2. Safe Harbor Statement
This presentation includes quot;forward-looking statementsquot; 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 quot;may,quot; quot;will,quot; quot;project,quot; quot;might,quot; quot;expect,quot; quot;believe,quot;
quot;anticipate,quot; quot;intend,quot; quot;could,quot; quot;would,quot; quot;estimate,quot; quot;continuequot; or quot;pursue,quot; or the negative or other variations thereof or
comparable terminology. In particular, they include statements relating to, among other things, future actions, strategies, future
performance, and future financial results of Harrah's Entertainment, Inc. 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 or results 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 quot;Risk Factorsquot; and quot;Management's Discussion and Analysis of
Financial Condition and Results of Operationsquot; contained therein): financial community and rating agency perceptions of
Harrah's; the effects of economic, credit and capital market conditions on the economy in general, and on gaming and hotel
companies in particular; construction factors, including delays, 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; the ability to timely and cost-effectively integrate into Harrah's operations
the companies that it acquires, access to available and feasible financing on a timely basis; 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; our ability to recoup costs of capital investments through higher revenues; acts of war or terrorist
incidents; 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
2005
3. Harrah’s Today
Harrah’s Entertainment, Inc.
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2005
4. At the foot of a steep growth curve through acquisition…
1999
2004
1998
2005
Harrah’s Entertainment, Inc.
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2005
5. At the foot of a steep growth curve overseas…
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6. At the foot of a steep growth curve in Las Vegas…
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7. At the foot of a steep growth curve in Atlantic City…
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8. Company Overview
Largest provider of branded casino entertainment
4 million square feet of casino space
40,000 hotel rooms
90,000 employees
40 million Total Rewards members
Harrah’s Entertainment, Inc.
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2005
10. A Portfolio of Winning Brands
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2005
11. 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
Highest dividend yield in the gaming industry 2.0%
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Confidential and Proprietary
2005
12. 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%
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13. #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
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Confidential and Proprietary
2005
14. HET Core Strategy
Drive same-store growth, cross-market play through
superior marketing and technological capabilities
Brand
Loyalty
Decision Science
Capabilities
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2005
16. Loyalty strategy reflected in 4Q strength
Fourth-quarter rated customer trip growth
National Regional Local
(300+ miles) (70 – 300 miles) (< 70 miles)
23% 20% 21%
VIP
11% 11% 14%
AEP
3% 5% 10%
Retail
Harrah’s Entertainment, Inc.
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2005
17. 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 CEI
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Confidential and Proprietary
2005
18. Horseshoe – Merger Success
EPS Accretion
Horseshoe Market Share
35%
30%
$0.15
25%
$0.10
20%
15%
$0.05
10%
$0.00
5%
0%
04
04
05
05
05
05
Hammond Tunica Bossier City
3Q
4Q
1Q
2Q
3Q
4Q
12 months ended June 2004 Last tw elve months
$0.41 of Accretion
Since Merger Closing
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19. Growth opportunity
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2005
20. Controllable growth pipeline
New
Organic Reinvestment
Development
LV Master Plan El Reino, Spain
Caesars
synergies AC Center Harrah’s Chester
Total Boardwalk Baha Mar
Rewards New Orleans Eyeing select
Revenue
Metropolis markets in Asia,
management
Europe
Council Bluffs
Strategic
Caesars Indiana
Sourcing
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2005
21. 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
• Forum retail shops
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22. Harrah’s Chester Casino and Racetrack
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23. Baha Mar – Nassau, Bahamas
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24. Baha Mar – Nassau, Bahamas
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25. Prime Center Strip
Land Bank
18,000 Total Guest
Rooms
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
Un/Underdevloped
Land
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26. An attractive value
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27. Valuation Comparison
Forward EV/EBITDA Multiple
10.5x
9.5x
8.5x
7.5x
6.5x
5.5x
Jan-03 Apr-03 Jul-03 Oct-03 Jan-04 Apr-04 Jul-04 Oct-04 Jan-05 Apr-05 Jul-05 Oct-05 Jan-06
HET Peer Group Average
* Peer Group includes: MGM, STN, BYD, PENN, AZR
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2005
28. Despite successful growth record, HET prospects discounted
Current Firm Value = NOPAT / WACC
Peer Avg future value = 57%
EV (as
Future Firm Value = EV – Current Value
of 2/22)
8.4B
WYNN 110%
3.2B
Kerzner 23% 77%
21.0B
LVS 24% 76%
6.6B
Station 39% 61%
6.1B
Boyd 43% 57%
23.5B
MGM Mirage 51% 49%
23.9B
Harrah's 54% 46%
3.5B
Penn 59% 41%
1.7B
Ameristar 95% 5%
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2005
29. HET focused on shareholder value
25%
450% Per Annum
350%
250%
150%
50%
-50%
-150%
Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05
HET SP500
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Source: Bloomberg 2005
30. Positioned for long-term growth
Stable, diversified cash flow from operations
Consistent value creation
Strong position in each market of operation
Strong development track record
Modest value given growth prospects
Balance-sheet capacity to handle large developments, reinvestment
Continued focus on shareholder value creation
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2005
