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THE PROMUS COMPANIES INCORPORATED REPORTS YEAR END AND FOURTH QUARTER RECORDS

 MEMPHIS, Tenn., Feb. 10 /PRNewswire/ -- The Promus Companies Incorporated (NYSE: PRI) today reported a 74.9 percent increase in net income to a record $52.5 million for the year ended Dec. 31, 1992, compared to $30.0 million in 1991. Earnings per share increased 56 percent to $1.56 compared to $1.00 in the prior year. The company reported earnings per share of 15 cents and net income of $5.1 million for the fourth quarter 1992, both records.
 Total revenues were a record $1.113 billion for the year and $258.5 million for the quarter.
 Operating income for the year was a record $237.5 million, a 16.3 percent increase over the prior year. Operating income records were set in four of the company's five gaming markets and at each of the three hotel brands during 1992. Fourth quarter operating income was down 4.9 percent from prior year, primarily as a result of higher development costs related to the company's growing casino entertainment business and severe snow storms in northern Nevada that impacted business during December.
 HARRAH'S SETS OPERATING INCOME AND
 REVENUE RECORDS FOR THE YEAR
 Records at all five of the company's Nevada casinos contributed to record operating income of $187.2 million for 1992, a 9.6 percent increase over 1991. Operating income at Harrah's Atlantic City was up slightly from the prior year. For the fourth quarter, operating income for the company's gaming business declined 6.5 percent from the prior year to $35.7 million primarily because of the development expenses and severe weather mentioned above.
 Operating income for 1992 at the company's northern Nevada casinos increased 19.1 percent over prior year, with all three properties -- Harrah's Reno, Harrah's Lake Tahoe and Bill's -- achieving records and double digit percentage increases. At each of the company's northern Nevada properties, operating efficiencies and cost controls helped to drive record operating margins for the year. For the fourth quarter, Harrah's Reno had record operating income, but access to the Lake Tahoe valley was interrupted three times in the quarter: a snowstorm in early December; a snowstorm during the holidays; and a week long fire which closed the main highway from California in October. Operating income for December 1992 at the company's northern Nevada properties was $2.0 million below the December 1991 amount.
 In southern Nevada, combined operating income for Harrah's Las Vegas and Harrah's Laughlin rose 18.3 percent during 1992 to a new annual record. Combined fourth quarter operating income for the two properties was also a record, up 6.1 percent from the prior year. The 1991 results included a $3.3 million one-time charge during the third quarter to terminate the Holiday Inn franchise agreement in Las Vegas. Table and slot volume were both up substantially from the prior year in Las Vegas, as the property continues to attract a higher value customer since the name change to Harrah's. Harrah's Laughlin also recorded a gaming volume increase during the year. A 700-room hotel tower and expanded parking facility at the Laughlin property were completed during the third quarter of 1992.
 Operating income at Harrah's Atlantic City for 1992 increased about one percent over the prior year. Fourth quarter operating income at the property was down 2.3 percent compared to the fourth quarter 1991. Revenues at Harrah's Atlantic City were up for the year despite a highly competitive market and continued weak economy in the northeast. Promotional costs have remained high in the market.
 "1992 was an excellent year for Harrah's. We set new records in every Nevada market throughout the year," said Michael D. Rose, chairman and chief executive officer of Promus. "Not only is the value of our Harrah's brand name continuing to grow in strength in our existing markets, it is also a valuable asset as our company pursues projects for casino entertainment facilities in the dynamic riverboat and Indian casino businesses. We have five new facilities in construction or exclusive negotiation stages across the country,
with several others in the exploratory stage. To our knowledge, this is more than any other casino entertainment company."
 If costs related to pursuing new casino development were excluded, operating income in Promus' gaming business would have increased approximately 13 percent for the year and would have been essentially even for the quarter.
 HOTELS SET OPERATING INCOME RECORDS FOR THE YEAR
 REVENUE PER AVAILABLE ROOM PREMIUMS OVER COMPETITORS INCREASE
 Combined operating income for Embassy Suites, Hampton Inn and Homewood Suites brands increased 43.3 percent over the prior year to a record $49.1 million. Fourth quarter operating income declined 6.4 percent to $7.7 million. 1991 hotel results included a 53 week calendar year, with the extra week of operations recorded in the fourth quarter, compared to 52 weeks in 1992.
 Record performance in the company's hotel business is primarily attributable to unit growth at Hampton Inn hotels and strong revenue per available room growth at all three brands.
 Thirty-eight hotels under Promus brand names opened during 1992, including 13 conversions and 25 new properties, bringing the total number of hotels under the company's three hotel brands to 454 at year end. An additional 30 hotels were under construction or in the process of being converted to a Promus brand at the end of the year.
 Hampton Inns opened 34 hotels during the year, bringing its system total to 327. Embassy Suites opened two hotels during 1992, including its first property outside of the United States in Markham, Ontario, for a year-end system size of 103 properties. Homewood Suites system size stood at 24 hotels at year end, two more than in the prior year.
 Revenue per available room increased 7.5 percent at Hampton Inn, 6.7 percent at Embassy Suites and 15.0 percent at Homewood Suites. Increases at all three brands were accomplished through a combination of improved occupancy and average daily rate. Average occupancy at all three brands ended the year at over 71 percent.
 "Each of our hotel brands had a strong year, particularly Hampton Inn. The ability of our franchisees to obtain financing in a slow economy and depressed real estate market shows the strength of the Hampton Inn product, market and cost structure," Rose stated. "Value pricing and our strong brand names helped each of our hotel brands to increase not only its revenue per available room, but its premium over direct competitors as well. These year-end figures show that when a hotel offers guests excellent value from the beginning, occupancy will remain strong without discounting, even in a highly competitive market."
 Corporate expense in 1992 was up 6.1 percent over the prior year, primarily
because of incentive compensation related expenses. Interest expense declined for the year and the quarter due to the combined impact of lower overall interest rates, lower debt and lower joint venture interest.
 A one-time $2 million charge to other income was recorded during the fourth quarter 1992 to reflect the company's estimated loss on its guarantee to a company-sponsored defined contribution savings plan's Executive Life Guaranteed Investment Contract. 1991 other income included a gain in the third quarter related to the company's sale of an investment interest in an insurance company.
 Promus is the parent company of four leading brand names in the casino and hotel industries: Harrah's Casino Hotels, Embassy Suites hotels, Hampton Inn hotels and Homewood Suites hotels.
 THE PROMUS COMPANIES INCORPORATED
 SUMMARY OF OPERATIONS (UNAUDITED)
 Fourth Quarter Ended Fiscal Year Ended
 Dec. 31, Jan. 3, Dec. 31, Jan. 3,
 1992 1992 1992 1992
 (In thousands, except per share amounts)
 Revenues
 Gaming $207,889 $201,569 $ 891,104 $ 858,943
 Hotel 50,321 48,441 218,214 166,991
 Other 255 1,238 3,748 5,178
 $258,465 $251,248 $1,113,066 $1,031,112
 Operating income
 Gaming $ 35,671 $ 38,154 $ 187,210 $ 170,795
 Hotel 7,698 8,220 49,075 34,250
 Other 628 (102) 1,171 (878)
 Operating income
 before property
 transactions 43,997 46,272 237,456 204,167
 Property
 transactions (703) (1,086) (6,040) (1,186)
 Operating income 43,294 45,186 231,416 202,981
 Corporate expense (7,530) (10,859) (28,450) (26,825)
 Interest, net of
 interest
 capitalized (28,176) (36,071) (118,282) (133,992)
 Interest income 276 894 1,977 3,024
 Other income (expense),
 net (2,050) 828 1,638 7,006
 Income (loss) before
 income taxes and
 extraordinary
 items 5,814 (22) 88,299 52,194
 Provision for income
 taxes (2,508) (775) (36,881) (22,183)
 Income (loss) before
 extraordinary
 items 3,306 (797) 51,418 30,011
 Extraordinary items,
 net of tax provision
 of $753
 (See Schedule) 1,821 - 1,074 -
 Net income
 (loss) $ 5,127 $ (797) $ 52,492 $ 30,011
 Earnings (loss) per
 share before
 extraordinary
 items $ 0.10 $ (0.02) $ 1.53 $ 1.00
 Extraordinary
 items, net 0.05 - 0.03 -
 Earnings (loss) per
 share $ 0.15 $ (0.02) $ 1.56 $ 1.00
 Average common shares
 outstanding 33,807 33,536 33,705 30,160
 THE PROMUS COMPANIES INCORPORATED
 SUMMARY OF OPERATIONS (UNAUDITED)
 SUPPLEMENTAL SCHEDULE OF EXTRAORDINARY ITEMS
 Fourth Quarter Ended Fiscal Year Ended
 Dec. 31, Jan. 3, Dec. 31, Jan. 3,
 1992 1992 1992 1992
 (In thousands)
 Loss on extinguishment
 of debt, net of tax
 benefit of $2,112 $ - $ - $ (3,446) $ -
 Gain on forgiveness of
 joint venture debt,
 net of tax provision
 of $1,654 - - 2,699 -
 Gain on extinguishment
 of debt, net of tax
 provision of $1,211 1,821 - 1,821 -
 Extraordinary items,
 net of tax provision
 of $753 $ 1,821 $ - $ 1,074 $ -
 -0- 2/10/93
 /CONTACT: Ralph Berry, The Promus Companies Incorporated, 901-762-8629/
 (PRI)


CO: The Promus Companies Incorporated ST: Tennessee IN: LEI SU: ERN

MM -- CH003 -- 5107 02/10/93 11:28 EST
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