Harrah's Entertainment Reports Record Q3 Results

20 Oct 2004

LAS VEGAS – (PRESS RELEASE) -- Harrah's Entertainment, Inc. (NYSE: HET) today reported record third-quarter revenues of $1.31 billion, up 25.5 percent from revenues of $1.04 billion in the 2003 third quarter.

Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) for the 2004 third quarter rose 26.2 percent to a record of $374.2 million from Property EBITDA of $296.5 million in the year-earlier period. Third-quarter 2004 Adjusted Earnings Per Share increased to a record $1.09, up 17.2 percent from the 93 cents achieved in 2003's third quarter.

Property EBITDA and Adjusted EPS are not Generally Accepted Accounting Principles (GAAP) measurements but are commonly used in the gaming industry as measures of performance and as a basis for valuation of gaming companies. In addition, analysts' per-share earnings estimates for gaming companies are comparable to Adjusted EPS. Reconciliations of Adjusted EPS to GAAP EPS and Property EBITDA to income from operations are attached to this release.

Results for certain properties that are contracted for sale have been reclassified to discontinued operations.

Third-quarter 2004 income from operations rose 26.9 percent to a record $257.8 million from $203.2 million in the year-earlier quarter. Third-quarter 2004 net income was a record $118.8 million, up 19.4 percent from $99.5 million in the 2003 third quarter. Diluted earnings per share for the 2004 third quarter was $1.06, 17.8 percent higher than the 90 cents achieved in the 2003 third quarter.

Third-quarter 2004 results included contributions from the three Horseshoe casinos acquired by Harrah's Entertainment on July 1, 2004.

Horseshoe Acquisition, Capital Spending, Capabilities Drive Growth

"Strategic acquisitions, capital investments and market-leading technological and marketing capabilities all played a role in propelling Harrah's Entertainment to record results," said Gary Loveman, the company's president and chief executive officer. "While 2003 and the first half of 2004 marked a period of transition with the rollout of new initiatives such as Total Rewards 2 and Fast Cash, we have now seen a resumption of significant growth. We believe our strategic initiatives and investments position us well for continued growth across key customer segments."

Third-quarter 2004 same-store revenues increased 8.8 percent over the year-ago period. Cross-market play -- gaming by customers at Harrah's Entertainment properties other than their "home" casino -- rose 16.5 percent from the third quarter of 2003. Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 12.8 percent from the 2003 third quarter.

"The Horseshoe acquisition played a significant role in this quarter's revenue and operating-income gains," Loveman said. "However, our continued same-store sales increases and cross-market play gains demonstrate that our organic-growth strategy is delivering strong results as well."

For the first nine months of 2004, revenues rose 12.0 percent to $3.36 billion from $3.00 billion in the 2003 period. Property EBITDA increased to $928.2 million, up 11.9 percent from $829.4 million in the first nine months of 2003. Adjusted EPS was $2.64, 9.1 percent higher than the $2.42 achieved in the first nine months of 2003.

Income from operations for the first nine months of 2004 was $626.1 million, up 12.8 percent from $555.0 million in the year-earlier period. Net income was $290.8 million, up 13.1 percent from $257.2 million in the first nine months of 2003. Nine-month diluted earnings per share was $2.58, up 10.7 percent from $2.33 in the year-ago period.

Among third-quarter highlights:

* Harrah's Entertainment completed its acquisition of Horseshoe Gaming Holding Corp., adding Horseshoe properties in Hammond, Ind., Bossier City, La., and Tunica, Miss., to its portfolio.

* Harrah's Entertainment signed a definitive agreement to acquire Caesars Entertainment, Inc. (NYSE: CZR), subject to shareholder and regulatory approvals. When it was announced on July 15, 2004, the transaction was valued at approximately $9.4 billion.

* Harrah's Entertainment received a total of 585 awards, including 255 first-place finishes, in Casino Player's Best of Gaming Awards, the magazine's annual national poll of gaming customers. Harrah's Entertainment has received more awards in the competition than any other gaming company for five consecutive years.

* For the fourth consecutive year, Harrah's Entertainment was selected as a component of the Dow Jones Sustainability World Index, a compilation of more than 300 companies from 24 countries selected for their responsible approaches to creating long-term shareholder value. No other U.S. gaming or hospitality company has been selected for the Index since 2001.

* The company was ranked No. 15 in CMP Media LLC's InformationWeek 500, an annual listing of the nation's most innovative users of information technology. Harrah's Entertainment was the top-ranked company in the media and entertainment category, and made its sixth consecutive appearance on the list.

* Harrah's Entertainment and Caesars signed a definitive agreement to sell Harrah's East Chicago, Harrah's Tunica, Atlantic City Hilton and Bally's Tunica to an affiliate of Colony Capital, LLC. Under terms of the transaction, which is subject to customary approvals, the Colony unit will pay a total of $1.24 billion for the four properties, approximately 8.5 times the trailing 12-month EBITDA of the four properties. Harrah's Entertainment plans to use its expected $476 million in after-tax proceeds from the sale of its two properties to reduce debt.

"In their first quarter in the Harrah's Entertainment network, the three Horseshoe properties contributed $217.9 million in revenues and $55.7 million in Property EBITDA, and we are on track to achieve our synergies target," Loveman said. "The transaction was accretive during the quarter, adding nearly 9 cents to earnings per share. The strong initial results from Horseshoe demonstrate that the integration is proceeding smoothly, which augurs well for the pending acquisition of Caesars that we expect to consummate in mid-2005.

"With the Caesars acquisition, we will control four of the best-known brands in gaming -- Harrah's, Caesars, Horseshoe and the World Series of Poker," Loveman said. "The newly acquired brands will enable us to reach millions of new customers and provide significant growth opportunities.

"The pending sale of our two properties to an affiliate of Colony Capital should help facilitate the closing of the Caesars transaction," Loveman said.

"We are honored by our inclusion in the Dow Jones Sustainability World Index for the fourth consecutive year," he said. "This is independent validation of Harrah's Entertainment's reputation as a successful, responsible company.

"We are also pleased to lead Casino Player's Best of Gaming Awards for the fifth straight year," Loveman said. "These awards are the voice of gaming players from coast to coast, and once again, they have overwhelmingly selected our properties as the best in delivering superior customer service. Our central strategy rests on improving customer loyalty and satisfaction; our strong performance in this poll shows we are succeeding."

This morning, Harrah's Entertainment announced that Philip Satre will, as planned, retire as chairman effective January 1, 2005. Gary Loveman will succeed Satre as chairman, while retaining his current positions as president and chief executive officer.

"I am sincerely honored that our board of directors selected me to take over the chairmanship when Phil Satre steps down next January," Loveman said. "His vision, integrity, intellect and leadership transformed Harrah's from a four-casino company into our industry's largest and most respected enterprise. I will do my very best to follow his tremendous example."

West Region Posts Record Results

Strong cross-market and cross-property play at Harrah's Las Vegas and the Rio, and a record performance at Harrah's Laughlin helped spur record results in Harrah's Entertainment's West Region.

Southern Nevada revenues rose 18.7 percent, income from operations gained 45.6 percent and Property EBITDA increased 32.2 percent from the 2003 third quarter. Southern Nevada revenues, income from operations and Property EBITDA were all at record levels.

Northern Nevada revenues fell 1.7 percent from the third quarter last year, while income from operations matched the prior year's level and Property EBITDA was 1.6 percent higher.

"Our Southern Nevada properties continued their string of record-breaking quarterly performances," said Tim Wilmott, Harrah's Entertainment's chief operating officer. "We look forward to significantly expanding our presence in this dynamic market in 2005 with the acquisition of Caesars."

For the first nine months of 2004, West Region revenues were up 12.5 percent, income from operations rose 32.9 percent and Property EBITDA gained 22.3 percent from the first nine months of 2003.

East Region Posts Gains

Combined results for Harrah's Entertainment's two Atlantic City properties rose from the year-ago third quarter. The gains were driven by strong results at Showboat Atlantic City, which benefited from improved yielding of its hotel and from a new entertainment offering. In addition, on July 3, 2004, the market passed the one-year anniversary of the opening of a competing casino property that impacted results in the year-ago third quarter.

Third-quarter revenues for the Atlantic City properties rose 5.9 percent to a record level, income from operations increased 2.5 percent and Property EBITDA increased 6.5 percent from the year-earlier period.

"We're pleased with our overall performance in Atlantic City, and believe we are positioned for long-term growth in this market," Wilmott said.

For the first nine months, East Region revenues increased 0.7 percent, income from operations fell 4.6 percent and Property EBITDA was 0.3 percent lower than in the year-earlier period.

North Region Reports Record Results

The addition of Horseshoe Hammond and a lower tax rate at Bluffs Run Casino contributed to a record quarter for Harrah's Entertainment's North Central Region. Results at Harrah's East Chicago have been reclassified to discontinued operations.

Third-quarter North Central Region revenues were up 44.9 percent, while income from operations rose 51.9 percent and Property EBITDA increased 45.7 percent.

Due to contributions from Horseshoe Hammond, acquired by the company on July 1, 2004, combined Illinois and Indiana third-quarter results approximately doubled from the prior-year period.

The company's two Iowa properties posted record third-quarter results, driven primarily by a lower tax rate at Bluffs Run Casino. Revenues were 5.9 percent higher than in the year-ago period, income from operations rose 77.3 percent and Property EBITDA increased 47.7 percent.

Combined third-quarter revenues at Harrah's two Missouri properties rose 6.3 percent over the 2003 third quarter, income from operations declined 4.6 percent and Property EBITDA increased 2.5 percent. The opening of an $80 million, 210-room hotel expansion at St. Louis led to strong gains at that property, though this was offset by declines at North Kansas City, which faced increased competition due to significant expansions by two other properties in that area.

"We are proceeding on schedule with a $107 million expansion project at Harrah's North Kansas City," Wilmott said. "Once completed in late 2005, this investment should allow us to regain a leadership position in the Kansas City market, as we have in St. Louis."

For the first nine months of 2004, North Central Region revenues were up 14.0 percent, income from operations was 21.3 percent higher and Property EBITDA was up 13.0 percent from the year-earlier period.

South Central Region Posts Record Results

The addition of Horseshoe Tunica and Horseshoe Bossier City contributed to a record quarter for the South Central Region. Results at Harrah's Tunica have been reclassified to discontinued operations.

At Harrah's Entertainment's Louisiana and Mississippi properties, revenues rose 56.4 percent, income from operations increased 84.7 percent and Property EBITDA was 75.9 percent higher than in the year-ago third quarter.

The increases were driven by the addition of Horseshoe Bossier City and Horseshoe Tunica on July 1. These gains were partially offset by the sale of Harrah's Shreveport to another operator on May 19, 2004. New Orleans also posted strong growth despite a three-day closure in mid-September due to Hurricane Ivan.

"With the Horseshoe acquisition, we now own three of the South's premier casinos -- Harrah's New Orleans, Horseshoe Bossier City, and Horseshoe Tunica," Wilmott said. "Despite challenging conditions in the Shreveport- Bossier City market, we believe our overall position in the South is strong, and will get only stronger with the planned acquisition of Caesars and the completion of our $142 million, 450-room hotel tower in New Orleans in early 2006."

Nine-month revenues for the South Central properties rose 25.8 percent, income from operations increased 29.2 percent and Property EBITDA was up 24.2 percent from the first nine months of 2003.

Managed Properties And Other Items

Third-quarter management-fee revenues were down 20.5 percent from the year-ago period due to lower fee schedules associated with contract extensions.

Third-quarter development costs rose to $4.7 million from $3.0 million in the year-ago quarter.

Corporate expense increased 51.6 percent over the year-ago quarter due to higher incentive-compensation costs and depreciation expense, costs associated with a management-development program and on-going costs related to Sarbanes- Oxley compliance.

Interest expense was 33.9 percent higher than in the 2003 third quarter due to additional debt related to the Horseshoe acquisition.

The effective income tax rate after minority interest for the 2004 third quarter was 38.0 percent, a higher rate than in the full year 2003 and the second quarter of 2004 as a result of higher accruals for state income taxes.

Harrah's Entertainment will host a conference call Wednesday, October 20, 2004, at 9:00 a.m. Eastern Daylight Time to review its 2004 third-quarter results. Those interested in participating in the call should dial 1-888-399-2695, or 1-706-679-7646 for international callers, approximately 10 minutes before the call start time.

A taped replay of the conference call can be accessed at 1-800-642-1687, or 1-706-645-9291 for international callers, beginning at 12:00 p.m. EDT Wednesday, October 20. The replay will be available through 11:59 p.m. EDT on Wednesday, October 27. The passcode number for the replay is 1163512.

Interested parties wanting to listen to the live conference call on the Internet may do so on the company's web site -- www.harrahs.com -- in the Investor Relations section behind the "About Us" tab.

Various subsidiaries of Harrah's Entertainment, Inc. own or manage 28 casinos in the United States, primarily under the Harrah's and Horseshoe brand names. Founded 66 years ago, Harrah's Entertainment is focused on building loyalty and value with its valued customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership.

Additional information about Harrah's Entertainment is available at www.harrahs.com.

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	Harrah's Entertainment Reports Record Q3 Results 20 Oct 2004 LAS VEGAS – (PRESS RELEASE) -- Harrah's Entertainment, Inc. (NYSE: HET) today reported record third-quarter revenues of $1.31 billion, up 25.5 percent from revenues of $1.04 billion in the 2003 third quarter. Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) for the 2004 third quarter rose 26.2 percent to a record of $374.2 million from Property EBITDA of $296.5 million in the year-earlier period. Third-quarter 2004 Adjusted Earnings Per Share increased to a record $1.09, up 17.2 percent from the 93 cents achieved in 2003's third quarter. Property EBITDA and Adjusted EPS are not Generally Accepted Accounting Principles (GAAP) measurements but are commonly used in the gaming industry as measures of performance and as a basis for valuation of gaming companies. In addition, analysts' per-share earnings estimates for gaming companies are comparable to Adjusted EPS. Reconciliations of Adjusted EPS to GAAP EPS and Property EBITDA to income from operations are attached to this release. Results for certain properties that are contracted for sale have been reclassified to discontinued operations. Third-quarter 2004 income from operations rose 26.9 percent to a record $257.8 million from $203.2 million in the year-earlier quarter. Third-quarter 2004 net income was a record $118.8 million, up 19.4 percent from $99.5 million in the 2003 third quarter. Diluted earnings per share for the 2004 third quarter was $1.06, 17.8 percent higher than the 90 cents achieved in the 2003 third quarter. Third-quarter 2004 results included contributions from the three Horseshoe casinos acquired by Harrah's Entertainment on July 1, 2004. Horseshoe Acquisition, Capital Spending, Capabilities Drive Growth "Strategic acquisitions, capital investments and market-leading technological and marketing capabilities all played a role in propelling Harrah's Entertainment to record results," said Gary Loveman, the company's president and chief executive officer. "While 2003 and the first half of 2004 marked a period of transition with the rollout of new initiatives such as Total Rewards 2 and Fast Cash, we have now seen a resumption of significant growth. We believe our strategic initiatives and investments position us well for continued growth across key customer segments." Third-quarter 2004 same-store revenues increased 8.8 percent over the year-ago period. Cross-market play -- gaming by customers at Harrah's Entertainment properties other than their "home" casino -- rose 16.5 percent from the third quarter of 2003. Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 12.8 percent from the 2003 third quarter. "The Horseshoe acquisition played a significant role in this quarter's revenue and operating-income gains," Loveman said. "However, our continued same-store sales increases and cross-market play gains demonstrate that our organic-growth strategy is delivering strong results as well." For the first nine months of 2004, revenues rose 12.0 percent to $3.36 billion from $3.00 billion in the 2003 period. Property EBITDA increased to $928.2 million, up 11.9 percent from $829.4 million in the first nine months of 2003. Adjusted EPS was $2.64, 9.1 percent higher than the $2.42 achieved in the first nine months of 2003. Income from operations for the first nine months of 2004 was $626.1 million, up 12.8 percent from $555.0 million in the year-earlier period. Net income was $290.8 million, up 13.1 percent from $257.2 million in the first nine months of 2003. Nine-month diluted earnings per share was $2.58, up 10.7 percent from $2.33 in the year-ago period. Among third-quarter highlights: * Harrah's Entertainment completed its acquisition of Horseshoe Gaming Holding Corp., adding Horseshoe properties in Hammond, Ind., Bossier City, La., and Tunica, Miss., to its portfolio. * Harrah's Entertainment signed a definitive agreement to acquire Caesars Entertainment, Inc. (NYSE: CZR), subject to shareholder and regulatory approvals. When it was announced on July 15, 2004, the transaction was valued at approximately $9.4 billion. * Harrah's Entertainment received a total of 585 awards, including 255 first-place finishes, in Casino Player's Best of Gaming Awards, the magazine's annual national poll of gaming customers. Harrah's Entertainment has received more awards in the competition than any other gaming company for five consecutive years. * For the fourth consecutive year, Harrah's Entertainment was selected as a component of the Dow Jones Sustainability World Index, a compilation of more than 300 companies from 24 countries selected for their responsible approaches to creating long-term shareholder value. No other U.S. gaming or hospitality company has been selected for the Index since 2001. * The company was ranked No. 15 in CMP Media LLC's InformationWeek 500, an annual listing of the nation's most innovative users of information technology. Harrah's Entertainment was the top-ranked company in the media and entertainment category, and made its sixth consecutive appearance on the list. * Harrah's Entertainment and Caesars signed a definitive agreement to sell Harrah's East Chicago, Harrah's Tunica, Atlantic City Hilton and Bally's Tunica to an affiliate of Colony Capital, LLC. Under terms of the transaction, which is subject to customary approvals, the Colony unit will pay a total of $1.24 billion for the four properties, approximately 8.5 times the trailing 12-month EBITDA of the four properties. Harrah's Entertainment plans to use its expected $476 million in after-tax proceeds from the sale of its two properties to reduce debt. "In their first quarter in the Harrah's Entertainment network, the three Horseshoe properties contributed $217.9 million in revenues and $55.7 million in Property EBITDA, and we are on track to achieve our synergies target," Loveman said. "The transaction was accretive during the quarter, adding nearly 9 cents to earnings per share. The strong initial results from Horseshoe demonstrate that the integration is proceeding smoothly, which augurs well for the pending acquisition of Caesars that we expect to consummate in mid-2005. "With the Caesars acquisition, we will control four of the best-known brands in gaming -- Harrah's, Caesars, Horseshoe and the World Series of Poker," Loveman said. "The newly acquired brands will enable us to reach millions of new customers and provide significant growth opportunities. "The pending sale of our two properties to an affiliate of Colony Capital should help facilitate the closing of the Caesars transaction," Loveman said. "We are honored by our inclusion in the Dow Jones Sustainability World Index for the fourth consecutive year," he said. "This is independent validation of Harrah's Entertainment's reputation as a successful, responsible company. "We are also pleased to lead Casino Player's Best of Gaming Awards for the fifth straight year," Loveman said. "These awards are the voice of gaming players from coast to coast, and once again, they have overwhelmingly selected our properties as the best in delivering superior customer service. Our central strategy rests on improving customer loyalty and satisfaction; our strong performance in this poll shows we are succeeding." This morning, Harrah's Entertainment announced that Philip Satre will, as planned, retire as chairman effective January 1, 2005. Gary Loveman will succeed Satre as chairman, while retaining his current positions as president and chief executive officer. "I am sincerely honored that our board of directors selected me to take over the chairmanship when Phil Satre steps down next January," Loveman said. "His vision, integrity, intellect and leadership transformed Harrah's from a four-casino company into our industry's largest and most respected enterprise. I will do my very best to follow his tremendous example." West Region Posts Record Results Strong cross-market and cross-property play at Harrah's Las Vegas and the Rio, and a record performance at Harrah's Laughlin helped spur record results in Harrah's Entertainment's West Region. Southern Nevada revenues rose 18.7 percent, income from operations gained 45.6 percent and Property EBITDA increased 32.2 percent from the 2003 third quarter. Southern Nevada revenues, income from operations and Property EBITDA were all at record levels. Northern Nevada revenues fell 1.7 percent from the third quarter last year, while income from operations matched the prior year's level and Property EBITDA was 1.6 percent higher. "Our Southern Nevada properties continued their string of record-breaking quarterly performances," said Tim Wilmott, Harrah's Entertainment's chief operating officer. "We look forward to significantly expanding our presence in this dynamic market in 2005 with the acquisition of Caesars." For the first nine months of 2004, West Region revenues were up 12.5 percent, income from operations rose 32.9 percent and Property EBITDA gained 22.3 percent from the first nine months of 2003. East Region Posts Gains Combined results for Harrah's Entertainment's two Atlantic City properties rose from the year-ago third quarter. The gains were driven by strong results at Showboat Atlantic City, which benefited from improved yielding of its hotel and from a new entertainment offering. In addition, on July 3, 2004, the market passed the one-year anniversary of the opening of a competing casino property that impacted results in the year-ago third quarter. Third-quarter revenues for the Atlantic City properties rose 5.9 percent to a record level, income from operations increased 2.5 percent and Property EBITDA increased 6.5 percent from the year-earlier period. "We're pleased with our overall performance in Atlantic City, and believe we are positioned for long-term growth in this market," Wilmott said. For the first nine months, East Region revenues increased 0.7 percent, income from operations fell 4.6 percent and Property EBITDA was 0.3 percent lower than in the year-earlier period. North Region Reports Record Results The addition of Horseshoe Hammond and a lower tax rate at Bluffs Run Casino contributed to a record quarter for Harrah's Entertainment's North Central Region. Results at Harrah's East Chicago have been reclassified to discontinued operations. Third-quarter North Central Region revenues were up 44.9 percent, while income from operations rose 51.9 percent and Property EBITDA increased 45.7 percent. Due to contributions from Horseshoe Hammond, acquired by the company on July 1, 2004, combined Illinois and Indiana third-quarter results approximately doubled from the prior-year period. The company's two Iowa properties posted record third-quarter results, driven primarily by a lower tax rate at Bluffs Run Casino. Revenues were 5.9 percent higher than in the year-ago period, income from operations rose 77.3 percent and Property EBITDA increased 47.7 percent. Combined third-quarter revenues at Harrah's two Missouri properties rose 6.3 percent over the 2003 third quarter, income from operations declined 4.6 percent and Property EBITDA increased 2.5 percent. The opening of an $80 million, 210-room hotel expansion at St. Louis led to strong gains at that property, though this was offset by declines at North Kansas City, which faced increased competition due to significant expansions by two other properties in that area. "We are proceeding on schedule with a $107 million expansion project at Harrah's North Kansas City," Wilmott said. "Once completed in late 2005, this investment should allow us to regain a leadership position in the Kansas City market, as we have in St. Louis." For the first nine months of 2004, North Central Region revenues were up 14.0 percent, income from operations was 21.3 percent higher and Property EBITDA was up 13.0 percent from the year-earlier period. South Central Region Posts Record Results The addition of Horseshoe Tunica and Horseshoe Bossier City contributed to a record quarter for the South Central Region. Results at Harrah's Tunica have been reclassified to discontinued operations. At Harrah's Entertainment's Louisiana and Mississippi properties, revenues rose 56.4 percent, income from operations increased 84.7 percent and Property EBITDA was 75.9 percent higher than in the year-ago third quarter. The increases were driven by the addition of Horseshoe Bossier City and Horseshoe Tunica on July 1. These gains were partially offset by the sale of Harrah's Shreveport to another operator on May 19, 2004. New Orleans also posted strong growth despite a three-day closure in mid-September due to Hurricane Ivan. "With the Horseshoe acquisition, we now own three of the South's premier casinos -- Harrah's New Orleans, Horseshoe Bossier City, and Horseshoe Tunica," Wilmott said. "Despite challenging conditions in the Shreveport- Bossier City market, we believe our overall position in the South is strong, and will get only stronger with the planned acquisition of Caesars and the completion of our $142 million, 450-room hotel tower in New Orleans in early 2006." Nine-month revenues for the South Central properties rose 25.8 percent, income from operations increased 29.2 percent and Property EBITDA was up 24.2 percent from the first nine months of 2003. Managed Properties And Other Items Third-quarter management-fee revenues were down 20.5 percent from the year-ago period due to lower fee schedules associated with contract extensions. Third-quarter development costs rose to $4.7 million from $3.0 million in the year-ago quarter. Corporate expense increased 51.6 percent over the year-ago quarter due to higher incentive-compensation costs and depreciation expense, costs associated with a management-development program and on-going costs related to Sarbanes- Oxley compliance. Interest expense was 33.9 percent higher than in the 2003 third quarter due to additional debt related to the Horseshoe acquisition. The effective income tax rate after minority interest for the 2004 third quarter was 38.0 percent, a higher rate than in the full year 2003 and the second quarter of 2004 as a result of higher accruals for state income taxes. Harrah's Entertainment will host a conference call Wednesday, October 20, 2004, at 9:00 a.m. Eastern Daylight Time to review its 2004 third-quarter results. Those interested in participating in the call should dial 1-888-399-2695, or 1-706-679-7646 for international callers, approximately 10 minutes before the call start time. A taped replay of the conference call can be accessed at 1-800-642-1687, or 1-706-645-9291 for international callers, beginning at 12:00 p.m. EDT Wednesday, October 20. The replay will be available through 11:59 p.m. EDT on Wednesday, October 27. The passcode number for the replay is 1163512. Interested parties wanting to listen to the live conference call on the Internet may do so on the company's web site -- www.harrahs.com -- in the Investor Relations section behind the "About Us" tab. Various subsidiaries of Harrah's Entertainment, Inc. own or manage 28 casinos in the United States, primarily under the Harrah's and Horseshoe brand names. Founded 66 years ago, Harrah's Entertainment is focused on building loyalty and value with its valued customers through a unique combination of great service, excellent products, unsurpassed distribution, operational excellence and technology leadership. Additional information about Harrah's Entertainment is available at www.harrahs.com.

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Harrah's Entertainment Reports Record Q3 Results