Hilton Hotels Corp. (NYSE:HLT) today reported results for the first quarter ended March 31, 2000, highlighted by significant increases in earnings before interest, taxes, depreciation, amortization and non-cash items (EBITDA) and revenue per available room (RevPAR) at the company`s owned hotels.
Financial information for 1999 is presented on a pro forma basis as if the company`s acquisition of Promus Hotel Corp. had occurred on Jan. 1, 1999.

Hilton reported net income for the first quarter of $58 million, compared with $42 million for the same period a year ago, an increase of 38 percent. Diluted net income per share increased 45 percent to $.16 per share from $.11 last year. The $.16 includes $.04 related to a net gain on asset dispositions, specifically the sale of certain securities.

The first-quarter 1999 results include non-recurring charges totaling $.02 per share and exclude a $.01 per share charge due to an accounting change. On a recurring basis, Hilton`s net income per share for the first-quarter 2000 was $.12, compared with pro forma $.13 in the 1999 period.

First-quarter EBITDA improved 11 percent to $280 million, a result of strong performances and RevPAR gains at most major-market Hilton owned hotels as well as the benefit of 1999 acquisitions and new hotel openings. The comparable 1999 period included the aforementioned non-recurring charges totaling $7 million, and includes EBITDA from owned Homewood Suites and Hampton Inn hotels that were subsequently sold later in the year.

Across all brands, EBITDA from owned properties in the first quarter totaled $183 million, with comparable EBITDA up 6.8 percent. RevPAR from comparable owned properties improved 4.7 percent, with occupancy flat at 71.1 percent and average daily rate (ADR) up 4.8 percent to $154.95. Owned hotel leverage was 1.5 times for the quarter across all brands, in line with the company`s target. EBITDA margins across the company`s owned hotel system were strong at 34 percent.

Comparable owned hotels in the Hilton portfolio showed a first-quarter EBITDA increase of 8.9 percent. RevPAR rose 5.3 percent on flat occupancy of 73.0 percent but a significant ADR gain of 5.7 percent to $169.23. RevPAR-to-EBITDA flow-through was strong at 1.7 times, as were operating margins of 34.5 percent.

Demonstrating the continued high demand in major metropolitan markets, as well as the locations and unique competitive positions of Hilton`s owned hotels, particularly strong RevPAR and EBITDA results were reported at the Hilton Hawaiian Village, Hilton New Orleans, Hilton New York, Hilton San Francisco, Waldorf-Astoria, Hilton Washington, Hilton at Short Hills and Hilton Minneapolis.

Impacting first-quarter results was sluggishness at the company`s Chicago and Phoenix owned hotels, owing to new competitive supply in those markets and low citywide convention demand in Chicago. Additionally, Hilton`s Chicago properties had a difficult quarter-over-quarter comparison as each of its three owned hotels in that market had a record first quarter 1999.

Based on good advance group bookings, however, the company anticipates a strong remainder of 2000 for its Chicago hotels. Contributing to first-quarter EBITDA, though on a non-comparable basis, was Hilton`s new hotel at Logan Airport in Boston, which opened in September 1999 and continues to exceed the company`s forecasts.

RevPAR at comparable Doubletree owned hotels improved 2.5 percent in the first quarter—occupancy down 1.6 points to 67.6 percent and ADR up 4.9 percent to $111.12—as a result of gains at properties in San Jose and Santa Barbara, Calif., and Bellevue, Wash., while EBITDA at this group of properties declined in the quarter.

Fee income from franchising and managing hotels (across all brands) increased 6 percent to $82 million in the first-quarter 2000. The increase was attributable mainly to growth in the Hilton Garden Inn and Hampton Inn brands.

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