Park Place Entertainment Corporation (NYSE: PPE) today reported a 17 percent increase in net income before pre-opening charges to $68 million for the third quarter ended September 30, 2000 compared to $58 million for the third quarter of 1999.
Diluted earnings per share for the quarter increased 16 percent to $0.22 compared to last year’s $0.19, excluding pre-opening charges. Including pre-opening charges, net income for the third quarter 2000 and third quarter 1999 was $67 million and $34 million, respectively, and diluted earnings per share was $0.22 and $0.11, respectively.
Diluted cash earnings per share (net income before pre-opening expense plus goodwill amortization) increased 18 percent to $0.26 in the third quarter 2000 from $0.22 last year.
Earnings before interest, taxes, depreciation and amortization, pre-opening expense and asset dispositions (EBITDA) were $338 million in the third quarter of 2000, up 59 percent compared to last year’s $213 million. The Company’s EBITDA margin in the third quarter increased 100 bps to 26.4 percent from 25.4 percent in 1999.
Park Place generated approximately $170 million in net cash flow in the third quarter 2000 and deployed it as follows:
* $72 million in new unit capital spending
* $61 million paydown of bank debt outstanding
* $37 million of share repurchases - 2.6 million shares at an average price of $14.20.
The Caesars asset integration continued successfully into the third quarter as EBITDA from that portfolio increased 24 percent to $126 million, as compared to $102 million in the third quarter of 1999. This improvement was driven by both top line revenue growth and cost reduction programs. For the first nine months of 2000, the Caesars assets produced $333 million of EBITDA versus $265 million, a 26 percent increase.