LAS VEGAS, April 18, 2001 - Harrah�s Entertainment, Inc.  (NYSE: HET), the leading consumer-marketing company in the gaming industry, today reported first-quarter Adjusted Earnings per Share of 42 cents, up 68 percent from 25 cents per share reported for the first quarter of 2000.  Diluted earnings per share rose to 38 cents from 25 cents in the first quarter of 2000.

The company posted record first-quarter revenues of $899.5 million, up 15.3 percent from $780.3 million in the 2000 first quarter.  First-quarter Property Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) rose 22.6 percent to a record $235.4 million from $192.0 million in the year-ago quarter.

�The year-over-year comparisons were aided by a full quarter of results from the three Players International, Inc. properties acquired on March 22, 2000, and by strong performances in most markets, including a reinvigorated performance at the Rio in Las Vegas,� said Phil Satre, Harrah�s Entertainment Chairman and Chief Executive Officer.

�Our Harrah�s brand properties achieved strong same-store sales growth of 5.6 percent above the 2000 first quarter, clearly indicating the ongoing benefits of our strategy that focuses on building customer loyalty through innovative marketing and effective use of information technology,� Satre said.

�Our overall results would have been even better were it not for the negative impact of the stock market�s poor performance on the investment results of our company-owned life insurance policies,� Satre said.

Among the first quarter�s highlights:

• JCC Holding Company completed its financial reorganization at the end of the first quarter after the Louisiana Legislature approved an equitable reduction in minimum annual payments to the State and relaxed operating restrictions that have kept the facility from reaching its full potential.  Harrah�s Entertainment owns 49 percent of the reorganized JCC Holding Company.

• Harrah�s Entertainment issued $500 million of new Senior Notes, using the net proceeds to reduce floating-rate debt.  Credit-rating agencies confirmed the company�s investment-grade ratings in connection with the new debt issue.

• Harrah�s Shreveport completed and opened a $150 million expansion that added 514 hotel rooms, four restaurants and other shore-side amenities.

• A 146-room hotel opened at Harrah�s Ak-Chin in March.

• A temporary casino managed by the Rincon San Luiseno Band of Mission Indians in Southern California began operations near the site where a permanent casino to be managed by Harrah�s is scheduled to open in the second quarter of 2002.

Rio Hotel & Casino
      Revenues                       $112.2          $105.2          6.7%
      Operating Profit                 11.7            (1.3)         N/M
      EBITDA                           22.7             7.1        219.7%
Harrah�s Southern Nevada
      Revenues                       $108.1           $98.1         10.2%
      Operating Profit                 22.8            18.1         26.0%
      EBITDA                           31.6            26.9         17.5%
Harrah�s Northern Nevada
      Revenues                        $65.2           $68.7         -5.1%
      Operating Profit                  1.8             6.9        -73.9%
      EBITDA                            8.0            11.6        -31.0%
Total Western Region
      Revenues                       $285.5          $272.0          5.0%
      Operating Profit                 36.3            23.7         53.2%
      EBITDA                           62.3            45.6         36.6%
 

Western Region results were spurred by a strong performance in Southern Nevada, including a significant turnaround at the Rio.  Revenues at the Rio rose 6.7 percent, aided by an increase in the table-games hold percentage to 16.6 percent, compared with a 12.4 percent table-games hold in the year-ago quarter.  The Rio�s EBITDA rose to $22.7 million from $7.1 million reported for the 2000 first quarter due to the higher hold percentage and successful cost management.

The two Southern Nevada Harrah�s properties posted record first-quarter revenues and Property EBITDA, while the company�s Northern Nevada casinos reported lower revenues and Property EBITDA.

�The company�s successful cross-marketing programs helped Harrah�s casinos in Las Vegas and Laughlin achieve record results,� Satre said.  �Our new, proprietary yield-management program, which ensures highly valued guests get priority for room reservations, was tested at Harrah�s Las Vegas during the first quarter and is expected to be rolled out to all properties in the second half of 2001.�

Revenues at Harrah�s Las Vegas rose 14.3 percent and Property EBITDA was 18.6 percent higher than in the first quarter of 2000.  In Laughlin, first-quarter revenues were level with the 2000 first quarter and Property EBITDA rose 10.6 percent to a record.

In Northern Nevada, tracked play was about even with last year�s first quarter, while walk-in business declined.  Harrah�s Reno reported 9.7 percent lower revenues and a 54.9 percent decline in Property EBITDA.  The company�s Lake Tahoe properties posted revenues approximately the same as in last year�s first quarter, but Property EBITDA declined 12.8 percent.

Harrah�s Atlantic City Posts Record Results, Though Harsh Winter Weather, Casino Reconfiguration Impact Eastern Region

Harrah�s Atlantic City
      Revenues                        $99.9           $99.8          0.1%
      Operating Profit                 25.4            23.5          8.1%
      EBITDA                           32.1            29.4          9.2%
Showboat Atlantic City
      Revenues                        $81.1           $85.6         -5.3%
      Operating Profit                 11.9            14.6        -18.5%
      EBITDA                           18.3            20.4        -10.3%
Total Eastern Region
      Revenues                       $181.0          $185.4         -2.4%
      Operating Profit                 37.3            38.1         -2.1%
      EBITDA                           50.4            49.8          1.2%
 

Harrah�s Atlantic City achieved record revenues and EBITDA despite unfavorable weather conditions in the first quarter of 2001.  Construction continued on the $110 million, 450-room addition to Harrah�s Atlantic City; the expansion is expected to open in the first quarter of 2002.

Showboat Atlantic City was impacted by poor weather that caused several bus lines to cancel service.  Showboat also faced construction disruptions related to reconfiguration of the casino floor.  The reconfiguration, designed to provide a higher-quality gaming experience and new, customer-preferred games at the Showboat, is expected to be completed in the second quarter of 2001.

�As has been the experience at Harrah�s brand properties, our tiered Total Rewards customer-loyalty program at the Showboat is expected to result in increased play from loyal guests aspiring to higher levels of service once all the elements of our program are in place,� Satre said.  �The completion of the Showboat casino reconfiguration and the opening of a new highway later this year also should benefit our Eastern Region properties.�

Central Region Posts Record Revenues, EBITDA

Central Region
      Revenues                       $415.0          $301.5         37.6%
      Operating Profit                 88.3            68.9         28.2%
      EBITDA                          112.9            83.4         35.4%
 

The Central Region�s first-quarter results benefited from the addition of the Players facilities in Maryland Heights, Mo., Metropolis, Ill., and Lake Charles, La., which were acquired in late March 2000, and from record performances at most Harrah�s properties in the Region.

�Harrah�s Chicagoland casinos showed continued strength in the first quarter, with East Chicago posting record revenues and Property EBITDA and Joliet achieving record revenues,� Satre said.  �Joliet�s performance was bolstered when we added a hotel to that facility in November 1999, and we anticipate similar results when we open our new luxury hotel in East Chicago around the end of 2001.

�In Joliet, construction continues on the new casino barges that are scheduled to replace our riverboats at the beginning of the fourth quarter, well ahead of the time when our competitors will open their new barge-based casinos,� Satre said.

Combined Chicagoland revenues rose 5.5 percent to a first-quarter record, while Property EBITDA was up 3.2 percent, also to a record.

In Missouri, record first-quarter revenues and Property EBITDA were posted at both the North Kansas City and St. Louis properties.  Harrah�s North Kansas City benefited from effective marketing and cost-management measures, while consolidation of the Players Maryland Heights facility with the Company�s adjacent Harrah�s casino led to improvements at Harrah�s St. Louis.  Combined revenues from the Missouri properties rose 41.3 percent and combined Property EBITDA was up 49.4 percent from the 2000 first quarter.  Construction is scheduled to be completed this summer on the new casino space in Kansas City that will replace the riverboat the Company has used in that market since 1994.

Harrah�s Shreveport opened its new hotel and restaurants during the first quarter, and achieved a 12.0 percent gain in revenues.  Property EBITDA was lower due to increased promotional expenses and the cost inefficiencies of the staggered opening of the new hotel and other amenities while construction was completed during the course of the quarter.  Harrah�s Shreveport reported Property EBITDA improved in March from January and February, reflecting the hotel�s positive impact on gaming results.

In Lake Charles, La., the December 2000 conversion of the Players property to the Harrah�s brand led to significant gains in market share.

�We are evaluating the appropriate level of additional investment we will make in the Shreveport and Lake Charles markets now that the rules are set about what style casinos will be allowed in the Louisiana riverboat markets,� Satre said.
�We began dockside operations in Lake Charles on April 1 this year, and expect that to have a positive impact on our revenues,� Satre said.  �We will face higher taxes on our riverboat operations in Louisiana in return for permanent dockside operations.�

MANAGED PROPERTIES:

The three Indian-owned casinos managed by Harrah�s posted strong revenues and Property EBITDA.  Management fees earned by Harrah�s from these casinos rose from the year-ago quarter.  During the 2001 first quarter, construction began on a 252-room hotel at Harrah�s Cherokee.

No management fees from Harrah�s New Orleans were recognized in the first quarter of 2001 due to the bankruptcy filing by JCC Holding.  Beginning in the second quarter of 2001, Harrah�s expects to resume recognizing management fees from the New Orleans casino, though at a reduced level from those reported in 2000.

�We are optimistic about the improved outlook for Harrah�s New Orleans and its potential to make positive contributions to our financial results in the future,� Satre said.

OTHER ITEMS:

On a combined basis, corporate expense and headquarters relocation and reorganization expenses rose 7.5 percent from the first quarter of 2000, but comprised a lower percentage of revenue than in the year-ago quarter.

Losses from affiliates, which totaled $23.7 million in the 2000 first quarter, were eliminated in the first quarter of 2001 due to write-offs and reserves for JCC Holding Company and National Airlines, Inc., which filed a voluntary bankruptcy petition for reorganization relief in December 2000.  The Company recorded the write-offs and reserves in the fourth quarter of 2000.

The increase in goodwill amortization is due to the Players acquisition, which was completed near the end of the first quarter 2000.

Interest expense increased due to the higher level of debt associated with the acquisition of Players and the Company�s stock-repurchase program.  No additional shares were repurchased under the stock-repurchase program during the first quarter of 2001.  The Company can repurchase up to 4.5 million shares under its current Board-approved authorization.

Net investment results for company-owned life insurance policies reported under Other Income/Expense included an $8.3 million expense for the first quarter 2001, compared with income of $1.0 million in the 2000 first quarter.
 

Founded more than 60 years ago, Harrah�s Entertainment, Inc. is the most recognized and respected name in the casino-entertainment industry, operating 21 casinos in the United States under the Harrah�s, Showboat, Rio and Players brand names.  

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.