<Page>
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SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

------------------------

FORM 10-Q

(MARK ONE)

<Table>

/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</Table>

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2001
OR

<Table>

/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
</Table>

FOR THE TRANSITION PERIOD FROM ______________ TO ______________

COMMISSION FILE NO. 1-10410

------------------------

HARRAH'S ENTERTAINMENT, INC.

(Exact name of registrant as specified in its charter)

<Table>

DELAWARE 62-1411755
(State of incorporation) (IRS Employer Identification No.)
</Table>

ONE HARRAH'S COURT
LAS VEGAS, NEVADA 89119
(Current address of principal executive offices)

(702) 407-6000
(Registrant's telephone number, including area code)

------------------------

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

Yes /X/ No / /

At June 30, 2001, there were outstanding 118,776,500 shares of the Company's
Common Stock.

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<Page>
PART I--FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

The accompanying unaudited Consolidated Condensed Financial Statements of
Harrah's Entertainment, Inc., a Delaware corporation, have been prepared in
accordance with the instructions to Form 10-Q, and therefore, do not include all
information and notes necessary for complete financial statements in conformity
with generally accepted accounting principles. The results for the periods
indicated are unaudited, but reflect all adjustments (consisting only of normal
recurring adjustments) that management considers necessary for a fair
presentation of operating results. Results of operations for interim periods are
not necessarily indicative of a full year of operations. These Consolidated
Condensed Financial Statements should be read in conjunction with the
Consolidated Financial Statements and notes thereto included in our 2000 Annual
Report to Stockholders.

1
<Page>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)

<Table>
<Caption>
JUNE 30, DEC. 31,
2001 2000
(IN THOUSANDS, EXCEPT SHARE AMOUNTS) ----------- -----------

ASSETS
Current assets:
Cash and cash equivalents................................. $ 267,110 $ 299,202
Receivables, less allowance for doubtful accounts of
$45,090 and $49,357..................................... 130,833 122,050
Deferred income taxes..................................... 35,153 35,126
Prepayments and other..................................... 59,806 104,239
Inventories............................................... 23,443 22,816
----------- -----------
Total current assets.................................... 516,345 583,433
----------- -----------
Land, buildings, riverboats and equipment................... 4,775,376 4,581,253
Less: accumulated depreciation.............................. (1,171,617) (1,084,884)
----------- -----------
3,603,759 3,496,369
Goodwill, net of amortization of $82,224 and $72,465 (Note
2)........................................................ 697,767 685,393
Investments in and advances to nonconsolidated affiliates... 80,904 86,681
Deferred costs, trademarks and other........................ 308,774 314,209
----------- -----------
$ 5,207,549 $ 5,166,085
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 75,258 $ 89,051
Accrued expenses.......................................... 350,930 343,524
Short-term debt........................................... 47,000 215,000
Current portion of long-term debt......................... 3,863 130,928
----------- -----------
Total current liabilities............................... 477,051 778,503
Long-term debt.............................................. 3,001,955 2,835,846
Deferred credits and other.................................. 174,320 177,654
Deferred income taxes....................................... 104,942 85,650
----------- -----------
3,758,268 3,877,653
----------- -----------
Minority interests.......................................... 18,586 18,714
----------- -----------
Commitments and contingencies (Notes 2, 4, 6 and 7)

Stockholders' equity (Note 3)
Common stock, $0.10 par value, authorized--360,000,000
shares, outstanding--118,776,500 and 115,952,394 shares
(net of 22,158,030 and 22,030,805 shares held in
treasury)............................................... 11,878 11,595
Capital surplus........................................... 1,138,503 1,075,313
Retained earnings......................................... 316,195 224,251
Accumulated other comprehensive income (loss)............. (1,705) (1,036)
Deferred compensation related to restricted stock......... (34,176) (40,405)
----------- -----------
1,430,695 1,269,718
----------- -----------
$ 5,207,549 $ 5,166,085
=========== ===========
</Table>

See accompanying Notes to Consolidated Condensed Financial Statements.

2
<Page>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(UNAUDITED)

<Table>
<Caption>
SECOND QUARTER ENDED SIX MONTHS ENDED
--------------------- -----------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2001 2000 2001 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) --------- --------- ---------- ----------

Revenues:
Casino......................................... $753,755 $721,057 $1,501,686 $1,354,814
Food and beverage.............................. 127,790 120,877 251,233 231,145
Rooms.......................................... 76,461 68,824 147,469 133,018
Management fees................................ 15,442 16,269 31,122 33,490
Other.......................................... 35,851 37,557 68,649 71,118
Less: casino promotional allowances............ (95,255) (88,411) (186,582) (167,152)
-------- -------- ---------- ----------
Total revenues............................. 914,044 876,173 1,813,577 1,656,433
-------- -------- ---------- ----------
Operating expenses:
Direct
Casino....................................... 395,556 374,187 779,599 705,266
Food and beverage............................ 58,230 59,157 113,152 113,029
Rooms........................................ 18,850 17,631 36,516 34,306
Depreciation and amortization.................. 68,331 61,934 134,460 112,505
Write-downs, reserves and recoveries:
Reserves for New Orleans casino.............. - - 2,322 -
Other........................................ 1,163 627 931 640
Project opening costs.......................... 2,108 1,452 4,267 1,744
Corporate expense.............................. 13,632 14,572 27,408 25,593
Headquarters relocation and reorganization
costs........................................ - 917 - 2,713
Equity in losses of nonconsolidated
affiliates................................... 849 10,600 423 34,296
Venture restructuring costs.................... 1,232 - 2,732 -
Amortization of goodwill and trademarks........ 5,697 5,337 11,299 9,874
Other.......................................... 206,664 193,421 414,210 380,029
-------- -------- ---------- ----------
Total operating expenses................... 772,312 739,835 1,527,319 1,419,995
-------- -------- ---------- ----------
Income from operations........................... 141,732 136,338 286,258 236,438
Interest expense, net of interest capitalized.... (63,189) (58,126) (127,415) (108,585)
Loss on equity interests in subsidiaries, net.... (5,410) - (5,040) -
Other income (expense), including interest
income......................................... 6,173 1,178 (305) 4,794
-------- -------- ---------- ----------
Income before income taxes and minority
interests...................................... 79,306 79,390 153,498 132,647
Provision for income taxes....................... (29,026) (28,632) (55,837) (47,278)
Minority interests............................... (2,417) (3,544) (5,587) (7,407)
-------- -------- ---------- ----------
Income before extraordinary losses............... 47,863 47,214 92,074 77,962
Extraordinary losses, net of income tax benefit
of $388, $71 and $388.......................... - (716) (131) (716)
-------- -------- ---------- ----------
Net income....................................... $ 47,863 $ 46,498 $ 91,943 $ 77,246
======== ======== ========== ==========
</Table>

See accompanying Notes to Consolidated Condensed Financial Statements.

3
<Page>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF INCOME (CONTINUED)
(UNAUDITED)

<Table>
<Caption>
SECOND QUARTER
ENDED SIX MONTHS ENDED
------------------- -------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2001 2000 2001 2000
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS) -------- -------- -------- --------

Earnings per share-basic
Income before extraordinary losses.................... $ 0.41 $ 0.40 $ 0.80 $ 0.65
Extraordinary losses, net............................. - (0.01) - (0.01)
------- ------- ------- -------
Net income.......................................... $ 0.41 $ 0.39 $ 0.80 $ 0.64
======= ======= ======= =======
Earnings per share-diluted
Income before extraordinary losses.................... $ 0.40 $ 0.40 $ 0.78 $ 0.65
Extraordinary losses, net............................. - (0.01) - (0.01)
------- ------- ------- -------
Net income.......................................... $ 0.40 $ 0.39 $ 0.78 $ 0.64
======= ======= ======= =======

Average common shares outstanding....................... 116,124 118,625 115,382 119,947
======= ======= ======= =======

Average common and common equivalent shares
outstanding........................................... 119,026 119,993 117,892 121,429
======= ======= ======= =======
</Table>

See accompanying Notes to Consolidated Condensed Financial Statements.

4
<Page>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)

<Table>
<Caption>
SIX MONTHS ENDED
---------------------
JUNE 30, JUNE 30,
2001 2000
(IN THOUSANDS) --------- ---------

Cash flows from operating activities:
Net income................................................ $ 91,943 $ 77,246
Adjustments to reconcile net income to cash flows from
operating activities
Extraordinary losses, before income taxes............... 202 1,104
Depreciation and amortization........................... 158,977 130,448
Write-downs, reserves and recoveries.................... 3,253 625
Other noncash items..................................... 38,257 5,768
Minority interests' share of income..................... 5,587 7,407
Equity in losses of nonconsolidated affiliates.......... 423 34,296
Realized loss from equity interests in nonconsolidated
affiliates, net....................................... 5,040 -
Net losses from asset sales............................. 900 303
Net change in long-term accounts........................ (10,082) (26,320)
Net change in working capital accounts.................. 18,570 25,269
--------- ---------
Cash flows provided by operating activities........... 313,070 256,146
--------- ---------
Cash flows from investing activities:
Land, buildings, riverboats and equipment additions....... (254,611) (191,762)
Investments in and advances to nonconsolidated
affiliates.............................................. (5,706) (73,065)
Proceeds from other asset sales........................... 13,435 69,977
Proceeds from equity interests in subsidiaries............ 1,883 131,475
Increase (decrease) in construction payables.............. 365 (1,252)
Payment for purchases of acquisitions, net of cash
acquired................................................ - (256,333)
Maturity of marketable equity securities for defeasance of
debt.................................................... - 58,091
Other..................................................... (7,039) (3,161)
--------- ---------
Cash flows used in investing activities............... (251,673) (266,030)
--------- ---------

Cash flows from financing activities:
Net (repayments) borrowings under long-term lending
agreements, net of deferred financing cost of $510 and
$1,486.................................................. (951,378) 246,514
Net short-term (repayments) borrowings, net of deferred
financing costs of $460 in 2000......................... (18,000) 148,522
Early extinguishments of debt............................. (150,000) (213,063)
Premiums paid on early extinguishments of debt............ - (1,104)
Minority interests' distributions, net of contributions... (5,713) (5,096)
Scheduled debt retirements................................ (1,852) (1,438)
Proceeds from issuance of 7.125% notes, net of discount
and issue costs of $5,286............................... 494,714 -
Proceeds from issuance of 8.0% notes, net of discount and
issue costs of $9,486................................... 490,514 -
Purchases of treasury stock............................... - (198,469)
Proceeds from exercises of stock options.................. 49,143 27,061
Other..................................................... (917) -
--------- ---------
Cash flows (used in) provided by financing
activities.......................................... (93,489) 2,927
--------- ---------
Net decrease in cash and cash equivalents................... (32,092) (6,957)
Cash and cash equivalents, beginning of period.............. 299,202 233,581
--------- ---------
Cash and cash equivalents, end of period.................... $ 267,110 $ 226,624
========= =========
</Table>

See accompanying Notes to Consolidated Condensed Financial Statements.

5
<Page>
HARRAH'S ENTERTAINMENT, INC.
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME
(UNAUDITED)

<Table>
<Caption>
SECOND QUARTER SIX MONTHS
ENDED ENDED
------------------- -------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
2001 2000 2001 2000
(IN THOUSANDS) -------- -------- -------- --------

Net income.............................................. $47,863 $46,498 $91,943 $77,246
------- ------- ------- -------

Other comprehensive income:
Unrealized gains on available-for-sale securities, net
of tax provision of $189, $35, $755 and $143........ 349 57 1,257 233
Realization of gain on available-for-sale securities,
net of tax provision of $123........................ - - (226) -
Unrealized loss on natural gas contract, net of tax
benefit of $731 and $921............................ (1,350) - (1,700) -
Foreign currency translation adjustments, net of tax
provision of $56.................................... - - - 90
Realization of foreign currency adjustments, net of
tax provision of $148............................... - - - 191
------- ------- ------- -------
Other comprehensive (loss) income................. (1,001) 57 (669) 514
------- ------- ------- -------
Comprehensive income.................................... $46,862 $46,555 $91,274 $77,760
======= ======= ======= =======
</Table>

See accompanying Notes to Consolidated Condensed Financial Statements.

6
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS

JUNE 30, 2001
(UNAUDITED)

NOTE 1--BASIS OF PRESENTATION AND ORGANIZATION

Harrah's Entertainment, Inc. ("Harrah's Entertainment", the "Company", "we",
"our" or "us", and including our subsidiaries where the context requires) is a
Delaware corporation. Our casino entertainment facilities, operating under the
Harrah's, Rio, Showboat and Players brand names, include casino hotels in Reno,
Lake Tahoe, Las Vegas and Laughlin, Nevada; two casino hotel properties in
Atlantic City, New Jersey; and riverboat and dockside casinos in Joliet and
Metropolis, Illinois; East Chicago, Indiana; Shreveport and Lake Charles,
Louisiana; Tunica and Vicksburg, Mississippi; and North Kansas City and St.
Louis, Missouri. We also manage the land-based casino in New Orleans, Louisiana,
and casinos on Indian lands near Phoenix, Arizona; Cherokee, North Carolina; and
Topeka, Kansas.

We have reclassified certain amounts for prior years to conform with our
presentation for 2001.

NOTE 2--ACQUISITIONS

HARVEYS CASINO RESORTS

On July 31, 2001, we consummated our acquisition of Harveys Casino Resorts
("Harveys") for $625 million, including assumption of Harveys' outstanding debt,
plus adjustments for changes in working capital of approximately $7 million. We
also assumed a $50 million off-balance-sheet liability. We financed the
acquisition and will refinance Harveys existing debt through our Bank Facility.
The purchase included the Harveys Resort & Casino in Lake Tahoe, Nevada, the
Harveys Casino Hotel and the Bluffs Run Casino, both in Council Bluffs, Iowa,
and the Harveys Wagon Wheel Hotel/Casino in Central City, Colorado. The
acquisition will be accounted for as a purchase and will be accounted for under
the provisions of the newly issued Statements of Financial Accounting Standards
("SFAS") No. 141, "Business Combinations" and No. 142, "Goodwill and Other
Intangible Assets". The purchase price will be allocated to the underlying
assets and liabilities based on their estimated fair values at the date of
acquisition. We will determine the estimated fair values based on independent
appraisals, discounted cash flows, quoted market prices and estimates made by
management. To the extent that the purchase price exceeds the fair value of the
net identifiable assets acquired, such excess will be allocated to goodwill.
Under the provisions of SFAS No. 142, goodwill arising from the acquisition will
not be amortized.

PLAYERS INTERNATIONAL, INC.

On March 22, 2000, we completed our acquisition of Players
International, Inc. ("Players"), paying a total of $266 million to purchase
Players outstanding common stock ($8.50 per share) and assuming $150 million of
Players 10 7/8% Senior Notes due 2005 (the "Players Notes"). Players operated a
dockside riverboat casino on the Ohio River in Metropolis, Illinois; two
cruising riverboat casinos in Lake Charles, Louisiana; two dockside riverboat
casinos in Maryland Heights, Missouri, a suburb of St. Louis; and a horse
racetrack in Paducah, Kentucky. Players and the Company jointly operated a
landside hotel and entertainment facility at the Maryland Heights property. The
operations of the Maryland Heights properties were consolidated with the
adjacent Harrah's operations in second quarter 2000, and the Lake Charles
facility was converted to the Harrah's brand in fourth quarter 2000.

The Metropolis facility is expected to be converted to the Harrah's brand
name after integration of our systems and technology, including Total Rewards,
which we anticipate will occur in the second half of 2001.

7
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001
(UNAUDITED)

NOTE 2--ACQUISITIONS (CONTINUED)
The acquisition was funded by our Bank Facility and was accounted for as a
purchase. The purchase price was allocated to the underlying assets and
liabilities based upon their estimated fair values at the date of acquisition.
We determined the estimated fair values based on independent appraisals,
discounted cash flows, quoted market prices and estimates made by management. To
the extent that the purchase price exceeded the fair value of the net
identifiable tangible assets acquired, such excess was allocated to goodwill and
is being amortized over 40 years. We will adopt SFAS No. 142 as of January 1,
2002. Under the provisions of SFAS No. 142, the goodwill arising from our
acquisition of Players, as well as the goodwill related to prior acquisitions,
will be assessed for any impairment by applying a fair-value-based test and
amortization of goodwill will cease.

NOTE 3--STOCKHOLDERS' EQUITY

In addition to its common stock, Harrah's Entertainment has the following
classes of stock authorized but unissued:

Preferred stock, $100 par value, 150,000 shares authorized
Special stock, $1.125 par value, 5,000,000 shares authorized--
Series A Special Stock, 2,000,000 shares designated

In April 2000, our Board of Directors authorized the repurchase of up to
12.5 million shares of our common stock in the open market and other
transactions as market conditions warrant (the "April 2000 Plan"). The
April 2000 Plan will expire on December 31, 2001. At June 30, 2001, we had
repurchased 8.0 million shares under the April 2000 Plan. No shares were
purchased during the first six months of 2001. Subsequent to the end of second
quarter, we repurchased 3.6 million additional shares, leaving, as of August 8,
2001, 0.9 million shares that may be repurchased under the April 2000 Plan.

In July 2001, our Board of Directors authorized the repurchase of an
additional 6 million shares of the Company's common stock before December 31,
2002 (the "July 2001 Plan"). Repurchases under the July 2001 Plan may be made
from time to time in open market or negotiated transactions as market conditions
and other factors warrant.

NOTE 4--DEBT

REVOLVING CREDIT FACILITIES

As of December 31, 2000, the Company had revolving credit and letter of
credit facilities (the "Bank Facility"), which provided us with borrowing
capacity of $1.9 billion. The Bank Facility consisted of a five-year
$1.525 billion revolving credit and letter of credit facility maturing in 2004
and a separate $375 million revolving credit facility, which is renewable
annually at the borrower's and lenders' options. On April 26, 2001, we renewed
the 364-day facility and reduced the available borrowing capacity of that
facility from $375 million to $328 million, reducing our total borrowing
capacity available under the Bank Facility to $1.85 billion. Currently, the Bank
Facility bears interest based upon

8
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001
(UNAUDITED)

NOTE 4--DEBT (CONTINUED)
80 basis points over LIBOR for current borrowings under the five-year facility
and 85 basis points over LIBOR for the 364-day facility. In addition, there is a
facility fee for borrowed and unborrowed amounts which is currently 20 basis
points on the five-year facility and 15 basis points on the 364-day facility.
The interest rate and facility fee are based on our current debt ratings and
leverage ratio and may change as our debt ratings and leverage ratio change. As
of June 30, 2001, $645 million in borrowings were outstanding under the Bank
Facility with an additional $36 million committed to back letters of credit and
$19 million committed to back Commercial Paper borrowings. After consideration
of these borrowings, $1.15 billion of additional borrowing capacity was
available to the Company as of June 30, 2001.

ISSUANCE OF NEW DEBT

In January 2001, Harrah's Operating Company, Inc. ("HOC"), a wholly-owned
subsidiary of the Company, completed a private placement of $500.0 million
principal amount 8% Senior Notes due 2011 (the "8% Notes"). The 8% Notes are
unsecured and contain certain covenants that limit our ability to enter into
certain sale and lease-back transactions, incur liens on our assets to secure
debt, merge or consolidate with another company and transfer or sell
substantially all of our assets. Proceeds from the 8% Notes were used to pay off
a $150 million credit agreement and to reduce indebtedness under our Bank
Facility. In June 2001, the Company completed an exchange offer whereby the
private placement notes were exchanged for public notes.

In June 2001, HOC completed a private placement of $500.0 million principal
amount 7.125% Senior Notes due 2007 (the "7.125% Notes"). The 7.125% Notes are
unsecured and contain restrictive covenants identical to those of the 8% Notes
discussed above. Proceeds from the 7.125% Notes were used to reduce indebtedness
under our Bank Facility so that capacity was available to us under the Bank
Facility to fund our acquisition of Harveys. We plan to commence an exchange
offer in third quarter, whereby the private placement notes would be exchanged
for public notes. We expect to complete this exchange offer by the end of 2001.

SHORT-TERM BORROWINGS

In a program designed for short-term borrowings at lower interest rates than
the rates paid under our Bank Facility, we have uncommitted line of credit
agreements with two lenders whereby we can borrow up to $50 million for periods
of ninety days or less. At June 30, 2001, we had borrowed $47 million under
these agreements. These agreements have no impact on our Bank Facility and do
not decrease our borrowing capacity under those agreements.

EARLY EXTINGUISHMENTS OF DEBT

In January 2001, we retired a $150 million credit agreement scheduled to
mature in June 2001 and recorded an extraordinary loss of $0.1 million, net of
tax.

9
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001
(UNAUDITED)

NOTE 4--DEBT (CONTINUED)
value as of the date of consummation of the acquisition. The difference between
the consideration paid to the holders of the Players Notes and the carrying
value of the Notes on the dates of the redemptions was recorded in the second
quarter as an extraordinary loss of $0.7 million, net of tax. We retired the
Players Notes using proceeds from our new $150 million Credit Agreement and our
Bank Facility.

We redeemed the Showboat, Inc. 9 1/4% First Mortgage Bonds on May 1, 2000,
the first call date. These bonds were defeased in 1998 by purchasing treasury
securities which were deposited with trustees to pay the scheduled interest
payments to the first call date and principal on the securities outstanding on
such date.

NOTE 5--SUPPLEMENTAL CASH FLOW DISCLOSURES

CASH PAID FOR INTEREST AND TAXES

The following table reconciles our interest expense, net of interest
capitalized, per the Consolidated Condensed Statements of Income, to cash paid
for interest:

<Table>
<Caption>
SIX MONTHS ENDED
-------------------
JUNE 30, JUNE 30,
2001 2000
(IN THOUSANDS) -------- --------

Interest expense, net of amount capitalized................. $127,415 $108,585
Adjustments to reconcile to cash paid for interest:
Net change in accruals.................................... (25,095) (11,461)
Amortization of deferred finance charges.................. (2,271) (1,931)
Net amortization of discounts and premiums................ (353) 168
-------- --------
Cash paid for interest, net of amount capitalized........... $ 99,696 $ 95,361
======== ========
Cash (refunds) payments of income taxes, net of payments
(refunds)................................................. $(50,328) $ 2,358
======== ========
</Table>

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES

NEW ORLEANS CASINO

JCC Holding Company and its subsidiary, Jazz Casino Company, LLC
(collectively, "JCC"), own and operate a land-based casino in New Orleans,
Louisiana (the "Casino"), in which the Company has a minority ownership interest
(and a noncontrolling board representation) and which is managed by a subsidiary
of the Company. On January 4, 2001, JCC filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code in order to allow restructuring of
their obligations to the State of Louisiana and the City of New Orleans,
long-term debt, bank credit facilities and trade and other obligations. JCC's
plan of reorganization was approved by the bankruptcy court on March 19, 2001,
and was effective on March 29, 2001.

10
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001
(UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
$81.6 million owed to us prior to JCC's reorganization. We are also providing a
$35 million revolving credit facility to JCC at market terms. A subsidiary of
the Company continues to manage the Casino pursuant to an amended management
agreement, which, among other things, (i) changed the base management fee to an
incentive management fee based on earnings of the business before interest
expense, income taxes, depreciation, amortization and management fees,
(ii) requires the Company to provide certain administrative services to JCC as
part of its management fee without any reimbursement from JCC and
(iii) provides for termination of management services if minimum performance
thresholds are not met.

Due to the filing of bankruptcy by JCC, in fourth quarter 2000 we recorded
reserves of $220 million for receivables not expected to be recovered in JCC's
reorganization plan. In first quarter 2001, an additional $2.3 million was
recorded to reserve for additional advances made to JCC during first quarter
2001 and to adjust the reserves for modifications to the approved reorganization
plan.

NATIONAL AIRLINES, INC.

We had an approximate 48% ownership interest in National Airlines, Inc.
("NAI"), which filed a voluntary petition for reorganization relief under
Chapter 11 of the U.S. Bankruptcy Code in December 2000. In 2001 we abandoned
all rights to our shares of NAI stock and stock purchase warrants. We have
provided $17.0 million in loans to NAI and funded letters of credit on their
behalf of $8.6 million. We fully reserved for our exposure under these items in
fourth quarter 2000. In addition, we are exposed to up to $15.5 million of
liability under other letters of credit which expire August 31, 2001. We have an
agreement with another investor of NAI whereby that investor is obligated to
reimburse us for approximately 56% of amounts that we pay in response to demands
on the letters of credit. During second quarter, a subsidiary of the Company
filed a lawsuit against the other investor for breach of contract due to the
investor's failure to reimburse the Company for his share of drafts we have paid
against the letters of credit. As contractually permitted, the guarantor has
elected to submit the issue to binding arbitration.

In fourth quarter 2000, we recorded write-offs and reserves totaling
$39.4 million for our investment in and loans to NAI and our estimated net
exposure under the letters of credit. If we are required to fund under the
remaining letters of credit and are unsuccessful in collecting from the other
investor, we would record additional losses of up to $15.3 million for NAI.

CONTRACTUAL COMMITMENTS

We continue to pursue additional casino development opportunities that may
require, individually and in the aggregate, significant commitments of capital,
up-front payments to third parties, guarantees by the Company of third party
debt and development completion guarantees. Excluding guarantees and commitments
for the New Orleans casino discussed above, as of June 30, 2001, we had
guaranteed third party loans and leases of $67.4 million, which are secured by
certain assets, and had commitments of $335.2 million for construction-related
and other obligations.

The agreements under which we manage casinos on Indian lands contain
provisions required by law which provide that a minimum monthly payment be made
to the tribe. That obligation has priority over scheduled payments of borrowings
for development costs. In the event that insufficient cash flow is generated by
the operations to fund this payment, we must pay the shortfall to the tribe.
Such

11
<Page>
HARRAH'S ENTERTAINMENT, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (CONTINUED)

JUNE 30, 2001
(UNAUDITED)

NOTE 6--COMMITMENTS AND CONTINGENT LIABILITIES (CONTINUED)
advances, if any, would be repaid to us in future periods in which operations
generate cash flow in excess of the required minimum payment. These commitments
will terminate upon the occurrence of certain defined events, including
termination of the management contract. As of June 30, 2001, the aggregate
monthly commitment pursuant to these contracts, which extend for periods of up
to 42 months from June 30, 2001, was $1.1 million.

Effective March 1, 2001, we entered into a fixed price agreement with a
third party to stabilize our cost of natural gas. The agreement is for a
24-month term and fixes the commodity portion of our natural gas cost at $5.09
per decatherm. At its inception, this derivative was determined to be an
effective cash flow hedge for purposes of SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities". At June 30, 2001, the fair value
of this contract was estimated to be a $2.6 million loss. The unrealized loss
from this derivative is recorded as a component of comprehensive income.

SEVERANCE AGREEMENTS

As of June 30, 2001, we have severance agreements with 36 of our senior
executives, which provide for payments to the executives in the event of their
termination after a change in control, as defined. These agreements provide,
among other things, for a compensation payment of 1.5 to 3.0 times the
executive's average annual compensation, as defined, as well as for accelerated
payment or accelerated vesting of any compensation or awards payable to the
executive under any of our incentive plans. The estimated amount, computed as of
June 30, 2001, that would be payable under the agreements to these executives
based on earnings and stock options aggregated approximately $110.7 million.

TAX SHARING AGREEMENTS

In connection with the 1995 spin-off of certain hotel operations (the "PHC
Spin-off") to Promus Hotel Corporation ("PHC"), we entered into a Tax Sharing
Agreement with PHC wherein each company is obligated for those taxes associated
with their respective businesses. Additionally, we are obligated for all taxes
for periods prior to the PHC Spin-off date which are not specifically related to
PHC operations and/or PHC hotel locations. Our obligations under this agreement
are not expected to have a material adverse effect on our consolidated financial
position or results of operations.

SELF-INSURANCE

We are self-insured for various levels of general liability, workers'
compensation and employee medical coverage. We also have stop loss coverage to
protect against unexpected claims. Insurance claims and reserves include
accruals of estimated settlements for known claims, as well as accruals of
actuarial estimates of incurred but not reported claims.

NOTE 7--LITIGATION

We are involved in various inquiries, administrative proceedings and
litigation relating to contracts, sales of property and other matters arising in
the normal course of business. While any proceeding or litigation has an element
of uncertainty, we believe that the final outcome of these matters will not have
a material adverse effect upon our consolidated financial position or our
results of operations.

12
<Page>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS

The following discussion and analysis of the financial position and
operating results of Harrah's Entertainment, Inc. (referred to in this
discussion, together with its consolidated subsidiaries where appropriate, as
"Harrah's Entertainment", "Company", "we", "our" and "us") for second quarter
2001 and 2000, updates, and should be read in conjunction with, Management's
Discussion and Analysis of Financial Position and Results of Operations
presented in our 2000 Annual Report.

ACQUISITION OF HARVEYS

On July 31, 2001, we completed our acquisition of Harveys Casino Resorts
("Harveys") for $625 million, including our assumption of Harveys' outstanding
debt, plus adjustments for changes in working capital of approximately
$7 million. We also assumed a $50 million off-balance-sheet liability. We
financed the acquisition, and will refinance Harveys assumed debt, through the
existing borrowing capacity available under our bank credit facilities. The
purchase includes the Harveys Resort & Casino in Lake Tahoe, Nevada, the Harveys
Casino Hotel and the Bluffs Run Casino, both in Council Bluffs, Iowa, and the
Harveys Wagon Wheel Hotel/Casino in Central City, Colorado. The addition of the
Harveys properties expands our geographic distribution to 25 casinos in 12
states, increases our nationwide casino square footage by almost 15% and adds
1,109 hotel rooms, 149 table games and 5,768 slot machines to serve our
customers. The transaction will introduce Harrah's and our Total Rewards
customer-loyalty program to 1.7 million potential new customers within 150 miles
of Council Bluffs and strengthen our relationships with customers throughout the
Nevada-Northern California gaming market.

JCC HOLDING COMPANY

JCC Holding Company and its subsidiary, Jazz Casino Company, LLC
(collectively, "JCC"), own and operate a land-based casino in New Orleans,
Louisiana (the "Casino"), in which the Company has a minority ownership interest
(and a noncontrolling board representation) and which is managed by a subsidiary
of the Company. On January 4, 2001, JCC filed a voluntary petition for relief
under Chapter 11 of the U.S. Bankruptcy Code to restructure its obligations to
the State of Louisiana and the City of New Orleans, long-term debt, bank credit
facilities and trade and other obligations. JCC's plan of reorganization was
approved by the bankruptcy court on March 19, 2001, and was effective on
March 29, 2001.

Pursuant to the reorganization plan, the Company is guaranteeing an annual
payment obligation of JCC owed to the State of Louisiana of $50 million in the
first year ($37.5 million remained at June 30, 2001) and $60 million for three
subsequent years. We receive a fee of 2% of the average amount at risk for
providing this guarantee. Also pursuant to the reorganization plan, we received
49% of the new common stock of JCC and hold approximately $51 million of the new
debt of JCC, which replaced $81.6 million owed to us prior to JCC's
reorganization. We are also providing a $35 million revolving credit facility to
JCC at market terms. A subsidiary of the Company continues to manage the Casino
pursuant to an amended management agreement, which, among other things,
(i) changed the base management fee to an incentive management fee based on
earnings of the business before interest expense, income taxes, depreciation,
amortization and management fees, (ii) requires the Company to provide certain
administrative services to JCC as part of its management fee without any
reimbursement from JCC and (iii) provides for termination of management services
if minimum performance thresholds are not met.

13
<Page>
OPERATING RESULTS AND DEVELOPMENT PLANS

OVERALL

<Table>
<Caption>
SECOND QUARTER PERCENTAGE FIRST SIX MONTHS PERCENTAGE
------------------- INCREASE/ ----------------------- INCREASE/
2001 2000 (DECREASE) 2001 2000 (DECREASE)
-------- -------- ---------- ---------- ---------- ----------

(IN MILLIONS, EXCEPT EARNINGS PER
SHARE)
Casino revenues...................... $ 753.8 $ 721.1 4.5% $ 1,501.7 $ 1,354.8 10.8%
Net revenues......................... 914.0 876.2 4.3% 1,813.6 1,656.4 9.5%
Income from operations............... 141.7 136.3 4.0% 286.3 236.4 21.1%
Income before extraordinary items.... 47.9 47.2 1.5% 92.1 78.0 18.1%
Net income........................... 47.9 46.5 3.0% 91.9 77.2 19.0%
Earnings per share-diluted........... 0.40 0.39 2.6% 0.78 0.64 21.9%
Operating margin..................... 15.5% 15.6% (0.1)pts 15.8% 14.3% 1.5pts
</Table>

Second quarter 2001 revenues increased 4.3% over second quarter 2000, and
net income increased 3.0% from the same period last year. Many of our properties
reported record revenues for the second quarter of 2001, which resulted in
overall second quarter record revenues.

For the six months ended June 30, 2001, revenues were up 9.5% and net income
was 19.0% over the same six-month period last year. These increases were driven,
in part, by our acquisition of Players International, Inc. ("Players") in
March 2000, as well as by improved results at the Rio Hotel & Casino ("Rio") in
Las Vegas, Nevada, which experienced exceptionally low table games hold
percentage in 2000.

Gaming revenues continue to grow, reaffirming the success of our strategy to
grow same store sales through customer loyalty programs. The following table
compares second quarter 2001 gaming revenues to second quarter 2000 gaming
revenues for our company-owned properties, including those acquired over the
past three years.

<Table>
<Caption>
SECOND QUARTER PERCENTAGE
------------------- INCREASE/
2001 2000 (DECREASE)
-------- -------- ----------

(IN MILLIONS)
Casino revenues
Harrah's.................................................. $462.9 $444.5 4.1%
Showboat acquisition...................................... 156.7 150.9 3.8%
Rio acquisition........................................... 40.1 38.5 4.2%
Players acquisition....................................... 94.1 87.2 7.9%
------ ------
Total................................................... $753.8 $721.1 4.5%
====== ======
</Table>

WESTERN REGION

<Table>
<Caption>
SECOND QUARTER PERCENTAGE FIRST SIX MONTHS PERCENTAGE
------------------- INCREASE/ ------------------- INCREASE/
2001 2000 (DECREASE) 2001 2000 (DECREASE)
-------- -------- ---------- -------- -------- ----------

(IN MILLIONS)
Casino revenues................................ $174.1 $168.0 3.6% $356.8 $340.0 4.9%
Net revenues................................... 283.3 270.6 4.7% 568.9 542.6 4.8%
Operating profit............................... 32.4 25.0 29.6% 68.7 48.7 41.1%
Operating margin............................... 11.4% 9.2% 2.2pts 12.1% 9.0% 3.1pts
</Table>

Increases in Western Region second quarter 2001 revenues and operating
profit from the same period last year were primarily due to improved performance
at the Rio and record revenues and increased operating profit at our Harrah's
brand properties in southern Nevada. Rio's second quarter

14
<Page>
2001 revenues were 5.1% above second quarter 2000 when that property experienced
a well-below-average table games hold percentage. In addition to improved
revenue, operating margin at the Rio improved due to successful cost management.
Rio's operating margin in second quarter 2000 was affected by marketing and
promotional costs incurred by the property in an effort to maintain its
competitive position in the market following the opening of several competitors.
Second quarter revenues at our southern Nevada Harrah's properties increased
11.0% and operating profit increased 15.1% over the same period last year. Our
northern Nevada properties reported a decline in revenue from second quarter
last year of 3.4%, and operating profit was 24.5% lower than in the same quarter
last year. The declines are due to lower than normal retail, or non-tracked
walk-in, business volumes in northern Nevada.

For the six months ended June 30, 2001, Western Region revenues increased
4.8% and operating profit increased 41.1%. These increases were due to improved
results at the Rio, driven primarily by favorable year-over-year table games
hold percentage, and continued strong performance of Harrah's Southern Nevada
properties. Six months year-over-year results also reflect the declines in
retail business at our Northern Nevada properties.

EASTERN REGION

(IN MILLIONS)
Casino revenues................................ $191.6 $190.3 0.7 % $362.5 $364.6 (0.6)%
Net revenues................................... 203.8 202.4 0.7 % 384.8 387.8 (0.8)%
Operating profit............................... 48.6 49.3 (1.4)% 85.9 87.5 (1.8)%
Operating margin............................... 23.8% 24.4% (0.6)pts 22.3% 22.6% (0.3)pts
</Table>

Harrah's Atlantic City reported record revenues and operating profit in
second quarter 2001, with revenues slightly above last year's second quarter
record and a 3.6% increase over their second quarter operating profit record set
last year. At Showboat Atlantic City, revenues increased 1.5% over the year-ago
quarter, but operating profit decreased 12.1% from the same period last year.

For the first six months of 2001, Harrah's Atlantic City posted moderate
gains in revenues and a 5.0% increase in operating profit over the same
six-month period last year. Showboat Atlantic City's revenues decreased 1.8% and
operating profit decreased 15.7% from the first six months of 2000. The Atlantic
City Showboat property, which is more reliant on bus customers, was impacted by
poor weather during first quarter 2001 and also experienced construction
disruptions related to reconfiguration of the casino floor. The reconfiguration
of Showboat's casino floor was completed in the second quarter of 2001. Our
tiered Total Rewards customer-loyalty program was recently implemented at the
Showboat and is expected to result in increased play as well as build guest
loyalty.

Construction is underway on a 450-room expansion at Harrah's Atlantic City,
which will increase the hotel's capacity to more than 1,600 rooms. The expansion
is expected to cost approximately $113 million, $31.1 million of which has been
spent at June 30, 2001. The expansion is scheduled to be completed in second
quarter 2002. Subsequent to the end of second quarter, we announced plans to
further expand the Harrah's Atlantic City casino and hotel complex to create an
additional 28,000 square feet of casino floor space and expand a buffet area.
This project is expected to cost approximately $80 million and is scheduled to
be completed in second quarter 2002.

15
<Page>
CENTRAL REGION

<Table>
<Caption>
SECOND QUARTER PERCENTAGE FIRST SIX MONTHS PERCENTAGE
------------------- INCREASE/ ------------------- INCREASE/
2001 2000 (DECREASE) 2001 2000 (DECREASE)
(IN MILLIONS) -------- -------- ---------- -------- -------- ----------

Casino revenues......................... $387.9 $362.6 7.0 % $782.1 $650.2 20.3%
Net revenues............................ 409.0 382.0 7.1 % 824.0 683.5 20.6%
Operating profit........................ 81.9 83.1 (1.4)% 170.2 151.9 12.0%
Operating margin........................ 20.0% 21.8% (1.8)pts 20.7% 22.2% (1.5)pts
</Table>

CHICAGOLAND/ILLINOIS--Harrah's Joliet reported record revenues for second
quarter 2001, a 3.9% increase over the same quarter last year; however,
operating profit for the quarter decreased 26.7% compared to the same period
last year. Construction is underway at this property on the new casino barges
that will replace the riverboats we operate later in 2001. The casino barges are
expected to cost approximately $83 million, of which $30.9 million had been
spent as of June 30, 2001. Because the two riverboats will be removed from
service, depreciation has been accelerated to reflect the current estimates of
the riverboats' useful lives and salvage values. In second quarter 2001, the
estimated salvage values of the riverboats were reviewed and revised and the
accelerated depreciation was increased from $2.4 million per quarter to
$3.8 million per quarter. Harrah's East Chicago reported record second quarter
revenues, an increase of 6.7% over second quarter 2000, while operating profit
was approximately the same as last year. Second quarter operating profit in the
Chicagoland market was affected by efforts to protect market share as a
competitive operator accelerated promotional spending during the quarter.
Construction is underway at the East Chicago property on a 292-room hotel, which
is anticipated to be completed near year-end 2001. The project is expected to
cost approximately $47.0 million, $17.4 million of which had been spent through
June 30, 2001. Second quarter revenues and operating income at Players
Metropolis were level with amounts reported in second quarter 2000. Construction
is underway at Players Metropolis to renovate the facilities and convert the
property to the Harrah's brand. This project, anticipated to be completed in
third quarter 2001, is expected to cost approximately $49 million,
$26.9 million of which had been spent at June 30, 2001.

For the six months ended June 30, 2001, revenues at Harrah's Joliet
increased 3.6%, but operating profit decreased 19.7%, due primarily to the
accelerated depreciation on the riverboats that are to be removed from service
and construction disruptions at that property. At Harrah's East Chicago revenues
increased 7.3% and operating income increased 5.6% over the same six-month
period last year. For the first six months of 2001, Players Metropolis
contributed $59.1 million in revenues and $16.0 million in operating income,
compared to $32.3 million and $10.0 million, respectively, for the same period
last year due to our acquisition of Players in late first quarter of 2000.

LOUISIANA--Harrah's Shreveport's revenues increased 27.7% over second
quarter last year while operating profit was approximately level with second
quarter 2000. The revenue gains, which were aided by the new hotel and
restaurants that opened during first quarter 2001, were offset by higher costs
driven by the competitive Shreveport market, increased depreciation associated
with the newly constructed assets and a 1% increase in gaming taxes that was
effective in second quarter. Gaming taxes at this property will increase another
1% in 2002 and another 1% in 2003. At Harrah's Lake Charles revenues increased
3.9% while operating profit decreased 7.2%. A major refurbishment of the hotel
at this property began in second quarter and almost 40% of the hotel rooms were
out of service in the quarter. This hotel refurbishment is estimated to cost
$14 million, of which $3.5 million had been spent at June 30, 2001. Also
affecting operating profit were a tropical storm that effectively closed the
market for a weekend in June and an increase in gaming taxes from 18.5% to 21.5%
of gaming revenues, which was effective in second quarter.

16
<Page>
For the first six months of 2001, Harrah's Shreveport experienced a 19.6%
increase in revenues and an 18.1% decrease in operating income due to increased
promotional expenses and the costs of inefficiencies associated with the
staggered opening of the new 514-room hotel and other amenities during first
quarter 2001. The Lake Charles property, which was acquired in the Players
acquisition in March 2000 and re-branded to the Harrah's brand in fourth quarter
2000, contributed $84.7 million in revenue and $16.5 million in operating
profit.

MISSISSIPPI--Combined second quarter revenues at our Mississippi properties
decreased $0.6 million from second quarter 2000, and operating profit was the
same as in the year-ago second quarter. For the six months ended June 30, 2001,
revenues decreased $2.7 million and operating income decreased $1.5 million.

MISSOURI--Second quarter revenues at our Missouri properties increased 8.6%
and operating profit increased 24.9% over the same period in 2000. These
increases are due primarily to operational synergies achieved through the
consolidation of the Players facility with the adjacent Harrah's casino in St.
Louis subsequent to our acquisition of Players in March 2000. The combined St.
Louis property reported revenues 11.7% above those reported in second quarter
2000, and operating income was 48.5% over the same period last year. Our North
Kansas City property increased revenues 4.6% and operating profit 2.4% over
second quarter last year.

For the six months ended June 30, 2001, revenues at our Missouri properties
increased 23.0% and operating profit increased 33.7% over the first six months
of 2000. These increases are primarily attributable to our acquisition of
Players and the integration of Players St. Louis and the Harrah's/ Players
jointly-owned shore-side facilities into our operations. Our St. Louis property
reported six-month revenues that were 35.2% higher than in the first six months
last year. Operating profit at that property was 54.3% higher than in the first
six months of 2000. Harrah's North Kansas City increased revenues 9.8% and
operating profit 14.1% over the same six-month period last year due to effective
marketing, cost management efforts and facilities enhancements at that property.
Construction was completed at the end of June 2001 on the new casino space at
North Kansas City that resulted in the consolidation of all gaming space into a
single facility and replaced the riverboat that had been used there since 1994.
That riverboat is now being refurbished to prepare it to replace the riverboat
at Players Metropolis.

MANAGED AND OTHER CASINOS

Our managed and other results for second quarter and the first six months of
2001 were lower than in the same periods last year. Fees from Harrah's New
Orleans and Star City in Sydney, Australia, were less in second quarter 2001
than in second quarter 2000 due to changes in the management agreements. No
management fees were recognized from Harrah's New Orleans in first quarter 2001
due to the bankruptcy filing by JCC. Management fees for second quarter and the
first six months of 2001 from Indian-owned casinos increased 7.9% and 7.7%,
respectively, from the same periods last year due primarily to strong
performance at the casino owned by the Eastern Band of Cherokee Indians
("Cherokee") in Cherokee, North Carolina. Construction has begun on a 252-room
hotel and conference center at the Cherokee property and is slated for
completion in first quarter 2002.

During first quarter 2001, a temporary casino managed by the Rincon San
Luiseno Band of Mission Indians in Southern California (the "Rincon") began
operations near the site where a permanent casino, which we will manage, is
scheduled to open in the second quarter of 2002. Subsequent to second quarter
the Rincon secured third-party financing, which we have guaranteed, for its
permanent casino.

See Debt and Liquidity for further discussion of Harrah's guarantees of debt
related to Indian projects.

17
<Page>
OTHER FACTORS AFFECTING NET INCOME

<Table>
<Caption>
FIRST SIX
SECOND QUARTER PERCENTAGE MONTHS PERCENTAGE
------------------- INCREASE/ ------------------- INCREASE/
2001 2000 (DECREASE) 2001 2000 (DECREASE)
(IN MILLIONS) -------- -------- ---------- -------- -------- ----------

(Income)/expense:
Project opening costs..................... $ 2.1 $ 1.5 0.4% $ 4.3 $ 1.7 N/M
Corporate expense......................... 13.6 14.6 (6.8)% 27.4 25.6 7.0%
Headquarters relocation expense........... - 0.9 N/M - 2.7 N/M
Equity in losses of nonconsolidated
affiliates.............................. 0.8 10.6 (92.5)% 0.4 34.3 (98.8)%
Write-downs, reserves and recoveries...... 1.2 0.6 N/M 3.3 0.6 N/M
Venture restructuring costs............... 1.2 - N/M 2.7 - N/M
Amortization of goodwill and trademarks... 5.7 5.3 7.5% 11.3 9.9 14.1%
Interest expense, net..................... 63.2 58.1 8.8% 127.4 108.6 17.3%
Other (income) expense.................... (6.2) (1.2) N/M 0.3 (4.8) N/M
Effective income tax rate................. 36.6% 36.1% 0.5pts 36.4% 35.6% 0.8pts
Minority interests........................ $ 2.4 $ 3.5 (31.4)% $ 5.6 $ 7.4 (24.3)%
Extraordinary losses, net of income
taxes................................... - 0.7 N/M 0.1 0.7 (85.7)%
</Table>

Corporate expense decreased 6.8% in second quarter 2001 from the prior year
level but increased 7.0% for the six months ended June 30, 2001, compared to the
same six month period last year due to timing of certain expenses and increases
in other costs associated with the growth and positioning of our Company.

Equity in losses of nonconsolidated affiliates for second quarter and the
first six months of 2000 included our share of losses from Harrah's New Orleans
and National Airlines, Inc. ("NAI"). As a result of the charges we recorded in
fourth quarter 2000 following the voluntary bankruptcy petitions for
reorganization relief filed by each of these entities, our equity pick-up of the
operating losses for both Harrah's New Orleans or NAI ceased as of the end of
2000. With the implementation of JCC's reorganization plan, we resumed recording
our share of JCC's results in second quarter, however, our ownership interest
has increased to 49% compared to approximately 42% last year. Equity in losses
of nonconsolidated affiliates for the six months ended June 30, 2000, also
included our pro rata share of the losses from the St. Louis shore-side
facilities through the date of the Players acquisition.

Write-downs, reserves and recoveries in second quarter 2001 reflect costs
incurred in connection with the closure of our reservations center in Memphis,
Tennessee. We have out-sourced this function to a third party service provider.
The first six months of 2001 also included a true-up to reserves recorded in
fourth quarter 2000 in connection with the approval of JCC's reorganization
plan. Venture restructuring costs represent fees to bankers and other
consultants to represent our interest in JCC's plan of reorganization.

Amortization of goodwill and trademarks increased from the second quarter
last year when goodwill related to the Players acquisition was estimated while
the purchase price allocation was in process. The use of estimates for Players
goodwill in 2000, coupled with the acquisition of Players in late first quarter
2000, resulted in higher amortization of goodwill for the six months ended
June 30, 2001.

Interest expense was higher in the second quarter and the first six months
of 2001 than in the same periods last year due to a second quarter 2001 charge
arising from an initiative to reduce the volatility of a deferred compensation
program and a higher level of debt associated with the acquisition of Players
and our stock repurchase program.

18
<Page>
Other (income) expense increased in second quarter 2001 due primarily to
higher net investment results for Company-owned life insurance policies.
However, those investment results were lower in first quarter 2001, causing a
net decrease in year-over-year results for the six months.

The effective income tax rates for both periods are higher than the federal
statutory rate due primarily to state income taxes and that portion of our
goodwill amortization that is not deductible for tax purposes.

Minority interests reflects joint venture partners' share of income, which
decreased in 2001 from the prior year as a result of lower earnings from those
ventures due primarily to the accelerated depreciation on the riverboats that
are to be removed from service.

The extraordinary losses reported in both years were due to the early
extinguishments of debt and the write-off of related unamortized deferred
finance charges. (See Debt and Liquidity--Extinguishment of Debt.)

CAPITAL SPENDING AND DEVELOPMENT

In addition to the specific development and expansion projects discussed in
the Operating Results and Development Plans section, we perform on-going
refurbishment and maintenance at our casino entertainment facilities to maintain
the Company's quality standards. We also continue to pursue development and
acquisition opportunities for additional casino entertainment facilities that
meet our strategic and return on investment criteria. Prior to the receipt of
necessary regulatory approvals, the costs of pursuing development projects are
expensed as incurred. Construction-related costs incurred after the receipt of
necessary approvals are capitalized and depreciated over the estimated useful
life of the resulting asset. Project opening costs are expensed as incurred.

Our planned development projects, if they go forward, will require,
individually and in the aggregate, significant capital commitments and, if
completed, may result in significant additional revenues. The commitment of
capital, the timing of completion and the commencement of operations of casino
entertainment development projects are contingent upon, among other things,
negotiation of final agreements and receipt of approvals from the appropriate
political and regulatory bodies. Cash needed to finance projects currently under
development as well as additional projects pursued is expected to be made
available from operating cash flows, bank borrowings (see Debt and Liquidity),
joint venture partners, specific project financing, guarantees of third party
debt and, if necessary, additional debt and/or equity offerings. Our capital
spending for the first six months of 2001 totaled approximately $267.3 million.
Estimated capital expenditures for 2001, excluding the acquisition of Harveys,
are expected to be between $485 million and $595 million.

DEBT AND LIQUIDITY

BANK FACILITY

At December 31, 2000, the Company had revolving credit and letter of credit
facilities (the "Bank Facility"), which provided us with borrowing capacity of
$1.9 billion. The Bank Facility consisted of a five-year $1.525 billion
revolving credit and letter of credit facility maturing in 2004 and a separate
$375 million 364-day revolving credit facility, which is renewable annually at
the borrower's and lenders' options. On April 26, 2001, we renewed the 364-day
facility and reduced the available borrowing capacity of that facility from
$375 million to $328 million, reducing our total borrowing capacity under the
Bank Facility to $l.85 billion. Currently, the Bank Facility bears interest
based upon 80 basis points over LIBOR for current borrowings under the five-year
facility and 85 basis points over LIBOR for the 364-day facility. In addition,
there is a facility fee for borrowed and unborrowed amounts which is currently
20 basis points on the five-year facility and 15 basis points on the 364-day
facility. The interest rate and facility fee are based on our current debt
ratings and leverage ratio and may change as our

19
<Page>
debt ratings and leverage ratio change. As of June 30, 2001, $645 million in
borrowings were outstanding under the Bank Facility with an additional
$36 million committed to back letters of credit and $19 million committed to
back Commercial Paper borrowings. After consideration of these borrowings,
$1.15 billion of additional borrowing capacity was available to the Company as
of June 30, 2001.

ISSUANCE OF NEW DEBT

In January 2001, Harrah's Operating Company, Inc. ("HOC"), a wholly-owned
subsidiary of the Company, completed a private placement of $500.0 million
principal amount 8% Senior Notes due 2011 (the "8% Notes"). The 8% Notes are
unsecured and contain certain covenants that limit our ability to enter into
certain sale and lease-back transactions, incur liens on our assets to secure
debt, merge or consolidate with another company and transfer or sell
substantially all of our assets. Proceeds from the 8% Notes were used to pay off
a $150 million credit agreement scheduled to mature in June 2001 and to reduce
indebtedness under our Bank Facility. In June 2001, the Company completed an
exchange offer whereby the private placement notes were exchanged for public
notes.

In June 2001, HOC completed a private placement of $500.0 million principal
amount 7.125% Senior Notes due 2007 (the "7.125% Notes"). The 7.125% Notes are
unsecured and contain restrictive covenants identical to those of the 8% Notes
discussed above. Proceeds from the 7.125% Notes were used to reduce indebtedness
under our Bank Facility so that capacity would be available under the Bank
Facility to fund our acquisition of Harveys. We plan to commence an exchange
offer in third quarter, whereby the private placement notes will be exchanged
for public notes. We expect to complete this exchange offer by the end of 2001.

SHORT-TERM BORROWINGS

In a program designed for short-term borrowings at lower interest rates than
the rates paid under our Bank Facility, we have uncommitted line of credit
agreements with two lenders whereby we can borrow up to $50 million for periods
of ninety days or less. At June 30, 2001, we had borrowed $47 million under
these agreements. These agreements have no impact on, and do not decrease the
borrowing capacity under, our Bank Facility.

EARLY EXTINGUISHMENTS OF DEBT

In January 2001, we retired a $150 million credit agreement scheduled to
mature in June 2001 and recorded an extraordinary loss of $0.1 million, net of
tax.

Approximately $2.3 million of the Players Notes were retired on April 28,
2000, in connection with a change of control offer. On June 5, 2000, we
purchased approximately $13.1 million of the Players Notes in the open market
for the face amount plus accrued interest and a premium. The remaining Players
Notes were redeemed on June 30, 2000, for the face amount plus accrued interest
and a premium. We recorded liabilities assumed in the Players acquisition,
including the notes, at their fair value as of the date of consummation of the
acquisition. The difference between the consideration paid to the holders of the
Players Notes and the carrying value of the Notes on the dates of the
redemptions was recorded in the second quarter as an extraordinary loss of
$0.7 million, net of tax. We retired the Players Notes using proceeds from our
new $150 million Credit Agreement and our Bank Facility.

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EQUITY REPURCHASE PROGRAM

In April 2000, our Board of Directors approved a plan whereby we can
purchase up to 12.5 million shares of the Company's stock in the open market.
These repurchases are funded through available cash and borrowings from our Bank
Facility. No repurchases were made during the first six months of 2001; however,
subsequent to June 30, 2001, 3.6 million shares were repurchased, leaving, as of
August 8, 2001, 0.9 million additional shares that may be repurchased under the
plan, which expires December 31, 2001.

In July 2001, our Board of Directors authorized the purchase of an
additional 6 million shares of the Company's common stock before December 31,
2002. The purchases may be made from time to time in open market or negotiated
transactions as market conditions and other factors warrant.

GUARANTEES OF THIRD PARTY DEBT AND OTHER COMMITMENTS

Pursuant to JCC's plan of reorganization, which was approved by the
bankruptcy court on March 19, 2001, and was effective on March 29, 2001, the
Company guarantees an annual payment obligation of JCC owed to the State of
Louisiana of $50 million in the first year and $60 million for three subsequent
years. Also pursuant to the reorganization plan, we hold approximately
$51 million of the new debt of JCC and are providing a $35 million revolving
credit facility to JCC.

The agreements pursuant to which we manage casinos on Indian lands contain
provisions required by law, which provide that a minimum monthly payment be made
to the tribe. That obligation has priority over scheduled repayments of
borrowings for development costs. In the event that insufficient cash flow is
generated by the operations to fund this payment, we must pay the shortfall to
the tribe. Such advances, if any, would be repaid to us in future periods in
which operations generate cash flow in excess of the required minimum payment.
These commitments will terminate upon the occurrence of certain defined events,
including termination of the management contract. Our aggregate monthly
commitment pursuant to the contracts for the three Indian-owned facilities now
open, which extend for periods of up to 42 months from June 30, 2001, is
$1.1 million.

We may guarantee all or part of the debt incurred by Indian tribes with
which we have entered a management contract to fund development of casinos on
the Indian lands. For all existing guarantees of Indian debt, we have obtained a
first lien on certain personal property (tangible and intangible) of the casino
enterprise. There can be no assurance, however, the value of such property would
satisfy our obligations in the event these guarantees were enforced.
Additionally, we have received limited waivers from the Indian tribes of their
sovereign immunity to allow us to pursue our rights under the contracts between
the parties and to enforce collection efforts as to any assets in which a
security interest is taken. The aggregate outstanding balance of such debt as of
June 30, 2001, was $65.1 million. In July 2001, the Rincon secured third-party
financing, which we have guaranteed, for their permanent casino. At August 8,
2001, the outstanding balance of Rincon's debt was $31.1 million.

We had an approximate 48% ownership interest in NAI, which filed a voluntary
petition for reorganization relief under Chapter 11 of the U.S. Bankruptcy Code
in December 2000. In 2001, we abandoned all rights to our shares of NAI stock
and stock purchase warrants. We have provided $17.0 million in loans to NAI and
funded letters of credit on their behalf of $8.6 million and fully reserved our
estimated exposure under these loans and letters of credit in fourth quarter
2001. In addition, we are exposed to up to $15.5 million of liability under
other letters of credit which expire on August 31, 2001. We have an agreement
with another investor of NAI whereby that investor is obligated to reimburse us
for approximately 56% of amounts that we pay in response to demands on the
letters of credit. During second quarter, a subsidiary of the Company filed a
lawsuit against the other investor for breach of contract due to the investor's
failure to reimburse the Company for his share of drafts we have paid against
the letters of credit. As contractually permitted, the guarantor has

21
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elected to submit the issue to binding arbitration, and the process of selecting
the arbitrator is underway.

Due to the rising cost of natural gas, particularly at our Nevada
properties, we entered into a fixed price agreement with a third party effective
March 1, 2001, to stabilize our cost of this resource. The agreement is for a
24-month term and fixes the commodity portion of our natural gas cost at $5.09
per decatherm. Our evaluation of the terms of this derivative contract applying
the provisions of Statement of Financial Accounting Standards No. 133,
"Accounting for Derivative Instruments and Hedging Activities," concluded that
it is an effective cash flow hedge. This results in any unrealized gain or loss
from this derivative instrument being recorded as a component of comprehensive
income (e.g. a component of equity on the balance sheet) and not recorded in
current income until realized. At June 30, 2001, the fair value of this contract
was estimated to be a $2.6 million loss.

EFFECTS OF CURRENT ECONOMIC AND POLITICAL CONDITIONS

COMPETITIVE PRESSURES

Due to the limited number of new markets opening for development, many
casino operators are reinvesting in existing markets in an effort to attract new
customers, thereby increasing competition in those markets. As companies have
completed expansion projects, supply has typically grown at a faster pace than
demand in some markets and competition has increased significantly. Furthermore,
several operators, including Harrah's, have announced plans for additional
developments or expansions in some markets.

In September 1999, the State of California and approximately 60 Indian
tribes executed Class III Gaming Compacts, which other California tribes can
join. The Compacts, when effective, will allow each tribe to operate, on tribal
trust lands, two casinos with up to 2,000 slot machines per tribe and unlimited
house-banked card games. At this time, the ultimate impact that the California
Compacts may have on the industry or on our Company is uncertain.

Although the short-term effect of these competitive developments on the
Company has typically been negative, we are not able to determine the long-term
impact, whether favorable or unfavorable, that these trends and events will have
on current or future markets. We believe that the geographic diversity of our
operations; our focus on multi-market customer relationships; our service
training, measurements and rewards programs; and our continuing efforts to
establish our brands as premier brands upon which we have built strong customer
loyalty have well-positioned us to face the challenges present within our
industry. We utilize the unique capabilities of WINet, a sophisticated
nationwide customer database, and Total Rewards, a nationwide reward and
recognition card that provides our customers with a simpler understanding of
exactly how to earn cash, comps and other benefits they want, to reward
customers for choosing Harrah's Entertainment casinos. We believe both of these
marketing tools provide us with competitive advantages, particularly with
players who visit more than one market. All of our properties are integrated
into both WINet and Total Rewards, with the exception of Players Metropolis,
which is expected to be integrated into the programs during the second half of
2001, and the just-purchased Harveys properties.

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INDUSTRY CONSOLIDATION

As evidenced by the number of recent public announcements by casino
entertainment companies of plans to acquire or be acquired by other companies
and our completed acquisitions of Showboat, Players and Harveys and our merger
with Rio, consolidation in the gaming industry continues. However, we have no
immediate plans to pursue any other large-scale acquisitions in the near future.

POLITICAL UNCERTAINTIES

The casino entertainment industry is subject to political and regulatory
uncertainty. From time to time, individual jurisdictions have also considered
legislation or referendums that could adversely impact our operations, and the
likelihood or outcome of similar legislation and referendums in the future is
difficult to predict.

The casino entertainment industry represents a significant source of tax
revenues to the various jurisdictions in which casinos operate. From time to
time, various state and federal legislators and officials have proposed changes
in tax laws, or in the administration of such laws, which would affect the
industry. It is not possible to determine with certainty the scope or likelihood
of possible future changes in tax laws or in the administration of such laws. If
adopted, such changes could have a material adverse effect on our financial
results.

RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

During first quarter 2001, the Emerging Issues Task Force reached a
consensus on the portion of Issue 00-22, Accounting for "Points" and Certain
Other Time-Based or Volume-Based Sales Incentive Offers, and Offers for Free
Products or Services to be Delivered in the Future, which addresses the income
statement classification of the value of the points redeemable for cash awarded
under point programs like our Total Rewards program. Per the consensus, which
for our Company was effective retroactively to January 1, 2001, with prior year
restatement also required, the cost of these programs should be reported as a
contra-revenue, rather than as an expense. Debate on a number of other facets of
Issue 00-22 continues.

We have historically reported the costs of such points as an expense, so we
have reclassified these costs to be contra-revenues in our Consolidated
Condensed Statements of Income to comply with the consensus. The amounts of
expense reclassified for second quarter and the six months ended June 30, 2000,
were $3.0 million and $6.4 million, respectively.

On June 30, 2001, the Financial Accounting Standards Board approved
Statements of Financial Accounting Standards ("SFAS") No. 141, "Business
Combinations," and No. 142, "Goodwill and Other Intangible Assets". SFAS
No. 141 requires all business combinations initiated after June 30, 2001, to be
accounted for using the purchase method. We will account for our acquisition of
Harveys as a purchase. SFAS No. 142 provides new guidance on the recognition and
amortization of intangible assets, eliminates the amortization of goodwill and
requires annual assessments for impairment of goodwill by applying a
fair-value-based test. We have not yet quantified the effect SFAS No. 142 will
have on our financial statements. Upon adoption of SFAS No. 142, our net income
will no longer reflect amortization of goodwill, however, certain other
intangible assets will continue to be amortized. Net income could also be
impacted by any charge for impairment of goodwill. These SFAS's are effective
for years beginning after December 15, 2001. Early adoption is not permitted.

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PRIVATE SECURITIES LITIGATION REFORM ACT

The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Form 10-Q and other materials filed or to be filed by the Company with the
Securities and Exchange Commission ("SEC") (as well as information included in
oral statements or other written statements made or to be made by the Company)
contains statements that are forward-looking. These forward-looking statements
generally can be identified by phrases such as the Company "believes,"
"expects," "anticipates," "foresees," "estimates," "intends," "plans," "seeks,"
or other words or phrases of similar import. These include statements relating
to the following activities, among others: (A) operations and expansions of
existing properties, including future performance, anticipated scope and opening
dates of expansions; (B) planned development of casinos and hotels that would be
owned or managed by the Company and the pursuit of strategic acquisitions;
(C) planned capital expenditures for 2001 and beyond; (D) the impact of the
WINet and Total Rewards Programs; and (E) any future impact of the Rincon
development or the acquisition of Harveys. Similarly, such statements herein
that describe, generally or specifically, the Company's business strategy,
outlook objectives, plans, intentions or goals are also forward-looking
statements. All such forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from those
expressed in any forward-looking statements made by or on behalf of the Company.
These include, but are not limited to, the following factors as well as other
factors described from time to time in the Company's reports filed with the SEC:
construction factors, including zoning issues, environmental restrictions, soil
conditions, weather and other hazards, site access matters and building permit
issues; access to available and feasible financing; regulatory, licensing and
other government approvals, third party consents and approvals, and relations
with partners, owners and other third parties; the inability to integrate the
operations of acquired companies; conditions of credit markets and other
business and economic conditions, including international and national economic
problems; litigation, judicial actions and political uncertainties, including
gaming legislative action, referenda, and taxation; abnormal gaming holds;
construction disruptions and delays; ineffective marketing; and the effects of
competition, including locations of competitors and operating and marketing
competition. Any forward-looking statements are made pursuant to the Private
Securities Litigation Reform Act of 1995 and, as such, speak only as of the date
made, and are qualified in their entirety by this and other cautionary
statements herein and in our filings with the SEC. The statements in this 10-Q
are as of June 30, 2001 or where clearly indicated as of the date of filing and
we undertake no obligation to update any such forward-looking statements.

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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK

Market risk is the risk of loss arising from adverse changes in market rates
and prices, such as interest rates, foreign currency exchange rates and
commodity prices. Our primary exposure to market risk is interest rate risk
associated with our debt. We attempt to limit our exposure to interest rate risk
by managing the mix of our debt between fixed rate and variable rate
obligations. We do not currently utilize derivative transactions to hedge our
exposure to interest rate changes. We do not hold or issue derivative financial
instruments for trading purposes and do not enter into derivative transactions
that would be considered speculative positions.

We hold investments in various available-for-sale equity securities,
however, our exposure to price risk arising from the ownership of these
investments is not material to our consolidated financial position, results of
operations or cash flows.

We have entered into a fixed price agreement with a third party to stabilize
our cost of natural gas. The agreement is for a 24-month term and fixes the
commodity portion of our natural gas cost. Any unrealized gain or loss from this
effective cash flow hedge, as determined pursuant to the provisions of Statement
of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities," is recorded as a component of comprehensive
income. The estimated fair value of the contract as of June 30, 2001, was an
unrealized loss of $2.6 million.

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PART II
OTHER INFORMATION

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a) Exhibits

<Table>

*EX-2.1 Stock Purchase Agreement dated as of April 24, 2001 by and
among Harrah's Entertainment, Inc., Colony HCR Voteco, LLC,
Colony Investors III, L.P., and Harveys Casino Resorts.

*EX-10.1 Form of Amended and Restated 364-Day Loan Agreement dated as
of April 26, 2001 among Harrah's Entertainment, Inc. as
Guarantor, Harrah's Operating Company, Inc. and Marina
Associates, as Borrowers, The Lenders, Syndication Agent,
Documentation Agents and Bank of America, N.A., as
Administrative Agent

*EX-10.2 Form of Second Amendment, dated as of April 26, 2001, to the
Five Year Loan Agreement among Harrah's Entertainment, Inc.
as Guarantor, Harrah's Operating Company, Inc. and Marina
Associates, as Borrowers, The Lenders, Syndication Agent,
Document Agents and Co-Documentation Agents and Bank of
America National Trust and Savings Association (now known as
Bank of America, N.A.), as Administrative Agent.

*EX-10.3 First Amendment, dated May 2, 2001, to the Executive
Supplemental Savings Plan.

EX-10.4 Description of Amendments to Benefits for Non-Management
Directors, effective February 21, 2001. (Incorporated by
reference from the Company's Proxy Statement for the May 3,
2001 Annual Meeting of Shareholders, filed March 27, 2001.)

*EX-10.5 Amendment, dated as of May 9, 2001, to Deferred Compensation
Agreement dated October 1, 1986, between Philip G. Satre and
Harrah's Operating Company, successor to Harrah's Club, as
amended January 1, 1987 and December 13, 1993.

*EX-10.6 Amendment to Employment Agreement, dated April 30, 2001,
between Harrah's Operating Company, Inc. and John M. Boushy.

*EX-10.7 Severance Agreement dated April 23, 2001 between Harrah's
Entertainment, Inc. and Charles L. Atwood.

*EX-11 Computation of per share earnings.
</Table>

- ------------------------

* Filed herewith.

(b) The following reports on Form 8-K were filed by the Company during
second quarter 2001.

(i) Form 8-K filed April 3, 2001, announcing that the bankruptcy
reorganization of JCC Holding Company was consummated effective March 29,
2001.

(ii) Form 8-K filed April 18, 2001, regarding the Company's
first-quarter results.

(iii) Form 8-K filed April 24, 2001, announcing the promotion of Gary W.
Loveman as President, the resignation of Colin V. Reed, and the promotion of
Charles L. Atwood as Chief Financial Officer.

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(iv) Form 8-K filed April 25, 2001, announcing that the Company's intent
to acquire Harveys Casino Resorts from Colony Capital Investors III, L.P.

(v) Form 8-K filed May 30, 2001 regarding the extension of the offer to
exchange the 8.0 percent Senior Notes of Harrah's Operating Company, Inc.

(vi) Form 8-K filed June 11, 2001 announcing the pricing of
$500 million 7.125 percent Senior Notes by Harrah's Operating Company, Inc.

(vii) Form 8-K filed June 12, 2001 regarding the second request from the
Federal Trade Commission regarding the pending acquisition of Harveys.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

<Table>

HARRAH'S ENTERTAINMENT, INC.

August 13, 2001 By: /s/ ANTHONY D. MCDUFFIE
-----------------------------------------
Anthony D. McDuffie
VICE PRESIDENT AND ASSISTANT CORPORATE
CONTROLLER
(CHIEF ACCOUNTING OFFICER)
</Table>

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EXHIBIT INDEX

<Table>
<Caption>
SEQUENTIAL
EXHIBIT NO. DESCRIPTION PAGE NO.
----------- ------------------------------------------------------------ ----------

EX-2.1 Stock Purchase Agreement dated as of April 24, 2001 by and
among Harrah's Entertainment, Inc., Colony HCR Voteco, LLC,
Colony Investors III, L.P., and Harveys Casino Resorts.

EX-10.1 Form of Amended and Restated 364-Day Loan Agreement dated as
of April 26, 2001 among Harrah's Entertainment, Inc. as
Guarantor, Harrah's Operating Company, Inc. and Marina
Associates, as Borrowers, The Lenders, Syndication Agent,
Documentation Agents and Bank of America, N.A., as
Administrative Agent.

EX-10.2 Form of Second Amendment, dated as of April 26, 2001, to the
Five Year Loan Agreement among Harrah's Entertainment, Inc.
as Guarantor, Harrah's Operating Company, Inc. and Marina
Associates, as Borrowers, The Lenders, Syndication Agent,
Document Agents and Co-Documentation Agents and Bank of
America National Trust and Savings Association (now known as
Bank of America, N.A.), as Administrative Agent.

EX-10.3 First Amendment, dated May 2, 2001, to the Executive
Supplemental Savings Plan.

EX-10.5 Amendment, dated as of May 9, 2001, to Deferred Compensation
Agreement dated October 1, 1986, between Philip G. Satre and
Harrah's Operating Company, successor to Harrah's Club, as
amended January 1, 1987 and December 13, 1993.

EX-10.6 Amendment to Employment Agreement, dated April 30, 2001,
between Harrah's Operating Company, Inc. and John M. Boushy.

EX-10.7 Severance Agreement dated April 23, 2001 between Harrah's
Entertainment, Inc. and Charles L. Atwood.

EX-11 Computation of per share earnings.
</Table>