Beverly Hills, Calif., February 4, 1999—Hilton Hotels Corporation (NYSE:HLT) today reported results for the fourth quarter and year ended December 31, 1998. The results for both the quarter and year reflect Hilton`s spin-off of its casino gaming operations, a tax-free distribution to shareholders that was completed December 31, 1998.
Hilton reported income from continuing operations for the fourth quarter of $44 million, or $.17 per diluted share, compared to $41 million, or $.15 per diluted share, for the same period in 1997. The company`s proportionate share of costs associated with the gaming spin-off reduced fourth quarter earnings by $.04 per diluted share. In the 1997 quarter, costs associated primarily with the ITT acquisition effort reduced earnings also by $.04 per diluted share.
For the year, Hilton reported income from continuing operations of $188 million, or $.71 per diluted share, versus 1997`s $183 million, or $.68 per diluted share. The aforementioned costs impacted both 1998 and 1997 EPS by $.04 per diluted share.
The company reported total fourth quarter 1998 earnings before interest, taxes, depreciation, amortization and non-cash items (EBITDA) of $151 million, a 36 percent increase over the 1997 period. Fourth quarter 1998 EBITDA included costs of $13 million associated with the gaming spin-off, while EBITDA for the same period in 1997 included $16 million of costs associated primarily with the ITT effort. On a recurring basis, total EBITDA for the fourth quarter 1998 rose 29 percent to $164 million from $127 million in 1997.
Fiscal year 1998 total EBITDA rose 20 percent to $596 million from $497 million in 1997. On a recurring basis, giving effect to the costs noted above, total EBITDA for the year was $609 million, up 19 percent from $513 million.
Driving the EBITDA gains for both the fourth quarter and year were exceptional performances from several of Hilton`s major market full-service hotels, along with the EBITDA contribution from hotel acquisitions made during the year.
Fourth quarter and fiscal 1998 interest expense reflect higher debt levels due to acquisition activity during the year, and a higher average cost of debt resulting from the company issuing long-term fixed notes to replace floating rate debt in 1997.