Park Place Entertainment Corporation (NYSE: PPE) today reported a net loss of $16 million, or $0.05 per share, for the quarter ended December 31, 2001. That compares to a net loss of $7 million, or $0.02 a share, for the fourth quarter of 2000.
Revenues were $1.11 billion for the fourth quarter of 2001 and $1.08 billion for the fourth quarter of 2000. Earnings before interest, taxes, depreciation, amortization, pre-opening expenses, and non-recurring items (EBITDA) were $194 million for the fourth quarter of 2001, compared to $240 million for the fourth quarter of 2000.
For the full year 2001, the company reported adjusted net income of $94 million, or $0.31 per diluted share. That compares to adjusted net income of $174 million, or $0.56 per diluted share, for 2000. Both figures exclude pre-opening expenses and one-time items. Including pre-opening expenses and one-time items, the company recorded a net loss of $24 million, or $0.08 per diluted share, for 2001 and net income of $143 million, or $0.46 per diluted share, for 2000. Net revenue for 2001 was $4.63 billion, compared to $4.66 billion for 2000. EBITDA for 2001 was $1.08 billion compared to $1.24 billion for 2000.
“We had a challenging fourth quarter and a challenging year,” said Park Place President and Chief Executive Officer Thomas E. Gallagher. “The slowing economy and the unprecedented disruption of the travel and tourism industry had a major impact on our business.
“That said, we`ve demonstrated in the past few months that our geographic and demographic diversity give Park Place an important advantage. Both our Atlantic City and Mid-South casino resorts showed their resilience in the fourth quarter,” Gallagher added.
During the quarter, Park Place`s portfolio of casino resorts reported a continuing recovery from the decline in tourism that hit the global travel and resort industry following the terrorist attacks of September 11.
Atlantic City, New Jersey, a market that largely serves drive-in customers, reported a fourth quarter year-over-year EBITDA increase of 16 percent (15 percent excluding the $1 million EBITDA contribution from the Claridge Hotel and Casino, which was acquired in June 2001). In Indiana, Mississippi and Louisiana, Park Place casino resorts recorded a fourth quarter increase of 4 percent, compared to the fourth quarter of 2000, led by a strong performance by Caesars Indiana and its recently opened hotel.
The eight Park Place properties in Nevada, which are more dependent on airline travel, continued to feel the effects of the tourism slowdown, but strengthened as the quarter progressed.
Company-wide, Park Place`s monthly results continued to improve during the quarter. EBITDA for the fourth quarter of 2001 was off 19 percent from the fourth quarter of 2000. December EBITDA was off 16 percent from the year-ago figure, while October EBITDA was off 25 percent from October 2000.
“We had a good fourth quarter in Atlantic City, and we were pleased with our results in Indiana, Louisiana and Mississippi,” Gallagher said. “Business in these regions, which represent about two-thirds of our EBITDA, essentially has returned to pre-September 11 levels. In Las Vegas, monthly trends have shown improvement.”
During 2001, Park Place made significant progress in its efforts to drive synergies among its 19 domestic properties, carefully target capital investments, improve its product offerings, and expand its market reach.
During the year, Park Place:
* Launched the Park Place Connection Card in Las Vegas, which unifies five existing slot card programs and encourages Park Place guests to visit additional Park Place properties.
* Completed the $65 million purchase of the Claridge Hotel and Casino in Atlantic City, which added 500 rooms, 1,100 parking spaces and approximately 60,000 square feet of casino space to Park Place`s center-Boardwalk presence.
* Opened the 500-room hotel tower at Caesars Indiana, which drove significant revenue growth for the property in the fourth quarter.
* Debuted the exclusive pool villas and high-end gaming salon at Caesars Palace in Las Vegas.
* Expanded the slot floor at Caesars Atlantic City by opening the popular Cleopatra`s Garden.
* Signed management and development agreements with the St. Regis Mohawk Tribe for a planned casino in Sullivan County, New York, where the company expects to break ground by the end of 2002.
* Sold the Flamingo Reno.
* Paid down approximately $90 million in debt.
* Issued $775 million of long-term debt (at an average interest rate of 7.8 percent) to pay down credit facilities.
“In addition to our investing in physical and financial resources, we added some tremendous new people to the management team during the year,” Gallagher said. “We`re drawing on the best and the brightest, both inside and outside the casino industry. That added firepower will help us enormously as we break the mold in growing our business. Indian gaming, international expansion and the Internet are just a few examples of where we`re going,” Gallagher added.