Filed by Harrah’s Entertainment, Inc. Pursuant to Rule 425

under the Securities Act of 1933

and deemed filed pursuant to Rule 14a-12

under the Securities Exchange Act of 1934

 

Subject Company: Caesars Entertainment, Inc.

Commission File No.: 001-14573

 

This filing relates to a proposed acquisition (the “Acquisition”) by Harrah’s Entertainment, Inc. (“Harrah’s”) of Caesars Entertainment, Inc. (“Caesars”) pursuant to the terms of an Agreement and Plan of Merger, dated as of July 14, 2004 (the “Merger Agreement”), by and among Harrah’s, Harrah’s Operating Company, Inc. and Caesars.  The Merger Agreement is on file with the Securities and Exchange Commission (the “SEC”) as an exhibit to the Current Report on Form 8-K filed by Harrah’s on July 15, 2004, and is incorporated by reference into this filing.

 

The following is a series of slides that were presented by Harrah’s at the Deutsche Bank 2004 Hospitality & Gaming Conference in New York, New York on November 4, 2004:

 



 

 

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[LOGOS]

 

Harrah's Entertainment, Inc.

 

Jonathan S. Halkyard

Vice President and Treasurer

 

November 4, 2004

 



 

Agenda

 

        Review of HET core strategy: organic growth through loyalty

 

        CZR acquisition enhances long-term growth profile

 

        Development pipeline provides complementary growth

 

        Compelling valuation

 



 

        Review of HET core strategy: organic growth through loyalty

 

        CZR acquisition enhances long-term growth profile

 

        Development pipeline provides complementary growth

 

        Compelling valuation

 



 

Clear Vision: Leading Distributor Of Gaming

 

[GRAPHIC]

 

Key Statistics

 

                  5 Brands — Harrah’s, Rio, Horseshoe, Showboat, and Harveys

 

                  28 Properties

 

                  $4.3B in revenue (2003)

 

                  $1.1B in EBITDA (2003)

 

                  Over $1.3 billion in cross-market play (2003)

 



 

HET Capabilities Enhance Loyalty

 

Total
Rewards

 

Decision
Science

 

Tiered
Card

 

Revenue
Management

 

 

 

 

 

 

 

Cross-market
Marketing and
Accounting

 

Increased Share of Customer Budget

 

Staffing
Optimization

 

 

[CHART]

 

 

Operational
Analysis

 

 

 

 

 

Procurement

 



 

Recent Same Store Sales Growth

 

[CHART]

 



 

        Review of HET core strategy: organic growth through loyalty

 

        CZR acquisition enhances long-term growth profile

 

        Development pipeline provides complementary growth

 

        Compelling valuation

 



 

CZR Acquisition: Review of Strategic Rationale

 

                  Desirable assets

                  Combination creates premier distribution network

                  Increases exposure to stable regulatory environments

 

                  Opportunity to create value through synergies and performance improvement

                  Application of HET capabilities to CZR assets

 

                  Optimal timing

                  CZR nearing completion of significant growth capital cycle

 

                  Resulting financial strength allows pursuit of complementary growth projects

 



 

Enhanced Network

 

[GRAPHIC]

 



 

Increased Exposure To Stable Regulatory Environments

 

Note: figures are unaudited

 

 

 

2003 Property EBITDA

 

 

 

 

 

HET (1)

 

CZR

 

Pro forma (1,2)

 

Nevada

 

 

 

 

 

 

 

Las Vegas

 

16.4

%

31.8

%

25.1

%

Other Nevada

 

10.3

 

2.8

 

7.3

 

Total Nevada

 

26.7

%

34.6

%

32.4

%

 

 

 

 

 

 

 

 

Atlantic City

 

21.8

%

36.9

%

27.9

%

 

 

 

 

 

 

 

 

Other locations

 

 

 

 

 

 

 

Illinois

 

7.1

 

0.0

 

4.1

 

Indiana

 

9.5

 

6.1

 

6.1

 

Iowa

 

4.1

 

0.0

 

2.4

 

New Orleans

 

4.7

 

0.1

 

2.7

 

Other Louisiana

 

7.2

 

0.0

 

4.1

 

Mississippi

 

7.2

 

16.2

 

10.6

 

Missouri

 

9.5

 

0.0

 

5.4

 

Other

 

2.3

 

6.0

 

4.3

 

Total other locations

 

51.5

%

28.4

%

39.7

%

 

 

 

 

 

 

 

 

Total

 

100.0

%

100.0

%

100.0

%

 


(1) Proforma for full year of Horseshoe and sale of Harrah’s Shreveport

(2) Proforma for announced divestitures of Harrah’s East Chicago, Harrah’s Tunica, AC Hilton, Bally’s Tunica, and Bally’s New Orleans

 



 

Premier Gaming Brands

 

Harrah's

 

 

 

 

 

Horseshoe

 

 

 

Caesars

 



 

Performance Improvement Opportunity

 

We believe the application of our capabilities will
unlock the value of some CZR assets

 

2003 LV Strip Property Metrics

 

 

 

Revenue /
Available Room

 

Caesars Palace

 

$

567.74

 

Rio

 

$

441.56

 

Harrah’s

 

$

367.66

 

Paris/Bally’s

 

$

314.14

 

Flamingo

 

$

237.89

 

 

 

 

EBITDA Margin

 

Harrah’s

 

30.6

%

Flamingo

 

28.7

%

Rio

 

25.7

%

Paris/Bally’s

 

24.7

%

Caesars Palace

 

20.0

%

 

2003 AC Property Metrics

 

 

 

Revenue /
Position

 

Caesars

 

$

332.45

 

Harrah’s

 

$

257.29

 

Bally’s

 

$

249.81

 

Showboat

 

$

233.54

 

 

 

 

EBITDA Margin

 

Harrah’s

 

38.6

%

Caesars

 

32.4

%

Showboat

 

31.9

%

Bally’s

 

26.8

%

 



 

CZR Is Near Completion of Significant Growth Capital Cycle

 

                  Caesars Palace

                  Roman Plaza opened July 2004

                  Forum Shops expansion opened October 2004

                  949-room hotel tower scheduled to open Summer 2005

 

                  Caesars Atlantic City

                  New parking garage scheduled to open 2Q05

                  The Pier at Caesars scheduled to open in 2005

 



 

Expected Outcomes of CZR Acquisition

 

                  Improved long-term growth profile

                  Enhanced distribution network = greater cross-market potential

                  Value creation through operational synergies

                  Greater development opportunities resulting from financial strength

 

                  Increased stability

                  Greater diversification

                  Increased exposure to stable regulatory environments

 



 

Closing Process

 

                  Legal / Regulatory

                  Received 2nd request for information from FTC; working to comply

                  State filings underway

 

                  Operational

                  Position of Chief Integration Officer created; formation of integration team nearly complete

                  Development of integration plan underway

 

                  Strategic

                  Portfolio review underway

                  Recently announced asset sales could reduce scope of FTC inquiry

 



 

                  Review of HET core strategy: organic growth through loyalty

 

                  CZR acquisition enhances long-term growth profile

 

                  Development pipeline provides complementary growth

 

                  Compelling valuation

 



 

St. Louis

 

[GRAPHIC]

 

$80M expansion

 

210 hotel rooms

 

F&B enhancements

 

Opened August 2004

 



 

Kansas City

 

[GRAPHIC]

 

$107M expansion

 

206 hotel rooms

 

F&B enhancements

 

2005 opening

 



 

New Orleans

 

[GRAPHIC]

 

$142M expansion

 

450 hotel rooms

 

1H06 opening

 



 

Chester Downs

 

[GRAPHIC]

 

Site near Philadelphia, PA

 

$250M - $275M budget (incl. license fee)

 

HET interest: 50% ownership + mgmt fee

 

2,000 slots initially

 

2006 opening targeted

 



 

Native American Gaming

 

                  Recently renewed Cherokee and Rincon contracts

 

                  Expansion projects recently completed / underway at 3 of our managed properties

 

                  Continue to pursue new contracts for Class III and Class II operations

 

                  CZR provides additional opportunities

                  Development / management agreement for facility in Sullivan County, NY with St. Regis Mohawk Tribe

                  Development / management agreement for facility near Fresno, CA with Big Sandy Band of Western Mono Indians

 



 

UK

 

[GRAPHIC]

 

 Enabling legislation expected spring 2005

 

Site selection process for regional casinos underway

 

CZR recently announced joint venture to develop $600M resort casino near Wembley Stadium

 



 

World Series of Poker

 

[GRAPHIC]

 

Participation in 2004 tournament 3x greater than previous record

 

WSOP Tournament Circuit begins in January

 

Multiple income streams:

Licensing/sponsorship

Broadcast fees

 



 

Demonstrated Record Of Success

 

2003 Est. ROIC vs. WACC

 

[CHART]

 

Source: Wall Street Research

 



 

                  Review of HET core strategy: organic growth through loyalty

 

                  CZR acquisition enhances long-term growth profile

 

                  Development pipeline provides complementary growth

 

                  Compelling valuation

 



 

Valuation Comparison

 

5-Year EPS CAGR

 

Dividend Yield

 

 

 

[CHART]

 

[CHART]

 

 

 

P/E (2005E)

 

[CHART]

 

Source: Bloomberg

 



 

Summary

 

                  Review of HET core strategy: organic growth through loyalty

 

                  CZR acquisition enhances long-term growth profile

 

                  Development pipeline provides complementary growth

 

                  Compelling valuation

 



 

[LOGO]

 



 

Additional Information about the Acquisition and Where to Find It

In connection with Harrah’s proposed acquisition of Caesars, on October 20, 2004 Harrah’s filed preliminary materials with the Securities and Exchange Commission, including a registration statement on Form S-4 that contains a preliminary prospectus and a preliminary joint proxy statement.  These materials are not yet final and will be amended.   INVESTORS AND SECURITY HOLDERS OF HARRAH’S AND CAESARS ARE URGED TO READ THE DEFINITIVE VERSIONS OF THE PROSPECTUS AND JOINT PROXY STATEMENT WHEN THEY BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT HARRAH’S, CAESARS AND THE ACQUISITION.  The preliminary materials filed on October 20, 2004, the definitive versions of these materials and other relevant materials (when they become available), and any other documents filed by Harrah’s or Caesars with the SEC, may be obtained free of charge at the SEC’s website at www.sec.gov.  In addition, investors and security holders may obtain free copies of the documents filed with the SEC by Harrah’s by directing a written request to: Harrah’s Entertainment, Inc., One Harrah’s Court, Las Vegas, Nevada 89119, Attention:  Investor Relations or Caesars Entertainment, Inc., 3930 Howard Hughes Parkway, Las Vegas, Nevada 89109, Attention:  Investor Relations. Investors and security holders are urged to read the proxy statement, prospectus and the other relevant materials when they become available before making any voting or investment decision with respect to the Acquisition.

Harrah’s, Caesars and their respective executive officers and directors may be deemed to be participants in the solicitation of proxies from the stockholders of Caesars and Harrah’s in connection with the Acquisition.  Information about those executive officers and directors of Harrah’s and their ownership of Harrah’s common stock is set forth in the Harrah’s Form 10-K for the year ended December 31, 2003, which was filed with the SEC on March 5, 2004, and the proxy statement for Harrah’s 2004 Annual Meeting of Stockholders, which was filed with the SEC on March 4, 2004.  Information about the executive officers and directors of Caesars and their ownership of Caesars common stock is set forth in the proxy statement for Caesars’ 2004 Annual Meeting of Stockholders, which was filed with the SEC on April 16, 2004.  Investors and security holders may obtain additional information regarding the direct and indirect interests of Harrah’s, Caesars and their respective executive officers and directors in the Acquisition by reading the proxy statement and prospectus regarding the Acquisition when it becomes available.

This communication shall not constitute an offer to sell or the solicitation of an offer to sell or the solicitation of an offer to buy any securities, nor shall there be any sale of securities in any jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such jurisdiction.  No offering of securities shall be made except by means of a prospectus meeting the requirements of Section 10 of the Securities Act of 1933, as amended.

Safe Harbor

This document 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, strategies, future performance, future financial results of Harrah’s and Caesars and Harrah’s anticipated acquisition of Caesars.  These forward-looking statements are based on current expectations and projections about future events.

Investors are cautioned that forward-looking statements are not guarantees of future performance or results and involve risks and uncertainties that cannot be predicted or quantified and, consequently, the actual performance or results of Caesars and 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):  financial community and rating agency perceptions of Harrah’s and Caesars’, the effects of economic, credit and capital market conditions on the economy in general, and on gaming and hotel companies in particular; construction factors, including delays, zoning issues, environmental restrictions, soil and water conditions, weather and other hazards, site access matters and building permit issues; the effects of environmental and structural building conditions relating to our properties;  the ability to timely and cost-effectively integrate into Harrah’s operations the companies that it acquires, including with respect to its acquisition of Caesars;  access to available and feasible financing, including financing for Harrah’s acquisition of Caesars, on a timely basis; changes in laws (including increased tax rates), regulations or accounting standards, third-party relations and approvals, and decisions of courts, regulators and governmental bodies; litigation outcomes and judicial actions, including gaming legislative action, referenda and taxation; the ability of our customer-tracking, customer loyalty and yield-management programs to continue to increase customer loyalty and same store sales; our ability to recoup costs of capital investments through higher revenues; acts of war or terrorist incidents; abnormal gaming holds; and the effects of competition, including locations of competitors and operating and market competition.