<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to
Commission file number 1-10410
A. Full title of the plan and address of the plan, if different
from that of the issuer named below:
Harrah's Entertainment, Inc.
Savings and Retirement Plan
B. Name of issuer of the securities held pursuant to the plan
and the address of its principal executive office:
Harrah's Entertainment, Inc.
1023 Cherry Road
Memphis, Tennessee 38117
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
FINANCIAL STATEMENTS AS OF DECEMBER 31, 1996 AND 1995
AND FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
TOGETHER WITH AUDITORS' REPORT
<PAGE>
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To the Trustees of Harrah's Entertainment, Inc.
Savings and Retirement Plan:
We have audited the accompanying statements of net assets available for
benefits, with fund information, of HARRAH'S ENTERTAINMENT, INC. SAVINGS AND
RETIREMENT PLAN as of December 31, 1996 and 1995, and the related statements of
changes in net assets available for benefits, with fund information, for each of
the three years ended December 31, 1996. These financial statements and the
schedules referred to below are the responsibility of the Plan Administrator.
Our responsibility is to express an opinion on these financial statements and
schedules based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits, with fund
information, of Harrah's Entertainment, Inc. Savings and Retirement Plan as of
December 31, 1996 and 1995, and the changes in its net assets available for
benefits, with fund information, for each of the three years ended December 31,
1996, in conformity with generally accepted accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of assets held
for investment purposes as of December 31, 1996 (Exhibit I), of loans or fixed
income obligations in default as of December 31, 1996 (Exhibit II) and of
reportable transactions for the year ended December 31, 1996 (Exhibit III) are
presented for purposes of additional analysis and are not a required part of the
basic financial statements, but are supplementary information required by the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974.
<PAGE>
The fund information in the statements of net assets available for benefits and
the statements of changes in net assets available for benefits is presented for
purposes of additional analysis rather than to present the net assets available
for benefits and changes in net assets available for benefits of each fund. The
supplemental schedules and fund information have been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, are fairly stated in all material respects in relation to the basic
financial statements taken as a whole.
Memphis, Tennessee,
April 14, 1997.
-2-
<PAGE>
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
Fund Information
------------------------------------------------------------------------------------------------
Participant Directed Funds
----------------------------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income Treasury Executive
Stock Fund Stock Fund Index Fund Bond Fund Fund Fund Life Fund
-------------- ------------ ----------- ---------- ------------ ----------- -----------
(Note 5)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 1 and 2)
Harrah's Common stock $135,632,128 $ - $ - $ - $ - $ - $ -
Mutual funds - 17,773,235 - 8,902,563 - 17,164,516 -
Common/collective trust fund - - 52,537,865 - - - -
Guaranteed investment contracts - - - - - - 7,840,674
Corporate securities - - - - 33,710,806 - -
U.S. government and agency securities - - - - 23,225,678 - -
Other - - - - 2,049,979 - -
Temporary investments 2,110,694 236,466 302,150 39,411 489,352 108,380 235,544
Receivables
Due from participants (Note 1) - - - - - - -
Interest and dividends - - - - 511,449 - -
Due (to) from other funds 495,533 934,948 548,072 (33,116) (879,066) (1,136,291) 151,977
Contributions 168,851 38,056 45,266 7,485 43,182 14,123 -
Other 684 - - - - - 82,203
Cash 651,044 73,014 93,296 12,169 151,099 33,465 -
------------ ----------- ----------- ---------- ----------- ----------- -----------
Total assets 139,058,934 19,055,719 53,526,649 8,928,512 59,302,479 16,184,193 8,310,398
------------ ----------- ----------- ---------- ----------- ----------- -----------
LIABILITIES
Advances from Harrah's - - - - - - (2,340,947)
Bank overdrafts (1,518,147) (170,260) (217,554) (28,377) (352,343) (78,036) -
Accrued expenses (199,960) (52,718) (61,572) (10,653) (60,393) (18,514) -
Accounts payable - - (10,431) - (2,286,159) (3,484) (552,032)
Other (31,069) (2,717) (13,097) (1,948) (14,635) (5,924) -
------------ ----------- ----------- ---------- ----------- ----------- -----------
Total liabilities (1,749,176) (225,695) (302,654) (40,978) (2,713,530) (105,958) (2,892,979)
------------ ----------- ----------- ---------- ----------- ----------- -----------
NET ASSETS AVAILABLE FOR BENEFITS $137,309,758 $18,830,024 $53,223,995 $8,887,534 $56,588,949 $16,078,235 $ 5,417,419
============ =========== =========== ========== =========== =========== ===========
<CAPTION>
-------------------------
Non-
Participant
Directed
Fund
----------
ESOP Fund Loan Fund Total
---------- ---------- ------------
<S> <C> <C> <C>
ASSETS
Investments (Notes 1 and 2)
Harrah's Common stock $10,809,098 $ - $146,441,226
Mutual funds - - 43,840,314
Common/collective trust fund - - 52,537,865
Guaranteed investment contracts - - 7,840,674
Corporate securities - - 33,710,806
U.S. government and agency securities - - 23,225,678
Other - - 2,049,979
Temporary investments 1,752 - 3,523,749
Receivables
Due from participants (Note 1) - 21,687,690 21,687,690
Interest and dividends - - 511,449
Due (to) from other funds (82,057) - -
Contributions - - 316,963
Other - - 82,887
Cash - - 1,014,087
------------ ------------ -------------
Total assets 10,728,793 21,687,690 336,783,367
------------ ------------ -------------
LIABILITIES
Advances from Harrah's - - (2,340,947)
Bank overdrafts - - (2,364,717)
Accrued expenses - - (403,810)
Accounts payable (14,326) - (2,866,432)
Other - - (69,390)
------------ ----------- ------------
Total liabilities (14,326) - (8,045,296)
------------ ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $10,714,467 $21,687,690 $328,738,071
============ =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
<PAGE>
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1995
Fund Information
-----------------------------------------------------------------------------------------------
Participant Directed Funds
-----------------------------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income Treasury Executive
Stock Fund Stock Fund Index Fund Bond Fund Fund Fund Life Fund
------------- ----------- ----------- ---------- ---------- ---------- ----------
(Note 5)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 1 and 2)
Harrah's Common stock $160,163,755 $ - $ - $ - $ - $ - $ -
Mutual funds - 8,007,657 - 7,514,110 1,128,109 17,092,695 -
Common/collective trust fund - - 36,722,025 - - - -
Guaranteed investment contracts - - - - 2,045,697 - 9,451,578
Corporate securities - - - - 19,189,663 - -
U.S. government and agency securities - - - - 40,736,885 - -
Other - - - - 15,585 - -
Temporary investments 2,359,298 259,654 471,371 87,883 631,077 183,755 203,015
Receivables
Due from participants (Note 1) - - - - - - -
Interest and dividends - - - - 776,309 - -
Due (to) from other funds (658,790) 1,023,690 1,529,977 543,451 (915,244) (1,661,867) 104,902
Contributions 813,137 75,874 152,317 29,465 217,288 70,208 -
Other 264,323 9,647 208,441 10,104 42,609 12,894 384,803
Cash 1,182 130 236 44 319 92 -
------------ ---------- ----------- ---------- ---------- ---------- ----------
Total assets 162,942,905 9,376,652 39,084,367 8,185,057 63,868,297 15,697,777 10,144,298
------------ ---------- ----------- ---------- ---------- ---------- ----------
LIABILITIES
Advances from Harrah's - - - - - - (2,543,851)
Bank overdrafts (1,255,131) (138,277) (251,026) (46,801) (334,172) (97,858) -
Accrued expenses (175,614) (11,355) (35,179) (5,056) (79,253) (16,261) -
Accounts payable (3,936) - - - (834,973) - (549,145)
Other (35,707) (52) (13,465) (4,726) (7,569) (38) -
------------ ---------- ----------- ---------- ---------- ---------- ----------
Total liabilities (1,470,388) (149,684) (299,670) (56,583) (1,255,967) (114,157) (3,092,996)
------------ ---------- ----------- ---------- ---------- ---------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $161,472,517 $9,226,968 $38,784,697 $8,128,474 $62,612,330 $15,583,620 $ 7,051,302
============ ========== =========== ========== =========== =========== ===========
<CAPTION>
--------------------------
Non-
Participant
Directed
Fund
---------
ESOP Fund Loan Fund Total
--------- ---------- ----------
<S> <C> <C> <C>
ASSETS
Investments (Notes 1 and 2)
Harrah's Common stock $13,861,665 $ - $174,025,420
Mutual funds - - 33,742,571
Common/collective trust fund - - 36,722,025
Guaranteed investment contracts - - 11,497,275
Corporate securities - - 19,189,663
U.S. government and agency securities - - 40,736,885
Other - - 15,585
Temporary investments 1,634 - 4,197,687
Receivables
Due from participants (Note 1) - 21,850,295 21,850,295
Interest and dividends - - 776,309
Due (to) from other funds 33,881 - -
Contributions 369,075 - 1,727,364
Other 2,563 - 935,384
Cash - - 2,003
----------- ----------- ------------
Total assets 14,268,818 21,850,295 345,418,466
----------- ----------- ------------
LIABILITIES
Advances from Harrah's - - (2,543,851)
Bank overdrafts - - (2,123,265)
Accrued expenses - - (322,718)
Accounts payable (44,032) - (1,432,086)
Other 208 - (61,349)
----------- ----------- ------------
Total liabilities (43,824) - (6,483,269)
----------- ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $14,224,994 $21,850,295 $338,935,197
=========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
<PAGE>
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1996
Fund Information
-------------------------------------------------------------------------------------------------
Participant Directed Funds
-----------------------------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income Treasury Executive
Stock Fund Stock Fund Index Fund Bond Fund Fund Fund Life Fund
------------- ----------- ------------ -----------------------------------------------------
(Note 5)
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 85,149 $ 8,625 $ 24,784 $ 4,662 $ 4,119,998 $ 8,581 $ 11,553
Dividends - 1,443,087 - 716,785 215,529 844,585 -
------------ ----------- ----------- ----------- ------------- ----------- -----------
85,149 1,451,712 24,784 721,447 4,335,527 853,166 11,553
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 14,523,763 1,033,468 4,104,657 1,088,641 369,001,219 3,137,358 -
Aggregate cost (9,349,397) (997,824) (3,079,235) (1,085,122) (369,936,453) (3,137,358) -
------------ ----------- ----------- ----------- ------------- ----------- -----------
Net realized gain (loss) 5,174,366 35,644 1,025,422 3,519 (935,234) - -
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (31,200,751) 108,890 8,535,784 (604,669) (1,297,829) - (1,131,082)
CONTRIBUTIONS
Participants 10,971,541 2,438,787 3,112,800 563,096 2,850,745 1,011,163 -
Company 7,492,343 1,556,769 2,006,493 389,196 2,017,605 656,236 -
------------ ----------- ----------- ----------- ------------- ----------- -----------
18,463,884 3,995,556 5,119,293 952,292 4,868,350 1,667,399 -
OTHER
Distributions to participants and
beneficiaries (13,300,851) (1,476,339) (3,990,424) (472,704) (6,439,459) (2,787,806) (511,468)
Transfers between funds (2,627,784) 5,738,338 4,058,146 213,219 (6,466,019) 827,018 (2,886)
Administrative expenses (756,772) (250,745) (333,707) (54,044) (88,717) (65,162) -
------------ ----------- ----------- ----------- ------------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (24,162,759) 9,603,056 14,439,298 759,060 (6,023,381) 494,615 (1,633,883)
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 161,472,517 9,226,968 38,784,697 8,128,474 62,612,330 15,583,620 7,051,302
------------ ----------- ----------- ----------- ------------- ----------- -----------
End of year $137,309,758 $18,830,024 $53,223,995 $ 8,887,534 $ 56,588,949 $16,078,235 $ 5,417,419
============ =========== =========== =========== ============= =========== ===========
<CAPTION>
---------------------------
Non-
Participant
Directed
Fund
-----------
ESOP Fund Loan Fund Total
------------ ---------- -------------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 118 $ 1,527,305 $ 5,790,775
Dividends - - 3,219,986
----------- ----------- -------------
118 1,527,305 9,010,761
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 1,022,357 - 393,911,463
Aggregate cost (999,591) - (388,584,980)
----------- ----------- -------------
Net realized gain (loss) 22,766 - 5,326,483
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (2,462,944) - (28,052,601)
CONTRIBUTIONS
Participants - - 20,948,132
Company - - 14,118,642
----------- ----------- -------------
- - 35,066,774
OTHER
Distributions to participants and
beneficiaries (755,793) - (29,734,844)
Transfers between funds (50,122) (1,689,910) -
Administrative expenses (264,552) - (1,813,699)
----------- ----------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (3,510,527) (162,605) (10,197,126)
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 14,224,994 21,850,295 338,935,197
----------- ----------- -------------
End of year $10,714,467 $21,687,690 $ 328,738,071
=========== =========== =============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
<PAGE>
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1995
Fund Information
-------------------------------------------------------------------------------------------------
Participant Directed Funds
-------------------------------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income Treasury Executive
Stock Fund Stock Fund Index Fund Bond Fund Fund Fund Life Fund
--------------- ----------- ------------ ----------- ---------- --------- -----------
(Note 5)
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 167,091 $ 2,729 $ 18,152 $ 3,950 $ 4,063,033 $ 8,764 $ -
Dividends - 281,594 222,699 487,722 - 852,043 -
------------- ----------- ------------ ----------- ------------ ----------- -----------
167,091 284,323 240,851 491,672 4,063,033 860,807 -
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 176,823,320 2,285,069 22,733,931 4,773,759 382,169,977 - -
Aggregate cost (123,347,247) (1,953,996) (19,801,212) (4,586,597) (381,528,827) - -
------------- ----------- ------------ ----------- ------------ ----------- -----------
Net realized gain (loss) 53,476,073 331,073 2,932,719 187,162 641,150 - -
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (34,479,120) 675,878 6,192,843 819,131 3,769,754 - -
CONTRIBUTIONS
Participants 12,600,382 933,238 2,383,150 449,623 3,316,793 1,107,898 -
Company 8,769,684 551,512 1,526,255 235,605 2,418,642 719,084 -
------------- ----------- ------------ ----------- ------------ ----------- -----------
21,370,066 1,484,750 3,909,405 685,228 5,735,435 1,826,982 -
OTHER
Distributions to participants and
beneficiaries (14,528,025) (106,902) (2,868,583) (130,710) (7,010,748) (1,975,670) (495,602)
Transfers between funds (22,763,179) 6,333,753 5,489,055 8,448,867 (2,015,058) 4,475,334 (3,086)
Transfers for spin-off (16,820,769) (1,996,362) (5,522,510) (4,157,672) (6,905,858) (2,753,804) (548,938)
Administrative expenses (483,416) (40,100) (106,921) (18,450) (478,985) (53,817) -
------------- ----------- ------------ ----------- ------------ ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (14,061,279) 6,966,413 10,266,859 6,325,228 (2,201,277) 2,379,832 (1,047,626)
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 175,533,796 2,260,555 28,517,838 1,803,246 64,813,607 13,203,788 8,098,928
------------- ----------- ------------ ----------- ------------ ----------- -----------
End of year $ 161,472,517 $ 9,226,968 $ 38,784,697 $ 8,128,474 $ 62,612,330 $15,583,620 $ 7,051,302
============= =========== ============ =========== ============ =========== ===========
<CAPTION>
--------------------------
Non-
Participant
Directed
Fund
-----------
ESOP Fund Loan Fund Total
--------- ----------- ------------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 319 $ 1,555,553 $ 5,819,591
Dividends - - 1,844,058
----------- ----------- --------------
319 1,555,553 7,663,649
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 14,826,674 - 603,612,730
Aggregate cost (11,114,433) - (542,332,312)
----------- ----------- --------------
Net realized gain (loss) 3,712,241 - 61,280,418
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (2,433,756) - (25,455,270)
CONTRIBUTIONS
Participants - - 20,791,084
Company 371,642 - 14,592,424
----------- ----------- --------------
371,642 - 35,383,508
OTHER
Distributions to participants and
beneficiaries (1,525,468) - (28,641,708)
Transfers between funds (9,714) 44,028 -
Transfers for spin-off (844,424) (1,596,056) (41,146,393)
Administrative expenses 1,229 - (1,180,460)
----------- ----------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (727,931) 3,525 7,903,744
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 14,952,925 21,846,770 331,031,453
----------- ----------- --------------
End of year $14,224,994 $21,850,295 $ 338,935,197
=========== =========== ==============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
<PAGE>
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 1994
Fund Information
----------------------------------------------------------------------------------------------
Participant Directed Funds
----------------------------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income Treasury Executive
Stock Fund Stock Fund Index Fund Bond Fund Fund Fund Life Fund
-------------- ----------- ------------ ----------- --------- ---------- -----------
(Note 5)
<S> <C> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 74,748 $ 145 $ 8,842 $ 102 $ 4,274,148 $ 4,484 $ 2,875
Dividends - - 603,276 11,584 - 456,209 -
------------ ----------- ------------- --------- ------------ ------------ -----------
74,748 145 612,118 11,686 4,274,148 460,693 2,875
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 17,486,151 - 3,124,163 - 2,879,687 - -
Aggregate cost (5,599,712) - (2,717,751) - (2,971,295) - -
------------ ----------- ------------- --------- ------------ ------------ -----------
Net realized gain (loss) 11,886,439 - 406,412 - (91,608) - -
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (92,596,671) (28,813) (2,382,635) 9,075 (2,262,385) - -
CONTRIBUTIONS
Participants 13,313,603 75,217 2,169,629 25,989 3,618,366 754,159 -
Company 9,058,805 47,402 1,415,552 17,370 2,575,445 621,675 -
------------ ----------- ------------- --------- ------------ ------------ -----------
22,372,408 122,619 3,585,181 43,359 6,193,811 1,375,834 -
OTHER
Distributions to participants and
beneficiaries (13,819,311) (91) (2,121,419) (549) (5,767,763) (1,145,732) (286,300)
Transfers between funds (12,149,250) 2,173,104 1,222,398 1,741,979 2,482,193 4,539,095 (61,541)
Administrative expenses (675,971) (6,409) (136,023) (2,304) (373,372) (45,847) -
------------ ----------- ------------- --------- ------------ ------------ -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (84,907,608) 2,260,555 1,186,032 1,803,246 4,455,024 5,184,043 (344,966)
NET ASSETS AVAILABLE FOR
BENEFITS,
Beginning of year 260,441,404 - 27,331,806 - 60,358,583 8,019,745 8,443,894
------------ ----------- ------------- --------- ------------ ------------ -----------
End of year $175,533,796 $2,260,555 $28,517,838 $1,803,246 $64,813,607 $13,203,788 $8,098,928
============ =========== ============= ========== ============ ============ ===========
<CAPTION>
---------------------------
Non-
Participant
Directed
Fund
-----------
ESOP Fund Loan Fund Total
----------- ----------- ----------
<S> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ - $ 1,616,847 $ 5,982,191
Dividends - - 1,071,069
----------- ----------- ------------
- 1,616,847 7,053,260
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 1,276,173 - 24,766,174
Aggregate cost (693,131) - (11,981,889)
----------- ----------- ------------
Net realized gain (loss) 583,042 - 12,784,285
UNREALIZED APPRECIATION
(DEPRECIATION) OF INVESTMENTS (8,085,372) - (105,346,801)
CONTRIBUTIONS
Participants - - 19,956,963
Company 540,119 - 14,276,368
----------- ----------- ------------
540,119 - 34,233,331
OTHER
Distributions to participants and
beneficiaries (1,242,271) - (24,383,436)
Transfers between funds 6,646 45,376 -
Administrative expenses - - (1,239,926)
----------- ----------- ------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (8,197,836) 1,662,223 (76,899,287)
NET ASSETS AVAILABLE FOR
BENEFITS,
Beginning of year 23,150,761 20,184,547 407,930,740
----------- ----------- ------------
End of year $14,952,925 $21,846,770 $331,031,453
=========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN
The following description of Harrah's Entertainment, Inc. Savings and Retirement
Plan (the "Plan," formerly The Promus Companies Incorporated Savings and
Retirement Plan) is provided for general information purposes only. Reference
should be made to the Plan Document for a more complete description of the
Plan's provisions.
The Plan
Effective June 30, 1995, The Promus Companies Incorporated ("Promus") was split
into two independent public corporations (the "Spin-off"). Promus, which was
renamed Harrah's Entertainment, Inc. ("Harrah's"), retained the casino
entertainment business. Promus' hotel operations were transferred to a newly
created company, Promus Hotel Corporation ("PHC"). The agreements governing the
terms of the Spin-off transaction required that the assets allocable to those
participants in the Plan who became employees of PHC be transferred to a new
savings and retirement plan (the "PHC Plan"), which was established for the
benefit of the eligible employees of PHC and its affiliates. Concurrent with the
completion of the Spin-off, the Plan was renamed the Harrah's Entertainment,
Inc. Savings and Retirement Plan. Participants' investments in Promus common
stock through the Company Stock Fund and the ESOP Fund were converted into
investments in the common stock of their employer, either Harrah's or PHC, after
the Spin-off.
The Plan was established by Harrah's effective February 6, 1990, to include
eligible employees of Harrah's and its affiliates (the "Company") for the
primary purpose of allowing these employees to accumulate capital for their
retirement. Participants can contribute either pre-tax payroll dollars (i.e.,
temporary deferral of federal and/or state income taxes) or after-tax dollars to
the Plan, as provided for under Sections 401(k) and 401(m) of the Internal
Revenue Code.
The Plan is subject to the provisions of the Employee Retirement Income Security
Act of 1974 ("ERISA").
Plan Investment Funds
By election of a participant, his or her account balance (comprised of
contributions, Company matching funds and accumulated earnings) can be invested
in one or in a combination of up to six separate funds of the Plan in 1%
increments as follows. Prior to October 1, 1996, funds could be invested in 10%
increments.
I. Company Stock Fund - invested in Harrah's common stock which provides a
return based on the change in market value of Harrah's common stock,
including any dividends declared thereon;
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
II. Aggressive Stock Fund - invested in the Delaware Trend Institutional
Fund, a mutual fund comprised primarily of a mix of common stocks of
emerging and other growth-oriented companies, including securities
convertible to common stocks;
III. S&P 500 Index Fund (formerly called the Diversified Stock Fund) -
invested in the State Street Bank Flagship Fund, an S&P 500 Indexed
common/collective trust fund, which provides a return based on the
performance of the stocks included within the Flagship Fund, including
dividends thereon;
IV. Long-Term Bond Fund - invested in the Vanguard Long-Term Corporate
Portfolio, a mutual fund with investments in a diversified mix of
long-term investment grade bonds;
V. Income Fund - invested primarily in intermediate-term bonds issued by
corporations and by the U.S. Government and its agencies, as directed
by Western Asset Management Company, the fund's investment manager; or
VI. Treasury Fund - invested in the Dreyfus Treasury Fund, a money market
mutual fund that invests solely in United States Treasury Department
backed short-term securities issued by the U.S. Government.
The Plan also includes three other special purpose funds, as follows:
VII. Executive Life Fund - segregates the assets and participants' equity
accounts related to the investment in Executive Life Insurance Company's
guaranteed investment contract. See Note 5 - Executive Life Investment
for further details.
VIII. ESOP Fund - accounts for special contributions by Harrah's of its common
stock or cash equivalents to eligible employees. The ESOP Fund was
established within the Plan to serve as a means to monitor the accounts
and records of the participants. Participants are not allowed to make
contributions to their ESOP account and distributions can be made only
after a participant terminates employment.
IX. Loan Fund - separately tracks loans to participants as provided for
under the Plan. See "How To Borrow Money" in the Summary Plan
Description for further details.
Occasionally, the Funds hold cash on a temporary basis pending investment or
withdrawals. Cash balances are invested in temporary investments.
Plan Administration
The general administration of the Plan is the responsibility of its Trustees,
who are appointed by the Human Resources Committee of the Harrah's Board of
Directors, and who act as the Plan Administrator. The Trustees perform the
duties and exercise the authority set forth in the Plan and Trustee Agreements.
The Trustees have delegated certain of their authority to individuals for
purposes of day-to-day administration.
-2-
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
Employee Eligibility, Vesting and Termination
Employees of the Company become eligible to join the Plan on the first entry
date (January 1 or July 1) following completion of 12 months during which the
employee is credited with at least 1,000 hours of service. Participants vest in
Company matching contributions over seven calendar years of credited service as
follows:
Years of Vested
Credited Service Percentage
---------------- ----------
One 10%
Two 20%
Three 30%
Four 40%
Five 60%
Six 80%
Seven 100%
An employee's active participation in the Plan ceases upon separation of service
at which time his or her vested account balance can either be withdrawn or
remain in the Plan according to the Plan Document.
Plan Expenses
As sponsor of the Plan, Harrah's, through its wholly-owned subsidiary Harrah's
Operating Company, Inc. ("HOC"), initially pays many of the costs associated
with the operation of the Plan. These costs include salaries for employees who
perform administrative services solely for the Plan, rent, various service
charges and other direct costs of operation. The Plan reimbursed HOC for these
costs in the amounts of approximately $1.1 million, $1.2 million and $1.2
million for 1996, 1995 and 1994, respectively. Such costs are included in
administrative expenses in the accompanying statements of changes in net assets
available for benefits.
Participants' Contributions and Withdrawals
Participants can elect to make basic contributions ranging from two to six
percent of their eligible earnings, as defined. These contributions are then
matched by the Company. If a non-highly compensated participant is making basic
pre-tax contributions of six percent of his earnings to the Plan, the
participant could elect to make supplemental contributions of up to an
additional 10% of which 8% can be pre-tax dollars. Highly compensated employees
could contribute up to an additional 10% of after-tax dollars as supplemental
contributions. The Company will match the first six percent of all participants'
contributions.
-3-
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
Participants' contributions, vested matching Company contributions and related
income may be withdrawn by giving 30 days written notice subject to Plan and
Internal Revenue Service rules. In-service withdrawals of pre-tax contributions
are subject to hardship rules if the withdrawal occurs before age 59 1/2.
Withdrawal of basic after-tax and matching contributions will not prohibit
participants from making further contributions; however, if these contributions
or any other funds are withdrawn, the Company will not match subsequent
contributions for six months. Supplemental after-tax contributions and any
earnings thereon may be withdrawn without this penalty. If a participant ceases
to make contributions to the Plan, the participant's equity may remain constant,
except for allocation of earnings, gains and losses on the Plan's investments.
Allocation of Forfeitures and Net Plan Income
As required by the Plan, forfeited amounts attributed to non-vested Company
matching contributions of terminated employees will not be reallocated to
remaining participants for a period of five years. Employees who return to
service within that period will be credited, subject to further vesting, at the
date of rehire with the unallocated equity amount. The total amount of potential
forfeitures of terminated non-vested participants at December 31, 1996 was
approximately $2.1 million. Forfeitures are allocated to active participants
based upon their total basic contributions for the year. The Plan Administrator
reallocated approximately $0.3 million, $0.5 million and $0.7 million of
forfeited funds during 1996, 1995 and 1994, respectively.
Net Plan income (i.e. unrealized appreciation/depreciation of investments,
dividend and interest income, and realized gains or losses on the sale of
investments) is allocated monthly to active participants based upon the
individual's prior month-end equity balance. For purposes of calculating the
realized gains or losses on investments, the Plan uses a cumulative average cost
per share.
Loans
Loans may be made to participants upon written application to the Plan
Administrator. All loans, other than those used to acquire or construct the
principal residence of the participant, shall be repaid within five years. The
minimum amount that may be borrowed is $500. The balance of loans outstanding
under the Plan to a participant may not exceed $50,000 (which maximum is subject
to reduction if another loan is outstanding) or one-half of the vested balance
of the participant's account, whichever is less. Loans bear interest at a rate
set by the Plan Administrator, and are secured by the account balance of the
participant equal to the outstanding loan amount. Principal and interest paid by
a participant are credited to the participant's account. At both December 31,
1996 and 1995, these loans had interest rates ranging from 7.5% to 9.5%.
-4-
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
Accounting Policies
The American Institute of Certified Public Accountants issued Statement of
Position 94-4 ("SOP 94-4"), "Reporting of Investment Contracts Held by Health
and Welfare Benefit Plans and Defined-Contribution Pension Plans," effective for
fiscal years beginning after December 15, 1994. The application of SOP 94-4 to
investment contracts entered into before December 31, 1993, is delayed to plan
years beginning after December 15, 1995. SOP 94-4 changes the Plan's reporting
for certain investment contracts (as defined in SOP 94-4) from contract value to
fair market value. The Plan adopted SOP 94-4 during 1996, which resulted in a
reduction in the carrying value of the Executive Life Insurance guaranteed
investment contract of approximately $1.1 million. This reduction is included in
unrealized appreciation (depreciation) of investments in the accompanying
statement of changes in net assets available for benefits. The contract value as
of December 31, 1996 was approximately $9.0 million. See Note 5 for further
discussion.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the amounts of income and expenses during the reporting period. Actual results
could differ from those estimates.
NOTE 2 - VALUATION OF INVESTMENTS
Investments in securities, common/collective trust funds and mutual funds are
stated at market values on the last business day of the plan year.
NOTE 3 - INVESTMENTS
The fair market values of individual investments that represent 5% or more of
the Plan's total net assets as of December 31, 1996 and 1995, were as follows:
<TABLE>
<CAPTION>
1996 1995
------------ ------------
<S> <C> <C>
Harrah's Entertainment, Inc. $146,441,226 $171,918,946
Common Stock
Delaware Trend Institutional Fund 17,773,235 8,007,657
Dreyfus Treasury Fund 17,164,516 17,092,695
State Street Bank Flagship Fund 52,537,865 36,722,025
Loans to Participants 21,687,690 21,850,295
</TABLE>
-5-
<PAGE>
NOTE 4 - EXCESS CONTRIBUTIONS
Certain plan participants received a refund of a portion of their contributions
and attributable earnings totaling approximately $54,000, $53,000 and $63,000 in
1996, 1995 and 1994, respectively. These refunds were paid in accordance with
Internal Revenue Code Section 401(m) which requires that certain
nondiscriminatory tests related to the overall composition of participants'
contributions be met and Section 415 which requires annual contributions not to
exceed 25% of the participant's compensation, as defined.
NOTE 5 - EXECUTIVE LIFE INVESTMENT
On May 1, 1991, the Plan was amended to provide that approximately $12.9 million
attributable to a guaranteed investment contract issued by Executive Life
Insurance Company ("Executive Life") and held in the Plan's Income Investment
Fund would be frozen until such time as the contract is finally paid out. The
$12.9 million represented the book value of this contract as of March 31, 1991.
The action was taken by the Company due to the conservatorship imposed on
Executive Life by the State of California Insurance Commissioner. The Company
has agreed to pay to the Plan any deficiency between the $12.9 million and any
amounts finally paid under the contract. The Company has also agreed to make
interest free loans to the Plan, which are to be repaid out of any amounts
received under the contract, so that persons who leave or who have already left
the Company's employment may withdraw the vested portion of the Executive Life
guaranteed investment contract, as well as other vested funds. Amounts loaned to
the Plan are reflected in the accompanying statements of net assets available
for benefits as advances from Harrah's.
On September 3, 1993, the California Department of Insurance closed on a
rehabilitation transaction with Aurora National Life Assurance Company
("Aurora"), whereby substantially all Executive Life assets and restructured
liabilities were transferred to Aurora. Additionally, on September 3, 1993,
Aurora made a payment of approximately $1.9 million to the Plan which reduced
the principal of the Executive Life contract. Of this payment, approximately
$0.4 million was paid to Harrah's to reduce the advances from Harrah's balance.
The remaining amount was used to unfreeze part of the Executive Life Fund for
each participant on a pro-rata basis.
On February 4, 1994, the Plan elected to participate in an ongoing
rehabilitation plan offered by Aurora. This plan provides for recovery of a
minimum of 77.7% of the March 31, 1991, book value.
On July 29, 1996, Aurora made a payment of approximately $0.1 million to the
Plan which reduced the principal of the Executive Life contract. This payment
will be used to unfreeze part of the Executive Life Fund for each participant on
a pro-rata basis.
Under the Plan Amendment that governs the Executive Life contract, non-benefit
responsive distributions are allocated pro-rata among the remaining participants
(based upon their investment in the contract) and to the Company (based on the
Plan's payable to the Company). Benefit responsive distributions are allocated
to the Company as the
-6-
<PAGE>
NOTE 5 - EXECUTIVE LIFE INVESTMENT (Continued)
Company previously loaned the Plan the funds for the distributions. In April
1995, Aurora began honoring requests for distributions for terminated
participants, as well as for hardship withdrawals. During 1996, Aurora
discontinued reimbursements for hardship withdrawals. Harrah's remains liable to
the Plan for any deficiency between the book value and amounts ultimately
received. The restructured contract matures on September 3, 1998, and is
presently earning interest at approximately 5%.
The accounts payable balance for the Executive Life Fund as of December 31, 1996
and 1995, primarily represents a payable to the PHC Plan for that plan's portion
of the Executive Life contract (see Note 1). The plan administrator expects the
contract to be split into two separate contracts during 1997.
NOTE 6 - PLAN QUALIFICATION
The Plan is intended to satisfy the tax qualification requirements under Section
401(a) of the Internal Revenue Code ("IRC"); therefore, the trust funds of the
Plan are intended to be exempt from federal income taxes under Section 501(a). A
favorable determination letter regarding the Plan's status, dated November 19,
1992, has been received from the Internal Revenue Service. The Plan has been
amended since receiving the determination letter; however, the plan
administrator and the Plan's legal counsel believe that the Plan is designed and
is currently being operated in compliance with the applicable requirements of
the IRC.
NOTE 7 - PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the right
under the Plan to discontinue its contributions at any time and to terminate the
Plan subject to the provisions of ERISA. In the event of Plan termination,
participants will become 100% vested in their accounts.
NOTE 8 - RECONCILIATION TO FORM 5500
As of December 31, 1996 and 1995, the Plan had approximately $0.7 million and
$2.0 million, respectively, of pending distributions to participants who elected
to withdraw from the Plan. These amounts are recorded as a liability in the
Plan's Form 5500; however, these amounts are not recorded as a liability in the
accompanying statement of net assets available for benefits in accordance with
generally accepted accounting principles.
-7-
<PAGE>
NOTE 8 - RECONCILIATION TO FORM 5500 (Continued)
The following table reconciles net assets available for benefits per the
financial statements to the Form 5500 as filed by the Company for the years
ended December 31, 1996 and 1995:
<TABLE>
<CAPTION>
NET ASSETS NET ASSETS
BENEFITS AVAILABLE FOR AVAILABLE FOR
PAYABLE TO BENEFITS BENEFITS
PARTICIPANTS BENEFITS PAID DECEMBER 31,1995 DECEMBER 31, 1996
------------ ------------- ---------------- -----------------
<S> <C> <C> <C> <C>
Per financial
statements $ - $29,734,844 $338,935,197 $328,738,071
Accrued benefit
payment 700,000 700,000 - (700,000)
Reversal of 1995 accrual
for benefit
payment - (2,000,000) (2,000,000) -
-------- ----------- ------------ ------------
Per Form 5500 $700,000 $28,434,844 $336,935,197 $328,038,071
======== =========== ============ ============
</TABLE>
NOTE 9 - SUBSEQUENT EVENT
Subsequent to December 31, 1996, Harrah's announced the sale of its ownership
interest in two limited stakes casinos located in Colorado, subject to
regulatory approval, and discontinued managing those casinos on March 31, 1997.
This event qualifies as a disposition of a subsidiary as defined in the Plan
Document, which resulted in the immediate vesting of all affected participants.
-8-
<PAGE>
EXHIBIT I
Page 1 of 4
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
COST MARKET VALUE
------------ ------------
<S> <C> <C>
HARRAH'S ENTERTAINMENT, INC.
COMMON STOCK
Company Stock Fund* $108,400,619 $135,632,128
ESOP Fund* 9,035,933 10,809,098
------------- -------------
117,436,552 146,441,226
------------- -------------
MUTUAL FUNDS
Delaware Trend Institutional Fund 16,900,229 17,773,235
Dreyfus Treasury Fund 17,164,516 17,164,516
Vanguard - Long-Term Corporate Portfolio 8,758,809 8,902,563
-------------- --------------
42,823,554 43,840,314
-------------- --------------
COMMON/COLLECTIVE TRUST FUND
State Street Bank Flagship Fund 36,059,519 52,537,865
-------------- --------------
GUARANTEED INVESTMENT CONTRACTS
Executive Life Insurance Company 8,971,756 7,840,674
-------------- --------------
CORPORATE SECURITIES
Asset Securitization Corporation Series 1996-MD6
Class A1A, 6.72%, dated 12/17/96, due 11/13/26 1,112,375 1,108,910
Bridgestone/Firestone Master Trust Series 1996-1 Class A,
6.17%, dated 11/8/96, due 7/1/03 1,592,000 1,591,648
Champion Home Equity Loan Series 1995-2 Class A2,
Variable Rate, dated 5/1/95, due 5/25/50 520,928 521,601
Citibank Credit Card Master Trust Series 1996-1 Class A,
0.00%, dated 1/29/96, due 2/7/03 1,156,250 1,249,680
Cityscape Home Equity Loan Trust Series 1996-4 Class AIO,
7.40%, dated 12/9/96, due 9/25/27 1,000,000 1,000,000
Contimortgage Home Equity Loan Trust Series 1995-1
Class A2A, 8.60%, dated 2/23/95, due 2/15/10 481,944 485,271
Deutsche Bank Financial, 6.70%, dated 12/13/96,
due 12/13/06 1,694,747 1,665,592
DLJ Mortgage Acceptance Corporation Series 1996-CF2,
Class A1A, 6.86%, dated 11/1/96, due 7/1/05 875,633 872,348
</TABLE>
<PAGE>
EXHIBIT I
Page 2 of 4
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
COST MARKET VALUE
----------- ------------
<S> <C> <C>
CORPORATE SECURITIES (CONTINUED)
Donaldson Lufkin and Jenrette, 5.625%, dated 2/15/96,
due 2/15/16 $ 1,241,136 $ 1,245,491
Faxco Series 1996-BA1 Class A, 9.05%, dated 9/1/96,
due 3/13/03 945,950 948,503
Ford Motor Credit Corporation Note, 7.75%,
dated 11/15/92, due 11/15/02 1,232,539 1,209,625
First Boston Mortgage Securities Corporation, Series A
Class IO, 9.488%, dated 3/1/87, due 5/16/18 316,816 331,632
First Boston Mortgage Securities Corporation, Series A
Class PO, 0.00%, dated 3/1/87, due 5/16/18 960,474 970,299
Green Tree Financial Corporation Series 1994-A Class A,
6.90%, dated 3/24/94, due 2/15/04 1,064,721 1,082,927
Heller Financial Inc., 6.50%, dated 11/4/96,
due 11/1/01 996,730 989,860
Lehman Brothers Mortgage Trust Series 1990-5 Class A1,
Adjustable Rate, dated 9/1/90, due 10/25/20 1,622,790 1,659,167
Mego FHA 1996-2, Class A1, 7.275%, dated 8/1/96,
due 8/25/17 949,113 956,029
Merrill Lynch Mortgage Invs Inc. Series 1996-C2 Class A1,
6.69%, dated 11/1/96, due 11/21/28 815,247 806,655
Mid-State Trust II Mortgage Backed Note Class A-4,
9.625%, dated 4/1/88, due 4/1/03 P/Q 1,235,287 1,204,782
Old Stone Credit Corporation Home Equity Trust
Series 1992-3 Class A2, 6.30%, dated 8/25/92, due 9/25/07 97,573 101,410
Oakdale Series 94-1 Class 144A, 7.95%, dated 4/1/94,
due 5/1/01 1,045,313 1,037,100
Option One Cts Arm Trust Series 1996-1 Class IO,
Floating Rate, dated 3/14/96, due 3/25/01 266,161 200,862
Phillip Morris, 6.95%, dated 6/1/96, due 6/1/06 999,640 1,013,100
Salomon, Inc. Mtn, Floating Rate, dated 11/4/96,
due 11/5/97 2,000,000 1,992,200
Securitized Asset Sales Inc. Series 1995-6 Class AP,
0.00%, dated 11/1/95, due 12/25/10 144,889 170,527
Standard Credit Card Trust Series 1995-9 Class A, 6.55%,
dated 10/13/95, due 10/7/07 1,468,713 1,473,390
TCI Communications, Inc., Variable Rate, dated 9/13/95,
due 9/15/10 1,188,552 1,192,128
</TABLE>
<PAGE>
EXHIBIT I
Page 3 of 4
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
Cost Market Value
------------ ------------
<S> <C> <C>
CORPORATE SECURITIES (CONTINUED)
The Money Store Home Equity Trust Series 1995-A2
Class A7, Floating Rate, dated 3/30/95, due 6/15/25 $ 582,657 $ 583,074
Time Warner Inc., 7.75%, dated 6/15/95, due 6/15/05 1,450,932 1,424,500
USL Capital Corporation Mtn, 7.76%, dated 3/29/95,
due 3/29/02 924,449 915,710
Wachovia Capital Trust I, 7.64%, dated 12/16/96,
due 1/15/27 1,300,000 1,300,000
World Financial Network Credit Card Master Trust
Series 1996-B Class A, 6.95%, dated 5/9/96, due 4/15/06 1,197,375 1,222,501
YPF Sociedad Anonima, 7.5%, dated 10/26/95,
due 10/26/02 1,178,405 1,184,284
------------ ------------
33,659,339 33,710,806
------------ ------------
U.S. GOVERNMENT AND AGENCY SECURITIES
U.S. Treasury Bill, due 1/9/97 194,591 194,591
U.S. Treasury Note, 6.875%, dated 5/15/96, due 5/15/06 1,715,354 1,762,907
U.S. Treasury Note, 7.00%, dated 7/15/96, due 7/15/06 2,953,248 2,909,368
U.S. Treasury Note, 6.125%, dated 12/31/96, due 12/31/01 2,994,401 2,988,750
FHLMC Multiclass Mortgage Partn CTFS GTD REMIC Trust
Series 1345 Class A, 0.00%, dated 7/1/92, due 7/15/22 251,529 248,401
FHLMC Gold Pool #C90020, 6.50%, dated 6/1/93, due 6/1/13 522,435 523,641
FHLMC Pool #181282, 7.50%, dated 8/1/82, due 9/1/07 635,363 631,198
FNMA GTD REMIC Pass Thru CTF REMIC Trust Series 4
Class 2 Strip, 9.50%, dated 3/1/87, due 2/25/17 78,897 97,929
FNMA Pool #303323, 9.00%, dated 4/1/95, due 4/1/25 597,493 613,252
GNMA II Pool #8585, Adjustable Rate, dated 1/1/95,
due 1/20/25 1,950,764 1,944,777
GNMA Pool #286149, 9.50%, dated 1/1/90, due 1/15/05 369,674 361,305
GNMA Pool #302318, 9.50%, dated 1/1/91, due 1/15/06 567,679 555,360
Resolution Trust Corporation Series 1991-3 Class 3A,
Floating Rate, dated 8/1/91, due 8/25/21 419,424 429,490
Resolution Trust Corporation Series 1991-4 Class B,
Adjustable Rate, dated 8/1/91, due 2/25/21 716,453 747,871
Resolution Trust Corporation Series 1991-6 Class A1,
Adjustable Rate, dated 9/1/91, due 5/25/19 257,470 264,949
Resolution Trust Corporation Series 1991-7 Class A,
7.75%, dated 9/1/91, due 12/25/18 568,981 580,832
</TABLE>
<PAGE>
EXHIBIT I
Page 4 of 4
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1996
COST MARKET VALUE
------------ ------------
<S> <C> <C>
U.S. GOVERNMENT AND AGENCY SECURITIES (CONTINUED)
Resolution Trust Corporation Series 1991-11 Class 3A,
Adjustable Rate, dated 10/1/91, due 10/25/21 $ 497,070 $ 499,724
Resolution Trust Corporation Series 1991-15 Class A2,
Floating Rate, dated 10/1/91, due 7/25/20 2,169,967 2,265,339
Resolution Trust Corporation Series 1991-M6 Class A2,
Floating Rate, dated 12/1/91, due 6/25/21 1,646,179 1,808,315
Resolution Trust Corporation Series 1992-3 Class A1,
Adjustable Rate, dated 2/1/92, due 11/25/21 871,766 869,374
Resolution Trust Corporation Series 1992-M4 Class A2,
Floating Rate, dated 5/1/92, due 9/25/21 935,698 956,546
Resolution Trust Corporation Series 1992-12 Class A1,
Variable Rate, dated 9/1/92, due 8/25/22 799,848 802,844
Resolution Trust Corporation Series 1992-15 Class A3,
10.00%, dated 4/1/96, due 7/25/27 1,180,362 1,168,915
------------ ------------
22,894,646 23,225,678
------------ ------------
OTHER
Long-term bond futures, expire 3/19/97 (14,954) (14,954)
United Mexican States, Floating Rate, dated 8/5/96,
due 8/6/01 895,500 901,125
Province of Quebec, step up, dated 2/29/96, due 2/27/26 1,200,000 1,163,808
------------ ------------
2,080,546 2,049,979
------------ ------------
LOANS TO PARTICIPANTS, 7.5% to 9.5% N/A 21,687,690
------------ ------------
TEMPORARY INVESTMENTS
Salomon Brothers, Inc. investment cash
Company Stock Fund 2,210 2,210
ESOP Fund 1,752 1,752
Fidelity Money Market Trust 3,519,787 3,519,787
------------ ------------
3,523,749 3,523,749
------------ ------------
Total Investments $267,449,661 $334,857,981
============ ============
</TABLE>
* Represents a party-in-interest transaction.
<PAGE>
EXHIBIT II
<TABLE>
<CAPTION>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
Current
Value of
Cost of Assets on
Purchase Selling Assets Transaction Gain
Description Price Price Sold Date (Loss)
- -------------------------------------------------- ----------- ----------- ------------ ----------- --------
<S> <C> <C> <C> <C> <C>
Fidelity Institutional Cash
Purchases/sales $80,779,838 $81,907,946 $(81,907,946) $81,907,946 $ -
Fidelity Money Market Trust
Purchases/sales 62,034,000 62,884,509 (62,884,509) 62,884,509 -
U.S. Treasury Note, 5.25%, dated 1/31/96, due 1/31/01
Purchases/sales 17,915,069 17,934,695 (17,915,069) 17,934,695 19,626
U.S. Treasury Note, 6.125%, dated 4/10/96, due 3/31/98
Purchases/sales 22,151,800 22,042,460 (22,151,800) 22,042,460 (109,340)
</TABLE>
<PAGE>
Signature
--------------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Trustees have duly caused this annual report to be signed on its
behalf by the undersigned hereunto duly authorized.
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
Dated: June 23, 1997 By: /S/ MICHAEL N. REGAN
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MICHAEL N. REGAN
Authorized Trustee of the Plan and
Vice President and Controller of
Harrah's Entertainment, Inc.
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation of our report dated April 14, 1997, included in this Form
11-K for the year ended December 31, 1996, into Harrah's previously
filed Registration Statement File No. 33-59975.
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
April 14, 1997.
