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harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
harrah's entertainment JH BofA91906
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harrah's entertainment JH BofA91906

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  • 1. Jonathan Halkyard Chief Financial Officer and Treasurer
  • 2. Safe Harbor Statement This presentation 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 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 Caesars into our operations; changes in laws, including increased tax rates, regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; the ability of our customer-tracking, customer loyalty and yield-management programs to continue to increase customer loyalty and same store sales or hotel sales; our ability to recoup costs of capital investments through higher revenues; acts of war or terrorist incidents or natural disasters; abnormal gaming holds; and the effects of competition, including locations of competitors and operating and market competition. Any forward-looking statements are made pursuant to the Private Securities Litigation Reform Act of 1995 and, as such, speak only as of the date made. Harrah’s disclaims any obligation to update the forward-looking statements. You are cautioned not to place undue reliance on these forward-looking statements which speak only as of the date stated, or if no date is stated, as of the date of this press release. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 3. Company Overview Largest provider of branded casino entertainment 4 million square feet of casino space 40,000 hotel rooms 85,000 employees 40 million Total Rewards members Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 4. Industry’s Broadest Footprint Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 5. A Portfolio of Winning Brands Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 6. Financial Strength Only investment-grade gaming company Borrows at industry’s most competitive rates Nearly $1.2 billion of capacity under revolver Revenues of nearly $9.0 billion on a pro-forma basis in 2005 Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 7. Diversity Of Cash Flow Provides Stability, Funds Growth Region # Properties % EBITDA Las Vegas 7 35% Atlantic City 5 26% LA/MS 5 9% Illinois/Indiana 4 11% Iowa/MO 4 9% Managed / Intl / Other 12 10% TOTAL 37 100% Represents 2005 EBITDA percentage contributions. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 8. #1 or #2 in every market in which we compete Atlantic City Las Vegas Chicagoland St. Louis Mississippi Kansas City S. Illinois/Indiana Laughlin Shreveport/ Bossier City New Orleans Reno/Tahoe Council Bluffs HET gained share in nearly all of its markets in 2005 Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 9. HET Core Strategy Drive same-store growth, cross-market play through superior marketing and technological capabilities Brand Loyalty Decision Science Capabilities Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 10. Evidence of HET’s organic growth engine Same-store sales growth Cross-market play CAGR: 18.2% 2,500 12% 10.2% 2,008 8.9% 2,000 1,711 7.5% 6.5% 1,456 5.7% 4.9% 1,256 7% 1,500 1,063 881 749 1,000 1.5% 2% 500 0 2000 2001 2002 2003 2004 2005 Thru 2000 2001 2002 2003 2004 2005 2006* -3% 1H06* Annualized based on 1H06 growth rate. *Includes same store results of the Caesars properties in the second quarter 2006. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 11. Caesars Acquisition Update Total Rewards integration completed in early 2Q06. Achieved $116 million in year 1 synergies 45% ahead of $80 million target. Expect $200 million in year 2 synergies for a two year synergy total of more than $300 million. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 12. Total Rewards: implications for 4 Caesars LV properties 5% 11% 100% 21% Tour & Travel 90% 80% 39% 15% 70% FIT 60% 50% Convention 40% 30% 60% 30% 20% Total Rewards / 20% Connection Card 10% 0% HET CZR Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 13. Loyalty strategy reflected in 2Q strength Second-quarter rated customer trip growth National Regional Local (300+ miles) (70 – 300 miles) (< 70 miles) 12% 10% 19% VIP 7% 2% 9% AEP 9% -2% 2% Retail Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 14. EBITDA Growth by Region 2Q06 Region EBITDA Growth % Las Vegas 17% Atlantic City 7% LA/MS* 13% Illinois/Indiana -5% Iowa/MO 12% Other Nevada 16% Includes acquired CZR property EBITDA growth from the prior comparable period. *Excludes Grand Gulfport, Grand Biloxi and Harrah’s Lake Charles. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 15. LV Strip EBITDA Growth 2Q06 20% 17% 15% 10% 5% 0% -5% -10% -11% -15% HET PEERS Peer group includes: MGM, LVS, AZR, BYD Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 16. Growth Opportunities Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 17. Controllable growth pipeline New Organic Reinvestment Development LV Master Plan El Reino, Spain Caesars synergies AC Center Harrah’s Chester Boardwalk Total Baha Mar Rewards New Orleans Eyeing select Revenue Council Bluffs markets in Asia, management Europe Hammond Strategic Harrah’s AC Sourcing Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 18. Strong Track Record of ROIC Harrah’s committed to high ROIC projects above current WACC of 9.00% Las Vegas and Atlantic City will adhere to these high-return standards. Harrah’s has invested over $550 million of capital in expansion projects over the last 3 years with a cumulative EBITDA return of 17%. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 19. Current Harrah’s Footprint in Las Vegas 18,000 Total Guest Rooms Prime Center Strip Land Bank 160 Acres from Harrah’s to Bally’s / Paris 80 Acres at CPLV, 90 Acres at Rio 1.25 miles of Strip Frontage 110+ Acres of Undevloped Land Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 20. Harrah’s Atlantic City Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 21. Horseshoe Hammond Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 22. El Reino – Ciudad Real, Spain • 50,000 sq. ft. casino • 850 hotel rooms • 3,000 seat Colosseum theater • Conference center • 30,000 sq. ft. spa • Multiple restaurants, bars • Retail shops Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 23. Harrah’s Chester Casino and Racetrack Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 24. Baha Mar – Nassau, Bahamas Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 25. Proposed London Clubs Acquisition Strong business, management team and pipeline. LCI would give Harrah’s immediate presence in growing gaming market. Call option on gaming liberalization – marketing, advertising, and new casino development. Broadens HET footprint in Europe with proven UK business. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 26. Positioned for long-term growth Stable, diversified cash flow from operations Landmark brands Strong financial position Leader in each market of operation Proven strategy to generate organic growth Pipeline of re-investment opportunities Opportunities for new development Harrah’s Entertainment, Inc. Confidential and Proprietary 2006
  • 27. This presentation and all trademarks appearing in this presentation are the sole and exclusive property of Harrah's License Company, LLC for use by its related companies (collectively, quot;Harrah'squot;). This presentation and its contents is confidential and proprietary to Harrah's and may not be used or reproduced in whole or in part without Harrah's express prior written authorization. Trademarks not owned by Harrah's that appear in this presentation are the property of the respective owners. © 2006, Harrah's License Company, LLC. Harrah’s Entertainment, Inc. Confidential and Proprietary 2006

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