  $2,278.4  $8,907.4  $9,366.9  $  760.1 $10,127.0
Property
 operating
 expenses      (1,656.0) (1,800.4) (6,753.8) (7,122.0)   (588.9) (7,710.9)
Depreciation
 and
 amortization    (167.1)   (174.5)   (683.9)   (626.9)    (63.5)   (690.4)
               --------  --------  --------  --------  --------  --------
  Operating
   profit         276.0     303.5   1,469.7   1,618.0     107.7   1,725.7

Project
 opening costs
 and other
 items            (30.0)    (80.6)   (111.5)    (45.1)     (5.4)    (50.5)
Impairment of
 goodwill and
 other
 non-amortizing
 intangible
 assets           (12.3) (5,489.6)  (1,638.0)  (5,489.6)      -  (5,489.6)
(Losses)/
 income on
 interests in
 non-
 consolidated
 affiliates        (0.9)     (0.8)     (2.2)     (2.1)      0.5      (1.6)
Corporate
 expense          (39.0)    (35.8)   (150.7)   (131.8)     (8.5)   (140.3)
Acquisition
 and
 integration
 costs                -      (1.0)     (0.3)    (24.0)   (125.6)   (149.6)
Amortization
 of intangible
 assets           (43.1)    (43.7)   (174.8)   (162.9)     (5.5)   (168.4)
               --------  --------  --------  --------  --------  --------

Income/(loss)
 from
 operations       150.7  (5,348.0)   (607.8) (4,237.5)    (36.8) (4,274.3)
Interest
 expense, net
 of interest
 capitalized     (487.8)   (605.6) (1,892.5) (2,074.9)    (89.7) (2,164.6)
Gains on early
 extinguish-
 ments of debt    686.3     946.0   4,965.5     742.1         -     742.1
Other income,
 including
 interest
 income            10.1      16.6      33.0      35.2       1.1      36.3
               --------  --------  --------  --------  --------  --------

Income/(loss)
 before income
 taxes            359.3  (4,991.0)  2,498.2  (5,535.1)   (125.4) (5,660.5)
Income tax
 (provision)/
 benefit          (61.0)    212.8  (1,651.8)    360.4      26.0     386.4
               --------  --------  --------  --------  --------  --------

Income/(loss)
 from
 continuing
 operations,
 net of tax       298.3  (4,778.2)    846.4  (5,174.7)    (99.4) (5,274.1)
Discontinued
 operations,
 net of tax           -       1.9         -      90.4       0.1      90.5
               --------  --------  --------  --------  --------  --------
  Net income/
   (loss)         298.3  (4,776.3)    846.4  (5,084.3)    (99.3) (5,183.6)
Less: net
 income
 attributable
 to non-
 controlling
 interests         (2.7)     (5.8)    (18.8)    (12.0)     (1.6)    (13.6)
               --------  --------  --------  --------  --------  --------
Net
 income/(loss)
 attributable
 to Harrah's
 Entertainment,
 Inc.          $  295.6 $(4,782.1) $  827.6 $(5,096.3) $ (100.9)$(5,197.2)
               ========  ========  ========  ========  ========  ========





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

                                                        Prede-
                             Successor                  cessor   Combined
               ----------------------------  --------  --------  --------
                                     Full    Jan. 28,   Jan. 1,    Full
                 Fourth Quarter      Year      2008      2008      Year
                      Ended         Ended    Through   Through    Ended
                     Dec. 31,      Dec. 31,  Dec. 31,  Jan. 27,  Dec. 31,
               ------------------  --------  --------  --------  --------
(In millions)    2009      2008      2009      2008      2008      2008
               --------  --------  --------  --------  --------  --------
Revenues
  Las Vegas
   Region      $  649.2  $  721.4  $2,698.0  $3,000.6  $  253.6  $3,254.2
  Atlantic
   City
   Region         467.4     492.8   2,025.9   2,156.0     160.8   2,316.8
  Louisiana/
   Mississippi
   Region         285.4     329.9   1,245.2   1,340.8     106.1   1,446.9
  Iowa/
   Missouri
   Region         179.5     189.6     756.6     727.0      55.8     782.8
  Illinois/
   Indiana
   Region         271.2     294.3   1,172.3   1,098.7      85.5   1,184.2
  Other
   Nevada
   Region         102.0     115.0     472.6     534.0      38.9     572.9
  Managed/
   International/
   Other          144.4     135.4     536.8     509.8      59.4     569.2
               --------  --------  --------  --------  --------  --------
    Net
     Revenues  $2,099.1  $2,278.4  $8,907.4  $9,366.9  $  760.1 $10,127.0
               ========  ========  ========  ========  ========  ========

Income/(Loss)
 from
 operations
  Las Vegas
   Region      $   97.3 $(2,485.3) $ (681.0)$(1,988.0) $   51.9 $(1,936.1)
  Atlantic
   City
   Region          22.3    (669.4)     28.3    (415.4)     18.7    (396.7)
  Louisiana/
   Mississippi
   Region          30.6    (299.7)    181.4      28.3      10.1      38.4
  Iowa/
   Missouri
   Region          41.4      (4.6)    187.5     108.2       7.7     115.9
  Illinois/
   Indiana
   Region          29.9    (597.2)    (35.4)   (505.9)      8.7    (497.2)
  Other
   Nevada
   Region          (1.2)   (315.6)     47.3    (255.9)      0.5    (255.4)
  Managed/
   International/
   Other          (30.6)   (939.4)   (184.9) (1,053.0)     (0.3) (1,053.3)
  Corporate
   Expense        (39.0)    (35.8)   (150.7)   (131.8)     (8.5)   (140.3)
  Acquisition
   and
   integration
   costs              -      (1.0)     (0.3)    (24.0)   (125.6)   (149.6)
               --------  --------  --------  --------  --------  --------
    Total
     (loss)/
     income
     from
     opera-
     tions     $  150.7 $(5,348.0) $ (607.8)$(4,237.5) $  (36.8)$(4,274.3)
               ========  ========  ========  ========  ========  ========

Property
 EBITDA (a)
  Las Vegas
   Region      $  174.6  $  189.6  $  756.8  $  905.4  $   76.0  $  981.4
  Atlantic
   City
   Region          67.1      86.7     400.3     484.0      36.4     520.4
  Louisiana/
   Mississippi
   Region          55.9      58.3     292.6     276.2      18.6     294.8
  Iowa/
   Missouri
   Region          54.3      58.1     238.4     206.1      13.0     219.1
  Illinois/
   Indiana
   Region          51.8      44.7     240.5     195.4      13.6     209.0
  Other
   Nevada
   Region          14.9      16.0     101.7     109.0       4.5     113.5
  Managed/
   International/
   Other           24.5      24.6     123.3      68.8       9.1      77.9
               --------  --------  --------  --------  --------  --------
    Total
     Property
     EBITDA    $  443.1  $  478.0  $2,153.6  $2,244.9  $  171.2  $2,416.1
               ========  ========  ========  ========  ========  ========

Project
 opening costs
 and other
 items
  Project
   opening
   costs       $   (0.7) $   (2.6) $   (3.6) $  (28.9) $   (0.7) $  (29.6)
  Insurance
   proceeds
   for
   hurricane
   losses             -         -         -     185.4         -     185.4
  Other
   write-
   downs,
   reserves and
   recoveries     (29.3)    (78.0)   (107.9)   (201.6)     (4.7)   (206.3)
               --------  --------  --------  --------  --------  --------
    Total
     Project
     opening
     costs and
     other
     items     $  (30.0) $  (80.6) $ (111.5) $  (45.1) $   (5.4) $  (50.5)
               ========  ========  ========  ========  ========  ========

(a) Property EBITDA (earnings before interest, taxes, depreciation and amortization) consists of income/(loss) from operations before depreciation and amortization, write-downs, reserves and recoveries, project opening costs, corporate expense, acquisition and integration costs, income/(losses) on interests in non-consolidated affiliates and amortization of intangible assets. Property EBITDA is a supplemental financial measure used by management, as well as industry analysts, to evaluate our operations. However, Property EBITDA should not be construed as an alternative to loss from operations (as an indicator of our operating performance) or to Cash flows from operating activities (as a measure of liquidity) as determined in accordance with generally accepted accounting principles. All companies do not calculate EBITDA in the same manner. As a result, Property EBITDA as presented by our Company may not be comparable to similarly titled measures presented by other companies.


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


                                    Fourth Quarter Ended Dec. 31, 2009
                                ==========================================
                                   Las      Atlantic  Louisiana/    Iowa/
                                  Vegas       City   Mississippi  Missouri
(In Millions)                     Region     Region     Region     Region
                                =========  =========  =========  =========
Net Revenues                    $   649.2  $   467.4  $   285.4  $   179.5
Property operating expenses        (474.6)    (400.3)    (229.5)    (125.2)
                                ---------  ---------  ---------  ---------
Property EBITDA                     174.6       67.1       55.9       54.3
Depreciation and amortization       (47.0)     (40.8)     (20.4)     (12.8)
                                ---------  ---------  ---------  ---------
Operating profit                    127.6       26.3       35.5       41.5
Project opening costs and other
 items                              (11.3)      (0.3)       0.5       (0.1)
Impairment of goodwill and
 other non-amortizing
 intangible assets                      -          -          -          -
Income/(losses) on interests in
 nonconsolidated affiliates             -          -        0.1          -
Corporate expense                       -          -          -          -
Amortization of intangible
 assets                             (19.0)      (3.7)      (5.5)         -
                                ---------  ---------  ---------  ---------
     Income/(loss) from
      operations                     97.3       22.3       30.6       41.4
                                ---------  ---------  ---------  ---------


                                Illinois/    Other
                                 Indiana     Nevada
(In Millions)                     Region     Region     Other      Total
                                =========  =========  =========  =========
Net Revenues                    $   271.2  $   102.0  $   144.4  $ 2,099.1
Property operating expenses        (219.4)     (87.1)    (119.9)  (1,656.0)
                                ---------  ---------  ---------  ---------
Property EBITDA                      51.8       14.9       24.5      443.1
Depreciation and amortization       (20.9)      (8.4)     (16.8)    (167.1)
                                ---------  ---------  ---------  ---------
Operating profit                     30.9        6.5        7.7      276.0
Project opening costs and other
 items                               (0.6)      (0.2)     (18.0)     (30.0)
Impairment of goodwill and
 other non-amortizing
 intangible assets                      -       (4.0)      (8.3)     (12.3)
Income/(losses) on interests in
 nonconsolidated affiliates             -          -       (1.0)      (0.9)
Corporate expense                       -          -      (39.0)     (39.0)
Amortization of intangible
 assets                              (0.4)      (3.5)     (11.0)     (43.1)
                                ---------  ---------  ---------  ---------
     Income/(loss) from
      operations                     29.9       (1.2)     (69.6)     150.7
                                ---------  ---------  ---------
Interest expense, net of
 interest capitalized                                               (487.8)
Gains on early extinguishments
 of debt                                                             686.3
Other income, including
 interest income                                                      10.1
                                                                 ---------
Income from continuing
 operations before income taxes                                      359.3
Provision for income taxes                                           (61.0)
                                                                 ---------
Net income                                                           298.3
Less: net income attributable
 to non-controlling interests                                         (2.7)
                                                                 ---------
Net income attributable to
 Harrah's Entertainment, Inc.                                    $   295.6
                                                                 ---------



                       HARRAH'S ENTERTAINMENT, INC.
                        SUPPLEMENTAL INFORMATION
                  RECONCILIATION OF PROPERTY EBITDA TO
         NET LOSS ATTRIBUTABLE TO HARRAH'S ENTERTAINMENT, INC.
                                (UNAUDITED)


                                      Fourth Quarter Ended Dec. 31, 2008
                                   ========================================
                                     Las      Atlantic  Louisiana/    Iowa/
                                    Vegas       City   Mississippi Missouri
(In Millions)                       Region     Region     Region     Region
                                   =========  ========  ========  =========
Net Revenues                        $  721.4  $  492.8  $  329.9  $  189.6
Property operating expenses           (531.8)   (406.1)   (271.6)   (131.5)
                                   ---------  --------  --------  --------
Property EBITDA                        189.6      86.7      58.3      58.1
Depreciation and amortization          (46.2)    (47.0)    (20.4)    (13.2)
                                   ---------  --------  --------  --------
Operating profit                       143.4      39.7      37.9      44.9
Project opening costs and other
 items                                 (30.4)     (5.4)     (3.4)     (0.5)


Impairment of goodwill and other
 non-amortizing intangible assets   (2,579.4)   (699.9)   (328.9)    (49.0)
Income/(losses) on interests in
 nonconsolidated affiliates                -         -       0.2         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (18.9)     (3.8)     (5.5)        -
                                   ---------  --------  --------  --------
   Loss from operations             (2,485.3)   (669.4)   (299.7)     (4.6)
                                   ---------  --------  --------  --------


                                   Illinois/    Other
                                    Indiana    Nevada
(In Millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $  294.3  $  115.0  $  135.4  $2,278.4
Property operating expenses           (249.6)    (99.0)   (110.8) (1,800.4)
                                   ---------  --------  --------  --------
Property EBITDA                         44.7      16.0      24.6     478.0
Depreciation and amortization          (21.6)     (8.7)    (17.4)   (174.5)
                                   ---------  --------  --------  --------
Operating profit                        23.1       7.3       7.2     303.5
Project opening costs and other
 items                                  (2.8)     (0.9)    (37.2)    (80.6)



Impairment of goodwill and other
 non-amortizing intangible assets     (617.1)   (318.5)   (896.8) (5,489.6)
Income/(losses) on interests in
 nonconsolidated affiliates                -         -      (1.0)     (0.8)
Corporate expense                          -         -     (35.8)    (35.8)
Acquisition and integration costs          -         -      (1.0)     (1.0)
Amortization of intangible assets       (0.4)     (3.5)    (11.6)    (43.7)
                                   ---------  --------  --------  --------
   Loss from operations               (597.2)   (315.6)   (976.2) (5,348.0)
                                   ---------  --------  --------
Interest expense, net of interest
 capitalized                                                        (605.6)
Gains on early extinguishments of
 debt                                                                946.0
Other income, including interest
 income                                                               16.6
                                                                  --------
Loss from continuing operations
 before income taxes                                              (4,991.0)
Benefit for income taxes                                             212.8
                                                                  --------
Loss from continuing operations,
 net of tax                                                       (4,778.2)
Discontinued operations, net of tax                                    1.9
                                                                  --------
Net loss                                                          (4,776.3)
  Less: net income attributable to
   non-controlling interests                                          (5.8)
                                                                  --------
Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(4,782.1)
                                                                  ========



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


                                                 Successor
                                        Full Year Ended Dec. 31, 2009
                                    ======================================
                                       Las    Atlantic Louisiana/   Iowa/
                                      Vegas     City  Mississippi Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $2,698.0  $2,025.9  $1,245.2  $  756.6
Property operating expenses         (1,941.2) (1,625.6)   (952.6)   (518.2)
                                   ---------  --------  --------  --------
Property EBITDA                        756.8     400.3     292.6     238.4
Depreciation and amortization         (186.2)   (174.2)    (81.6)    (50.6)
                                   ---------  --------  --------  --------
Operating profit                       570.6     226.1     211.0     187.8
Project opening costs and other
 items                                 (44.7)     (4.0)     (2.4)     (0.3)
Impairment of goodwill and other
 non-amortizing intangible assets   (1,130.9)   (178.7)     (6.0)        -
Income/(losses) on interests in
 non-consolidated affiliates               -         -       0.7         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (76.0)    (15.1)    (21.9)        -
                                   ---------  --------  --------  --------
  (Loss)/income from operations       (681.0)     28.3     181.4     187.5
                                   ---------  --------  --------  --------

                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,172.3  $  472.6  $  536.8  $8,907.4
Property operating expenses           (931.8)   (370.9)   (413.5) (6,753.8)
                                   ---------  --------  --------  --------
Property EBITDA                        240.5     101.7     123.3   2,153.6
Depreciation and amortization          (84.9)    (34.8)    (71.6)   (683.9)
                                   ---------  --------  --------  --------
Operating profit                       155.6      66.9      51.7   1,469.7
Project opening costs and other
 items                                  (8.9)     (1.7)    (49.5)   (111.5)
Impairment of goodwill and other
 non-amortizing intangible assets     (180.7)     (4.0)   (137.7) (1,638.0)
Income/(losses) on interests in
 non-consolidated affiliates               -         -      (2.9)     (2.2)
Corporate expense                          -         -    (150.7)   (150.7)
Acquisition and integration costs          -         -      (0.3)     (0.3)
Amortization of intangible assets       (1.4)    (13.9)    (46.5)   (174.8)
                                   ---------  --------  --------  --------
  (Loss)/income from operations        (35.4)     47.3    (335.9)   (607.8)
                                   ---------  --------  --------  --------
Interest expense, net of interest
 capitalized                                                      (1,892.5)
Gains on early extinguishments of
 debt                                                              4,965.5
Other income, including interest
 income                                                               33.0
                                                                  --------
Income from continuing operations
 before income taxes                                               2,498.2
Provision for income taxes                                        (1,651.8)
                                                                  --------
Net income                                                           846.4
  Less: net income attributable to
   non-controlling interests                                         (18.8)
                                                                  --------
Net Income attributable to Harrah's
 Entertainment, Inc.                                              $  827.6
                                                                  ========



                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                      RECONCILIATION OF PROPERTY EBITDA TO
              NET LOSS ATTRIBUTABLE TO HARRAH'S ENTERTAINMENT, INC.
                                 (UNAUDITED)


                                                  Combined
                                         Full Year Ended Dec. 31, 2008
                                    ======================================
                                      Las     Atlantic Louisiana/   Iowa/
                                      Vegas     City  Mississippi  Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $3,254.2  $2,316.8  $1,446.9  $  782.8
Property operating expenses         (2,272.8) (1,796.4) (1,152.1)   (563.7)
                                    ========  ========  ========  ========
Property EBITDA                        981.4     520.4     294.8     219.1
Depreciation and amortization         (188.7)   (191.1)    (82.8)    (53.2)
                                    ========  ========  ========  ========
Operating profit                       792.7     329.3     212.0     165.9
Project opening costs and other
 items                                 (78.8)    (10.4)    175.6      (0.8)

Impairment of goodwill and other
 non-amortizing intangible assets   (2,579.4)   (699.9)   (328.9)    (49.0)
Income/(losses) on interests in
 non-consolidated affiliates               -         -       0.4         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (70.6)    (15.7)    (20.7)     (0.2)
                                    ========  ========  ========  ========
  Loss/(income) from operations     (1,936.1)   (396.7)     38.4     115.9
                                    ========  ========  ========  ========


                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,184.2  $  572.9  $  569.2 $10,127.0
Property operating expenses           (975.2)   (459.4)   (491.3) (7,710.9)
                                    ========  ========  ========  ========
Property EBITDA                        209.0     113.5      77.9   2,416.1
Depreciation and amortization          (66.0)    (36.6)    (72.0)   (690.4)
                                    ========  ========  ========  ========
Operating profit                       143.0      76.9       5.9   1,725.7
Project opening costs and other
 items                                 (21.3)     (1.0)   (113.8)    (50.5)

Impairment of goodwill and other
 non-amortizing intangible assets     (617.1)   (318.5)   (896.8) (5,489.6)
Income/(losses) on interests in
 non-consolidated affiliates               -         -      (2.0)     (1.6)
Corporate expense                          -         -    (140.3)   (140.3)
Acquisition and integration costs          -         -    (149.6)   (149.6)
Amortization of intangible assets       (1.8)    (12.8)    (46.6)   (168.4)
                                    ========  ========  ========  ========
  Loss/(income) from operations       (497.2)   (255.4) (1,343.2) (4,274.3)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                      (2,164.6)
Gains on early extinguishments of
 debt                                                                742.1
Other income, including interest
 income                                                               36.3
                                                                  ========
Loss from continuing operations
 before income taxes                                              (5,660.5)
Benefit for income taxes                                             386.4
                                                                  ========
Loss from continuing operations,
 net of tax                                                       (5,274.1)
Discontinued operations, net of tax                                   90.5
                                                                  ========
Net loss                                                          (5,183.6)
  Less: net income attributable to
   non-controlling interests                                         (13.6)
                                                                  ========
Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(5,197.2)
                                                                  ========



                            HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                        RECONCILIATION OF PROPERTY EBITDA TO
               NET LOSS ATTRIBUTABLE TO HARRAH'S ENTERTAINMENT, INC
                                    (UNAUDITED)

                                                  Successor
                                    ======================================
                                      Jan. 28, 2008 Through Dec. 31, 2008
                                    ======================================
                                      Las     Atlantic Louisiana/  Iowa/
                                      Vegas     City   Mississippi Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $3,000.6  $2,156.0  $1,340.8  $  727.0
Property operating expenses         (2,095.2) (1,672.0) (1,064.6)   (520.9)
                                    ========  ========  ========  ========
Property EBITDA                        905.4     484.0     276.2     206.1
Depreciation and amortization         (170.0)   (175.4)    (74.2)    (48.1)
                                    ========  ========  ========  ========
Operating profit                       735.4     308.6     202.0     158.0
Project opening costs and other
 items                                 (74.4)    (10.3)    175.0      (0.8)

Impairment of goodwill and other
 non-amortizing intangible assets   (2,579.4)   (699.9)   (328.9)    (49.0)
Income/(losses) on interests in
 nonconsolidated affiliates                -         -       0.4         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (69.6)    (13.8)    (20.2)        -
                                    ========  ========  ========  ========
  (Loss)/income from operations     (1,988.0)   (415.4)     28.3     108.2
                                    ========  ========  ========  ========


                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,098.7  $  534.0  $  509.8  $9,366.9
Property operating expenses           (903.3)   (425.0)   (441.0) (7,122.0)
                                    ========  ========  ========  ========
Property EBITDA                        195.4     109.0      68.8   2,244.9
Depreciation and amortization          (61.7)    (32.7)    (64.8)   (626.9)
                                    ========  ========  ========  ========
Operating profit                       133.7      76.3       4.0   1,618.0
Project opening costs and other
 items                                 (21.3)     (1.0)   (112.3)    (45.1)
Impairment of goodwill and other                                   -
 non-amortizing intangible assets     (617.1)   (318.5)   (896.8) (5,489.6)
Income/(losses) on interests in
 nonconsolidated affiliates                -         -      (2.5)     (2.1)
Corporate expense                          -         -    (131.8)   (131.8)
Acquisition and integration costs          -         -     (24.0)    (24.0)
Amortization of intangible assets       (1.2)    (12.7)    (45.4)   (162.9)
                                    ========  ========  ========  ========
  (Loss)/income from operations       (505.9)   (255.9) (1,208.8) (4,237.5)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                      (2,074.9)
Gains on early extinguishments of
 debt                                                                742.1
Other income, including interest
 income                                                               35.2
                                                                  ========
Loss from continuing operations
 before income taxes                                              (5,535.1)
Benefit for income taxes                                             360.4
                                                                  ========
Loss from continuing operations,
 net of tax                                                       (5,174.7)
Discontinued operations, net of tax                                   90.4
                                                                  ========
Net income                                                        (5,084.3)
Less: net income attributable
 to non-controlling interests                                        (12.0)
                                                                  ========
Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(5,096.3)
                                                                  ========



                          HARRAH'S ENTERTAINMENT, INC.
                            SUPPLEMENTAL INFORMATION
                     RECONCILIATION OF PROPERTY EBITDA TO
              NET LOSS ATTRIBUTABLE TO HARRAH'S ENTERTAINMENT, INC
                                 (UNAUDITED)



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


                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $   85.5  $   38.9  $   59.4  $  760.1
Property operating expenses            (71.9)    (34.4)    (50.3)   (588.9)
Property EBITDA                         13.6       4.5       9.1     171.2
Depreciation and amortization           (4.3)     (3.9)     (7.2)    (63.5)
Operating profit                         9.3       0.6       1.9     107.7
Project opening costs and other
 items                                     -         -      (1.5)     (5.4)
Income on interests in
 non-consolidated affiliates               -         -       0.5       0.5
Corporate expense                          -         -      (8.5)     (8.5)
Acquisition and integration costs          -         -    (125.6)   (125.6)
Amortization of intangible assets       (0.6)     (0.1)     (1.2)     (5.5)
                                    ========  ========  ========  ========
  Income/(loss) from operations          8.7       0.5    (134.4)    (36.8)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                         (89.7)
Other income, including interest
 income                                                                1.1
Loss from continuing operations
 before income taxes                                                (125.4)
Benefit for income taxes                                              26.0
                                                                  ========
Loss from continuing operations,
 net of tax                                                          (99.4)
Discontinued operations, net of tax                                    0.1
                                                                  ========
Net loss                                                             (99.3)
  Less: net income attributable to
   non-controlling interests                                          (1.6)
                                                                  ========
Net loss attributable to Harrah's
 Entertainment, Inc.                                              $ (100.9)
                                                                  ========



          HARRAH'S ENTERTAINMENT, INC.SUPPLEMENTAL INFORMATION
RECONCILIATION OF NET INCOME/(LOSS) ATTRIBUTABLE TO HARRAH'S ENTERTAINMENT,
                     INC TO 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, first lien notes, second lien notes and/or our senior secured credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA 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.

The following table reconciles Net income/(loss) attributable to Harrah's Entertainment, Inc. to Adjusted EBITDA for the Successor quarters ended December 31, 2009 and 2008.


                                                --------------------------
                                                      Quarter Ended
                                                --------------------------
                                                  Dec. 31,      Dec. 31,
(In millions)                                       2009          2008
                                                ------------  ------------
Net income/(loss) attributable to Harrah's
 Entertainment, Inc.                            $      295.6  $   (4,782.1)
Interest expense, net                                  477.7         590.1
Provision/(benefit) for income taxes                    61.0        (212.8)
Depreciation and amortization                          213.2         221.7
                                                ------------  ------------
  EBITDA (a)                                         1,047.5      (4,183.1)
Project opening costs, abandoned projects and
 development costs (b)                                   0.7           2.9

Acquisition and integration costs                          -           1.0

Gains on early extinguishments of debt (c)            (686.3)       (946.0)
Discontinued operations, net of tax                        -          (1.9)
Net income attributable to non-controlling
 interests, net of distributions (d)                    (1.7)         (3.8)
Impairment of goodwill and other intangible
 assets                                                 12.3       5,489.6
Non-cash expense for stock compensation
 benefits (e)                                            3.8           4.0

Other non-recurring or non-cash items (f)               42.3          90.9
                                                ------------  ------------
  Adjusted EBITDA (f)                           $      418.6  $      453.6
                                                ============  ============

(a) Amount will differ from amounts previously reported as the starting point has been changed from Income/(loss) from continuing operations to Net income/(loss) attributable to Harrah's Entertainment, Inc.

(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 stock-based compensation expense.

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

(g) Does not include the full period estimated impact of newly completed construction projects or the cost savings yet-to-be-realized from our newly identified and previously announced profitability improvement program.

          HARRAH'S ENTERTAINMENT, INC. SUPPLEMENTAL INFORMATION
           RECONCILIATION OF NET (LOSS)/INCOME ATTRIBUTABLE TO
             HARRAH'S ENTERTAINMENT, INC. TO ADJUSTED EBITDA
                              (UNAUDITED)

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

The following table reconciles Net (loss)/income attributable to Harrah's Entertainment, Inc. to LTM Adjusted EBITDA for the year ended December 31, 2009, the Successor period from January 28, 2008 through December 31, 2008, and for the Predecessor period from January 1, 2008 through January 27, 2008. We have also combined the Successor and Predecessor periods' results for the year ended December 31, 2008, in the presentation below because company management believes that it enables a meaningful presentation and comparison of results to the Successor year ended December 31, 2009.



                                        ----------  ----------
                            Successor   Predecessor  Successor    Combined
                                        ----------  ----------
                                          Jan. 1,     Jan. 28,    Jan. 1,
                                           2008        2008        2008
                            Year Ended    Through     Through     Through
                             Dec. 31,    Jan. 27,    Dec. 31,    Dec. 31,
(In millions)                  2009        2008        2008        2008
                            ----------  ----------  ----------  ----------
Net (loss)/income
 attributable to Harrah's
 Entertainment, Inc         $    827.6  $   (100.9) $ (5,096.3) $ (5,197.2)
Interest expense, net          1,859.2        89.7     2,041.2     2,130.9
(Benefit)/provision for
 income taxes                  1,651.8       (26.0)     (360.4)     (386.4)
Depreciation and
 amortization                    872.0        72.7       805.2       877.9
                            ----------  ----------  ----------  ----------
  EBITDA (a)                   5,210.6        35.5    (2,610.3)   (2,574.8)
Project opening costs,
 abandoned projects and
 development costs (b)             3.5         0.9        31.6        32.5
Acquisition and integration
 costs                             0.3       125.6        24.0       149.6
Gains on early
 extinguishments of debt (c)  (4,965.5)          -      (742.1)     (742.1)
Discontinued operations,
 net of tax                          -        (0.1)      (90.4)      (90.5)
Net income attributable to
 non-controlling interests,
 net of distributions (d)         (1.5)        1.0        (7.4)       (6.4)
Impairment of goodwill and
 other intangible assets       1,638.0           -     5,489.6     5,489.6
Non-cash expense for stock
 compensation benefits (e)        16.3         2.4        16.3        18.7
Income from insurance
 claims for hurricane
 losses (f)                          -           -      (185.4)     (185.4)
Other non-recurring or
 non-cash items (g)              169.0         6.7       249.9       256.6
Pro forma adjustment for
 acquired, new or disposed
 properties(h)                    17.0                                 8.0
Pro forma adjustment for
 yet-to-be realized cost
 savings (i)                     208.8                               501.5
                            ----------                          ----------
  LTM adjusted EBITDA       $  2,296.5                          $  2,857.3
                            ==========                          ==========

(a) Amount will differ from amounts previously reported as the starting point has been changed from Income/(loss) from continuing operations to Net income/(loss) attributable to Harrah's Entertainment, Inc.

(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 stock-based compensation expense.

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

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

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

(i) Represents the cost savings yet-to-be-realized from our newly identified and 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
         NET LOSS ATTRIBUTABLE TO HARRAH'S OPERATING COMPANY, INC.
                              (UNAUDITED)


                                    Fourth Quarter Ended Dec. 31, 2009
                                ==========================================
                                   Las     Atlantic  Louisiana/    Iowa/
                                  Vegas      City   Mississippi   Missouri
                                  Region     Region     Region     Region
                                =========  =========  =========  =========
(In millions)
Net Revenues                    $   307.5  $   352.1  $   285.4  $   179.5
Property operating expenses        (225.3)    (307.3)    (229.5)    (125.2)
                                =========  =========  =========  =========
Property EBITDA                      82.2       44.8       55.9       54.3
Depreciation and amortization       (21.6)     (28.2)     (20.4)     (12.8)
                                =========  =========  =========  =========
Operating profit                     60.6       16.6       35.5       41.5
Project opening costs and other
 items                               (3.3)      (0.1)       0.5       (0.1)
Impairment of goodwill and
 other non-amortizing
 intangible assets                      -          -          -          -
Income/(loss) on interests in
 non-consolidated affiliates            -        0.4        0.1          -
Corporate expense                       -          -          -          -
Amortization of intangible
 assets                              (8.1)      (2.7)      (5.5)         -
                                =========  =========  =========  =========
     Income/(loss) from
      operations                     49.2       14.2       30.6       41.4
                                =========  =========  =========  =========


                                Illinois/    Other
                                 Indiana     Nevada
                                  Region     Region     Other      Total
                                =========  =========  =========  =========
(In millions)
Net Revenues                    $   271.2  $    70.9  $   164.9  $ 1,631.5
Property operating expenses        (219.4)     (63.3)    (128.8)  (1,298.8)
                                =========  =========  =========  =========
Property EBITDA                      51.8        7.6       36.1      332.7
Depreciation and amortization       (20.9)      (6.5)     (16.8)    (127.2)
                                =========  =========  =========  =========
Operating profit                     30.9        1.1       19.3      205.5
Project opening costs and other
 items                               (0.6)      (0.1)     (18.1)     (21.8)
Impairment of goodwill and
 other non-amortizing
 intangible assets                      -       (4.0)      (8.3)     (12.3)
Income/(loss) on interests in
 non-consolidated affiliates            -          -       (1.0)      (0.5)
Corporate expense                       -          -      (18.2)     (18.2)
Amortization of intangible
 assets                              (0.4)      (0.6)     (10.9)     (28.2)
                                =========  =========  =========  =========
     Income/(loss) from
      operations                     29.9       (3.6)     (37.2)     124.5
                                =========  =========  =========
Interest expense, net of
 interest capitalized                                               (433.5)
Losses on early extinguishments
 of debt                                                              (1.8)

Other income including interest
 income                                                                9.9
                                                                 =========
Loss from continuing operations
 before income taxes                                                (300.9)
Benefit for income taxes                                             193.6
                                                                 =========
Net loss                                                            (107.3)
  Less: net income attributable
   to non-controlling interests                                       (1.8)
                                                                 =========
Net loss attributable to
 Harrah's Entertainment, Inc.                                    $  (109.1)
                                                                 =========



            HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
                       RECONCILIATION OF PROPERTY EBITDA TO
              NET LOSS ATTRIBUTABLE TO HARRAH'S OPERATING COMPANY, INC.

                                   (UNAUDITED)

                                      Fourth Quarter Ended Dec. 31, 2008
                                    ======================================
                                      Las     Atlantic Louisiana/   Iowa/
                                      Vegas     City  Mississippi  Missouri
                                     Region    Region    Region    Region
                                    ========  ========  ========  ========
(In millions)
Net Revenues                        $  322.4  $  374.8  $  329.9  $  189.6
Property operating expenses           (246.3)   (313.1)   (271.6)   (131.5)
                                    ========  ========  ========  ========
Property EBITDA                         76.1      61.7      58.3      58.1
Depreciation and amortization          (20.9)    (33.0)    (20.4)    (13.2)
                                    ========  ========  ========  ========
Operating profit                        55.2      28.7      37.9      44.9
Project opening costs and other
 items                                  (2.1)     (4.6)     (3.4)     (0.5)

Impairment of goodwill and other
 non-amortizing intangible assets   (1,121.4)   (514.5)   (328.9)    (49.0)
Income/(loss) on interests in
 non-consolidated affiliates               -         -       0.2         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets       (8.1)     (2.7)     (5.5)        -
                                    ========  ========  ========  ========
   Loss from operations             (1,076.4)   (493.1)   (299.7)     (4.6)
                                    ========  ========  ========  ========

                                   Illinois/    Other
                                    Indiana    Nevada
                                     Region    Region     Other     Total
                                    ========  ========  ========  ========
(In millions)
Net Revenues                        $  294.3  $   79.7  $  162.1  $1,752.8
Property operating expenses           (249.6)    (73.3)   (121.3) (1,406.7)
                                    ========  ========  ========  ========
Property EBITDA                         44.7       6.4      40.8     346.1
Depreciation and amortization          (21.6)     (6.6)    (17.5)   (133.2)
                                    ========  ========  ========  ========
Operating profit                        23.1      (0.2)     23.3     212.9
Project opening costs and other
 items                                  (2.8)     (0.7)    (37.3)    (51.4)

Impairment of goodwill and other
 non-amortizing intangible assets     (617.1)   (217.5)   (896.8) (3,745.2)
Income/(loss) on interests in
 non-consolidated affiliates               -         -      (1.0)     (0.8)
Corporate expense                          -         -     (17.7)    (17.7)
Acquisition and integration costs          -         -      (1.0)     (1.0)
Amortization of intangible assets       (0.4)     (0.6)    (11.5)    (28.8)
                                    ========  ========  ========  ========
   Loss from operations               (597.2)   (219.0)   (942.0) (3,632.0)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                        (496.2)
Gains on early extinguishments of
 debt                                                                946.0
Other income, including interest
 income                                                               14.2
                                                                  ========

Loss from continuing operations
 before income taxes                                              (3,168.0)
Benefit for income taxes                                             191.9
                                                                  ========

Loss from continuing operations,
 net of tax                                                       (2,976.1)
Discontinued operations, net of tax                                    1.9
                                                                  ========
Net loss                                                          (2,974.2)
  Less: net income attributable to
   non-controlling interests                                          (4.8)
                                                                  ========


Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(2,979.0)
                                                                  ========



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


                                                  Successor
                                    ======================================
                                           Year Ended Dec. 31, 2009
                                    ======================================

                                      Las     Atlantic  Louisiana/ Iowa/
                                      Vegas     City   Mississippi Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $1,215.1  $1,528.1  $1,245.2  $  756.6
Property operating expenses           (898.0) (1,252.1)   (952.6)   (518.2)
                                    ========  ========  ========  ========
Property EBITDA                        317.1     276.0     292.6     238.4
Depreciation and amortization          (84.6)   (123.5)    (81.6)    (50.6)
                                    ========  ========  ========  ========
Operating profit                       232.5     152.5     211.0     187.8
Project opening costs and other
 items                                  (9.5)     (2.7)     (2.4)     (0.3)
Impairment of goodwill and other
 non-amortizing intangible assets     (671.8)   (178.7)     (6.0)        -
Income/(loss) on interests in
 non-consolidated affiliates               -       2.6       0.7         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (32.3)    (10.9)    (21.9)        -
                                    ========  ========  ========  ========
  (Loss)/income from operations       (481.1)    (37.2)    181.4     187.5
                                    ========  ========  ========  ========


                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,172.3  $  332.5  $  623.4  $6,873.2
Property operating expenses           (931.8)   (271.8)   (451.5) (5,276.0)
                                    ========  ========  ========  ========
Property EBITDA                        240.5      60.7     171.9   1,597.2
Depreciation and amortization          (84.9)    (26.7)    (71.6)   (523.5)
                                    ========  ========  ========  ========
Operating profit                       155.6      34.0     100.3   1,073.7
Project opening costs and other
 items                                  (8.9)     (1.5)    (49.5)    (74.8)
Impairment of goodwill and other
 non-amortizing intangible assets     (180.7)     (4.0)   (137.7) (1,178.9)
Income/(loss) on interests in
 non-consolidated affiliates               -         -      (2.9)      0.4
Corporate expense                          -         -     (74.5)    (74.5)
Acquisition and integration costs          -         -      (0.3)     (0.3)
Amortization of intangible assets       (1.4)     (2.2)    (46.5)   (115.2)
                                    ========  ========  ========  ========
  (Loss)/income from operations        (35.4)     26.3    (211.1)   (369.6)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                      (1,678.5)
Gains on early extinguishments of
 debt                                                              3,929.6
Other income, including interest
 income                                                               32.0
                                                                  ========
Income from continuing operations
 before income taxes                                               1,913.5
Provision for income taxes                                        (1,287.2)
                                                                  ========
Net income                                                           626.3
  Less: net income attributable to
   non-controlling interests                                         (13.5)
                                                                  ========
Net income attributable to Harrah's
 Entertainment, Inc.                                              $  612.8
                                                                  ========



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


                                                   Combined
                                    ======================================
                                           Year Ended Dec. 31, 2008
                                    ======================================
                                      Las     Atlantic Louisiana/   Iowa/
                                      Vegas     City  Mississippi  Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $1,437.4  $1,776.6  $1,446.9  $  782.8
Property operating expenses         (1,034.7) (1,405.9) (1,152.1)   (563.7)
                                    ========  ========  ========  ========
Property EBITDA                        402.7     370.7     294.8     219.1
Depreciation and amortization          (82.0)   (137.1)    (82.8)    (53.2)
                                    ========  ========  ========  ========
Operating profit                       320.7     233.6     212.0     165.9
Project opening costs and other
 items                                  (8.4)     (7.9)    175.6      (0.8)
Impairment of goodwill and other
 non-amortizing intangible assets   (1,121.4)   (514.5)   (328.9)    (49.0)
Income/(loss) on interests in
 non-consolidated affiliates               -         -       0.4         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (30.5)    (11.9)    (20.7)     (0.2)
                                    ========  ========  ========  ========
(Loss)/income from operations         (839.6)   (300.7)     38.4     115.9
                                    ========  ========  ========  ========

                                   Illinois/    Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,184.2  $  406.3  $  661.0  $7,695.2
Property operating expenses           (975.2)   (338.4)   (525.2) (5,995.2)
                                    ========  ========  ========  ========
Property EBITDA                        209.0      67.9     135.8   1,700.0
Depreciation and amortization          (66.0)    (28.0)    (72.0)   (521.1)
                                    ========  ========  ========  ========
Operating profit                       143.0      39.9      63.8   1,178.9
Project opening costs and other
 items                                 (21.3)     (0.7)   (104.9)     31.6

Impairment of goodwill and other
 non-amortizing intangible assets     (617.1)   (217.5)   (896.8) (3,745.2)
Income/(loss) on interests in
 non-consolidated affiliates               -         -      (1.9)     (1.5)
Corporate expense                          -         -     (80.1)    (80.1)
Acquisition and integration costs          -         -    (149.6)   (149.6)
Amortization of intangible assets       (1.8)     (2.1)    (46.5)   (113.7)
                                    ========  ========  ========  ========
(Loss)/income from operations         (497.2)   (180.4) (1,216.0) (2,879.6)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                      (1,794.0)
Gains on early extinguishments of
 debt                                                                742.1
Other income, including interest
 income                                                               34.7
                                                                  ========
Loss from continuing operations
 before income taxes                                              (3,896.8)
Benefit for income taxes                                             400.1
Income from continuing operations,
 net of tax                                                       (3,496.7)
Discontinued operations, net of tax                                   90.5
                                                                  ========
Net loss                                                          (3,406.2)
  Less: net income attributable to
   non-controlling interests                                          (7.8)
                                                                  ========
Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(3,414.0)
                                                                  ========





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



                                                  Successor
                                    ======================================
                                      Jan. 28, 2008 Through Dec. 31, 2008
                                    ======================================

                                      Las     Atlantic Louisiana/   Iowa/
                                      Vegas     City  Mississippi  Missouri
(In millions)                        Region    Region    Region    Region
                                    ========  ========  ========  ========
Net Revenues                        $1,318.9  $1,650.8  $1,340.8  $  727.0
Property operating expenses           (954.3) (1,302.0) (1,064.6)   (520.9)
                                    ========  ========  ========  ========
Property EBITDA                        364.6     348.8     276.2     206.1
Depreciation and amortization          (74.6)   (125.2)    (74.2)    (48.1)
                                    ========  ========  ========  ========
Operating profit                       290.0     223.6     202.0     158.0
Project opening costs and other
 items                                  (8.4)     (7.8)    175.0      (0.8)

Impairment of goodwill and other
 non-amortizing intangible assets   (1,121.4)   (514.5)   (328.9)    (49.0)
Income/(loss) on interests in
 non-consolidated affiliates               -         -       0.4         -
Corporate expense                          -         -         -         -
Acquisition and integration costs          -         -         -         -
Amortization of intangible assets      (29.5)    (10.0)    (20.2)        -
                                    ========  ========  ========  ========
  (Loss)/income from operations       (869.3)   (308.7)     28.3     108.2
                                    ========  ========  ========  ========


                                   Illinois/     Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $1,098.7  $  379.5  $  602.0  $7,117.7
Property operating expenses           (903.3)   (312.8)   (469.4) (5,527.3)
                                    ========  ========  ========  ========
Property EBITDA                        195.4      66.7     132.6   1,590.4
Depreciation and amortization          (61.7)    (25.0)    (64.8)   (473.6)
                                    ========  ========  ========  ========
Operating profit                       133.7      41.7      67.8   1,116.8
Project opening costs and other
 items                                 (21.3)     (0.7)   (103.5)     32.5

Impairment of goodwill and other
 non-amortizing intangible assets     (617.1)   (217.5)   (896.8) (3,745.2)
Income/(loss) on interests in
 non-consolidated affiliates               -         -      (2.4)     (2.0)
Corporate expense                          -         -    (106.3)   (106.3)
Acquisition and integration costs          -         -     (24.0)    (24.0)
Amortization of intangible assets       (1.2)     (2.0)    (45.3)   (108.2)
                                    ========  ========  ========  ========
  (Loss)/income from operations       (505.9)   (178.5) (1,110.5) (2,836.4)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                      (1,704.3)
Gains on early extinguishments of
 debt                                                                742.1
Other income, including interest
 income                                                               29.6
                                                                  ========
Loss from continuing operations
 before income taxes                                              (3,769.0)
Benefit for income taxes                                             378.5
                                                                  ========
Loss from continuing operations,
 net of tax                                                       (3,390.5)
Discontinued operations, net of tax                                   90.4
                                                                  ========
Net loss                                                          (3,300.1)
  Less: net income attributable to
   non-controlling interests                                          (6.4)
                                                                  ========
Net loss attributable to Harrah's
 Entertainment, Inc.                                             $(3,306.5)
                                                                  ========



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



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


                                   Illinois/     Other
                                    Indiana    Nevada
(In millions)                        Region    Region     Other     Total
                                    ========  ========  ========  ========
Net Revenues                        $   85.5  $   26.8  $   59.0  $  577.5
Property operating expenses            (71.9)    (25.6)    (55.8)   (467.9)
                                    ========  ========  ========  ========
Property EBITDA                         13.6       1.2       3.2     109.6
Depreciation and amortization           (4.3)     (3.0)     (7.2)    (47.5)
                                    ========  ========  ========  ========
Operating profit                         9.3      (1.8)     (4.0)     62.1
Project opening costs and other
 items                                     -         -      (1.4)     (0.9)
Income on interests in
 non-consolidated affiliates               -         -       0.5       0.5
Corporate expense                          -         -      26.2      26.2
Acquisition and integration costs          -         -    (125.6)   (125.6)
Amortization of intangible assets       (0.6)     (0.1)     (1.2)     (5.5)
                                    ========  ========  ========  ========
  Income/(loss) from operations          8.7      (1.9)   (105.5)    (43.2)
                                    ========  ========  ========
Interest expense, net of interest
 capitalized                                                         (89.7)
Other income, including interest
 income                                                                5.1
                                                                  ========
Loss from continuing operations
 before income taxes                                                (127.8)
Benefit for income taxes                                              21.6
                                                                  ========
Loss from continuing operations,
 net of tax                                                         (106.2)
Discontinued operations, net of tax                                    0.1
                                                                  ========
Net loss                                                            (106.1)
  Less: net income attributable to
   non-controlling interests                                          (1.4)
                                                                  ========

Net loss attributable to Harrah's
 Entertainment, Inc.                                              $ (107.5)
                                                                  ========



      HARRAH'S OPERATING COMPANY, INC., 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, first lien notes, second lien notes and/or our senior secured credit facilities. We believe that the inclusion of supplementary adjustments to EBITDA applied in presenting Adjusted EBITDA 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, Harvey's Lake Tahoe and Bill's Lake Tahoe. Subsequent to the closing, Paris Las Vegas and Harrah's Laughlin and their related operating assets were spun off from Harrah's Operating Company and its subsidiaries to Harrah's Entertainment, and Harrah's Lake Tahoe, Harvey's Lake Tahoe, Bill's Lake Tahoe and Showboat Atlantic City and their related operating assets were transferred to subsidiaries of Harrah's Operating Company from Harrah's Entertainment (the "Post-Close CMBS Transaction"). The properties spun off from Harrah's Operating Company and owned by Harrah's Entertainment, whether at closing or after the subsequent transfer, are collectively referred to as "the CMBS properties." We refer to the CMBS Spin-Off and the Post-Closing CMBS Transaction as the "CMBS Transactions."

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

The following table reconciles Net loss attributable to Harrah's Operating Company, Inc. to Adjusted EBITDA for the Successor period quarters ended December 31, 2009 and 2008.


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


                                                  ------------------------
                                                        Quarter Ended
                                                  ------------------------
                                                    Dec. 31,     Dec. 31,
(In millions)                                         2009         2008
                                                  -----------  -----------
Net loss attributable to Harrah's Operating
 Company, Inc.                                    $    (109.1) $  (2,979.0)
Interest expense, net                                   423.6        482.3
Benefit for income taxes                               (193.6)      (191.9)
Depreciation and amortization                           158.4        165.5
                                                  -----------  -----------
  EBITDA (a)                                            279.3     (2,523.1)
Project opening costs, abandoned projects and
 development costs (b)                                    0.6          2.9

Acquisition and integration costs                           -          1.0
Losses/(gains) on early extinguishments
 of debt (c)                                              1.8       (946.0)
Discontinued operations, net of tax                         -         (1.9)
Net income attributable to non-controlling
 interests, net of distributions (d)                     (1.6)        (3.3)
Impairment of goodwill and other non-amortizing
 intangible assets                                       12.3      3,745.2
Non-cash expense for stock compensation
 benefits (e)                                             2.7          2.9

Other non-recurring or non-cash items (f)                22.1         46.3
                                                  -----------  -----------
  Adjusted EBITDA(g)                              $     317.2  $     324.0
                                                  ===========  ===========


(a) Amount will differ from amounts previously reported as the starting point has been changed from Income/(loss) from continuing operations to Net income/(loss) attributable to Harrah's Operating Company, Inc.

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

(g) Does not include the full period estimated impact of newly completed construction projects or the cost savings yet-to-be realized from our newly identified and previously announced profitability improvement program.

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

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

The following table reconciles Net (loss)/income attributable to Harrah's Operating Company, Inc. to LTM Adjusted EBITDA for the Successor period ended December 31, 2009, the Successor period from January 28, 2008 through December 31, 2009, and for the Predecessor period from January 1, 2008 through January 27, 2008. We have also combined the Successor and Predecessor periods' results for the year ended December 31, 2008, in the presentation below because company management believes that it enables a meaningful presentation and comparison of results to the Successor period ended December 31, 2009.


                        -----------  -----------  -----------  -----------
                         Successor   Predecessor   Successor     Combined
                        -----------  -----------  -----------  -----------
                                        Jan. 1,      Jan. 28,     Jan. 1,
                                          2008         2008         2008
                         Year Ended     Through      Through      Through
                          Dec. 31,      Jan. 27,     Dec. 31,     Dec. 31,
(In millions)               2009          2008         2008         2008
                        -----------  -----------  -----------  -----------

Net (loss)/income
 attributable to
 Harrah's Operating
 Company, Inc.          $     612.8  $    (107.5) $  (3,306.5) $  (3,414.0)
Interest expense, net       1,646.2         85.7      1,675.4      1,761.1
(Benefit)/provision for
 income taxes               1,287.2        (21.6)      (378.5)      (400.1)
Depreciation and
 amortization                 652.0         56.7        597.2        653.9
                        -----------  -----------  -----------  -----------
  EBITDA(a)                 4,198.2         13.3     (1,412.4)    (1,399.1)

Project opening costs,
 abandoned projects and
 development costs (b)          3.3          0.9         30.0         30.9

Acquisition and
 integration costs              0.3        125.6         24.0        149.6

(Gains)/losses on early
 extinguishments of
 debt (c)                  (3,929.6)           -       (742.1)      (742.1)
Discontinued
 operations, net of tax           -         (0.1)       (90.4)       (90.5)

Net income attributable
 to non-controlling
 interests, net of
 distributions (d)             (1.8)         0.8         (7.2)        (6.4)

Impairment of goodwill
 and other
 non-amortizing
 intangible assets          1,178.9            -      3,745.2      3,745.2

Non-cash expense for
 stock compensation
 benefits (e)                  12.0          1.7         12.1         13.8

Income from insurance
 claims for hurricane
 losses (f)                       -            -       (185.4)      (185.4)

Other non-recurring or
 non-cash items (g)            89.3          0.8        130.1        130.9

Pro forma adjustment
 for new properties(h)         17.0                                    8.0

Pro forma adjustment
 for yet-to-be realized
 cost savings (i)             150.3                                  361.1
                        -----------                            -----------
  LTM adjusted EBITDA   $   1,717.9                            $   2,016.0
                        ===========                            ===========


(a) Amount will differ from amounts previously reported as the starting point has been changed from Income/(loss) from continuing operations to Net income/(loss) attributable to Harrah's Operating Company, Inc.

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

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

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

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

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

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

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

(i) Represents the cost savings yet-to-be realized from our newly identified and previously announced profitability improvement program.



The following tables present the condensed combined statement of operations of Harrah's Operating Company, Inc. for the quarter and full year ended December 31, 2009, the quarter ended December 31, 2008, the Successor period from January 28, 2008 through December 31, 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
                      FOR THE QUARTER ENDED DEC. 31, 2009
                                 (UNAUDITED)

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

Revenues                                $  1,631.5  $    467.6  $  2,099.1
Property operating expenses               (1,298.8)     (357.2)   (1,656.0)
Depreciation and amortization               (127.2)      (39.9)     (167.1)
                                        ----------  ----------  ----------
  Operating profit                           205.5        70.5       276.0
Project opening costs and other items        (21.8)       (8.2)      (30.0)
Impairment of goodwill and other
 non-amortizing intangible assets            (12.3)          -       (12.3)
Loss on interests in non-consolidated
 affiliates                                   (0.5)       (0.4)       (0.9)
Corporate expense                            (18.2)      (20.8)      (39.0)
Acquisition and integration costs                -           -           -
Amortization of intangible assets            (28.2)      (14.9)      (43.1)
                                        ----------  ----------  ----------
Income from operations                       124.5        26.2       150.7
Interest expense, net of interest
 capitalized                                (433.5)      (54.3)     (487.8)
(Losses)/gains on early extinguishment
 of debt                                      (1.8)      688.1       686.3
Other income, including interest income        9.9         0.2        10.1
                                        ----------  ----------  ----------
(Loss)/income before income taxes           (300.9)      660.2       359.3
Income tax benefit/(provision)               193.6      (254.6)      (61.0)
                                        ----------  ----------  ----------
Net (loss)/income                           (107.3)      405.6       298.3
Less: net income attributable to
 non-controlling interests                    (1.8)       (0.9)       (2.7)
                                        ----------  ----------  ----------
  Net (loss)/income attributable to
   Harrah's Operating Company, Inc.     $   (109.1) $    404.7  $    295.6
                                        ==========  ==========  ==========


(a) Represents the financial information of HOC.

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

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


       HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                        HARRAH'S ENTERTAINMENT, INC.
           CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                   FOR THE QUARTER ENDED DEC. 31, 2008
                             (UNAUDITED)



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

Revenues                                $  1,752.8  $    525.6  $  2,278.4
Property operating expenses               (1,406.7)     (393.7)   (1,800.4)
Depreciation and amortization               (133.2)      (41.3)     (174.5)
                                        ----------  ----------  ----------
  Operating profit                           212.9        90.6       303.5
Project opening costs and other items        (51.4)      (29.2)      (80.6)
Impairment of goodwill and other
 non-amortizing intangible assets         (3,745.2)   (1,744.4)   (5,489.6)
Loss on interests in non-consolidated
 affiliates                                   (0.8)          -        (0.8)
Corporate expense                            (17.7)      (18.1)      (35.8)
Acquisition and integration costs             (1.0)          -        (1.0)
Amortization of intangible assets            (28.8)      (14.9)      (43.7)
                                        ----------  ----------  ----------
Loss from operations                      (3,632.0)   (1,716.0)   (5,348.0)
Interest expense, net of interest
 capitalized                                (496.2)     (109.4)     (605.6)
Gain on early extinguishment of debt         946.0           -       946.0
Other income, including interest income       14.2         2.4        16.6
                                        ----------  ----------  ----------
Loss before income taxes                  (3,168.0)   (1,823.0)   (4,991.0)
Income tax benefit                           191.9        20.9       212.8
                                        ----------  ----------  ----------
Loss from continuing operations, net
 of tax                                   (2,976.1)   (1,802.1)   (4,778.2)
Discontinued operations, net of tax            1.9           -         1.9
                                        ----------  ----------  ----------
Net loss                                  (2,974.2)   (1,802.1)   (4,776.3)
Less: net income attributable to
 non-controlling interests                    (4.8)       (1.0)       (5.8)
                                        ----------  ----------  ----------
  Net loss attributable to Harrah's
   Operating Company, Inc.              $ (2,979.0) $ (1,803.1) $ (4,782.1)
                                        ==========  ==========  ==========

(a) Represents the financial information of HOC.

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

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

       HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                         HARRAH'S ENTERTAINMENT, INC.
                  CONDENSED COMBINED STATEMENT OF OPERATIONS
                                (SUCCESSOR)
                      FOR THE YEAR ENDED DEC. 31, 2009
                                (UNAUDITED)



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

Revenues                                $  6,873.2  $  2,034.2  $  8,907.4
Property operating expenses               (5,276.0)   (1,477.8)   (6,753.8)
Depreciation and amortization               (523.5)     (160.4)     (683.9)
                                        ----------  ----------  ----------
  Operating profit                         1,073.7       396.0     1,469.7

Project opening costs and other items        (74.8)      (36.7)     (111.5)
Impairment of goodwill and other
 non-amortizing intangible assets         (1,178.9)     (459.1)   (1,638.0)
Income/(loss) on interests in
 non-consolidated affiliates                   0.4        (2.6)       (2.2)
Corporate expense                            (74.5)      (76.2)     (150.7)
Acquisition and integration costs             (0.3)          -        (0.3)
Amortization of intangible assets           (115.2)      (59.6)     (174.8)
                                        ----------  ----------  ----------
Loss from operations                        (369.6)     (238.2)     (607.8)
Interest expense, net of interest
 capitalized                              (1,678.5)     (214.0)   (1,892.5)
Gains on early extinguishment of debt      3,929.6     1,035.9     4,965.5
Other income, including interest income       32.0         1.0        33.0
                                        ----------  ----------  ----------
Income before income taxes                 1,913.5       584.7     2,498.2
Income tax provision                      (1,287.2)     (364.6)   (1,651.8)
                                        ----------  ----------  ----------
Net income                                   626.3       220.1       846.4
Less: net income attributable to
 non-controlling interests                   (13.5)       (5.3)      (18.8)
                                        ----------  ----------  ----------
  Net income attributable to Harrah's
   Operating Company, Inc.              $    612.8  $    214.8  $    827.6
                                        ==========  ==========  ==========

(a) Represents the financial information of HOC.

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

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


        HARRAH'S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF
                          HARRAH'S ENTERTAINMENT, INC.
             CONDENSED PRO FORMA COMBINED STATEMENT OF OPERATIONS
                                 (SUCCESSOR)
            FOR THE PERIOD FROM JAN. 28, 2008 THROUGH DEC. 31, 2008
                                 (UNAUDITED)


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

Revenues                                $  7,117.7  $  2,249.2  $  9,366.9
Property operating expenses               (5,527.3)   (1,594.7)   (7,122.0)
Depreciation and amortization               (473.6)     (153.3)     (626.9)
                                        ----------  ----------  ----------
  Operating profit                         1,116.8       501.2     1,618.0
Project opening costs and other items         32.5       (77.6)      (45.1)
Impairment of goodwill and other
 non-amortizing intangible assets         (3,745.2)   (1,744.4)   (5,489.6)
Loss on interests in non-consolidated
 affiliates                                   (2.0)       (0.1)       (2.1)
Corporate expense                           (106.3)      (25.5)     (131.8)
Acquisition and integration costs            (24.0)          -       (24.0)
Amortization of intangible assets           (108.2)      (54.7)     (162.9)
                                        ----------  ----------  ----------
Loss from operations                      (2,836.4)   (1,401.1)   (4,237.5)
Interest expense, net of interest
 capitalized                              (1,704.3)     (370.6)   (2,074.9)
Gain on early extinguishment of debt         742.1           -       742.1
Other income, including interest income       29.6         5.6        35.2
                                        ----------  ----------  ----------
Loss before income taxes                  (3,769.0)   (1,766.1)   (5,535.1)
Income tax benefit/(provision)               378.5       (18.1)      360.4
                                        ----------  ----------  ----------
Loss from continuing operations, net of
 tax                                      (3,390.5)   (1,784.2)   (5,174.7)
Discontinued operations, net of tax           90.4           -        90.4
                                        ----------  ----------  ----------
Net loss                                  (3,300.1)   (1,784.2)   (5,084.3)
Less: net income attributable to
 non-controlling interests                    (6.4)       (5.6)      (12.0)
                                        ----------  ----------  ----------
  Net loss attributable to Harrah's
   Operating Company, Inc.              $ (3,306.5) $ (1,789.8) $ (5,096.3)
                                        ==========  ==========  ==========


(a) Represents the financial information of HOC.

(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 parent company.

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



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


                                                        HET Parent
                                                        and Other
                                                         Harrah's
                                                      Entertainment
                           London                     Subsidiaries
                   HOC     Clubs      CMBS   Historical   and     Harrah's
             Restructured Transfer Transactions  HOC    Accounts Entertain-
(In millions)                (a)       (b)       (c)       (d)    ment (e)
                --------  --------  --------  --------  --------  --------

Revenues        $  577.5  $  (34.0) $  182.3  $  725.8  $   34.3  $  760.1
Property
 operating
 expenses         (467.9)     34.0    (126.5)   (560.4)    (28.5)   (588.9)
Depreciation
 and
 amortization      (47.5)      1.6     (16.0)    (61.9)     (1.6)    (63.5)
                --------  --------  --------  --------  --------  --------
 Operating
  profit/(loss)     62.1       1.6      39.8     103.5       4.2     107.7
Project opening
 costs and
 other items        (0.9)      0.7      (4.5)     (4.7)     (0.7)     (5.4)
Income on
 interests
 in non-
 consolidated
 affiliates          0.5         -         -       0.5         -       0.5
Corporate
 expense            26.2         -     (34.7)     (8.5)        -      (8.5)
Acquisition and
 integration
 costs            (125.6)        -         -    (125.6)        -    (125.6)
Amortization of
 intangible
 assets             (5.5)      0.2         -      (5.3)     (0.2)     (5.5)
                --------  --------  --------  --------  --------  --------
(Loss)/income
 from
 operations        (43.2)      2.5       0.6     (40.1)      3.3     (36.8)
Interest
 expense, net
 of interest
 capitalized       (89.7)        -         -     (89.7)        -     (89.7)
Other income/
 (expense)
 including
 interest
 income              5.1      (3.3)     (4.0)     (2.2)      3.3       1.1
                --------  --------  --------  --------  --------  --------
(Loss)/income
 before income
 taxes            (127.8)     (0.8)     (3.4)   (132.0)      6.6    (125.4)
Income tax
 benefit/
 (provision)        21.6      (0.9)      1.2      21.9       4.1      26.0
                --------  --------  --------  --------  --------  --------
(Loss)/income
 from
 continuing
 operations,
 net of tax       (106.2)     (1.7)     (2.2)   (110.1)     10.7     (99.4)
Discontinued
 operations,
 net of tax          0.1         -         -       0.1         -       0.1
                --------  --------  --------  --------  --------  --------
Net (loss)/
 income           (106.1)     (1.7)     (2.2)   (110.0)     10.7     (99.3)
Less: net
 income
 attributable
 to non-
 controlling
 interests          (1.4)      0.9      (0.2)     (0.7)     (0.9)     (1.6)
                --------  --------  --------  --------  --------  --------
   Net
    (loss)/
    income
    attributable
    to Harrah's
    Operating
    Company,
    Inc.        $ (107.5) $   (0.8) $   (2.4) $ (110.7) $    9.8  $ (100.9)
                ========  ========  ========  ========  ========  ========


(a) 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.

(b) 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.

(c) Represents the historical financial information of HOC.

(d) 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 parent company.

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

Contact Information

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

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