Park Place Entertainment Corporation (NYSE: PPE) reported a 16 percent increase in net income to $52 million for the first quarter ended March 31, 2000 compared to $45 million for the first quarter of 1999.
Earnings before interest, taxes, depreciation and amortization, pre-opening expense and non-cash items (EBITDA) were $327 million in the first quarter of 2000, up 69 percent compared to last year`s $193 million.
Diluted earnings per share for the quarter were up 13 percent to $0.17 compared to last year`s $0.15, and cash earnings (net income plus goodwill amortization) increased 11 percent to $0.21 in the first quarter 2000 from $0.19 last year. Excluding pre-opening charges and the cumulative effect of an accounting change, earnings per share in 1999 were $0.16.
Positive results in the first quarter of 2000 were driven primarily by strong operating performance across all properties in the Eastern region, Paris Las Vegas in the Western region and the acquisition of Caesars on December 29, 1999.
In the Eastern region, the Company`s properties led the Atlantic City market with 13 percent same-store gaming revenue growth, as compared to 5 percent growth for the rest of the market. The Park Place properties outperformed the market due to the continued success of local and national marketing programs which served to increase visitation and play. Park Place Entertainment leveraged its top line growth into a 35 percent same-store EBITDA improvement for Atlantic City.
Other recent highlights include:
* Generating approximately $180 million in free cash flow
* Repurchasing 4 million shares at an average price of $10.25
* Paying down $142 million in bank debt
* Increasing the Caesars portfolio EBITDA by 16 percent to $97 million
* Increasing PPE`s overall EBITDA margin from 25.8 percent (25.2 percent pro forma for Caesars) to 26.6 percent
* Entering into an agreement with the St. Regis Mohawk Tribe to be the exclusive developer and manager for any new casino gaming sites the Tribe obtains in New York State for the next three years
“Same store growth, Paris, and the successful implementation of cost saving programs associated with the acquisition of Caesars are driving earnings and free cash flow,” said Arthur Goldberg, president and CEO. “We will continue to judiciously allocate capital to developmental and strategic opportunities that provide attractive returns while at the same time shrink the right side of our balance sheet by paying down debt and repurchasing our stock.”