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Harrah's Reports 1st Quarter Net Income of $81.7 million
Slightly Better than the $81.1 million Recorded in 2003;
Southern Nevada Properties Particularly Strong
LAS VEGAS, April 21, 2004 - Harrah's Entertainment, Inc.  (NYSE: HET) today reported record first-quarter revenues of $1.11 billion, up 4.7 percent from revenues of $1.06 billion in the 2003 first quarter.

Property Earnings Before Interest, Taxes, Depreciation and Amortization
(Property EBITDA) rose 1.4 percent to a first-quarter record of $287.5 million from Property EBITDA of $283.6 million in the year-earlier period.  First-quarter Adjusted Earnings Per Share rose to a record 76 cents from 74 cents in 2003's first-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.

First-quarter income from operations declined 1.3 percent to $188.0 million from $190.4 million in the year-earlier quarter.  First-quarter net income was $81.7 million, up 0.7 percent from $81.1 million in the 2003 first quarter.  Diluted earnings per share from continuing operations for the 2004 first quarter was 73 cents, matching that of the year-earlier period despite a 2.3 percent increase in the number of shares outstanding.

"Strong same-store sales growth fueled by enhancements added last year to our Total Rewards customer-loyalty program accelerated the positive momentum we developed in the fourth quarter of 2003," said Gary Loveman, Harrah's Entertainment's president and chief executive officer.  "As a result, net income exceeded that of the 2003 first quarter despite the impact of gaming-tax rate increases imposed in mid-2003 in several states."

First-quarter 2004 same-store revenues increased 5.8 percent over the year-ago period.  Cross-market play -- gaming by customers at Harrah's properties other than their "home" casino -- rose 23.1 percent from the first quarter of 2003.  Tracked play -- gaming by customers using the company's Total Rewards player cards -- increased 12.0 percent from the year-ago first quarter.

"We benefited from increased revenues in all segments, ranging from rated retail customers who typically spend $50 or less per visit to VIP customers who spend $400 or more per visit," Loveman said.

"Our Southern Nevada operations posted particularly strong performances and we were pleased with the results from Atlantic City despite increased competition in that market due to a new casino that opened last summer," Loveman continued.

"We are optimistic about the outlook for the remainder of the year.  Pending regulatory approvals, we expect to close on the previously announced acquisition of Horseshoe Gaming Holding Corp. around mid-year, adding three superb properties to our portfolio and giving us control of the Horseshoe brand worldwide," Loveman said.

"In a separate transaction, we opened Binion's Horseshoe in downtown Las Vegas on April 1 and are ready to host the 35th anniversary of the World Series of Poker -- the world's largest gaming tournament -- at that property beginning this week," Loveman said.

Harrah's acquired rights to the World Series of Poker during the first quarter.  The company and a subsidiary of MTR Gaming Group, Inc. will operate the Horseshoe in Las Vegas for a one-year period with options to extend for up to two additional years.

"Last week, we opened both a new nightclub and a Diamond players' facility at Harrah's St. Louis, where our new 200-room hotel is expected to open by the end of the third quarter," Loveman said.  "We are also completing plans for expansion of our North Kansas City operation.

"Next month, we will open our permanent casino at Louisiana Downs, adding 500 slot machines and raising the slot total at the facility to 1,400," Loveman said.  "Also this quarter, we expect to begin site preparation for construction of our new $142 million, 450-room hotel at Harrah's New Orleans, which should bolster that property's results beginning in 2006.

"We are moving quickly to deploy Fast Cash, our coinless slot system," Loveman said.  "As of March 31, we had completed conversions on more than 60 percent of the slots we plan to convert to Fast Cash and expect to be well over 90 percent completed by the end of the second quarter.

"On April 7, a committee composed of peers and members of Parliament recommended that a bill to liberalize gaming in the United Kingdom be introduced this year, marking another milestone in the development of expansion opportunities in the U.K.," Loveman said.

"We are pleased that the committee recognizes the economic benefits gaming's expansion can bring to the U.K. and the need for Parliament to move quickly on the proposed legislation," Loveman said.  "If Parliament does act favorably this year on legislation that includes the opportunity for us to earn a fair return on our investment, we plan to move forward aggressively into the U.K. regional casino market with our joint-venture partner, Gala Group Ltd."

Among the first-quarter highlights:

  • Harrah's Entertainment reopened the historic Horseshoe Hotel & Casino in Las Vegas with MTR Gaming Group.  Upon the expected completion of the Horseshoe Gaming acquisition later this year, Harrah's will own worldwide rights to the Horseshoe brand.
  • In furtherance of the Horseshoe gaming acquisition, Harrah's also announced a definitive agreement to sell Harrah's Shreveport to Boyd Gaming Corporation for $190 million, pending receipt of Louisiana regulatory approvals.
  • Harrah's launched "Lucky Me," its subscription-based online gaming venture, in the United Kingdom.
  • The Rio All-Suite Hotel & Casino entered into an alliance with Greektown Casino in Detroit to develop a casino marketing program for Greektown customers who travel to Las Vegas as a gaming destination.
  • Institutional Investor magazine named Gary Loveman the gaming and lodging industry's "Best CEO," based on voting by investment portfolio managers and equity research analysts at more than 400 money-management firms.

Las Vegas Properties Lead West Region To Record Results
     West Region Results
     (in millions)
                                   2004      2003      Percent
                                   First     First     Increase
                                  Quarter   Quarter   (Decrease)
     Northern Nevada
       Total revenues             $105.5    $104.2        1.2%
       Income from operations        8.7      12.0      -27.5%
       Property EBITDA              18.5      21.4      -13.6%
     Southern Nevada
       Total revenues              258.6     228.2       13.3%
       Income from operations       65.4      44.9       45.7%
       Property EBITDA              82.2      63.6       29.2%
     Total West Region
       Total revenues              364.1     332.4        9.5%
       Income from operations       74.1      56.9       30.2%
       Property EBITDA             100.7      85.0       18.5%

Strong cross-market play at the company's two Las Vegas properties helped Harrah's West Region achieve record results.  Southern Nevada revenues rose 13.3 percent, income from operations gained 45.7 percent and Property EBITDA increased 29.2 percent from the 2003 first quarter.

Competition from Native American casinos in Northern California required increased marketing expenses that impacted results from Northern Nevada.  Revenues rose 1.2 percent to a record level from the first quarter last year, but income from operations fell 27.5 percent and Property EBITDA was down 13.6 percent.

"We expect the outstanding performances of the Rio and Harrah's Las Vegas to continue," said Tim Wilmott, Harrah's chief operating officer.

East Region Quarter Results Rise
     East Region Results
     (in millions)
                                   2004      2003      Percent
                                   First     First     Increase
                                  Quarter   Quarter   (Decrease)
     Harrah's Atlantic City
       Total revenues             $100.4    $102.2       -1.8%
       Income from operations       26.1      29.9      -12.7%
       Property EBITDA              35.0      38.4      - 8.9%
     Showboat Atlantic City
       Total revenues               81.4      76.2        6.8%
       Income from operations       18.5      13.7       35.0%
       Property EBITDA              26.2      20.0       31.0%
     Total East Region
       Total revenues              181.8     178.4        1.9%
       Income from operations       44.6      43.6        2.3%
       Property EBITDA              61.2      58.4        4.8%

Despite new competition in Atlantic City, the strong performance of the Showboat led to record combined results for Harrah's two East Region properties.  First-quarter revenues rose 1.9 percent, income from operations gained 2.3 percent and Property EBITDA increased 4.8 percent from the year-earlier period.

"We believe the recent expansion of the Showboat and the earlier expansion at Harrah's Atlantic City proved prudent as the market growth that began with the opening last summer of Atlantic City's first new hotel-casino in 12 years continues to accelerate," Wilmott said.

North Central Region Reports Lower Results For Quarter
     North Central Region Results
     (in millions)
                                   2004      2003     Percent
                                   First     First    Increase
                                  Quarter   Quarter  (Decrease)
       Total revenues             $174.6    $178.5       -2.2%
       Income from operations       24.1      35.1      -31.3%
       Property EBITDA              32.8      44.2      -25.8%
       Total revenues              $60.7      58.7        3.4%
       Income from operations        7.9       8.4       -6.0%
       Property EBITDA              13.6      12.9        5.4%
       Total revenues              108.4     109.5       -1.0%
       Income from operations       18.6      21.7      -14.3%
       Property EBITDA              27.8      30.3       -8.3%
     Total North Central
       Total revenues              343.7     346.7       -0.9%
       Income from operations       50.6      65.2      -22.4%
       Property EBITDA              74.2      87.4      -15.1%

Continued competitive pressures and higher gaming-tax rates than in the year-ago quarter led to declines in 2004 first-quarter results from the company's North Central Region.  Revenues were down 0.9 percent from the first quarter of 2003, while income from operations declined 22.4 percent and Property EBITDA fell 15.1 percent.

Combined first-quarter revenues at Harrah's East Chicago, Joliet and Metropolis facilities fell 2.2 percent, income from operations declined 31.3 percent, and Property EBITDA was 25.8 percent lower.

At the company's two Iowa properties, combined first-quarter revenues were 3.4 percent higher than in the year-ago period and income from operations was 6.0 percent lower, but Property EBITDA rose 5.4 percent to a first-quarter record.

Combined first-quarter revenues at Harrah's St. Louis and North Kansas
City fell 1.0 percent, income from operations declined 14.3 percent and
Property EBITDA decreased 8.3 percent from the 2003 first quarter as gains in
St. Louis were more than offset by declines in Kansas City, which was impacted
by significant expansions at competitive facilities.

South Central Region Reports Record First-Quarter Results
     South Central Region Results
     (in millions)
                                   2004      2003       Percent
                                   First     First      Increase
                                  Quarter   Quarter    (Decrease)
     Total South Central
       Total revenues             $201.9     180.1       12.1%
       Income from operations       30.7      30.0        2.3%
       Property EBITDA              42.2      42.5       -0.7%

The South Central Region, which includes Harrah's Louisiana and Mississippi properties, reported record first-quarter revenues and income from operations.  Revenues rose 12.1 percent, income from operations increased 2.3 percent, while Property EBITDA fell 0.7 percent.

The 2004 first quarter included results from Louisiana Downs, where 900 slot machines were introduced in May 2003.

"The May opening of an expanded Louisiana Downs, the expected closing of the Horseshoe Gaming acquisition around mid-year and the beginning of construction this summer on our new hotel at Harrah's New Orleans are expected to bolster future results from this region," Wilmott said.

Managed Properties And Other Items

First-quarter management-fee revenues were down 14.9 percent from the year-ago period due to the extension of management contracts at lower fee schedules.

First-quarter development costs rose to $3.3 million from $2.8 million in the 2003 first quarter.

Corporate expense rose 21.7 percent in the 2004 first quarter from the year-earlier period.  Interest expense was down 1.1 percent from the 2003 first quarter.

The effective tax rate after minority interest for the 2004 first quarter was 37.1 percent, equal to the full-year 2003 rate but lower than in the year-earlier first quarter.

First Quarter Ended March 31,
(In thousands, except per share amounts) 
                                                        2004            2003*

    Revenues                                  $1,109,166      $1,058,929
    Property operating expenses                 (821,696)       (775,292)
    Depreciation and amortization                (78,072)        (78,528)
      Operating profit                           209,398         205,109

    Corporate expense                            (14,730)        (12,104)
    Income/(losses) on interests in
     nonconsolidated affiliates                      434             (62)
    Amortization of intangible assets             (1,236)         (1,199)
    Project opening costs and other items         (5,834)         (1,318)

    Income from operations                       188,032         190,426
    Interest expense, net of interest
     capitalized                                 (58,246)        (58,874)
    Other income, including interest income        2,241             685

    Income before income taxes and
     minority interests                          132,027         132,237
    Provision for income taxes                   (48,206)        (48,814)
    Minority interests                            (2,090)         (3,160)
    Income from continuing operations             81,731          80,263
    Discontinued operations, net of tax               --             817
      Net income                                 $81,731         $81,080

    Earnings per share - basic
    Income from continuing operations              $0.74           $0.74
    Discontinued operations, net of tax               --            0.01
      Net income                                   $0.74           $0.75

    Earnings per share - diluted
    Income from continuing operations              $0.73           $0.73
    Discontinued operations, net of tax               --            0.01
      Net income                                   $0.73           $0.74

    Weighted average common shares
     outstanding                                 110,703         108,489
    Weighted average common and
     common equivalent shares outstanding        112,614         110,066
    * See note (a) on Supplemental Operating Information.

                           HARRAH'S ENTERTAINMENT, INC.
                                              First Quarter Ended March 31,
    (In thousands)                                2004             2003
    Revenues (a)
      West Region                               $364,131        $332,389
      East Region                                181,777         178,449
      North Central Region                       343,687         346,671
      South Central Region                       201,880         180,074
      Managed                                     14,556          17,112
      Other                                        3,135           4,234
        Total Revenues                        $1,109,166      $1,058,929

    Income from operations (a)
      West Region                                $74,089         $56,855
      East Region                                 44,573          43,632
      North Central Region                        50,563          65,239
      South Central Region                        30,696          29,972
      Managed                                     12,194          14,767
      Other                                       (9,353)         (7,935)
      Corporate expense                          (14,730)        (12,104)
        Total Income from operations            $188,032        $190,426

    Property EBITDA (a) (b)
      West Region                               $100,712         $84,973
      East Region                                 61,160          58,391
      North Central Region                        74,199          87,366
      South Central Region                        42,236          42,505
      Managed                                     12,250          14,787
      Other                                       (3,087)         (4,385)
        Total Property EBITDA                   $287,470        $283,637

    Project opening and other items (a)
      Project opening costs                      $(2,435)          $(467)
      Writedowns, reserves and Recoveries         (3,399)           (851)
        Total                                    $(5,834)        $(1,318)

    (a)  In second quarter 2003, Harrah's Vicksburg was classified as an asset
         held for sale.  Therefore, its 2003 first quarter results have been reclassified from Income from continuing operations to Discontinued operations.  The property was sold in fourth quarter 2003.
    (b)  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, income/(losses) on interest in nonconsolidated affiliates, venture restructuring costs 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.

                           HARRAH'S ENTERTAINMENT, INC.
                             SUPPLEMENTAL INFORMATION
    Calculation of Adjusted Earnings Per Share
                                              First Quarter Ended March 31,
    (In thousands, except per share amounts)       2004            2003
    Income before income taxes and minority interests                         $132,027        $132,237 Add:
      Project opening costs and other items        5,834           1,318
    Adjusted income before income taxes
     and minority interests                      137,861         133,555
    Provision for income taxes                   (50,371)        (49,312)
    Minority interests                            (2,090)         (3,160)

    Adjusted income from continuing Operations    85,400          81,083
    Discontinued operations, net of tax               --             817
    Adjusted net income                          $85,400         $81,900

    Diluted adjusted earnings per share            $0.76           $0.74

    Weighted average common and common
     equivalent shares outstanding               112,614         110,066

                           HARRAH'S ENTERTAINMENT, INC.
    Reconciliation of Property EBITDA to Income from Operations (In thousands)
    First Quarter Ended March 31, 2004
                    West      East      North     South   Managed   Total
                   Region    Region    Central   Central    and
                                       Region    Region   Other

    Revenues     $364,131  $181,777  $343,687  $201,880  $17,691 $1,109,166
    Operating expenses    (263,419) (120,617) (269,488) (159,644)  (8,528)  (821,696)
     EBITDA       100,712    61,160    74,199    42,236    9,163    287,470
     amortization (25,586)  (16,580)  (21,927)  (10,209)  (3,770)   (78,072)
     profit        75,126    44,580    52,272    32,027    5,393    209,398
     of intangible
     assets          (181)       --    (1,018)      (37)      --     (1,236)
     on interests in
     affiliates        --        --        --      (105)     539        434
    Project opening
     costs and
     other items     (856)       (7)     (691)   (1,189)  (3,091)    (5,834) Corporate expense           --        --        --        --  (14,730)   (14,730)
       Income from
        operations $74,089   $44,573   $50,563   $30,696 $(11,889)  $188,032*

    First Quarter Ended March 31, 2003
    Revenues     $332,389  $178,449  $346,671  $180,074  $21,346 $1,058,929 Operating expenses    (247,416) (120,058) (259,305) (137,569) (10,944)  (775,292)
     EBITDA        84,973    58,391    87,366    42,505   10,402    283,637
     amortization (28,004)  (14,685)  (20,579)  (11,609)  (3,651)   (78,528)
     profit        56,969    43,706    66,787    30,896    6,751    205,109
     of intangible
     assets          (181)       --    (1,018)        -        -     (1,199)
     on interest in
     affiliates        --        --        --      (143)      81        (62)
    Project opening
     costs and
     other items       67       (74)     (530)     (781)      --     (1,318) Corporate expense           --        --        --        --  (12,104)   (12,104)
       Income from
        operations $56,855   $43,632   $65,239   $29,972  $(5,272)  $190,426*
    * 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.

Founded 66 years ago, Harrah's Entertainment, Inc. owns or manages through various subsidiaries 26 casinos in the United States, primarily under the Harrah's brand name.  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.

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. 

Harrah's Entertainment, Inc.
Web Site:

Also See: Harrah's Entertainment, Inc. Proceeding with Construction of a $142 million, 450-room Hotel Tower at Harrah's New Orleans Casino / March 2004

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