Hotel Online Press Releases
Hilton Reports First Quarter Earnings; Net Income Per Share Increases 37%; Continued Strong Results in Lodging
Contact: Marc Grossman Sr. Vice President - Corporate Affairs (310) 205-4030
Beverly Hills, Calif., April 23, 1997 -- Hilton Hotels Corporation (NYSE:HLT) today reported results for the first quarter ended March 31, 1997.
Net income for the quarter totaled $68 million, or $.26 per share, compared to $37 million, or $.19 per share last year -- a 37% increase in earnings per share. Average shares outstanding were 250 million in 1997 versus 195 million in 1996.
First quarter earnings before interest, taxes, depreciation, amortization and non-cash charges (EBITDA) totaled $231 million, compared to last year's $127 million. This increase was attributable to the 1996 acquisitions of Bally Entertainment Corporation and the majority of The Prudential Insurance Company's interests in six full-service hotel properties, as well as continued improvement in EBITDA and revenue per available room (REVPAR) at the company's large full-service hotels. The quarter also benefited from a return to a more normalized baccarat win percentage at the Las Vegas Hilton.
EBITDA for Hilton's lodging division was $111 million, an increase of 41 percent from $79 million a year ago, reflecting strong operating results at the company's major owned and equity properties.
First quarter results in 1997 also benefited from increased ownership interests in six full-service hotels -- the Chicago, San Francisco, New York, Washington, Capital and Rye Town Hiltons -- acquired from Prudential last year.
In the first quarter, the company's "Top Ten" owned and equity hotels contributed $67 million in EBITDA, compared to $47 million for the same period a year ago. 1997 EBITDA includes approximately $11 million attributable to increased equity ownership at the properties acquired from Prudential.
The "Top 10" properties, located in the key markets of New York, Chicago, Washington, New Orleans, San Francisco and Honolulu, continue to benefit from high demand, no new competition in their respective markets and an emphasis on yield management. Average daily rate (ADR) at these ten hotels was $160.79 in the first quarter, compared with $150.31 last year, with occupancy showing a 2.4-point improvement to 73.9 percent, resulting in a REVPAR increase of 11 percent. EBITDA margin at these hotels increased two percentage points.
Overall occupancy for Hilton's hotel division -- including all owned, equity and managed properties -- was 71.8 percent, comparable to last year's 71.6 percent, with ADR improving 8 percent to $146.66. Overall hotel division REVPAR increased 8 percent from a year ago.
Hilton's gaming division benefited from the addition of Bally's properties in Las Vegas, Atlantic City, Mississippi and New Orleans, along with improved results at the Las Vegas Hilton.
EBITDA from the gaming division was $133 million compared to $54 million last year. Overall gaming division occupancy declined 1.5 points to 87.2 percent, with ADR increasing 4 percent to $77.38.
EBITDA at the Las Vegas Hilton was $19 million, compared to a loss of $1 million a year ago. The property benefited from a baccarat win percentage of 27 percent, in line with historical averages and significantly above the abnormally low win percentage in last year's first quarter.
Occupancy and average rate were comparable with the prior period. The hotel's "Star Trek: The Experience" attraction, along with a new 22,000 square foot, 24th century-themed casino, is on schedule for a summer 1997 opening.
Bally's Las Vegas reported EBITDA of $27 million, which, while not included in the company's 1996 results, was comparable to the prior year. Despite increased room supply in the market, Bally's Las Vegas reaped the benefits of strong slot play at the property. Occupancy decreased to 90.3 percent from 93.1 percent last year, and ADR rose 4 percent to $97.27.
The Flamingo Hilton-Las Vegas, coming off an extraordinarily strong first quarter 1996, showed an EBITDA decrease of 10 percent to $27 million. Occupancy dipped to 92.2 percent from last year's 95.5 percent, and ADR was down 2 percent to $81.73, a result of the short-term impact of new supply introduced in the market.
First quarter occupancy and ADR at all Hilton's Nevada properties -- which includes six hotel-casinos in Las Vegas, Reno and Laughlin -- was 88.5 percent and $76.56, respectively, compared with 91.5 percent and $72.59 last year.
In Atlantic City, Bally's Park Place and The Atlantic City Hilton (formerly The Grand) generated EBITDA of $30 million and $5 million, respectively. While not included in the company's consolidated results last year, EBITDA at these properties totaled $29 million and $10 million, respectively, in the 1996 first quarter.
Bally's Park Place will benefit from the July 1997 opening of "The Wild, Wild West," a new 70,000 square foot casino adjacent to the property that represents Atlantic City's first themed casino attraction.
Construction of a new 300-room tower at The Atlantic City Hilton adversely impacted walk-in business at that hotel. The tower will be completed in July 1997.
Hilton gaming properties in Laughlin, Tunica and Kansas City were affected by over-supply and generally soft market conditions in those jurisdictions, while the company's Reno hotel-casinos suffered the affects of severe flooding which virtually shut down the entire city.
Internationally, strong results were reported at the company's casinos in Brisbane, Australia and Windsor, Canada, as well as initial positive results at the newly opened Conrad International Punta del Este in Uruguay.
"These results are indicative of the excellent geographic locations of our hotels and casinos, strong operational management and positive market conditions in both of our lines of business," said Stephen F. Bollenbach, president and chief executive officer of Hilton Hotels Corporation. "In addition, we continue to pursue new opportunities in both lodging and gaming that will create additional value for our shareholders, as evidenced by our recent purchase of the Anchorage Hilton, signing of the worldwide strategic alliance with Ladbroke, and upcoming openings of 'The Wild, Wild West,' 'Star Trek' and the new guest rooms at the Atlantic City Hilton."
Bollenbach added, "Our offer to acquire ITT Corporation, which is in line with our strategic growth objectives, represents another unique opportunity for the shareholders of both companies, and we are on track for what we are confident will be a successful conclusion."