Park Place Entertainment Corporation (NYSE: PPE) today reported a 24 percent increase in net income before asset dispositions and pre-opening charges to $56 million for the second quarter ended June 30, 2000 compared to $45 million for the second quarter of 1999.
Diluted earnings per share for the quarter increased 20 percent to $0.18 compared to last year’s $0.15, excluding the impact of asset dispositions and pre-opening charges. Including these items, net income for the second quarter 2000 was $31 million and diluted earnings per share was $0.10.
Diluted cash earnings (net income before asset dispositions plus goodwill amortization) increased 22 percent to $0.22 in the second quarter 2000 from $0.18 last year.
Earnings before interest, taxes, depreciation and amortization, pre-opening expense and asset dispositions (EBITDA) were $335 million in the second quarter of 2000, up 87 percent compared to last year’s $179 million. The Company’s EBITDA margin increased to 26.8 percent from 24.2 percent in 1999 as more high margin revenues were earned and operating costs were spread over additional units.
Positive results in the second quarter of 2000 were driven by 18 percent company-wide same store EBITDA growth and the introduction of Paris Las Vegas on September 1, 1999. The same store improvement was driven principally by successful local marketing efforts and Park Place’s domestic marketing network. The Company also reported impressive top-line growth with total revenues up 69 percent for the quarter.
Park Place generated approximately $176 million in net cash flow in the second quarter 2000. The Company deployed the excess cash flow as follows:
* $100 million reduction in bank debt outstanding
* $49 million share repurchase - 4 million shares at an average price of $12.34
* $27 million in new unit capital spending.
“I am pleased to report that our Company continues to generate significant same store EBITDA growth and substantial free cash flow from operations,” said Arthur Goldberg, President and CEO. “We plan to use our free cash flow and proceeds from the disposition of non-strategic assets to reduce debt, buy back stock and invest in high ROI driven projects. At the same time, we are seamlessly assimilating our Caesars assets and are on track to meet or exceed our synergy projections.”