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                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549

                                    FORM 10-K/A

         (MARK ONE)

          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
               EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                       OR

          [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
               SECURITIES EXCHANGE ACT OF 1934 NO FEE REQUIRED)

                        FOR THE TRANSITION PERIOD FROM TO

                         COMMISSION FILE NUMBER: 1-12095

                               JCC HOLDING COMPANY
             (Exact name of registrant as specified in its charter)


<TABLE>
<S>                                                  <C>
             DELAWARE                                    62-1650470
         (State or other                              (I.R.S. Employer
  jurisdiction of incorporation)                     Identification No.)
</TABLE>

                                 ONE CANAL PLACE
                           365 CANAL STREET, SUITE 900
                          NEW ORLEANS, LOUISIANA 70130
                    (Address of principal executive offices)

                                 (504) 533-6000
                         (Registrant's telephone number)

          Securities registered pursuant to Section 12(b) of the Act:


<TABLE>
<CAPTION>
                TITLE OF EACH CLASS                  NAME OF EACH EXCHANGE ON
                                                         WHICH REGISTERED
              -----------------------               ---------------------------
<S>                                                      <C>
                Class A Common Stock,
                par value $0.01 per share                OTC Bulletin Board
</TABLE>


          Securities registered pursuant to Section 12(g) of the Act:
                                      NONE

         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 [ ].

         Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the


<PAGE>   2


registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ ]

         The aggregate market value of the class A common stock and class B
common stock held by non-affiliates of the registrant was $277,345 and $7,500,
respectively, at March 1, 2001, based on the closing sale price of $0.05 per
share for the class A common stock on such date on the Over the Counter Bulletin
Board trading system. Because the class B common stock is not publicly traded
and each share of class B common stock is convertible into one share of class A
common stock under certain circumstances, the market value of the class B common
stock is based on the closing sale price for the class A common stock on the
Over the Counter Bulletin Board trading system.

         As of March 1, 2001, the number of shares of our class A common stock
outstanding was 5,777,890 and the number of shares of our class B common stock
outstanding was 4,452,623.

         On March 19, 2001 the United States Bankruptcy Court for the Eastern
District of Louisiana confirmed our Plan of Reorganization (the "Plan of
Reorganization") which, among other things, resulted in the elimination of all
of our outstanding shares of class A common stock and class B common stock upon
the effective date of the Plan of Reorganization, which was March 29, 2001. A
copy of the Plan of Reorganization was filed on March 29, 2001, with the SEC as
part of a Form 8-K filing concerning the approval of the bankruptcy proceeding
(which filing is incorporated herein by reference).







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                               JCC HOLDING COMPANY

                           ANNUAL REPORT ON FORM 10-K
                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000

                                TABLE OF CONTENTS



<TABLE>
<CAPTION>
 ITEM                                                                   PAGE
NUMBER                                                                 NUMBER
------                                                                 ------
<S>                                                                           <C>
                                   PART I
 1.      Business..........................................................     4
 2.      Properties........................................................    16
 3.      Legal Proceedings.................................................    17
 4.      Submission of Matters to a Vote of Security Holders...............    17

                                   PART II
 5.      Market for the Registrant's Common Equity,
           and Related Stockholder Matters.................................    17
 6.      Selected Financial Data...........................................    18
 7.      Management's Discussion and Analysis of Financial Condition
         and Results of Operations.........................................    20
 7(A).   Quantitative and Qualitative Disclosures about Market
         Risk..............................................................    30
 8.      Financial Statements and Supplementary Data.......................    31
 9.      Changes in and Disagreements with Accountants on Accounting
         and Financial Disclosure..........................................    82

                                  PART III
10.      Directors and Executive Officers of the Registrant................    82
11.      Executive Compensation............................................    87
12.      Security Ownership of Certain Beneficial Owners and
         Management........................................................    90
13.      Certain Relationships and Related Transactions....................    91

                                   PART IV
14.      Exhibits, Financial Statement Schedules and Reports on Form
         8-K...............................................................    94
         Signatures........................................................    99
</TABLE>




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<PAGE>   4


                                     PART I

ITEM 1. DESCRIPTION OF THE BUSINESS.

         SPECIAL CAUTIONARY NOTICE REGARDING FORWARD-LOOKING STATEMENTS

         This report of JCC Holding Company ("JCC Holding") includes
forward-looking statements made pursuant to the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995, including in particular the
statements about (1) our plans, objectives, expectations and prospects,
including, generally, the outcome of our bankruptcy proceedings to be concluded
on or before March 29, 2001, (2) the development of non-gaming entertainment
space on the second floor of the casino in New Orleans, Louisiana and of various
adjacent properties for entertainment uses supporting the casino, (3) funding of
our minimum payment obligation to the State of Louisiana under the minimum
payment guaranty provided by Harrah's Entertainment, Inc. and Harrah's Operating
Company, Inc. through March 31, 2001, and thereafter pursuant to our Plan of
Reorganization filed in the United States Bankruptcy Court and approved by the
Court on March 19, 2001, (4) adjustments to our operating expenses, debt and
capital structure under our Plan of Reorganization, and (5) our ability to
continue operations, after the effective date of our Plan of Reorganization. In
particular, such statements appear under the heading "Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations" in
this document. The words "expect," "anticipate," "intend," "plan," "believe,"
"seek," "estimate" and similar expressions identify forward-looking statements.
Although we believe that the plans, objectives, expectations and prospects
reflected in or suggested by such forward-looking statements are reasonable,
such statements involve uncertainties and risks, and we cannot assure you that
such plans, objectives, expectations and prospects will be achieved. Important
factors that could cause actual results to differ materially from the results
anticipated by the forward-looking statements include such matters as:

o        our ability to achieve sufficient revenues under our Plan of
         Reorganization to meet our reduced but continuous obligations to the
         State of Louisiana, the City of New Orleans and our various other
         creditors, including, in particular, our minimum required annual
         payment to the State of Louisiana in the amount of $50 million ($60
         million after our first quarter of operations after our reorganization)
         or 21.5% of our gross gaming revenues;

o        our ability to compete successfully with dockside gaming operations in
         our market area which are now permitted to remain dockside without the
         requirement of periodically traveling offshore; and

o        our ability to develop a sufficiently effective marketing plan to
         succeed in operating in a highly competitive regional gaming market
         where we also compete with other entertainment alternatives,
         particularly in the City of New Orleans where we are located.

All written or oral forward-looking statements attributable to us are expressly
qualified in their entirety by these cautionary statements.


                                   THE COMPANY

GENERAL

         We are a casino and entertainment company. We operate a land-based
casino entertainment facility (the "Casino") in downtown New Orleans, Louisiana
at the foot of Canal and Poydras Streets on the site of New Orleans' former
Rivergate convention center, which opened for business on October 28, 1999.
Pursuant to a casino operating contract dated October 30, 1998 among Jazz Casino
Company, L.L.C. which operates the Casino, Harrah's Jazz Company (now dissolved)
and the State of Louisiana, through the Louisiana Gaming Control Board, we were
granted the exclusive right to operate the Casino in Orleans Parish.

         JCC Holding was incorporated on August 20, 1996, in anticipation of
assuming the business formerly owned by Harrah's Jazz Company, which, as
described below, had filed for bankruptcy in November, 1995. We conduct business
through our wholly-owned subsidiaries,



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Jazz Casino Company, L.L.C., a Louisiana limited liability company ("Jazz
Casino"), JCC Development Company, L.L.C., a Louisiana limited liability company
("JCC Development"), JCC Canal Development, L.L.C., a Louisiana limited
liability company formerly known as CP Development, L.L.C. ("Canal
Development"), and JCC Fulton Development, L.L.C., a Louisiana limited liability
company formerly known as FP Development, L.L.C. ("Fulton Development"). We
filed for bankruptcy protection in January 2001, as further described below.
Except as otherwise noted, for purposes of this report, the words "we," "us" and
"our" refer to JCC Holding Company together with each of its subsidiaries. Our
principal executive offices are located at One Canal Place, 365 Canal Street,
Suite 900, New Orleans, Louisiana 70130, and our telephone number is
(504) 533-6000.

JCC HOLDING BANKRUPTCY PROCEEDINGS

         In July 2000, we engaged the services of the investment banking firm of
Jefferies & Company ("Jefferies") to assist us in evaluating ways to restructure
our financial obligations as we realized that, based on our operating losses, we
would need to reorganize in order to remain in business. In September 2000, the
Mayor of the City of New Orleans appointed a Tax Advisory Committee to review
the financial condition of the Casino and advise him on the financial viability
of the Casino and its economic impact on the city. Based on Jefferies' advice,
in November 2000 we presented a proposal for restructuring our financial
obligations to the Tax Advisory Committee. The proposal recommended, among other
things, a pre-negotiated bankruptcy proceeding to achieve a reorganization of
our financial arrangements and existing capital structure.

         On January 4, 2001 (the "Petition Date"), we filed voluntary petitions
for relief under Chapter 11 of the U.S. Bankruptcy Code in order to allow
restructuring of our obligations to the State of Louisiana and the City of New
Orleans, long-term debt, bank credit facilities, and trade and other
obligations. The filing was made in the U.S. Bankruptcy Court for the Eastern
District of Louisiana in New Orleans (the "Bankruptcy Court"). After the
Petition Date, we continued to operate as debtors-in-possession subject to the
Bankruptcy Court's supervision and orders.

         The bankruptcy petitions were filed in order to give us the opportunity
to restructure our debt and other obligations. Our Plan of Reorganization filed
with the Bankruptcy Court set forth the means for satisfying claims, including
liabilities subject to compromise, and interests in our company. The Plan of
Reorganization was approved by the Bankruptcy Court on March 19, 2001 and was
effective March 29, 2001. Consummation of this plan resulted in, among other
things, elimination of all our common stock existing prior to the date of
effectiveness of our Plan of Reorganization and the issuance of new equity and
debt securities to creditors. In accordance with the Plan of Reorganization, we
issued, effective on March 29, 2001, 12,386,200 shares of new common stock to
certain of our creditors, including Harrah's Entertainment Company, in
consideration of their consent to cancellation or reduction of claims against us
in connection with certain agreements.

         Pursuant to Section 365 of the U.S. Bankruptcy Code, we had the right
to assume or reject executory contracts or unexpired leases, and have done so in
certain instances in connection with our Plan of Reorganization. We did not
reject any executory contracts or unexpired leases material to our business
operations.

         While this report covers the fiscal year ended December 31, 2000, this
report should be read in light of our bankruptcy proceeding and Plan of
Reorganization. The full Plan of Reorganization and related Disclosure Statement
were filed with the SEC as part of a Form 8-K filing concerning the approval of
the bankruptcy proceeding, on March 29, 2001 (which filing is incorporated
herein by reference). The outcome of our emergence from bankruptcy and the
consummation of our Plan of Reorganization will materially affect many of the
matters described in this report.

THE CASINO

         The Casino consists of 196,000 square feet on its first floor, 100,000
square feet of which is gaming space in five themed areas named The Jazz Court,
The Mardi Gras Court, The Smuggler's Court, The Court of the Mansion and The
Court of Good Fortune. The remaining space is used for a food service area with
a 250 seat buffet, casino support facilities, and multi-function, special event
and meeting-room space. The second floor of the Casino,



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which is subleased by Jazz Casino to JCC Development, has not yet been
developed. Parking for approximately 400 cars and approximately 145,000 square
feet of back-of-house and support areas are provided in the basement level of
the Casino under the main gaming floor. Across Poydras Street and connected to
the Casino by an underground tunnel are two parking facilities that together
contain approximately 1,550 parking spaces.

         The Casino has approximately 2,900 slot machines and 120 table games,
including live poker, blackjack, craps, roulette and baccarat. The gaming
activities that may be conducted at the Casino, subject to the rule-making
authority of the Louisiana Gaming Control Board, include any banking or
percentage game that is played with cards, dice or any electronic, electrical or
mechanical device or machine for money, property or any thing of value. The
Casino, however, may not offer lotteries, bingo, wagering on dog or horse races,
sports betting or wagering on any type of sports contest or event. The Casino is
open 24 hours a day, 365 days a year and can extend credit, with no loss or
wagering limits.

         As funding and circumstances may permit, we also plan to develop
approximately 130,000 square feet of multipurpose non-gaming entertainment space
on the second floor of the Casino and develop various adjacent properties for
entertainment uses supporting the Casino. We have not obtained financing to fund
these developments, and cannot assure that we will ever obtain such funding in
light of our obligations as restructured by our Plan of Reorganization.

DESCRIPTION OF THE MANAGER

         On October 29, 1998, Jazz Casino and Harrah's New Orleans Management
Company (the "Manager") entered into an agreement pursuant to which Jazz Casino
engaged the Manager to manage the operations of the Casino. The Manager is an
indirect wholly-owned subsidiary of Harrah's Entertainment, Inc. and was formed
in May 1993 for the purpose of acting as the manager of the Casino. Harrah's
Entertainment's casino business began operations more than 60 years ago and,
through its operating subsidiaries and other affiliates, Harrah's Entertainment
currently operates casino entertainment facilities in 10 states under the
Harrah's, Showboat and Rio brand names.

Under the management agreement, the Manager is responsible for and has authority
over, among other things:

         o        hiring, supervising and establishing labor policies with
                  respect to employees working in the Casino;

         o        gaming and entertainment policies and operations including
                  security and internal control procedures;

         o        advertising, marketing and promoting the Casino;

         o        providing Casino-level accounting and budgeting services;

         o        maintaining, renovating and improving the Casino;

         o        performing certain system services generally performed at
                  casinos owned or managed by Harrah's Entertainment or its
                  affiliates; and

         o        performing certain other functions identified by Jazz Casino
                  and agreed to by the Manager.

         During the term of the management agreement, Jazz Casino is required to
fund the cost of operating the Casino and is responsible for, among other
things:

         o        approving budgets presented by the Manager;

         o        maintaining Jazz Casino's leasehold interest in the Casino's
                  premises, free from encumbrances other than those set forth as
                  exceptions in the title policy covering the Casino's premises;

         o        obtaining and maintaining all licenses and permits required to
                  own and operate the Casino and handling governmental affairs;



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         o        developing, leasing and financing the second floor of the
                  Casino;

         o        complying with certain minority, women and disadvantaged
                  persons hiring requirements;

         o        paying indebtedness encumbering the Casino;

         o        handling all community and public relations, except
                  advertising, marketing and promotions;

         o        establishing and administering employee benefit plans and
                  other employee benefit matters;

         o        determining, based on the Manager's recommendations, which
                  entity will provide the Casino certain administrative
                  services;

         o        assisting the Manager with any matters delegated to the
                  Manager if requested in writing by the Manager and agreed to
                  by Jazz Casino; and

         o        handling all corporate, administrative and other business
                  activities of Jazz Casino and any other matters not expressly
                  delegated to the Manager under the management agreement.

         Under the agreement in effect through December 31, 2000 and prior to
our bankruptcy proceeding, the Manager was entitled to receive a management fee
having two components, a fixed base fee and an incentive fee that is based on
Jazz Casino obtaining certain consolidated earnings before interest, taxes,
depreciation and amortization ("EBITDA") targets. In addition, the Manager was
entitled to receive a travel fee of $100,000 per year, subject to adjustment
based on changes in the Consumer Price Index. We were also required to pay the
Manager a "marketing contribution" that, as of December 31, 2000, was equal to
1.5% of the Casino's net revenues. This marketing contribution could be used for
advertising services, special promotions, public relations and other marketing
services. Harrah's Entertainment affiliates could pool the marketing
contribution with contributions made by other participating casinos owned or
managed by Harrah's Entertainment affiliates. The Manager could increase this
marketing contribution from time to time to ensure that it generally equals the
fee charged to other participating casinos owned or managed by affiliates of
Harrah's Entertainment.

         The management agreement also provided, among other things, that
neither the Manager nor Jazz Casino nor any of their affiliates controlled by
the Manager's ultimate parent or Jazz Casino's ultimate parent, as the case may
be, could develop, own, finance or manage a casino or other gaming operations in
Orleans, Plaquemines, St. Charles, St. Tammany, Jefferson or St. Bernard
Parishes, Louisiana, except for the Casino.

         Jazz Casino also entered into an administrative services agreement with
Harrah's Operating Company, Inc., a wholly-owned subsidiary of Harrah's
Entertainment, whereby, Harrah's Operating Company provided certain services for
a monthly fee that are not covered by the management agreement, such as computer
processing, payroll, risk management, marketing teleservices and administering
certain employee benefit packages.

         The management agreement called for the deferral of fees under certain
circumstances. Under an agreement of limited forbearance, Harrah's Operating
Company agreed to forego reimbursement under the administrative services
agreement of the fees due it. The original agreement called for the fees to be
forborne through August 1, 2000. The Manager and Harrah's Operating Company
extended the forbearance through April 1, 2001. This arrangement was subject to
the outcome of our bankruptcy proceedings, which revised the terms of the
management agreement and the administrative services agreement, as described in
our Plan of Reorganization.

MARKETING STRATEGY

         Our marketing strategy is designed to attract primarily a broad "middle
market" of casino patrons made up of both domestic and international premium
gaming customers. We use marketing material emphasizing the Casino as a total
entertainment destination, leveraging New Orleans' music, food, history,
architecture and spirit. Additionally, under the terms



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of our ground lease with the Rivergate Development Corporation and the City of
New Orleans for the site on which the Casino is located, in effect through
December 31, 2000 and prior to our bankruptcy proceeding, we paid the City of
New Orleans $1 million per year to market and promote the Casino as a part of
its destination marketing program. The Rivergate Development Corporation is a
public benefit corporation formed for the purpose of subleasing to us the site
in New Orleans designated by law for the Casino's location. This ground lease
arrangement was revised as a result of our bankruptcy proceedings, as described
in our Plan of Reorganization.

COMPETITION

         We face significant competition on a regional and local scale from
gaming operations in Mississippi and Louisiana. The Casino competes for patrons
on a national and international scale with large casino hotel facilities in Las
Vegas, Nevada and Atlantic City, New Jersey. Because of the large number of
casinos competing on both the local and national levels and the continued
development of other gaming markets, the competition facing the Casino is
expected to increase. In addition, negative publicity associated with our
Plan of Reorganization may have an adverse impact on the Casino's ability to
compete.

         The terms of the Louisiana Economic Development and Gaming Corporation
Act and the Louisiana Gaming Control Act (collectively, the "Gaming Act") and
the rules and regulations promulgated thereunder in effect through December 31,
2000 and prior to the effectiveness of our Plan of Reorganization, prohibited us
from engaging in certain activities including:

         o        giving away or subsidizing food within the Casino;

         o        offering direct table food services or food service with
                  seating in excess of 250 persons;

         o        contracting with local restaurant owners to provide food at
                  designated areas within the Casino, except under certain
                  circumstances;

         o        offering lodging within the Casino;

         o        engaging in any practice or entering into any business
                  relationships to give any hotel, whether or not affiliated
                  with us, any advantage or preference not available to any
                  similarly situated hotels; and

         o        selling products in the Casino that are not directly related
                  to gaming.

         Also, under the casino operating contract in effect through December
31, 2000, and the Gaming Act's rules and regulations prior to the effectiveness
of our Plan of Reorganization, those provisions relating to food, lodging and
retail activities applied to the second floor of the Casino. Under the terms of
the Casino's second floor sublease, we could not offer restaurant facilities on
the second floor of the Casino. In contrast, the vast majority of the Casino's
competitors operate without restrictions on lodging, food services and
entertainment. We believe that the ability to provide such amenities was a
considerable competitive advantage for our competitors. In order to compensate
for these limitations and offer our patrons the integrated Casino, dining and
entertainment experience, we offered our patrons complimentary meals, hotel
rooms, transportation, entertainment, and other amenities at various local
establishments. All of these restrictions and arrangements on our operations
were modified by legislative changes as a result of our Plan of Reorganization.

         MISSISSIPPI. We compete on a national, regional and local scale for
visitors with existing gaming facilities in Mississippi. The Mississippi Gulf
Coast has become a major gaming destination. There are currently 12 dockside
casinos operating on the Mississippi Gulf Coast that are within 100 miles of New
Orleans. In addition, there is substantial growth in Mississippi's Gulf Coast
gaming industry, including significant expansions of hotel and convention space
and the addition of golf courses. For example, in March 1999 Mirage Resorts,
Inc. opened the Beau Rivage, an 1,800 room hotel, resort and dockside casino in
Biloxi that is larger than any hotel in New Orleans. Approximately $600 million
was spent to develop the Beau Rivage and due to its size and amenities, Beau
Rivage provides significant competition to the Casino. Mississippi law allows
dockside gaming and does not limit the number of casinos or the square feet of
gaming space in these facilities. Mississippi has recently promulgated a
regulation, however, that requires new



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entrants in the industry to spend certain amounts of money on non-gaming
facilities in addition to the casino boat itself. Unlike the Casino, gaming
facilities in Mississippi operate with no restrictions on lodging, food and
beverage service, and entertainment, and several of such facilities have
recently expanded to enhance such services.

         LOUISIANA. We currently have the exclusive right to operate a
land-based casino in Orleans Parish. In authorizing the operation of a single,
official land-based gaming establishment, the Louisiana legislature intended to
promote economic development and maintain public confidence in the integrity of
casino gaming operations in a manner that ensures that the owner or operator of
the casino has no incentive to (1) divert or skim revenues, (2) engage in
illegal activities or reduce competition from other gaming entities, or (3)
conduct land-based gaming operations so as to prevent guests from patronizing
local businesses other than the official gaming establishment. The legislature
further determined that by authorizing only a single, land-based casino, all
persons involved with the casino gaming operation, including manufacturers,
suppliers, and distributors of certain gaming devices and equipment, could be
licensed, regulated, and controlled in such a manner as to, among other things,
protect the public health, safety, morals, good order, and general welfare of
the citizens of the State of Louisiana. Notwithstanding our exclusive right to
operate a land-based casino in Orleans Parish, on a regional and local scale, we
still compete with gaming operations in Louisiana, where 14 riverboats are
operating, including:

         o        one riverboat in Orleans Parish;

         o        two riverboats in the New Orleans metropolitan area;

         o        two riverboats in Baton Rouge;

         o        four riverboats in Lake Charles in western Louisiana; and

         o        five dockside casinos in Shreveport/Bossier City in northern
                  Louisiana.

         In addition, a fifteenth license to conduct riverboat gaming in
Louisiana has not yet been awarded but is currently being considered by the
Louisiana Gaming Control Board. The riverboat gaming operations are regulated by
the Louisiana Riverboat Economic Development and Gaming Control Act (the
"Riverboat Act"), which does not impose wagering or loss limits and permits all
forms of gaming with the exception of sports betting. Although the Riverboat Act
permits only dockside gaming at the facilities in the Shreveport area, the
Riverboat Act has been administered in the past so as to allow riverboats to
refrain from cruising under certain circumstances. Riverboats that remain moored
under such circumstances may allow customers unlimited entry and exit. In March
2001, the Louisiana legislature passed legislation that will allow all
riverboats to remain dockside. This change will increase competition for our
casino. We also compete with land-based gaming facilities located in central
Louisiana on Native American land. The Tunica-Biloxi, Chitimacha and Coushatta
Native American tribes have each opened casinos near the towns of Marksville,
Charenton and Kinder, respectively, each of which is located more than 105 miles
from New Orleans.

         NATIONAL AND INTERNATIONAL COMPETITION. We compete for patrons on a
national and international scale with large casino hotel facilities located in
Las Vegas, Nevada and Atlantic City, New Jersey. Several new facilities have
recently opened in Las Vegas and other existing facilities in Las Vegas and
Atlantic City have undergone major expansions. This construction and expansion
increased the number of hotel rooms and gaming positions in the Las Vegas and
Atlantic City markets and created several attractions that have enhanced the
appeal of those cities as tourist destinations. To a lesser degree, we also
compete for international patrons with casinos in other parts of the world.

         OTHER VENUES. We may face additional regional competition generated
from land-based or dockside casino facilities to be located in states which do
not currently allow casino gaming activities including Alabama and Texas. Bills
seeking to legalize gaming were introduced in both of these states in the past.
Currently, the Texas Legislature is considering a bill that would allow casinos
on American Indian reservations. If the bill passes, several tribes have already
shown interest in building casinos. For example, the Alabama-Coushatta tribe,
whose reservation is near Livingston, Texas, will try to develop a casino
pending the outcome of the legislation. Further, in February 2001, a committee
of the Texas House of Representatives endorsed a bill to let federally
recognized tribes



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operate casinos. A debate and a vote by the full House is expected to occur
before the legislative session ends on May 30, 2001. If such legislation allows
casino gaming activities in Alabama or Texas, the Casino will compete for
patrons in those states. These new markets may have an adverse impact on the
Casino's ability to compete.


         OTHER FORMS OF LEGAL WAGERING. We compete for local customers with
other forms of legal wagering, including racetracks and off-track betting
parlors. In addition, under Louisiana law, certain parishes (including Orleans
Parish) permit:

         o        restaurants, taverns, hotels and licensed clubs to operate up
                  to three video draw poker devices per location;

         o        certain truck stops to operate up to 50 video draw poker
                  devices per location;

         o        racetracks and off-track betting parlors to operate an
                  unlimited number of video draw poker devices per location; and

         o        the use of slot machines at racetracks in these Parishes (but
                  not Orleans Parish).

         Louisiana law, however, limits video draw poker device wagering and
jackpots. Other forms of wagering, including charitable gaming and a state
lottery, provide additional local competition. In 1997, the Louisiana
legislature authorized the use of slot machines in racetracks in three parishes.
This legislation was subject to approval by a referendum in each of the parishes
where the racetracks were located. The voters in all three parishes approved the
use of slot machines at the racetracks located in those parishes, and
legislative action on the fees and taxes to be imposed on the slot machines
received legislative approval. If slot machines are ultimately operated at
racetracks in the three parishes that approved the use of slot machines, the
Casino would compete for patrons with slot machines at the racetracks. These
tracks are located in Calcasieu (near Lake Charles), Bossier (near Shreveport)
and St. Landry (near Lafayette) Parishes.

DEVELOPMENT PLANS

         Concurrent with constructing the Casino's gaming facilities,
approximately 130,000 square feet of multipurpose non-gaming entertainment space
on the second floor of the Casino was constructed to the point at which the
shell of the structure is complete. We presented a preliminary master plan
governing the use of the second floor of the Casino to the City of New Orleans
on February 22, 2000, and, we are considering alternatives for financing of the
remainder of this development. We cannot assure you that we will ever obtain
such financing. Without additional financing, we will be unable to build-out and
develop the second floor of the Casino. Jazz Casino has subleased the second
floor to JCC Development pursuant to the terms of a sublease dated October 29,
1998, and JCC Development intends to manage and lease the second floor
development in a manner consistent with the master plan. The term of the second
floor sublease commenced in September 1999. As in effect through December 31,
2000, unless the second floor sublease is sooner terminated by its terms, the
sublease will terminate on the earlier of the date of expiration or the date of
termination of Jazz Casino's amended and restated ground lease dated October 29,
1998 with the Rivergate Development Corporation, as landlord, and the City of
New Orleans, as intervenor, for the Casino site in New Orleans (this lease was
amended pursuant to the terms of the Plan of Reorganization). The Louisiana
Gaming Control Board has the authority to approve the master plan and all
subleases and uses on the second floor. Jazz Casino is entitled to convert any
portion of the second floor to gaming use, subject to the approval of the
Louisiana Gaming Control Board and the provisions of its casino operating
contract. If, however, this conversion reduces the sublease revenue payable to
the Rivergate Development Corporation pursuant to the second floor sublease,
Jazz Casino is required, under certain circumstances and for certain periods of
time, to compensate the Rivergate Development Corporation for the reduction. The
casino operating contract was modified pursuant to the terms of the Plan of
Reorganization.

         We own a city block of historical buildings across the street from the
Casino and its garages, which we have planned to develop into other
entertainment uses that support the Casino. At this time, we have not completed
our plans and have not obtained financing for this development. We cannot assure
you that we can obtain such financing. This property



                                       10
<PAGE>   11


does not generate any material revenue for us. We also own the parcel of land
across from the Casino located at 3 Canal Place in New Orleans, adjacent to the
Canal Place Shopping Center. On February 14, 2000, we entered into a contract to
sell this property to Wyndham International, a hotel developer, for $6.5
million. However, we rejected this contract in connection with our Plan of
Reorganization.

1998 REORGANIZATION AND CORPORATE STRUCTURE

         Harrah's Jazz Company, a general partnership that, prior to October 30,
1998, was comprised of (1) Harrah's New Orleans Investment Company, an indirect
wholly-owned subsidiary of Harrah's Entertainment, (2) New Orleans/Louisiana
Development Corporation and (3) Grand Palais Casino, Inc., was formed on
November 29, 1993 to develop, own and operate the Casino. On November 19, 1994
Harrah's Jazz Company closed a series of transactions to finance the development
of the Casino. By November 1995, however, design modifications and project cost
overruns, coupled with operating losses incurred by the temporary casino (the
"Basin Street Casino") operated by Harrah's Jazz Company in the City of New
Orleans' Municipal Auditorium on a temporary basis until the Casino was
completed, depleted all of the equity contributions made by Harrah's Jazz
Company's partners and the proceeds from the sale of mortgage notes. On November
19, 1995, the lending banks informed Harrah's Jazz Company that they would no
longer disburse funds under the terms of the credit facilities. Faced with an
absence of funding, on November 21, 1995 Harrah's Jazz Company closed the Basin
Street Casino and suspended construction of the Casino. On November 22, 1995,
Harrah's Jazz Company and Harrah's Jazz Finance Corp. filed for bankruptcy
protection.

         On April 3, 1996, Harrah's Jazz Company, Harrah's Jazz Finance Corp.,
Harrah's New Orleans Investment Company and Harrah's Entertainment filed a plan
of reorganization and related disclosure statement with the United States
Bankruptcy Court for the Eastern District of Louisiana. A plan of reorganization
under Chapter 11 of Title 11 of the United States Bankruptcy Code, was confirmed
by the bankruptcy court on October 13, 1998, the transactions contemplated
thereby were consummated on October 30, 1998, and the construction of the Casino
resumed shortly thereafter. Under that plan of reorganization, we are the
successor to the operations of Harrah's Jazz Company.

         Pursuant to the Harrah's Jazz Company plan of reorganization, through
December 31, 2000 and through the date of effectiveness of our Plan of
Reorganization, our stock consisted of shares of class A common stock and class
B common stock. With certain exceptions, including the election of directors and
the right to separate class voting with respect to certain amendments to our
Certificate of Incorporation and Bylaws, each share of class A and class B
common stock had identical rights and privileges, ranked equally, and was
entitled to one vote. Except as otherwise required by law, the holders of the
shares of class A and class B common stock voted together as one class on all
matters.

         Our corporate structure as described above has been materially altered
as a result of our bankruptcy. All of our current class A and class B common
stock was eliminated on March 29, 2001. New common stock was issued to our
secured debtholders, who now control us. No new stock or any other consideration
will be given to replace the class A and class B common stock that was
eliminated.

EMPLOYEES

         As of March 1, 2001, we had 2,565 full-time employees and 255 part-time
employees. Jazz Casino, through the Manager, hires and trains employees to
operate the Casino. The Casino's executive staff is comprised of employees of
the Manager. The Gaming Act requires that at least 80% of the Casino's employees
be Louisiana residents for at least one year prior to employment. Jazz Casino's
amended and restated ground lease with the Rivergate Development Corporation and
the City of New Orleans also requires that at least 55% of the employees of Jazz
Casino and JCC Development live and reside in Orleans Parish, subject to
reduction to comply with applicable law. This minimum percentage will increase
by 2% on each anniversary of the Casino's opening on October 28, 1999, until the
residency requirement reaches 65%, subject to reductions to comply with
applicable law. Jazz Casino's amended general development agreement and amended
and restated ground lease also require it to comply with the revised and updated
open access program and plans adopted pursuant thereto that are designed to
facilitate participation by minorities, women, and disadvantaged persons and
business enterprises in developing, constructing and operating the Casino. This
lease was modified by our Plan of Reorganization.



                                       11
<PAGE>   12


                                   REGULATION

LOUISIANA GAMING ACT

         The ownership and operation of the Casino are subject to pervasive
governmental regulation, including regulation by the Louisiana Gaming Control
Board in accordance with the terms of the Gaming Act, the rules and regulations
promulgated thereunder and our casino operating contract. The operating contract
has a twenty-year term beginning in July 1994, with one ten-year option to
extend.

         The Gaming Act and the rules and regulations promulgated thereunder,
all of which are subject to amendment or revision, establish significant
regulatory requirements with respect to gaming and non-gaming activities,
including, without limitation:

         o        requirements with respect to permitted games;

         o        minimum accounting and financial practices;

         o        standards for gaming devices and surveillance;

         o        suitability requirements for our equity and debt holders,
                  officers, directors, and employees, and licensing requirements
                  for our vendors;

         o        standards for credit extension and collection; and

         o        permissible food services.

Failure to comply with the Gaming Act or its rules and regulations could result
in disciplinary action, including fines and suspension or revocation of a
license or a suitability determination. Certain regulatory violations could also
constitute an event of default under our casino operating contract resulting in
the termination of our right to operate the Casino.

         Under the Gaming Act and the rules and regulations promulgated
thereunder, Jazz Casino, JCC Holding, and their members, officers and directors
were required to be found suitable by the Louisiana Gaming Control Board in
order to own and operate the Casino. This suitability requirement must be
continuously satisfied during the term of the casino operating contract. The
Gaming Act and its rules and regulations also require suitability findings for,
among others, the Casino's Manager, anyone with a direct ownership interest
(regardless of percentage interest) or the ability to control Jazz Casino, JCC
Holding or the Casino's Manager (as well as their intermediary and holding
companies), certain officers and directors of such companies, certain employees
of Jazz Casino and the Casino's Manager and certain specified debt holders and
lenders that have loaned Jazz Casino or JCC Holding money in connection with the
Casino's construction and operation. To be found suitable, an applicant must
show:

         o        the applicant is a person of good character, honesty and
                  integrity;

         o        the applicant's prior activities, criminal record, if any,
                  reputation, habits and associations do not pose a threat to
                  the public interest of Louisiana or the regulation and control
                  of casino gaming or create or enhance the dangers of
                  unsuitable, unfair or illegal practices, methods and
                  activities in the conduct of gaming or the carrying on of the
                  business and financial arrangements incidental thereto; and

         o        the applicant is capable of and is likely to conduct the
                  activities for which a license or contract is sought.

In addition, to be found suitable for purposes of the casino operating contract,
Jazz Casino must demonstrate that:

         o        it has or can guarantee its ability to acquire adequate
                  business competence and experience in conducting casino gaming
                  operations;



                                       12
<PAGE>   13


         o        financing that it seeks to obtain is adequate for the proposed
                  operation and is from suitable sources; and

         o        it has, or is capable of, and guarantees its ability to obtain
                  a bond or satisfactory financial guarantee of a sufficient
                  amount to guarantee successful completion of and compliance
                  with the casino operating contract or such other projects that
                  are regulated by the Louisiana Gaming Control Board.

         Under the Gaming Act and its rules and regulations, any person holding
or controlling a direct or beneficial 5% or more equity interest (either alone
or in combination with others) in a direct or indirect holding company of Jazz
Casino, including JCC Holding or the Casino's Manager, is presumed to have the
ability to control Jazz Casino or the Casino's Manager (or their holding
companies, as the case may be), requiring a finding of suitability. However,
this suitability finding is not required if, among other things, the presumption
of control is rebutted or the holder is one of several specified passive
institutional investors and, it submits documentation which establishes (i) it
holds its interest in the ordinary course of business for investment purposes
only; (ii) it does not exercise influence over the affairs of JCC Holding or
Jazz Casino (this shall not include the exercise of voting privileges), and
(iii) it does not intend to exercise influence over JCC Holding or Jazz Casino
and that it will notify the Louisiana Gaming Control Board in writing if such
intent should change. To the extent any holder of the securities of JCC Holding
fails to satisfy such requirement, the holder may be required to obtain certain
qualifications or approvals (including a finding of suitability) from the
Louisiana Gaming Control Board to continue to hold such securities. Any failure
to obtain these qualifications or approvals may, by virtue of the requirements
imposed on us, subject these security holders to certain requirements,
limitations or prohibitions, including a requirement that the security holders
liquidate their securities at a time or at a cost that is otherwise unfavorable.
In addition, the Louisiana Gaming Control Board has the authority to investigate
the suitability or qualifications of any of our investors, including an
institutional investor, should it become aware of facts or information that an
investor may be found unsuitable or disqualified.

         Further, under the Gaming Act, the sale, transfer, assignment, pledge,
alienation, disposition, public offering, or acquisition of securities that
results in one person's owning 5% or more of the total outstanding shares issued
by Jazz Casino is void as to such person without prior approval of the Louisiana
Gaming Control Board. Failure to obtain prior approval by the Louisiana Gaming
Control Board of a person acquiring 5% or more of the total outstanding shares
of a licensee or 5% or more economic interest in Jazz Casino is grounds for
cancellation of the casino operating contract or license suspension or
revocation.

         Under the Gaming Act and its rules and regulations, the Louisiana
Gaming Control Board has the authority to deny, revoke, suspend, limit,
condition, or restrict any finding of suitability. The Louisiana Gaming Control
Board also has the authority to take further action against Jazz Casino on the
grounds that a person found suitable is associated with, or controls, or is
controlled by, or is under common control with, an unsuitable or disqualified
person. If at any time the Louisiana Gaming Control Board finds that any person
required to be and remain suitable has failed to demonstrate suitability, the
Louisiana Gaming Control Board may take any action that it deems necessary to
protect the public interest. However, if a person associated with Jazz Casino,
the Casino's Manager or their affiliates, intermediaries, or holding companies,
as the case may be, has failed to be found or remain suitable, the Louisiana
Gaming Control Board will not declare these companies unsuitable if the
companies comply with the conditional licensing provisions, take immediate good
faith action and comply with any order of the Louisiana Gaming Control Board to
cause the person to dispose of its interest, and, before such disposition,
ensure that the disqualified person does not receive any ownership benefits.
These protections do not apply if Jazz Casino, the Casino's Manager or their
affiliates, intermediaries, or holding companies, as the case may be, (1) fail
to remain suitable, (2) had actual or constructive knowledge of the facts that
are the basis for the Louisiana Gaming Control Board regulatory action and
failed to take appropriate action, or (3) are so tainted by such person that it
affects the suitability of the entity under the standards of the Gaming Act.



                                       13
<PAGE>   14


         Under the Gaming Act, the Louisiana Gaming Control Board and the
Louisiana state police are required to issue licenses or permits to certain
persons associated with our gaming operations, including:

         o        certain employees of Jazz Casino and the Casino's Manager;

         o        certain manufacturers, distributors and suppliers of gaming
                  devices;

         o        certain suppliers of non-gaming goods or services;

         o        any person who furnishes services or property to Jazz Casino
                  under an arrangement pursuant to which the person receives
                  payments based on earnings, profits or receipts from gaming
                  operations; and

         o        any other persons deemed necessary by the Louisiana Gaming
                  Control Board.

         Securing the requisite licenses and permits under the Gaming Act is a
prerequisite for conducting, operating or performing any activity regulated by
the Louisiana Gaming Control Board or the Gaming Act. The Louisiana Gaming
Control Board has full and absolute power to deny an application, or to limit,
condition, restrict, revoke or suspend any license, permit or approval, or to
fine any person licensed, permitted or approved for any cause specified in the
Gaming Act or rules promulgated by the Louisiana Gaming Control Board. The
Gaming Act's rules and regulations provide that the Louisiana Gaming Control
Board may take any such actions with respect to any person licensed, permitted,
or approved, or any person registered, found suitable, or holding a contract,
for any cause deemed reasonable. Moreover, any license, permit, contract,
approval or thing obtained or issued pursuant to the provisions of the Gaming
Act has been expressly declared by the legislature to be a pure and absolute
revocable privilege and not a right, property or otherwise, under the
constitutions of the United States or of the State of Louisiana. The Gaming Act
also provides that no holder acquires any vested right therein or thereunder.

         Under the Gaming Act's rules and regulations, all of which are subject
to amendment or revision from time to time, gaming activities that may be
conducted at an official gaming establishment, subject to the rule-making
authority of the Louisiana Gaming Control Board, include any banking or
percentage game that is played with cards, dice or any electronic, electrical or
mechanical device or machine for money, property or any thing of value, but
exclude lottery, bingo, charitable games, raffles, electronic video bingo, pull
tabs, cable television bingo, wagering on dog or horse races, sports betting or
wagering on any type of sports contest or event. The Gaming Act's rules and
regulations provide the Louisiana Gaming Control Board broad discretionary
authority to regulate all aspects of a casino operator's operations, including
the power to, among other things:

         o        establish significant regulatory requirements with respect to
                  gaming activities, including, but not limited to:

                  o        suitability standards for direct and indirect
                           investors,

                  o        requirements with respect to minimum accounting and
                           financial practices,

                  o        standards for gaming devices and surveillance,

                  o        licensure requirements for vendors and employees, and

                  o        permissible food services;

         o        investigate violations of the Gaming Act and any rules and
                  regulations promulgated thereunder, and any other incidents or
                  transactions that it deems appropriate;

         o        conduct hearings and proceedings concerning, and reviews and
                  inspections of, gaming operations and related activities;

         o        inspect and examine all premises, and all equipment or
                  supplies thereon, where gaming activities are conducted, and
                  impound, examine and inspect any equipment or supplies;

         o        audit the records of applicants and gaming operators relating
                  to revenues produced by their gaming operations;

         o        issue interrogatories and subpoenas; and



                                       14
<PAGE>   15


         o        monitor the conduct of a casino operator such as Jazz Casino,
                  and licensees, permittees and other persons having a material
                  involvement directly or indirectly with the casino operator.

         Under our casino operating contract in effect as of December 31, 2000
and through March 29, 2001, for each fiscal year of the Casino's operation, we
were required to pay to the Louisiana Gaming Control Board the greater of: (1)
$100 million or (2) specified percentages of the Casino's gross gaming revenue.
We were required to make this payment to the Louisiana Gaming Control Board in
daily increments equal to approximately $274,000, with a year-end settlement if
gross gaming revenues exceed certain amounts. At least one day prior to the
beginning of each fiscal year (no later than March 31 of each year), Jazz Casino
was required to post with the Louisiana Gaming Control Board an unconditional
guaranty of the minimum $100 million payment to the Louisiana Gaming Control
Board issued by a lender or third party with resources suitable to cover this
payment. The failure to post such a guaranty would result in the automatic
termination of the casino operating contract. Harrah's Entertainment, Inc. and
Harrah's Operating Company have provided that guaranty until March 31, 2001. On
December 27, 2000, we received notification from those entities that they would
not provide this guaranty for the period beyond March 31, 2001, under current
circumstances.

         On September 27, 2000, we received a notice from the Louisiana Gaming
Control Board that we were in default of the casino operating contract because
we had failed, as required by the contract, to demonstrate by clear and
convincing evidence that we had the continuing ability to pay, exchange,
refinance or extend debt that will mature or otherwise become due and payable
during the twelve month period commencing on July 1, 2002, primarily due to the
lack of a minimum payment guarantor for the period beyond March 31, 2001.
Pursuant to the casino operating contract, we had six months after receipt of
the Board's notice, or until March 27, 2001, to cure such a default. The failure
to cure a financial stability default within the specified period of time is an
event of default under the casino operating contract that could lead to the
closing of the Casino, terminating our casino operating contract and/or the
appointing a conservator. As a result of these and other circumstances
negatively affecting our ability to continue operations, we filed for bankruptcy
protection on January 4, 2001.

         Our Plan of Reorganization and actions by the Louisiana legislature
relating to our Plan of Reorganization, resulted in, among other things, certain
changes to the Gaming Act and the casino operating contract including (i)
lowering the minimum payment due the Louisiana Gaming Control Board from $100
million to $50 million for the fiscal year April 1, 2001 to March 31, 2002 and
$60 million for each fiscal year of the term of the casino operating contract
thereafter; (ii) altering the guaranty requirements for this minimum payment;
and (iii) easing the food, hotel and retail restrictions imposed on our
operations.

         As in effect as of December 31, 2000 and through the date of
effectiveness of our Plan of Reorganization, the Gaming Act prohibited Jazz
Casino from engaging in the following activities:

         o        Offering seated restaurant facilities with table food service
                  for patrons. However, Jazz Casino may offer limited cafeteria
                  style food services for employees and patrons if permitted by
                  rule of the Louisiana Gaming Control Board, provided, however,
                  that no food may be given away or subsidized within the Casino
                  by Jazz Casino or any licensee, and no facility for food
                  service may exceed seating for 250 people (by rule and
                  regulation, the Louisiana Gaming Control Board has authorized
                  Jazz Casino to contract with local food preparers to provide
                  certain limited food offerings at the Casino).

         o        Offering lodging in the Casino, or engaging in any practice or
                  entering into any business relationships to give any hotel,
                  whether or not affiliated with Jazz Casino, an advantage or
                  preference not available to all similarly situated hotels.

         o        Engaging in activities that are prohibited by the casino
                  operating contract.

         o        Engaging in the sale of products that are not directly related
                  to gaming.



                                       15
<PAGE>   16


         o        Cashing or accepting in exchange for the purchase of tokens,
                  chips or electronic cards an identifiable employee payroll
                  check.

Any contract between Jazz Casino and any hotel or lodging facilities was
required to be submitted to the Louisiana Gaming Control Board for approval
prior to entering into the contract.

         The Gaming Act, its rules and regulations, and the casino operating
contract have extensive provisions and prior approval requirements relating to
certain borrowings incurred, and security interests granted, by Jazz Casino and
JCC Holding in connection with the Casino. The Gaming Act authorizes the
Louisiana Gaming Control Board to provide for the protection of the rights of
holders of security interests in both immovable property and movable property
used in or related to casino gaming operations and to provide for the continued
operation of the official gaming establishment during the period of time that a
lender, as a holder of a security interest, seeks to enforce its security
interest in such property. In connection therewith, the Gaming Act provides that
the holder of a security interest in gaming related collateral may receive
payments from the owner or lessee of such property out of the proceeds of casino
gaming operations received by the owner or lessee, and, the holder of the
security interest may be exempt from the licensing requirements of the Gaming
Act with respect to these payments if the transaction(s) giving rise to the
payments were approved in advance by the Louisiana Gaming Control Board, comply
with all rules and regulations of the Louisiana Gaming Control Board and the
Louisiana Gaming Control Board determines that the holder is suitable.

STATE LEGISLATION

         Because legalized gaming is a relatively new industry in Louisiana,
there has been significant attention by the Louisiana legislature over the past
few years to gaming related bills dealing with a wide range of subjects that
could impact the Casino. For example, at various times, bills have been
introduced to, among other things:

         o        constitutionally and/or legislatively repeal all forms of
                  gaming (including gaming at the Casino);

         o        increase taxes on casinos (which bill passed in March, 2001);

         o        permit dockside riverboat gaming (which bill passed in March,
                  2001);

         o        limit credit that may be extended by casinos;

         o        mandate payout schedules for slot machines; and

         o        limit days and hours of operations.


ITEM 2. PROPERTIES.

         We own the parcel of land across from the Casino at 3 Canal Place,
adjacent to the Canal Place Shopping Center. We also own a city block of
historical buildings across the street from the Casino and its garages. Neither
of these properties currently generate any material revenues. In addition, we
are party to an approximately 30-year, long-term ground lease for the Casino
site at the foot of Canal and Poydras Streets in New Orleans. Under the ground
lease, we also lease the land across Poydras Street upon which the Casino
operates two parking facilities that are connected to the Casino by an
underground tunnel and that together contain approximately 1,550 spaces. The
terms and continuation of this lease have been modified as a result of our Plan
of Reorganization.

         We lease our principal executive offices of approximately 30,000 square
feet under a 104 month lease effective as of January 1, 2000. Our property
located on Fulton and Poydras Streets, which contains approximately 48,300
square feet of usable office space, is being used for recruiting offices until
the property is developed. We currently use our property located at 3 Canal
Place for employee parking. On February 14, 2000, we entered into a contract to
sell to Wyndham International, a hotel developer, the property located at 3
Canal Place for $6.5 million. We rejected this contract under our Plan of
Reorganization.



                                       16
<PAGE>   17


         Approximately 130,000 square feet of multipurpose non-gaming
entertainment space on the second floor of the Casino has been constructed to
the point at which the shell of the structure is complete and the space is
suitable for tenant build-out. Jazz Casino has subleased the second floor to JCC
Development and JCC Development intends to manage and lease the second floor in
a manner consistent with a master plan being developed by JCC Development and
Jazz Casino. The term of the second floor sublease commenced in September 1999
and terminates on the earlier of the date of expiration or the date of
termination of Jazz Casino's amended and restated ground lease with the
Rivergate Development Corporation and the City of New Orleans, unless the second
floor sublease is sooner terminated by its terms. The ground lease has been
modified as a result of our Plan of Reorganization.

         Under a lease that expires in July 2023, we lease approximately 15
acres of land, including an unoccupied 15,000 square foot building. It was
originally anticipated that this land would be used for employee parking.
However, more suitable parking was located closer to the Casino. On January 3,
2001 this lease was amended to provide that a significant portion of the
property, including the unoccupied building, will be released to the landlord,
effective March 31, 2001 and the rent reduced. We have the right to terminate
this lease on August 1, 2003. On February 7, 2001, we entered into a
month-to-month sublease agreement with a third party which subleased the
remaining property under this lease effective as of February 1, 2001. Pursuant
to a master lease that expires in February 2004, we also lease an aggregate of
approximately 41,000 square feet of warehouse space where we store gaming
equipment and supplies for use in the Casino.

         To secure present and future indebtedness under certain of our
agreements the following were subject to mortgages granted to the Bank of New
York as the collateral agent: (1) Jazz Casino's interest in the amended and
restated ground lease between Jazz Casino and the Rivergate Development
Corporation and the City of New Orleans, (2) the property located at 3 Canal
Place, (3) the property located on Fulton and Poydras Streets, (4) the sublease
of the second floor of the Casino, and (5) the lease of approximately 15 acres
of land described above. These mortgages have been cancelled and have been
replaced as a result of our Plan of Reorganization.

ITEM 3. LEGAL PROCEEDINGS.

         We are subject to legal proceedings and claims which arise in the
normal course of business. While we cannot predict the outcome of these matters
with certainty, we do not believe they will materially and adversely affect our
business, financial condition or results of operations. On January 4, 2001, we
filed voluntary petitions for relief under Chapter 11 of the U.S. Bankruptcy
Code in order to allow restructuring of our obligations to the State of
Louisiana and the City of New Orleans, long-term debt, bank credit facilities,
trade and other obligations. The filing was made in the U.S. Bankruptcy Court
for the Eastern District of Louisiana in New Orleans (the "Bankruptcy Court").
The Bankruptcy Court confirmed our plan on March 19, 2001. The plan was
effective on March 29, 2001.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

         We did not submit any matters to a vote of stockholders during our
fourth fiscal quarter ended December 31, 2000.

                                     PART II

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
        MATTERS.

CLASS A COMMON STOCK PRICE

         Our class A common stock began trading on the American Stock Exchange
under the symbol "JAZ" on December 9, 1998. Prior to that time, our class A
common stock was not listed or traded on any organized market. On November 15,
2000, the American Stock Exchange halted trading in our stock and notified us
that we no longer met the Exchange's continued listing requirements. The class A
common stock was delisted by the Exchange on November 30, 2000. The table set
forth below provides, on a per share basis for each quarter in 2000 and 1999,
the high and low sales prices of our class A common stock as reported on the
American Stock Exchange and through the Over the Counter Bulletin Board trading
system.



                                       17
<PAGE>   18


<TABLE>
<CAPTION>
                                                   HIGH     LOW
                                                  ------   -----
<S>                                               <C>      <C>
Fiscal 2000
  First Quarter.................................  $ 4.25   $ 1.19
  Second Quarter................................  $ 2.00   $ 0.63
  Third Quarter.................................  $ 1.56   $ 0.50
  Fourth Quarter................................  $ 0.81   $ 0.02
Fiscal 1999
  First Quarter.................................  $ 3.75   $ 3.00
  Second Quarter................................  $ 8.75   $ 3.38
  Third Quarter.................................  $ 9.50   $ 5.88
  Fourth Quarter................................  $10.00   $ 2.69
</TABLE>

HOLDERS

         As of March 1, 2001, there were approximately 431 record holders of the
class A common stock, and we estimate that there were approximately 2,107
beneficial owners of the class A common stock. As of March 1, 2001 there were
three beneficial owners and record holders of the class B common stock. All of
our outstanding common stock was eliminated as a result of our Plan of
Reorganization which was effective on March 29, 2001.

DIVIDEND POLICY

         We have never paid any cash dividends on our class A or class B common
stock and none will ever be paid inasmuch as all of these shares of common stock
were eliminated on March 29, 2001 as a result of our Plan of Reorganization.

ITEM 6. SELECTED FINANCIAL DATA.

         The following table sets forth selected consolidated statements of
operations and balance sheet data of (1) JCC Holding for the fiscal years ended
and as of December 31, 2000 and 1999, and the two-month period ended December
31, 1998, and (2) Harrah's Jazz Company for the ten-month period ended October
30, 1998 and for the fiscal years ended, and as of, December 31, 1997 and 1996.
Although JCC Holding was incorporated on August 20, 1996, prior to October 30,
1998, we had not conducted any operations, generated any revenues or issued any
capital stock. Accordingly, separate financial information with respect to the
Company prior to the two month period ended December 31, 1998 are omitted
because we do not believe that such separate financial information is material.
On October 30, 1998, Jazz Casino succeeded to all of the assets of Harrah's Jazz
Company except the property located at 3 Canal Place and the property located on
Fulton and Poydras Streets, which vested in Canal Development and Fulton
Development, respectively. The selected financial data for the ten-month period
ended October 30, 1998 and for the fiscal years ended and as of December 31,
1997 and 1996 have been derived from Harrah's Jazz Company's audited financial
statements. The selected financial data for the fiscal years ended and as of
December 31, 2000 and 1999 and for the two-month period ended and as of December
31, 1998 have been derived from our audited financial statements. The selected
financial data should be read in conjunction with "Item 7. Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Item 8. Financial Statements and Supplementary Data," and in light of our Plan
of Reorganization.



                                       18
<PAGE>   19


<TABLE>
<CAPTION>
                                               JCC HOLDING (SUCCESSOR)            HARRAH'S JAZZ COMPANY (PREDECESSOR)
                                      ----------------------------------------  --------------------------------------
                                      FISCAL YEAR   FISCAL YEAR    TWO MONTH     TEN MONTH   FISCAL YEAR   FISCAL YEAR
                                        ENDED          ENDED      PERIOD ENDED  PERIOD ENDED    ENDED         ENDED
                                      DECEMBER 31,  DECEMBER 31,  DECEMBER 31,   OCTOBER 30, DECEMBER 31,  DECEMBER 31,
                                         2000          1999           1998         1998         1997          1996
                                      -----------   ------------  ------------  ------------ ------------  ------------
                                                         (IN THOUSANDS, EXCEPT PER SHARE DATA)
<S>                                   <C>            <C>           <C>            <C>         <C>          <C>
Operating Revenues (a)                $  261,105     $  41,156     $       14     $      87   $   1,679    $    1,661
Extraordinary items (b)                       --            --             --     $ 267,706          --            --
Consolidated net income
(loss)(c)                             $ (354,228)    $ (59,140)    $   (3,677)    $ 169,993   $ (21,244)   $  (20,900)
Basic loss per share                  $   (34.79)    $   (5.88)    $    (0.37)          N/A         N/A           N/A
Total assets                          $  221,461     $ 506,402     $  343,131     $ 354,417   $ 359,469    $  364,480
Long-term debt                        $  396,412     $ 368,222     $  185,519            --          --            --
Liabilities subject to compromise     $       --     $      --     $       --     $      --   $ 523,468    $  523,483
Stockholders' Equity (Deficit)        $ (308,673)    $  45,554     $  104,410     $      --   $      --    $       --
Partners' Deficit                     $       --     $      --     $       --     $      --   $(212,207)   $ (190,963)
</TABLE>

         (a)      JCC Holding's fiscal 1999 results of operations reflect
                  approximately two months of revenues generated from the
                  Casino, which opened on October 28, 1999.

         (b)      A discussion of the extraordinary item related to the
                  discharge of debt during the bankruptcy proceedings is
                  presented in Note 1 to Harrah's Jazz Company's financial
                  statements included in "Item 8. Financial Statements and
                  Supplementary Data."

         (c)      A discussion of the impairment charges of $258.8 million is
                  presented in Note 3 to JCC Holding Company's financial
                  statements included in "Item 8. Financial Statements and
                  Supplementary Data."





                                       19
<PAGE>   20


ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
        AND RESULTS OF OPERATIONS.

         The following discussion and analysis should be read in conjunction
with "Item 6. Selected Financial Data" and "Item 8. Financial Statements and
Supplementary Data." This discussion contains forward-looking statements that
involve uncertainties and risks, such as statements of our plans, objectives,
expectations and prospects. Our actual results could differ materially from
those discussed herein as a result of certain factors, including but not limited
to those discussed below in "Factors Affecting Future Performance" and elsewhere
in this document. All of these statements and the entire text that follows
should be read in conjunction with and in light of our Plan of Reorganization
that became effective March 29, 2001.

OVERVIEW

         We are a casino and entertainment company. JCC Holding Company was
incorporated under Delaware law on August 20, 1996, and conducts business
through its wholly-owned subsidiaries, Jazz Casino Company, JCC Development
Company, JCC Canal Development and JCC Fulton Development. We began operations
in October 1998, when we assumed the business operations formerly owned by
Harrah's Jazz Company, a general partnership, and its subsidiary, Harrah's Jazz
Finance Corporation, which filed for relief under the United States Bankruptcy
Code on November 22, 1995. On October 30, 1998, in accordance with the plan of
reorganization of Harrah's Jazz Company and its subsidiary, Harrah's Jazz
Finance Corporation, we became the successor to the operations of Harrah's Jazz
Company.

         Although JCC Holding Company was incorporated on August 20, 1996, prior
to October 30, 1998, we did not conduct any operations, generate any revenues or
issue any capital stock. During the period from October 30, 1998 to October 27,
1999, our activities consisted primarily of administering the construction of
our Casino and preparing for opening the Casino on October 28, 1999. Because the
Casino did not open until October 28, 1999, our results of operations for the
periods presented in this report are not comparable. As a result, the discussion
regarding operating results during the periods presented in this report
addresses only the various significant components of revenue and expense line
items contributing to net losses for the respective periods. In accordance with
the Securities and Exchange Commission's guidelines, our financial statements
and supplementary data and that of Harrah's Jazz Company are presented in
Item 8 herein.

         On January 4, 2001, we filed voluntary petitions for relief under
Chapter 11 of the U.S. Bankruptcy Code in order to allow restructuring of our
obligations to the State of Louisiana and the City of New Orleans, long-term
debt, bank credit facilities and trade and other obligations. The filing was
made in the U.S. Bankruptcy Court for the Eastern District of Louisiana in New
Orleans (the "Bankruptcy Court"). The Bankruptcy Court confirmed our plan on
March 19, 2001 and the plan was effective on March 29, 2001. All of the
following text should be read in light of and in conjunction with the Plan of
Reorganization, a copy of which was filed on March 29, 2001, with the SEC as
part of a Form 8-K filing concerning the approval of the bankruptcy proceeding
(which filing is incorporated herein by reference).

RESULTS OF OPERATIONS

         Total Revenues. In 2000, we generated Casino revenue of $245.5 million,
food and beverage revenue of $20.3 million, and retail, parking and other
revenue of $9.8 million. Casino promotional allowances amounted to $14.5 million
resulting in total net revenues of $261.1 million. Revenues continue to be below
the level necessary to satisfy our liquidity needs. Despite the deferrals under
certain of our contractual agreements, our obligations, including the $100
million minimum annual payment required under our casino operating contract,
continue to exceed revenues on a monthly basis.

         From October 28, 1999 to December 31, 1999, we generated Casino revenue
of $38.0 million, food and beverage revenue of $3.7 million, and retail, parking
and other revenue of $1.7 million. Casino promotional allowances amounted to
$2.4 million resulting in total net revenues of $41.0 million. For the same
period, although approximately 1.1 million people visited the Casino, which
exceeded expectations, revenues fell short of expectations due to less gaming
activity per visitor than projected.



                                       20
<PAGE>   21


         From January 1, 1999 to October 27, 1999, we generated revenues of
approximately $126,000 consisting of parking revenues generated primarily by the
parking facilities located on our property at 3 Canal Place which opened in June
1999 and at the Casino which opened in October 1999.

         From October 30, 1998 to December 31, 1998, we generated revenues of
approximately $14,000 consisting of parking revenues generated by the parking
lot located on our property at 3 Canal Place.

         Casino Expenses. In 2000, we incurred Casino expenses of $215.2 million
resulting in a gaming operating profit of $15.8 million. Casino expenses
primarily consisted of the minimum daily payments to the Louisiana Gaming
Control Board required under our casino operating contract, labor costs, player
development and entertainment costs, promotional costs, and security and
surveillance related expenses. The minimum daily payments to the Louisiana
Gaming Control Board totaled $100.3 million of the $215.2 million of casino
operating expenses for the year 2000. The high fixed cost components associated
with the business, particularly the minimum daily payments of $274,000 to the
Louisiana Gaming Control Board, adversely affect our ability to generate
operating profits and maintain adequate liquidity for ongoing operations.

         From October 28, 1999 to December 31, 1999, we incurred Casino expenses
of $35.0 million resulting in a gaming operating profit of $631,000. Casino
expenses primarily consisted of the minimum gaming revenue share payments to the
Louisiana Gaming Control Board under Jazz Casino's casino operating contract,
labor costs, player development and entertainment costs, promotional costs, and
security and surveillance related expenses. Operating profit was lower than
expected due to lower than anticipated revenue levels coupled with the high
fixed cost component associated with the business.

         Food and Beverage Expenses. In 2000, we incurred food and beverage
operating expenses of $16.1 million resulting in a food and beverage operating
profit of $4.2 million. Food and beverage operating expenses primarily consisted
of labor costs and food and beverage raw materials costs. The Casino's food and
beverage operations and potential revenues from them have been limited by
restrictions imposed by the Gaming Act and the regulations of the Louisiana
Gaming Control Board. For example, the Casino has been prohibited from offering
seated restaurant facilities with table food services for patrons. The Casino
has been, however, able to offer cafeteria-style food services for employees and
a buffet for patrons with seating for up to 250 people. In addition, the
Louisiana Gaming Control Board has permitted the Casino to contract with local
food preparers to provide food from kiosks in specific locations on the gaming
floor.

         From October 28, 1999 to December 31, 1999, we incurred food and
beverage operating expenses of $2.9 million resulting in a food and beverage
operating profit of $818,000. Food and beverage operating expenses primarily
consisted of labor costs and food and beverage raw materials costs. Our food and
beverage operations and potential revenues from them were somewhat limited by
the contractual restrictions imposed by the Louisiana Gaming Control Board in
accordance with the terms of the Gaming Act.

         Retail, Parking and Other Expenses. In 2000, we incurred retail,
parking and other expenses of $4.1 million resulting in retail, parking and
other operating profit of $5.7 million. Retail, parking and other operating
expenses primarily consisted of the cost of retail merchandise sold and expenses
related to operating the Casino's two parking facilities and providing an
employee cafeteria.

         In 1999, we incurred retail, parking and other expenses of $1.2 million
resulting in retail, parking and other operating profit of $619,000. Retail,
parking and other operating expenses primarily consisted of the cost of retail
merchandise sold and expenses related to operating the Casino's two parking
facilities, and providing an employee cafeteria.

         General and Administrative Expenses. In 2000, we incurred general and
administrative expenses of $86.4 million consisting primarily of city rental
payments, salaries and wages of administrative staff, advertising expenses,
entertainment costs, and legal and professional fees.

         In 1999, we incurred general and administrative expenses of $16.0
million consisting primarily of city rental payments, salaries and wages of
administrative staff, advertising expenses, entertainment costs, and legal and
professional fees.



                                       21
<PAGE>   22


         From October 30, 1998 to December 31, 1998, we incurred general and
administrative expenses of $310,000 related to franchise taxes.

         Depreciation and Amortization Expenses. In 2000 and 1999 and from
October 30, 1998 to December 31, 1998, we incurred depreciation and amortization
expenses of $26.3 million, $5.1 million and $111,000, respectively.

         Provision for Asset Impairment. We periodically evaluate whether events
and circumstances have occurred that indicate that certain assets may not be
recoverable. Management concluded from the results of our recent evaluation that
a significant impairment of our long lived assets had occurred and that an
impairment charge was required. Accordingly, during the fourth quarter of 2000,
we recorded an impairment charge of approximately $255.9 million and an
additional $2.9 million for the write-down of assets to be disposed of during
2000. See Note 3 to the consolidated financial statements for a discussion of
our asset impairment adjustments. Considerable management judgment is necessary
to estimate the fair value of our long lived assets. Accordingly, actual results
may vary from management's estimates.

         Pre-opening Expenses. From January 1, 1999 to October 27, 1999 and from
October 30, 1998 to December 31, 1998, we incurred pre-opening expenses of $35.2
million and $3.6 million, respectively. These expenses consisted primarily of
salaries and wages, legal and professional fees, costs incurred to recruit and
train employees to work in the Casino and pre-opening marketing expenses.

         Reorganization Item. During 1999, our pre-1998 bankruptcy confirmation
contingencies were reduced by $1.6 million due to a change in estimate.

         Other Income (Expenses). In 2000 and from October 28, 1999 to December
31, 1999, we incurred interest charges of $46.7 million and $6.9 million,
respectively. Prior to October 28, 1999, we capitalized all interest charges. In
2000 and from January 1, 1999 to October 27, 1999 and from October 30, 1998 to
December 31, 1998, the Company capitalized interest of $140,000, $21.7 million,
and $3.5 million, respectively.

         In 2000 and 1999 and from October 30, 1998 to December 31, 1998, we
generated interest income of $413,000, $412,000 and $310,000, respectively,
attributable primarily to overnight repurchase investments.

LIQUIDITY AND CAPITAL RESOURCES

         Because of unsustainable operating results, on January 4, 2001, we
filed a voluntary petition for Chapter 11 reorganization in the Bankruptcy Court
for the Eastern District of Louisiana in New Orleans. Our Plan of
Reorganization, which was approved by the Bankruptcy Court on March 19, 2001 and
became effective on March 29, 2001, reflects reorganization of our debt and
capital structure in conjunction with a reduction in our $100 million minimum
annual payment to the State of Louisiana, a reduction in rent and certain other
charges imposed by the City of New Orleans and relief from certain operating
restrictions. The timing of this filing was in part the result of our need to
conclude our reorganization process prior to March 31, 2001 to meet the
obligations imposed by our casino operating contract with the State of Louisiana
and prevent closure of the Casino, as explained below.

         Our confirmed Plan of Reorganization resulted in, among other things,
elimination of all of our common stock existing prior to March 29, 2001 and the
issuance of new securities to certain creditors in exchange for a reduction of
our obligations to them.

         The Casino remained open and continued operations during the bankruptcy
proceedings. No disruptions in employment or operations were experienced.

         The following discussion of our performance should be read in
conjunction with and in light of our Plan of Reorganization.

         Capital resources for construction projects. From October 30, 1998
until the Casino's opening on October 28, 1999, our principal capital
requirements related to constructing the Casino. As of December 31, 2000, all
construction and pre-opening invoices had been paid. However, there are several
remaining unresolved creditor claims from the November 1995 bankruptcy. These
claims total approximately $2 million.



                                       22
<PAGE>   23


         The funds necessary to complete the development and construction of the
Casino following Harrah's Jazz Company's bankruptcy (including the installation
of certain gaming equipment and other furniture, fixtures and equipment) were
derived from a combination of $15 million of new equity investment from Harrah's
Crescent City Investment Company made in connection with Harrah's Jazz Company's
reorganization, $211.5 million of term loans under our credit agreement, $22.5
million provided under our junior subordinated credit facility and the issuance
of approximately $27.3 million of convertible junior subordinated debentures,
all of which had been funded as of December 31, 2000. In addition, to finance
the loading of the Casino's slot machines with approximately $6 million in
coins, in a sale and leaseback transaction on October 20, 1999, we sold 1,085 of
our slot machines to a subsidiary of Harrah's Entertainment, Inc. This
subsidiary leased the slot machines back to us, and we used the proceeds from
the sale to fill the slot machines with coins. We also borrowed $5.1 million
under the completion loan agreement with Harrah's Entertainment and Harrah's
Operating Company pursuant to their completion guarantees to fund the final
construction and pre-opening expenses. As of December 31, 2000, $1.8 million of
these funds were available to settle the unresolved claims.

         Working capital for operations. In 2000, we experienced operating
losses before depreciation and amortization and a provision for asset impairment
of approximately $60.7 million. A number of our contractual agreements contained
provisions that allowed us to defer payment of certain operating expenses to
help absorb these initial operating losses. Despite these deferrals, our
obligations continued to exceed our revenues on a monthly basis. A description
of the various deferral arrangements follows.

         We had the option to pay the first six semi-annual payments of fixed
interest on our senior subordinated notes with contingent payments, in kind
rather than in cash. We also had the option of paying the interest on our
convertible junior subordinated debentures, in whole or in part, in kind rather
than in cash (1) at any time on or prior to October 30, 2003, and (2) at any
time thereafter if we did not make contingent payments with respect to our
senior subordinated contingent notes on the immediately preceding interest
payment date for the senior subordinated contingent notes.

         In addition, the scheduled quarterly repayments under our credit
agreement with the banks could be deferred for any of the first six semi-annual
interest payment periods if we paid interest on our senior subordinated notes
with contingent payments in kind. Further, the Casino's Manager deferred its
fees under the terms of its management agreement with us and its agreement to
provide us a minimum payment guaranty to the State of Louisiana as required by
the casino operating contract, as in effect through December 31, 2001.

         During 2000 and 1999, we paid the first four semi-annual interest
payments on our senior subordinated notes with contingent payments and
convertible junior subordinated debentures in kind rather than in cash, which
amounted to $12.1 million and $11.7 million, respectively. In 2000, we deferred
an aggregate of $5.2 million, in principal repayments under our credit agreement
that were scheduled to be paid on July 31, 2000 and October 31, 2000, in
accordance with the terms of that agreement.

         No fixed interest was payable on our senior subordinated contingent
notes through December 31, 2000. Contingent payments with respect to our senior
subordinated notes with contingent payments and our senior subordinated
contingent notes, to the extent they were due and owing, were payable on each
interest payment date based on the Contingent Payment Measurement Amount, as
such term is defined in the indentures governing these notes. In 2000, the
Contingent Payment Measurement Amount was negative $58.5 million and in 1999 it
was negative $11.8 million. During these same periods, our Consolidated EBITDA,
as such term is defined in the indentures governing our senior subordinated
notes with contingent payments and our senior subordinated contingent notes,
(through the date of our bankruptcy filing on January 4, 2001) was negative
$58.5 million and $17.9 million, respectively. During these periods, no
contingent payments were accrued or were paid on either the senior subordinated
notes with contingent payments or the senior subordinated contingent notes.

         Additionally, in accordance with the terms of the applicable agreement,
we deferred the following amounts owed to Harrah's Entertainment or its
subsidiaries:

         o        interest payments under our junior subordinated credit
                  facility and our completion loan agreement;




                                       23
<PAGE>   24


         o        credit enhancement fees payable as consideration for the
                  guaranty that they have agreed to provide with respect to
                  certain amounts outstanding under our bank credit agreement;

         o        fees under the HET/JCC agreement relating to our minimum
                  payment guaranty agreement; and

         o        management fees under our management agreement with Harrah's
                  New Orleans Management Company.


As of December 31, 2000, $22.1 million had been deferred under these contracts
and was owed to Harrah's Entertainment or its subsidiaries.

         On February 29, 2000, we entered into a limited forbearance agreement
with Harrah's New Orleans Management Company and Harrah's Operating Company,
which was subsequently amended on August 31, 2000. Under this amendment to the
forbearance agreement, Harrah's Operating Company and Harrah's New Orleans
Management Company each agreed to forbear until April 1, 2001, the payment of
the following additional items that we owed or which became due prior to April
1, 2001:

         o        rent and certain additional charges with respect to certain
                  equipment used at the Casino that we lease from Harrah's
                  Operating Company;

         o        fees with respect to certain administrative services that
                  Harrah's Operating Company provides us under an administrative
                  services agreement; and

         o        certain costs, expenses and services for which we are required
                  to reimburse Harrah's New Orleans Management Company under our
                  management agreement.


         As of December 31, 2000, we had deferred a total of $18.0 million of
payments to Harrah's New Orleans Management Company or Harrah's Operating
Company under the limited forbearance agreement.

         Under our credit agreement, $25 million was available for working
capital purposes under our revolving line of credit which has been used to
partially cover operating losses. As of December 31, 2000, the outstanding
balance under the revolving line of credit was $25.0 million, including
outstanding letters of credit of $1.7 million. Our credit agreement required
that we satisfy certain EBITDA maintenance requirements on a quarterly basis. We
did not meet the required EBITDA test for the quarter ended June 30, 2000.
However, at our request, the bank lenders under the credit agreement granted a
temporary waiver of our failure to comply with this covenant. That waiver, which
also placed a temporary limit on our revolver borrowing, expired on August 31,
2000 and was replaced with an amendment to our credit agreement as discussed
below.

         Under the HET/JCC agreement, advances by Harrah's Entertainment and
Harrah's Operating Company under the minimum payment guaranty constituted a
demand obligation of JCC and were secured by first priority liens on our assets.
During various periods in 2000, under the terms of the minimum payment guaranty,
Harrah's Operating Company, Inc., began making the minimum daily payments of
approximately $274,000 due to the Louisiana Gaming Control Board under our
casino operating contract in order to provide us with necessary working capital.
As of December 31, 2000, Harrah's Entertainment and Harrah's Operating Company
had advanced $44.1 million to the Louisiana Gaming Control Board on our behalf
under the minimum payment guaranty. The principal balance outstanding was
subject to interest at The London Interbank Offered Rate ("LIBOR") plus 1% (8.0%
as of December 31, 2000). Because funding under the minimum payment guaranty
(and any subsequent minimum payment guaranty) could constitute a default under
our credit agreement with the banks if our reimbursement obligation to Harrah's
Entertainment and Harrah's Operating Company in connection therewith exceeded $5
million, our bank lenders granted us a limited waiver of the default subject to
the following conditions, which were agreed to:

         o        Harrah's Entertainment and Harrah's Operating Company agreed
                  to renew their minimum payment guaranty for the full fiscal
                  year beginning April 1, 2000 through March 31, 2001;



                                       24
<PAGE>   25


         o        with respect to the monies that Harrah's Entertainment and
                  Harrah's Operating Company paid to the Louisiana Gaming
                  Control Board on our account under the minimum payment
                  guaranty, they would not demand repayment of, and we could not
                  repay, the principal or accrued interest owed on the
                  principal, until, at the earliest, March 31, 2001;

         o        the principal amount of un-reimbursed payment obligations
                  under this agreement to Harrah's Entertainment and Harrah's
                  Operating Company could not exceed $40 million without
                  additional lender waivers; and

         o        the waiver would be terminated if Harrah's Entertainment or
                  Harrah's Operating Company demanded repayment of the principal
                  and accrued interest on the advances under the minimum payment
                  guaranty.

         In connection with these agreements, on August 31, 2000, we entered
into the Amendment to Credit Agreement; Modifications to Third Waiver and
Related Documents; Amendment to Manager Subordination Agreement; and Other
Agreements Amongst the Parties. The terms of this agreement provided for the
following amendments and modifications to certain of our then existing
agreements:

         o        The agreement (1) amended our credit agreement to, among other
                  things, change the EBITDA maintenance requirements with which
                  we were required to comply through the quarter ended December
                  31, 2000 (and through the date of our bankruptcy filing on
                  January 4, 2001); (2) subject to certain limitations,
                  re-established our $25 million revolving line of credit; (3)
                  granted additional waivers to allow Harrah's Entertainment,
                  Inc. and Harrah's Operating Company to advance up to an
                  additional $10 million for a total of $50 million under their
                  minimum payment guaranty of the $100 million minimum annual
                  payment that we were required to pay to the Louisiana Gaming
                  Control Board under our casino operating contract, subject to
                  certain limitations, including the requirement that we had to
                  first borrow all of the $25 million available under our
                  revolving line of credit before additional amounts could be
                  advanced under the minimum payment guaranty; and (4) extended
                  until February 28, 2001, the date by which a notice by
                  Harrah's Entertainment, Inc. to the banks or the Louisiana
                  Gaming Control Board that the minimum payment guarantee will
                  not be extended, would constitute an event of default.

         o        The agreement amended our limited forbearance agreement (as
                  discussed above) with Harrah's New Orleans Management Company
                  and Harrah's Operating Company to permit us to continue to
                  forbear until April 1, 2001, the payment of certain amounts,
                  including amounts due and becoming due under the
                  administrative services agreement, reimbursable costs due
                  under our management agreement and the rent and certain
                  additional charges with respect to certain equipment that we
                  lease from Harrah's Operating Company. The previous expiration
                  date of the forbearance agreement had been August 31, 2000.

         o        Harrah's Operating Company, Inc. purchased from our bank
                  lenders approximately $145.5 million of our present
                  obligations to the bank lenders, which it had previously
                  guaranteed under the Guaranty and Loan Purchase Agreement, and
                  agreed to provide the funding for the balance of our $25
                  million revolving line of credit as it was drawn.

         On July 24, 2000, in accordance with Section 9.5 of the Amended and
Renegotiated Casino Operating Contract with the State of Louisiana, Harrah's New
Orleans Management Company and we submitted a Certificate confirming compliance
with the requirements of Section 9.5(a) through 9.5(d) of the casino operating
contract relating to the maintenance of a casino bankroll, the performance and
payment of operating expenses, the performance and payment of debt obligations
and the payment of capital maintenance expenses. However, on September 27, 2000,
we received a notice from the Louisiana Gaming Control Board that we were in
default of Section 9.5(c) of the Amended and Renegotiated Casino Operating
Contract with the State of Louisiana. The Gaming Control Board informed us of
the Board's determination that we had failed, as required by the casino
operating contract, to demonstrate by clear and convincing evidence that we had
the continuing ability to pay, exchange, refinance or extend debt that will
mature or otherwise become due and payable during the twelve month period
commencing on July 1, 2001, primarily due to the lack of a minimum payment
guarantor for the period beyond March 31, 2001. Pursuant to the



                                       25
<PAGE>   26


casino operating contract, we had six months after receipt of the Board's
notice, or until March 27, 2001, to cure such a default.

         In order to address timely the Board's finding of default and provide
for the possibility of continued operations, in light of our unsustainable
financial performance, we began considering a significant restructuring of our
arrangements with our securities holders, our lenders, Harrah's Entertainment,
Inc., Harrah's Operating Company, Inc., Harrah's New Orleans Management Company
(the manager of the casino and a wholly controlled affiliate of Harrah's
Entertainment, Inc.), the State of Louisiana, the city of New Orleans, and other
parties to whom we had contractual or legal obligations. We engaged the services
of the investment banking firm Jefferies & Company, Inc., to assist us in
evaluating how we might restructure our financial obligations and possibly
continue operations. The evaluation by Jefferies & Company determined that we
principally needed to restructure the $100 million annual minimum payment to the
State because that payment by itself materially and fundamentally affected our
financial viability.

         The casino operating contract required that the minimum daily payments
to the State of Louisiana be guaranteed for each year beginning on April 1 of
the year that the Casino is open and if there is no guaranty the casino
operating contract is deemed automatically terminated. On December 27, 2000, we
received notice from Harrah's Operating Company and Harrah's Entertainment, Inc.
that they would not post the guaranty for the period beginning April 1, 2001.
These events led to our bankruptcy filing on January 4, 2001.

         Capital expenditures. Pursuant to our amended and restated ground lease
with the Rivergate Development Corporation and the City of New Orleans, our
management agreement with Harrah's New Orleans Management Company and our casino
operating contract, we established a capital replacement fund to fund the
capital expenditures necessary to operate the Casino. We were contractually
required to fund monthly payments into the capital replacement fund in an
aggregate amount equal to $3 million for the first 12 months following the
Casino's opening, $4 million for the second 12 months following the Casino's
opening, $5 million for the third 12 months following the Casino's opening, and
2% of the gross revenues of the Casino for each fiscal year thereafter. As of
December 31, 2000, we had deposited $3.4 million into the interest-bearing
capital reserve account and expended approximately $1.9 million.

         Capital resources for development activities. In addition to the gaming
related entertainment offered at the Casino, as funding and circumstances may
permit, we plan to develop additional real estate in New Orleans for
entertainment uses that support the Casino. The second floor of our Casino was
constructed to the point at which the shell of the structure was complete when
the Casino opened in October 1999. The Casino's second floor was planned to
ultimately consist of approximately 130,000 square feet of multipurpose
non-gaming entertainment space.

         We have spent approximately $1.7 million through December 31, 2000
towards developing a master plan for the build out and leasing of the second
floor of the Casino for non-gaming uses and for construction-related work that
needed to take place on the second floor of the Casino prior to opening the
Casino in order to prevent disruption to the Casino's gaming operations. We have
arranged to borrow up to $2 million from a subsidiary of Harrah's Entertainment
to fund these items. Borrowings under this were subject to interest at 9% per
year, and, at our option, could be paid in cash or in kind. Principal and
interest under this loan could be paid out of the permanent financing ultimately
obtained for the completion of the second floor of the Casino. As of December
31, 2000, we had borrowed $1.7 million under this loan. We presented a
preliminary master plan governing the use of the second floor of the Casino to
the City of New Orleans on February 22, 2000 and are currently considering
alternatives for financing of the remainder this development. Without additional
financing, we will be unable to build-out and develop the second floor of the
Casino. We have not obtained successful financing to fund these developments,
and cannot assure that we will ever be able to do so.

         We also own the city block of historical buildings across the street
from the Casino and its garages, which we have planned to develop into other
entertainment uses that support the Casino. At this time, we have not completed
our plans and have not obtained financing for this development. We do not expect
to obtain such financing if ever, unless and until we restructure our
contractual obligations.

         We also own the parcel of land across from the casino located at 3
Canal Place, adjacent to the Canal Place Shopping Center. On February 14, 2000,
we entered into a



                                       26
<PAGE>   27


contract to sell this property to Wyndham International, a hotel developer for
$6.5 million, but have since rejected that contract under our Plan of
Reorganization.

         Inflation. To date, we believe inflation has not had a material impact
on our operations.

         Recently Issued Pronouncements. In June 1998, the Financial Accounting
Standards Board ("FASB") issued SFAS No. 133, "Accounting for Derivative
Instruments and Hedging Activities", amended in June 2000 by SFAS No. 138,
"Accounting for Certain Derivative Instruments and Certain Hedging Activities",
which requires the recognition of all derivatives as assets or liabilities in
the statement of financial position and measures those instruments at fair
value. Changes in fair value derivatives are recorded in earnings or other
comprehensive income depending upon the intended use of the derivative and the
resulting designation. The effective date of this statement has been delayed to
fiscal years beginning after June 15, 2000. The adoption of SFAS No. 133 on
January 1, 2001, as amended by SFAS No. 138, had no material impact on the
consolidated financial position and results of operations.

FACTORS AFFECTING FUTURE PERFORMANCE

         The following discussion should be read with our current Plan of
Reorganization in mind. The discussion is prospective and should be considered
in light of our ongoing operations as contemplated by our Plan of
Reorganization.

GAMING LAWS AND REGULATIONS COULD ADVERSELY AFFECT OUR OPERATIONS

         Future state legislation could adversely affect our operations. We
cannot assure you that the Louisiana legislature will not enact legislation that
imposes obligations, restrictions or costs that could interfere with Jazz
Casino's casino operations, cause Jazz Casino to violate agreements to which it
is a party or otherwise materially and adversely affect us. Because legalized
gaming is a relatively new industry in Louisiana, over the past few years the
Louisiana state legislature has given a significant amount of attention to
gaming related bills, many of which could impact the Casino. For example, at
various times, bills have been introduced to:

         o        constitutionally and/or legislatively repeal all forms of
                  gaming (including gaming at the Casino);

         o        increase taxes on casinos (which bill passed in March, 2001);

         o        permit dockside riverboat gaming (which bill passed in March,
                  2001);

         o        limit credit that may be extended by casinos;

         o        mandate payout schedules for slot machines;

         o        limit days and hours of casino operations; and

         o        create additional restrictions on food service offered at the
                  Casino.


         We cannot assure you that Louisiana will not subsequently enact new
legislation that modifies or revokes our right to conduct gaming activities or
otherwise materially and adversely affects our business and operations. For
example, in the spring of 1996, the Louisiana legislature passed legislation
that called for a parish-by-parish referendum to decide, on an item-by-item
basis, whether riverboat gaming, video poker gaming and, in Orleans Parish, a
land-based casino should be permitted to operate in the parish. Although, on
November 5, 1996, voters in Orleans Parish elected to permit land-based casino
gaming, riverboat gaming and video poker gaming in Orleans Parish, if similar
legislation is enacted in the future, it could lead to the Casino's gaming
operations being suspended or permanently prohibited. In addition, the State of
Louisiana could increase competition by authorizing additional riverboats or
other forms of gaming or other land-based casinos in Orleans Parish or elsewhere
in Louisiana. For example, in 1997, the Louisiana legislature authorized the use
of slot machines at racetracks in three parishes in Louisiana (but not Orleans
Parish) subject to a 15,000 square foot limitation, and in 2001 it passed
legislation authorizing dockside gaming. In addition, other legislative changes,
such as broadened food service restrictions, and the introduction of new
legislation, could materially and adversely affect our business, financial
condition and results of operations.



                                       27
<PAGE>   28


         Jazz Casino and certain of its affiliates must be found suitable under
Louisiana law. Jazz Casino was not permitted to operate the Casino unless and
until certain persons were found suitable by the Louisiana Gaming Control Board.
These persons include (1) Jazz Casino, (2) JCC Holding, (3) Harrah's
Entertainment, (4) the Manager, and (5) certain members, officers and directors
of these companies. In addition, additional officers and directors of Jazz
Casino, JCC Holding or the Manager may be required to be found suitable. If all
required suitability findings are not received on a timely basis, it could
materially and adversely affect our business, financial condition and results of
operations. Once found suitable, entities and persons that are required to be
suitable have an ongoing obligation to maintain their suitability throughout the
term of the casino operating contract. Jazz Casino's and the Manager's
suitability also may be adversely affected by persons associated with them and
their respective affiliates, over whom Jazz Casino and the Manager have no
control. If Jazz Casino or the Manager is found unsuitable and, as a
consequence, our casino operating contract is revoked, it would materially and
adversely affect our business, financial condition and results of operations.

         The Gaming Act, its rules and regulations, and the casino operating
contract also impose certain suitability requirements on the holders of our debt
instruments and equity.

         We and our debt and equity holders (resulting from our Plan of
Reorganization) could be the subject of regulatory enforcement actions. The
Louisiana Gaming Control Board is empowered to sanction Jazz Casino, JCC
Holding, the Manager, holders of debt and equity of Jazz Casino and its
affiliates, including JCC Holding, and people that hold permits, licenses or
that are required to be found suitable by the Louisiana Gaming Control Board for
violations of the Gaming Act and the rules and regulations promulgated
thereunder. If Jazz Casino, Jazz Casino's employees, JCC Holding or the Manager
fails to comply with the Gaming Act, its rules and regulations or regulatory
requirements in our casino operating contract, including suitability
requirements, it could materially and adversely affect us and holders of our
debt and equity. For example, we could be subject to fines, suspension of our
rights granted by the casino operating contract and, under certain
circumstances, revocation or termination of our casino operating contract. In
addition, if any holder of our debt instruments or equity is required to be
suitable and fails to be suitable, the holder may be required to sell or
otherwise divest such securities at substantially below-market prices.

         We may not be able to enforce our contractual rights against the State
of Louisiana. Under our casino operating contract, we are entitled to bring an
action to compel specific performance or any other remedy permitted or provided
by law if the Louisiana Gaming Control Board breaches the contract and fails to
cure the breach. In the spring of 1996, however, the Louisiana legislature
enacted a bill that purports to amend the Gaming Act to provide the State of
Louisiana and all of its subdivisions (including the Louisiana Gaming Control
Board) with immunity from suit and liability for any action or failure to act on
the part of Louisiana or any of its political subdivisions (including the
Louisiana Gaming Control Board). We cannot assure you that in the event we seek
to enforce our rights under the casino operating contact, that a court would
allow the suit to proceed. If the Louisiana Gaming Control Board fails to comply
with the casino operating contract, it could materially and adversely affect our
business, financial condition and results of operations. This adverse affect
would be exacerbated if a court applied the immunity statute.

         Our operations could be subject to future federal legislation. In 1996,
Congress enacted a law creating a federal commission to study the economic and
social impact of gaming and report its findings to Congress and the President. A
report was issued by the commission in June 1999. We cannot determine the impact
of this report on future legislation that may impact the gaming industry. We
cannot assure you that the report will not result in new laws or regulations
that would adversely impact the gaming industry in general and the Casino in
particular.

THE POLITICAL ENVIRONMENT IN LOUISIANA COULD ADVERSELY AFFECT OUR ABILITY TO
OPERATE THE CASINO OR DEVELOP OUR OTHER PROPERTIES

         Louisiana state and local politics have affected, and will continue to
affect, the Casino's development and may affect the Casino's operation. There is
considerable opposition to gaming among a segment of the population in
Louisiana. The enactment and implementation of gaming legislation in Louisiana
and the Casino's development have been the subject of lawsuits, claims and
delays brought about by various anti-gaming and preservationist groups and
competitors of the Casino. Although these lawsuits and claims have all been
settled or dismissed, these lawsuits and claims, together with contract
negotiations with Louisiana and



                                       28
<PAGE>   29


New Orleans governmental entities, significantly delayed the Casino's
development. Additional lawsuits and the uncertain political environment may
result in further delays, all of which could materially and adversely affect our
business, financial condition and results of operations.

WE MAY NOT BE ABLE TO RENEW OUR MINIMUM PAYMENT GUARANTY

         After the effectiveness of our Plan of Reorganization, we will be
required to pay at least $60.0 million per year after the first year of
operations to the State of Louisiana under the casino operating contract and to
obtain a guaranty of this $60.0 million payment obligation. Harrah's
Entertainment and Harrah's Operating Company agreed to post the guaranty for the
first four years of operation through March 31, 2005, but not for the entire
term of the casino operating contract. There can be no assurance that we will be
able to obtain a guaranty beyond March 31, 2005.

THE CASINO MAY NEVER BE PROFITABLE

         We cannot predict the number of visitors to the Casino, their
propensity to wager or the success of land based gaming in New Orleans, a market
that has never supported significant land based gaming operations. For example,
Harrah's Jazz Company projected that revenues for the 12 months that its
temporary Basin Street Casino was scheduled to operate would be approximately
$395 million, or an average of approximately $33 million per month. The actual
results of the Basin Street Casino, however, proved to be significantly less
than those projections. Gross revenues for the Basin Street Casino's six full
months of operations averaged approximately $13 million per month and, for those
six months, the Basin Street Casino had significant negative operating cash
flows, and net losses in every month, averaging approximately $13.5 million per
month. As a result, the Casino may never be profitable or generate positive net
earnings. We have sustained losses since opening. For the years ended December
31, 2000 and 1999, we incurred losses of $354.2 million and $59.1 million,
respectively, which were greater than anticipated due primarily to the Casino's
lower than projected revenues, coupled with an extremely high ratio of fixed
expenses due to the $100 million fixed payment to the State and an impairment
charge in 2000.

JAZZ CASINO MAY HAVE NO RECOURSE IF ADDITIONAL LAND-BASED CASINOS ARE PERMITTED

         The Gaming Act presently restricts land-based casino gaming in Orleans
Parish to where the Casino is presently located, at the foot of Canal and
Poydras Streets on the site of New Orleans' former Rivergate Convention Center.
However, we cannot assure that the State of Louisiana will not enact future
legislation that would permit competing land-based casinos at other sites or in
parishes other than Orleans Parish, including other parishes in the New Orleans
metropolitan area. If an additional land-based casino gaming establishment is
authorized to operate in Orleans Parish, Jazz Casino would not have to pay the
Louisiana Gaming Control Board the compensation required under the provisions of
its casino operating contract, although this obligation may resume pursuant to
the terms of the casino operating contract. Additional land-based casino
operations could materially and adversely affect the Casino's operations by
increasing the amount of competition it faces.

OUR OPERATIONS DEPEND ON GAMING OPERATIONS IN A SINGLE MARKET

         We do not have and do not presently anticipate having operations other
than the Casino and operations that support the Casino. Therefore, we depend
solely upon visitors to New Orleans and New Orleans area residents for our
revenue. As a result, any of the following occurrences could negatively impact
the Casino's operations, which could materially and adversely affect our
business, financial condition and results of operations:

         o        a downturn in the local or regional economy;

         o        a decline in tourism in New Orleans;

         o        a decline in the New Orleans gaming market;

         o        an increase in competition faced by the Casino; or

         o        a reduction or cessation of activities at the Casino due to
                  flooding, severe weather, natural disasters or otherwise.




                                       29
<PAGE>   30


WE MAY NOT BE ABLE TO DEVELOP CERTAIN OF OUR PROPERTIES

         We cannot complete our anticipated build-out of the non-gaming tenant
improvements on the second floor of the Casino until, among other things, the
master plan governing the use of the second floor is approved, tenant leases are
obtained, the necessary financing is secured and certain zoning ordinance
waivers are obtained. In addition, we will be unable to develop the property
located on Fulton and Poydras Streets for entertainment uses that support the
Casino until, among other things, we obtain the necessary financing. We have not
completed plans for the development of this property. We may not be able to
obtain the necessary financing and satisfy the other conditions to developing
the non-gaming tenant improvements on the second floor of the Casino, or the
property located on Fulton and Poydras Streets. The failure to develop these
properties could materially and adversely affect our ongoing business, financial
condition and results of operations.

THE MANAGER AND CERTAIN OF OUR DIRECTORS HAVE CONFLICTS OF INTERESTS REGARDING
THE CASINO

       Harrah's Entertainment owns or controls (indirectly through one or more
subsidiaries or affiliates) dockside casinos in Vicksburg and Tunica,
Mississippi, Shreveport, Louisiana and two riverboat casinos in Lake Charles,
Louisiana. These casinos, together with other casinos that Harrah's
Entertainment (or one or more of its subsidiaries or affiliates) may develop,
compete with the Casino at a regional level. Harrah's Entertainment also owns or
controls (indirectly through one or more subsidiaries or affiliates), casinos in
the five major Nevada and New Jersey gaming markets, which casinos compete with
the Casino on a national basis. Currently, the Chairman of our board of
directors, Mr. Colin V. Reed, is also a member of Harrah's Entertainment
three-executive office of the President, the Executive Vice President and Chief
Financial Officer of Harrah's Entertainment and Senior Vice President of the
Manager. Mr. Reed has served as a Class B director while also serving in these
capacities with Harrah's Entertainment and the Manager. In addition, Mr. Philip
G. Satre, the Chairman of the Board, President and Chief Executive Officer of
Harrah's Entertainment, and Eddie N. Williams, a director of Harrah's
Entertainment, have been Class B directors. Under Jazz Casino's management
agreement with the Manager, the Manager, a wholly-owned subsidiary of Harrah's
Entertainment, has been exclusively responsible for supervising and managing the
Casino. As a result of Harrah's Entertainment's ownership of competing casinos,
together with its ownership of the Manager and the positions held by Messrs.
Reed, Satre and Williams as both Class B directors and officers or directors of
Harrah's Entertainment and/or the Manager, a conflict of interest have may have
existed because they have access to our information and business opportunities,
any or all of which could be useful to one or more of Harrah's Entertainment's
competing casinos. The indentures governing Jazz Casino's Notes, its credit
agreement and its management agreement with the Manager each have imposed
restrictions on our ability to enter into transactions with affiliates,
including Harrah's Entertainment. In addition, our board of directors has
implemented procedures that require transactions with Harrah's Entertainment and
its affiliates to be approved by disinterested directors. We cannot assure,
however, that the restrictions in such agreements or these procedures will
successfully resolve conflicts of interest confronting, or which may confront,
us.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

         We do not engage in trading market risk sensitive instruments. We also
do not purchase, for investment, hedging or for purposes `other than trading,'
instruments that are likely to expose us to market risk, whether interest rate,
foreign currency exchange, commodity price or equity price risk, except as
discussed in the following paragraph. We have not entered into any forward or
futures contracts, purchased any options or entered into any swaps. We have no
foreign operations and currently do not deal in foreign currencies. Thus, we do
not believe that we have any material exposure to foreign currency exchange rate
risk.

         Through the date of our bankruptcy filing on January 4, 2001, we had a
significant amount of indebtedness, which accrued interest at fixed and variable
rates. As of December 31, 2000, the aggregate amount of our outstanding
indebtedness was $530.9 million, of which $255.6 million accrued interest at
variable rates and $275.3 million accrued interest at fixed rates. The interest
rate of our variable rate indebtedness fluctuated with changes in the base rate
and the LIBOR rate applicable under our credit agreement. A change in either the
base rate or LIBOR under our credit agreement would affect the interest rate at
which indebtedness outstanding under the credit agreement accrues. As a result,
a



                                       30
<PAGE>   31


significant increase in either the base rate or LIBOR could materially and
adversely affect our financial position and results of operations.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.





                                       31
<PAGE>   32


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To the Board of Directors and Stockholders
of JCC Holding Company
New Orleans, LA

         We have audited the accompanying consolidated balance sheets of JCC
Holding Company and subsidiaries (the "Company") (Successor to "Harrah's Jazz
Company") as of December 31, 2000 and 1999, and the related consolidated
statements of operations, stockholders' equity (deficit) and cash flows for the
years ended December 31, 2000 and 1999 and for the period from October 30, 1998
to December 31, 1998. These financial statements are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.

         We conducted our audits in accordance with auditing standards generally
accepted in the United States of America. 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.

         As discussed in Note 1 to the financial statements, on October 13,
1998, the Bankruptcy Court entered an order confirming a plan of reorganization
which became effective after the close of business on October 29, 1998.
Accordingly, the accompanying financial statements have been prepared in
conformity with AICPA Statement of Position 90-7, "Financial Reporting for
Entities in Reorganization Under the Bankruptcy Code," for the successor company
as a new entity with assets, liabilities, and a capital structure having
carrying values not comparable with prior periods.

         As further discussed in Note 1, the Company filed for reorganization
under Chapter 11 of the Federal Bankruptcy Code on January 4, 2001. The
Bankruptcy Court entered an order confirming the plan of reorganization which
became effective on March 29, 2001. The consequences of this bankruptcy
proceeding will be reflected in the financial statements as of the effective
date.

         In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of JCC Holding Company and
subsidiaries as of December 31, 2000 and 1999, and the results of their
operations and their cash flows for the years ended December 31, 2000 and 1999
and for the period from October 30, 1998 to December 31, 1998 in conformity with
accounting principles generally accepted in the United States of America.


                                             /s/ DELOITTE & TOUCHE LLP

Memphis, Tennessee
March 30, 2001




                                       32

<PAGE>   33
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      (Successor to Harrah's Jazz Company)
                           CONSOLIDATED BALANCE SHEETS
                           December 31, 2000 and 1999
                      (In thousands, except per share data)

<TABLE>
<CAPTION>

                                                                                            2000              1999
                                                                                        ------------       ------------
<S>                                                                                     <C>                <C>
                                     ASSETS
Current Assets:
     Cash and cash equivalents (includes restricted
         cash of $2,113 and $6,382, respectively)                                       $     26,626       $     34,687
     Accounts receivable, net of allowance for doubtful
         accounts of  $1,958 and $228, respectively                                            6,272              3,177
     Inventories                                                                                 685                354
     Prepaids and other assets                                                                 3,678              2,760
     Property available for sale                                                                  --              4,831
                                                                                        ------------       ------------
             Total current assets                                                             37,261             45,809
                                                                                        ------------       ------------

Property and Equipment:
     Buildings on leased land                                                                128,936            306,129
     Furniture, fixtures and equipment                                                        22,492             43,634
     Property held for development                                                            15,520             10,138
     Leasehold improvements                                                                      245                 --
     Construction in progress                                                                     89                151
                                                                                        ------------       ------------
             Total                                                                           167,282            360,052
     Less - accumulated depreciation                                                         (25,561)            (4,179)
                                                                                        ------------       ------------
             Net property and equipment                                                      141,721            355,873
                                                                                        ------------       ------------

Other Assets:
     Deferred operating contract cost, net of accumulated
         amortization of $3,269 and $494, respectively                                        25,536             68,182
     Lease prepayment, net of accumulated
         amortization of $816 and $124, respectively                                           6,312             16,861
     Deferred charges and other, net of accumulated
         amortization of $1,567 and $421, respectively                                        10,631             19,677
                                                                                        ------------       ------------
             Total other assets                                                               42,479            104,720
                                                                                        ------------       ------------

             Total Assets                                                               $    221,461       $    506,402
                                                                                        ============       ============

                     LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current Liabilities:
     Short-term borrowings                                                              $     23,250       $     15,850
     Accounts payable - trade                                                                    844              2,012
     Accrued interest                                                                          7,025              2,081
     Accrued expenses                                                                         12,301             20,791
     Due to affiliates                                                                        64,806              4,648
     Preconfirmation contingencies                                                             2,212              3,033
     Other                                                                                     1,977              2,009
                                                                                        ------------       ------------
             Total current liabilities                                                       112,415             50,424
                                                                                        ------------       ------------

Long-term debt (including debt to affiliates of $31,947 and $23,704, respectively)           396,412            368,222
Deferred income taxes                                                                             --             37,900
Due to affiliates                                                                             20,968              4,302
Other long-term liabilities                                                                      339                 --

Commitments and Contingencies

Stockholders' Equity (Deficit):
     Common Stock:
         Unclassified Common Stock (40,000 shares authorized; none
             issued and outstanding; par value $.01 per share)                                    --                 --
         Class A Common Stock (20,000 shares authorized; 5,778 shares
             and 5,638 shares, respectively, issued and outstanding;
             par value $.01 per share)                                                            58                 56
         Class B Common Stock (20,000 shares authorized; 4,453 shares
             issued and outstanding; par value $.01 per share)                                    45                 45
     Additional paid-in capital                                                              108,269            108,538
     Accumulated deficit                                                                    (417,045)           (62,817)
     Less - unearned compensation                                                                 --               (268)
                                                                                        ------------       ------------
             Total stockholders' equity (deficit)                                           (308,673)            45,554
                                                                                        ------------       ------------

             Total Liabilities and Stockholders' Equity (Deficit)                       $    221,461       $    506,402
                                                                                        ============       ============
</TABLE>

See Notes to Consolidated Financial Statements.



                                       33
<PAGE>   34

                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      (Successor to Harrah's Jazz Company)
                      CONSOLIDATED STATEMENTS OF OPERATIONS
          For the Years Ended December 31, 2000 and 1999 and the Period
                   from October 30, 1998 to December 31, 1998
                        (In thousands, except share data)

<TABLE>
<CAPTION>

                                                                                                TWO-MONTH
                                                          YEAR ENDED        YEAR ENDED         PERIOD ENDED
                                                         DECEMBER 31,       DECEMBER 31,       DECEMBER 31,
                                                            2000                1999               1998
                                                         ------------       ------------       ------------
<S>                                                      <C>                <C>                <C>
REVENUES:
      Casino                                             $    245,473       $     38,005       $         --
      Food and beverage                                        20,356              3,693                 --
      Retail, parking and other                                 9,821              1,819                 14
      Less - casino promotional allowances                    (14,545)            (2,361)                --
                                                         ------------       ------------       ------------
         Total net revenues                                   261,105             41,156                 14
                                                         ------------       ------------       ------------

OPERATING EXPENSES:
      Direct:
         Casino                                               215,176             35,013                 --
         Food and beverage                                     16,131              2,875                 --
         Retail, parking and other                              4,133              1,200                 --
      General and administrative                               86,387             16,046                310
      Depreciation and amortization                            26,339              5,107                111
      Provision for asset impairment                          258,812                 --                 --
      Pre-opening expenses                                         --             35,160              3,580
                                                         ------------       ------------       ------------
         Total operating expenses                             606,978             95,401              4,001
                                                         ------------       ------------       ------------

OPERATING LOSS                                               (345,873)           (54,245)            (3,987)
                                                         ------------       ------------       ------------

REORGANIZATION ITEM                                                --              1,562                 --

OTHER INCOME (EXPENSE):
      Interest expense, net of capitalized interest           (46,668)            (6,869)                --
      Interest and other income                                   413                412                310
                                                         ------------       ------------       ------------
         Total other income (expense)                         (46,255)            (6,457)               310
                                                         ------------       ------------       ------------

LOSS BEFORE TAXES                                            (392,128)           (59,140)            (3,677)

INCOME TAX BENEFIT                                             37,900                 --                 --
                                                         ------------       ------------       ------------

NET LOSS                                                 $   (354,228)      $    (59,140)      $     (3,677)
                                                         ============       ============       ============

BASIC NET LOSS PER SHARE                                 $     (34.79)      $      (5.88)      $      (0.37)
                                                         ============       ============       ============

WEIGHTED AVERAGE SHARES OUTSTANDING                        10,180,505         10,055,140         10,000,000
                                                         ============       ============       ============
</TABLE>


See Notes to Consolidated Financial Statements.


                                       34
<PAGE>   35
                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      (Successor to Harrah's Jazz Company)
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          For the Years Ended December 31, 2000 and 1999 and the Period
                   from October 30, 1998 to December 31, 1998
                                 (In thousands)

<TABLE>
<CAPTION>

                                                                                                                    TWO-MONTH
                                                                              YEAR ENDED         YEAR ENDED        PERIOD ENDED
                                                                              DECEMBER 31,       DECEMBER 31,       DECEMBER 31,
                                                                                  2000               1999               1998
                                                                              ------------       ------------       ------------
<S>                                                                           <C>                <C>                <C>
Cash Flows From Operating Activities:
   Net loss                                                                   $   (354,228)      $    (59,140)      $     (3,677)
   Adjustments to reconcile net loss to net cash used in operating
     activities:
        Depreciation and amortization                                               26,339              5,107                111
        Provision for asset impairment                                             258,812                 --                 --
        Deferred income taxes                                                      (37,900)                --                 --
        Amortization of note discount                                                5,369                765                 --
        Amortization of unearned compensation                                           --                259                 --
        Deferred rent                                                                1,624                226                 --
        Provision for bad debts                                                      1,770                 --                 --
        Write-off of preconfirmation contingencies                                      --             (1,562)                --
        Loss on sale of property and equipment                                          --                 27                 --
   Changes in operating assets and liabilities:
        Accounts receivable                                                         (4,865)            (3,134)               (43)
        Inventories                                                                   (331)              (354)                --
        Prepaids and other assets                                                     (918)            (1,062)            (1,634)
        Accounts payable - trade                                                    (1,168)             1,369                643
        Accrued interest                                                            19,523             (5,855)                --
        Accrued expenses                                                            (7,652)            16,336              4,455
        Preconfirmation contingencies                                                 (821)            (2,084)           (68,750)
        Due to affiliates                                                           34,090              8,224                500
        Other current liabilities                                                      (31)             2,009                 --
                                                                              ------------       ------------       ------------
          Net cash flows used in operating activities                              (60,387)           (38,869)           (68,395)
                                                                              ------------       ------------       ------------

Cash Flows From Investing Activities:
   Capital expenditures                                                             (3,408)          (130,552)           (27,026)
   Proceeds from sale of property                                                       --              6,042                 --
   Increase in deferred charges and other assets                                    (1,218)            (8,492)            (5,700)
                                                                              ------------       ------------       ------------
          Net cash flows used in investing activities                               (4,626)          (133,002)           (32,726)
                                                                              ------------       ------------       ------------

Cash Flows From Financing Activities:
   Net borrowings (repayments) of short-term borrowings                              7,400             15,850                 --
   Proceeds from notes payable to affiliates                                        49,552                 --                 --
   Proceeds from issuance of long-term debt                                             --            165,202                 --
                                                                              ------------       ------------       ------------
          Net cash flows provided by financing activities                           56,952            181,052                 --
                                                                              ------------       ------------       ------------

Net increase (decrease) in cash and cash equivalents                                (8,061)             9,181           (101,121)

Cash and cash equivalents, beginning of period                                      34,687             25,506            126,627
                                                                              ------------       ------------       ------------

Cash and cash equivalents, end of period                                      $     26,626       $     34,687       $     25,506
                                                                              ============       ============       ============

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
   Cash paid during the period for:
        Interest                                                              $     15,519       $     10,473                 --
   Noncash investing and financing activities:
        Increase in long-term debt for payment-in-kind interest payments      $     14,578       $     14,013                 --
        Capitalized interest                                                  $        140       $     18,924       $      3,025
        Issuance of restricted stock awards                                   $        199       $        527                 --
        Amortization of note discount                                                   --       $      2,771       $        506
</TABLE>


See Notes to Consolidated Financial Statements.


                                       35

<PAGE>   36

                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      (Successor to Harrah's Jazz Company)
           CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
         For the Years Ended December 31, 2000 and 1999 and the Period
                   from October 30, 1998 to December 31, 1998
                                 (In thousands)

<TABLE>
<CAPTION>


                                                  COMMON STOCK
                                --------------------------------------------------
                                        CLASS A                    CLASS B         ADDITIONAL
                                -----------------------     ----------------------   PAID-IN   ACCUMULATED    UNEARNED
                                 SHARES         AMOUNT        SHARES      AMOUNT     CAPITAL     DEFICIT     COMPENSATION     TOTAL
                                ---------     ---------     ---------    ---------  ---------    -------     ------------   --------

<S>                             <C>           <C>           <C>          <C>        <C>         <C>           <C>         <C>
Balance -- October 30, 1998         5,547     $      55         4,453    $      45  $ 107,987   $      --     $      --   $ 108,087

Net loss                                                                                           (3,677)                   (3,677)
                                ---------     ---------     ---------    ---------  ---------   ---------     ---------   ---------
Balance -- December 31, 1998        5,547            55         4,453           45    107,987      (3,677)           --     104,410
                                ---------     ---------     ---------    ---------  ---------   ---------     ---------   ---------

Restricted stock activity              92             1                                   526                      (268)        259
Other                                  (1)                                                 25                                    25
Net loss                                                                                          (59,140)                  (59,140)
                                ---------     ---------     ---------    ---------  ---------   ---------     ---------   ---------
Balance -- December 31, 1999        5,638            56         4,453           45    108,538     (62,817)         (268)     45,554
                                ---------     ---------     ---------    ---------  ---------   ---------     ---------   ---------

Restricted stock activity             140             2                                  (269)                      268           1

Net loss                                                                                         (354,228)                 (354,228)
                                ---------     ---------     ---------    ---------  ---------   ---------     ---------   ---------
Balance -- December 31, 2000        5,778     $      58         4,453    $      45  $ 108,269   ($417,045)    $      --   ($308,673)
                                =========     =========     =========    =========  =========   =========     =========   =========

</TABLE>

See Notes to Consolidated Financial Statements.



                                       36

<PAGE>   37



                      JCC HOLDING COMPANY AND SUBSIDIARIES
                      (Successor to Harrah's Jazz Company)
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
          FOR THE YEARS ENDED DECEMBER 31, 2000 AND 1999 AND THE PERIOD
                   FROM OCTOBER 30, 1998 TO DECEMBER 31, 1998


NOTE 1.  ORGANIZATION, BASIS OF PRESENTATION AND BANKRUPTCY IN JANUARY 2001

Organization. JCC Holding Company ("JCC Holding") was incorporated under
Delaware law on August 20, 1996 in contemplation of succeeding to all of the
assets and liabilities of Harrah's Jazz Company, a general partnership, which
filed for relief under the United States Bankruptcy Code on November 22, 1995.
JCC Holding conducts business through its wholly-owned subsidiaries, Jazz Casino
Company, L.L.C., a Louisiana limited liability company ("Jazz Casino"), JCC
Development Company, L.L.C., a Louisiana limited liability company ("JCC
Development"), JCC Canal Development, L.L.C., a Louisiana limited liability
company formerly known as CP Development, L.L.C. ("Canal Development")and JCC
Fulton Development, L.L.C., a Louisiana limited liability company, formerly
known as FP Development, L.L.C. ("Fulton Development" and, together with JCC
Holding, Jazz Casino, JCC Development and Canal Development, the "Company").
Except as otherwise noted for purposes of this report, references to the words
"we", "us" and "our" refer to JCC Holding Company together with each of its
subsidiaries.

On October 30, 1998, in accordance with the Harrah's Jazz Company Joint Plan of
Reorganization confirmed by the United States Bankruptcy Court, we became the
successor to the operations of Harrah's Jazz Company. In connection with the
Harrah's Jazz Company plan of reorganization, JCC Holding issued an aggregate of
10 million shares of its capital stock consisting of both Class A and Class B
Common Stock. The former bondholders of Harrah's Jazz Company received Class A
Common Stock, which constituted approximately 52% of the issued and outstanding
Class A and Class B Common Stock. In addition, the former bondholders also
received their pro rata share of (i) $187.5 million in aggregate principal
amount of Jazz Casino's senior subordinated notes with contingent payments, and
(ii) Jazz Casino's senior subordinated contingent notes (see Note 6). Harrah's
Entertainment, Inc. ("Harrah's Entertainment") acquired beneficial ownership of
Class B Common Stock which constitutes approximately 43% of the issued and
outstanding Class A and Class B Common Stock.

Our purpose is to develop and operate an exclusive land-based casino
entertainment facility (the "Casino") in New Orleans, Louisiana. The Casino
commenced operations on October 28, 1999. Through certain of its subsidiaries,
JCC Holding also plans to develop approximately 130,000 square feet of
multipurpose non-gaming entertainment space on the second floor of the Casino
and develop various adjacent properties for entertainment uses supporting the
Casino. Currently, we have not obtained financing to fund these developments.

Basis of Presentation - 1998 Reorganization. As of October 30, 1998, the
Company's consolidated financial statements have been prepared in accordance
with the American Institute of Certified Public Accountants' ("AICPA") Statement
of Position No. 90-7, "Financial Reporting by Entities in Reorganization Under
the Bankruptcy Code" ("SOP 90-7").

In accordance with the SOP 90-7, we established its reorganization value and
adopted "fresh start" reporting as of October 30, 1998. We adopted "fresh start"
reporting because owners immediately before filing and confirmation of the
Harrah's Jazz Company plan of reorganization received less than 50% of the
voting shares of the emerging entity, and its reorganization value is less than
the postpetition liabilities and allowed claims, as shown below:

<TABLE>
<S>                                                                                 <C>
                                                                                    (In thousands)
Post-petition current liabilities                                                      $  83,777
Liabilities deferred pursuant to Chapter 11 proceedings                                  523,468
                                                                                       ---------
Total postpetition liabilities and allowed claims                                        607,245
Reorganization value                                                                     331,000
                                                                                       ---------
Excess of liabilities over reorganization value                                       $  276,245
                                                                                      ==========
</TABLE>



                                       37
<PAGE>   38
Pursuant to SOP 90-7, the total reorganization value of the reorganized
Company's assets was determined using several factors and by reliance on various
valuation methods, including discounting cash flow, as well as by analyzing
market cash flow multiples applied to our forecasted cash flows. The factors
considered by the Company included: (1) forecasted cash flow results which gave
effect to the estimated impact of the restructuring; (2) the discounted residual
value at the end of the forecast period; (3) competition and general economic
considerations; and (4) future potential profitability. Based on this analysis,
we, after consultation with an independent firm specializing in reorganizations,
established our reorganization value as follows:

<TABLE>
<S>                                                                                 <C>
                                                                                     (In thousands)
Reorganization value as of October 30, 1998 based
     upon independent appraisal                                                        $  495,000
Financing to occur post bankruptcy but prior to opening                                  (164,000)
                                                                                       ----------
Reorganization value                                                                   $  331,000
                                                                                       ==========
</TABLE>


Under the principles of "fresh start" reporting, our total net assets were
recorded at this assumed reorganization value, which was then allocated to
identifiable tangible assets on the basis of their estimated fair value. In
accordance with "fresh start" reporting, the difference between the assumed
reorganization value and the aggregate fair value of the identifiable tangible
assets resulted in a reduction in the value assigned to intangible deferred
operating contract costs and lease prepayments. In addition, our accumulated
deficit was eliminated.

The effect of the Harrah's Jazz Company plan of reorganization and the
application of "fresh start" reporting to our condensed (unaudited) balance
sheet as of October 30, 1998 was as follows:



                                       38
<PAGE>   39
<TABLE>
<CAPTION>

                                      (Predecessor)                                             (Successor)
                                      Harrah's Jazz                                             JCC Holding
                                         Company                                                  Company
                                     Pre-Fresh Start     Plan of                                Fresh Start
                                     Balance Sheet    Reorganization       Fair Value          Balance Sheet
                                    October 30, 1998  Adjustments (A)    Adjustments (B)     October 30, 1998
                                    ----------------  ---------------    ---------------     -----------------
                                                                (In thousands)

<S>                                  <C>                <C>                <C>                <C>
Cash and cash equivalents            $     14,339       $    112,288       $         --       $    126,627
Prepaids and other assets                      65                 --                 --                 65
                                     ------------       ------------       ------------       ------------
         Total current assets              14,404            112,288                 --            126,692
Property and equipment                    199,967                 --            (11,795)           188,172
Deferred operating contract
   cost                                   122,222                 --            (53,546)            68,676
Lease prepayment                           30,263                 --            (13,278)            16,985
Other assets                                2,084                 --              3,820              5,904
                                     ------------       ------------       ------------       ------------
         Total                       $    368,940       $    112,288       $    (74,799)      $    406,429
                                     ============       ============       ============       ============
Liabilities not subject to
   compromise                        $     83,777       $     (8,348)      $         --       $     75,429
Liabilities subject to
   compromise                             523,468           (523,468)                --                 --
Long-term debt                                 --            185,013                 --            185,013
Other long-term obligations                    --             37,900                 --             37,900
Partners' deficit/stockholders'
   equity                                (238,305)           421,191            (74,799)           108,087
                                     ------------       ------------       ------------       ------------
         Total                       $    368,940       $    112,288       $    (74,799)      $    406,429
                                     ============       ============       ============       ============
</TABLE>

(A)  To record the transactions consummated pursuant to the Harrah's Jazz
     Company plan of reorganization and eliminate partners' deficit. These
     adjustments include a $15 million direct infusion of equity to JCC Holding
     from Harrah's Crescent City Investment Company.
(B)  To record the adjustment to state assets and liabilities at fair value and
     adjust for the difference between the assumed reorganization value and the
     fair value of the identifiable tangible and intangible assets by reducing
     the value assigned to deferred operating contract cost and lease
     prepayments.

Preconfirmation contingencies represent amounts owed to creditors of the
predecessor company, Harrah's Jazz Company, which were transferred to the
Company under the Harrah's Jazz Company Plan of Reorganization. During 1999,
preconfirmation contingencies were reduced by $1.6 million due to a change in
estimate. This amount is included as a reorganization item on the consolidated
statements of operations.

Bankruptcy in January 2001. On January 4, 2001, we filed a voluntary petition
for relief under Chapter 11 of the U.S. Bankruptcy Code in order to allow
restructuring of our obligations to the State of Louisiana and the City of New
Orleans, long-term debt, bank credit facilities, and trade and other
obligations. The filing was made in the U.S. Bankruptcy Court for the Eastern
District of Louisiana in New Orleans (the "Bankruptcy Court"). After the
Petition Date, we continued to operate as debtors-in-possession subject to the
Bankruptcy Court's supervision and orders.

The consummation of a plan of reorganization was our primary objective. The
plan, which was approved by the bankruptcy court on March 19, 2001 and was
effective on March 29, 2001 (the "Effective Date"), resulted in, among other
things, elimination of existing common stock and the issuance of new securities
to creditors. The consequences of this bankruptcy proceeding will be reflected
in the financial statements as of the Effective Date. The cancellation of
non-affiliate debt and related accrued interest will result in an extraordinary
gain as of the Effective Date. In addition, the cancellation of affiliate debt
and other obligations will result in an increase to additional paid in capital
as of the Effective Date. The Company did not meet the requirements to utilize
fresh start reporting.

The plan includes the reduction of Jazz Casino's annual minimum payment
obligations to the Louisiana Gaming Control Board to the greater of 21.5% of
gross gaming revenue or a minimum payment of $50 million commencing April 1,
2001, through March 31, 2002, and $60 million each fiscal year thereafter. Under
the plan, Harrah's Entertainment and Harrah's Operating Company, Inc. ("Harrah's
Operating Company"), will provide a new minimum payment guaranty to the
Louisiana Gaming Control Board (the "New Minimum Payment Guaranty"), which
guaranty will secure Jazz Casino's annual minimum payment obligation to the
Louisiana Gaming Control Board pursuant to a new HET/JCC Agreement among
Harrah's Entertainment and Harrah's Operating Company and Jazz Casino (the "New
HET/JCC Agreement"). In exchange for providing a New Minimum Payment Guaranty,
Harrah's Entertainment and Harrah's Operating Company (and any substitute
guarantor) will receive from Jazz Casino an annual guaranty fee. The obligations
under the



                                       39
<PAGE>   40


New HET/JCC Agreement will be secured by, among other things, a first lien on
substantially all of our assets (except the Second and Third Amendments to the
Amended and Renegotiated Casino Operating Contract and the Gross Revenue Share
Payments) (as defined in Note 10). The plan further calls for a reduction of at
least $5 million in the amounts required to be paid under Jazz Casino's
agreements with the City of New Orleans and the Rivergate Development
Corporation.

On the Effective Date, the outstanding Common Stock of JCC Holding consisted of
12,386,200 shares of new common stock ("New Common Stock"). Under the Plan of
Reorganization, in consideration of, among other things, Harrah's
Entertainment's and Harrah's Operating Company's consent to the cancellation and
extinguishment of all claims against us arising under the Revolving Credit
Facility, the Tranche A-2 Term Loan, the Tranche B-2 Term Loan, the Slot Lease,
the Junior Subordinated Credit Facility, the Completion Loan Guarantee, and the
JCC Development promissory note, it and its affiliates' agreement to waive all
claims relating to existing defaults under the Management Agreement, the
Administrative Services Agreement, the Forbearance Agreement, the Warrant
Agreement, and any other pre-petition claims against us, and Harrah's Operating
Company's agreement to contribute the Slot Machines to JCC Holding, Harrah's
Entertainment will receive 6,069,238 shares (49%) of the New Common Stock of JCC
Holding; holders of claims arising under the Tranche B-1 of the Bank Credit
Facilities will receive 1,734,068 shares (14%) of the New Common Stock of JCC
Holding; and holders of claims arising under the Senior Subordinated Notes will
receive 4,582,894 shares (37%) of the New Common Stock of JCC Holding.

In addition, Jazz Casino issued term notes (the "New Notes") in the aggregate
amount of $124.5 million (face value), which will mature 7 years from their
issuance and bear interest at The London Interbank Offered Rate ("LIBOR") plus
275 basis points. The holders of claims arising under Tranches A-1, A-3 and B-1
of the Bank Credit Facilities received $55.0 million in New Notes; Harrah's
Entertainment and its affiliates, as holders of claims arising under the HET/JCC
Agreement and Tranche A-2 of the Bank Credit Facilities received $51.6 million
in New Notes; and holders of claims arising under the Senior Subordinated Notes
received $17.9 million in New Notes.

Under the Plan of Reorganization, all holders of Casino Operation-Related
Unsecured Claims will be paid, in cash, the full amount of their claims.

Jazz Casino will have up to $35 million available for working capital purposes
under a new revolving line of credit (the "New Revolving Credit Facility"), to
be provided by Harrah's Entertainment. The New Revolving Credit Facility bears
interest at a rate of LIBOR plus 3.00% per annum and will mature in 2006. The
obligations under the New Revolving Credit Facility are secured by substantially
all of our assets (except the Second and Third Amendments to the Amended and
Renegotiated Casino Operating Contract, the Casino's bankroll and the Gross
Revenue Share Payments (as defined in Note 10)). The New Revolving Credit
Facility will be secured on a second lien priority basis, junior only to a lien
securing certain obligations of Jazz Casino under the New HET/JCC Agreement
pursuant to which Harrah's Entertainment will agree to provide a Minimum Payment
Guaranty. The New Notes will be secured by junior liens on the same assets.

Harrah's New Orleans Management Company ("Manager") will continue to manage the
Casino pursuant to the third amended management agreement (the "Amended
Management Agreement"). Under the Amended Management Agreement, Jazz Casino will
have the right to terminate the Amended Management Agreement if the Casino fails
to achieve adjusted earnings before interest, income taxes,
depreciation, amortization and management fees ("EBITDAM") of not less than 85%
for 2001, 84% for 2002, and 83% for 2003 and thereafter, of the adjusted EBITDAM
forecast by the Manager. The amount of the management fee currently paid to
Manager will be adjusted under the Amended Management Agreement, and certain
fees now charged to the Casino by the Manager and its affiliates will be
eliminated.

Upon the filing of our Chapter 11 cases, we required funds to meet certain
postpetition financial obligations, including the Minimum Daily Payments
required under the casino operating contract and the payment obligations arising
under the Rivergate Development Corporation Lease. To meet those cash needs, we
arranged for a debtor-in-possession financing facility provided by Harrah's
Entertainment and its affiliates, the terms of which were negotiated with
Harrah's Entertainment prior to the date of filing our bankruptcy petition.


                                       40
<PAGE>   41

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation. The consolidated financial statements include the
accounts of JCC Holding Company and its subsidiaries. All significant
inter-company accounts and transactions have been eliminated in consolidation.

Cash and Cash Equivalents. For purposes of the consolidated statements of cash
flows and consolidated balance sheets, cash and cash equivalents include highly
liquid investments with original maturities of three months or less. As of
December 31, 2000, restricted cash includes approximately $1.9 million of unused
contributions to the capital replacement fund (see Notes 9 and 10), $184,000 of
contributions to the Open Access Program public support efforts (see Note 10)
and $8,000 of construction escrow funds. As of December 31, 1999, restricted
cash includes approximately $501,000 of contributions to the capital replacement
fund (see Notes 9 and 10), $126,000 of contributions to the Open Access Program
public support efforts (see Note 10) and $5.8 million of construction escrow
funds.

Inventories. Inventories, which consist primarily of food, beverage, operating
supplies and retail items, are stated at average cost.

Property and Equipment. Property and equipment are stated at cost, except for
adjustments related to fresh start reporting (see Note 1) and adjustments
related to asset impairment (See Note 3). Improvements and repairs that extend
the life of the asset are capitalized. Maintenance and repairs are expensed as
incurred. Interest is capitalized on constructed assets at the Company's overall
weighted average rate of interest. Capitalized interest amounted to $140,000 and
$21.7 million in 2000 and 1999, respectively.

Depreciation is calculated using the straight-line method over the shorter of
the estimated useful lives of the assets, the related lease term, or the life of
the amended casino operating contract as follows:

<TABLE>

<S>                                  <C>
Buildings on leased land             25 years
Leasehold improvements               9 years
Furniture, fixtures and equipment    3 to 7 years
</TABLE>

Property held for development is valued at the lower of cost or estimated fair
value. Costs incurred in developing these properties, not in excess of their
fair values, are capitalized.

Property available for sale consists of land owned by Canal Development of $4.8
million as of December 31, 1999. The land is valued at the lower of cost or
estimated fair value. In addition, costs incurred in developing the Canal
Development property prior to offering the property for sale, not in excess of
its fair value, have been capitalized. On February 14, 2000, we entered into a
contract to sell this property to Wyndham International, a hotel developer, for
$6.5 million. However, on March 29, 2001, we rejected this contract in
connection with our Plan of Reorganization. Thus, the development property was
reclassified as property held for development.

Deferred Operating Contract Cost. Deferred operating contract cost consists of
payments, net of adjustments related to asset impairment (see Note 3) and of
adjustments related to fresh start reporting (see Note 1), to the Louisiana
Economic Development and Gaming Corporation (see Note 10) required under the
original casino operating contract between Harrah's Jazz Company and the
Louisiana Economic Development and Gaming Corporation, which commenced on July
15, 1994, and is being amortized on the straight-line basis over the period from
October 28, 1999 through July 24, 2024, the life of the amended and renegotiated
casino operating contract dated October 30, 1998 among Harrah's Jazz Company,
Jazz Casino and the State of Louisiana, by and through the Louisiana Gaming
Control Board. The amended and renegotiated casino operating contract, which was
entered into in connection with the Harrah's Jazz Company plan of
reorganization, modified the original casino operating contract between Harrah's
Jazz Company and the Louisiana Economic Development and Gaming Corporation and
is referred to herein as the amended casino operating contract. This contract
will be subject to further revisions as a result of our recent Plan of
Reorganization.

Lease Prepayment. Lease prepayment includes a non-refundable initial payment,
net of adjustments related to fresh start reporting (see Note 1) and adjustments
related to asset impairment (See Note 3), required under the original ground
lease for the site on which the Casino has been constructed (see Note 9) and is
being amortized on a straight-line basis over 25 years, the life of the amended
casino operating contract.


                                       41
<PAGE>   42

Revenue Recognition and Promotional Allowances. Jazz Casino recognizes the net
win from gaming activities (the difference between gaming wins and losses) as
casino revenues. Casino revenues are net of accruals for anticipated payouts of
progressive slot machine jackpots and certain progressive table game payouts.
Such anticipated jackpots and payouts are reflected as other current liabilities
on the accompanying consolidated balance sheets. Food and beverage, parking,
retail, and other revenues are recognized as services are provided. The
estimated value of beverages, food, parking, retail and other items, which are
provided to customers without charge or in exchange for earned total reward
points, has been included in revenues and a corresponding amount has been
deducted as promotional allowances.

The estimated costs of providing such complimentary services are included in
casino costs and expenses and for the year ended December 31, 2000 amounted to
$5.7 million, $1.9 million, $1.1 million, and $474,000 for beverages, food,
parking and retail items, respectively. From October 28, 1999 to December 31,
1999 these same estimated costs amounted to $893,000, $235,000 and $39,000, for
beverages, parking and retail items, respectively.

Under the terms of the amended casino operating contract, in effect for the
years ended December 31, 2000 and 1999, Jazz Casino is not allowed to give away
or subsidize food from the Casino's buffet and is prohibited from developing
on-site lodging. In order to compensate for these limitations and offer its
patrons the integrated Casino, dining and entertainment experience, the Casino
offers its patrons complimentary meals, hotel rooms, transportation,
entertainment, and other amenities at various local establishments. The expense
related to providing these external complimentary services are included in
casino costs and expenses and totaled $20.8 million in 2000 and $4.5 million for
the period from October 28, 1999 to December 31, 1999.

Preopening Costs. Preopening costs represent primarily the direct salaries and
other operating costs incurred by us prior to the opening of the Casino on
October 28, 1999. We account for start-up activities under provisions of the
AICPA SOP 98-5, "Reporting on the Costs of Start-Up Activities," which provides
guidance on the financial reporting of start-up costs and organization costs. It
requires costs of start-up activities and organization costs to be expensed as
incurred.

Amortization of Note Discount. The discount associated with Jazz Casino's senior
subordinated notes with contingent payments (see Note 6) is amortized using the
interest method. Our interest expense for 2000, 1999 and 1998 includes
amortization of the note discount of $5.4 million, $3.5 million and $506,000,
respectively.

Income Taxes. We account for income taxes under the provisions of Statement of
Financial Accounting Standard ("SFAS") No. 109, "Accounting for Income Taxes."
Under SFAS No. 109, deferred tax assets and liabilities are determined based on
the difference between the financial statement and tax bases of assets and
liabilities, using enacted tax rates in effect for the year in which the
differences are expected to reverse.

Net Income Per Share. We account for net income per share under the provisions
of SFAS No. 128, "Earnings Per Share." This standard requires dual presentation
of net income per common share and net income per share assuming dilution on the
face of the statement of operations. Basic net income per common share is
computed by dividing the net income attributable to common stockholders by the
weighted average number of shares outstanding during the period. Diluted
earnings per common share assume that any dilutive convertible debentures
outstanding at the beginning of each year were converted at those dates, with
related interest and outstanding common shares adjusted accordingly. Jazz
Casino's convertible junior subordinated debentures (see Note 6) were not
included in the computation of diluted earnings per common share for 2000, 1999
and 1998 because it would have resulted in an antidilutive effect. Diluted
earnings per common share also assumes that outstanding common shares were
increased by shares issuable upon exercise of those stock warrants and stock
options for which market price exceeds exercise price, less shares which could
have been purchased by us with related proceeds. Since the exercise price
associated with the warrant issued to Harrah's Crescent City Investment Company
(see Note 12) is above the market price of the Class A Common Stock, it was not
dilutive in 2000, 1999 and 1998.

Stock-Based Compensation. In 1999, we adopted the disclosure-only provisions of
SFAS No. 123 "Accounting for Stock-Based Compensation." SFAS No. 123 encourages,
but does not require, companies to adopt a fair value based method for
determining expense related to


                                       42
<PAGE>   43

stock-based compensation. We continue to account for stock-based compensation
using the intrinsic value method as prescribed under Accounting Principles Board
Opinion ("APB") No. 25, "Accounting for Stock Issued to Employees," and related
interpretations.

Use of Estimates. Financial statements prepared in accordance with accounting
principles generally accepted in the United States of America require 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 reported amounts of revenues and expenses during
the reporting period. Actual results could differ from those estimates.

Long-Lived Assets. We periodically evaluate whether events and circumstances
have occurred that indicate that certain assets may not be recoverable. When
factors indicate that long-lived assets should be evaluated for impairment, we
use an estimate of undiscounted net cash flow over the shorter of the remaining
life of the related lease, contract, or asset, as applicable, in determining
whether the assets are recoverable. See Note 3 for a discussion of asset
impairment adjustments recorded during the fourth quarter of 2000 as a result of
our asset impairment evaluation.

Fair Value of Financial Instruments. SFAS No. 107, "Disclosure About Fair Value
of Financial Instruments", requires certain disclosures regarding the fair value
of financial instruments. Current assets and current liabilities, including due
to affiliates, are reflected in the consolidated financial statements at fair
value because of the short-term maturity of these instruments, except for
short-term borrowings, due to affiliates and accrued interest which has a fair
value of $17.6 million, $50.0 million and $2.3 million, respectively, based on
the Plan of Reorganization. The fair value of long-term other assets and
liabilities, excluding debt and due to affiliates, closely approximates their
carrying value (see Note 6). We use quoted market prices, when available, or
discounted cash flows to calculate these fair values.

Risk of Competition. The Casino faces significant competition on a national,
regional and local scale from gaming operations in Mississippi and, on a
regional level and local scale, from gaming operations in the State of
Louisiana. The Casino also competes for patrons on a national and international
scale with large casino hotel facilities in Las Vegas, Nevada and Atlantic City,
New Jersey.

Segment Information. Our principal line of business is casino and entertainment
development.

Recently Issued Pronouncements. In June 1998, the Financial Accounting Standards
Board ("FASB") issued SFAS No. 133, "Accounting for Derivative Instruments and
Hedging Activities", amended in June 2000 by SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities", which requires
the recognition of all derivatives as assets or liabilities in the statement of
financial position and measures those instruments at fair value. Changes in fair
value derivatives are recorded in earnings or other comprehensive income
depending upon the intended use of the derivative and the resulting designation.
The effective date of this statement has been delayed to fiscal years beginning
after June 15, 2000. The adoption of SFAS No. 133 on January 1, 2001, as amended
by SFAS No. 138, had no material impact on the consolidated financial position
and results of operations.

Reclassifications. Certain reclassifications have been made in prior year's
financial statements to conform to classifications used in the current year.

NOTE 3. ACCOUNTING FOR THE IMPAIRMENT OF LONG LIVED ASSETS

We account for impairment of long lived assets in accordance with SFAS No. 121,
"Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to
be Disposed of". On December 27, 2000, we received notice from Harrah's
Entertainment, Inc. and Harrah's Operating Company that they would not provide
the minimum payment guaranty required under the terms of our casino operating
contract. Accordingly, management reviewed its long-lived assets and
identifiable intangibles and determined an impairment had occurred. The
estimated fair value of the assets was determined by management using judgment
and a reorganization value determined in consultation with an independent firm
specializing in reorganizations. During the fourth quarter of 2000, we recorded
an impairment charge and wrote down approximately $255.9 million of impaired
long-lived assets. The write down



                                       43
<PAGE>   44

included $177.4 million of buildings on leased land, $19.2 million of furniture,
fixtures and equipment, $293,000 of leasehold improvements, $138,000 of
construction in progress, $39.9 million of deferred operating contract costs,
$9.9 million of lease prepayments and $9.1 million of deferred charges and other
long lived assets. Generally, fair value represents our expected future cash
flows from the use of the long-term assets, discounted at a rate commensurate
with the risks involved. Considerable management judgment is necessary to
estimate the fair value of our long-lived assets. Accordingly, actual results
may vary from management's estimates. In addition for the year ending December
31, 2000, we recorded asset impairment adjustments of $2.9 million to write down
furniture, fixtures and equipment to be disposed of to their net realizable
value.

NOTE 4. ACCRUED EXPENSES

Accrued expenses as of December 31 consist of the following:

<TABLE>
<CAPTION>

                                                        2000            1999
                                                     ----------     ----------
                                                          (In thousands)

<S>                                                   <C>            <C>
Payroll and related benefits                          $ 6,996       $  5,048
Orleans Parish School Board contribution                2,000            333
State gaming taxes                                      1,096            548
Professional fees                                         457          2,593
Hotel rooms and catering                                  412          1,942
Construction costs                                          8          8,577
Other                                                   1,332          1,750
                                                      -------        -------
Total                                                 $12,301        $20,791
                                                      =======        =======
</TABLE>

NOTE 5.  SHORT-TERM BORROWINGS

Pursuant to the credit agreement dated as of October 29, 1998 among Jazz Casino,
as borrower, JCC Holding, as guarantor, and a syndicate of lenders led by
Bankers Trust Company, Jazz Casino obtained a $25 million revolving line of
credit, which terminates in January 2006, to cover short-term working capital
requirements. Letters of credit could be drawn on the available balance under
this credit facility up to $10 million. Under the revolving line of credit, the
interest rate on the Eurodollar loans ranged from LIBOR plus 2.50% to LIBOR plus
3.50% and the interest rate on the base rate loans was prime plus 1.0% less than
the applicable margin on the Eurodollar loans. As of December 31, 2000, Jazz
Casino had outstanding borrowings of $23.3 million and outstanding letters of
credit of $1.7 million under this revolving line of credit. The weighted average
interest rates on our outstanding short-term borrowings during the years ended
December 31, 2000 and 1999 were 9.56% and 9.13%, respectively. Refer to Note 6
for a discussion of the guaranty related to the revolving line of credit.

On the Effective Date, this revolving line of credit was cancelled. The New
Revolving Credit Facility provided on the Effective Date by Harrah's
Entertainment will provide Jazz Casino with up to $35 million of availability to
meet working capital requirements, including up to $10 million of availability
for letters of credit. The New Revolving Credit Facility bears interest at a
rate of LIBOR plus 3.00% per annum and will mature in 2006. The New Revolving
Credit Facility is secured by substantially all of our assets (except the Second
and Third Amendments to the Amended and Renegotiated Casino Operating Contract,
the Casino bankroll and the Gross Revenue Share Payments (as defined in Note
10)). The New Revolving Credit Facility is secured on a second lien priority
basis, junior only to a lien securing obligations of Jazz Casino under the New
HET/JCC Agreement (see Note 1).

NOTE 6. LONG-TERM DEBT AND OTHER FINANCING AGREEMENTS

Long-term debt consisted of the following as of December 31:

                                       44

<PAGE>   45
<TABLE>
<CAPTION>

                                                                  2000               1999
                                                              ------------       ------------
                                                                      (In thousands)
<S>                                                           <C>                <C>

Term loans:
   Tranche A-1, 8.00% (a)                                     $     10,000       $     10,000
   Tranche A-2, 9.75% (a)                                           20,000             20,000
   Tranche A-3, 8.00% (a)                                           30,000             30,000
   Tranche B-1, 9.50% (a)                                           30,000             30,000
   Tranche B-2, 9.75% (a)                                          121,500            121,500
                                                              ------------       ------------
                                                                   211,500            211,500
                                                              ------------       ------------
Senior subordinated notes with contingent
   payments, 6.10% (a)                                             211,305            199,143

Unamortized note discount                                          (90,365)           (95,734)
                                                              ------------       ------------
                                                                   120,940            103,409
                                                              ------------       ------------
Senior subordinated contingent notes                                    --                 --

Convertible junior subordinated debentures, 8.00% (a)               32,025             29,609

Junior subordinated credit facility-affiliate, 8.00% (a)            25,167             22,500

Completion Loan - affiliate, 8.00% (a)                               5,127

Promissory note - affiliate, 9.00% (a)                               1,653              1,204
                                                              ------------       ------------
Total long-term debt                                          $    396,412       $    368,222
                                                              ============       ============
</TABLE>

----------
(a)   Represents the interest rate for the respective debt agreements in effect
      as of December 31, 2000.

Term Loans

Pursuant to the credit agreement dated as of October 29, 1998 among Jazz Casino,
as borrower, JCC Holding, as guarantor, and a syndicate of lenders led by
Bankers Trust Company, Jazz Casino obtained a construction financing commitment
of $211.5 million under various term loans and up to $25 million of available
working capital under a revolving line of credit (see Note 5). The term loans
and the revolving line of credit were a single combined credit facility.

Under our credit agreement, we had up to $25 million available for working
capital purposes under our revolving line of credit, which was used to partially
cover operating losses. Our credit agreement required that we satisfy certain
Earnings Before Interest, Taxes, Depreciation, Amortization ("EBITDA")
maintenance requirements on a quarterly basis. We did not meet the required
EBITDA test for the quarter ended June 30, 2000. However, at our request, the
bank lenders under the credit agreement granted a temporary waiver of our
failure to comply with this covenant. That waiver, which also placed a temporary
limit on our revolver borrowing, expired on August 31, and was replaced with an
amendment to our credit agreement, which (1) amended our credit agreement to,
among other things, change the EBITDA maintenance requirements with which we are
required to comply through the quarter ended December 31, 2000; (2) subject to
certain limitations, re-established our $25 million revolving line of credit;
(3) granted additional waivers to allow Harrah's Entertainment and Harrah's
Operating Company to advance up to an additional $10 million to a total of $50
million under their minimum payment guaranty of the $100 million minimum annual
payment that we were required to pay to the Louisiana Gaming Control Board under
our casino operating contract, subject to certain limitations, including the
requirement that we must first borrow all of the $25 million available under our
revolving line of credit before additional amounts may be advanced under the
minimum payment guaranty; and (4) extended until February 28, 2001, the date by
which a notice by Harrah's Entertainment to the banks


                                       45
<PAGE>   46

or the Louisiana Gaming Control Board that the minimum payment guaranty will not
be extended, would constitute an event of default.

In conjunction with the amendment to our credit agreement discussed above, on
September 1, 2000, Harrah's Operating Company purchased from our bank lenders
approximately $145.5 million of our present obligations to the bank lenders,
which amount it had previously guaranteed under the Guaranty and Loan Purchase
Agreement, and agreed to provide the funding for the balance of our $25 million
revolving line of credit as it is drawn from the banks.

The interest rates on the term loans assuming that they were maintained as
Eurodollar loans, were as follows:

<TABLE>
<CAPTION>

                                                     Interest Rate
                                                     -------------
<S>                                                  <C>
         Tranche A-1                                 LIBOR plus 1%
         Tranche A-2                                 LIBOR plus 2.5% to LIBOR plus 3.5%
         Tranche A-3                                 LIBOR plus 1%
         Tranche B-1                                 LIBOR plus 2.5%
         Tranche B-2:
           Up to $10 Million                         LIBOR plus Harrah's Entertainment's applicable
                                                     margin then in effect*
           In Excess of $10 Million                  LIBOR plus 2.5% to LIBOR plus 3.5%
</TABLE>

         *Represents Harrah's Entertainment's current interest rate on its
          credit facility.

The interest rate on the term loans maintained as base rate loans was the sum of
(i) the applicable base interest rate and (ii) that percentage (not below 1.0%)
which was 1.0% less than the margin for loans of such tranche maintained as
Eurodollar loans.

The term loans have the following repayment terms:


         Tranche A-1 and A-2 (Combined)   Quarterly installments of $100,000
                                          beginning July 31, 2000 with a $27.8
                                          million lump sum payment due at April
                                          2006.

         Tranche A-3                      Quarterly installments of $1 million
                                          in year one, $1.5 million in years two
                                          and three and $1.75 million in years
                                          four and five.

         Tranche B-1 and B-2 (Combined)   Quarterly installments beginning July
                                          31, 2000 of $1.5 million in year one,
                                          $2.5 million in years two through
                                          five, $2.125 million in year six with
                                          a $97 million lump sum payment due at
                                          January 2006.

The scheduled quarterly repayments were deferred for any of the first six
semi-annual interest payment periods if interest on Jazz Casino's senior
subordinated notes with contingent payments (see below) was paid in kind and the
Manager had deferred its fees under the terms of its management agreement with
Jazz Casino (see Note 8) and under the agreement (the "HET/JCC Agreement") among
Jazz Casino, Harrah's Entertainment and Harrah's Operating Company, a wholly
owned subsidiary of Harrah's Entertainment, pursuant to which Harrah's
Entertainment and Harrah's Operating Company had provided an initial guaranty in
favor of the State of Louisiana by and through the Louisiana Gaming Control
Board of a $100 million annual payment due to the State of Louisiana under the
amended casino operating contract (see Note 10). Jazz Casino has included $13.4
million and $5.2 million of repayments due in 2001 and 2000 as long-term debt
due to its intent to defer these repayments.

The tranche A term loans generally rank senior to all existing and future
indebtedness of Jazz Casino except certain obligations of Jazz Casino under the
HET/JCC Agreement (see Note 8).

The term loans and the revolving line of credit were secured by liens on
substantially all of the assets of each of Jazz Casino (excluding the amended
casino operating contract, funds deposited in the house bank maintained at the
Casino and the Gross Gaming Revenue Share Payments (as defined in Note 10)), JCC
Holding, JCC Development, Canal Development and Fulton


                                       46
<PAGE>   47

Development. The credit agreement contained affirmative covenants with respect
to, among other things, the maintenance of certain leverage ratios, coverage
ratios and levels of tangible net worth, limitations on indebtedness, changes in
Jazz Casino's business, the sale of all or substantially all of Jazz Casino's
assets, mergers, acquisitions, reorganizations and recapitalizations, liens,
guarantees, the payment of management fees, dividends and other distribution,
investments, debt prepayments, sale-leasebacks, capital expenditures, lease
expenditures and transactions with affiliates, and financial reporting.

The obligations of Jazz Casino under its credit agreement were guaranteed on a
senior basis by JCC Holding, JCC Development, Canal Development and Fulton
Development.

The tranche A-2 and B-2 term loans along with the revolving line of credit were
also guaranteed by Harrah's Entertainment and Harrah's Operating Company. As
consideration for this guaranty, Harrah's Entertainment received an annual
credit support fee from Bankers Trust Company and Jazz Casino equal to 2% and
approximately 0.75%, respectively, of the average aggregate principal amount of
loans and/or stated amount of letters of credit outstanding under tranche A-2
and B-2 term loans and the revolving line of credit (in the case of tranche B-2
term loans only to the extent of the aggregate principal amount thereof from
time to time in excess of $10 million). During the year ended December 31, 2000
and 1999, Jazz Casino incurred annual credit support fees of approximately $1.1
million and $388,000, which were deferred under the terms of the HET/JCC
Agreement.

On the Effective Date, this credit facility was cancelled and New Notes and New
Common Stock were issued in the amount of $55.0 million (face value) and 1.7
million shares, respectively, to the syndicate of lenders and New Notes of $21.0
(face value) and 2.5 million shares to Harrah's Entertainment and its affiliates
(see Note 1).

Senior Subordinated Notes and Contingent Notes

In connection with the Harrah's Jazz Company plan of reorganization, in 1998
Jazz Casino issued (1) $187.5 million aggregate principal amount of senior
subordinated notes with contingent payments maturing in 2009, and (2) senior
subordinated contingent notes maturing in 2009 pursuant to indentures, dated as
of October 30, 1998, by and among Jazz Casino, as obligor, JCC Holding, JCC
Development, Canal Development and Fulton Development, as guarantors, and
Norwest Bank Minnesota, National Association, as Trustee.

As of December 30, 1998, the stated interest rate on the senior subordinated
notes with contingent payments was considered by the Company to be lower than
prevailing interest rates for debt with similar terms and credit ratings. In
accordance with fresh start reporting, the senior subordinated notes with
contingent payments were valued based on discounting concepts to approximate
their fair value (16% discount rate).

The fixed interest rate on the senior subordinated notes with contingent
payments was 5.867% per year, increasing over the first three years to a rate of
6.214% in the fourth and fifth years and increasing to 8% after the first five
years and was payable semiannually in arrears on each May 15 and November 15,
beginning May 15, 1999. Jazz Casino had the option to pay the first six
semi-annual payments of fixed interest on its senior subordinated notes with
contingent payments in kind rather than in cash; provided, however, that Jazz
Casino must pay the first four semi-annual payments of fixed interest in kind if
tranche A-1 and/or tranche A-2 term loans were outstanding when such payments
were due. Jazz Casino had the option to pay the fifth and sixth semi-annual
payments of fixed interest in kind and was required to do so by its credit
agreement under certain circumstances. Jazz Casino paid the first four interest
payments amounting to $23.8 million on its senior subordinated notes with
contingent payments in kind rather than in cash.

As of December 31, 2000 and 1999, there were no amounts outstanding under the
senior subordinated contingent notes or the contingent payments under the senior
subordinated notes.

The senior subordinated notes with contingent payments and the senior
subordinated contingent notes were secured on an equal and ratable basis by
liens on substantially all of the assets of Jazz Casino, JCC Holding, JCC
Development, Canal Development and Fulton Development (excluding the amended
casino operating contract, funds deposited in the house bank maintained at the
Casino and the Gross Gaming Revenue Share Payments (as defined in Note 10)). See
Note 13 for guarantor condensed financial information.


                                       47
<PAGE>   48

Each of the indentures governing the notes contained certain restrictions on,
among other things, restricted payments, liens, incurrence of additional
indebtedness, payment of management fees, subsidiary dividend restrictions,
asset sales, transactions with affiliates, mergers and consolidations.

On the Effective Date, the senior subordinated notes with contingent payments
and the senior subordinated contingent notes were cancelled. The senior
subordinated noteholders received New Notes and New Common Stock in the amount
of $17.9 million (face value) and 4.6 million shares, respectively. The senior
subordinated contingent noteholders did not receive any New Notes or New Common
Stock for the cancellation of this debt (see Note 1).

Convertible Junior Subordinated Debentures

On October 30, 1998, Jazz Casino issued to Bankers Trust Company, Donaldson,
Lufkin & Jenrette Securities Corporation, Salomon Smith Barney Inc., BT Alex.
Brown Incorporated and Bank One, $27,287,500 aggregate principal amount of its
convertible junior subordinated debentures due 2010. The convertible junior
subordinated debentures mature in May 2010. The convertible junior subordinated
debentures bear interest at the rate of 8% per year, payable semi-annually in
cash; provided, however, that Jazz Casino had the option of paying the interest
on the debentures, in whole or in part, in kind rather than in cash (1) at any
time on or prior to October 30, 2003, and (2) at any time thereafter if Jazz
Casino did not make contingent payments with respect to the senior subordinated
contingent notes on the immediately preceding interest payment date for the
senior subordinated contingent notes. Jazz Casino has paid the first four
interest payments amounting to $4.7 million in kind. The convertible junior
subordinated debentures were unsecured obligations of Jazz Casino. The
convertible junior subordinated debentures were convertible at the option of the
holders, in whole or in part, at any time after October 1, 2002, into Class A
Common Stock or, after the Transition Date (as defined in the agreement),
Unclassified Common Stock of JCC Holding at a conversion price of $25.00 per
share, subject to dilution and other appropriate adjustments.

The indenture under which the convertible junior subordinated debentures were
issued restricts mergers and consolidations involving, and the sale, transfer,
lease or conveyance of all or substantially all of the assets of Jazz Casino and
JCC Holding. The obligations of Jazz Casino to the holders of the convertible
junior subordinated debentures were guaranteed on a subordinated basis by JCC
Holding.

On the Effective Date, the convertible junior subordinated debentures were
cancelled. The holders of the convertible junior subordinated debentures did not
receive any New Notes or New Common Stock for the cancellation of this debt (see
Note 1).


                                       48
<PAGE>   49

Junior Subordinated Credit Facility

On October 30, 1998, Jazz Casino entered into a junior subordinated credit
facility with Harrah's Entertainment and Harrah's Operating Company whereby
Harrah's Operating Company agreed to make available to Jazz Casino up to $22.5
million of subordinated indebtedness to fund project costs to the extent that
such costs exceeded amounts available under the term loans (excluding the
tranche A-2 and tranche B-2 term loans), the proceeds from the issuance of the
convertible junior subordinated debentures and the $15 million equity investment
by Harrah's Crescent City Investment Company in JCC Holding on October 30, 1998.
As of December 31, 1999, Jazz Casino has drawn $22.5 million under this
facility.

The junior subordinated credit facility was unsecured. Amounts owed under the
junior subordinated credit facility were due and payable six months following
the maturity of the senior subordinated notes with contingent payments.
Outstanding principal under the junior subordinated credit facility bore
interest at the rate of 8% per year. Interest would be paid in cash and would be
added to the outstanding principal amount if certain EBITDA tests were not met
for the contingent payment periods or if Jazz Casino paid interest in kind on
its senior subordinated notes with contingent payments after September 30, 2000.
Jazz Casino paid the first interest payment due on September 30, 2000 amounting
to $2.7 million under this facility in kind. As of December 31, 2000, the
outstanding balance amounted to $25.2 million.

On the Effective Date the junior subordinated credit facility was cancelled. The
holders of the junior subordinated credit facility did not receive any New Notes
or New Common Stock for the cancellation of this debt (see Note 1).

Completion Loan Agreement

On October 30, 1998, Jazz Casino entered into an amended and restated
subordinated completion loan agreement with Harrah's Entertainment and Harrah's
Operating Company under which any expenditure made by Harrah's Entertainment and
Harrah's Operating Company under its completion guarantees, which were not also
expenditures under our amended and restated construction lien indemnity
agreement with Harrah's Operating Company, were deemed unsecured loans. The
loans under the completion loan agreement bear interest at a rate of 8% per
annum and will mature on April 30, 2010. No fees are payable to Harrah's
Entertainment and Harrah's Operating Company in connection with the completion
guarantees. As of December 31, 2000, the outstanding balance under the
completion loan was $5.1 million.

On the Effective Date, the completion loan agreement was cancelled. The holders
of the completion loan agreement did not receive any New Notes or New Common
Stock for the cancellation of this debt (see Note 1).

Promissory Note

On October 26, 1999, JCC Development entered into a promissory note with
Harrah's Operating Company that provides for borrowings up to $2 million.
Borrowings under this loan accrued interest at 9% per year, and, at JCC
Development's option, could be paid in cash or in kind. The entire unpaid
balance of principal and interest is due on October 26, 2004. As of December 31,
2000 and 1999, JCC Development had outstanding borrowings under this note of
$1.7 million and $1.2 million, respectively, and had incurred interest costs of
$140,000 and $19,000, respectively, which were capitalized in connection with
its development activities.

On the Effective Date, the promissory note was cancelled. The holder of this
promissory note did not receive any New Notes or New Common Stock for the
cancellation of this debt (see Note 1).


                                       49
<PAGE>   50


As of December 31, 2000, maturities of long-term debt (by their original terms)
are as follows:

<TABLE>
<CAPTION>
                          (in thousands)
<S>                       <C>
2001                         $     --
2002                           16,400
2003                           22,027
2004                           19,053
2005                           15,650
Thereafter                    323,282
                             --------
Total Long-Term Debt         $396,412
                             ========
</TABLE>

On the Effective Date, the long-term debt was cancelled. New Notes were issued
in the aggregate principal (face) amount of $124.5 million that will mature
seven years after the Effective Date (see Note 1) in connection with the
cancellation of long-term debt and certain other obligations (see Note 9). The
New Notes will pay interest semi-annually at LIBOR plus 2.75% per annum. In the
first year, one half of the interest payments on the New Notes may be paid in
kind and added to the principal at our option. Principal payments on the New
Notes will be amortized as follows: zero in the first year; 50% of free cash
flow (as defined in the New Note agreement) in the second through fourth years;
and $6 million annually in the fifth through seventh years, with all remaining
unpaid principal payable at maturity.

Fair Value

The estimated fair values and carrying amounts of long-term debt and due to
affiliates are as follows (in thousands):

<TABLE>
<CAPTION>
                                             2000                           1999
                                  ------------------------------   ----------------------------
                                  Fair Value      Carrying Value   Fair Value    Carrying Value
                                  ----------      --------------   ----------    --------------
<S>                               <C>             <C>              <C>           <C>
Senior subordinated notes
     with contingent                $ 46,182        $120,940        $113,539        $103,409
     payments
Term loans                            72,238         211,500         211,500         211,500
Convertible junior
     subordinated debentures              --          32,025          29,595          29,609
Junior subordinated credit                --          25,167          19,422          22,500
      facility - affiliate
Completion loan - affiliate               --           5,127              --              --
Promissory note - affiliate               --           1,653           1,191           1,204
Long-Term due to affiliates               --          20,968           4,302           4,302
</TABLE>

The fair value of Jazz Casino's long-term debt and due to affiliates was
determined using valuation techniques that considered cash flows discounted at
current market rates and management's best estimate for instruments without
quoted market prices.


NOTE 7.  FEDERAL INCOME TAXES

As of December 31, 2000 and 1999 the effective income tax rate differs from the
statutory federal income tax rate as follows:


                                       50
<PAGE>   51

<TABLE>
<CAPTION>
                                            2000            1999
                                           -------        -------
<S>                                        <C>            <C>
Statutory federal rate                       38.00%         38.00%
State income taxes, net of federal
     income tax benefit                         --             --
Valuation allowance                         (28.73)        (38.23)
Permanent items                               0.40           0.23
                                           -------        -------
Effective tax rate                            9.67%          0.00%
                                           =======        =======
</TABLE>

Significant components of net deferred tax liabilities as of December 31
consisted of the following:

<TABLE>
<CAPTION>
                                                           2000              1999
                                                         ---------         ---------
                                                                 (in thousands)
<S>                                                      <C>               <C>
   Deferred Tax Liabilities:
      Discount on debt                                   $ (34,339)        $ (36,379)
      Capitalized Interest                                    (410)           (1,902)
      Original issue discount                               (1,717)             (134)
                                                         ---------         ---------
            Total                                          (36,466)          (38,415)
                                                         ---------         ---------

   Deferred Tax Assets:
      Net operating loss                                    76,936            22,991
      Basis difference in fixed assets                      88,288            19,380
      Basis difference in intangible assets                 22,393                36
      Accrued reserves                                       1,354               868
      Contribution carryover                                   709               118
      Stock compensation cost                                   85               102
      Work opportunity and welfare-to-work credit              226                98
      Self Insurance                                           753                --
                                                         ---------         ---------
      Valuation allowance                                 (154,278)          (43,078)
                                                         ---------         ---------
            Total                                           36,466               515
                                                         ---------         ---------

            Net deferred tax liability                   $      --         $ (37,900)
                                                         =========         =========
</TABLE>


The impairment charge recorded during 2000 created a deferred tax asset
available to offset our deferred tax liabilities. As of December 31, 2000, the
valuation allowance was adjusted to reduce the Company's net deferred taxes to
zero resulting in an income tax benefit of $37.9 million. At December 31, 1999,
the Company had a valuation allowance to reduce the deferred tax assets.



                                       51
<PAGE>   52

As of December 31, 2000, the Company has a net operating loss carryforward for
both regular tax and alternative minimum tax of $202.5 million, expiring as
follows: $3.4 million in 2018; $60.2 million in 2019; and $138.9 million in
2020.

In addition, the Company has a charitable contribution carryforward of
approximately $1.8 million expiring as follows: $242,000 in 2004; and $1.6
million in 2005.

The Company also has tax credit carryforwards for the Work Opportunity Credit of
$167,000 and the Welfare to Work Credit of $58,000. The Work Opportunity Credit
expires as follows: $18,000 in 2019; and $149,000 in 2020. The Welfare to Work
Credit expires as follows: $5,000 in 2019; and $53,000 in 2020.

For state income tax purposes, Jazz Casino has a net operating loss carryforward
of $201.4 million which expires as follows: $3.1 million in 2013; $60.1 million
in 2014; and $138.2 million in 2015. In addition, JCC Holding has a state net
operating loss carryforward of $1.1 million which expires as follows: $297,000
in 2013; $162,000 in 2014; and $627,000 in 2015.

NOTE 8. RELATED PARTY TRANSACTIONS

Management and Administrative Services Agreements

The Casino's operations are managed by Harrah's New Orleans Management Company
(the "Manager"), a wholly-owned subsidiary of Harrah's Entertainment, pursuant
to the second amended and restated management agreement. Under the terms of the
management agreement, the Manager is entitled to receive a management fee having
two components. The first component is equal to 3% of annual gross revenues of
the Casino. The second component is an incentive based fee that is equal to 7%
of certain consolidated EBITDA targets. In addition, the Manager is entitled to
receive a travel fee equal to $100,000 per year, subject to adjustment based on
changes in the Consumer Price Index and a "marketing contribution," which as of
December 31, 2000, 1999, and 1998 was an amount equal to 1.5%, 1.5%, and 0.4% of
the Casino's net revenues, respectively. The Manager may increase this marketing
contribution from time to time to ensure that it generally equals the fee
charged to other participating casinos owned or managed by Harrah's
Entertainment's affiliates. Under the terms of the management agreement, the
management fee has been deferred until such time as Jazz Casino meets certain
interest payment requirements under its various debt agreements.

Jazz Casino has also contracted with Harrah's Operating Company to perform
various administrative services pursuant to an administrative services
agreement. The administrative service agreement, dated October 30, 1998, is
renewable each year and may be cancelled by either party 30 days after written
notice. Services to be provided under this agreement include accounting,
computer processing, risk management, marketing and


                                       52
<PAGE>   53

administration of certain human resource matters. The fees under the
administrative agreement are negotiated annually and are to be paid monthly.

During 2000 and 1999, Jazz Casino leased certain employees from Harrah's
Entertainment or its affiliates for approximately $174,000 and $913,000,
respectively.

For the years ending December 31, 2000 and 1999, Jazz Casino incurred costs of
$21.9 million and $9.0 million, respectively, under the above agreements. For
the year ending December 31, 1998, Jazz Casino incurred costs of $4.2 million
consisting primarily of reimbursements for pre-reorganization amounts.

On the Effective Date, all fees under the management agreement were waived and
Jazz Casino entered into the Amended Management Agreement. Under the Amended
Management Agreement, the Manager will continue to be responsible for and have
authority over, among other things:

     o    hiring, supervising and establishing labor policies with respect to
          employees of the Casino;

     o    gaming and entertainment operations including security and internal
          control procedures;

     o    public relations and promotions;

     o    retaining certain suppliers;

     o    all accounting, budgeting, financial and treasury functions in the
          Casino; and

     o    performing certain system services generally performed at casinos
          owned or operated by Harrah's Entertainment and its affiliates.

In addition, the Manager and Harrah's Operating Company shall continue to
provide the administrative services currently provided by Harrah's Operating
Company under the Administrative Service Agreement, which is being terminated on
the Effective Date, at no additional costs (other than insurance and risk
management services).

Under the Amended Management Agreement on the Effective Date, as consideration
for managing the Casino, the Manager will be entitled to receive a management
fee equal to thirty percent of EBITDAM. Under the Amended Management Agreement,
Jazz Casino shall reimburse Harrah's Entertainment for the cost of property
level executive salaries currently being funded by Harrah's Entertainment and
shall reimburse Harrah's Entertainment for insurance related to the Casino and
previously funded by Harrah's Entertainment on Jazz Casino's behalf. Neither the
Manager or any of its affiliates shall be entitled to receive fees for services
currently provided under the Administrative Service Agreement, which services
shall be provided at no additional cost (see Note 1).

HET/JCC Agreement

On October 30, 1998, Jazz Casino entered into the HET/JCC Agreement with
Harrah's Entertainment and Harrah's Operating Company, under which Harrah's
Entertainment and Harrah's Operating Company had posted an initial payment
guaranty for the benefit of the State of Louisiana by and through the Louisiana
Gaming Control Board to assure payment of the minimum $100 million annual
payment due to the State of Louisiana under Jazz Casino's amended casino
operating contract. Any amounts funded by Harrah's Entertainment to the
Louisiana Gaming Control Board under this agreement take the form of a demand
obligation by Jazz Casino to Harrah's Entertainment, and are first priority
liens on our assets.

For the years ending December 31, 2000 and 1999, Jazz Casino incurred minimum
payment guaranty fees of approximately $6.0 million and $1.1 million,
respectively.

Under the terms of the minimum payment guaranty, on February 29, 2000, upon
notice by the Louisiana Gaming Control Board that we had failed to make a daily
payment, Harrah's Operating Company, Inc., began making the minimum daily
payments of approximately $274,000 due to the Louisiana Gaming Control Board
under the terms of our casino operating contract. As of December 31, 2000,
Harrah's Entertainment and Harrah's Operating Company had advanced $44.1 million
to the Louisiana Gaming Control Board on our behalf under the minimum payment
guaranty which is included in current due to affiliates. The principal balance
outstanding bears interest at LIBOR plus 1% (8.00% as of December 31, 2000).

Because funding under the minimum payment guaranty would constitute a default
under our credit agreement with our bank lenders if our reimbursement obligation
to Harrah's Entertainment and Harrah's Operating Company under the HET/JCC
agreement exceeded $5 million, at our request, our bank lenders granted us a
limited waiver of the default


                                       53
<PAGE>   54

subject to certain conditions. The waiver granted by the bank lenders allowed
funding under the HET/JCC agreement of up to $40 million. This limit was reached
on July 20, 2000, at which time we resumed making the minimum daily payments. On
August 31, 2000, the credit agreement was amended to include additional waivers
to allow Harrah's Entertainment and Harrah's Operating Company to advance up to
an additional $10 million under the HET/JCC agreement, subject to certain
limitations, including the requirement that we must first borrow all of the $25
million available under our revolving line of credit before additional amounts
may be advanced under the minimum payment guaranty.

On the Effective Date, the minimum payment loan along with the guaranty fees and
related interest charges were cancelled and Harrah's Entertainment and Harrah's
Operating Company received New Notes and New Common Stock in the amount of $30.6
million (face value) and approximately 3.1 million shares, respectively. In
addition, Jazz Casino entered into the New HET/JCC Agreement pursuant to which
Harrah's Entertainment will provide a minimum payment guaranty to the Louisiana
Gaming Control Board. Jazz Casino will procure an initial rolling, four-year
minimum payment guaranty guaranteeing the minimum payment required to be made to
the Louisiana Gaming Control Board under the Second and Third Amendments to the
Amended and Renegotiated Casino Operating Contract, and will provide rolling,
three year minimum payment guaranties thereafter. The initial minimum payment
guaranty will be provided by Harrah's Entertainment, and will guarantee the
following amounts payable to the Louisiana Gaming Control Board:

     o    $50 million in the period April 1, 2001 to March 31, 2002;

     o    $60 million in the period April 1, 2002 to March 31, 2003;

     o    $60 million in the period April 1, 2003 to March 31, 2004; and

     o    $60 million in the period April 1, 2004 to March 31, 2005.

Harrah's Entertainment and Harrah's Operating Company will receive an annual
guaranty fee in the amount of two percent of the total amount at risk at such
time under the minimum payment guaranty. The guaranty fees for the period
through March 31, 2002 shall be deferred and become payable in four equal
installments due on March 31, 2002, March 31, 2003, March 31, 2004, and March
31, 2005, provided that any then unpaid installments of the deferred guaranty
fee for the period through March 31, 2002 shall be due and payable in full upon
any termination of the Amended Management Agreement. For any periods after March
31, 2002, the guaranty fee for the period April 1, 2002 to March 31, 2003 shall
be due and payable on March 31, 2002; the guaranty fee for the period from April
1, 2003 to March 31, 2004 shall be due and payable on March 31, 2003; and the
guaranty fee for the period from April 1, 2004 to March 31, 2005 shall be due
and payable on March 31, 2004. Advances made by Harrah's Entertainment on Jazz
Casino's behalf pursuant to the New HET/JCC Agreement shall bear interest at the
rate specified for loans under the New Revolving Credit Facility (LIBOR plus
3.00% per annum) and shall be secured on a first lien priority basis by
substantially all of the Debtors' assets (except the Second and Third Amendments
to the Amended and Renegotiated Casino Operating Agreement, the Casino bankroll
and the Gross Revenue Share Payments (as defined in Note 10)).

Junior Subordinated Credit Facility

Harrah's Entertainment and Harrah's Operating Company have provided Jazz Casino
with the $22.5 million junior subordinated credit facility (see Note 6). On the
Effective Date, this Junior Subordinated credit facility was cancelled (see
Note 1).

Promissory Note

Harrah's Operating Company has provided JCC Development with a $2 million
promissory note (see Note 6). On the Effective Date, this promissory note was
cancelled (see Note 1).

Harrah's Entertainment Loan Guarantee

Harrah's Entertainment and Harrah's Operating Company have provided a payment
guaranty with respect to the tranche A-2 and B-2 term loans and the revolving
line of credit (see Notes 5 and 6). On the Effective Date, this payment guaranty
was cancelled (see Note 1).

Completion Guarantee

Harrah's Entertainment and Harrah's Operating Company entered into a series of
completion guarantees in favor of the State of Louisiana and others pursuant to
which Harrah's Entertainment and Harrah's Operating Company guaranteed, among
other things, the completion


                                       54
<PAGE>   55

of the Casino and the payment of all obligations of Jazz Casino up to and
through the completion of the Casino's construction. This included the duty to
complete, equip and open the Casino if Jazz Casino failed to commence or
complete the Casino's construction and to pay certain of Jazz Casino's costs and
expenses until the Casino opened prior to the termination of the construction
date.

Amended Completion Loan Agreement

Harrah's Entertainment and Harrah's Operating Company provided Jazz Casino with
draws on the available completion loan totaling $5.1 million (see Note 6). On
the Effective Date, this completion loan was cancelled (see Note 1).

Equipment Leases

During 1999, Jazz Casino entered into a master lease agreement for approximately
1,900 slot machines with Harrah's Operating Company (see Note 9). On the
Effective Date, this master lease was cancelled (see Note 1).

Limited Forbearance Agreement

On February 29, 2000, Jazz Casino entered into a limited forbearance agreement
with Harrah's Operating Company and Harrah's New Orleans Management Company, the
Manager of our casino. This agreement was subsequently amended on August 31,
2000. Under this amended forbearance agreement, Harrah's Operating Company and
Harrah's New Orleans Management Company each agreed to forbear until April 1,
2001 certain payments under the management agreement, the administrative
agreement and the master lease agreement that we owed or which become due prior
to April 1, 2001. The amended limited forbearance agreement also waived any
penalties or late charges assessed on the deferred payments under these
agreements. As of December 31, 2000, pursuant to the amended limited forbearance
agreement, we had deferred approximately $18.0 million related to the payments
and fees payable to Harrah's Operating Company or Harrah's New Orleans
Management Company.

On the Effective Date, the limited forbearance agreement was cancelled and
Harrah's Operating Company and Harrah's New Orleans Management Company will not
receive New Notes or New Common Stock related to this agreement (see Note 1).

NOTE 9. LEASES

We lease real estate, office space, and equipment for use in our business
through operating leases. In addition to minimum rentals, certain leases provide
for contingent rents based on percentages of revenue. Real estate operating
leases range from 12 months to 30 years with options for extensions for up to an
additional 30 years. The average remaining term for non-real estate leases
ranges from one to five years.

The Casino Site

Jazz Casino entered into an amended and restated ground lease agreement dated
October 29, 1998 with the Rivergate Development Corporation, as landlord, and
the City of New Orleans, as intervenor, for the site on which the Casino is
located. The initial term of the amended and restated ground lease is for 30
years beginning October 29, 1998, with three consecutive ten-year renewal
options.

Under the terms of the original ground lease, Harrah's Jazz Company was required
to make an initial payment of $30 million. The amended and restated ground lease
required payments of $736,000 per month until the Casino opened. These monthly
payments were capitalized during the construction of the Casino until opening
and are being amortized over the life of the amended casino operating contract.
Subsequent to October 28, 1999, the minimum lease payment increased to $12.5
million per year. The amended and restated ground lease provides for additional
rents based on various percentages of gross gaming and non-gaming revenues. Jazz
Casino is also required to make a $2.0 million annual contribution to the
Orleans Parish School Board as well as certain additional non-recurring rental
payments totaling $2.25 million over the lease term of which $875,000 was paid
during the year ended December 31, 1999. The remaining non-recurring payments
were scheduled to be paid during 2001. The amended and restated ground lease
also requires annual payments of approximately $1.25 million contingent upon
gross gaming revenues equaling $350 million. Jazz Casino is required to fund
this initial amount on a monthly basis in the first fiscal year of operations.
At the end of the first fiscal


                                       55
<PAGE>   56

year of operations, if Jazz Casino's gross gaming revenue is less than $350
million, no additional amounts are required to be paid, and the initial funded
amount of $1.25 million, which was funded in 2000 and 1999, will be utilized as
a credit in the first fiscal year that gross gaming revenue equals or exceeds
$350 million. Jazz Casino is further obligated to pay contingent rent in the
event a dividend is declared or if the Manager is paid a termination fee. Under
certain conditions, the Rivergate Development Corporation has a one-time right
to receive additional rent based on the net market appreciation of JCC Holdings'
Common Stock as computed by a defined formula. Jazz Casino is also required to
contribute $1.0 million each year to the City of New Orleans for a joint
marketing fund and to make monthly payments to a capital replacement fund. The
annual aggregate payments to the capital replacement fund are $3.0 million in
the first year of the Casino's operations and increase $1.0 million in year two
and three and in each succeeding year the payments are based on 2.0% of gross
gaming and non-gaming revenues to be paid 10 days in arrears on a monthly basis.
For the years ended December 31, 2000, 1999 and 1998, Jazz Casino has
contributed $1 million to the City of New Orleans for the joint marketing fund,
respectively. In addition, for the years ended December 31, 2000 and 1999, Jazz
Casino has contributed $2.8 million and $500,000 in an interest-bearing account
to fund the capital replacement reserve. In connection with the development of
the second floor of the Casino, Jazz Casino is also required to pay the
Rivergate Development Corporation rent equal to 50% of net operating cash income
generated from operations on the second floor of the Casino.

On the Effective Date, Jazz Casino entered into a New Amended and Restated
Ground Lease, which provides for a $5 million reduction in overall payments to
the Rivergate Development Corporation and the City of New Orleans.

Slot Leases

In October 1999, Jazz Casino entered into a master lease agreement with Harrah's
Operating Company pursuant to which Jazz Casino leases approximately 1,900 slot
machines, including the 1,085 slot machines sold to Harrah's Operating Company
as discussed below. The terms of the various slot machines leased under the
master lease agreement range from 3 years to 3.7 years.

In October 1999, Jazz Casino sold approximately 1,085 slot machines for $6.0
million to Harrah's Operating Company. These slot machines are being leased back
under an operating lease from Harrah's Operating Company for a term of 3.7 years
pursuant to the terms of the master lease described above. The master lease is
being accounted for as an operating lease. The master lease agreement grants
Jazz Casino an option to purchase the underlying slot machines at prices
approximating fair value in 2001, 2002 and at lease termination.

On the Effective Date, the master lease agreement was cancelled. Harrah's
Operating Company contributed the slot machines under the master lease agreement
to us in exchange for receiving New Common Stock of approximately 500,000 shares
(see Note 1).

Future Minimum Rental Commitments

The aggregate contractual future minimum rental commitments, excluding
contingent rentals related to the amended and restated ground lease and after
the Effective Date of the New Amended and Restated Ground Lease as of December
31, 2000, are as follows:


<TABLE>
<CAPTION>
                                 (in thousands)
<S>                                <C>
2001                               $ 18,736
2002                                 18,768
2003                                 15,685
2004                                 13,230
2005                                 13,160
Thereafter                          265,422
                                   --------
Total Minimum Lease Payments       $345,001
                                   ========
</TABLE>

Scheduled rent increases are amortized on a straight-line basis primarily over
the life of the applicable lease. Lease expense for the years ended December 31,
2000 and 1999 and the period from October 30, 1998 to December 31, 1998 was
approximately $22.5 million, $6.3 million and $139,000, respectively.


                                       56
<PAGE>   57

NOTE 10. COMMITMENTS AND CONTINGENCIES

Casino Operating Contract

Pursuant to the original casino operating contract, which commenced on July 15,
1994, the Louisiana Economic Development and Gaming Corporation granted Harrah's
Jazz Company the right to conduct gaming operations at the Casino. On October
30, 1998, all of Harrah's Jazz Company's right, title and interest in and to the
original casino operating contract revested in Harrah's Jazz Company, and the
original casino operating contract was modified by the amended casino operating
contract and assigned to Jazz Casino in accordance with applicable Louisiana law
and the agreement of the parties thereto. The term of the amended casino
operating contract is 20 years, commencing in July 1994, with one automatic ten
year renewal option.

Under the original casino operating contract, Harrah's Jazz Company paid the
Louisiana Economic Development and Gaming Corporation an initial payment of $125
million in installments as well as certain percentage payments based on the
gross gaming revenues from the operations of a temporary casino operated by
Harrah's Jazz Company. Under Jazz Casino's amended casino operating contract,
during each fiscal year of the Casino's operation, Jazz Casino is required to
pay to the State of Louisiana, by and through the Louisiana Gaming Control
Board, an amount equal to the greater of (i) $100 million or (ii) the sum of the
following percentages of gross gaming revenue from the Casino in a fiscal year
(the "Gross Gaming Revenue Share Payments"):

18.5% of gross gaming revenue up to $600 million

20.0% of gross gaming revenue in excess of $600 million up to $700 million

22.0% of gross gaming revenue in excess of $700 million up to $800 million

24.0% of gross gaming revenue in excess of $800 million up to $900 million

25.0% of gross gaming revenue in excess of $900 million

Under the amended casino operating contract, Jazz Casino was required to advance
the Louisiana Gaming Control Board up to $3.5 million to reimburse the Louisiana
Gaming Control Board for its actual personnel costs (to include Louisiana Gaming
Control Board, the Louisiana State Police and Louisiana Attorney General
personnel and contract staff appropriate to the suitability process) that were
incurred in connection with the suitability findings necessary for the execution
of the amended casino operating contract and the opening of the Casino. Harrah's
Jazz Company paid $500,000 of this amount prior to October 30, 1998, and Jazz
Casino advanced $3 million of this amount on October 30, 1998. On October 19,
1999, Jazz Casino was notified through an amendment to the amended casino
operating contract by the Louisiana Gaming Control Board that the $3.5 million
advance discussed above would not be sufficient to pay the suitability costs and
that an additional $1.7 million would be required. The amendment provided for
the $1.7 million to be deducted from the $4.8 million credit due from the
Louisiana Gaming Control Board to Jazz Casino. As of December 31, 2000, the
remaining credit of $3.1 million is in long-term other assets. Jazz Casino is
entitled to offset this credit against daily payments to the Louisiana Gaming
Control Board on or after April 1, 2003 subject to certain stipulations under
the Second and Third Amendments to the Amended and Renegotiated Casino Operating
Contract as described below.

The amended casino operating contract obligates Jazz Casino to maintain a
capital replacement fund. The capital replacement fund is the same as that
required pursuant to Jazz Casino's amended and restated ground lease with the
Rivergate Development Corporation and the City of New Orleans and its management
agreement with the Manager and is not meant to duplicate the capital replacement
fund obligations under those agreements (see Note 9).

Under the amended casino operating contract, the Casino is prohibited from
engaging in certain activities related to food, lodging and retail, which also
applies to our operations on the second floor of the Casino. The amended casino
operating contract also imposes certain financial stability requirements on Jazz
Casino relating to its ability to meet ongoing operating expenses, casino
bankroll requirements, projected debt payments and capital maintenance
requirements.

On September 27, 2000, we received a notice from the Louisiana Gaming Control
Board that we were in default of Section 9.5(c) of the Amended and Renegotiated
Casino Operating Contract dated October 30, 1998, with the State of Louisiana.


                                       57
<PAGE>   58

The Gaming Control Board informed us of the Board's determination that we have
failed, as required by the casino operating contract, to demonstrate by clear
and convincing evidence that we have the continuing ability to pay, exchange,
refinance or extend our debt that will mature or otherwise become due and
payable during the twelve-month period commencing on July 1, 2001, primarily due
to the lack of a minimum payment guarantor for the period beyond March 31, 2001.
Pursuant to the casino operating contract, we had six months after receipt of
the Board's notice, or until March 27, 2001, to cure such a default.

On the Effective Date, Jazz Casino will operate under a Third Amendment to the
Amended and Renegotiated Casino Operating Contract establishing the payments to
the Louisiana Gaming Control Board at the greater of (i) 21.5% of gross gaming
revenues from the casino in the applicable casino operating contract fiscal year
or (ii) $50 million for the period from April 1, 2001 to March 31, 2002, and $60
million for each annual period thereafter. In addition, Jazz Casino will pay an
override on gross gaming revenues equal to (i) 1.5% of gross gaming revenues in
excess of $500 million, up to $700 million, (ii) 3.5% for gross gaming revenues
in excess of $700 million, up to $800 million, (iii) 5.5% for gross gaming
revenues in excess of $800 million, up to $900 million, and (iv) 7.5% for gross
gaming revenues in excess of $900 million.

Jazz Casino must procure an initial rolling, four-year minimum payment guaranty
guaranteeing the minimum payments required to be made to the Louisiana Gaming
Control Board under the Third Amendment to the Amended and Renegotiated Casino
Operating Contract, and must provide rolling, three-year minimum payment
guaranties thereafter. By March 31 of each year (beginning with March 31, 2003),
Jazz Casino must obtain a minimum payment guaranty (or extension thereof)
extending the minimum payment guaranty to the third anniversary of such date, so
that three years of future payments to the Louisiana Gaming Control Board are
guaranteed. Jazz Casino need not procure the guaranty if its gross gaming income
exceeds $350 million.

In addition, certain restrictions previously imposed on food and restaurant
facilities and service, lodging or the sale of products not directly related to
gaming operations have been modified (see Note 1).

General Development Agreement

The general development agreement entered into with the Rivergate Development
Corporation sets forth the obligations of the parties and the procedures to be
followed relating to the design, development and construction of the Casino and
certain related facilities. Jazz Casino is obligated to reimburse the Rivergate
Development Corporation for certain costs incurred during the construction of
the Casino and certain of its parking facilities, totaling approximately
$280,000. During 2000 and 1999, Jazz Casino reimbursed the Rivergate Development
Corporation for approximately $248,000 of these costs.

Amended Open Access Program and Plans

The amended open access program and plans require Jazz Casino to form a special
purpose corporation to foster new and existing businesses owned and controlled
by minorities, women and disadvantaged people. Harrah's Jazz Company was
required to capitalize this corporation with $500,000. Jazz Casino will
underwrite its operations at a minimum of $250,000 per year for five years. The
first $250,000 payment was required to be paid on October 30, 1998 with
subsequent annual payments payable quarterly in equal installments of $62,500.
Jazz Casino must also contribute an additional $500,000 per year for five years
to promote similar public support efforts, in accordance with standards to be
established by the Company. The first annual installment was due on October 28,
1999, with the remaining installments to be funded quarterly in equal
installments of $125,000. Jazz Casino is required to deposit these amounts into
a separate account and then fund contributions to qualified recipients based
upon certain criteria. For the years ended December 31, 2000 and 1999, Jazz
Casino has contributed $750,000 and $187,500 related to the amended open access
program and plans.

Audubon Institute Agreement

On October 30, 1998, Jazz Casino assumed the obligations related to a ticket
purchase agreement with the Audubon Institute whereby Jazz Casino has agreed to
purchase tickets from the Audubon Institute for a minimum of $375,000 per year
for the first six years of Casino operations. This amount is subject to increase
based on increasing gross gaming


                                       58
<PAGE>   59

revenue levels achieved by Jazz Casino. For the years ended December 31, 2000
and 1999, Jazz Casino has contributed $375,000 and $125,000 related to the
ticket purchase agreement.

Other Contingencies

We have various commitments to Harrah's Entertainment and its affiliates (see
Note 8).

The enactment and implementation of gaming legislation in the State of Louisiana
and the development of the Casino, and related facilities have been subject to
lawsuits, claims and delays brought about by various parties. Additional
lawsuits and the uncertain political environment may result in claims or
actions, any of which could have a material adverse effect on the Company.

We are involved in various inquiries and administrative proceedings arising in
the normal course of business. While any proceeding 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.

NOTE 11. EMPLOYEE BENEFIT PLANS

We have established the following employee and non-employee programs.

Jazz Casino Company 401(k) Plan. On November 27, 1998, we established a defined
contribution savings and retirement plan, which among other things, allows
pretax and after-tax contributions to be made by employees to the plan. Under
the plan, participating employees may elect to contribute up to 16 percent of
their eligible earnings, the first six percent of which is fully matched by us.
Under the terms of the plan, we may also elect to make an additional
discretionary contribution. Amounts contributed to the plan are invested at the
participant's direction in a money market fund, a bond fund, two balanced funds,
a small capitalization stock fund, a Standard and Poor's 500 Index Fund, or an
international stock fund. Participants become vested in the matching
contribution over five years of credited service. Our contribution expense for
the years ended December 31, 2000 and 1999 and the period from October 30, 1998
to December 31, 1998 was approximately $626,000, $46,000, and $4,400,
respectively.

1998 Long-Term Incentive Plan. On October 29, 1998, the board of directors
adopted the JCC Holding 1998 Long-Term Incentive Plan, which received
stockholder approval on May 13, 1999. Under the terms of the long-term incentive
plan, the following can be awarded to employees, officers, consultants and
directors: restricted cash awards, stock options, stock appreciation rights,
performance units, restricted stock, dividend equivalents, other stock-based
awards or any other right or interest relating to Class A Common Stock. JCC
Holding has reserved for issuance upon the grant or exercise of the above
awards, 750,000 shares of the authorized but unissued shares of Class A Common
Stock. During the year ended December 31, 2000, we granted 145,000 shares of
restricted Class A Common Stock under the long-term incentive plan. During the
year ended December 31, 1999, JCC Holding granted options to purchase an
aggregate of 214,835 shares of Class A Common Stock and 24,664 shares of
restricted Class A Common Stock under the long-term incentive plan.

1999 Non-Employee Director Stock Option Plan. On March 4, 1999, the board of
directors adopted the 1999 Non-Employee Director Stock Option Plan, which
received stockholder approval on May 13, 1999. Under the terms of JCC Holding's
director stock option plan, options to purchase Class A Common Stock may be
awarded to certain non-employee directors of JCC Holding. JCC Holding has
reserved for issuance upon the exercise of stock options granted under JCC
Holding's director stock option plan an aggregate of 150,000 shares of the
authorized but unissued shares of Class A Common Stock. During the year ended
December 31, 1999, JCC Holding granted options to purchase an aggregate of
20,000 shares of Class A Common Stock under JCC Holding's director stock option
plan. On the Effective Date, the director stock options were cancelled (see Note
1).

Stock Option Awards. A stock option grant under JCC Holding's long-term
incentive plan typically vests in equal installments over a four year period and
allows the option holder to purchase stock over specified periods of time,
generally ten years from the date of grant, at a fixed price equal to the market
value at the date of grant. Options granted under JCC Holding's director stock
option plan are immediately exercisable.


                                       59
<PAGE>   60

As of December 31, 2000, there were 208,889 outstanding stock options with
exercise prices ranging from $3.50 to $7.56 and weighted average remaining
contractual lives of 8.7 years. As of December 31, 2000, there were 158,250
exercisable stock options with a weighted average exercise price of $4.04. The
weighted average fair value per share of options granted during 1999 was $5.59.

On the Effective Date, the stock options were cancelled (see Note 1).

Restricted Stock Awards. Restricted stock awards have full voting and dividend
rights during the restricted period; however, the shares are restricted as to
transfer and subject to forfeiture during a specified period or periods prior to
vesting. The compensation arising from a grant of restricted stock awards is
based upon the market price at the grant date. Such expense is deferred and
amortized to expense over the vesting period.

On the Effective Date, the restricted stock awards were cancelled (see Note 1).

Deferred Compensation Plans. On November 18, 1999, JCC Holding's board of
directors approved two deferred compensation plans under which certain
executives and employees may defer a portion of their compensation. Amounts
deposited into these plans are our unsecured liabilities and earn interest at
rates approved by the compensation committee of the board of directors. The
first plan year for each of these plans commenced on January 1, 2000 and the
liability related to deferred compensation as of December 31, 2000 was
approximately $11,000.

NOTE 12. STOCKHOLDERS' EQUITY

Pursuant to the Harrah's Jazz Company 1998 plan of reorganization, the capital
stock of JCC Holding consisted of shares of Class A Common Stock, Class B Common
Stock, and Unclassified Common Stock. With certain exceptions, including the
election of directors and the right to separate class voting with respect to
certain amendments to JCC Holding's Certificate of Incorporation and Bylaws,
each share of Class A, Class B and Unclassified Common Stock had identical
rights and privileges, and ranked equally, shared ratably and was identical in
every respect and as to all matters, including rights in liquidation, and was
entitled to vote upon all matters submitted to a vote of the common
stockholders, was entitled to one vote for each share held, and, except as
otherwise required by law, the holders of shares of Class A, Class B and
Unclassified Common Stock generally voted together as one class on all matters
submitted to a vote of stockholders.

Harrah's Entertainment Warrants. Pursuant to a warrant agreement between JCC
Holding and Harrah's Crescent City Investment Company dated October 30, 1998,
Harrah's Crescent City Investment Company received warrants entitling it to
purchase additional shares of JCC Holding Unclassified Common Stock such that,
upon exercise of the warrant in its entirety, Harrah's Entertainment and its
subsidiaries, including Harrah's Crescent City Investment Company, will own in
the aggregate 50.0% of the then outstanding shares of Unclassified Common Stock,
subject to certain adjustments. On the Effective Date, these warrants were
eliminated as a result of the Plan of Reorganization.

On the Effective Date, JCC Holding's Class A Common Stock and Class B Common
Stock was cancelled. The Class A Common Stockholders and Class B Common
Stockholders did not receive any distributions for their respective stock. On
the Effective Date, the outstanding New Common Stock of JCC Holding consisted of
12,386,200 shares of New Common Stock. In consideration of, among other things,
Harrah's Entertainment's and Harrah's Operating Company's consent to the
cancellation and extinguishment of all claims against us arising under the
revolving credit facility, the Tranche A-2 term loan, the Tranche B-2 term loan,
the slot lease, the junior subordinated credit facility, the completion loan
agreement and the promissory note, it and its affiliates' agreement to waive all
claims relating to existing defaults under the management agreement, the
administrative services agreement, the forbearance agreement, the warrant
agreement, and any other pre-petition claims against us, and Harrah's Operating
Company's agreement to contribute the slot machines to the Company, Harrah's
Entertainment received 6,069,238 shares (49%) of the New Common Stock; holders
of claims arising under the Tranche B-1 term loan of the bank credit facilities
received 1,734,068 shares (14%) of the New Common Stock; and holders of claims
arising under the senior subordinated notes will receive 4,582,894 shares (37%)
of our New Common Stock (see Note 1).


                                       60
<PAGE>   61


The Board of Directors of JCC Holding Company shall initially consist of seven
directors. Four of the initial directors will be selected by the noteholders
committee and Bankers Trust Company and three of the initial directors will be
selected by Harrah's Entertainment. The three directors selected by Harrah's
Entertainment shall initially have one one-year, one two-year and one three-year
term, and the four directors elected by the noteholders committee and Bankers
Trust Company will initially have one one-year, one two-year and two three-year
terms.




                                       61
<PAGE>   62

NOTE 13. GUARANTOR FINANCIAL INFORMATION

JCC Holding and all of its other wholly owned subsidiaries (the "Guarantor
Subsidiaries") have fully and unconditionally guaranteed on a joint and several
basis Jazz Casino's obligations under the senior subordinated notes described in
Note 6. The Guarantor Subsidiaries and Jazz Casino comprise all of the direct
and indirect subsidiaries of the Company. All of the assets of JCC Holding's
subsidiaries are restricted and may not be transferred to JCC Holding in the
form of loans, cash or dividends without the consent of a third party. The
following consolidating schedules present condensed financial information on a
combined basis as of and for the years ended December 31, 2000 and 1999 and the
period from October 28, 1998 to December 31, 1998:


<TABLE>
<CAPTION>
 BALANCE SHEET DATA:
                                                                                      DECEMBER 31, 2000
                                                             --------------------------------------------------------------------
 ASSETS:                                                     Jazz Casino   JCC Holding    Guarantor                  Consolidated
                                                               Company       Company    Subsidiaries   Eliminations     Total
                                                             -----------   -----------  ------------   ------------  ------------
<S>                                                          <C>           <C>           <C>           <C>           <C>
CURRENT ASSETS

Cash and cash equivalents                                    $    26,602   $        14   $        10   $        --   $    26,626
Accounts receivable, net of allowance for doubtful accounts        8,017            --             1        (1,746)        6,272
Inventories                                                          685            --            --            --           685
Prepaids and other assets                                          3,678            --            --            --         3,678
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT ASSETS                                         38,982            14            11        (1,746)       37,261
                                                             -----------   -----------   -----------   -----------   -----------

Property and Equipment                                           151,735            --        15,547            --       167,282
Less - accumulated depreciation                                  (25,561)           --            --            --       (25,561)
                                                             -----------   -----------   -----------   -----------   -----------
     NET PROPERTY AND EQUIPMENT                                  126,174            --        15,547            --       141,721
                                                             -----------   -----------   -----------   -----------   -----------

OTHER ASSETS:
  Deferred operating contract                                     25,536            --            --            --        25,536
  Lease prepayments                                                6,312            --            --            --         6,312
  Deferred charges and other                                      10,589            --            42            --        10,631
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL OTHER ASSETS                                           42,437            --            42            --        42,479
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL ASSETS                                            $   207,593   $        14   $    15,600   $    (1,746)  $   221,461
                                                             ===========   ===========   ===========   ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Short-term borrowings                                        $    23,250   $        --   $        --   $        --   $    23,250
Accounts payable - trade                                             845           757           988        (1,746)          844
Accrued interest                                                   7,025            --            --            --         7,025
Accrued expenses                                                  12,270            30             1            --        12,301
Due to affiliate                                                  64,806            --            --            --        64,806
Preconfirmation contingencies                                      2,212            --            --            --         2,212
Other                                                              1,977            --            --            --         1,977
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT LIABILITIES                                   112,385           787           989        (1,746)      112,415
                                                             -----------   -----------   -----------   -----------   -----------

Long-term Debt                                                   394,759            --         1,653            --       396,412
Due to affiliate                                                  20,943            --            25            --        20,968
Other long-term liabilities                                          339            --            --            --           339
Investment in subsidiaries                                                     307,900            --      (307,900)           --

STOCKHOLDER'S EQUITY (DEFICIT):
Class A common stock                                                  --            58            --            --            58
Class B common stock                                                  --            45            --            --            45
Additional paid in capital                                        94,926       108,268        13,187      (108,113)      108,268
Accumulated deficit                                             (415,759)     (417,044)         (254)      416,013      (417,044)
Less: Unearned compensation                                           --            --            --            --            --
                                                             -----------   -----------   -----------   -----------   -----------
Total Stockholder's equity (deficit)                            (320,833)     (308,673)       12,933       307,900      (308,673)
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $   207,593   $        14   $    15,600   $    (1,746)  $   221,461
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>

                                       62
<PAGE>   63
<TABLE>
<CAPTION>
                                                                                      DECEMBER 31, 1999
                                                             --------------------------------------------------------------------
 ASSETS:                                                     Jazz Casino   JCC Holding    Guarantor                  Consolidated
                                                               Company       Company    Subsidiaries   Eliminations     Total
                                                             -----------   -----------  ------------   ------------  ------------
<S>                                                          <C>           <C>           <C>           <C>           <C>
CURRENT ASSETS

Cash and cash equivalents                                    $    34,681   $         4   $         2   $        --   $    34,687
Accounts receivable, net of allowance for doubtful accounts        4,356            63            22        (1,264)        3,177
Inventories                                                          354            --            --            --           354
Prepaids and other assets                                          2,760            --            --            --         2,760
Property available for sale                                           --            --         4,831            --         4,831
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT ASSETS                                         42,151            67         4,855        (1,264)       45,809
                                                             -----------   -----------   -----------   -----------   -----------

Property and Equipment                                           349,764            --        10,288            --       360,052
Less - accumulated depreciation                                   (4,179)           --            --            --        (4,179)
                                                             -----------   -----------   -----------   -----------   -----------
     NET PROPERTY AND EQUIPMENT                                  345,585            --        10,288            --       355,873
                                                             -----------   -----------   -----------   -----------   -----------

OTHER ASSETS:
  Deferred operating contract                                     68,182            --            --            --        68,182
  Lease prepayments                                               16,861            --            --            --        16,861
  Deferred charges and other                                      19,630            --            47            --        19,677
  Investment In subsidiaries                                          --        46,042                     (46,042)           --
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL OTHER ASSETS                                          104,673        46,042            47       (46,042)      104,720
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL ASSETS                                            $   492,409   $    46,109   $    15,190   $   (47,306)  $   506,402
                                                             ===========   ===========   ===========   ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Short-term borrowings                                        $    15,850   $        --   $        --   $        --   $    15,850
Accounts payable - trade                                           2,057           462           757        (1,264)        2,012
Accrued interest                                                   2,081            --            --            --         2,081
Accrued expenses                                                  20,761            30            --            --        20,791
Due to affiliate                                                   4,648            --            --            --         4,648
Preconfirmation contingencies                                      3,033            --            --            --         3,033
Other                                                              2,009            --            --            --         2,009
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT LIABILITIES                                    50,439           492           757        (1,264)       50,424
                                                             -----------   -----------   -----------   -----------   -----------

Long-term debt                                                   367,018            --         1,204            --       368,222
Deferred income taxes                                             37,900            --            --            --        37,900
Due to affiliate                                                   4,283            --            19            --         4,302
Other long-term liabilities                                           --            --            --            --

STOCKHOLDER'S EQUITY (DEFICIT):
Class A common stock                                                  --            56            --            --            56
Class B common stock                                                  --            45            --            --            45
Additional paid in capital                                        94,926       108,539        13,185      (108,112)      108,538
Accumulated deficit                                              (62,095)      (62,817)           25        62,070       (62,817)
Less: Unearned compensation                                          (62)         (206)           --            --          (268)
                                                             -----------   -----------   -----------   -----------   -----------
Total stockholder's equity (deficit)                              32,769        45,617        13,210       (46,042)       45,554
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $   492,409   $    46,109   $    15,190   $   (47,306)  $   506,402
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>

                                       63
<PAGE>   64

<TABLE>
<CAPTION>
                                                                                      DECEMBER 31, 1998
                                                             -------------------------------------------------------------------
 ASSETS:                                                     Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                               Company       Company    Subsidiaries   Eliminations     Total
                                                             -----------   -----------  ------------   ------------  -----------
<S>                                                          <C>           <C>           <C>           <C>           <C>
CURRENT ASSETS

Cash and cash equivalents                                    $    25,506   $        --   $        --   $        --   $    25,506
Accounts receivable, net of allowance for doubtful accounts          127            --            --           (84)           43
Inventories                                                           --            --            --            --            --
Prepaids and other assets                                          1,666            --            32            --         1,698
Property available for sale                                           --            --            --            --            --
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT ASSETS                                         27,299            --            32           (84)       27,247
                                                             -----------   -----------   -----------   -----------   -----------

Property and Equipment                                           205,529            --        13,200            --       218,729
Less - accumulated depreciation                                      (71)           --            --            --           (71)
                                                             -----------   -----------   -----------   -----------   -----------
     NET PROPERTY AND EQUIPMENT                                  205,458            --        13,200            --       218,658
                                                             -----------   -----------   -----------   -----------   -----------

OTHER ASSETS:
  Deferred operating contract                                     68,676            --            --            --        68,676
  Lease prepayments                                               16,985            --            --            --        16,985
  Deferred Charges and other                                      11,512            --            53            --        11,565
  Investment In subsidiaries                                                   104,720                    (104,720)           --
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL OTHER ASSETS                                           97,173       104,720            53      (104,720)       97,226
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL ASSETS                                            $   329,930   $   104,720   $    13,285   $  (104,804)  $   343,131
                                                             ===========   ===========   ===========   ===========   ===========

LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)

CURRENT LIABILITIES:
Accounts payable - trade                                     $       643   $        --   $        84   $       (84)  $       643
Accrued interest                                                   3,025            --            --            --         3,025
Accrued expenses                                                   4,145           310            --            --         4,455
Due to affiliate                                                     500            --            --            --           500
Preconfirmation Contingencies                                      6,679            --            --            --         6,679
                                                             -----------   -----------   -----------   -----------   -----------
     TOTAL CURRENT LIABILITIES                                    14,992           310            84           (84)       15,302
                                                             -----------   -----------   -----------   -----------   -----------

Long-term debt                                                   185,519            --            --            --       185,519
Deferred income taxes                                             37,900            --            --            --        37,900

STOCKHOLDER'S EQUITY (DEFICIT):
Class A common stock                                                  --            55            --            --            55
Class B common stock                                                  --            45            --            --            45
Additional paid in capital                                        94,900       107,987        13,187      (108,087)      107,987
Accumulated deficit                                               (3,381)       (3,677)           14         3,367        (3,677)
                                                             -----------   -----------   -----------   -----------   -----------
Total Stockholder's equity (deficit)                              91,519       104,410        13,201      (104,720)      104,410
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
   TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                $   329,930   $   104,720   $    13,285   $  (104,804)  $   343,131
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>


                                       64
<PAGE>   65

STATEMENT OF OPERATIONS DATA:

<TABLE>
<CAPTION>
                                                                           FOR THE YEAR ENDED DECEMBER 31, 2000
                                                             -------------------------------------------------------------------
                                                             Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                               Company       Company    Subsidiaries   Eliminations     Total
                                                             -----------   -----------  ------------   ------------  -----------
<S>                                                          <C>           <C>           <C>           <C>           <C>
 REVENUES:
Casino                                                       $   245,473   $        --   $        --   $        --   $   245,473
Food and beverage                                                 20,356            --            --            --        20,356
Retail, parking, and other                                         9,798            --            23            --         9,821
Less: Casino promotional allowances                              (14,545)           --            --            --       (14,545)
                                                             -----------   -----------   -----------   -----------   -----------
     Total net revenues                                          261,082            --            23            --       261,105
                                                             -----------   -----------   -----------   -----------   -----------

OPERATING EXPENSES:
  Direct:
      Casino                                                     215,176            --            --            --       215,176
      Food and beverage                                           16,131            --            --            --        16,131
      Retail, parking and other                                    4,123            --            10            --         4,133
  General and administrative                                      85,951           286           150            --        86,387
  Depreciation and amortization                                   26,334            --             5            --        26,339
  Provision for asset impairment                                 258,674            --           138            --       258,812
  Equity in subsidiary losses                                         --       353,942            --      (353,942)           --
                                                             -----------   -----------   -----------   -----------   -----------
     Total operating expenses                                    606,389       354,228           303      (353,942)      606,978
                                                             -----------   -----------   -----------   -----------   -----------

OPERATING LOSS                                                  (345,307)     (354,228)         (280)      353,942      (345,873)
                                                             -----------   -----------   -----------   -----------   -----------

OTHER INCOME (EXPENSE):
  Interest expense, net of capitalized interest                  (46,668)                         --                     (46,668)
  Interest and other income                                          411                           2                         413
                                                             -----------   -----------   -----------   -----------   -----------
     Total other income (expense)                                (46,257)           --             2            --       (46,255)
                                                             -----------   -----------   -----------   -----------   -----------

LOSS BEFORE TAXES                                               (391,564)     (354,228)         (278)      353,942      (392,128)

 INCOME TAX BENEFIT                                               37,900            --            --            --        37,900

                                                             -----------   -----------   -----------   -----------   -----------
 NET LOSS                                                       (353,664)     (354,228)         (278)      353,942      (354,228)
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>


                                       65
<PAGE>   66


<TABLE>
<CAPTION>
                                                                           FOR THE YEAR ENDED DECEMBER 31, 1999
                                                             -------------------------------------------------------------------
                                                             Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                               Company       Company    Subsidiaries   Eliminations     Total
                                                             -----------   -----------  ------------   ------------  -----------
<S>                                                          <C>           <C>           <C>           <C>           <C>
 REVENUES:
Casino                                                       $    38,005   $        --   $        --   $        --   $    38,005
Food and beverage                                                  3,693            --            --            --         3,693
Retail, parking, and other                                         1,796            --            23            --         1,819
Less: Casino promotional allowances                               (2,361)           --            --            --        (2,361)
                                                             -----------   -----------   -----------   -----------   -----------
     Total net revenues                                           41,133            --            23            --        41,156
                                                             -----------   -----------   -----------   -----------   -----------

OPERATING EXPENSES:
  Direct:
      Casino                                                      35,013            --            --            --        35,013
      Food and beverage                                            2,875            --            --            --         2,875
      Retail, parking and other                                    1,200            --            --            --         1,200
  General and administrative                                      15,602           437             7            --        16,046
  Depreciation and amortization                                    5,102            --             5            --         5,107
  Pre-opening Expenses                                            35,160            --            --            --        35,160
  Equity in subsidiary losses                                         --        58,703            --       (58,703)           --
                                                             -----------   -----------   -----------   -----------   -----------
     Total operating expenses                                     94,952        59,140            12       (58,703)       95,401
                                                             -----------   -----------   -----------   -----------   -----------

OPERATING LOSS                                                   (53,819)      (59,140)           11        58,703       (54,245)
                                                             -----------   -----------   -----------   -----------   -----------

REORGANIZATION ITEM                                                1,562            --            --            --         1,562

OTHER INCOME (EXPENSE):
  Interest expense, net of capitalized interest                   (6,869)           --            --            --        (6,869)
  Interest and other income                                          412            --            --            --           412
                                                             -----------   -----------   -----------   -----------   -----------
     Total other income (expense)                                 (6,457)           --            --            --        (6,457)
                                                             -----------   -----------   -----------   -----------   -----------

                                                             -----------   -----------   -----------   -----------   -----------
 NET LOSS                                                    $   (58,714)  $   (59,140)  $        11   $    58,703   $   (59,140)
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>


                                       66
<PAGE>   67


<TABLE>
<CAPTION>
                                                                 FOR THE PERIOD FROM OCTOBER 28, 1998 TO DECEMBER 31, 1998
                                                             ------------------------------------------------------------------
                                                             Jazz Casino   JCC Holding    Guarantor                Consolidated
                                                               Company       Company    Subsidiaries  Eliminations    Total
                                                             -----------   -----------  ------------  ------------ ------------
<S>                                                          <C>           <C>           <C>           <C>           <C>
 REVENUES:
Retail, parking, and other                                   $        --   $        --   $        14  $        --   $        14
                                                             -----------   -----------   -----------  -----------   -----------
     Total net revenues                                               --            --            14           --            14
                                                             -----------   -----------   -----------  -----------   -----------

OPERATING EXPENSES:
  General and administrative                                          --           310            --           --           310
  Depreciation and amortization                                      110            --             1           --           111
  Pre-opening Expenses                                             3,580            --            --           --         3,580
  Equity in subsidiary losses                                         --         3,367            --       (3,367)           --
                                                             -----------   -----------   -----------  -----------   -----------
     Total operating expenses                                      3,690         3,677             1       (3,367)        4,001
                                                             -----------   -----------   -----------  -----------   -----------

OPERATING LOSS                                                    (3,690)       (3,677)           13        3,367        (3,987)
                                                             -----------   -----------   -----------  -----------   -----------

OTHER INCOME (EXPENSE):
  Interest expense, net of capitalized interest                       --            --            --           --            --
  Interest and other income                                          310            --            --           --           310
                                                             -----------   -----------   -----------  -----------   -----------
     Total other income (expense)                                    310            --            --           --           310
                                                             -----------   -----------   -----------  -----------   -----------

                                                             -----------   -----------   -----------  -----------   -----------
 NET LOSS                                                    $    (3,380)  $    (3,677)  $        13  $     3,367   $    (3,677)
                                                             ===========   ===========   ===========  ===========   ===========
</TABLE>



                                       67
<PAGE>   68


STATEMENT OF CASH FLOW DATA:

<TABLE>
<CAPTION>
                                                                          FOR THE YEAR ENDED DECEMBER 31, 2000
                                                            -------------------------------------------------------------------
                                                            Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                              Company       Company    Subsidiaries   Eliminations     Total
                                                            -----------   -----------  ------------   ------------  -----------
<S>                                                         <C>           <C>           <C>           <C>           <C>
Cash Flows From Operating Activities:
  Net Loss                                                  $  (353,664)  $  (354,228)  $      (278)  $   353,942   $  (354,228)
  Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation and amortization                               26,334            --             5            --        26,339
     Provision for asset impairment                             258,674            --           138            --       258,812
     Deferred income taxes                                      (37,900)           --            --            --       (37,900)
     Amortization of note discount                                5,369            --            --            --         5,369
     Deferred rent                                                1,624            --            --            --         1,624
     Provision for bad debts                                      1,770            --            --            --         1,770
     Equity in subsidiary losses                                     --       353,942            --      (353,942)           --
Changes in operating assets and liabilities:
     Accounts receivable                                         (5,368)           --            21           482        (4,865)
     Inventories                                                   (331)           --            --            --          (331)
     Prepaids and other assets                                     (918)           --            --            --          (918)
     Accounts payable - trade                                    (1,075)          296            93          (482)       (1,168)
     Accrued interest                                            19,523            --            --            --        19,523
     Accrued expenses                                            (7,653)           --             1            --        (7,652)
     Preconfirmation contingencies                                 (821)           --            --            --          (821)
     Due to affiliates                                           34,084            --             6            --        34,090
     Other current liabilities                                      (31)           --            --            --           (31)
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows used in operating activities              (60,383)           10           (14)           --       (60,387)
                                                            -----------   -----------   -----------   -----------   -----------

Cash Flows From Investing Activities:
     Capital expenditures                                        (2,981)           --          (427)           --        (3,408)
     Increase in deferred charges and other assets               (1,218)           --            --            --        (1,218)
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows used in investing activities               (4,199)           --          (427)           --        (4,626)
                                                            -----------   -----------   -----------   -----------   -----------

Cash Flows From Financing Activities:
     Net borrowings (repayments) of short-term borrowings         7,400            --            --            --         7,400
     Proceeds from notes payable to affiliate                    49,103            --           449            --        49,552
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows provided by financing activities           56,503            --           449            --        56,952
                                                            -----------   -----------   -----------   -----------   -----------

Net increase (decrease) in cash and cash equivalents             (8,079)           10             8            --        (8,061)

Cash and cash equivalents, beginning of period                   34,681             4             2            --        34,687

                                                            -----------   -----------   -----------   -----------   -----------
Cash and cash equivalents, end of period                    $    26,602   $        14   $        10   $        --   $    26,626
                                                            ===========   ===========   ===========   ===========   ===========
</TABLE>


                                       68
<PAGE>   69
<TABLE>
<CAPTION>
                                                                          FOR THE YEAR ENDED DECEMBER 31, 1999
                                                            -------------------------------------------------------------------
                                                            Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                              Company       Company    Subsidiaries   Eliminations     Total
                                                            -----------   -----------  ------------   ------------  -----------
<S>                                                         <C>           <C>           <C>           <C>           <C>

Cash Flows From Operating Activities:
  Net Loss                                                  $   (58,714)  $   (59,140)  $        11   $    58,703   $   (59,140)
  Adjustments to reconcile net loss to net cash used in
  operating activities:
     Depreciation and amortization                                5,102            --             5            --         5,107
     Amortization of note discount                                  765            --            --            --           765
     Amortization of unearned compensation                           --           259            --            --           259
     Deferred rent                                                  226            --            --            --           226
     Write-off of preconfirmation contingencies                  (1,562)           --            --            --        (1,562)
     Loss on sale of property and equipment                          27            --            --            --            27
     Equity in subsidiary losses                                     --        58,703            --       (58,703)           --
Changes in operating assets and liabilities:
     Accounts receivable                                         (3,134)           --            --            --        (3,134)
     Inventories                                                   (354)           --            --            --          (354)
     Prepaids and other assets                                   (1,062)           --            --            --        (1,062)
     Accounts payable - trade                                       907           462            --            --         1,369
     Accrued interest                                            (5,855)           --            --            --        (5,855)
     Accrued expenses                                            16,616          (280)           --            --        16,336
     Preconfirmation contingencies                               (2,084)           --            --            --        (2,084)
     Due to affiliates                                            8,224            --            --            --         8,224
     Other current liabilities                                    2,009            --            --            --         2,009
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows used in operating activities              (38,889)            4            16            --       (38,869)
                                                            -----------   -----------   -----------   -----------   -----------

Cash Flows From Investing Activities:
     Capital expenditures                                      (129,334)           --        (1,218)           --      (130,552)
     Proceeds from sale of property                               6,042            --            --            --         6,042
     Increase in deferred charges and other assets               (8,492)           --            --            --        (8,492)
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows used in investing activities             (131,784)           --        (1,218)           --      (133,002)
                                                            -----------   -----------   -----------   -----------   -----------

Cash Flows From Financing Activities:
     Net borrowings (repayments) of short-term borrowings        15,850            --            --            --        15,850
     Proceeds from notes payable to affiliate                        --            --         1,204            --            --
     Proceeds from issuance of long-term debt                   163,998            --            --            --       165,202
                                                            -----------   -----------   -----------   -----------   -----------
       Net cash flows provided by financing activities          179,848            --         1,204            --       181,052
                                                            -----------   -----------   -----------   -----------   -----------

Net increase (decrease) in cash and cash equivalents              9,175             4             2            --         9,181

Cash and cash equivalents, beginning of period                   25,506            --            --            --        25,506

                                                            -----------   -----------   -----------   -----------   -----------
Cash and cash equivalents, end of period                    $    34,681   $         4   $         2   $        --   $    34,687
                                                            ===========   ===========   ===========   ===========   ===========
</TABLE>

                                       69
<PAGE>   70


<TABLE>
<CAPTION>
                                                                FOR THE PERIOD FROM OCTOBER 28, 1998 TO DECEMBER 31, 1998
                                                            -------------------------------------------------------------------
                                                            Jazz Casino   JCC Holding    Guarantor                 Consolidated
                                                              Company       Company    Subsidiaries   Eliminations     Total
                                                            -----------   -----------  ------------   ------------  -----------
<S>                                                         <C>           <C>           <C>           <C>           <C>

 Cash Flows From Operating Activities:
   Net Loss                                                  $    (3,380)  $    (3,677)  $        13   $     3,367   $    (3,677)
   Adjustments to reconcile net loss to net cash used in
   operating activities:
      Depreciation and amortization                                  110            --             1            --           111
      Equity in subsidiary losses                                     --         3,367            --        (3,367)           --
 Changes in operating assets and liabilities:
      Accounts receivable                                           (128)           --            --            85           (43)
      Prepaids and other assets                                   (1,603)           --           (31)           --        (1,634)
      Accounts payable - trade                                       643            --            85           (85)          643
      Accrued expenses                                             4,145           310            --            --         4,455
      Preconfirmation contingencies                              (68,750)           --            --            --       (68,750)
      Due to affiliates                                              500            --            --            --           500
                                                             -----------   -----------   -----------   -----------   -----------
        Net cash flows used in operating activities              (68,463)           --            68            --       (68,395)
                                                             -----------   -----------   -----------   -----------   -----------

 Cash Flows From Investing Activities:
      Capital expenditures                                       (27,011)           --           (15)                    (27,026)
      Increase in deferred charges and other assets               (5,647)           --           (53)           --        (5,700)
                                                             -----------   -----------   -----------   -----------   -----------
        Net cash flows used in investing activities              (32,658)           --           (68)           --       (32,726)
                                                             -----------   -----------   -----------   -----------   -----------

 Cash Flows From Financing Activities:
      Net borrowings (repayments) of short-term borrowings            --            --            --            --            --
      Proceeds from issuance of long-term debt                        --            --            --            --            --
                                                             -----------   -----------   -----------   -----------   -----------
        Net cash flows provided by financing activities               --            --            --            --            --
                                                             -----------   -----------   -----------   -----------   -----------

 Net increase (decrease) in cash and cash equivalents           (101,121)           --            --            --      (101,121)

 Cash and cash equivalents, beginning of period                  126,627            --            --                     126,627

                                                             -----------   -----------   -----------   -----------   -----------
 Cash and cash equivalents, end of period                    $    25,506   $        --   $        --   $        --   $    25,506
                                                             ===========   ===========   ===========   ===========   ===========
</TABLE>

                                       70
<PAGE>   71

NOTE 14. QUARTERLY FINANCIAL DATA (UNAUDITED)

Prior to October 28, 1999, we did not have any gaming operations and most of our
activities related to completing the construction of the Casino and hiring and
training employees. Our operating results for the four quarters of 2000 and 1999
were as follows:

<TABLE>
<CAPTION>
                              FIRST            SECOND            THIRD             FOURTH
                             QUARTER          QUARTER           QUARTER            QUARTER
                            ---------         ---------         ---------         ---------
                                                    (IN THOUSANDS)
<S>                         <C>               <C>               <C>               <C>
FISCAL 2000
Revenues                    $  62,616         $  64,314         $  69,925         $  64,250
Loss from operations        $ (24,209)        $ (21,073)        $ (19,616)        $(280,975)
Net loss                    $ (34,750)        $ (32,125)        $ (31,355)        $(255,998)
Basic loss per share        $   (3.44)        $   (3.16)        $   (3.06)        $  (25.13)
</TABLE>

<TABLE>
<CAPTION>
                              FIRST            SECOND            THIRD             FOURTH
                             QUARTER          QUARTER           QUARTER            QUARTER
                            ---------         ---------         ---------         ---------
                                                    (IN THOUSANDS)
<S>                         <C>               <C>               <C>               <C>
FISCAL 1999
Revenues                    $       6         $       4         $      93         $  41,053
Loss from operations        $  (2,989)        $  (6,697)        $ (11,331)        $ (33,228)
Net loss                    $  (2,824)        $  (6,627)        $ (11,270)        $ (38,419)
Basic loss per share        $   (0.28)        $   (0.66)        $   (1.12)        $   (3.82)
</TABLE>

The fourth quarter 2000 included a $255.9 million impairment charge (see Note
3). The impairment charge recorded in the fourth quarter 2000 created a deferred
tax asset available to offset our deferred tax liability. As of December 31,
2000, the valuation allowance was adjusted to reduce our net deferred taxes to
zero resulting in an income tax benefit of $37.9 million (see Note 7).



                                       71
<PAGE>   72


                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS




To Harrah's Jazz Company:

         We have audited the accompanying consolidated statements of operations,
partners' capital and cash flows of Harrah's Jazz Company (a Louisiana general
partnership) and subsidiary ("HJC") for the ten-month period ended October 30,
1998. These financial statements are the responsibility of HJC's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.

         We conducted our audit 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 audit provides a reasonable basis
for our opinion.

         In our opinion, the financial statements referred to above present
fairly, in all material respects, the results of operations and cash flows of
Harrah's Jazz Company and subsidiary for the ten-month period ended October 30,
1998, in conformity with accounting principles generally accepted in the United
States.



                                               /s/ Arthur Andersen LLP

New Orleans, Louisiana
March 25, 1999



                                       72
<PAGE>   73


                      HARRAH'S JAZZ COMPANY AND SUBSIDIARY
                      (PREDECESSOR TO JCC HOLDING COMPANY)
                             (DEBTOR-IN-POSSESSION)
                      CONSOLIDATED STATEMENT OF OPERATIONS
                 For the ten-month period ended October 30, 1998
                                 (in thousands)
                                 (Notes 1 and 2)


<TABLE>
<S>                                                      <C>
REVENUES:
   Other                                                 $      87

OPERATING EXPENSES:
   General and administrative                               14,965
   Depreciation                                                522
                                                         ---------
       Total operating expenses                             15,487
                                                         ---------
       Loss from operations                                (15,400)
                                                         ---------
REORGANIZATION ITEMS:
   Costs and expenses (Note 2)                              (7,643)
   Adjust assets to reorganization value (Note 1)          (74,799)
   Recovery of accounts receivable                               3
   Interest income                                             126
                                                         ---------
       Total reorganization items                          (82,313)
                                                         ---------
OTHER INCOME (EXPENSE):
   Interest expense, net of capitalized
     interest (Notes 2 and 4)                                   --
                                                         ---------
NET LOSS BEFORE
   EXTRAORDINARY ITEM                                      (97,713)

EXTRAORDINARY ITEM - gain on discharge of
   debt (Note 1)                                           267,706
                                                         ---------
       Net Income                                        $ 169,993
                                                         =========
</TABLE>

        The accompanying notes are an integral part of these statements.



                                       73
<PAGE>   74


                      HARRAH'S JAZZ COMPANY AND SUBSIDIARY
                      (PREDECESSOR TO JCC HOLDING COMPANY)
                             (DEBTOR-IN-POSSESSION)
              CONSOLIDATED STATEMENT OF PARTNERS' CAPITAL (DEFICIT)
                 For the ten-month period ended October 30, 1998
                                 (in thousands)
                                 (Notes 1 and 2)

<TABLE>
<CAPTION>
                                                                                         Equity as a
                                                 Partners' Capital     Accumulated         Result of
                                                   Contributions          Deficit       Reorganization
                                                 -----------------     -----------      --------------
<S>                                              <C>                   <C>              <C>
Balance - December 31, 1997                             167,000          (379,207)               --

Net Income                                                   --           169,993                --

Discharge of debt exchanged in part for equity
                                                             --                --           135,301
Reclassification of partners' capital
   contributions and accumulated deficit as
   of effective date                                   (167,000)          209,214           (42,214)
                                                      ---------         ---------         ---------
Balance - October 30, 1998                            $      --         $      --         $  93,087
                                                      =========         =========         =========
</TABLE>


        The accompanying notes are an integral part of these statements.



                                       74
<PAGE>   75


                      HARRAH'S JAZZ COMPANY AND SUBSIDIARY
                      (PREDECESSOR TO JCC HOLDING COMPANY)
                             (DEBTOR-IN-POSSESSION)
                      CONSOLIDATED STATEMENT OF CASH FLOWS
                 For the ten-month period ended October 30, 1998
                                 (in thousands)
                                 (Notes 1 and 2)

<TABLE>
<S>                                                            <C>
Cash flows from operating activities:
   Net income                                                  $ 169,993

   Adjustments to reconcile net income to net cash used
       in operations

       Adjust assets to reorganization value                      74,799
       Gain on discharge of debt                                (267,706)
       Depreciation                                                  522
       Increase (Decrease) in accounts payable and
              accrued expenses                                    10,162

         Cash flows used in operating activities                 (12,230)
                                                               ---------
Cash flows from investing activities:
   Purchase of land, buildings and equipment                      (4,956)

         Cash flows used in investing activities                  (4,956)
                                                               ---------
Cash flows from financing activities:
   Proceeds received from Debtor-in-Possession
         borrowings                                               27,770
                                                               ---------
         Cash flows provided by financing
           activities                                             27,770
                                                               ---------
Net increase in cash and cash Equivalents                         10,584
Cash and cash equivalents, beginning of period                     3,755
                                                               ---------
Cash and cash equivalents, end of period                       $  14,339
                                                               =========
</TABLE>


        The accompanying notes are an integral part of these statements.



                                       75
<PAGE>   76



NOTE 1. ORGANIZATION, BANKRUPTCY, BASIS OF PRESENTATION AND FACTORS AFFECTING
FUTURE PERFORMANCE

Organization

         Harrah's Jazz Company ("HJC") is a Louisiana general partnership that
was formed on November 29, 1993 for the purposes of developing, owning and
operating the exclusive land-based casino entertainment facility (the "Casino")
in New Orleans, Louisiana, on the site of the former Rivergate Convention
Center. HJC operated a temporary casino in the Municipal Auditorium (the "Basin
Street Casino" and, together with the Casino, the "Gaming Facilities") from May
1, 1995 to November 22, 1995.

         HJC was comprised of (i) Harrah's New Orleans Investment Company
("HNOIC"), an indirect wholly-owned subsidiary of Harrah's Entertainment, Inc.
("HET"), (ii) New Orleans/Louisiana Development Corporation ("NOLDC"), and (iii)
Grand Palais Casino, Inc. ("Grand Palais" and, collectively with HNOIC and
NOLDC, the "Partners").

         HJC entered into a contract (the "Casino Operating Contract") with the
Louisiana Economic Development and Gaming Corporation ("LEDGC") to develop and
operate the casino at the Rivergate site and entered into the Ground Lease with
the City of New Orleans (the "City") and the Rivergate Development Corporation
(the "RDC") for the Rivergate site. HJC, the RDC and the City also entered into
the General Development Agreement which governed the design, development and
construction of the casino and certain related facilities and an open access
program and open access plans adopted thereunder regarding hiring goals and
programs (collectively, the "Open Access Program and Plans"). HJC engaged
Harrah's New Orleans Management Company ("the Manager"), an indirect
wholly-owned subsidiary of HET, to manage the operations of the casino.

Petition For Relief Under Chapter 11

         On November 22, 1995 (the "Petition Date"), HJC (which is sometimes
referred to herein as the "Debtor") and its subsidiary Harrah's Jazz Finance
Corp. ("Finance Corp.") (sometimes referred to collectively herein as the
"Debtors") filed petitions for relief under Chapter 11 of Title 11 of the United
States Code ("Chapter 11") in the United States Bankruptcy Court for the Eastern
District of Louisiana (the "Bankruptcy Court" or the "Court").

         Under Chapter 11, the prosecution of certain claims against the Debtor
in existence prior to the Petition Date is stayed under federal bankruptcy law
while the Debtor attempts to reorganize. The prosecution of claims secured by
the Debtors' assets also is stayed, although the holders of such claims have the
right to move the Court for relief from the stay. Secured claims were
collateralized primarily by substantially all of the Debtors' assets.

         HJC, Finance Corp., HNOIC and HET (collectively, the "Proponents")
filed a plan of reorganization and related disclosure statement with the
Bankruptcy Court on April 3, 1996. As a result of, among other things, ongoing
negotiations with the City, the State of Louisiana and other parties, the
Proponents amended the plan of reorganization several times during the
reorganization process.

         Following a hearing on the adequacy of the disclosure statement held on
September 3, 1998, the disclosure statement was approved, and the Plan of
Reorganization was confirmed by Bankruptcy Court on October 13, 1998. The Plan
of Reorganization and the transactions contemplated thereby were consummated on
October 30, 1998.

         JCC Holding Company ("JCC Holding") was incorporated under Delaware law
on August 20, 1996 in contemplation of succeeding to all of the assets and
liabilities of HJC. JCC Holding conducts its business through its wholly-owned
subsidiaries, Jazz Casino Company, L.L.C., a Louisiana limited liability company
("JCC"), JCC Development Company, a Louisiana limited liability company ("JCC
Development"), JCC Canal Development, L.L.C., a Louisiana limited liability
company formerly known as CP Development, L.L.C. ("Canal Development"), and JCC
Fulton Development, L.L.C., a Louisiana limited liability company, formerly
known as FP Development, L.L.C. ("Fulton Development").



                                       76
<PAGE>   77



         On October 30, 1998 (the "Effective Date") in accordance with the
Harrah's Jazz Company Joint Plan of Reorganization (the "Plan"), JCC Holding
became the successor to the operations of HJC. Except for certain real property
which vested in Canal Development and Fulton Development, all of the assets of
HJC vested in JCC. On the Effective Date in connection with the reorganization,
JCC Holding issued an aggregate of 10 million shares of Common Stock consisting
of both Class A and Class B stock. The former bondholders of HJC received an
aggregate of 5,197,377 shares of Class A Common Stock, valued at $75.3 million,
which constituted approximately 52% of the issued and outstanding Common Stock.
In addition, the former bondholders also received their pro rata share of $187.5
million in aggregate principal amount of New Notes and New Contingent Notes.
HET, through a wholly-owned subsidiary, acquired beneficial ownership of the
Class B Common Stock and currently is the beneficial owner of 4,302,623 shares,
which constitutes approximately 43% of the issued and outstanding common stock.
These shares were acquired in consideration of, among other things, an equity
investment of $15 million and the conversion to equity and contribution to JCC
Holding on the Effective Date of $60 million in debtor-in-possession financing
that had been provided to HJC by HET or its affiliates over the course of the
reorganization. HET originally acquired 4,802,623 shares of Class B Common
Stock. However, under certain settlement agreements entered into in connection
with the Plan of Reorganization, HET transferred from its acquired shares of
Class B Common Stock (i) options to purchase 300,000 shares to the shareholders
of NOLDC, (ii) options to purchase 150,000 shares to Bank One, Louisiana, N.A.,
formerly known as First National Bank of Commerce ("Bank One") and (iii) its
right to receive 350,000 shares to the senior secured bond holders of Grand
Palais. Because the senior secured bond holders of Grand Palais are not
permitted to own Class B Common Stock, the shares received by the senior secured
bondholders were automatically converted to Class A Common Stock.

         Throughout most of the period in which HJC was in reorganization, it
was able to continue in existence because of loans (the "DIP Financing") from
HET or one of its affiliates (the "DIP Lender"). (See Note 4).

        As a result of the transactions described above, HJC's 14 1/4% First
Mortgage Notes due 2001 With Contingent Interest (the "Old Bonds") were
cancelled and certain other indebtedness was forgiven and/or cancelled (see Note
4). Accordingly, HJC recognized an extraordinary gain totaling $267.7 million in
its statement of operations for the ten month period ended October 30, 1998.

FRESH START REPORTING

         In accordance with the AICPA Statement of Position No. 90-7, "Financial
Reporting by Entities in Reorganization Under the Bankruptcy Code" ("SOP 90-7")
HJC established its reorganization value and adopted "fresh start" accounting as
of October 30, 1998. HJC adopted "fresh start" reporting because owners
immediately before filing and confirmation of the Plan received less than 50% of
the voting shares of the emerging entity and its reorganization value is less
than the postpetition liabilities and allowed claims, as shown below:

<TABLE>
<CAPTION>
                                                                      (IN THOUSANDS)
<S>                                                                   <C>
Post Petition Date current liabilities                                  $ 83,777
Liabilities deferred pursuant to Chapter 11 proceedings                  523,468
                                                                        --------

Total post Petition Date liabilities and allowed claims                  607,245
Reorganization value                                                     331,000
                                                                        --------
Excess of liabilities over reorganization value                         $276,245
                                                                        ========
</TABLE>

         Pursuant to SOP 90-7, the total reorganization value of the reorganized
entity's assets was determined using several factors and by reliance on various
valuation methods, including discounting cash flow, as well as by analyzing
market cash flow multiples applied to JCC's forecasted cash flows. The factors
considered by JCC included: (i) forecasted cash flow results which gave effect
to the estimated impact of the restructuring; (ii) the discounted residual value
at the end of the forecast period; (iii) competition and general economic
considerations; and (iv) future potential profitability. Under the principles of
"fresh start" accounting HJC's total net assets were recorded at this assumed
reorganization value, which resulted in a write-down of assets totaling $74.8
million.



                                       77
<PAGE>   78



FACTORS AFFECTING FUTURE PERFORMANCE

         HJC has identified certain factors that may impact the development of
the Casino or HJC's successor's ability to achieve successful future operations:

               a. Future state legislation could adversely affect the Casino's
             operations. There can be no assurance that the Louisiana state
             legislature will not enact legislation that imposes obligations,
             restrictions or costs that could interfere with JCC's casino
             operations, cause JCC to violate agreements to which it is a party
             or otherwise materially and adversely affect the Casino. Because
             legalized gaming is a relatively new industry in Louisiana, over
             the past few years the Louisiana state legislature has given a
             significant amount of attention to gaming related bills that could
             impact the Casino.

               b. The interpretation of current regulations and the Gaming Act
             could adversely affect JCC's operations. In May 1996, the State
             Legislature enacted a bill that, among other things, transferred
             regulatory authority over the Casino from the LEDGC to the
             Louisiana Gaming Control Board (the "LGCB") and provided that the
             LGCB would have the assistance of the State Police. Although the
             existing Rules and Regulations promulgated by the LEDGC remain in
             force and effect at this time, the LGCB is empowered to repeal
             these Rules and Regulations and to promulgate its own Rules and
             Regulations. This law also authorizes the State Police to, among
             other things, conduct investigations and audits of gaming license
             applicants and to assist the LGCB in determining compliance with
             gaming laws and regulations. JCC and the Manager have little
             operational or other experience with the LGCB or the State Police
             and the regulatory framework established by the State legislature
             in 1996. JCC has been advised that the LGCB intends to promulgate a
             number of its own Rules and Regulations. The LGCB's or the State
             Police's interpretation and implementation of the Gaming Act, the
             adoption of new Rules and Regulations, or the repeal of existing
             Rules and Regulations could impose additional obligations,
             restrictions or costs that could interfere with JCC's casino
             operations, cause JCC to violate agreements to which it is a party
             or otherwise materially and adversely affect the Casino.

               c. The gaming industry is highly competitive, with companies that
             in many instances have greater resources than JCC. In addition,
             considerable competition has developed since the land-based Casino
             project was initially proposed in the early 1990's. The attraction
             of a land-based casino in New Orleans may have decreased as a
             result of the large number of casinos competing on local, regional,
             and national levels as well as the continued development of other
             gaming markets. Negative publicity associated with HJC's bankruptcy
             also may have an adverse impact on the Casino's ability to compete.
             Further, the Casino operates under significant restrictions on its
             ability to provide lodging, food services and entertainment. The
             Casino's competitors' ability to provide these services without
             restriction is a considerable competitive advantage.

               d. Additional land-based casino operations could materially and
             adversely affect the Casino's operations by increasing the amount
             of competition it faces. The Gaming Act presently restricts
             land-based casino gaming to the Rivergate site; however, there can
             be no assurance that the State will not enact future legislation
             that would permit competing land-based casinos at other sites or in
             parishes other than Orleans Parish, including other parishes in the
             New Orleans metropolitan area.

               e. JCC incurred significant debt in connection with the
             transactions described above, and, as a result, has significant
             debt service obligations. JCC also has payment obligations to the
             RDC and the LGCB. The Casino may not achieve the level of gaming
             and operating cash flow necessary to satisfy the JCC obligations
             described above. Future operating results are subject to
             significant business, economic, regulatory, political, and
             competitive uncertainties and contingencies, many of which are
             outside of the Casino's control.

               f. Louisiana state and local political environments affected the
             Casino's development and construction and may affect the Casino's
             operation. There is considerable opposition to gaming among a
             segment of the population in Louisiana. The enactment and
             implementation of gaming legislation in Louisiana and the




                                       78
<PAGE>   79


             Casino's development have been the subject of lawsuits, claims and
             delays brought about by various anti-gaming and preservationist
             groups and competitors of the Casino. Although these lawsuits and
             claims have all been settled or dismissed, these lawsuits and
             claims, together with contract negotiations with Sate and City
             governmental entities, significantly delayed the Casino's
             development. Additional lawsuits and the uncertain political
             environment could materially and adversely affect the Casino.

NOTE 2.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Pervasiveness of Estimates - Certain Significant Estimates

         Financial statements prepared in accordance with generally accepted
accounting principles require the use of management estimates. The most
significant estimates with regard to these financial statements are with respect
to the reorganization value (see Note 1) of HJC's successor and the future
recoverability, assuming a going concern, of buildings and equipment, property
held for development, deferred operating contract costs, and lease prepayments,
as discussed below. Realization of buildings and equipment, deferred operating
contract costs and lease prepayments is dependent upon JCC's ability to achieve
successful future operations, as discussed in Note 1 above. The amount of
buildings and equipment, deferred operating contract costs and lease prepayments
considered realizable could be significantly reduced, if in HJC's or its
successor's judgment or a change in circumstances, the likelihood of achieving
successful future operations becomes remote.

Cash and Cash Equivalents

         For purposes of the consolidated statement of cash flows, cash and cash
equivalents include highly liquid investments with original maturities of three
months or less. All cash is collateral for the Old Bonds pursuant to the
Indenture (see Note 4); however, the Court authorized HJC to use such funds to
pay approved post Petition Date costs.

Land, Buildings and Equipment

         Land, buildings and equipment are stated at cost, except for
adjustments related to fresh start reporting (see Note 1). Improvements and
extraordinary repairs that extend the life of the asset are capitalized.
Maintenance and repairs are expensed as incurred.

         Depreciation is calculated using the straight-line method over the
estimated useful lives of the assets or related lease terms, whichever is
shorter, as follows:

<TABLE>
<S>                                                             <C>
         Buildings and improvements..........................     30 years
         Furniture, fixtures and equipment...................   3-15 years
</TABLE>

See discussion below under Reorganization Costs and Impairment of Asset Carrying
Values.

         HJC has property held for future development which has been valued at
the lower of cost or estimated fair value, net of a valuation allowance of $5.1
million provided in 1995. The amount ultimately realizable from the property
could differ materially from the estimated fair value.

Other Assets

         Deferred Operating Contract Cost

         Deferred operating contract cost consists of payments to the LEDGC (see
Note 6) required by the Casino Operating Contract, and will be amortized over
the life of the contract.

         Lease Prepayments

         Lease prepayments include non-refundable initial payments required
under HJC's leases (see Note 5) and will be amortized on a straight-line basis
over the life of the related lease.




                                       79
<PAGE>   80

Reorganization Costs and Impairment of Asset Carrying Values

         Reorganization costs are segregated from normal operations in the
accompanying consolidated statement of operations and reflect the costs incurred
associated with the reorganization of HJC.

         Reorganization costs and expenses consisted primarily of professional
fees for the ten months ended October 30, 1998.

         HJC periodically evaluates whether events and circumstances have
occurred that indicate that certain assets may not be recoverable. When factors
indicate that long-lived assets should be evaluated for impairment, HJC uses an
estimate of undiscounted net cash flow over the remaining life of the related
lease or contract, as applicable, in determining whether the assets are
recoverable.

Income Taxes

         No provision is made in the accounts of HJC for federal and state
income taxes, as such taxes are the responsibility of the individual partners.
HJC's tax returns and amounts of its allocable revenues and expenses are subject
to examination by federal and state taxing authorities. If such examinations
occur and result in changes, the portion of HJC's income or loss reported by the
individual partners would also change.

NOTE 3.  TRANSACTIONS WITH PARTNERS

Partners' Capital

         The Partnership Agreement entered into by the Partners upon formation
of HJC provides that certain assets acquired, net of related debt, and expenses
incurred by the Partners on behalf of HJC would be contributed capital. The
principle followed in determining the net value of such assets and expenses was
on the Partners' original cost, except for the ground lease for the Casino site
which was acquired at a price negotiated among the Partners. The Partners
believe that such price represented the fair market value of the ground lease.

         The agreements discussed in the remainder of this Note are executory
contracts (see discussion in Note 1). Under the Plan, certain of these
agreements were amended and assumed, or rejected.

Management Agreement

         The operations of the Casino were to be managed by Harrah's New Orleans
Management Company, an affiliate of HNOIC, pursuant to a management agreement
executed on March 15, 1994.

         On October 29, 1998, JCC and the Manager entered into a second amended
and restated management agreement granting the Manager the sole and exclusive
right to manage and operate the Casino and the management agreement with HJC was
terminated.

Debtor-in-Possession Financing

         See Note 4.

Other Transactions

         During 1995, HJC sold computer equipment to HET for $495,000, which
approximated the equipment's carrying value on the date of sale. In connection
with the Plan, a receivable from HET related to the sale was forgiven and is
included in reorganization costs in the accompanying statement of operations for
the ten-month period ended October 30, 1998.

NOTE 4.  DEBT

         On November 16, 1994, HJC issued $435 million of the Old Bonds bearing
interest at a rate of 14.25% per annum, plus contingent interest equal to 7.25%
of HJC's consolidated earnings before interest, taxes, depreciation and
amortization, due 2001, which were secured by substantially all assets of HJC.




                                       80
<PAGE>   81



         In connection with the Plan, the Old Bonds were cancelled (see Note 1).

         In accordance with the provisions of the United States Bankruptcy Code,
payment on HJC's pre-petition debt was suspended and reclassified as
"Liabilities Subject to Compromise." HJC believed that all of its secured
creditors were undersecured; therefore, HJC stopped accruing interest on
unsecured and undersecured debt as of November 22, 1995. For the ten-month
period ended October 30, 1998, contractual interest on those obligations
amounted to $51.7 million, which is $51.7 million in excess of reported interest
expense.

         As discussed in Note 1, HJC obtained DIP Financing. Interest on all
existing loans comprising the DIP Financing ("DIP Loans") accrued at the rate of
8% per annum, payable upon maturity.

         In connection with the Plan, the principal balance outstanding under
the DIP Loans at the Effective Date were converted to equity in JCC Holding (see
Note 1) and the accrued interest on the DIP Loans was forgiven and is reflected
as an extraordinary gain in the accompanying statement of operations.

NOTE 5.  LEASES

         HJC leased both real estate and equipment for use in its business
through operating leases. In addition to minimum rentals, certain leases provide
for contingent rents based on percentages of revenue and certain payments to
Partners out of cash flow, as defined. Rent payments with escalation provisions
are amortized so as to achieve level rent expense, except for the impact of
contingent rentals, over the life of the lease. Real estate operating leases
range from 21 months to 30 years with options for extensions up to an additional
30 years.

         Under the Plan, all real estate and equipment leases or contracts with
HJC were either rejected or assumed by JCC.

The Casino Site

         On March 15, 1994, HJC entered into a lease with the RDC and the City
for the Rivergate site on which the Casino was being constructed, all pursuant
to an assignment, dated as of March 15, 1994, from Grand Palais.

         On October 29, 1998 and effective as of the Effective Date, JCC entered
into the Amended Ground Lease for the Rivergate site with the RDC and the City,
as intervenor. Beginning on the Effective Date, the Amended Ground Lease has a
term of 30 years with three consecutive ten-year renewal options. The Amended
Ground Lease entitles JCC to possess the Rivergate site and obligates JCC to
construct, build and operate the Casino, the support facilities, and the other
improvements in accordance with the terms of the Amended Ground Lease and the
Amended GDA.

NOTE 6.  COMMITMENTS AND CONTINGENCIES

         See "The Company - Reorganization" for a complete discussion of certain
of the agreements discussed in the balance of this note as a result of the
consummation of the Plan.

Operating Contract

         HJC entered into the Casino Operating Contract with the LEDGC to
operate the Gaming Facilities for 20 years, with a 10-year extension option.
Under the Casino Operating Contract, HJC paid the LEDGC an initial payment of
$125 million (the "Initial Payment") in installments as well as 25% of the gross
gaming revenues from the Basin Street Casino during the period that it operated.

         Under the Plan, on the Effective Date, all of HJC's right, title and
interest in and to the Casino Operating Contract revested in HJC, and the Casino
Operating Contract was modified by the Amended and Renegotiated Casino Operating
Contract and assigned to JCC in accordance with applicable State law and the
agreement of the parties thereto.

         Under the Amended and Renegotiated Casino Operating Contract, each
fiscal year of the Casino's operation, JCC is required to pay to the State, by
and through the LGCB, an



                                       81
<PAGE>   82


amount equal to the greater of (i) $100 million or (ii) the sum of the following
percentages of gross gaming revenue from the Casino in a fiscal year: (A) 18.5%
of gross gaming revenue up to and including $600 million; plus (B) 20% of gross
gaming revenue in excess of $600 million up to and including $700 million; plus
(C) 22% of the gross gaming revenue in excess of $700 million up to and
including $800 million; plus (D) 24% of gross gaming revenue in excess of $800
million up to and including $900; plus 25% of gross gaming revenue in excess of
$900 million (the "Gross Gaming Revenue Share Payments").

General Development Agreement

         On October 29, 1998, JCC entered into the amended General Development
Agreement (the "Amended GDA") with the RDC and the City, as intervenor. The
Amended GDA sets forth the obligations of the parties and the procedures to be
followed relating to the design, development and construction of the Casino and
certain related facilities (the "Casino Development"). The Amended GDA imposes
responsibility on JCC for the location, identification and condition of all
utilities serving the Casino Development and obligates JCC to provide certain
traffic signalization and intersection improvements as a part of the cost of the
project.

Open Access Program and Plans

         The Open Access Program and Plans requires HJC to form a special
purpose corporation to interface with new and existing businesses owned and
controlled by minorities, women and disadvantaged persons. HJC is required to
capitalize this corporation with $500,000 and underwrite its operations at a
minimum of $250,000 per year for five years. HJC must also contribute an
additional $500,000 per year for five years to similar public efforts, in
accordance with standards to be established by the Company. As of the Petition
Date, HJC had paid $883,000 towards this obligation. Under the terms of the
Plan, the Open Access Program and Plans were amended and JCC assumed the
obligations of HJC under the Open Access Program and Plans, as so amended.

Status of Litigation Existing Prior to the Effective Date

           Settlement agreements were executed and took effect on the Effective
Date which resolved substantially all of the litigation outstanding with respect
to HJC. All costs associated with these settlement agreements were recorded by
HJC prior to the Effective Date.

Other Contingencies

           JCC, as successor to HJC, will be subject to legal proceedings and
claims which arise in the normal course of business. While the outcome of these
matters cannot be predicted with certainty, management does not believe the
outcome of any of these legal matters will materially and adversely affect HJC
or its successor's business, financial condition or results of operations.

         The enactment and implementation of gaming legislation in Louisiana and
the development of the Gaming Facilities have been the subject of lawsuits,
claims and delays brought about by various parties. Additional lawsuits and the
uncertain political environment may result in further delays, all of which could
have a material adverse effect on HJC or JCC as its successor and operator of
the Casino.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
        FINANCIAL DISCLOSURE.

         Not applicable.


                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

         Our board of directors included six members through December 31, 2000
and the effective date of our Plan of Reorganization which was March 29, 2001.
The following table sets forth certain information regarding certain of our
directors and executive officers.




                                       82
<PAGE>   83



<TABLE>
<CAPTION>
Name                                   Biographical Information
----                                   ------------------------
<S>                                    <C>
Eddie N. Williams                      Mr. Williams, age 68, has been a director
                                       since October, 1998. Mr. Williams has
                                       served as President, Chief Executive
                                       Officer and Director of the Joint Center
                                       for Political and Economic Studies, a
                                       national non-profit research institution,
                                       since July 1972. Mr. Williams also serves
                                       as a director of each of Harrah's
                                       Entertainment and Riggs National
                                       Corporation, a publicly held banking
                                       company. Mr. Williams was a member of the
                                       executive committee of Harrah's Jazz
                                       Company and a director of Harrah's Jazz
                                       Finance Corp. from January 1995 to
                                       October 1998, both of which filed
                                       petitions under Chapter 11 of the United
                                       States Bankruptcy Code in November 1995.

Edwin Jacobson                         Mr. Jacobson, age 71, has been a Class A
                                       director since March 4, 1999. Since
                                       September 1990, Mr. Jacobson has served
                                       as the President and Chief Executive
                                       Officer of Heartland Partners LP, a
                                       limited partnership organized to engage
                                       in the ownership, development, leasing
                                       and sale of real estate, and as a
                                       director and the President and Chief
                                       Executive Officer of Heartland
                                       Technology, Inc., an electronics
                                       manufacturer primarily for the computer
                                       and computer printer industries.

Colin V. Reed                          Mr. Reed, age 53, has been a Class B
                                       director and Chairman of the board of
                                       directors since April 1998. Mr. Reed has
                                       also been a member of Harrah's
                                       Entertainment's three-Executive Office of
                                       the President since May 1999, a director
                                       of Harrah's Entertainment since December
                                       1998, and Chief Financial Officer of
                                       Harrah's Entertainment since April 1997.
                                       He was Executive Vice President of
                                       Harrah's Entertainment from September
                                       1995 to May 1999, and has served in
                                       several other management positions with
                                       Harrah's Entertainment since 1987. Mr.
                                       Reed was a member of the executive
                                       committee of Harrah's Jazz Company and a
                                       director, Senior Vice President and
                                       Secretary of Harrah's Jazz Finance Corp.,
                                       both of which filed petitions under
                                       Chapter 11 of the United States
                                       Bankruptcy Code in November 1995. He was
                                       also a director and Senior Vice President
                                       of Harrah's New Orleans Investment
                                       Company, which filed a petition under
                                       Chapter 11 of the United States
                                       Bankruptcy Code in December 1995. Mr.
                                       Reed served as our Chief Executive
                                       Officer and President from August 1996 to
                                       April 1998 and as President of our
                                       subsidiary, Jazz Casino Company, from May
                                       1997 to March 1998. Mr. Reed is also a
                                       director of National Airlines, Inc.


Seth E. Lemler                         Mr. Lemler, age 42, has been a Class A
                                       director since October 1998. Mr. Lemler
                                       has served as a Managing Director in the
                                       Investment Banking Department of Amroc
                                       Capital LLC since October 2000. He
                                       previously served in that same capacity
                                       since 1996 at Ladenburg Thalmann & Co.
                                       Inc. Prior to joining Ladenburg Thalmann
                                       & Co. Inc., Mr. Lemler served as a
                                       consultant at New Valley Corporation from
                                       January 1996 to May 1996. From February
                                       1987 to December 1995, Mr. Lemler served
                                       in various capacities with Deloitte &
                                       Touche LLP, including as a senior manager
                                       in the Reorganization Advisory Services
                                       Consulting Group.

Philip G. Satre                        Mr. Satre, age 51, has been a Class B
                                       director since March 2, 2000. Mr. Satre
                                       has been Chairman of the Board
</TABLE>




                                       83
<PAGE>   84


<TABLE>
<S>                                    <C>
                                       of Harrah's Entertainment since January
                                       1997, Chief Executive Officer since April
                                       1994, and President since April 1991. He
                                       was President of the Harrah's
                                       Entertainment's Gaming Group from 1984 to
                                       August 1995. He has been a director of
                                       Harrah's Entertainment since November
                                       1989. He is the Chairman of the executive
                                       committee of the Harrah's Entertainment
                                       board of directors. Mr. Satre is also a
                                       director of JDN Realty Corporation and
                                       TABCORP Holdings Limited, an Australian
                                       public company (pending regulatory
                                       approval). He was Chairman of the
                                       executive committee of Harrah's Jazz
                                       Company and a director and President of
                                       Harrah's Jazz Finance Corp., both of
                                       which filed petitions under Chapter 11 of
                                       the United States Bankruptcy Code in
                                       November 1995.

Rudy J. Cerone                         Mr. Cerone, age 47, has been a Class A
                                       director since March 4, 1999. Since
                                       December 1987, Mr. Cerone has been a
                                       partner in McGlinchey Stafford, PLLC, a
                                       law firm located in New Orleans,
                                       Louisiana.
</TABLE>

         Effective March 2, 2000, Mr. John M. Boushy, formerly a Class B, Group
III director, resigned from our board of directors. We recognize Mr. Boushy's
exceptional service on our board of directors and commend him for his laudable
efforts to continually advance our performance. Effective March 2, 2000, Mr.
Philip G. Satre replaced Mr. Boushy as a Class B, Group III director to serve
until the 2001 annual meeting of stockholders.

         Our senior management includes four executive officers who are elected
by the board and report directly to it. Set forth below is certain information
as of January 1, 2001 regarding our executive officers.

<TABLE>
<CAPTION>
Name                                   Biographical Information
----                                   ------------------------
<S>                                    <C>
Frederick Burford                      Frederick W. Burford, age 50, has served
                                       as the President of JCC Holding and Jazz
                                       Casino since April 1998 and President of
                                       JCC Development, Canal Development and
                                       Fulton Development since September 1998.
                                       Mr. Burford was also the Secretary and
                                       Treasurer of JCC Holding from December
                                       1997 until September 1998. Mr. Burford
                                       was a consultant to Harrah's
                                       Entertainment from May 1997 until October
                                       1998 and served as Vice President of JCC
                                       Holding from December 1997 to April 1998.
                                       During August 1997, Mr. Burford served as
                                       President of TPI Enterprises, Inc., a
                                       restaurant holding company. From November
                                       1991 until September 1997 Mr. Burford
                                       served as a director and the Executive
                                       Vice President and Chief Financial
                                       Officer of TPI Enterprises, Inc. From
                                       March 1990 to October 1991, Mr. Burford
                                       served as the Vice President, Controller
                                       and Treasurer of The Promus Companies,
                                       Inc., a gaming and hotel holding company,
                                       and from August 1977 until February 1990
                                       Mr. Burford held various positions with
                                       the Holiday Corporation, a gaming and
                                       hotel holding company, including most
                                       recently, Vice President and Treasurer.

L. Camille Fowler                      L. Camille Fowler, age 46, has served as
                                       the Vice President -- Finance, Treasurer
                                       and Secretary of JCC Holding, Jazz
                                       Casino, JCC Development, Canal
                                       Development and Fulton Development since
                                       September 1998. Ms. Fowler also served as
                                       Director of Finance of the Manager from
                                       April 1996 to November 1998, Vice
                                       President and Secretary of the Manager
                                       from January 1998 to November 1998, and
                                       Treasurer of the Manager from February
                                       1998 to November 1998. From October 1993
                                       until April 1996, Ms. Fowler served as
                                       the Director of Financial Reporting of
                                       the Manager.
</TABLE>





                                       84
<PAGE>   85



<TABLE>
<S>                                   <C>
Frederick J. Keeton                    Frederick J. Keeton, age 43, has served
                                       as the Vice President -- Government
                                       Affairs and Community Relations for JCC
                                       Holding since July 1999. From September
                                       1998 to June 1999, he served in the same
                                       position as a leased employee from
                                       Harrah's Entertainment. Mr. Keeton's
                                       position with JCC Holding remains subject
                                       to the Louisiana Gaming Control Board
                                       finding him suitable under the Gaming
                                       Act. Prior to joining the Company, Mr.
                                       Keeton served in various capacities at
                                       Harrah's Entertainment including Director
                                       of Government Affairs from August 1994 to
                                       September 1998, Director of Corporate
                                       Claims Management from February 1990 to
                                       July 1994, Senior Manager of Corporate
                                       Claims Management from February 1989 to
                                       February 1990, and Manager of Claims from
                                       June 1984 to January 1989.

Thomas M. Morgan                       Thomas M. Morgan, age 46, has served as
                                       the Vice President -- Development of JCC
                                       Holding since January 2000. From January
                                       1999 to December 1999, he served in the
                                       same capacity as a leased employee from
                                       Harrah's Entertainment. Mr. Morgan's
                                       position with JCC Holding remains subject
                                       to the Louisiana Gaming Holding Control
                                       Board finding him suitable under the
                                       Gaming Act. Prior to joining the Company,
                                       Mr. Morgan served as Vice President --
                                       Development for Harrah's Entertainment
                                       from January 1996 through December 1998.
                                       Prior to his employment with Harrah's
                                       Entertainment, Mr. Morgan served as
                                       Director of Development for Embassy
                                       Suites, Inc., a hotel holding company.
</TABLE>

MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS

         Through December 31, 2000 and the date of effectiveness of our Plan of
Reorganization which was March 29, 2001 the board of directors has conducted its
business through meetings of the full board and through committees of the board.
Our Bylaws required us to maintain the following committees: the audit
committee, gaming committee, compensation committee, Class A director nomination
committee, Class B director nomination committee and capital committee. In
addition, we may form or maintain additional committees upon the affirmative
vote of (1) a majority of the Class A directors then in office and (2) a
majority of the Class B directors then in office. Pursuant to this authority,
the board of directors established a counsel retention committee. During the
fiscal year ended December 31, 2000, the board of directors held 9 meetings, and
all directors who were serving on the board at the time of such meetings
attended 100% of all meetings of the full board of directors except for Eddie
Williams who attended 56% of the meetings. The alternate Class A director
generally attends board meetings as an observer, but does not vote with the
board. The audit committee held 5 meetings during fiscal 2000, the compensation
committee held 4 meetings during fiscal 2000, and each of the gaming committee,
compensation committee, Class A director nomination committee, Class B director
nomination committee and capital committee held no meetings during fiscal 2000.
The counsel retention committee did not meet during fiscal 2000.

         Audit Committee. The audit committee has consisted of the Class A
directors and has had the power to undertake and complete an audit or
investigation, at any time, into our business affairs. The audit committee is
comprised of Edwin Jacobson (Chairman), Seth E. Lemler and Rudy J. Cerone.

         Gaming Committee. The gaming committee has supervised our day-to-day
activities and, except with respect to certain significant transactions (as set
out in our Restated Certificate of Incorporation), has and may exercise all of
the powers of the board of directors in the management or direction of our
business and affairs, not inconsistent, however, with any specific direction as
the board of directors may give. The gaming committee consists of two Class B
directors (or, if there is only one Class B director, such director); provided,
however, that upon the occurrence of a flip event (as that term is defined in
our Restated Certificate of Incorporation), the Class B directors will be
replaced on the gaming committee by two Class A directors (or, if there is only
one Class A director at such time, such director). The gaming committee is
comprised of Philip G. Satre (Chairman) and Colin V. Reed.




                                       85
<PAGE>   86


         Compensation Committee. The compensation committee has consisted of the
Class A directors and was empowered to act on our behalf in all matters
regarding the compensation of officers and directors. The compensation committee
was comprised of Seth E. Lemler (Chairman), Edwin Jacobson and Rudy J. Cerone.

         Nomination Committees. The Class A director nomination committee has
consisted of the Class A directors whose terms do not expire at the next annual
meeting of stockholders. It selects the person(s) to stand for election as Class
A directors at each meeting of stockholders, and is comprised of Rudy J. Cerone
and Seth E. Lemler. The Class B director nomination committee consists of the
Class B directors whose terms do not expire at the next annual meeting of
stockholders. It selects the person(s) to stand for election as Class B
directors at each meeting of stockholders, and is comprised of Philip G. Satre
and Colin V. Reed. The board of directors will also consider nominees
recommended by stockholders.

     Capital Committee. The capital committee has consisted of one Class A
director and one Class B director. After the date on which the completion
guarantees (as that term is defined below) have been terminated, the capital
committee is empowered to act on our behalf with respect to all changes to our
capital budget and the capital budget of our subsidiary, Jazz Casino Company,
between $250,000 and $2 million. The term "completion guarantees" means (1) the
Notes Completion Guarantee dated as of October 30, 1998 by Harrah's Operating
Company, Inc. and Harrah's Entertainment to Norwest Bank Minnesota, National
Association, as trustee, (2) the Bank Completion Guarantee dated as of October
29, 1998 by Harrah's Operating Company and Harrah's Entertainment to Bankers
Trust Company, as administrative agent for the lenders under our bank credit
agreement, (3) the LGCB Completion Guarantee dated as of October 30, 1998 by
Harrah's Operating Company and Harrah's Entertainment to the State of Louisiana
and the Louisiana Gaming Control Board and (4) the RDC/City of New Orleans
Completion Guarantee dated as of October 29, 1998 by Harrah's Operating Company
and Harrah's Entertainment to the Rivergate Development Corporation and the city
of New Orleans. The capital committee is comprised of Seth E. Lemler (Chairman)
and Philip G. Satre.

     Counsel Retention Committee. The counsel retention committee has consisted
of one Class A director and one Class B director and is empowered to approve our
selection of legal counsel in connection with any matters, transaction or
transactions with our affiliates that were not approved by us prior to or on
October 30, 1998, and otherwise to consider any issues relating to retaining
legal counsel that the counsel retention committee deems appropriate. The
counsel retention committee is comprised of Colin V. Reed and Seth E. Lemler.

DIRECTOR COMPENSATION

       We have paid each director who is not our employee $40,000, per year plus
$2,000 for each board meeting attended by the director and of $1,000 for each
meeting of any committee of the board attended by the director. We have also
paid these fees for each board meeting attended by the Class A director
alternate. Each director also receives reasonable out-of-pocket expenses for
attending board and committee meetings. In addition, we have paid similar
expenses of the Class A director alternate. In addition, under our Non-Employee
Director Stock Option Plan, each non-employee director was granted (1) an option
to purchase 5,000 shares of class A common stock on the later of May 13, 1999,
the date our stockholders approved the director stock option plan, or the date
that the person first becomes a non-employee director and (2) an option to
purchase 5,000 shares of class A common stock (a) as of the date following the
first annual meeting of stockholders that occurs more than one year after the
person first becomes a non-employee director and (b) on the day following each
subsequent annual meeting of stockholders, if the person is serving as a
non-employee director as of that date. These stock options were cancelled under
the Plan of Reorganization. Pursuant to our Bylaws, directors who are employees
of Harrah's Entertainment or certain affiliates of Harrah's Entertainment
(including Messrs. Reed and Satre), receive no directors' fees or stock options.



                                       86
<PAGE>   87


ITEM 11. EXECUTIVE COMPENSATION.

SUMMARY OF COMPENSATION

       The following table summarizes the compensation paid or accrued during
2000 to Frederick W. Burford, our President and Chief Executive Officer, and
each of our other executive officers who served as an executive officer at
December 31, 2000 and whose annual compensation and bonus was $100,000 or more
during fiscal 2000. We refer to these four executive officers as the "named
executive officers."




                                       87
<PAGE>   88




<TABLE>
<CAPTION>

                                                                 SUMMARY COMPENSATION TABLE

                               Annual Compensation                    Long-Term Compensation Awards
                               -------------------                    -----------------------------
Name and                                                                         Restricted      Securities
Principal                                        Other Annual   Restricted         Stock         Underlying       All Other
Position           Year     Salary      Bonus    Compensation   Cash Awards      Awards (1)     Options (1)     Compensation
--------           ----     ------      -----    ------------   -----------      ----------     -----------     ------------
<S>                <C>      <C>         <C>      <C>            <C>              <C>            <C>             <C>
Frederick W.
Burford            2000     $278,481    $68,750              -    $398,750(2)     $138,000(3)               -      $10,743 (6)
    President      1999     $260,000   $130,000        $35,063              -     $323,125(4)        $115,000       $6,866 (5)
                   1998      $39,000    $95,335              -              -               -               -          $44 (8)
                                 (7)

L. Camille         2000     $151,260    $13,250              -    $112,500(2)      $34,500(3)               -      $10,485(12)
Fowler (9)         1999     $145,000    $50,750              -              -      $88,125(4)         $31,500       $8,966(10)
Vice President -   1998      $21,750    $30,000              -              -               -               -         $669(11)
Finance,
 Treasurer and
 Secretary

Fred J. Keeton     2000     $137,976    $24,500              -    $105,000(2)      $27,600(3)               -          $25 (8)
(10)               1999      $64,904    $79,092   $22,847 (14)              -      $52,875(4)         $19,000         $266 (8)
Vice President-    1998            -    $40,747              -              -               -               -          $44 (8)
 Business
 Affairs

Thomas M.          2000     $179,681   $137,131              -    $185,725(2)               -               -      $33,199(17)
Morgan (15)        1999            -          -   $25,665 (16)              -               -               -                -
Vice President -
Development
</TABLE>


----------

(1)      These restricted stock awards and options were eliminated as of March
         29, 2001 as a result of our Plan of Reorganization.

(2)      On November 30, 2000, we granted restricted cash awards under the
         provisions of our 1998 Long Term Incentive Plan, which vest ratably
         over four years with the first installment payment to be made on
         January 1, 2002. The Board of Directors resolved to defer the decision
         on whether the form of the award would be in cash or stock until after
         the conclusion of the reorganization. These awards have no legal or
         economic effect as a result of our Plan of Reorganization.

(3)      On May 16, 2000, we granted restricted stock awards under the
         provisions of our 1998 Long Term Incentive Plan, which vest ratably
         over four years beginning on January 1, 2001.

(4)      On April 29, 1999, we issued the following number of shares of
         restricted class A common stock to the following named executive
         officers: 55,000 shares to Mr. Burford, 15,000 shares to Ms. Fowler and
         9,000 shares to Mr. Keeton. The amounts in the table above represent
         the fair value of the awards on the grant date. The officers can vote
         the stock and are eligible for any dividends paid on the stock but may
         not dispose of the shares until January 1, 2003, or earlier with
         respect to the following percentages of the shares upon our obtaining
         the following performance goals: (a) 33% of the shares upon the board
         of director's determination that our casino and its parking garage
         construction were completed by October 30, 1999 within budget; (b) 33%
         of the shares upon the board of director's determination that by
         November, 2000 (i) the master plan for the initial build-out and
         leasing of the second floor of our casino for non-gaming uses has been
         approved by us, as well as by the State of Louisiana and the City of
         New Orleans and (ii) certain minimum non-gaming entertainment
         activities are available on the second floor of the casino; and (c) 34%
         of the shares upon the board of directors determination that
         construction and leasing of the facilities to be built on our real
         property located on Fulton and Poydras Streets in the City of New
         Orleans has been substantially completed by November, 2001. As of March
         2, 2000, 33% of each officer's shares of restricted stock vested and
         the restrictions thereon terminated. As of December 31, 1999, the value
         of the restricted stock awards were as follows: $154,688 for Mr.
         Burford, $42,188 for Ms. Fowler and $25,313 for Mr. Keeton.

(5)      Consists of $6,600 of matching contributions made by us to our 401(k)
         plan based on a percentage of Mr. Burford's contributions to the 401(k)
         plan and $266 of insurance premiums paid by us for term life insurance
         for the benefit of Mr. Burford.

(6)      Consists of $10,500 of matching contributions made by us to our 401(k)
         plan based on a percentage of Mr. Burford's contributions to the 401(k)
         plan and $4,242 on insurance premiums paid by us for term life
         insurance for the benefit of Mr. Burford.

(7)      In connection with the consummation of the transactions contemplated by
         the plan of reorganization of Harrah's Jazz Company, Harrah's Jazz
         Finance Corp. and Harrah's New Orleans Investment Company, Mr. Burford
         served as a paid consultant to Harrah's Entertainment from March 1998
         until October 1998. The compensation presented excludes $229,047 paid
         in 1998 by Jazz Casino Company, our wholly-owned subsidiary, to
         Harrah's



                                       88
<PAGE>   89



         Operating Company to reimburse Harrah's Operating Company for amounts
         paid to Mr. Burford for his services as a consultant in connection with
         the reorganization process.

(8)      Consists of insurance premiums paid by us for term life insurance for
         the benefit of the named executive officer.

(9)      Ms. Fowler served as the Director of Finance, Vice President, Secretary
         and Treasurer of Harrah's New Orleans Management Company until November
         1998, when she was elected as our Vice President - Finance, Treasurer
         and Secretary.

(10)     Consists of $8,700 of matching contributions made by us to our 401(k)
         plan based on a percentage of Ms. Fowler's contributions to the 401(k)
         plan and $266 of insurance premiums paid by us for term life insurance
         for the benefit of Ms. Fowler.

(11)     Consists of matching contributions made by us to our 401(k) plan based
         on a percentage of Ms. Fowler's contributions to the 401(k) plan.

(12)     Consists of $10,114 of matching contributions made by us to our 401(k)
         plan based on a percentage of Ms. Fowler's contributions to the 401(k)
         plan, $71 of insurance premiums paid by us for term life insurance for
         the benefit of Ms. Fowler and $300 reimbursement for financial
         consulting services.

(13)     Mr. Keeton joined us in September 1998 as an officer that we leased
         from Harrah's Operating Company. From September 1998 to July 1, 1999,
         Mr. Keeton was employed by Harrah's Operating Company, from which we
         leased Mr. Keeton. The compensation presented excludes amounts that
         Jazz Casino Company paid Harrah's Operating Company to reimburse it for
         amounts paid to Mr. Keeton. For a description of this leasing
         arrangement, refer to "Certain Relationships and Related Transactions."

(14)     Includes $19,839 of rent for an apartment in New Orleans, Louisiana.

(15)     Mr. Morgan joined us in January 1999 when he began serving in the
         capacity of an officer that we leased from Harrah's Operating Company.
         From January 1999 to January 2000, Mr. Morgan was employed by Harrah's
         Operating Company, from which we leased Mr. Morgan. The compensation
         presented excludes amounts that Jazz Casino Company paid Harrah's
         Operating Company to reimburse it for amounts paid to Mr. Morgan. For a
         description of this leasing arrangement, refer to "Certain
         Relationships and Related Transactions."

(16)     Includes $24,000 of rent for an apartment in New Orleans, Louisiana.

(17)     Consists of $10,500 of matching contributions made by us to our 401(k)
         plan based on a percentage of Mr. Morgan's contributions to the 401(k)
         plan, $21 of insurance premiums paid by us for term life insurance for
         the benefit of Mr. Morgan, and $22,679 of rent for an apartment in New
         Orleans.

         OPTION EXERCISES AND FISCAL YEAR-END OPTION VALUES. The following table
sets forth information regarding (a) the number of shares of class A common
stock received upon exercise of options by the named executive officers during
fiscal 1000, (b) the net value realized upon such exercise, (c) the number of
unexercised options held at December 31, 2000 and (d) the aggregate dollar value
of unexercised options held at December 31, 2000. The value of unexercised
in-the-money options is equal to the difference between the option exercise
price and the closing sale price of $.08 per share of class A common stock on
the Over the Counter Bulletin Board trading system on December 31, 2000
multiplied by the number of shares underlying the option.


AGGREGATED OPTION EXERCISES IN THE LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES


<TABLE>
<CAPTION>
                                                            Number of Securities
                         Shares                            Underlying Unexercised              Value of Unexercised
                       Acquired on         Value                  Option at                  In-The-Money Options at
                        Exercise        Realized ($)         December 31, 1999 (#)             December 31, 1999 ($)
Name                      (#)              (#)             Exercisable/Unexercisable        Exercisable/Unexercisable
----                   -----------      ------------      --------------------------        -------------------------
<S>                    <C>              <C>                <C>                              <C>
Frederick W.                o                o                 92,000/23,000                          $/$
Burford

L. Camille Fowler           o                o                  25,200/6,300                          o/o

Fred J. Keeton              o                o                  15,200/3,800                          o/o

Thomas M. Morgan            o                o                      o/o                               o/o
</TABLE>




                                       89
<PAGE>   90


ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

       The following table sets forth certain information as of February 1, 2000
(unless otherwise indicated) regarding the beneficial ownership of our class A
and class B common stock by (a) each person who is known by us to own more than
5% of either the class A or class B common stock, (b) each director and nominee
for director, (c) each executive officer named in the Summary Compensation Table
and (d) all directors and executive officers as a group. As of February 1, 2000,
there were 5,777,890 shares of class A common stock and 4,452,623 shares of
class B common stock outstanding.

       Pursuant to the rules of the SEC, the number of shares of class A and
class B common stock beneficially owned by a specified person or group includes
shares issuable pursuant to convertible securities, warrants and options held by
the person or group that may be converted or exercised within 60 days after
February 1, 2000. These shares are deemed to be outstanding for the purpose of
computing the percentage of the class beneficially owned by the person or group
but are not deemed to be outstanding for the purpose of computing the percentage
of the class beneficially owned by any other person or group.

       The persons named in the table gave us the stock ownership information
about themselves. Except as explained in the footnotes below, the named persons
have sole voting and investment power with regard to the shares shown as
beneficially owned by them.

<TABLE>
<CAPTION>
                                     CLASS A COMMON STOCK         CLASS B COMMON STOCK
                                     --------------------         --------------------
                                     SHARES                       SHARES
NAME AND ADDRESS                     BENEFICIALLY   PERCENT OF    BENEFICIALLY   PERCENT OF
OF BENEFICIAL OWNER                      OWNED      CLASS OWNED       OWNED      CLASS OWNED
-------------------                  ------------   -----------   ------------   -----------
<S>                                  <C>            <C>           <C>            <C>
Harrah's Entertainment, Inc.(1)                --            --      4,302,623          96.6%
Merrill Lynch & Co., Inc.(2)            1,042,654          18.1%            --            --
Merrill Lynch Corporate Bond
  Fund - High Income (3)                  732,105          12.7%            --            --
Colin V. Reed                                  --            --             --            --
Seth E. Lemler(4)                           5,000             *             --            --
Eddie N. Williams(4)                       12,000             *             --            --
Edwin Jacobson(4)                           5,000             *             --            --
Philip G. Satre                                --            --             --            --
Rudy J. Cerone (4)                          5,000             *             --            --
Frederick W. Burford(5)(6)                247,000           4.3%            --            --
L. Camille Fowler(5)(7)                    65,200           1.1%            --            --
Fred J. Keeton(5)(8)                       44,200             *             --            --
Thomas M.  Morgan                              --            --             --            --
All directors and executive
  officers as a group (ten                383,400           6.6%            --            --
  persons)(9)
</TABLE>

----------
*        Represents less than 1.0%.

(1)      Shares are held of record by Harrah's Entertainment's indirect
         wholly-owned subsidiary, Harrah's Crescent City Investment Company.
         Does not include shares of unclassified common stock issuable upon the
         exercise of a warrant held by Harrah's Crescent City Investment
         Company. For a description of this warrant, refer to "Certain
         Relationship and Related Transactions." The address of Harrah's
         Entertainment and Harrah's Crescent City Investment Company is 5100
         West Sahara Boulevard, Suite 200, Las Vegas, Nevada 89140.

(2)      According to Schedule 13G dated February 6, 2001. Merrill Lynch & Co.,
         Inc., a parent holding company, holds shares of class A common stock
         through its indirectly-owned asset management subsidiaries, Merrill
         Lynch Investment Managers, L.P. and Fund Asset Management, L.P. Merrill
         Lynch Investment Managers, L.P. and Fund Asset Management, L.P. are
         investment advisers registered under Section 203 of the Investment
         Advisors Act of 1940, and act as investment advisors for certain
         investment companies registered under Section 8 of the Investment
         Company Act of 1940. Merrill Lynch & Co., Inc., through Merrill Lynch
         Investment Managers, L.P. and Fund Asset Management, L.P., shares
         voting and dispositive power, and disclaims beneficial ownership, with
         respect to all of the shares of class A common stock presented. The
         address of Merrill Lynch & Co., Inc. is World Financial Center, North
         Tower, 250 Vesey Street, New York, New York 10381.

(3)      According to Schedule 13G dated February 6, 2001. Merrill Lynch
         Corporate Bond Fund - High Income shares voting and dispositive power,
         and disclaims beneficial ownership, with respect to



                                       90
<PAGE>   91


         all of the shares of class A common stock presented. The address of
         Merrill Lynch Corporate Bond Fund, Inc. is 800 Scudders Mill Road,
         Plainsboro, New Jersey 08536.

(4)      Includes 5,000 shares issuable upon the exercise of presently
         exercisable outstanding stock options.

(5)      Includes shares of restricted class A common stock issued on April 29,
         1999, for which the officer has voting rights but does not have the
         right to dispose of the stock until we satisfy certain performance
         goals. For a description of these performance goals, refer to footnote
         2 in the Summary Compensation Table included under the heading
         "Executive Compensation." As of March 2, 2000, the restrictions on the
         following number of each officers' shares of class A common stock
         terminated:

         o        18,150 shares for Mr. Burford

         o        4,950 shares for Ms. Fowler

         o        2,970 shares for Mr. Keeton

(6)      Includes 92,000 shares issuable upon the exercise of presently
         exercisable outstanding stock options

(7)      Includes 25,200 shares issuable upon the exercise of presently
         exercisable outstanding stock options.

(8)      Includes 15,200 shares issuable upon the exercise of presently
         exercisable outstanding stock options.

(9)      Includes 152,400 shares issuable upon the exercise of presently
         exercisable outstanding stock options.


ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

       Harrah's Entertainment stock ownership. As of March 23, 2000, Harrah's
Entertainment, through Harrah's Crescent City Investment Company, an indirect
wholly-owned subsidiary of Harrah's Entertainment, owned 4,302,623 shares of
class B common stock, or approximately 96.6% of all of the issued and
outstanding shares of class B common stock, and approximately 42.6% of all of
the issued and outstanding shares of class A and class B common stock.
Accordingly, Harrah's Entertainment, through Harrah's Crescent City Investment
Company, is able to elect all of the Class B directors, who, prior to the
transition date, generally supervise our day-to-day activities. Further,
Harrah's Crescent City Investment Company was granted a warrant entitling it,
upon and after the transition date, to purchase shares of unclassified common
stock such that, upon exercise of the warrant in its entirety, Harrah's
Entertainment and its subsidiaries will own in the aggregate 50% of the then
outstanding shares of unclassified common stock.

       Casino management agreement. Our subsidiary, Jazz Casino Company, and
Harrah's New Orleans Management Company, an indirect wholly-owned subsidiary of
Harrah's Entertainment, entered into a management agreement, dated as of October
29, 1998, under which Harrah's New Orleans Management Company was exclusively
responsible for supervising and managing our casino's operations. During 1999
Jazz Casino Company reimbursed Harrah's New Orleans Management for $100,000 of
travel expenses that it incurred in connection with managing the casino. In
addition, as of December 31, 1999, Jazz Casino Company had deferred the payment
of approximately $1.3 million in management fees payable to Harrah's New Orleans
Management Company under the management agreement.

       Minimum payment and loan guarantees. Under the terms of Jazz Casino
Company's casino operating contract with the Louisiana Gaming Control Board,
Jazz Casino Company was required to obtain a guaranty in favor of the State of
Louisiana by and through the Louisiana Gaming Control Board to assure payment of
a $100 million minimum annual payment due to the State of Louisiana by Jazz
Casino Company under its casino operating contract. On October 30, 1998, Jazz
Casino Company entered into an agreement with Harrah's Entertainment and
Harrah's Operating Company under which Harrah's Entertainment and Harrah's
Operating Company agreed to provide this guaranty of the $100 million minimum
payment obligation on an annual basis through March 31, 2004, which is subject
to annual non-renewal in accordance with the terms of the agreement. As of
December 31, 1999, Jazz Casino Company had deferred approximately $1.1 million
in fees payable to Harrah's Entertainment and Harrah's Operating Company under
the minimum payment guaranty agreement. To ensure that we had sufficient
liquidity to satisfy our operating expenses, on February 28, 2000, Jazz Casino
Company stopped making the required daily payment of the minimum payment
obligation due to the Louisiana Gaming Control Board under the casino operating
contract and on February 29, 2000, Harrah's Entertainment and Harrah's Operating
Company, in accordance with their minimum payment guaranty, began making the
required daily payment of the minimum payment obligation due to the Louisiana
Gaming Control Board under the casino operating contract. Harrah's Entertainment
and Harrah's Operating Company also




                                       91
<PAGE>   92



provided a payment guarantee or "put" agreement for an aggregate principal
amount of up to $166.5 million of our loans and/or stated amount of letters of
credit under the Credit Agreement, dated as of October 29, 1998, among Jazz
Casino Company, as borrower, JCC Holding Company, as guarantor, the banks
parties thereto and Bankers Trust Company, as administrative agent. In exchange
for this loan guaranty, Jazz Casino Company agreed to pay Harrah's Entertainment
an annual credit support fee equal to 0.75% of the average aggregate principal
amount of loans and/or stated amount of letters of credit that are guaranteed.
As of December 31, 1999, Jazz Casino Company had deferred approximately $387,000
of fees payable to Harrah's Entertainment and Harrah's Operating Company under
this loan guaranty.

       Completion guarantees. Pursuant to their completion guarantees, Harrah's
Entertainment and Harrah's Operating Company agreed, among other things, to (1)
fund Jazz Casino Company's working capital shortfalls until the date on which,
among other things, the casino is equipped with the required furniture, fixtures
and equipment and ready to open for business, the casino construction is
substantially completed and initial casino operations have opened for business
and (2) to guarantee that, at such time, Jazz Casino Company will have available
for working capital $5 million of cash and an amount equal to $25 million (less
up to $10 million for certain letters of credit issued under our credit
agreement and borrowings thereunder to fund a bank account for the casino)
available for immediate borrowing(s) under the working capital facility provided
pursuant to our credit agreement.

       Pursuant to their completion guarantees, Harrah's Entertainment and
Harrah's Operating Company also agreed to guarantee certain obligations of Jazz
Casino Company including, among others, the following: (a) the obligation to
complete and timely pay for the construction and equipping of the casino in
accordance with the terms of (1) the Amended and Restated Lease Agreement, dated
October 29, 1998, among Jazz Casino Company, the Rivergate Development
Corporation and the City of New Orleans, as intervenor, (2) the General
Development Agreement, dated October 29, 1998, among Jazz Casino Company, the
Rivergate Development Corporation and the City of New Orleans, as intervenor,
(3) the indentures under which Jazz Casino Company's senior subordinated notes
with contingent payments and its senior subordinated contingent notes are issued
and (4) any applicable requirement of the Louisiana Gaming Control Board and (b)
the obligation to maintain insurance coverage for, and prevent deterioration and
unauthorized access to, the casino, and to pay on a timely basis certain amounts
owing by Jazz Casino Company. Any expenditures made by Harrah's Entertainment or
Harrah's Operating Company under these guarantees must be repaid by Jazz Casino
Company pursuant to the Amended and Restated Subordinated Completion Loan
Agreement, dated as of October 30, 1998, with Harrah's Entertainment and
Harrah's Operating Company. We estimate that Jazz Casino Company will borrow an
amount ranging from $5 million to $8 million under the completion loan agreement
with Harrah's Entertainment and Harrah's Operating Company pursuant to their
completion guarantees to fund the balance of the casino's construction and
pre-opening costs.

       Construction lien indemnity obligations. Jazz Casino Company obtained a
title insurance policy from First American Title Insurance Company for the
premises underlying the casino leased by Jazz Casino Company and certain related
leased property. Pursuant to the Amended and Restated Construction Lien
Indemnity Obligation Agreement dated October 30, 1998 between Jazz Casino
Company and Harrah's Operating Company, any expenditures made by Harrah's
Operating Company under a construction lien indemnity agreement delivered by
Harrah's Entertainment and Harrah's Operating Company to First American Title
Insurance Company regarding mechanic's liens that claim priority to loans and
reimbursement obligations for letters of credit under our credit agreement, Jazz
Casino Company's senior subordinated notes with contingent payments or its
senior subordinated contingent notes, will be deemed unsecured limited recourse
indebtedness of Jazz Casino Company to Harrah's Operating Company, due and
payable on demand.

       Junior subordinated credit facility and second floor construction and
master plan financing. Harrah's Entertainment and Harrah's Operating Company
have agreed to provide Jazz Casino Company with up to $22.5 million of
subordinated financing under a junior subordinated credit facility. As of
December 31, 2000, $25.2 million of principal was outstanding under the junior
subordinated credit facility and Jazz Casino Company had accrued approximately
$487,000 of interest payable under the facility. To fund the development of a
master plan for the build out and leasing of the second floor of our casino for
non-gaming entertainment uses and construction-related work that needed to take
place on the second floor of our casino prior to its opening in order to prevent
disruption to the casino's gaming operations, on October 26, 1999 our
wholly-owned subsidiary, JCC Development Company, L.L.C., arranged to borrow up
to $2 million from a subsidiary of Harrah's




                                       92
<PAGE>   93


Entertainment to fund these items. Borrowings under this loan bear interest at
9% per year, and, at JCC Development Company's option, may be repaid in cash or
in kind. Principal and interest under this loan must be paid out of the
permanent financing ultimately obtained for the completion of the second floor
of the casino. As of December 31, 2000, approximately $1.7 million of principal
and accrued interest were outstanding under this borrowing arrangement.

         Administrative services and executive leasing agreements. Pursuant to
an administrative services agreement, during fiscal 2000 Harrah's Operating
Company, a wholly-owned subsidiary of Harrah's Entertainment, provided various
administrative systems and services (including, among others, accounting,
payroll and risk management services, and human resources administration).
Pursuant to the limited forbearance agreement described below, during fiscal
2000 Jazz Casino Company deferred the fees owed under this administrative
services agreement.

         Slot machine lease. To finance the loading of the slot machines with
approximately $6.0 million in coins, in a sale and leaseback transaction on
October 20, 1999, Jazz Casino Company sold 1,085 of its slot machines to a
subsidiary of Harrah's Entertainment for approximately $6.0 million. The
Harrah's Entertainment subsidiary is leasing the slot machines back to Jazz
Casino Company and Jazz Casino Company used the proceeds from the sale to fill
the slot machines with coins. Pursuant to the limited forbearance agreement
described below, during fiscal 2000, Jazz Casino deferred its lease payments to
the Harrah's Entertainment subsidiary.

         Forbearance agreement. On February 29, 2000, Jazz Casino entered into a
limited forbearance agreement with Harrah's New Orleans Management Company, the
manager of our casino, and Harrah's Operating Company. Under this forbearance
agreement, Harrah's Operating Company and/or Harrah's New Orleans Management
Company agreed to forebear until August 1, 2000 the payment of the following
items owed by Jazz Casino:

o        rent and certain additional charges owed with respect to certain
         equipment used at the casino that Jazz Casino leases from Harrah's
         Operating Company;

o        fees owed with respect to certain administrative services that Harrah's
         Operating Company provides Jazz Casino under an administrative services
         agreement; and

o        certain costs, expenses and services for which Jazz Casino is required
         to reimburse Harrah's New Orleans Management Company under its
         management agreement.


As of December 31, 2000, Jazz Casino had deferred approximately $18.0 million in
accordance with the forbearance agreement.

         Affiliate transactions and competition. Currently, the Chairman of the
board, Colin V. Reed, is also (1) a member of Harrah's Entertainment's board of
directors, (2) a member of Harrah's Entertainment's three-Executive Office of
the President, and (3) Chief Financial Officer of Harrah's Entertainment . Colin
V. Reed is expected to continue to serve as a Class B director while also
serving in these capacities with Harrah's Entertainment and Harrah's New Orleans
Management Company. In addition, Eddie N. Williams, a Class B director, is a
director of Harrah's Entertainment, and Philip G. Satre, a Class B director, is
also (1) the Chairman of the board, Chief Executive Officer, and a member of the
three-Executive office of the President of Harrah's Entertainment, and (2) the
Chairman of the board and Chief Executive Officer of Harrah's New Orleans
Management Company. Harrah's Entertainment owns or controls (indirectly through
one or more subsidiaries or affiliates) dockside casinos in Vicksburg and
Tunica, Mississippi, Shreveport, Louisiana, and two riverboat casinos in Lake
Charles, Louisiana. Harrah's Entertainment (or one or more of its subsidiaries
or affiliates) may also develop other casinos that may compete with our casino.
As a result of Harrah's Entertainment's ownership of certain casinos that may,
or currently, compete with our casino, together with the positions held by
Messrs. Reed, Satre and Williams as both Class B directors and officers or
directors of Harrah's Entertainment, a conflict of interest may be deemed to
exist by reason of such persons' access to our information and business
opportunities, any or all of which could be useful to one or more of its
competing casinos. The indentures governing Jazz Casino Company's senior
subordinated notes with contingent payments and senior subordinated contingent
notes, its management agreement with Harrah's New Orleans Management Company and
our credit agreement each impose restrictions on our



                                       93
<PAGE>   94



ability to enter into transactions with affiliates, including Harrah's
Entertainment. In addition, the board of directors has implemented procedures
that require transactions with affiliates to be approved by disinterested
directors. We cannot assure you, however, that the restrictions in these
agreements or these procedures will successfully resolve conflicts of interest
confronting us, or which we may confront.

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

         (a) 1. Consolidated Financial Statements

         The following consolidated financial statements of JCC Holding Company
and Subsidiaries and of Harrah's Jazz Company and Subsidiary are set forth in
Item 8 hereof:

         Financial statement of JCC Holding Company and Subsidiaries Report of
         Independent Public Accountants

                  Report of Independent Public Accountants

                  Consolidated Balance Sheets as of December 31, 2000 and 1999
                  and for the period from October 30, 1998 to December 31, 1998

                  Consolidated Statements of Stockholders' Equity for the Years
                  Ended December 31, 2000 and 1999 and for the period from
                  October 30, 1998 to December 31, 1998.

                  Consolidated Statements of Cash Flows for the Years Ended
                  December 31, 2000 and 1999 and the period from October 30,
                  1998 to December 31, 1998

                  Notes to Consolidated Financial Statements.

         Financial Statements of Harrah's Jazz Company and Subsidiary

                  Report of Independent Public Accountants

                  Consolidated Statements of Operations for the Ten Month Period
                  Ended October 30, 1998

                  Period Ended October 30, 1998

                  Consolidated Statement of Partners Capital (Deficit) for the
                  Ten Month Period ended October 30, 1998

                  Consolidated Statements of Cash Flows for the Ten Month Period
                  ended October 30, 1998.

                  Notes to Consolidated Financial Statements.




                                       94
<PAGE>   95
              Condensed Statements of Cash Flows for the Year Ended December
              31, 2000 and 1999 and for the Period from October 30, 1998 to
              December 31, 1998.

         3. Exhibits

         The following exhibits either (i) are filed herewith or (ii) have
previously been filed with the Securities and Exchange Commission and are
incorporated herein by reference to such prior filings. Previously filed
registration statements and reports which are incorporated herein by reference
are identified in the column captioned "SEC Document Reference." The Company
will furnish any exhibit upon request to L. Camille Fowler, Vice President --
Finance, Treasurer and Secretary of the Company, One Canal Place, 365 Canal
Street, Suite 900, New Orleans, Louisiana 70130. There is a charge of $.50 per
page to cover expenses of copying and mailing.


<TABLE>
<CAPTION>
    EXHIBIT
       NO.          DESCRIPTION                                           SEC DOCUMENT REFERENCE
    -------         -----------                                           ----------------------
<S>                 <C>                                                   <C>
      2.01          Joint Plan of Reorganization under Chapter 11         Exhibit 2.2 to JCC Holding Company's Current Report
                    of the Bankruptcy Code as of February 8, 2001         on Form 8-K dated March 29, 2001

      3.01*         Second Amended and Restated Certificate of
                    Incorporation of JCC Holding Company

      3.02*         Third Amended and Restated Bylaws of JCC
                    Holding Company

      4.01*         Indenture by and between Jazz Casino Company,
                    L.L.C., as Issuer, JCC Holding Company, JCC
                    Canal Development, L.L.C., JCC Fulton
                    Development, L.L.C., and JCC Development
                    Company, L.L.C., as Guarantors, and Wells
                    Fargo Bank Minnesota, National Association, as
                    Trustee dated as of March 30, 2001, relating
                    to aggregate principal amount of $124,520,000
                    Senior Notes due 2008

      4.02*         Registration Rights Agreement (Senior Notes),
                    dated as of March 30, 2001, among Jazz Casino
                    Company, L.L.C., JCC Holding Company, JCC
                    Canal Development, L.L.C., JCC Fulton
                    Development, L.L.C., JCC Development Company,
                    L.L.C., and Bankers Trust Company and Harrah's
                    Entertainment, Inc.

      4.03*         Registration Rights Agreement (Common Stock),
                    dated as of March 30, 2001, among JCC Holding
                    Company, Bankers Trust Company and Harrah's
                    Entertainment, Inc.
</TABLE>



                                       95

<PAGE>   96


<TABLE>
<S>                 <C>                                                  <C>
      4.04*         Manager Subordination Agreement (Noteholders)

      4.05*         Intercreditor Agreement, dated as of March 30,
                    2001, among Harrah's Entertainment, Inc., and
                    Harrah's Operating Company, Inc., as the
                    minimum payment guarantors, and, together with
                    Harrah's New Orleans Management Company, Inc.
                    as the revolving lenders, Wells Fargo Bank
                    Minnesota, National Association, as trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent

      4.06*         Revolving Credit Agreement among Jazz Casino
                    Company, L.L.C., as borrower; JCC Holding
                    Company, JCC Canal Development L.L.C., JCC
                    Fulton Development, L.L.C. and JCC Development
                    Company, L.L.C., as guarantors; and Harrah's
                    Entertainment, Inc., Harrah's Operating
                    Company, Inc., and Harrah's New Orleans
                    Management Company, as lenders

      4.07*         Pledge Agreement, dated as of March 30, 2001,
                    among Harrah's Entertainment, Inc., and
                    Harrah's Operating Company, Inc., as the
                    minimum payment guarantors, and, together with
                    Harrah's New Orleans Management Company, Inc.
                    as the revolving lenders, Wells Fargo Bank
                    Minnesota, National Association, as trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent

      4.08*         Security Agreement, dated as of March 30,
                    2001, among JCC Holding Company, Jazz Casino
                    Company, L.L.C., and certain of their
                    subsidiaries, as assignors, Harrah's
                    Entertainment, Inc. and Harrah's Operating
                    Company, Inc., as the minimum payment
                    guarantors, and, together with Harrah's New
                    Orleans Management Company, Inc. as the
                    revolving lenders, Wells Fargo, as Trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent
</TABLE>



                                       96
<PAGE>   97

<TABLE>
<S>                 <C>                                                   <C>
      10.01*        First Amendment to Amended and Restated Lease
                    Agreement by and between Rivergate Development
                    corporation and Jazz Casino regarding Canal
                    Street Casino Property dated as of March 29,
                    2001

      10.02*        Second Amendment to Amended and Renegotiated
                    Casino Operating Contract between Jazz Casino
                    Company, L.L.C. and the State of Louisiana

      10.03*        Third Amendment to Amended and Renegotiated
                    Casino Operating Contract between Jazz Casino
                    Company, L.L.C. and the State of Louisiana
                    dated as of March 29, 2001

      10.04*        Third Amended and Restated Management
                    Agreement between Jazz Casino Company, L.L.C.
                    and Harrah's New Orleans Management Company
                    dated as of March 30, 2001

      10.05*        Amended and Restated HET/JCC Agreement among
                    Jazz Casino Company, L.L.C., Harrah's
                    Entertainment, Inc., Harrah's Operating
                    Company, Inc., and JCC Holding Company
                    regarding Minimum Payment Guaranty, dated as
                    of March 30, 2001

      10.06         Second Floor Non-Gaming Sublease Between Jazz    1-12095
                    Casino Company, L.L.C., as Sublessor, and JCC    Exhibit 10.07 to Pre-Effective Amendment No. 2 to
                    Development Company, L.L.C., as Sublessee,       JCC Holding Company's Registration Statement on Form 10
                    dated October 29, 1998

      10.07         Amended and Restated Open Access Plans of Jazz   1-12095
                    Casino Company, L.L.C., submitted to the         Exhibit 10.37 to Pre-Effective Amendment No. 2 to
                    council of the City of New Orleans on October    JCC Holding Company's Registration Statement on Form 10
                    29, 1998

      10.08         Open Access Program                              1-12095
                                                                     Exhibit 10.38 to JCC Holding Company's Annual
                                                                     Report on Form 10-K for the Year Ended December 31, 1998
</TABLE>



                                       97
<PAGE>   98


<TABLE>
<S>                 <C>                                                   <C>
      10.09         Employment Agreement, dated as of May 6, 1999,   Exhibit 10.40 to JCC Holding Company's Quarterly
                    by and between JCC Holding Company and           Report on Form 10-Q for the Quarter Ended June 30, 1999
                    Frederick W. Burford

      10.10         Agreement effective as of January 1, 1999 by     Exhibit 10.12 to JCC Holding Company's Annual Report
                    and between Jazz Casino Company, L.L.C. and      on Form 10-K for the Year Ended December 31, 1999
                    Thomas M. Morgan

      10.11         Sublease Agreement by and between Jazz Casino    Exhibit 10.13 to JCC Holding Company's Annual Report
                    Company, L.L.C. and Sullivan Transfer Co.        on Form 10-K for the Year Ended December 31, 2000

      10.12*        Act of Mortgage and Collateral Assignment by
                    Jazz Casino Company, L.L.C.

      10.13*        Act of Mortgage and Collateral Assignment by
                    JCC Canal Development, L.L.C. in favor of The
                    Bank of New York as Collateral Agent for the
                    present and future holders of the secured
                    obligations

      10.14*        Act of Mortgage and Collateral Assignment by
                    JCC Fulton Development, L.L.C. in favor of The
                    Bank of New York as Collateral Agent for the
                    present and future holders of the secured
                    obligations

      10.15*        Act of Mortgage and Collateral Assignment by JCC
                    Development Company in favor of The Bank of New
                    York as Collateral Agent for the present and
                    future holders of the secured obligations

      10.16*        Four Year Unconditional Minimum Payment
                    Guaranty Agreement from Harrah's Entertainment,
                    Inc. and Harrah's Operating Company, Inc., in
                    favor of the State of Louisiana, dated as of
                    March 29, 2001

      21.01         List of subsidiaries of JCC Holding Company      Exhibit 21.01 to JCC Holding Company's Annual Report
                                                                     on Form 10-K for the Year Ended December 31, 2000

      23.02         Consent of Deloitte & Touche LLP, Independent    Exhibit 23.02 to JCC Holding Company's Annual Report
                    Public Accountants, dated March 30, 2001         on Form 10-K for the Year Ended December 31, 2000
</TABLE>

* Filed herewith

     (b)  Reports on Form 8-K

          (1)  On November 14, 2000, we filed a Current Report on Form 8-K
               describing a plan by our financial advisors to restructure our
               financial obligations. The plan included a provision to eliminate
               current equity holders through a bankruptcy proceeding. The date
               of the earliest event reported was November 13, 2000.

          (2)  On November 16, 2000, we filed an amended Current Report on Form
               8-K/A amending the November 14, 2000 filing to correct certain
               errors contained in the text. The date of the Earliest event
               reported was November 13, 2000.

          (3)  On December 1, 2000, we filed a Current Report on Form 8-K
               disclosing that the American Stock Exchange delisted our stock
               based on the fact that we no longer met the Exchange's continued
               listing requirements. The date of the earliest event reported was
               November 30, 2000.


                                       98




<PAGE>   99



                                   SIGNATURES

     Pursuant to the requirements of Section 13 or 15(d) 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, on April 30, 2001.

                                            JCC HOLDING COMPANY

                                            By:  /s/ FREDERICK W. BURFORD
                                              ----------------------------------
                                                     Frederick W. Burford
                                                President and Chief Executive
                                                            Officer

     Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities indicated on April 30, 2001.


<TABLE>
<CAPTION>
                      SIGNATURE                                  TITLE
                      ---------                                  -----
<S>                                                      <C>
              /s/ FREDERICK W. BURFORD                   President and Chief Executive Officer
-----------------------------------------------------    (principal executive officer)
                Frederick W. Burford

               /s/ PHILLIP G. SATRE                      Class B Director
-----------------------------------------------------
                   Phillip G. Satre

                 /s/ RUDY J. CERONE                       Class A Director
-----------------------------------------------------
                   Rudy J. Cerone

                /s/ L. CAMILLE FOWLER                    Vice President -- Finance, Treasurer and
-----------------------------------------------------    Secretary (principal financial and
                  L. Camille Fowler                      accounting officer)
</TABLE>







                                       99
<PAGE>   100


                                 EXHIBIT INDEX

<TABLE>
<CAPTION>
     EXHIBIT
       NO.          DESCRIPTION                                           SEC DOCUMENT REFERENCE
     -------        -----------                                           ----------------------
<S>                 <C>                                                   <C>
      2.01          Joint Plan of Reorganization under Chapter 11         Exhibit 2.2 to JCC Holding Company's Current Report
                    of the Bankruptcy Code as of February 8, 2001         on Form 8-K dated March 29, 2001

      3.01*         Second Amended and Restated Certificate of
                    Incorporation of JCC Holding Company

      3.02*         Third Amended and Restated Bylaws of JCC
                    Holding Company

      4.01*         Indenture by and between Jazz Casino Company,
                    L.L.C., as Issuer, JCC Holding Company, JCC
                    Canal Development, L.L.C., JCC Fulton
                    Development, L.L.C., and JCC Development
                    Company, L.L.C., as Guarantors, and Wells
                    Fargo Bank Minnesota, National Association, as
                    Trustee dated as of March 30, 2001, relating
                    to aggregate principal amount of $124,520,000
                    Senior Notes due 2008

      4.02*         Registration Rights Agreement (Senior Notes),
                    dated as of March 30, 2001, among Jazz Casino
                    Company, L.L.C., JCC Holding Company, JCC
                    Canal Development, L.L.C., JCC Fulton
                    Development, L.L.C., JCC Development Company,
                    L.L.C., and Bankers Trust Company and Harrah's
                    Entertainment, Inc.

      4.03*         Registration Rights Agreement (Common Stock),
                    dated as of March 30, 2001, among JCC Holding
                    Company, Bankers Trust Company and Harrah's
                    Entertainment, Inc.

      4.04*         Manager Subordination Agreement (Noteholders)

</TABLE>


<PAGE>   101


<TABLE>
<S>                 <C>                                                  <C>
      4.05*         Intercreditor Agreement, dated as of March 30,
                    2001, among Harrah's Entertainment, Inc., and
                    Harrah's Operating Company, Inc., as the
                    minimum payment guarantors, and, together with
                    Harrah's New Orleans Management Company, Inc.
                    as the revolving lenders, Wells Fargo Bank
                    Minnesota, National Association, as trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent

      4.06*         Revolving Credit Agreement among Jazz Casino
                    Company, L.L.C., as borrower; JCC Holding
                    Company, JCC Canal Development L.L.C., JCC
                    Fulton Development, L.L.C. and JCC Development
                    Company, L.L.C., as guarantors; and Harrah's
                    Entertainment, Inc., Harrah's Operating
                    Company, Inc., and Harrah's New Orleans
                    Management Company, as lenders

      4.07*         Pledge Agreement, dated as of March 30, 2001,
                    among Harrah's Entertainment, Inc., and
                    Harrah's Operating Company, Inc., as the
                    minimum payment guarantors, and, together with
                    Harrah's New Orleans Management Company, Inc.
                    as the revolving lenders, Wells Fargo Bank
                    Minnesota, National Association, as trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent

      4.08*         Security Agreement, dated as of March 30,
                    2001, among JCC Holding Company, Jazz Casino
                    Company, L.L.C., and certain of their
                    subsidiaries, as assignors, Harrah's
                    Entertainment, Inc. and Harrah's Operating
                    Company, Inc., as the minimum payment
                    guarantors, and, together with Harrah's New
                    Orleans Management Company, Inc. as the
                    revolving lenders, Wells Fargo, as Trustee,
                    for the holders from time to time of the
                    Senior Notes, and the Bank of New York, as
                    Collateral Agent
</TABLE>

<PAGE>   102

<TABLE>
<S>                 <C>                                                   <C>
      10.01*        First Amendment to Amended and Restated Lease
                    Agreement by and between Rivergate Development
                    corporation and Jazz Casino regarding Canal
                    Street Casino Property dated as of March 29,
                    2001

      10.02*        Second Amendment to Amended and Renegotiated
                    Casino Operating Contract between Jazz Casino
                    Company, L.L.C. and the State of Louisiana

      10.03*        Third Amendment to Amended and Renegotiated
                    Casino Operating Contract between Jazz Casino
                    Company, L.L.C. and the State of Louisiana
                    dated as of March 29, 2001

      10.04*        Third Amended and Restated Management
                    Agreement between Jazz Casino Company, L.L.C.
                    and Harrah's New Orleans Management Company
                    dated as of March 30, 2001

      10.05*        Amended and Restated HET/JCC Agreement among
                    Jazz Casino Company, L.L.C., Harrah's
                    Entertainment, Inc., Harrah's Operating
                    Company, Inc., and JCC Holding Company
                    regarding Minimum Payment Guaranty, dated as
                    of March 30, 2001

      10.06         Second Floor Non-Gaming Sublease Between Jazz    1-12095
                    Casino Company, L.L.C., as Sublessor, and JCC    Exhibit 10.07 to Pre-Effective Amendment No. 2 to
                    Development Company, L.L.C., as Sublessee,       JCC Holding Company's Registration Statement on Form 10
                    dated October 29, 1998

      10.07         Amended and Restated Open Access Plans of Jazz   1-12095
                    Casino Company, L.L.C., submitted to the         Exhibit 10.37 to Pre-Effective Amendment No. 2 to
                    council of the City of New Orleans on October    JCC Holding Company's Registration Statement on Form 10
                    29, 1998

      10.08         Open Access Program                              1-12095
                                                                     Exhibit 10.38 to JCC Holding Company's Annual
                                                                     Report on Form 10-K for the Year Ended December 31, 1998

      10.09         Employment Agreement, dated as of May 6, 1999,   Exhibit 10.40 to JCC Holding Company's Quarterly
                    by and between JCC Holding Company and           Report on Form 10-Q for the Quarter Ended June 30, 1999
                    Frederick W. Burford

      10.10         Agreement effective as of January 1, 1999 by     Exhibit 10.12 to JCC Holding Company's Annual Report
                    and between Jazz Casino Company, L.L.C. and      on Form 10-K for the Year Ended December 31, 1999
                    Thomas M. Morgan

</TABLE>

<PAGE>   103


<TABLE>
<S>                 <C>                                                   <C>
      10.11         Sublease Agreement by and between Jazz Casino    Exhibit 10.13 to JCC Holding Company's Annual Report
                    Company, L.L.C. and Sullivan Transfer Co.        on Form 10-K for the Year Ended December 31, 2000

      10.12*        Act of Mortgage and Collateral Assignment by
                    Jazz Casino Company, L.L.C.

      10.13*        Act of Mortgage and Collateral Assignment by
                    JCC Canal Development, L.L.C. in favor of The
                    Bank of New York as Collateral Agent for the
                    present and future holders of the secured
                    obligations

      10.14*        Act of Mortgage and Collateral Assignment by
                    JCC Fulton Development, L.L.C. in favor of The
                    Bank of New York as Collateral Agent for the
                    present and future holders of the secured
                    obligations

      10.15*        Act of Mortgage and Collateral Assignment by JCC
                    Development Company in favor of The Bank of New
                    York as Collateral Agent for the present and
                    future holders of the secured obligations

      10.16*        Four Year Unconditional Minimum Payment
                    Guaranty Agreement from Harrah's Entertainment,
                    Inc. and Harrah's Operating Company, Inc., in
                    favor of the State of Louisiana, dated as of
                    March 29, 2001

      21.01         List of subsidiaries of JCC Holding Company      Exhibit 21.01 to JCC Holding Company's Annual Report
                                                                     on Form 10-K for the Year Ended December 31, 2000

      23.02         Consent of Deloitte & Touche LLP, Independent    Exhibit 23.02 to JCC Holding Company's Annual Report
                    Public Accountants, dated March 30, 2001         on Form 10-K for the Year Ended December 31, 2000
</TABLE>

* Filed herewith