Park Place Entertainment Reports $0.15 for the Second Quarter 1999
LAS VEGAS--(BUSINESS WIRE)--July 20, 1999--Park Place
Entertainment Corporation (NYSE:PPE) today reported results for the
second quarter and first half of 1999. Diluted earnings per share for
the quarter were $0.15, flat with last year's pro forma diluted
earnings per share of $0.15. The second quarter 1999 results exclude
pre-opening charges associated primarily with the construction of the
Paris Las Vegas Casino Resort. Including the pre-opening charges,
diluted earnings per share were $0.13 for the quarter compared to
$0.15 in the prior year.
Earnings before interest, taxes, depreciation and amortization,
pre-opening expense and non-cash items (EBITDA) were $179 million
compared to the pro forma second quarter 1998 results of $184 million.
Operating highlights from the second quarter 1999 include strong
year-over-year performance at both the Atlantic City Hilton and
Bally's Park Place in the Eastern region and a significant cash flow
increase at the Grand Casino Tunica in the Mid-South region.
"The second quarter results provide further evidence of the power
of our unique diversification," said Arthur Goldberg, president and
CEO. "Our goal is to generate a more stable and predictable earnings
stream and one of the best ways to do that is to diversify our sources
of revenues and cash flow."
Eastern Region
EBITDA in the Eastern region increased 16 percent in the second
quarter of 1999 driven by marketing programs that primarily boosted
table game play at the two Atlantic City casino resorts.
The Atlantic City Hilton registered a 75 percent EBITDA increase
in the second quarter of 1999 to $14 million. The increase resulted
from a 23 percent increase in table games drop and a 16 percent
increase in slot handle, as well as a 12 percent RevPAR increase.
EBITDA at Bally's Park Place rose $2 million to $43 million
primarily as a result of increased table games drop and slot handle,
partially offset by a lower hold percentage.
Mid-South Region
The Mid-South region posted a 21 percent increase in its second
quarter EBITDA driven by the improved performance of Grand Tunica, a
$2 million reduction in regional overhead and relative stability on
the Gulf Coast despite a major increase in competitive supply.
Grand Tunica's second quarter 1999 EBITDA was $18 million,
doubling last year's results. The 600 room Terrace Hotel & Spa, which
opened in late March 1999, successfully expanded the market and
substantially boosted the property's customer counts and gaming
volume.
Gaming play was up at both Mississippi Gulf Coast properties in
the second quarter of 1999, however, a lower hold percentage and
competitive market conditions resulted in a 10 percent decline in
EBITDA. Grand Biloxi reported EBITDA of $18 million in the second
quarter of 1999, down $2 million from last year. Grand Gulfport
reported $9 million as compared to $10 million of EBITDA in the second
quarter 1998, the decline partially resulting from refurbishment of
the casino floor.
During the last week of June, the Oasis Resort & Spa opened at
Grand Gulfport. The new 600 room hotel opened to strong ADRs and high
occupancy, which is driving increased play into the casino.
Western Region
EBITDA at the Flamingo Hilton Las Vegas was roughly flat at $29
million compared to $30 million last year. Flat room revenues and
increased slot handle were offset by a lower hold percentage.
Bally's Las Vegas reported EBITDA of $21 million for the second
quarter of 1999, down slightly from last year's $22 million as modest
RevPAR gains were offset by a reduction in the table games hold
percentage.
The Las Vegas Hilton reported EBITDA of $7 million in the second
quarter of 1999 compared with last year's $22 million. The expected
decrease in cash flow was a result of a concentration of play in the
first quarter of 1999, general softness in the baccarat market and
unusually high drop and hold in the comparable quarter of 1998.
"Despite the added supply in Las Vegas, we have kept in line with
our internal budgets and are well ahead of where the conventional
wisdom had us at the beginning of the year," said Goldberg. "The Las
Vegas market continues to grow and our properties, with their premier
locations and strong brand names, continue to compete effectively in
the market."
International
Second quarter 1999 International results were roughly flat with
last year's second quarter as EBITDA from the two casino resorts in
Australia and the Conrad International in Punta del Este, Uruguay came
in at $7 million versus $8 million last year.
Six Month Results
EBITDA for the six month period ended June 30, 1999 totaled $372
million, a 3 percent increase over last year's $360 million.
Net income for the six month period was $94 million, or $0.31 per
diluted share, up from the $0.29 per diluted share reported for the
six months ended June 30, 1998. The results in 1999 exclude $9 million
net of tax or $0.03 per diluted share of pre-opening expense primarily
related to the construction of Paris Las Vegas. Including pre-opening
expenses, net income for the six month period ended June 30, 1999 was
$85 million or $0.28 per diluted share.
Corporate Items
On April 27, the Company announced the signing of a definitive
agreement to purchase Caesars and other gaming assets from Starwood
Hotels & Resorts. Transition efforts are well under way and the
transaction is expected to close on schedule in the fourth quarter of
this year, pending regulatory approval.
The Company plans to open Paris Las Vegas on September 1, 1999.
The 2,900 room casino resort is adjacent to Bally's Las Vegas on the
Four Corners and contains an 85,000 sq. ft. casino, eight restaurants,
five lounges, more than 130,000 sq. ft. of meeting space and a
50-story replica of the Eiffel Tower.
On December 31, 1998, Park Place Entertainment Corporation was
created through the tax-free distribution of Hilton Hotels
Corporation's gaming division to its shareholders and the subsequent
merger with the Mississippi operations of Grand Casinos, Inc. The
financial information for the 1998 period is presented on a pro forma
basis as if the December 31, 1998 distribution by Hilton and
subsequent merger with the Grand Properties had occurred on January 1,
1998. The Company believes the pro forma information is a more
meaningful presentation than the historical results for comparative
reasons.
Following the September opening of Paris Las Vegas, the Company
will own or have an interest in 17 gaming properties located
throughout the United States and in Australia and Uruguay, with a
total of 1.4 million square feet of gaming space and approximately
23,500 hotel rooms. |
