8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

August 8, 2008

Date of Report (Date of earliest event reported)

Harrah’s Entertainment, Inc.

(Exact name of registrant as specified in its charter)

Delaware	001-10410	62-1411755
(State of Incorporation)	(Commission File Number)	(IRS Employer Identification Number)

One Caesars Palace Drive

Las Vegas, Nevada 89109

(Address of principal executive offices) (Zip Code)

(702) 407-6000

(Registrant’s telephone number, including area code)

N/A

(Former Name or Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 2.02 Results of Operations and Financial Condition.

Attached and incorporated herein by reference as Exhibit 99.1 is a copy of the press release of the Registrant, dated August 8, 2008, reporting the Registrant’s financial results for the quarter ended June 30, 2008.

The information, including exhibits attached hereto, in this Current Report is being furnished and shall not be deemed “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section. The information in this Current Report shall not be incorporated by reference into any registration statement or other document pursuant to the Securities Act of 1933, except as otherwise expressly stated in such filing.

Item 9.01 Financial Statements and Exhibits.

(d) Exhibits. The following exhibits are being filed herewith:

99.1 Text of press release, dated August 8, 2008.

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	HARRAH’S ENTERTAINMENT, INC.
Date: August 8, 2008	By:	/s/ Michael D. Cohen
		Michael D. Cohen
		Vice President, Associate General Counsel and Corporate Secretary

EXHIBIT INDEX

Exhibit Number	Document Description
99.1	Text of press release, dated August 8, 2008.

EX-99.1

EXHIBIT 99.1

Contact: Gary Thompson – Media   Harrah’s Entertainment, Inc.   (702) 407-6529 Jonathan Halkyard – Investors   Harrah’s Entertainment, Inc.   (702) 407-6080

Harrah’s Entertainment Reports 2008 Second-Quarter Global Results

• Revenues decline 3.7 percent from 2007 second quarter

• Property EBITDA declines 9.5 percent

LAS VEGAS – August 8, 2008 – Harrah’s Entertainment, Inc. today reported the following financial results for the 2008 second quarter and first half:

HARRAH’S ENTERTAINMENT, INC.

Company-wide Results

	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
(In millions)	2008		2007
Total revenues	$	2,602.1	$	2,701.7	(3.7)%
Property EBITDA		646.0		713.9	(9.5)%
Adjusted EBITDA (1)		634.3		713.4	(11.1)%

⁽¹⁾ Does not include the pro forma effect of yet-to-be realized cost savings.

In accordance with Generally Accepted Accounting Principles, we have separated our historical financial results for the Successor period from January 28, 2008 to June 30, 2008 and the Predecessor period from January 1, 2008 to January 27, 2008; however, we have also combined the Successor and Predecessor periods’ results for the six months ended June 30, 2008, in the presentations included herein because Company management believes that it enables a meaningful presentation and comparison of results.

	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
(In millions)					2008		2007
Total revenues	$	4,442.6	$	760.1	$	5,202.7	$	5,357.4	(2.9)%
Property EBITDA		1,125.2		171.2		1,296.4		1,412.4	(8.2)%
Adjusted EBITDA (1)		1,088.3		172.0		1,260.3		1,408.0	(10.5)%

⁽¹⁾ Does not include the pro forma effect of yet-to-be realized cost savings.

Property Earnings Before Interest, Taxes, Depreciation and Amortization (Property EBITDA) and Adjusted EBITDA are not Generally Accepted Accounting Principles (GAAP) measurements 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 income from operations and Adjusted EBITDA to income from continuing operations are attached to this release.

On January 28, 2008, Harrah’s Entertainment was acquired by affiliates of Apollo Global Management, LLC and TPG Capital, LP in a transaction valued at $30.7 billion, including assumption of $12.4 billion of debt and approximately $1.0 billion of acquisition costs. Harrah’s stockholders received $90 cash for each share of common stock, or a total of $17.3 billion.

The company’s second-quarter income from operations was $323.1 million, compared with $477.9 million in the 2007 second quarter. The net loss for the 2008 second quarter was $97.6 million, compared with net income of $237.5 million in the year-ago quarter.

First-half revenues declined 2.9 percent to $5.2 billion from $5.4 billion in the first six months of 2007. Income from operations totaled $724.1 million in the 2008 first half, compared with $929.1 million in the prior-year period. The net loss for the first six months of 2008 was $285.4 million, compared with net income of $422.8 million in the first half of 2007.

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“The first half of the year presented us with the most turbulent economic conditions the casino-entertainment industry has faced in years,” said Gary Loveman, Harrah’s chairman, president and chief executive officer. “Customer visitation fell in the second quarter as consumers coped with higher fuel costs, declining asset values, the impact of widespread flooding in the Midwest and other financial challenges.

“During the second quarter, we reduced certain costs in response to reduced demand, but continued to fund for the future,” Loveman said. “We completed the re-branding of Caesars Indiana to Horseshoe Southern Indiana and Grand Tunica to Harrah’s Casino Tunica.

“Today we celebrate the grand opening of the $485 million expansion at Horseshoe Hammond in Northern Indiana, and we remain on track with the expansion of the hotel tower and convention center areas at Caesars Palace in Las Vegas,” Loveman said. “Further, we have completed the $565 million expansion of Harrah’s Atlantic City.”

A substantial portion of the debt of Harrah’s Entertainment’s consolidated group is issued by Harrah’s Operating Company, Inc., (HOC) a wholly owned subsidiary of Harrah’s Entertainment, Inc. Therefore, the company believes it is meaningful to also provide information pertaining solely to the results of operations of HOC. The information for HOC assumes that a post-closing swap of certain properties between HOC and Harrah’s Entertainment that was consummated during the second quarter actually occurred on January 1, 2007.

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HARRAH’S OPERATING COMPANY

Overall

	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
(In millions)	2008		2007
Total revenues	$	1,783.4	$	2,023.0	(11.8)%
Property EBITDA		436.7		526.6	(17.1)%
Adjusted EBITDA (1)		424.2		534.2	(20.6)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 Through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	3,072.7	$	577.5	$	3,650.2	$	4,010.7	(9.0)%
Property EBITDA		779.9		109.6		889.5		1,012.9	(12.2)%
Adjusted EBITDA (1)		725.5		143.0		868.5		1,020.5	(14.9)%

⁽¹⁾ Does not include the pro forma effect of yet-to-be realized cost savings.

Summaries of results by region follow:

Las Vegas Region

Second-quarter results for the company’s Las Vegas Region were lower than in the year-ago quarter due to reduced visitation and lower spend per trip. First-half declines were driven by lower spend per trip and fewer hotel rooms available due to room remodeling and remediation projects at three Harrah’s properties.

HARRAH’S ENTERTAINMENT, INC.

Las Vegas Region

	Successor		Predecessor		Percent
	Second Quarter				Increase/
(In millions)	2008		2007		(Decrease)
Total revenues	$	873.1	$	922.5	(5.4)%
Income from operations		199.0		238.8	(16.7)%
Property EBITDA		286.4		306.5	(6.6)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	1,482.5	$	253.6	$	1,736.1	$	1,821.1	(4.7)%
Income from operations		341.9		51.9		393.8		474.5	(17.0)%
Property EBITDA		485.8		76.0		561.8		604.1	(7.0)%

Las Vegas Region properties include Harrah’s Las Vegas, Rio, Bally’s Las Vegas, Paris, Flamingo Las Vegas, Caesars Palace, Imperial Palace and Bill’s Gamblin’ Hall & Saloon since its acquisition on February 27, 2007.

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HARRAH’S OPERATING COMPANY

Las Vegas Region

	Successor		Predecessor		Percent
	Second Quarter				Increase/
(In millions)	2008		2007		(Decrease)
Total revenues	$	380.9	$	412.2	(7.6)%
Income from operations		83.8		109.8	(23.7)%
Property EBITDA		114.9		142.3	(19.3)%

	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
(In millions)					2008		2007
Total revenues	$	641.4	$	118.5	$	759.9	$	805.8	(5.7)%
Income from operations		140.3		29.7		170.0		210.8	(19.4)%
Property EBITDA		192.0		38.1		230.1		272.1	(15.4)%

Las Vegas Region properties include Bally’s Las Vegas, Caesars Palace, Imperial Palace and Bill’s Gamblin’ Hall & Saloon since its acquisition on February 27, 2007.

Atlantic City Region

Second-quarter revenue gains were attributable to strong results at Harrah’s Chester and the phased opening of the expansion at Harrah’s Atlantic City; those properties’ performances partially offset the impact of reduced visitation, smoking restrictions and new competition in key feeder markets. Income from operations declined due to reduced visitor volume and higher advertising spending.

First-half results also benefited from strong performances at Harrah’s Chester and from Harrah’s Atlantic City, which opened in phases during the first half of the year. Income from operations was affected by the Atlantic City smoking restrictions and competition from slot parlors in feeder markets.

HARRAH’S ENTERTAINMENT, INC.

Atlantic City Region

	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
(In millions)	2008		2007
Total revenues	$	599.8	$	592.6	1.2%
Income from operations		71.3		77.2	(7.6)%
Property EBITDA		133.1		143.4	(7.2)%

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	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
(In millions)					2008		2007
Total revenues	$	1,008.0	$	160.8	$	1,168.8	$	1,138.7	2.6%
Income from operations		130.5		18.7		149.2		149.3	(0.1)%
Property EBITDA		232.8		36.4		269.2		276.2	(2.5)%

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

HARRAH’S OPERATING COMPANY

Atlantic City Region

	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
(In millions)	2008		2007
Total revenues	$	460.4	$	471.0	(2.3)%
Income from operations		51.3		63.5	(19.2)%
Property EBITDA		95.0		111.8	(15.0)%

	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
(In millions)					2008		2007
Total revenues	$	780.9	$	125.8	$	906.7	$	900.3	0.7%
Income from operations		96.4		8.0		104.4		115.4	(9.5)%
Property EBITDA		169.1		21.9		191.0		211.1	(9.5)%

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

Louisiana/Mississippi Region

Combined second-quarter revenues declined for the Louisiana/Mississippi Region as a result of lower visitor volume due in part to disruptions during the renovation in preparation for the re-branding of Grand Casino Tunica, which became Harrah’s Casino Tunica in mid-May. Income from operations was lower than in the year-earlier second quarter, when $37.0 million of insurance proceeds were included in the results.

Combined first-half revenues decreased due to a decline in visitation in the Tunica market and the impact of disruptions during the renovations at the former Grand Tunica. Income from operations in the first half of 2008 includes $185.4 million of insurance proceeds in excess of the net book value of impacted assets, costs and expenses related to 2005 hurricanes, while the 2007 first-half income from operations includes $55.7 million of such insurance proceeds.

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HARRAH’S ENTERTAINMENT, INC.

Louisiana/Mississippi Region

(In millions)	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
	2008		2007
Total revenues	$	368.2	$	389.0	(5.3)%
Income from operations		46.1		93.6	(50.7)%
Property EBITDA		77.2		88.8	(13.1)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	642.6	$	106.1	$	748.7	$	779.5	(4.0)%
Income from operations		278.8		10.1		288.9		169.2	70.7%
Property EBITDA		144.1		18.6		162.7		172.9	(5.9)%

Louisiana/Mississippi Region properties include Harrah’s New Orleans, Horseshoe Bossier City, Louisiana Downs, Horseshoe Tunica, Harrah’s Tunica, Sheraton Tunica and Grand Casino Biloxi.

Iowa/Missouri Region

Combined second-quarter and first-half revenues were lower than in the year-ago periods due primarily to competition from a new facility that opened in the St. Louis market. Income from operations was higher in the 2008 second quarter as a result of cost savings, especially at our Iowa operations.

HARRAH’S ENTERTAINMENT, INC.

Iowa/Missouri Region

(In millions)	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
	2008		2007
Total revenues	$	196.3	$	205.3	(4.4)%
Income from operations		40.3		37.2	8.3%
Property EBITDA		53.8		56.9	(5.4)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	339.3	$	55.8	$	395.1	$	407.0	(2.9)%
Income from operations		71.0		7.7		78.7		70.3	11.9%
Property EBITDA		94.5		13.0		107.5		109.8	(2.1)%

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

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Illinois/Indiana Region

A smoking ban in Illinois led to lower 2008 second-quarter and first-half results in the Illinois/Indiana Region. The first-half numbers were also impacted by heavy rains and flooding that lead to closure of our Southern Indiana property, now known as Horseshoe Southern Indiana, for four days in March 2008.

Construction has been completed on a $485 million renovation of Horseshoe Hammond that celebrates its grand opening today.

HARRAH’S ENTERTAINMENT, INC.

Illinois/Indiana Region

	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
(In millions)	2008		2007
Total revenues	$	294.5	$	321.8	(8.5)%
Income from operations		42.7		50.1	(14.8)%
Property EBITDA		59.9		66.3	(9.7)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	502.6	$	85.5	$	588.1	$	646.2	(9.0)%
Income from operations		69.8		8.7		78.5		101.2	(22.4)%
Property EBITDA		96.4		13.6		110.0		134.4	(18.2)%

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

Other Nevada Region

Second-quarter and first-half results for the Other Nevada Region declined due to lower spend per trip in the Reno and Laughlin markets, increased competition in Reno and higher promotional costs.

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HARRAH’S ENTERTAINMENT, INC.

Other Nevada

(In millions)	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
	2008		2007
Total revenues	$	140.8	$	154.2	(8.7)%
Income from operations		11.8		22.3	(47.1)%
Property EBITDA		24.5		34.7	(29.4)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008		Combined		Predecessor		Percent Increase/ (Decrease)
					Six Months Ended June 30,
					2008		2007
Total revenues	$	248.6	$	38.9	$	287.5	$	307.9	(6.6)%
Income from operations		25.9		0.5		26.4		42.7	(38.2)%
Property EBITDA		47.6		4.5		52.1		67.5	(22.8)%

Other Nevada properties include Harrah’s Reno, Harrah’s Lake Tahoe, Harveys Lake Tahoe, Bill’s Casino and Harrah’s Laughlin.

HARRAH’S OPERATING COMPANY

Other Nevada

(In millions)	Successor		Predecessor		Percent Increase/ (Decrease)
	Second Quarter
	2008		2007
Total revenues	$	96.6	$	108.0	(10.6)%
Income from operations		4.9		10.6	(53.8)%
Property EBITDA		12.5		20.3	(38.4)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008		Predecessor Jan. 1, 2008 through Jan. 27, 2008			Combined		Predecessor		Percent Increase/ (Decrease)
						Six Months Ended June 30,
						2008		2007
Total revenues	$	172.3	$	26.8		$	199.1	$	216.3	(8.0)%
Income from operations		13.1		(1.9	)		11.2		18.8	(40.4)%
Property EBITDA		26.2		1.2			27.4		38.2	(28.3)%

Other Nevada properties include Harrah’s Reno, Harrah’s Lake Tahoe, Harveys Lake Tahoe and Bill’s Casino.

Managed/International/Other

Second-quarter revenues increased due to the inclusion of three new London Clubs International properties that opened in 2007. Income from operations was impacted by a smoking ban, lower table-games hold percentage and higher gaming taxes, all of which affected LCI results.

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Second-quarter and first-half results from managed properties were lower due to termination of a Native American management contract in June 2007 and lower operating results from other managed properties.

HARRAH’S ENTERTAINMENT, INC.

Managed/International/Other

(In millions)	Successor			Predecessor			Percent Increase/ (Decrease)
	Second Quarter
	2008			2007
Total revenues	$	129.4		$	116.3		11.3%
Income from operations		(46.4	)		(11.2	)	N/M
Property EBITDA		11.1			17.3		(35.8)%

(In millions)	Successor Jan. 28, 2008 through June 30, 2008			Predecessor Jan. 1, 2008 through Jan. 27, 2008			Combined			Predecessor			Percent Increase/ (Decrease)
							Six Months Ended June 30,
							2008			2007
Total revenues	$	219.0		$	59.4		$	278.4		$	257.0		8.3%
Income from operations		(73.6	)		(0.3	)		(73.9	)		(10.4	)	N/M
Property EBITDA		24.0			9.1			33.1			47.5		(30.3)%

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.

Other items

Interest expense increased significantly from the 2007 second quarter and first half due to higher debt levels associated with the company’s acquisition, which was consummated in the 2008 first quarter. Second-quarter results were favorably affected by a credit of $61.0 million due to an increase in the fair value of the company’s derivative instruments. For the first six months of the year, the change in the fair value of the derivative instruments increased interest expense by $80.8 million. The average interest rate on the company’s variable-rate debt, including the impact of the derivative instruments, was 5.5 percent at June 30, 2008.

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For the 2008 second quarter, tax benefits were generated by operating losses at an effective rate of 20.5 percent, whereas in the second quarter of 2007, operating income resulted in tax expenses at an effective rate of 37.3 percent.

Harrah’s will host a conference today at 8 a.m. Pacific Daylight Time to discuss its 2008 second-quarter results. Persons from the United States and Canada who are interested in participating in the call should dial 1-877-876-8924, or 1-706-758-4271 for international callers, approximately 10 minutes before the call start time. A taped replay of the conference call will be available at 1-800-642-1687, or 1-706-645-9291 for international callers, beginning at 9 a.m. PDT the day of the call. The replay will be available through 8:59 p.m. PDT August 22. The pass code number for the conference call and replay is 54273574.

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 London Clubs International family of casinos and the World Series of Poker®. 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.

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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 outcome of any legal proceedings that have been, or will be, instituted against the company related to the acquisition of the company by affiliates of TPG Capital and Apollo Management; 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

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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 acquisition 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 or natural disasters; abnormal gaming holds; the potential difficulties in employee retention as a result of the sale of the company to affiliates of TPG Capital and Apollo Management; 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.

-More-

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HARRAH’S ENTERTAINMENT, INC.

CONSOLIDATED SUMMARY OF OPERATIONS

(UNAUDITED)

							Successor			Predecessor			Combined			Predecessor
	Successor			Predecessor			Jan. 28, 2008 Through June 30, 2008			Jan. 1, 2008 Through Jan. 27, 2008			Six Months Ended June 30,
	Second Quarter Ended
(In millions)	June 30, 2008			June 30, 2007									2008			2007
Revenues	$	2,602.1		$	2,701.7		$	4,442.6		$	760.1		$	5,202.7		$	5,357.4
Property operating expenses		(1,956.1	)		(1,987.8	)		(3,317.4	)		(588.9	)		(3,906.3	)		(3,945.0	)
Depreciation and amortization		(176.2	)		(204.3	)		(300.4	)		(63.5	)		(363.9	)		(394.6	)
Operating profit		469.8			509.6			824.8			107.7			932.5			1,017.8
Corporate expense		(36.6	)		(26.6	)		(61.3	)		(8.5	)		(69.8	)		(60.1	)
Merger and integration costs		(5.1	)		(3.5	)		(22.1	)		(125.6	)		(147.7	)		(7.6	)
Income on interests in nonconsolidated affiliates		0.5			3.8			1.3			0.5			1.8			3.6
Amortization of intangible assets		(48.2	)		(17.9	)		(80.5	)		(5.5	)		(86.0	)		(35.7	)
Project opening costs and other items		(57.3	)		12.5			98.7			(5.4	)		93.3			11.1
Income/(loss) from operations		323.1			477.9			760.9			(36.8	)		724.1			929.1
Interest expense, net of interest capitalized		(468.0	)		(176.6	)		(935.9	)		(89.7	)		(1,025.6	)		(362.4	)
Losses on early extinguishments of debt		—			—			(211.3	)		—			(211.3	)		—
Other income, including interest income		3.8			15.6			11.5			1.1			12.6			23.8
(Loss)/income before income taxes and minority interests		(141.1	)		316.9			(374.8	)		(125.4	)		(500.2	)		590.5
Income tax benefit/(provision)		43.5			(116.3	)		101.7			26.0			127.7			(216.6	)
Minority interests		(0.4	)		(5.1	)		1.0			(1.6	)		(0.6	)		(11.2	)
(Loss)/income from continuing operations		(98.0	)		195.5			(272.1	)		(101.0	)		(373.1	)		362.7
Discontinued operations, net of tax		0.4			42.0			87.6			0.1			87.7			60.1
Net (loss)/income	$	(97.6	)	$	237.5		$	(184.5	)	$	(100.9	)	$	(285.4	)	$	422.8

14

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL OPERATING INFORMATION

(UNAUDITED)

	Successor			Predecessor			Successor			Predecessor			Combined			Predecessor
							Jan. 28, 2008			Jan. 1, 2008
	Second Quarter Ended						Through June 30, 2008			Through Jan. 27, 2008			Six Months Ended June 30,
(In millions)	June 30, 2008			June 30, 2007									2008			2007
Revenues
Las Vegas Region	$	873.1		$	922.5		$	1,482.5		$	253.6		$	1,736.1		$	1,821.1
Atlantic City Region		599.8			592.6			1,008.0			160.8			1,168.8			1,138.7
Louisiana/Mississippi Region		368.2			389.0			642.6			106.1			748.7			779.5
Iowa/Missouri Region		196.3			205.3			339.3			55.8			395.1			407.0
Illinois/Indiana Region		294.5			321.8			502.6			85.5			588.1			646.2
Other Nevada Region		140.8			154.2			248.6			38.9			287.5			307.9
Managed/International/Other		129.4			116.3			219.0			59.4			278.4			257.0
Total Revenues	$	2,602.1		$	2,701.7		$	4,442.6		$	760.1		$	5,202.7		$	5,357.4
Income/(loss) from operations
Las Vegas Region	$	199.0		$	238.8		$	341.9		$	51.9		$	393.8		$	474.5
Atlantic City Region		71.3			77.2			130.5			18.7			149.2			149.3
Louisiana/Mississippi Region		46.1			93.6			278.8			10.1			288.9			169.2
Iowa/Missouri Region		40.3			37.2			71.0			7.7			78.7			70.3
Illinois/Indiana Region		42.7			50.1			69.8			8.7			78.5			101.2
Other Nevada Region		11.8			22.3			25.9			0.5			26.4			42.7
Managed/International/Other		(46.4	)		(11.2	)		(73.6	)		(0.3	)		(73.9	)		(10.4	)
Corporate Expense		(36.6	)		(26.6	)		(61.3	)		(8.5	)		(69.8	)		(60.1	)
Merger and integration costs		(5.1	)		(3.5	)		(22.1	)		(125.6	)		(147.7	)		(7.6	)
Total Income/(loss) from operations	$	323.1		$	477.9		$	760.9		$	(36.8	)	$	724.1		$	929.1
Property EBITDA (a)
Las Vegas Region	$	286.4		$	306.5		$	485.8		$	76.0		$	561.8		$	604.1
Atlantic City Region		133.1			143.4			232.8			36.4			269.2			276.2
Louisiana/Mississippi Region		77.2			88.8			144.1			18.6			162.7			172.9
Iowa/Missouri Region		53.8			56.9			94.5			13.0			107.5			109.8
Illinois/Indiana Region		59.9			66.3			96.4			13.6			110.0			134.4
Other Nevada Region		24.5			34.7			47.6			4.5			52.1			67.5
Managed/International/Other		11.1			17.3			24.0			9.1			33.1			47.5
Total Property EBITDA	$	646.0		$	713.9		$	1,125.2		$	171.2		$	1,296.4		$	1,412.4
Project opening costs and other items
Project opening costs	$	(7.2	)	$	(8.3	)	$	(10.0	)	$	(0.7	)	$	(10.7	)	$	(17.2	)
Insurance proceeds for hurricane losses		—			37.0			185.4			—			185.4			55.7
Other write-downs, reserves and recoveries		(50.1	)		(16.2	)		(76.7	)		(4.7	)		(81.4	)		(27.4	)
Total Project opening costs and other items	$	(57.3	)	$	12.5		$	98.7		$	(5.4	)	$	93.3		$	11.1

(a) Property EBITDA (earnings before interest, taxes, depreciation and amortization) consists of Income from operations before depreciation and amortization, write-downs, reserves and recoveries, project opening costs, corporate expense, merger 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 Income 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.

15

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Successor
	Second Quarter Ended June 30, 2008
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	873.1		$	599.8		$	368.2		$	196.3		$	294.5		$	140.8		$	129.4		$	2,602.1
Property operating expenses		(586.7	)		(466.7	)		(291.0	)		(142.5	)		(234.6	)		(116.3	)		(118.3	)		(1,956.1	)
Property EBITDA		286.4			133.1			77.2			53.8			59.9			24.5			11.1			646.0
Depreciation and amortization		(48.4	)		(53.8	)		(22.5	)		(13.6	)		(13.1	)		(9.2	)		(15.6	)		(176.2	)
Operating profit		238.0			79.3			54.7			40.2			46.8			15.3			(4.5	)		469.8
Amortization of intangible assets		(18.2	)		(5.7	)		(6.1	)		0.2			(0.2	)		(3.5	)		(14.7	)		(48.2	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			0.5			0.5
Project opening costs and other items		(20.8	)		(2.3	)		(2.5	)		(0.1	)		(3.9	)		—			(27.7	)		(57.3	)
Corporate expense		—			—			—			—			—			—			(36.6	)		(36.6	)
Merger and integration costs		—			—			—			—			—			—			(5.1	)		(5.1	)
Income/(loss) from operations*	$	199.0		$	71.3		$	46.1		$	40.3		$	42.7		$	11.8		$	(88.1	)	$	323.1
	Predecessor
	Second Quarter Ended June 30, 2007
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	922.5		$	592.6		$	389.0		$	205.3		$	321.8		$	154.2		$	116.3		$	2,701.7
Property operating expenses		(616.0	)		(449.2	)		(300.2	)		(148.4	)		(255.5	)		(119.5	)		(99.0	)		(1,987.8	)
Property EBITDA		306.5			143.4			88.8			56.9			66.3			34.7			17.3			713.9
Depreciation and amortization		(62.3	)		(53.8	)		(25.0	)		(18.5	)		(13.9	)		(11.9	)		(18.9	)		(204.3	)
Operating profit		244.2			89.6			63.8			38.4			52.4			22.8			(1.6	)		509.6
Amortization of intangible assets		(3.5	)		(6.4	)		(2.0	)		(0.8	)		(2.0	)		(0.2	)		(3.0	)		(17.9	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			3.8			3.8
Project opening costs and other items		(1.9	)		(6.0	)		31.8			(0.4	)		(0.3	)		(0.3	)		(10.4	)		12.5
Corporate expense		—			—			—			—			—			—			(26.6	)		(26.6	)
Merger and integration costs		—			—			—			—			—			—			(3.5	)		(3.5	)
Income/(loss) from operations*	$	238.8		$	77.2		$	93.6		$	37.2		$	50.1		$	22.3		$	(41.3	)	$	477.9

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income.

16

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Successor
	January 28, 2008 Through June 30, 2008
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	1,482.5		$	1,008.0		$	642.6		$	339.3		$	502.6		$	248.6		$	219.0		$	4,442.6
Property operating expenses		(996.7	)		(775.2	)		(498.5	)		(244.8	)		(406.2	)		(201.0	)		(195.0	)		(3,317.4	)
Property EBITDA		485.8			232.8			144.1			94.5			96.4			47.6			24.0			1,125.2
Depreciation and amortization		(83.1	)		(87.9	)		(37.4	)		(23.3	)		(21.5	)		(15.7	)		(31.5	)		(300.4	)
Operating profit		402.7			144.9			106.7			71.2			74.9			31.9			(7.5	)		824.8
Amortization of intangible assets		(31.4	)		(10.2	)		(10.7	)		—			(0.7	)		(5.9	)		(21.6	)		(80.5	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			1.3			1.3
Project opening costs and other items		(29.4	)		(4.2	)		182.8			(0.2	)		(4.4	)		(0.1	)		(45.8	)		98.7
Corporate expense		—			—			—			—			—			—			(61.3	)		(61.3	)
Merger and integration costs		—			—			—			—			—			—			(22.1	)		(22.1	)
Income/(loss) from operations*	$	341.9		$	130.5		$	278.8		$	71.0		$	69.8		$	25.9		$	(157.0	)	$	760.9
	Predecessor
	January 1, 2008 Through January 27, 2008
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	253.6		$	160.8		$	106.1		$	55.8		$	85.5		$	38.9		$	59.4		$	760.1
Property operating expenses		(177.6	)		(124.4	)		(87.5	)		(42.8	)		(71.9	)		(34.4	)		(50.3	)		(588.9	)
Property EBITDA		76.0			36.4			18.6			13.0			13.6			4.5			9.1			171.2
Depreciation and amortization		(18.7	)		(15.7	)		(8.6	)		(5.1	)		(4.3	)		(3.9	)		(7.2	)		(63.5	)
Operating profit		57.3			20.7			10.0			7.9			9.3			0.6			1.9			107.7
Amortization of intangible assets		(1.0	)		(1.9	)		(0.5	)		(0.2	)		(0.6	)		(0.1	)		(1.2	)		(5.5	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			0.5			0.5
Project opening costs and other items		(4.4	)		(0.1	)		0.6			—			—			—			(1.5	)		(5.4	)
Corporate expense		—			—			—			—			—			—			(8.5	)		(8.5	)
Merger and integration costs		—			—			—			—			—			—			(125.6	)		(125.6	)
Income/(loss) from operations*	$	51.9		$	18.7		$	10.1		$	7.7		$	8.7		$	0.5		$	(134.4	)	$	(36.8	)

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income.

17

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Combined
	Six Months Ended June 30, 2008
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	1,736.1		$	1,168.8		$	748.7		$	395.1		$	588.1		$	287.5		$	278.4		$	5,202.7
Property operating expenses		(1,174.3	)		(899.6	)		(586.0	)		(287.6	)		(478.1	)		(235.4	)		(245.3	)		(3,906.3	)
Property EBITDA		561.8			269.2			162.7			107.5			110.0			52.1			33.1			1,296.4
Depreciation and amortization		(101.8	)		(103.6	)		(46.0	)		(28.4	)		(25.8	)		(19.6	)		(38.7	)		(363.9	)
Operating profit		460.0			165.6			116.7			79.1			84.2			32.5			(5.6	)		932.5
Amortization of intangible assets		(32.4	)		(12.1	)		(11.2	)		(0.2	)		(1.3	)		(6.0	)		(22.8	)		(86.0	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			1.8			1.8
Project opening costs and other items		(33.8	)		(4.3	)		183.4			(0.2	)		(4.4	)		(0.1	)		(47.3	)		93.3
Corporate expense		—			—			—			—			—			—			(69.8	)		(69.8	)
Merger and integration costs		—			—			—			—			—			—			(147.7	)		(147.7	)
Income/(loss) from operations*	$	393.8		$	149.2		$	288.9		$	78.7		$	78.5		$	26.4		$	(291.4	)	$	724.1
	Predecessor
	Six Months Ended June 30, 2007
	Las Vegas Region			Atlantic City Region			Louisiana/ Mississippi Region			Iowa/ Missouri Region			Illinois/ Indiana Region			Other Nevada Region			Other			Total
Revenues	$	1,821.1		$	1,138.7		$	779.5		$	407.0		$	646.2		$	307.9		$	257.0		$	5,357.4
Property operating expenses		(1,217.0	)		(862.5	)		(606.6	)		(297.2	)		(511.8	)		(240.4	)		(209.5	)		(3,945.0	)
Property EBITDA		604.1			276.2			172.9			109.8			134.4			67.5			47.5			1,412.4
Depreciation and amortization		(116.8	)		(103.3	)		(49.5	)		(37.2	)		(28.0	)		(24.0	)		(35.8	)		(394.6	)
Operating profit		487.3			172.9			123.4			72.6			106.4			43.5			11.7			1,017.8
Amortization of intangible assets		(6.9	)		(12.8	)		(4.0	)		(1.6	)		(4.0	)		(0.4	)		(6.0	)		(35.7	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			3.6			3.6
Project opening costs and other items		(5.9	)		(10.8	)		49.8			(0.7	)		(1.2	)		(0.4	)		(19.7	)		11.1
Corporate expense		—			—			—			—			—			—			(60.1	)		(60.1	)
Merger and integration costs		—			—			—			—			—			—			(7.6	)		(7.6	)
Income/(loss) from operations*	$	474.5		$	149.3		$	169.2		$	70.3		$	101.2		$	42.7		$	(78.1	)	$	929.1

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income.

18

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF EBITDA 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 and senior toggle notes, the interim loan agreement and/or our new senior 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 EBITDA and Adjusted EBITDA of Harrah’s Entertainment, Inc. for the Predecessor period from January 1, 2008 to January 27, 2008 and for the Successor period from January 28, 2008 to June 30, 2008.

(In millions)	Predecessor									Successor			Combined
	Dec. 31, 2007			June 30, 2007			Jan. 1, 2008 Through Jan. 27, 2008			Jan. 28, 2008 Through June 30, 2008			Jan. 1, 2008 Through June 30, 2008			LTM
Income/(loss) from continuing operations	$	527.2		$	362.7		$	(101.0	)	$	(272.1	)	$	(373.1	)	$	(208.6	)
Interest expense, net		780.8			359.0			89.7			925.0			1,014.7			1,436.5
Provision/(benefit) for income taxes		350.1			216.6			(26.0	)		(101.7	)		(127.7	)		5.8
Depreciation and amortization		934.7			451.6			72.7			389.2			461.9			945.0
EBITDA		2,592.8			1,389.9			35.4			940.4			975.8			2,178.7
Project opening costs, abandoned projects and development costs (a)		29.8			19.0			0.9			11.6			12.5			23.3
Merger and integration costs (b)		13.4			7.6			125.6			22.1			147.7			153.5
Losses on early extinguishment of debt (c)		2.0			—			—			211.3			211.3			213.3
Minority interests, net of distributions (d)		(4.8	)		4.0			1.0			(5.4	)		(4.4	)		(13.2	)
Impairment of goodwill, intangible assets and investment securities (e)		169.6			—			—			—			—			169.6
Non-cash expense for stock compensation benefits (f)		53.0			26.5			2.4			6.8			9.2			35.7
Income from insurance claims for hurricane losses (g)		(130.3	)		(55.7	)		—			(185.7	)		(185.7	)		(260.3	)
Other non-recurring or non-cash items (h)		84.0			13.9			6.7			87.2			93.9			164.0
Pro forma adjustment for acquired, new or disposed properties (i)		3.3			2.8			—			—			—			0.5
Pro forma adjustment for yet-to-be realized cost savings (j)																	54.6
Adjusted EBITDA																$	2,719.7

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

b) Represents costs in connection with the Merger, including review of certain strategic matters by the special committee established by Harrah’s Entertainment’s Board of Directors, and costs for consultants and dedicated internal resources executing the plans for the integration of Caesars into Harrah’s.

c) Represents premiums paid and the write-off of historical unamortized deferred financing costs.

19

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

e) Represents impairment of intangible assets and impairment of investment securities.

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

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

h) Represents the elimination of other non-recurring and 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.

i) Represents the full year/period estimated impact of acquired, new and disposed properties.

j) Represents the cost savings realized from our previously announced profitability improvement program.

20

HARRAH’S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Successor
	Second Quarter Ended June 30, 2008
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	380.9		$	460.4		$	368.2		$	196.3		$	294.5		$	96.6		$	(13.5	)	$	1,783.4
Property operating expenses		(266.0	)		(365.4	)		(291.0	)		(142.5	)		(234.6	)		(84.1	)		36.9			(1,346.7	)
Property EBITDA		114.9			95.0			77.2			53.8			59.9			12.5			23.4			436.7
Depreciation and amortization		(21.3	)		(39.3	)		(22.5	)		(13.6	)		(13.1	)		(7.0	)		(15.6	)		(132.4	)
Operating profit		93.6			55.7			54.7			40.2			46.8			5.5			7.8			304.3
Amortization of intangible assets		(7.7	)		(3.0	)		(6.1	)		0.2			(0.2	)		(0.6	)		(14.8	)		(32.2	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			0.5			0.5
Project opening costs and other items		(2.1	)		(1.4	)		(2.5	)		(0.1	)		(3.9	)		—			(27.9	)		(37.9	)
Corporate expense		—			—			—			—			—			—			(28.8	)		(28.8	)
Merger and integration costs		—			—			—			—			—			—			(5.1	)		(5.1	)
Income/(loss) from operations*	$	83.8		$	51.3		$	46.1		$	40.3		$	42.7		$	4.9		$	(68.3	)	$	200.8
	Predecessor
	Second Quarter Ended June 30, 2007
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	412.2		$	471.0		$	389.0		$	205.3		$	321.8		$	108.0		$	115.7		$	2,023.0
Property operating expenses		(269.9	)		(359.2	)		(300.2	)		(148.4	)		(255.5	)		(87.7	)		(75.5	)		(1,496.4	)
Property EBITDA		142.3			111.8			88.8			56.9			66.3			20.3			40.2			526.6
Depreciation and amortization		(27.1	)		(40.2	)		(25.0	)		(18.5	)		(13.9	)		(9.2	)		(18.7	)		(152.6	)
Operating profit		115.2			71.6			63.8			38.4			52.4			11.1			21.5			374.0
Amortization of intangible assets		(3.3	)		(6.4	)		(2.0	)		(0.8	)		(2.0	)		(0.2	)		(3.0	)		(17.7	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			3.8			3.8
Project opening costs and other items		(2.1	)		(1.7	)		31.8			(0.4	)		(0.3	)		(0.3	)		(10.3	)		16.7
Corporate expense		—			—			—			—			—			—			(19.3	)		(19.3	)
Merger and integration costs		—			—			—			—			—			—			(3.5	)		(3.5	)
Income/(loss) from operations*	$	109.8		$	63.5		$	93.6		$	37.2		$	50.1		$	10.6		$	(10.8	)	$	354.0

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income.

21

HARRAH’S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Successor
	January 28, 2008 Through June 30, 2008
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	641.4		$	780.9		$	642.6		$	339.3		$	502.6		$	172.3		$	(6.4	)	$	3,072.7
Property operating expenses		(449.4	)		(611.8	)		(498.5	)		(244.8	)		(406.2	)		(146.1	)		64.0			(2,292.8	)
Property EBITDA		192.0			169.1			144.1			94.5			96.4			26.2			57.6			779.9
Depreciation and amortization		(36.2	)		(64.4	)		(37.4	)		(23.3	)		(21.5	)		(12.1	)		(31.4	)		(226.3	)
Operating profit		155.8			104.7			106.7			71.2			74.9			14.1			26.2			553.6
Amortization of intangible assets		(13.4	)		(5.5	)		(10.7	)		—			(0.7	)		(1.0	)		(21.6	)		(52.9	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			1.3			1.3
Project opening costs and other items		(2.1	)		(2.8	)		182.8			(0.2	)		(4.4	)		—			(46.1	)		127.2
Corporate expense		—			—			—			—			—			—			(70.3	)		(70.3	)
Merger and integration costs		—			—			—			—			—			—			(22.1	)		(22.1	)
Income/(loss) from operations*	$	140.3		$	96.4		$	278.8		$	71.0		$	69.8		$	13.1		$	(132.6	)	$	536.8
	Predecessor
	January 1, 2008 Through January 27, 2008
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	118.5		$	125.8		$	106.1		$	55.8		$	85.5		$	26.8		$	59.0		$	577.5
Property operating expenses		(80.4	)		(103.9	)		(87.5	)		(42.8	)		(71.9	)		(25.6	)		(55.8	)		(467.9	)
Property EBITDA		38.1			21.9			18.6			13.0			13.6			1.2			3.2			109.6
Depreciation and amortization		(7.4	)		(11.9	)		(8.6	)		(5.1	)		(4.3	)		(3.0	)		(7.2	)		(47.5	)
Operating profit		30.7			10.0			10.0			7.9			9.3			(1.8	)		(4.0	)		62.1
Amortization of intangible assets		(1.0	)		(1.9	)		(0.5	)		(0.2	)		(0.6	)		(0.1	)		(1.2	)		(5.5	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			0.5			0.5
Project opening costs and other items		—			(0.1	)		0.6			—			—			—			(1.4	)		(0.9	)
Corporate expense		—			—			—			—			—			—			26.2			26.2
Merger and integration costs		—			—			—			—			—			—			(125.6	)		(125.6	)
Income/(loss) from operations*	$	29.7		$	8.0		$	10.1		$	7.7		$	8.7		$	(1.9	)	$	(105.5	)	$	(43.2	)

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income and Earnings per share for the periods presented.

22

HARRAH’S OPERATING COMPANY, INC., A WHOLLY OWNED SUBSIDIARY OF

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF PROPERTY EBITDA TO INCOME FROM OPERATIONS

(UNAUDITED)

(In millions)	Combined
	Six Months Ended June 30, 2008
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	759.9		$	906.7		$	748.7		$	395.1		$	588.1		$	199.1		$	52.6		$	3,650.2
Property operating expenses		(529.8	)		(715.7	)		(586.0	)		(287.6	)		(478.1	)		(171.7	)		8.2			(2,760.7	)
Property EBITDA		230.1			191.0			162.7			107.5			110.0			27.4			60.8			889.5
Depreciation and amortization		(43.6	)		(76.3	)		(46.0	)		(28.4	)		(25.8	)		(15.1	)		(38.6	)		(273.8	)
Operating profit		186.5			114.7			116.7			79.1			84.2			12.3			22.2			615.7
Amortization of intangible assets		(14.4	)		(7.4	)		(11.2	)		(0.2	)		(1.3	)		(1.1	)		(22.8	)		(58.4	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			1.8			1.8
Project opening costs and other Items		(2.1	)		(2.9	)		183.4			(0.2	)		(4.4	)		—			(47.5	)		126.3
Corporate expense		—			—			—			—			—			—			(44.1	)		(44.1	)
Merger and integration costs		—			—			—			—			—			—			(147.7	)		(147.7	)
Income/(loss) from operations*	$	170.0		$	104.4		$	288.9		$	78.7		$	78.5		$	11.2		$	(238.1	)	$	493.6
	Predecessor
	Six Months Ended June 30, 2007
	Las			Atlantic			Louisiana/			Iowa/			Illinois/			Other
	Vegas			City			Mississippi			Missouri			Indiana			Nevada
	Region			Region			Region			Region			Region			Region			Other			Total
Revenues	$	805.8		$	900.3		$	779.5		$	407.0		$	646.2		$	216.3		$	255.6		$	4,010.7
Property operating expenses		(533.7	)		(689.2	)		(606.6	)		(297.2	)		(511.8	)		(178.1	)		(181.2	)		(2,997.8	)
Property EBITDA		272.1			211.1			172.9			109.8			134.4			38.2			74.4			1,012.9
Depreciation and amortization		(49.0	)		(77.4	)		(49.5	)		(37.2	)		(28.0	)		(18.6	)		(35.8	)		(295.5	)
Operating profit		223.1			133.7			123.4			72.6			106.4			19.6			38.6			717.4
Amortization of intangible assets		(6.7	)		(12.8	)		(4.0	)		(1.6	)		(4.0	)		(0.4	)		(5.9	)		(35.4	)
Income on interests in nonconsolidated affiliates		—			—			—			—			—			—			3.6			3.6
Project opening costs and other Items		(5.6	)		(5.5	)		49.8			(0.7	)		(1.2	)		(0.4	)		(19.7	)		16.7
Corporate expense		—			—			—			—			—			—			(41.0	)		(41.0	)
Merger and integration costs		—			—			—			—			—			—			(7.6	)		(7.6	)
Income/(loss) from operations*	$	210.8		$	115.4		$	169.2		$	70.3		$	101.2		$	18.8		$	(32.0	)	$	653.7

* Total Income from operations as reported on this schedule corresponds with the amounts reported for the respective periods on our CONSOLIDATED SUMMARY OF OPERATIONS. See our CONSOLIDATED SUMMARY OF OPERATIONS for the additional income and expenses recorded in the determination of Net income and Earnings per share for the periods presented.

23

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 and senior toggle notes, the interim loan agreement and/or our new senior 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. As of the Merger date, the CMBS properties were Harrah’s Las Vegas, Rio, Flamingo Las Vegas, Harrah’s Atlantic City, Showboat Atlantic City, Harrah’s Lake Tahoe, Harveys Lake Tahoe and Bill’s Lake Tahoe. The CMBS properties borrowed secured by the assets of the CMBS properties. On May 22, 2008, Paris Las Vegas and Harrah’s Laughlin and their related operating assets were spun out of HOC to Harrah’s Entertainment and became properties secured under the CMBS loans, and Harrah’s Lake Tahoe, Harveys Lake Tahoe, Bill’s Lake Tahoe and Showboat Atlantic City were transferred to HOC from Harrah’s Entertainment.

The following table reconciles EBITDA and Adjusted EBITDA of Harrah’s Operating for the Predecessor period from January 1, 2008 to January 27, 2008 and for the Successor period from January 28, 2008 to June 30, 2008 and takes into consideration the CMBS Spin-Off, the London Clubs Transfer and the Post-Close CMBS exchange:

24

HARRAH’S OPERATING COMPANY, A WHOLLY OWNED SUBSIDIARY OF

HARRAH’S ENTERTAINMENT, INC.

SUPPLEMENTAL INFORMATION

RECONCILIATION OF EBITDA TO ADJUSTED EBITDA

(UNAUDITED)

	Predecessor									Successor			Combined
(In millions)	Dec. 31, 2007			June 30, 2007			Jan. 1, 2008 Through Jan. 27, 2008			Jan. 28, 2008 Through June 30, 2008			Jan. 1, 2008 Through June 30, 2008			LTM
Income/(loss) from continuing operations	$	166.8		$	196.4		$	(107.6	)	$	(295.4	)	$	(403.0	)	$	(432.6	)
Interest expense, net		787.5			357.2			85.7			762.7			848.4			1,278.7
Provision/(benefit) for income taxes		152.6			112.4			(21.6	)		(137.1	)		(158.7	)		(118.5	)
Depreciation and amortization		729.4			352.2			56.7			287.5			344.2			721.4
EBITDA		1,836.3			1,018.2			13.2			617.7			630.9			1,449.0
Project opening costs, abandoned projects and development costs (a)		26.8			16.4			0.9			10.5			11.4			21.8
Merger and integration costs (b)		9.4			5.3			125.6			22.1			147.7			151.8
Losses on early extinguishment of debt (c)		2.0			—			—			211.3			211.3			213.3
Minority interests, net of distributions (d)		(3.7	)		4.9			0.8			(5.7	)		(4.9	)		(13.5	)
Impairment of goodwill, intangible assets and investment securities (e)		155.9			—			—			—			—			155.9
Non-cash expense for stock compensation benefits (f)		38.2			19.1			1.7			5.1			6.8			25.9
Income from insurance claims for hurricane losses (g)		(130.3	)		(55.7	)		—			(185.7	)		(185.7	)		(260.3	)
Other non-recurring or non-cash items (h)		55.6			9.5			0.8			50.2			51.0			97.1
Pro forma adjustment for acquired, new or disposed properties (i)		3.3			2.8			—			—			—			0.5
Pro forma adjustment for yet-to-be realized cost savings (j)																	38.2
Adjusted EBITDA																$	1,879.7

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

b) Represents costs in connection with the Acquisition, including review of certain strategic matters by the special committee established by Harrah’s Entertainment’s Board of Directors, and costs for consultants and dedicated internal resources executing the plans for the integration of Caesars into Harrah’s.

c) Represents premiums paid and the write-off of historical unamortized deferred financing costs.

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

e) Represents impairment of intangible assets and impairment of investment securities.

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

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

h) Represents the elimination of other non-recurring and 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.

i) Represents the full year/period estimated impact of acquired, new and disposed properties.

25

j) Represents the cost savings realized from our previously announced profitability improvement program.

The following tables present the condensed combined statement of operations of Harrah’s Operating Company, Inc. for the Predecessor period from January 1, 2008 to January 27, 2008 and for the Successor period from January 28, 2008 to June 30, 2008, taking into consideration the London Clubs Transfer and the Post-Close CMBS exchange:

26

Harrah’s Operating Company, Inc. (Successor)

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Three Months Ended

June 30, 2008

(In millions)	Harrah’s Entertainment (1)			HET Parent and Other Harrah’s Entertainment Subsidiaries and Accounts (2)			HOC (3)
Revenues
Casino	$	2,057.5		$	(429.3	)	$	1,628.2
Food and beverage		431.3			(161.2	)		270.1
Rooms		335.9			(142.7	)		193.2
Management fees		17.1			—			17.1
Other		168.7			(198.7	)		(30.0	)
Less: casino promotional allowances		(408.4	)		113.2			(295.2	)
Net revenues		2,602.1			(818.7	)		1,783.4
Operating expenses
Direct
Casino		1,131.0			(202.0	)		929.0
Food and beverage		183.7			(78.4	)		105.3
Rooms		64.1			(28.0	)		36.1
Property general, administrative and other		577.3			(301.0	)		276.3
Depreciation and amortization		176.2			(43.8	)		132.4
Write-downs, reserves and recoveries		50.1			(18.9	)		31.2
Project opening costs		7.2			(0.5	)		6.7
Corporate expense		36.6			(7.8	)		28.8
Merger and integration costs		5.1			—			5.1
Income on interests in nonconsolidated affiliates		(0.5	)		—			(0.5	)
Amortization of intangible assets		48.2			(16.0	)		32.2
Total operating expenses		2,279.0			(696.4	)		1,582.6
Income from operations		323.1			(122.3	)		200.8
Interest expense, net of interest capitalized		(468.0	)		73.1			(394.9	)
Other income, including interest income		3.8			4.1			7.9
(Loss)/income before income taxes and minority interests		(141.1	)		(45.1	)		(186.2	)
Benefit/(provision) for income taxes		43.5			21.5			65.0
Minority interests		(0.4	)		1.8			1.4
(Loss)/income from continuing operations	$	(98.0	)	$	(21.8	)	$	(119.8	)

(1) Represents the financial information of Harrah’s Entertainment.

(2) 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.

(3) Represents the financial information of HOC.

27

Harrah’s Operating Company, Inc.

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Three Months Ended

June 30, 2007

(In millions)	Harrah’s Entertainment(1)			HET Parent and Other Harrah’s Entertainment Subsidiaries and Accounts(2)			Historical HOC(3)			CMBS Spin-Off(4)			London Clubs Transfer(5)			HOC Restructured
Revenues
Casino	$	2,200.7		$	(53.8	)	$	2,146.9		$	(435.5	)	$	53.8		$	1,765.2
Food and beverage		429.7			(5.5	)		424.2			(159.0	)		5.5			270.7
Rooms		348.0			(0.9	)		347.1			(145.1	)		0.9			202.9
Management fees		21.3			(0.2	)		21.1			—			0.2			21.3
Other		174.8			(1.1	)		173.7			(61.2	)		0.6			113.1
Less: casino promotional allowances		(472.8	)		2.3			(470.5	)		122.6			(2.3	)		(350.2	)
Net revenues		2,701.7			(59.2	)		2,642.5			(678.2	)		58.7			2,023.0
Operating expenses
Direct
Casino		1,162.6			(45.6	)		1,117.0			(202.3	)		45.6			960.3
Food and beverage		188.3			(2.4	)		185.9			(77.7	)		2.4			110.6
Rooms		68.7			—			68.7			(30.1	)		—			38.6
Property general, administrative and other		568.2			(34.9	)		533.3			(156.8	)		10.4			386.9
Depreciation and amortization		204.3			(2.4	)		201.9			(51.7	)		2.4			152.6
Write-downs, reserves and recoveries		(20.8	)		—			(20.8	)		(2.6	)		—			(23.4	)
Project opening costs		8.3			(5.5	)		2.8			(1.6	)		5.5			6.7
Corporate expense		26.6			—			26.6			(7.3	)		—			19.3
Merger and integration costs		3.5			—			3.5			—			—			3.5
Income on interests in nonconsolidated affiliates		(3.8	)		3.1			(0.7	)		—			(3.1	)		(3.8	)
Amortization of intangible assets		17.9			—			17.9			(0.2	)		—			17.7
Total operating expenses		2,223.8			(87.7	)		2,136.1			(530.3	)		63.2			1,669.0
Income/(loss) from operations		477.9			28.5			506.4			(147.9	)		(4.5	)		354.0
Interest expense, net of interest capitalized		(176.6	)		3.4			(173.2	)		—			(3.4	)		(176.6	)
Losses on early extinguishments of debt		—			—			—			—			—			—
Other income, including interest income		15.6			(0.1	)		15.5			0.6			0.2			16.3
Income/loss before income taxes and minority interests		316.9			31.8			348.7			(147.3	)		(7.7	)		193.7
(Provision)/benefit for income taxes		(116.3	)		1.2			(115.1	)		50.5			(1.6	)		(66.2	)
Minority interests		(5.1	)		—			(5.1	)		2.0			—			(3.1	)
Income/(loss) from continuing operations	$	195.5		$	33.0		$	228.5		$	(94.8	)	$	(9.3	)	$	124.4

(1) Represents the financial information of Harrah’s Entertainment.

(2) Represents the historical financial information of (i) all subsidiaries of Harrah’s Entertainment that have historically not been a component of HOC, namely, captive insurance companies and London Clubs and its subsidiaries; and (ii) accounts at Harrah’s Entertainment.

(3) Represents the historical financial information of HOC.

(4) Reflects the removal of the historical 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 historical 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

28

as accounting, tax, treasury, payroll and benefits administration, risk management, legal, and information management and technology. The CMBS transactions reflect the push-down of corporate expense of $7.3 million that was unallocated at June 30, 2007. Following the Merger, many of these services will continue to be provided by HOC pursuant to a shared services agreement with the CMBS properties.

(5) 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.

29

Unaudited Condensed Combined Statement of Operations

Harrah’s Operating Company, Inc. (Successor)

For the Period from January 28, 2008

Through June 30, 2008

	Harrah’s Entertainment (1)			HET Parent and Other Harrah’s Entertainment Subsidiaries and Accounts (2)			HOC (3)
Revenues
Casino	$	3,523.1		$	(727.9	)	$	2,795.2
Food and beverage		732.6			(274.0	)		458.6
Rooms		577.5			(246.6	)		330.9
Management fees		29.2			—			29.2
Other		280.5			(317.4	)		(36.9	)
Less: casino promotional allowances		(700.3	)		196.0			(504.3	)
Net revenues		4,442.6			(1,369.9	)		3,072.7
Operating expenses
Direct
Casino		1,907.7			(339.6	)		1,568.1
Food and beverage		308.0			(130.2	)		177.8
Rooms		114.5			(52.1	)		62.4
Property general, administrative and other		987.2			(502.7	)		484.5
Depreciation and amortization		300.4			(74.1	)		226.3
Write-downs, reserves and recoveries		(108.7	)		(27.5	)		(136.2	)
Project opening costs		10.0			(1.0	)		9.0
Corporate expense		61.3			9.0			70.3
Merger and integration costs		22.1			—			22.1
Equity in income of nonconsolidated affiliates		(1.3	)		—			(1.3	)
Amortization of intangible assets		80.5			(27.6	)		52.9
Total operating expenses		3,681.7			(1,145.8	)		2,535.9
Income from operations		760.9			(224.1	)		536.8
Interest expense, net of interest capitalized		(935.9	)		162.3			(773.6	)
Losses on early extinguishment of debt		(211.3	)		—			(211.3	)
Other income, including interest income		11.5			—			11.5
(Loss)/income before income taxes and minority interests		(374.8	)		(61.8	)		(436.6	)
Income tax benefit/(provision)		101.7			35.4			137.1
Minority interests		1.0			3.1			4.1
(Loss)/income from continuing operations	$	(272.1	)	$	(23.3	)	$	(295.4	)

(1) Represents the financial information of Harrah’s Entertainment.

(2) 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.

(3) Represents the financial information of HOC.

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Unaudited Condensed Combined Statement of Operations

Harrah’s Operating Company, Inc. (Predecessor)

For the Period from January 1, 2008

Through January 27, 2008

	Harrah’s Entertainment(1)			HET Parent and Other Harrah’s Entertainment Subsidiaries and Accounts(2)			Historical HOC(3)			CMBS Spin-Off(4)			London Clubs Transfer(5)			HOC Restructured
Revenues
Casino	$	614.6		$	(29.5	)	$	585.1		$	(116.4	)	$	29.5		$	498.2
Food and beverage		118.4			(4.7	)		113.7			(41.1	)		4.7			77.3
Rooms		96.4			(0.4	)		96.0			(40.4	)		0.4			56.0
Management fees		5.0			(0.1	)		4.9			—			0.1			5.0
Other		42.7			(1.4	)		41.3			(14.4	)		1.1			28.0
Less: casino promotional allowances		(117.0	)		1.8			(115.2	)		30.0			(1.8	)		(87.0	)
Net revenues		760.1			(34.3	)		725.8			(182.3	)		34.0			577.5
Operating expenses
Direct
Casino		340.6			(24.5	)		316.1			(55.4	)		24.5			285.2
Food and beverage		50.5			(1.8	)		48.7			(20.2	)		1.8			30.3
Rooms		19.6			(0.2	)		19.4			(8.9	)		0.2			10.7
Property general, administrative and other		178.2			(2.0	)		176.2			(42.0	)		7.5			141.7
Depreciation and amortization		63.5			(1.6	)		61.9			(16.0	)		1.6			47.5
Write-downs, reserves and recoveries		4.7			—			4.7			(4.5	)		—			0.2
Project opening costs		0.7			(0.7	)		—			—			0.7			0.7
Corporate expense		8.5			—			8.5			(34.7	)		—			(26.2	)
Merger and integration costs		125.6			—			125.6			—			—			125.6
Equity in income of nonconsolidated affiliates		(0.5	)		—			(0.5	)		—			—			(0.5	)
Amortization of intangible assets		5.5			(0.2	)		5.3			—			0.2			5.5
Total operating expenses		796.9			(31.0	)		765.9			(181.7	)		36.5			620.7
(Loss)/income from operations		(36.8	)		(3.3	)		(40.1	)		(0.6	)		(2.5	)		(43.2	)
Interest expense, net of interest capitalized		(89.7	)		—			(89.7	)		—			—			(89.7	)
Losses on early extinguishment of debt		—			—			—			—			—			—
Other income, including interest income		1.1			(3.3	)		(2.2	)		4.0			3.3			5.1
(Loss)/income before income taxes and minority interests		(125.4	)		(6.6	)		(132.0	)		3.4			0.8			(127.8	)
Income tax benefit/(provision)		26.0			(4.1	)		21.9			(1.2	)		0.9			21.6
Minority interests		(1.6	)		0.9			(0.7	)		0.2			(0.9	)		(1.4	)
(Loss)/income from continuing operations	$	(101.0	)	$	(9.8	)	$	(110.8	)	$	2.4		$	0.8		$	(107.6	)

(1) Represents the financial information of Harrah’s Entertainment.

(2) Represents the historical financial information of (i) all subsidiaries of Harrah’s Entertainment that have historically not been a component of HOC, namely, captive insurance companies and London Clubs and its subsidiaries; and (ii) accounts at Harrah’s Entertainment.

(3) Represents the historical financial information of HOC.

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(4) Reflects the removal of the historical operating results of the CMBS properties, pursuant to the CMBS Spin-Off 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 historical 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 Merger, many of these services will continue to be provided by HOC pursuant to a shared services agreement with the CMBS properties.

(5) 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.

32

Harrah’s Operating Company, Inc.

Unaudited Condensed Pro Forma Combined Statement of Operations

For the Six Months Ended

June 30, 2007

(In millions)	Harrah’s			HET Parent and Other Harrah’s Entertainment Subsidiaries and			Historical			CMBS			London Clubs			HOC
	Entertainment(1)			Accounts(2)			HOC(3)			Spin-Off(4)			Transfer(5)			Restructured
Revenues
Casino	$	4,353.0		$	(109.4	)	$	4,243.6		$	(864.4	)	$	109.4		$	3,488.6
Food and beverage		854.0			(12.2	)		841.8			(315.9	)		12.2			538.1
Rooms		694.4			(1.2	)		693.2			(292.1	)		1.2			402.3
Management fees		43.7			(0.3	)		43.4			—			0.3			43.7
Other		340.3			(3.9	)		336.4			(117.6	)		2.5			221.3
Less: casino promotional allowances		(928.0	)		4.9			(923.1	)		244.7			(4.9	)		(683.3	)
Net revenues		5,357.4			(122.1	)		5,235.3			(1,345.3	)		120.7			4,010.7
Operating expenses
Direct
Casino		2,248.9			(86.0	)		2,162.9			(399.6	)		86.0			1,849.3
Food and beverage		359.4			(8.4	)		351.0			(153.2	)		8.4			206.2
Rooms		134.1			(0.6	)		133.5			(60.8	)		0.6			73.3
Property general, administrative and other		1,202.6			(46.5	)		1,156.1			(305.2	)		18.1			869.0
Depreciation and amortization		394.6			(4.7	)		389.9			(99.1	)		4.7			295.5
Write-downs, reserves and recoveries		(28.3	)		—			(28.3	)		(3.5	)		—			(31.8	)
Project opening costs		17.2			(8.9	)		8.3			(2.1	)		8.9			15.1
Corporate expense		60.1			(0.1	)		60.0			(19.0	)		—			41.0
Merger and integration costs		7.6			—			7.6			—			—			7.6
Income on interests in nonconsolidated affiliates		(3.6	)		1.4			(2.2	)		—			(1.4	)		(3.6	)
Amortization of intangible assets		35.7			—			35.7			(0.3	)		—			35.4
Total operating expenses		4,428.3			(153.8	)		4,274.5			(1,042.8	)		125.3			3,357.0
Income/(loss) from operations		929.1			31.7			960.8			(302.5	)		(4.6	)		653.7
Interest expense, net of interest capitalized		(362.4	)		5.1			(357.3	)		—			(5.1	)		(362.4	)
Losses on early extinguishments of debt		—			—			—			—			—			—
Other income, including interest income		23.8			(0.3	)		23.5			1.4			0.4			25.3
Income/loss before income taxes and minority interests		590.5			36.5			627.0			(301.1	)		(9.3	)		316.6
(Provision)/benefit for income taxes		(216.6	)		1.5			(215.1	)		104.0			(1.3	)		(112.4	)
Minority interests		(11.2	)		—			(11.2	)		3.4			—			(7.8	)
Income/(loss) from continuing operations	$	362.7		$	38.0		$	400.7		$	(193.7	)	$	(10.6	)	$	196.4

(1) Represents the financial information of Harrah’s Entertainment.

(2) Represents the historical financial information of (i) all subsidiaries of Harrah’s Entertainment that have historically not been a component of HOC, namely, captive insurance companies and London Clubs and its subsidiaries; and (ii) accounts at Harrah’s Entertainment.

(3) Represents the historical financial information of HOC.

33

(4) Reflects the removal of the historical 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 historical 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 transactions reflect the push-down of corporate expense of $19.0 million that was unallocated at June 30, 2007. Following the Merger, many of these services will continue to be provided by HOC pursuant to a shared services agreement with the CMBS properties.

(5) 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.

34