<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, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
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.
5100 West Sahara Avenue, Suite 200
Las Vegas, Nevada 89146
1
<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, 1999 and 1998, and the related statements of
changes in net assets available for benefits, with fund information, for each of
the three years ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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, 1999 and 1998, and the changes in net assets available for
benefits, with fund information, for each of the three years ended December 31,
1999, in conformity with accounting principles generally accepted in the United
States.
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, 1999 (Exhibit I) and of loans or
fixed income obligations as of December 31, 1999 (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,
June 23, 2000.
2
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Fund Information
-----------------------------------------------------------------------
Participant Directed Funds
-----------------------------------------------------------------------
Company Aggressive Fidelity S&P 500 Long-Term
Stock Fund Stock Fund Magellan Fund Index Fund Bond Fund
-------------- ----------- ------------- ----------- ----------
<S> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 1, 2 and 3)
Harrah's common stock $133,962,963 $ - $ - $ - $ -
Registered investment company - 24,979,796 60,110,101 - 9,254,070
Common/collective trust fund - - - 139,621,583 -
Short-term investment fund 4,460,672 46,413 (5,002) 87,435 13,514
Receivables
Due from participants (Note 1) 29 1,015 619 1,547 29
Interest and dividends 24,252 345 (37) 650 56,049
Due (to) from other funds (106,201) 23,550 285,787 90,357 51,945
Other 1,303,710 - - - -
Cash 112,495 42,805 (4,613) 80,638 12,463
-------------- ----------- ------------- ----------- ----------
Total assets 139,757,920 25,093,924 60,386,855 139,882,210 9,388,070
-------------- ----------- ------------- ----------- ----------
LIABILITIES
Accrued expenses (333,374) (8,951) (88,153) (278,053) (29,383)
Accounts payable (5,819) (7,964) (6,329) (4,578) -
-------------- ----------- ------------- ----------- ----------
Total liabilities (339,193) (16,915) (94,482) (282,631) (29,383)
-------------- ----------- ------------- ----------- ----------
NET ASSETS AVAILABLE FOR BENEFITS $139,418,727 $25,077,009 $60,292,373 $139,599,579 $9,358,687
============ =========== =========== ============ ==========
<CAPTION>
Fund Information
----------------------------------------------------------------------------------------------
Non-
Participant
Directed
Participant Directed Funds Fund
---------------------------------- ------------------------
Income Treasury Executive
Fund Fund Life Fund Esop Fund Loan Fund Total
----------- ----------- ---------- ------------ ----------- ------------
(Note 5)
<S> <C> <C> <C> <C> <C> <C>
ASSETS
Investments (Notes 1, 2 and 3)
Harrah's common stock $ - $ - $ - $10,810,347 $ - $144,773,310
Registered investment company 53,114,212 - - - - 147,458,179
Common/collective trust fund - - - - - 139,621,583
Short-term investment fund 47,786 45,098,842 1,186,522 172,930 5,578 51,114,690
Receivables
Due from participants (Note 1) - - - - 31,524,864 31,528,103
Interest and dividends 355 207,616 - 941 42 290,213
Due (to) from other funds (49,599) (289,306) - - (6,533) -
Other - - - 58,890 - 1,362,600
Cash 44,072 23,292 - 2,058 5,145 318,355
----------- ----------- ---------- ------------ ----------- ------------
Total assets 53,156,826 45,040,444 1,186,522 11,045,166 31,529,096 516,467,033
----------- ----------- ---------- ------------ ----------- ------------
LIABILITIES
Accrued expenses (67,989) (65,707) - (627) - (872,237)
Accounts payable (34) (61,384) - - - (86,108)
----------- ----------- ---------- ------------ ----------- ------------
Total liabilities (68,023) (127,091) - (627) - (958,345)
----------- ----------- ---------- ------------ ----------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $53,088,803 $44,913,353 $1,186,522 $11,044,539 $31,529,096 $515,508,688
=========== =========== ========== =========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
3
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS, WITH FUND INFORMATION
AS OF DECEMBER 31, 1998
<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 $ 97,766,963 $ - $ - $ - $ - $ - $ -
Registered investment company - 26,407,990 - 12,318,879 59,100,110 - -
Common/collective trust fund - - 100,073,839 - - - -
Guaranteed investment contracts 4,359,863 97,593 206,107 29,642 111,368 25,875,361 1,142,271
Receivables
Due from participants (Note 1) - - - - - - -
Interest and dividends 17,028 - - 229,409 - 113,688 5
Due (to) from other funds 286,338 8,836 828,025 (122,428) (3,103) (993,734) -
Cash 4,696 1,735 3,473 513 1,610 836 -
-------------- ----------- ----------- ---------- --------------- ------------ ----------
Total assets 102,434,888 26,516,154 101,111,444 12,456,015 59,209,985 24,996,151 1,142,276
-------------- ----------- ----------- ---------- --------------- ------------ ----------
LIABILITIES
Accrued expenses (204,932) (41,501) (92,076) (6,803) (38,540) (18,873) -
Accounts payable (6,495) (4,603) (10,865) (1,337) (4,679) (6,460) -
-------------- ----------- ----------- ---------- --------------- ------------ ----------
Total liabilities (211,427) (46,104) (102,941) (8,140) (43,219) (25,333) -
-------------- ----------- ----------- ---------- --------------- ------------ ----------
NET ASSETS AVAILABLE FOR BENEFITS $102,223,461 $26,470,050 $101,008,503 $12,447,875 $59,166,766 $24,970,818 $1,142,276
============ =========== ============ =========== =========== =========== ==========
<CAPTION>
Non-
Participant
Directed
Fund
---------
Esop Fund Loan Fund Total
--------- ---------- ------------
<S> <C> <C> <C>
ASSETS
Investments (Notes 1, 2 and 3)
Harrah's common stock $7,079,910 $ - $104,846,873
Registered investment company - - 97,826,979
Common/collective trust fund - - 100,073,839
Guaranteed investment contracts 165,377 10,765 31,998,347
Receivables
Due from participants (Note 1) - 24,183,191 24,183,191
Interest and dividends 569 - 360,699
Due (to) from other funds - (3,934) -
Cash - - 12,863
- --------- ---------- ------------
Total assets 7,245,856 24,190,022 359,302,791
- --------- ---------- ------------
LIABILITIES
Accrued expenses (308) - (403,033)
Accounts payable (324) - (34,763)
- --------- ---------- ------------
Total liabilities (632) - (437,796)
- --------- ---------- ------------
NET ASSETS AVAILABLE FOR BENEFITS $7,245,224 $24,190,022 $358,864,995
========== =========== ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
4
<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, 1999
Fund Information
----------------------------------------------------------------------------------
Participant Directed Funds
----------------------------------------------------------------------------------
Company Aggressive Fidelity S&P 500 Long-Term Income
Stock Fund Stock Fund Magellan Fund Index Fund Bond Fund Fund
------------- ----------- ------------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 253,085 $ 1,734 $ - $ 5,794 $ 748 $ 3,364
Dividends - - 2,575,080 - 782,473 -
------------- ----------- ------------- ----------- ---------- -------------
253,085 1,734 2,575,080 5,794 783,221 3,364
------------- ----------- ------------- ----------- ---------- -------------
REALIZED GAIN (LOSS) ON
INVESTMENTS
Aggregate proceeds 43,554,454 9,618,481 6,411,693 31,337,208 7,555,878 15,809,950
Aggregate cost (29,588,097) (10,795,847) (6,422,081) (24,793,602) (7,872,301) (14,938,247)
------------- ----------- ------------- ----------- ---------- -------------
Net realized gain (loss) 13,966,357 (1,177,366) (10,388) 6,543,606 (316,423) 871,703
------------- ----------- ------------- ----------- ---------- -------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF
INVESTMENTS 49,890,302 2,183,227 3,382,383 16,031,981 (1,191,763) (558,986)
------------- ----------- ------------- ----------- ---------- -------------
CONTRIBUTIONS
Participants 7,501,449 3,460,816 3,609,238 8,700,499 985,708 2,404,899
Company 4,098,762 1,849,344 1,273,850 4,351,579 480,416 1,352,561
------------- ----------- ------------- ----------- ---------- -------------
11,600,211 5,310,160 4,883,088 13,052,078 1,466,124 3,757,460
OTHER
Distributions to participants and
beneficiaries (13,570,704) (3,302,744) (3,014,324) (14,092,045) (1,488,001) (7,308,810)
Transfers between funds (24,246,626) (4,187,486) 22,002,780 (3,161,677) (2,272,766) (5,370,840)
Transfers in, net of forfeitures 6,969 9,399 30,597,758 20,895,655 2,777 2,903,204
Administrative expenses (704,328) (229,965) (124,004) (684,316) (72,357) (375,058)
------------- ----------- ------------- ----------- ---------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 37,195,266 (1,393,041) 60,292,373 38,591,076 (3,089,188) (6,077,963)
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 102,223,461 26,470,050 - 101,008,503 12,447,875 59,166,766
------------- ----------- ------------- ----------- ---------- -------------
End of year $139,418,727 $25,077,009 $60,292,373 $139,599,579 $ 9,358,687 $ 53,088,803
============= =========== ============= =========== ============ =============
<CAPTION>
Non-
Participant
Directed
Fund
-------------------------- ------------
Treasury Executive
Fund Life Fund Esop Fund Loan Fund Total
------------ ------------- ------------ ------------- --------------
(Note 5)
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 1,414,262 $ 47,822 $ 9,084 $ 2,040,024 $ 3,775,917
Dividends 350,580 - - - 3,708,133
------------ ------------- ------------ ------------- --------------
1,764,842 47,822 9,084 2,040,024 7,484,050
------------ ------------- ------------ ------------- --------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds - - 938,136 - 115,225,800
Aggregate cost - - (706,527) - (95,116,702
------------ ------------- ------------ ------------- --------------
Net realized gain (loss) - - 231,609 - 20,109,098
------------ ------------- ------------ ------------- --------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS - - 4,436,964 - 74,174,108
------------ ------------- ------------ ------------- --------------
CONTRIBUTIONS
Participants 4,436,103 - - - 31,098,712
Company 1,230,944 - - - 14,637,456
------------ ------------- ------------ ------------- --------------
5,667,047 - - - 45,736,168
OTHER
Distributions to participants and
beneficiaries (6,179,377) - (851,568) (2,722,861) (52,530,434)
Transfers between funds 13,371,611 (3,576) (22,956) 3,891,536 -
Transfers in, net of forfeitures 5,491,597 - - 4,130,375 64,037,734
Administrative expenses (173,185) - (3,818) - (2,367,031)
------------ ------------- ------------ ------------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 19,942,535 44,246 3,799,315 7,339,074 156,643,693
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 24,970,818 1,142,276 7,245,224 24,190,022 358,864,995
------------ ------------- ------------ ------------- --------------
End of year $44,913,353 $ 1,186,522 $ 11,044,539 $ 31,529,096 $515,508,688
=========== ============= ============ ============= =============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
5
<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, 1998
Fund Information
------------------------------------------------------------------------
Participant Directed Funds
------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income
Stock Fund Stock Fund Index Fund Bond Fund Fund
------------- ----------- ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 381,604 $ 28,962 $ 76,561 $ 8,941 $ 50,915
Dividends - - - 908,197 -
------------- ----------- ----------- ---------- --------------
381,604 28,962 76,561 917,138 50,915
------------- ----------- ----------- ---------- --------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 44,270,937 7,727,937 22,152,418 4,212,306 11,894,665
Aggregate cost (40,392,408) (8,343,747) (19,993,398) (4,137,390) (11,554,323)
------------- ----------- ----------- ---------- --------------
Net realized gain (loss) 3,878,529 (615,810) 2,159,020 74,916 340,342
------------- ----------- ----------- ---------- --------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS (19,357,722) (1,308,361) 19,475,071 (50,483) 3,640,419
------------- ----------- ----------- ---------- --------------
CONTRIBUTIONS
Participants 8,097,933 3,865,866 5,947,595 811,161 2,338,054
Company 5,644,661 2,590,264 4,000,484 557,723 1,683,595
------------- ----------- ----------- ---------- --------------
13,742,594 6,456,130 9,948,079 1,368,884 4,021,649
OTHER
Distributions to participants and
beneficiaries (9,687,407) (3,048,048) (8,159,430) (1,149,397) (6,519,340)
Transfers between funds (8,390,528) (2,545,639) 1,751,526 2,947,497 4,492,737
Administrative expenses (755,850) (355,971) (494,524) (51,994) (460,513)
------------- ----------- ----------- ---------- --------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (20,188,780) (1,388,737) 24,756,303 4,056,561 5,566,209
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 122,412,241 27,858,787 76,252,200 8,391,314 53,600,557
------------- ----------- ----------- ---------- --------------
End of year $102,223,461 $26,470,050 $ 101,008,503 $12,447,875 $59,166,766
============ =========== ============= =========== ===========
<CAPTION>
Non-
Participant
Directed
Fund
------------------------- ----------
Treasury Executive
Fund Life Fund Esop Fund Loan Fund Total
------------ ------------ ---------- ----------- ----------------
(Note 5)
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 1,317,409 $ 1,089,215 $ 58,078 $ 1,441,977 $ 4,453,662
Dividends - - - - 908,197
------------ ------------ ---------- ----------- ----------------
1,317,409 1,089,215 58,078 1,441,977 5,361,859
------------ ------------ ---------- ----------- ----------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds - - - - 90,258,263
Aggregate cost - - - - (84,421,266)
------------ ------------ ----------- ------------ ----------------
Net realized gain (loss) - - - - 5,836,997
------------ ------------ ----------- ------------ ----------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS - 395,825 (1,387,327) - 1,407,422
------------ ------------ ----------- ------------ ----------------
CONTRIBUTIONS
Participants 1,403,677 - - - 22,464,286
Company 876,483 - 25 - 15,353,235
------------ ------------ ----------- ------------ ----------------
2,280,160 - 25 - 37,817,521
OTHER
Distributions to participants and
beneficiaries (4,541,794) (269,206) (712,278) (2,229,587) (36,316,487)
Transfers between funds 3,970,947 (5,732,680) (17,936) 3,524,076 -
Administrative expenses (110,636) - (3,423) - (2,232,911)
------------ ------------ ----------- ------------ ----------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 2,916,086 (4,516,846) (2,062,861) 2,736,466 11,874,401
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 22,054,732 5,659,122 9,308,085 21,453,556 346,990,594
------------ ------------ ----------- ------------ ----------------
End of year $ 24,970,818 $ 1,142,276 $ 7,245,224 $24,190,022 $ 358,864,995
============ ============ ============ =========== ================
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
6
<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, 1997
Fund Information
------------------------------------------------------------------------
Participant Directed Funds
------------------------------------------------------------------------
Company Aggressive S&P 500 Long-Term Income
Stock Fund Stock Fund Index Fund Bond Fund Fund
------------- ----------- ----------- ---------- -------------
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 207,435 $ 36,094 $ 103,055 $ 10,731 $ 3,958,749
Dividends - 2,493,299 - 548,485 604,594
------------- ----------- ----------- ---------- -------------
207,435 2,529,393 103,055 559,216 4,563,343
------------- ----------- ----------- ---------- -------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 13,455,144 357,037 3,095,294 3,472,373 426,467,256
Aggregate cost (13,326,188) (363,806) (2,826,113) (3,510,300) (427,259,849)
------------- ----------- ----------- ---------- -------------
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)
------------- ----------- ----------- ---------- -------------
CONTRIBUTIONS
Participants 8,842,945 3,189,152 4,086,540 591,768 3,567,373
Company 6,550,364 2,195,211 2,836,051 422,475 1,803,608
------------- ----------- ----------- ---------- -------------
15,393,309 5,384,363 6,922,591 1,014,243 5,370,981
OTHER
Distributions to participants and
beneficiaries (11,986,354) (2,514,096) (7,303,377) (651,488) (7,610,485)
Transfers between funds (11,911,103) 2,657,661 6,087,107 (1,675,667) (3,514,232)
Administrative expenses (594,339) (250,358) (356,935) (53,759) (384,605)
------------- ----------- ----------- ---------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS (14,897,517) 9,028,763 23,028,205 (496,220) (2,988,392)
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 137,309,758 18,830,024 53,223,995 8,887,534 56,588,949
------------- ----------- ----------- ---------- -------------
End of year $ 122,412,241 $27,858,787 $ 76,252,200 $8,391,314 $ 53,600,557
============= =========== ============ ========== =============
<CAPTION>
------------------------------------------------------
Non-
Participant
Directed
Fund
----------------------- -----------
Treasury Executive
Fund Life Fund Esop Fund Loan Fund Total
----------- ----------- ------------ ------------- -------------
(Note 5)
<S> <C> <C> <C> <C> <C>
NET INVESTMENT INCOME
Interest $ 19,457 $ 21,029 $ - $ 1,445,731 $ 5,802,281
Dividends 886,789 - - - 4,533,167
----------- ----------- ------------ ------------- -------------
906,246 21,029 - 1,445,731 10,335,448
----------- ----------- ------------ ------------- -------------
REALIZED GAIN (LOSS) ON INVESTMENTS
Aggregate proceeds 3,475,184 - 1,134,111 - 451,456,399
Aggregate cost (3,475,184) - (988,066) - (451,749,506)
----------- ----------- ------------ ------------- -------------
Net realized gain (loss) - - 146,045 - (293,107)
----------- ----------- ------------ ------------- -------------
UNREALIZED NET APPRECIATION
(DEPRECIATION) OF INVESTMENTS - 735,257 (649,967) - 12,213,382
----------- ----------- ------------ ------------- -------------
CONTRIBUTIONS
Participants 1,126,452 - - - 21,404,230
Company 806,745 - 69 - 14,614,523
----------- ----------- ------------ ------------- -------------
1,933,197 - 69 - 36,018,753
OTHER
Distributions to participants and
beneficiaries (5,754,658) (514,583) (873,965) (1,100,736) (38,309,742)
Transfers between funds 8,962,818 - (27,455) (579,129) -
Administrative expenses (71,106) - (1,109) - (1,712,211)
----------- ----------- ------------ ------------- -------------
NET INCREASE (DECREASE) IN NET
ASSETS AVAILABLE FOR BENEFITS 5,976,497 241,703 (1,406,382) (234,134) 18,252,523
NET ASSETS AVAILABLE FOR BENEFITS,
Beginning of year 16,078,235 5,417,419 10,714,467 21,687,690 328,738,071
----------- ----------- ------------ ------------- -------------
End of year $22,054,732 $ 5,659,122 $ 9,308,085 $ 21,453,556 $346,990,594
=========== ============ ============ ============= ============
</TABLE>
The accompanying Notes to Financial Statements are an integral part of this
statement.
7
<PAGE>
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
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 pretax 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 TRANSFER
On January 1, 1999, Showboat Marina Casino Partnership (SMCP) became a
participating employer and SMCP employees became eligible to participate in the
Plan. The account balances of SMCP's employees transferred from the Showboat,
Inc. Retirement and Savings Plan to this Plan on January 1, 1999, in the amount
of $3 million. On July 1, 1999, the Showboat Atlantic City employees became
eligible to participate in the Plan. The account balances of Showboat Atlantic
City's employees were transferred from the Showboat, Inc. Retirement and Savings
Plan to this Plan on July 1, 1999, in the amount of $64 million.
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 1% increments in one or in a combination of up to seven separate funds
(collectively, the "Funds") of the Plan as follows:
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;
8
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (CONTINUED)
II. Aggressive Stock Fund - invested in the SSGA Small Cap Matrix 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. Fidelity Magellan Fund - invested in the Fidelity Magellan Fund, a
publicly-traded mutual fund comprised primarily of common stocks and
convertible securities of large companies based both in the U.S. and
overseas, which seeks capital appreciation;
IV. S&P 500 Index Fund - invested in the State Street Bank & Trust S&P 500
Index Fund, an S&P 500 Indexed common/collective trust fund, which
provides a return based on the performance of the stocks included within
the S&P 500 Index Fund, including dividends thereon;
V. 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;
VI. Income Fund - invested in the SSGA Intermediate Bond Fund, a mutual fund
comprised primarily of high quality intermediate-term government,
corporate, mortgage-backed and asset-backed securities; or
VII. Treasury Fund - invested in a commingled fund managed by State Street
Global Advisors, which provides investments in high-quality money market
securities and other short-term debt instruments.
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.
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.
9
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (CONTINUED)
Effective January 2, 1998, State Street Global Advisors (SSGA) began
administering the Plan. SSGA provides recordkeeping, accounting, daily trading,
custodial, and investment management services.
EMPLOYEE ELIGIBILITY, VESTING AND TERMINATION
Employees of the Company become eligible to join the Plan after 90 days of
service. Eligibility for Company matching contributions begins on the first
entry date (January 1 or July 1) following completion of 12 months of service.
Participants vest in Company matching contributions over five calendar years of
credited service as follows:
Years of Vested
Credited Service Percentage
---------------- ----------
One 10%
Two 20%
Three 30%
Four 60%
Five 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 other 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 $387,000, $790,000 and $1.6 million for
1999, 1998 and 1997, 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
pretax contributions of six percent of his or her earnings to the Plan, the
participant could elect to make supplemental contributions of up to an
additional ten percent of which up to eight percent can be pretax dollars.
Highly compensated employees could contribute up to an additional ten percent 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 notice to the Plan Administrator, which may
include a telephone or electronic communication, subject to Plan and Internal
Revenue Service rules. In-service withdrawals of pretax contributions are
subject to hardship rules if the withdrawal occurs before age 59 1/2.
10
<PAGE>
NOTE 1 - SUMMARY DESCRIPTION OF THE PLAN (CONTINUED)
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 who did not receive a
distribution of their vested account balance will be held 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, 1999 was approximately $0.8 million. Beginning in
September 1999, forfeitures were used to reduce the Company matching
contributions. During 1999, the Company used approximately $4.2 million of
forfeitures to reduce Company matching contributions. Prior to September 1999,
forfeitures were reallocated to the remaining participants. The Plan
Administrator reallocated approximately $0.9 million and $0.5 million of
forfeited funds during 1999 and 1997, respectively. No forfeitures were
reallocated during 1998.
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 daily to active participants based upon the
individual's prior daily equity balance. For purposes of calculating the
realized gains or losses on the sale 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 by giving notice to the Plan Administrator,
which may include a telephone or electronic communication. 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 December 31, 1999 and 1998, these
loans had interest rates ranging from 7.5 percent to 9.5 percent.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States 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.
11
<PAGE>
NOTE 2 - VALUATION OF INVESTMENTS
Investments in securities, common/collective trust funds and registered
investment companies 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, 1999 and 1998, were as follows:
<TABLE>
<CAPTION>
1999 1998
----------- ------------
<S> <C> <C>
Harrah's Entertainment, Inc. Common Stock $144,773,310 $104,846,873
Fidelity Magellan Fund 60,110,101 -
State Street Bank & Trust S&P 500 Index Fund 139,621,583 100,073,839
SSGA Small Cap Matrix Fund Series A 24,979,796 26,407,990
SSGA Intermediate Bond Fund Series A 53,114,212 59,100,110
SSB Yield Enhanced Short-Term Investment Fund 45,073,587 25,809,653
Loans to Participants 31,524,864 24,183,191
</TABLE>
NOTE 4 - EXCESS CONTRIBUTIONS
Certain plan participants received a refund of a portion of their contributions
and attributable earnings totaling approximately $152,000 in 1997. No refunds
were required for 1999 or 1998. 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 percent 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 was 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
agreed to pay to the Plan any deficiency between the $12.9 million and any
amounts finally paid under the contract. The Company also agreed to make
interest free loans to the Plan, which were to be repaid out of any amounts
received under the contract, so that persons who leave or who had already left
the Company's employment may withdraw the vested portion of the Executive Life
guaranteed investment contract, as well as other vested funds.
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
12
<PAGE>
NOTE 5 - EXECUTIVE LIFE INVESTMENT (CONTINUED)
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 provided 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 included in the determination of
the allocation of interest earned.
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 remained
liable to the Plan for any deficiency between the book value and amounts
ultimately received. The restructured contract matured on September 3, 1998, and
$9.2 million was received by the Plan in September 1998. Of this amount, $8.7
million represented principal and $0.5 million represented interest earnings.
The principal was allocated to participant accounts to unfreeze the investment
and was used to repay the balance of advances from Harrah's. The Company is in
the process of determining the allocation of the interest earned.
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 Trustees 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 - SUBSEQUENT EVENTS
Due to the volatility of the stock market, the per share value of Harrah's
common stock has decreased from $26.4375 at December 31, 1999, to $21.0625 at
June 9, 2000. If Harrah's common stock for the Company Stock Fund and the ESOP
Fund were value at the June 9, 2000, prices, the balances of these funds would
be approximately $131.3 million and $8.8 million, respectively, due to this
decrease in per market value.
13
<PAGE>
NOTE 8 - SUBSEQUENT EVENTS (CONTINUED)
Effective January 1, 2000, the vesting percentages were modified to 20 percent
vesting every year of service and continue to allow participants to become fully
vested after five years of service. In addition, maximum pretax contribution
limits increased to 16 percent and 7 percent for non-highly compensated and
highly compensated participants, respectively.
On January 1, 2000, Rio Suite Hotel and Casino became a participating employer
and Rio employees became eligible to participate in the Plan. The account
balances of the Rio employees were transferred from the Rio 401(k) plan to this
Plan on February 28, 2000, in the amount of $36.3 million.
On March 23, 2000, Players International, Inc. became a participating employer
and Players employees became eligible to participate in the Plan.
Effective February 28, 2000, the Company added the Small Cap Growth Fund as a
new investment option. In addition, as of February 28, 2000, certain of the
current investment funds changed names to enable participants to better
recognize the fund types. The Aggressive Stock Fund became the Small Cap Value
Fund. The Income Fund became the Intermediate Bond Fund. The Treasury Fund
became the Money Market Fund.
On February 28, 2000, a new withdrawal option was added concerning the Stock
Fund. As of that date, participants can request "in-kind" distributions from the
Stock Fund (i.e. - receive actual shares of stock instead of cash) in certain
circumstances.
14
<PAGE>
EXHIBIT I
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
AS OF DECEMBER 31, 1999
<TABLE>
<CAPTION>
Market Value
------------
<S> <C>
HARRAH'S ENTERTAINMENT, INC. COMMON STOCK
Company Stock Fund* $133,962,963
ESOP Fund, cost of $6,812,559* 10,810,347
------------
144,773,310
------------
REGISTERED INVESTMENT COMPANIES
Fidelity Magellan Fund 60,110,101
SSGA Intermediate Bond Fund Series A 53,114,212
SSGA Small Cap Matrix Fund Series A 24,979,796
Vanguard - Long-Term Corporate Portfolio 9,254,070
------------
147,458,179
------------
COMMON/COLLECTIVE TRUST FUND
State Street Bank & Trust S&P 500 Index Fund Series A (Lending) 139,621,583
------------
LOANS TO PARTICIPANTS, 7.5% to 9.5% 31,524,864
------------
SHORT-TERM INVESTMENT FUND
SSB Yield Enhanced Short-Term Investment Fund 45,073,587
SSGA Short-Term Investment Fund 5,215,769
Fidelity Money Market Trust 825,334
------------
51,114,690
------------
TOTAL INVESTMENTS $514,492,626
============
</TABLE>
* Represents a party-in-interest transaction.
15
<PAGE>
EXHIBIT II
HARRAH'S ENTERTAINMENT, INC.
SAVINGS AND RETIREMENT PLAN
SCHEDULE G, PART 1 - SCHEDULE OF LOANS OR FIXED INCOME OBLIGATIONS
DECEMBER 31, 1999
<TABLE>
<CAPTION>
Identity of Obligor Description of Loan Amount Defaulted
--------------------------- ------------------------------------------- ----------------
<S> <C> <C>
Various plan participants 137 participant loans with loan origination $688,694
dates ranging from October 28, 1996 to
November 16, 1999 with interest rates
ranging from 7.5% to 9.5%
</TABLE>
16
<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.
17
