<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 [NO FEE REQUIRED]
For the fiscal year ended December 31, 1997
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>
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, 1997 and 1996, and the related statements of
changes in net assets available for benefits, with fund information, for each of
the three years ended December 31, 1997. 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, 1997 and 1996, and the changes in its net assets available for
benefits, with fund information, for each of the three years ended December 31,
1997 in conformity with generally accepted accounting principles.
Our audits were performed 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, 1997 (Exhibit I) and of reportable
transactions for the year ended December 31, 1997 (Exhibit II) 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. 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.
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
April 17, 1998.
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
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, 2 and 3)
Harrah's common stock $120,795,432 $ - $ - $ - $ - $ - $ -
Mutual funds - 27,181,908 - 7,620,196 - 22,248,346 -
Common/collective trust fund - - 75,016,238 - - - -
Guaranteed investment contracts - - - - - - 7,988,711
Corporate securities - - - - 30,037 - -
U.S. government and agency
securities - - - - 39,058 - -
Temporary investments 2,122,448 881,714 1,198,497 158,392 51,138,731 306,224 466,107
Receivables
Due from participants (Note 1) - - - - - - -
Interest and dividends - - - - 61,386 - -
Due (to) from other funds (450,495) (209,556) 72,263 630,815 413,117 (483,299) 18,745
Pending trades - - - - 1,348,807 - -
Other - - - - - - 78,538
Cash 847,901 352,238 478,790 63,276 853,997 122,334 -
------------ ----------- ----------- ---------- ----------- ----------- ----------
Total assets 123,315,286 28,206,304 76,765,788 8,472,679 53,885,133 22,193,605 8,552,101
------------ ----------- ----------- ---------- ----------- ----------- ----------
LIABILITIES
Advances from Harrah's - - - - - - (2,340,947)
Bank overdrafts (588,125) (244,321) (332,101) (43,890) (169,708) (84,854) -
Accrued expenses (100,470) (37,777) (59,832) (6,660) (38,641) (13,904) -
Accounts payable (204,734) (64,967) (121,044) (30,735) (75,916) (39,957) (552,032)
Other (9,716) (452) (611) (80) (311) (158) -
------------ ------------ ----------- ---------- ----------- ----------- ----------
Total liabilities (903,045) (347,517) (513,588) (81,365) (284,576) (138,873) (2,892,979)
------------ ------------ ----------- ---------- ----------- ----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $122,412,241 $27,858,787 $76,252,200 $8,391,314 $53,600,557 $22,054,732 $5,659,122
------------ ------------ ----------- ---------- ----------- ----------- ----------
------------ ------------ ----------- ---------- ----------- ----------- ----------
Fund Information
---------------------------
Non-
Participant
Directed
Fund
----------
ESOP Fund Loan Fund Total
----------- ----------- -----------
<C> <C> <C>
ASSETS
Investments (Notes 1, 2 and 3)
Harrah's common stock $ 9,299,675 $ - $130,095,107
Mutual funds - - 57,050,450
Common/collective trust fund - - 75,016,238
Guaranteed investment contracts - - 7,988,711
Corporate securities - - 30,037
U.S. government and agency
securities - - 39,058
Temporary investments - - 56,272,113
Receivables
Due from participants (Note 1) - 21,453,556 21,453,556
Interest and dividends - - 61,386
Due (to) from other funds 8,410 - -
Pending trades - - 1,348,807
Other - - 78,538
Cash - - 2,718,536
------------ ------------ ------------
Total assets 9,308,085 21,453,556 352,152,537
------------ ------------ ------------
LIABILITIES
Advances from Harrah's - - (2,340,947)
Bank overdrafts - - (1,462,999)
Accrued expenses - - (257,284)
Accounts payable - - (1,089,385)
Other - - (11,328)
------------ ------------ ------------
Total liabilities - - (5,161,943)
------------ ------------ ------------
NET ASSETS AVAILABLE FOR BENEFITS $9,308,085 $21,453,556 $346,990,594
------------ ------------ ------------
------------ ------------ ------------
</TABLE>
The accompanying Notes to Financial Statements are an integral
part of this statement.
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1996
<TABLE>
<CAPTION>
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
------------ ------------ ----------- ---------- ------------ ------------ -----------
------------ ------------ ----------- ---------- ------------ ------------ -----------
Fund Information
---------------------------
Non-
Participant
Directed
Fund
----------
ESOP Fund Loan Fund Total
----------- ----------- -----------
<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>
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, 1997
<TABLE>
<CAPTION>
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 $ 207,435 $ 36,094 $ 103,055 $ 10,731 $ 3,958,749 $ 19,457 $ 21,029
Dividends - 2,493,299 - 548,485 604,594 886,789 -
------------ ----------- ----------- ---------- ------------- ----------- -----------
207,435 2,529,393 103,055 559,216 4,563,343 906,246 21,029
------------ ----------- ----------- ---------- ------------- ----------- -----------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 13,455,144 357,037 3,095,294 3,472,373 426,467,256 3,475,184 -
Aggregate cost (13,326,188) (363,806) (2,826,113) (3,510,300) (427,259,849) (3,475,184) -
------------ ----------- ----------- ---------- ------------- ----------- -----------
Net realized gain (loss) 128,956 (6,769) 269,181 (37,927) (792,593) - -
------------ ----------- ----------- ---------- ------------- ----------- -----------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS (6,135,421) 1,228,569 17,306,583 349,162 (620,801) - 735,257
------------ ----------- ----------- ---------- ------------- ----------- -----------
CONTRIBUTIONS
Participants 8,842,945 3,189,152 4,086,540 591,768 3,567,373 1,126,452 -
Company 6,550,364 2,195,211 2,836,051 422,475 1,803,608 806,745 -
------------ ----------- ----------- ---------- ------------- ----------- -----------
15,393,309 5,384,363 6,922,591 1,014,243 5,370,981 1,933,197 -
OTHER
Distributions to participants and
beneficiaries (11,986,354) (2,514,096) (7,303,377) (651,488) (7,610,485) (5,754,658) (514,583)
Transfers between funds (11,911,103) 2,657,661 6,087,107 (1,675,667) (3,514,232) 8,962,818 -
Administrative expenses (594,339) (250,358) (356,935) (53,759) (384,605) (71,106) -
------------ ----------- ----------- ---------- ------------- ----------- -----------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (14,897,517) 9,028,763 23,028,205 (496,220) (2,988,392) 5,976,497 241,703
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 137,309,758 18,830,024 53,223,995 8,887,534 56,588,949 16,078,235 5,417,419
------------ ----------- ----------- ---------- ------------- ----------- -----------
End of year $122,412,241 $27,858,787 $76,252,200 $8,391,314 $ 53,600,557 $22,054,732 $5,659,122
------------ ----------- ----------- ---------- ------------- ----------- -----------
------------ ----------- ----------- ---------- ------------- ----------- -----------
<CAPTION>
Fund Information
-------------------------
Non-
Participant
Directed
Fund
-----------
ESOP Fund Loan Fund Total
----------- ----------- -------------
<C> <C> <C>
NET INVESTMENT INCOME
Interest $ - $ 1,445,731 $ 5,802,281
Dividends - - 4,533,167
----------- ----------- -------------
- 1,445,731 10,335,448
----------- ----------- -------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 1,134,111 - 451,456,399
Aggregate cost (988,066) - (451,749,506)
----------- ----------- -------------
Net realized gain (loss) 146,045 - (293,107)
----------- ----------- -------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS (649,967) - 12,213,382
----------- ----------- -------------
CONTRIBUTIONS
Participants - - 21,404,230
Company 69 - 14,614,523
----------- ----------- -------------
69 - 36,018,753
OTHER
Distributions to participants and
beneficiaries (873,965) (1,100,736) (38,309,742)
Transfers between funds (27,455) (579,129) -
Administrative expenses (1,109) - (1,712,211)
----------- ----------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (1,406,382) (234,134) 18,252,523
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 10,714,467 21,687,690 328,738,071
----------- ----------- ------------
End of year $ 9,308,085 $21,453,556 $346,990,594
----------- ----------- ------------
----------- ----------- ------------
</TABLE>
The accompanying Notes to Financial Statements
are an integral part of this statement.
<PAGE>
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
<TABLE>
<CAPTION>
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 NET 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>
Fund Information
-------------------------
Non-
Participant
Directed
Fund
-----------
ESOP Fund Loan Fund Total
----------- ----------- -------------
<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 NET 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>
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
<TABLE>
<CAPTION>
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 NET 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>
Fund Information
--------------------------
Non-
Participant
Directed
Fund
------------
ESOP Fund Loan Fund Total
------------ ----------- -------------
<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 NET 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>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1997
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN
The following description of the 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 (collectively, the
"Funds") of the Plan in 1% increments as follows (10% increments prior to
October 1, 1996):
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 United States 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 United States Government.
The Plan also includes three other special purpose funds, as follows:
I. 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.
II. 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.
III. Loan Fund - separately tracks loans to participants as provided for under
the Plan.
Occasionally, the Funds hold cash on a temporary basis pending investment or
withdrawals. Cash balances are invested in temporary investments. At December
31, 1997, the Income Fund held $51.1 million in temporary investments due to the
liquidation of the securities investments in anticipation of the January 2, 1998
transfer of funds to State Street Global Advisors (see Note 9).
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
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.
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:
<TABLE>
<CAPTION>
Years of Vested
Credited Service Percentage
---------------- ----------
<S> <C>
One 10%
Two 20%
Three 30%
Four 40%
Five 60%
Six 80%
Seven 100%
</TABLE>
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 $1.6 million, $1.1 million and $1.2
million for 1997, 1996 and 1995, 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%
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (Continued)
of which up to 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.
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, 1997 was
approximately $3.2 million. Forfeitures are allocated to active participants
based upon their total basic contributions for the year. The Plan Administrator
reallocated approximately $0.5 million, $0.3 million and $0.5 million of
forfeited funds during 1997, 1996 and 1995, 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 the revalued cost (i.e.
the fair value of the assets at the beginning of the current plan year).
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,
1997 and 1996, these loans had interest rates ranging from 7.5% to 9.5%.
<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. The changes in market value
for 1997 and 1996 are included in unrealized appreciation (depreciation) of
investments in the accompanying statement of changes in net assets available for
benefits. The contract value was approximately $8.4 million and $9.0 million as
of December 31, 1997 and 1996, respectively. 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, 1997 and 1996, were as follows:
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Harrah's Entertainment, Inc.
Common Stock $130,095,107 $146,441,226
Delaware Trend Institutional Fund 27,181,908 17,773,235
Dreyfus Treasury Fund 22,248,346 17,164,516
State Street Bank Flagship Fund 75,016,238 52,537,865
Loans to Participants 21,453,556 21,687,690
Fidelity Institutional Cash-U.S.
Govt. Portfolio 50,526,283 -
</TABLE>
<PAGE>
NOTE 4 - EXCESS CONTRIBUTIONS
Certain plan participants received a refund of a portion of their contributions
and attributable earnings totaling approximately $152,000, $54,000 and $53,000
in 1997, 1996 and 1995, 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 and again on April 22, 1997, Aurora made a payment of
approximately $0.1 million to the Plan which reduced the principal of the
Executive Life contract. These payments will be used to unfreeze part of the
Executive Life Fund for each participant on a pro-rata basis.
<PAGE>
NOTE 5 - EXECUTIVE LIFE INVESTMENT (Continued)
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 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, 1997
and 1996, 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 to
repay the PHC Plan once the maturity proceeds are received from Aurora.
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, the Plan had approximately $0.7 million of pending
distributions to participants who elected to withdraw from the Plan. As of
December 31, 1997, the Plan had no pending distributions to participants, due to
the scheduled conversion to a different outside recordkeeper as of January 2,
1998 (see Note 9). The 1996 amount was recorded as a liability in the Plan's
Form 5500; however, the amount was not recorded as a liability in the
accompanying 1996 statement of net assets available for benefits in accordance
with generally accepted accounting principles.
<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, 1997 and 1996:
<TABLE>
<CAPTION>
Benefits Payable to Net Assets Available Net Assets Available
Participants at Benefits Paid for Benefits for Benefits
December 31, 1997 During 1997 December 31,1996 December 31, 1997
----------------- ------------- -------------------- --------------------
<S> <C> <C> <C> <C>
Per financial
statements $ - $38,309,742 $328,738,071 $346,990,594
Accrued benefit
payment - - - -
Reversal of 1996
accrual for benefit
payment - (700,000) (700,000) -
--------------- ------------- ------------- --------------
Per Form 5500 $ - $37,609,742 $328,038,071 $346,990,594
--------------- ------------- ------------- --------------
--------------- ------------- ------------- --------------
</TABLE>
NOTE 9 - SUBSEQUENT EVENT
Due to the volatility of the stock market, the per share value of Harrah's
common stock has increased from $18.875 at December 31, 1997, to $25.000 at
April 17, 1998. This increase in per share market value would result in an
approximately $160.0 million and $12.3 million balance in Harrah's common stock
for the Company Stock Fund and the ESOP Fund, respectively, if such funds were
valued at April 17, 1998.
Effective January 2, 1998, State Street Global Advisors (SSGA) began
administering the Plan. SSGA will provide recordkeeping, accounting, daily
trading, trustee, custodial, and investment management services. In connection
with this change, Fund options will remain the same; however, certain of the
underlying investments will change. As a result of the change to daily
valuation, participants are no longer required to give written notice to apply
for a loan or to request a withdrawal from the Plan. Those requests will be
submitted via telephone to SSGA's operated voice response unit.
<PAGE>
EXHIBIT I
Page 1 of 2
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Cost Market Value
---------- ------------
<S> <C> <C>
HARRAH'S ENTERTAINMENT, INC.
COMMON STOCK
Company Stock Fund* $102,310,902 $120,795,432
ESOP Fund* 8,176,472 9,299,675
--------------- ---------------
110,487,374 130,095,107
--------------- ---------------
MUTUAL FUNDS
Delaware Trend Institutional Fund 25,097,467 27,181,908
Dreyfus Treasury Fund 22,248,346 22,248,346
Vanguard - Long-Term Corporate Portfolio 7,181,726 7,620,196
--------------- ---------------
54,527,539 57,050,450
--------------- ---------------
COMMON/COLLECTIVE TRUST FUND
State Street Bank Flagship Fund 42,095,914 75,016,238
--------------- ---------------
GUARANTEED INVESTMENT CONTRACTS
Executive Life Insurance Company 8,384,536 7,988,711
--------------- ---------------
INCOME FUND:
CORPORATE SECURITIES
First Boston Mortgage Securities Corporation, Series A
Class PO, 0.00%, dated 3/1/87, due 5/16/18 11,173 11,595
Mego FHA 1996-2, Class A1, 7.275% dated 8/1/96,
due 8/25/17 17,917 18,442
--------------- ----------------
29,090 30,037
--------------- ----------------
U.S. GOVERNMENT AND AGENCY SECURITIES
FHLMC Pool #181282, 7.50%, dated 8/1/82, due 9/1/07 5,408 5,437
FNMA Pool #303323, 9.00%, dated 4/1/95, due 4/1/25 12,575 13,079
FNMA Pool #313654, 6.00%, dated 7/1/97, due 7/1/12 20,069 20,542
--------------- ----------------
38,052 39,058
--------------- ----------------
67,142 69,095
--------------- ---------------
</TABLE>
<PAGE>
EXHIBIT I
Page 2 of 2
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1997
<TABLE>
<CAPTION>
Cost Market Value
---------------- ---------------
LOANS TO PARTICIPANTS, 7.5% to 9.5% N/A 21,453,556
---------------- ---------------
<S> <C> <C>
TEMPORARY INVESTMENTS
Fidelity Money Market Trust 5,745,830 5,745,830
Fidelity Institutional Cash-U.S. Govt. Portfolio 50,526,283 50,526,283
---------------- ---------------
56,272,113 56,272,113
---------------- ---------------
Total Investments $271,834,618 $347,945,270
---------------- ---------------
---------------- ---------------
</TABLE>
* Represents a party-in-interest transaction.
<PAGE>
EXHIBIT II
Page 1 of 2
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Current
Value of
Assets on
Purchase Selling Cost of Assets Transaction
Description Price Price Sold Date Gain (Loss)
- --------------------------------------------------- ------------ ----------- -------------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Series of Transactions:
Fidelity Institutional Cash
Purchases/sales $161,624,989 $111,098,706 $(111,098,706) $111,098,706 $ -
Fidelity Money Market Trust
Purchases/sales 63,325,000 61,425,000 (61,425,000) 61,425,000 -
U.S. Treasury Note, 6.00%, dated 7/31/97, due 7/31/02
Purchases/sales 17,606,481 17,622,375 (17,606,481) 17,622,375 15,894
U.S. Treasury Note, 5.75%, dated 12/1/97, due 11/30/02
Purchases/sales 47,172,390 47,195,334 (47,172,390) 47,195,334 22,944
U.S. Treasury Note, 7.00%, dated 7/15/96, due 7/15/06
Purchases/sales 7,171,388 10,105,320 (10,124,637) 10,105,320 (19,317)
U.S. Treasury Note, 6.25%, dated 2/28/97, due 2/28/02
Purchases/sales 10,913,358 10,866,391 (10,913,358) 10,866,391 (46,967)
U.S. Treasury Note, 6.375%, dated 5/15/97, due 5/15/07
Purchases/sales 12,284,228 12,302,266 (12,284,228) 12,302,266 18,038
U.S. Treasury Note, 6.50%, dated 6/2/97, due 5/31/02
Purchases/sales 10,128,711 10,162,414 (10,128,711) 10,162,414 33,703
U.S. Treasury Note, 6.25%, dated 6/30/97, due 6/30/02
Purchases/sales 14,125,174 14,150,494 (14,125,174) 14,150,494 25,320
</TABLE>
<PAGE>
EXHIBIT II
Page 2 of 2
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FOR THE YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
Current
Value of
Assets on
Purchase Selling Cost of Assets Transaction
Description Price Price Sold Date Gain (Loss)
- --------------------------------------------------- ----------- ------------ ------------- -------------- -----------
<S> <C> <C> <C> <C> <C>
Series of Transactions, continued:
U.S. Treasury Note, 5.875%, dated 9/30/97, due 9/30/02
Purchases/sales 11,185,819 11,214,130 (11,185,819) 11,214,130 28,311
Harrah's Entertainment, Inc. Stock
Purchases/sales 4,624,913 13,455,144 (10,714,630) 13,455,144 2,740,514
Single Transactions:
Fidelity Institutional Cash
Purchase 24,611,303 - - 24,611,303 -
Purchase 41,504,143 - - 41,504,143 -
Sale - 39,049,070 (39,049,070) 39,049,070 -
U.S. Treasury Note, 5.75%, dated 12/1/97, due 11/30/02
Purchase 39,981,250 - - 39,981,250 -
Sale - 40,412,088 (40,369,911) 40,412,088 42,177
</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
By: /s/ Judy T. Wormser
----------------------------
Judy T. Wormser
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 17, 1998, included in this Form 11-K for the year
ended December 31, 1997, into Harrah's previously filed Registration
Statement File No. 33-59975.
ARTHUR ANDERSEN LLP
Memphis, Tennessee,
June 1, 1998.
