Harrah’s Entertainment, Inc.




        September 2008
Strictly Confidential and Proprietary – Do Not Reproduce




Forward Looking Statements

Certain information in this prese...
Strictly Confidential and Proprietary – Do Not Reproduce




      Corporate Structure
                                   ...
Business & Market Overviews
Strictly Confidential and Proprietary – Do Not Reproduce




  Company Snapshot
                                          ...
Strictly Confidential and Proprietary – Do Not Reproduce




 Differentiated Business Strategy
                   • Levera...
Strictly Confidential and Proprietary – Do Not Reproduce




  Highly Strategic Las Vegas Market Position…
Harrah’s has th...
Strictly Confidential and Proprietary – Do Not Reproduce




     … Drives Market Outperformance
($ in millions)          ...
Strictly Confidential and Proprietary – Do Not Reproduce




     Atlantic City Snapshot
($ in millions)



              ...
Strictly Confidential and Proprietary – Do Not Reproduce




       The Leader in Regional Markets
 ($ in millions)

     ...
Strictly Confidential and Proprietary – Do Not Reproduce




   Growing International Presence
London Clubs International
...
Investment For Growth
Strictly Confidential and Proprietary – Do Not Reproduce




 Harrah’s Atlantic City Expansion
Project Overview
   New Wat...
Strictly Confidential and Proprietary – Do Not Reproduce




 Horseshoe Hammond Expansion
Project Overview
   Riverboat ca...
Strictly Confidential and Proprietary – Do Not Reproduce




 Caesars Palace Las Vegas Expansion
Project Overview
   New h...
Strictly Confidential and Proprietary – Do Not Reproduce




  Harrah’s Kansas
Project Overview
    Awarded sole gaming co...
Investment Strengths
Strictly Confidential and Proprietary – Do Not Reproduce




Market Leader with Unparalleled Scale
       Harrah’s is the ...
Strictly Confidential and Proprietary – Do Not Reproduce




 Most Diversified Gaming Operator
LTM 6/30/08 EBITDA by Geogr...
Strictly Confidential and Proprietary – Do Not Reproduce




Portfolio of Leading Brands
 Each brand has a strong identity...
Strictly Confidential and Proprietary – Do Not Reproduce


Superior Business Model: Generating Same Store
Gaming Revenue G...
Strictly Confidential and Proprietary – Do Not Reproduce


Strong and Predictable Free Cash Flow
Generation

 Stable and p...
Strictly Confidential and Proprietary – Do Not Reproduce




Substantial Land Value
            125 Undeveloped Las Vegas ...
Harrah’s Entertainment, Inc.




        September 2008
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harrah's entertainment 09/25/08_DB_Presentation_FINAL

  1. 1. Harrah’s Entertainment, Inc. September 2008
  2. 2. Strictly Confidential and Proprietary – Do Not Reproduce Forward Looking Statements Certain information in this presentation may be considered forward-looking information within the meaning of the Private Securities Litigation Reform Act of 1995. This information is based on the Company's current expectations and actual results could vary materially depending on risks and uncertainties that may affect the Company's operations, markets, services, prices and other factors as discussed in filings with the Securities and Exchange Commission. These risks and uncertainties include, but are not limited to, industry and economic conditions, competitive, legal, governmental and technological factors. There is no assurance that the Company's expectations will be realized. The Company assumes no obligation to update any forward-looking information contained in this presentation should circumstances change, except as otherwise required by securities and other applicable laws. Market data and other statistical information used throughout this presentation are based on independent industry publications, government publications, reports by market research firms or other published independent sources. Some data are also based on our good faith estimates which are derived from our review of internal surveys, as well as the independent sources listed above. Although we believe these sources are reliable, we have not independently verified the information and cannot guarantee its accuracy and completeness. 2
  3. 3. Strictly Confidential and Proprietary – Do Not Reproduce Corporate Structure Guarantor of new and existing Harrah’s HOC Debt Entertainment, Inc. Guarantor of leases for PropCo debt LTM Revenue: $10.7 bn LTM Adjusted EBITDA: $2.7 bn PropCo Borrowing Structure HOC Borrowing Structure $2.0 bn Revolver (Undrawn) Harrah’s Operating $6.5 bn CMBS Debt $7.3 bn Term Loan B Facility (1) Other CMBS Borrowers Company, Inc. $6.8 bn New Senior Notes/Bridge (“HOC”) $4.6 bn Existing Senior Unsecured Notes LTM Revenue: $2.7 bn LTM Revenue: $8.0 bn LTM Adjusted EBITDA: $0.8 bn LTM Adjusted EBITDA: $1.9 bn All Material Subsidiary Pledgors under New Credit Operating Facility and Guarantors under Senior Unsecured Bridge Facility / Notes Subsidiaries Underlying Properties Underlying Properties Harrah's Las Vegas Imperial Palace Caesars Atlantic City Sheraton Tunica (MS) Caesars Indiana Rio Bill’s Gamblin’ Hall Showboat Atlantic City Harrah's Council Bluffs (IA) Harrah's Reno Flamingo Las Vegas & Saloon Harrah’s Chester (PA) Horseshoe Council Bluffs / Harrah’s Ak-Chin Paris Las Vegas Bally's Las Vegas Harrah's New Orleans (LA) Bluffs Run (IA) Harrah’s Rincon Harrah's Atlantic City Caesars Palace Harrah's Louisiana Downs (LA) Harrah's North Kansas City (MO) Harrah’s Cherokee Harrah's Laughlin Harrah's Lake Tahoe Horseshoe Bossier City (LA) Harrah's St. Louis (MO) Casino Windsor Bill's Lake Tahoe Horseshoe Tunica (MS) Harrah's Joliet (IL) Conrad Punta Del Este Harveys Lake Tahoe Grand Tunica (MS) Harrah's Metropolis (IL) London Clubs (2) Bally's Atlantic City Grand Biloxi (MS) Horseshoe Hammond (IN) 125 acres of developable land in Las Vegas 175 acres of land in Macau LTM through of 6/30/08 • Includes captive insurance subsidiaries. • Includes 10 casino clubs in the UK, 2 in Egypt and 1 in South Africa. 3
  4. 4. Business & Market Overviews
  5. 5. Strictly Confidential and Proprietary – Do Not Reproduce Company Snapshot A Portfolio of Winning Brands One of the world’s largest and most diversified gaming companies – #1 or #2 market share in almost every major market in the U.S. – 51 casinos in six countries (1) – Approximately 40,000 hotel rooms and suites, 3 million square feet of casino gaming space, and 2 million square feet of convention center space (1) Industry leading loyalty program (Total Rewards) with over 40 million members LTM 6/30/08 Net Revenue ($10.7 Billion)(2) LTM 6/30/08 Property EBITDA ($2.7 Billion)(2) Managed / Intl / Other, 3% Managed / Intl / Other, 5% Other Nevada, 5% Other Nevada, 6% Iowa / Missouri, 8% Iowa / Missouri, 7% Las Vegas, 33% Illinois / Indiana, 9% Las Vegas, 41% Illinois / Indiana, 12% Mississippi / Louisiana, 12% Mississippi / Louisiana, 14% Atlantic City, 23% Atlantic City, 22% (1) As of June 30, 2008, HOC and its subsidiaries own or manage 45 of the Harrah’s Entertainment casinos. (2) Property EBITDA excludes corporate overhead, normalizations and pro forma cost savings. HOC LTM Net Revenue of $8.0 billion and Property EBITDA of $1.8 billion. 5
  6. 6. Strictly Confidential and Proprietary – Do Not Reproduce Differentiated Business Strategy • Leverage scale and Total Rewards program to generate same store gaming revenue growth and cross-market play - Hub and spoke network of properties Drive Profitable - Highly scalable existing infrastructure Sales Growth - Application of centralized marketing to new properties/operations • Pursue targeted investments in proven markets • Focuses on organizational restructuring, teleservices reorganization and procurement savings Increase • Substantial progress against $164M savings goal Profitability • Ongoing rationalization of property labor and marketing costs • Stable, predictable revenue • High operating margins Maximize Cash • Low maintenance capex Flow • Growth capex channeled to highest return uses 6
  7. 7. Strictly Confidential and Proprietary – Do Not Reproduce Highly Strategic Las Vegas Market Position… Harrah’s has the #2 Market Share in Las Vegas, With 8 Properties 28% of the Strip’s revenue and 25% of the Strip’s positions 160 contiguous acres on the east side of the Strip combined with 170 acres on the west side – 125 acres of developable land Harrah’s controls three of the “4 Corners” at the intersection of Flamingo and Las Vegas Blvd Las Vegas Property Map To Downtown Stratosphere Sahara ip St r Fontainebleau* Riviera The Circus Circus LV Hilton Convention Center Echelon* Encore* W. Desert Inn Rd E. Desert Inn Rd New Frontier Montreux* Plaza* Wynn Spring Mountain Rd Fashion Treasure Island Show Mall The Wynn Palazzo* Golf Club Harrah’s Venetian Royale Imperial Palace Mirage Sands Expo Rio Caesar’s Caesars Flamingo Flamingo Rd Barbary Coast Bill’s Gamblin’ Hall 15 Bally’s Bellagio Palms University of Nevada – Paris Cosmopolitan* Las Vegas Hard Rock City Center* Harmon Blvd * Monte Carlo Aladdin/Planet Hollywood Planet Hollywood Tropicana Ave Tropicana Ave New York New York New York New York Hooters Excaliber ** McCarran Luxor MGM Grand 604 Int’l Airport Mandalay Bay Tropicana HOC PropCo Harrah’s Undeveloped Land 7 * Denotes property either under development or planned for development.
  8. 8. Strictly Confidential and Proprietary – Do Not Reproduce … Drives Market Outperformance ($ in millions) Rooms Casino Space Property & Suites (sq. ft.) Caesars Palace 129,900 3,350 Rio Hotel & 107,000 2,520 Casino Harrah’s Las 90,300 2,530 Vegas Harrah’s Las Vegas Paris Las 85,000 2,920 Vegas Flamingo Las Bally’s Las Vegas 76,800 3,500 Vegas Imperial Palace 75,000 2,640 Bally’s Las 66,400 2,810 Vegas Paris Las Vegas Bill’s Gamblin’ 42,500 210 Hall & Saloon TOTAL 672,900 20,480 Caesars Palace HET Las Vegas LTM Net Revenues $3,542 $1,123 HET Las Vegas LTM EBITDA Rio Hotel & Casino 8
  9. 9. Strictly Confidential and Proprietary – Do Not Reproduce Atlantic City Snapshot ($ in millions) Rooms & Property Casino Space (sq. ft.) Suites Bally’s 225,800 1,740 Atlantic City Harrah’s Atlantic City Caesars Atlantic City 145,000 1,140 Harrah’s Atlantic City 160,800 1,630 Showboat Atlantic City Showboat Atlantic City 124,200 1,330 Harrah’s Chester (PA) 92,000 -- 747,800 5,840 TOTAL Bally’s Atlantic City HET Atlantic City LTM Net Revenues $2,402 HET Atlantic City LTM EBITDA $595 Note: LTM as of 6/30/08. Caesars Atlantic City 9
  10. 10. Strictly Confidential and Proprietary – Do Not Reproduce The Leader in Regional Markets ($ in millions) Casino Space Rooms LTM Net LTM 2007 Market Harrah’s Market Share(1) Market Properties (sq. ft.) & Suites Revenues EBITDA Revenues Louisiana / 7 427,500 3,550 $1,508 $332 $3,267 37% Mississippi(2) Illinois / Indiana(3) 4 188,900 960 $1,288 $234 $4,034 32% Iowa / Missouri(4) 4 286,900 1,140 $799 $223 $2,105 37% TOTAL 15 903,300 5,650 $3,535 $789 Note: LTM as of 6/30/08. All properties included in HOC. Source of market revenues and Harrah’s market share: State gaming commission and control boards. (1) Market Share based on year ending Dec.2007 (2) Louisiana / Mississippi market defined as Shreveport – Bossier City, LA, New Orleans, LA, Gulfcoast and Tunica, MS. (3) Illinois / Indiana market defined as Chicagoland and Southern Illinois and Indiana. (4) Iowa / Missouri market defined as Council Bluffs, IA, St. Louis, MO, and Kansas City, MO. Caesars Indiana Grand Casino Biloxi Grand Casino Tunica 10
  11. 11. Strictly Confidential and Proprietary – Do Not Reproduce Growing International Presence London Clubs International Properties in London, Egypt and South Africa Total Casino Space: 143,200 sq. ft. Total Hotel Rooms & Suites: 190 Macau Orient Golf Course 18-hole golf course on 175 acres in Cotai Acquired in September 2007 The Golden Nugget – London Casino Windsor, Ontario (1) VENETIAN Casino Space:100,000 sq. ft. CITY OF GALAXY DREAMS Hotel Rooms & Suites: 340 FOUR SEASONS SHERATON ST. REGIS Conrad Punta Del Este Resort & Casino, Uruguay FAR EAST Only Las Vegas style resort and casino in Uruguay HILTON Nature MACAU CONRAD preserve STUDIO CITY MACAU DOME FAIRMONT RAFFLES BORDER CROSSING Total Casino Space: 44,500 sq. ft. – 510 slot machines, 50 table games TBD Fifty – London MACAU ORIENT GOLF (OWNED BY HARRAH’S) Total Hotel Rooms & Suites: 300 RESERVOIR 175 Acres on Cotai Strip in Macau Emerald Safari – South Africa 11 (1) HOC owns a 50% interest in Windsor Casino Limited, which manages the property.
  12. 12. Investment For Growth
  13. 13. Strictly Confidential and Proprietary – Do Not Reproduce Harrah’s Atlantic City Expansion Project Overview New Waterfront hotel tower, connected to existing Bayview Tower Number of Hotel Rooms: 851 Number of Suites: 109 Amentities: – Elizabeth Arden Red Door Spa; – The Pool (80,000 gallon pool under 90ft. glass dome w/82 degree temp); – Daytime pool with cabanas and club atmosphere at night; – The Waterfront Shops (7 unique shops); – Taste of the Shore Food Court (4 eateries), Waterfront Buffet, new Reflections Cafe and McCormick & Schmick’s (located on existing property) Official opening ceremony March 6, 2008 HET Rest MKT Gaming Revenue YoY Growth % 6% 4% 2% 0% -2% -4% -6% -8% -10% -12% Jan-08 Feb-08 Mar-08 Apr-08 May-08 Jun-08 Jul-08 Aug-08 13
  14. 14. Strictly Confidential and Proprietary – Do Not Reproduce Horseshoe Hammond Expansion Project Overview Riverboat casino on Indiana side of Lake Michigan Casino Space: 48,300 sq. ft. Slot Machines: 1,940 Table Games: 60 Expanded casino space of 108,000 sq. ft. will include +3,200 slots and 94 table games including 40 poker tables Officially opened July 29, 2008 14
  15. 15. Strictly Confidential and Proprietary – Do Not Reproduce Caesars Palace Las Vegas Expansion Project Overview New hotel tower and convention space on Flamingo Road next to existing Augustus Tower Number of hotel rooms: 662 Number of suites: 68 New convention space: 110,000 s.f. 3 Pool Villas; 3 new pools Renovate buffet, Race & Sports Book, miscellaneous restaurants, casino space Hotel and convention space scheduled to open Summer 2009 15
  16. 16. Strictly Confidential and Proprietary – Do Not Reproduce Harrah’s Kansas Project Overview Awarded sole gaming contract in southcentral Kansas – Subject to completion of background investigations and licensing requirements $485M resort casino – 2,000 slots, 50 tables, WSOP Poker Room – 175 hotel rooms, including 30 suites and 5 pool villas – 30,000 square feet of convention space – 5 restaurants, including celebrity concepts – 18 hole championship golf course JV with local real estate developers Attractive project due to proximity to Wichita and limited competition in area – Project located within 20 minute drive of Wichita city center – Also within driving distance of Oklahoma City Opening expected in August 2010 16
  17. 17. Investment Strengths
  18. 18. Strictly Confidential and Proprietary – Do Not Reproduce Market Leader with Unparalleled Scale Harrah’s is the world’s largest and most diversified gaming company – 51 casinos across 6 countries (1) – #1 or #2 share in almost every major domestic market #1 Detroit Chicagoland #1 Atlantic City Council Bluffs #1 Reno / Lake Tahoe Chester Black Hawk / #1 #1 St. Louis Central City #2 Las Vegas #2 Kansas City Cripple Creek #1 #2 Laughlin Tunica #1 Shreveport / #1 Vicksburg Bossier City HOC Property Biloxi Major Gaming Market Lake PropCo Property #1 Charles #1 Market Share New Orleans #1 Native American Casino #2 #2 Market Share Managed by HOC Unparalleled Scale and Diversification Drives Growth and Stability Note: Joint venture interest in Canadian property not directly owned. 18 (1) HOC owns or manages 45 casinos.
  19. 19. Strictly Confidential and Proprietary – Do Not Reproduce Most Diversified Gaming Operator LTM 6/30/08 EBITDA by Geography Harrah’s (1) MGM Mirage Wynn Managed / Intl / Other, 3% Other, 3% Mississippi, 4% Other Nevada, 5% AC (Borgota ) (2), 5% Iowa / Missouri, 8% Detroit, 6% Illinois / Indiana, 9% Las Vegas , 42% Las Vegas, 41% Mississippi / Macau, 58% Louisiana, 12% Las Vegas Strip, 82% Atlantic City, 22% Station (3) Las Vegas Sands (4) Boyd AC (Borgota ) (2), 19% Managed, 22% Las Vegas , 37% Las Vegas Locals, 50% Macau, 63% Midwest / South, 31% Las Vegas Locals, 78% Source: Derived or extrapolated from public company filings and available third party analyst reports. (1) Represents HET consolidated. (2) Borgata is 50/50 owned by MGM/Boyd. (3) Based off 2007 operating income as reported. 19 (4) Based off Adjusted EBITDAR.
  20. 20. Strictly Confidential and Proprietary – Do Not Reproduce Portfolio of Leading Brands Each brand has a strong identity and enjoys powerful customer recognition Diverse collection of brands appeals to wide range of customer preferences and encourages multiple visits 20
  21. 21. Strictly Confidential and Proprietary – Do Not Reproduce Superior Business Model: Generating Same Store Gaming Revenue Growth and Cross-Market Play Loyalty Brand Hydrogen Decision science capabilities 21
  22. 22. Strictly Confidential and Proprietary – Do Not Reproduce Strong and Predictable Free Cash Flow Generation Stable and predictable revenues – Favorable business mix with over 70% of gross revenue driven by casino operations – High operating margins – Profitability improvement program implemented in 2006 Reasonable capital expenditure requirements – Well-maintained asset base ($4.6 billion of total capex since 2004) – Capital expenditures channeled to highest return uses 22
  23. 23. Strictly Confidential and Proprietary – Do Not Reproduce Substantial Land Value 125 Undeveloped Las Vegas Acres 175 Acres on Cotai Strip in Macau VENETIAN CITY OF GALAXY DREAM S 36.73 Acres FOUR SEASONS SHERAT ON ST. REGIS FAR 38.15 EAST (1) Acres HILTON MACAU Nature CONRA STUDIO preserve D CITY Flamingo MACAU FAIRMON DOME Road T BORDER RAFFLES CROSSING 3.87 Acres Las Vegas 48.21 TBD Blvd. Acres MACAU ORIENT GOLF (OWNED BY HARRAH’S) RESERVOIR 125 undeveloped Las Vegas acres surrounding the Strip Purchased Macau Orient Golf in September 2007 Illustrative Illustrative Purchase price: $578 million (a) Value ($mm) Value / Acre ($mm) $30 $3,750 25 3,125 20 2,500 15 1,875 10 1,250 (a) Based on 125 acres (1) Total size of indicated plot is 38.15 acres, with 36.20 acres owned by Harrah’s. 23 Note: Values shown for Las Vegas land are for illustrative purposes only and do not reflect any performed land value appraisals by the Company.
  24. 24. Harrah’s Entertainment, Inc. September 2008

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