Park Place Entertainment Corporation (NYSE: PPE) today reported results for the fourth quarter and full year 2000.
The Company`s diluted earnings per share excluding non-recurring charges for the fourth quarter were $0.00 versus $0.11 last year. The fourth quarter 2000 results exclude $6 million, net of tax, or $0.02 per diluted share of non-recurring items relating to the one time charge for the fulfillment of the employment contract of the Company`s former Chief Executive Officer, Arthur Goldberg, who passed away in late October 2000 and a gain on the sale of trademark rights associated with Bally`s Total Fitness. The 1999 results exclude $17 million, net of tax, or $0.06 per diluted share of non-recurring charges related to the write down of the Flamingo Reno.
Cash earnings per share (net income before goodwill amortization associated with its acquisitions) for the fourth quarter were $0.04 versus $0.14, excluding the non-recurring charges.
Earnings before interest, taxes, depreciation and amortization, pre-opening expenses and non-recurring charges (“EBITDA”) increased 24% to $240 million compared to the fourth quarter 1999 results of $193 million. Fourth quarter EBITDA of $240 million decreased 9% when compared to pro forma fourth quarter 1999 results of $264 million. The pro forma 1999 EBITDA includes the Caesars properties, which were acquired on December 29, 1999.
EBITDA at the Caesars portfolio of properties increased 21% to $86 million in the fourth quarter of 2000 compared to 1999 fourth quarter results of $71 million. The improvement resulted primarily from increased levels of slot play and operating expense reductions.
As previously announced, the Company`s fourth quarter EBITDA and earnings shortfall to expectations were primarily attributed to (i) unusually low table hold percentage at its Las Vegas properties, (ii) the level of play at Paris Las Vegas in the fourth quarter was below the comparable quarter of 1999, the property`s first full quarter of operations, (iii) inclement weather in Atlantic City, Tunica and Indiana and (iv) the competitive environment in the Mississippi gaming marketplace.
Highlights from 2000 include:
* Increasing full year EBITDA by 59%.
* Generating $615 million in excess cash flow and deploying it in $233 million of new unit growth projects, paying down $226 million in debt and repurchasing $156 million in Company stock.
* Increasing the Caesars portfolio EBITDA by 25% from $336 million to $419 million.
* Paris Las Vegas achieving a 14% EBITDA return in 2000.
* Increasing the company-wide EBITDA margin from 24.1% in 1999 to 25.3% in 2000.
* Increasing hotel room revenues by 12%, primarily by increasing occupancy by approximately 2%.
* Reducing Net Debt to EBITDA from 4.7x to 4.1x.
* Opening the Wild Wild West expansion in Atlantic City, forming the largest contiguous gaming “complex” on the Boardwalk comprised of Bally`s Park Place, Caesars Atlantic City and the Wild Wild West.
* Opening the retail and entertainment pavilion at Caesars Indiana.
* Successfully completing the approvals and financing for the monorail expansion.
“We are very proud of our accomplishments this year, especially the successful integration of the Caesars portfolio, and we look forward to leveraging that integration to drive growth in 2001,” said Tom Gallagher, president and CEO. “We are working towards achieving maximum operating efficiency throughout all of our properties while continuing to deliver quality service to our customers.”