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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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FORM 8-K
CURRENT REPORT PURSUANT TO
SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): July 22, 1997
Hilton Hotels Corporation
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(Exact Name of Registrant as
Specified in Charter)
Delaware 1-3427 36-2058176
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(State or Other (Commission (IRS Employer
Jurisdiction of File Identification
Incorporation) Number) No.)
9336 Civic Center Drive
Beverly Hills, California 90210
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(Address of Principal
Executive Offices)
(310) 278-4321
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(Registrant's telephone
number, including area code)
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ITEM 5. OTHER EVENTS
On July 22, 1997 the Registrant announced its earnings for its second fiscal
quarter ended June 30, 1997. A copy of the press release is attached hereto
as Exhibit 99.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
7(c) Exhibits.
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99 Press Release of Hilton Hotels Corporation, dated July
22, 1997.
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Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.
HILTON HOTELS CORPORATION
By: /s/ Scott A. LaPorta
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Name: Scott A. LaPorta
Dated: July 25, 1997 Title: Senior Vice President and Treasurer
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EXHIBIT 99
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Contact: Marc Grossman
Sr. Vice President - Corporate Affairs
(310) 205-4030
HILTON REPORTS SECOND QUARTER EARNINGS;
NET INCOME PER SHARE UP 20%; EBITDA UP 76%
Beverly Hills, Calif., July 22, 1997 -- Hilton Hotels Corporation
(NYSE:HLT) today reported results for the second quarter and six months ended
June 30, 1997.
Net income for the second quarter totaled $93 million, or $.36 per
share, compared to $59 million, or $.30 per share, last year -- a 20 percent
increase in earnings per share. Average shares outstanding were 251 million
in 1997 versus 197 million in 1996.
Second quarter earnings before interest, taxes, depreciation,
amortization and non-cash items (EBITDA) totaled $278 million, compared to
last year's $158 million. The increase was attributable to continued
improvement in revenue per available room (REVPAR) and EBITDA at the
company's owned and equity hotels, as well as the 1996 acquisitions of Bally
Entertainment Corporation and the majority of The Prudential Insurance
Company's interests in six full-service hotel properties.
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LODGING
EBITDA for Hilton's lodging division was $162 million, an increase of 54
percent from $105 million a year ago, reflecting 11% REVPAR growth and
combined EBITDA margins nearing 37% at the company's owned and equity
properties. Second quarter results in 1997 also benefited from increased
ownership interests in six full-service properties -- the Chicago, San
Francisco, New York, Washington, Capital and Rye Town Hiltons, as well as the
acquisition of the Anchorage Hilton, completed in the first quarter 1997.
In the second quarter, the company's "Top Ten" owned and equity hotels
contributed $104 million in EBITDA, an increase of 58 percent from $66
million for the same period a year ago. On a "same store" basis, EBITDA from
the "Top 10" increased 20 percent. These properties, located in New York,
Chicago, Washington, New Orleans, San Francisco and Honolulu, continue to
benefit from high demand and a lack of new supply in their respective
markets. Average daily rate (ADR) at these ten hotels was $164.71 in the
second quarter, compared with $150.70 last year, with occupancy showing a 1.5
point improvement to 84.3 percent, resulting in a REVPAR increase of 11
percent.
Overall occupancy for Hilton's lodging division -- including all owned,
equity and managed properties -- was 78.5 percent, up 1.5 points from 77.0
percent last year, with ADR improving 8 percent to $144.43. Overall lodging
division REVPAR increased 11 percent from a year ago.
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GAMING
Benefiting from the addition of Bally's properties in Las Vegas,
Atlantic City, Mississippi and New Orleans, along with outstanding results at
the company's gaming facilities in Australia, Hilton's gaming division posted
second quarter EBITDA of $136 million compared to $66 million last year.
While overall gaming division occupancy declined 3.5 points to 87.8 percent,
ADR rose 9 percent to $80.10.
EBITDA at the Las Vegas Hilton was $10 million, comparable with last
year's results. The property benefited from a baccarat win percentage of 29
percent, slightly above historical averages and above the low win percentage
in last year's second quarter. However, the increase in baccarat win was
offset by a decline in hotel revenues as evidenced by a 10.5 point decline in
occupancy at the Las Vegas Hilton. ADR, however, increased 6 percent to
$106.66.
Bally's Las Vegas reported EBITDA of $23 million, which, while not
included in the company's 1996 results, was up 10 percent from last year.
The property benefited from higher slot revenues and increased table game win
during the quarter. Despite increased competition in the market, occupancy
was flat at 93 percent, while ADR rose 7 percent to $91.35.
The Flamingo Hilton-Las Vegas, coming off a strong second quarter 1996
and despite increased competition on the strip, reported EBITDA of $30
million, in line with last year's results. Occupancy declined to 93.4
percent, though ADR was up 9 percent to $85.11.
Second quarter occupancy and ADR at all of Hilton's Nevada properties --
which includes six hotel-casinos in Las Vegas, Reno and Laughlin -- was 88.3
percent and $77.99, respectively, compared with 93.2 percent and $73.41 last
year (including Bally's - Las Vegas).
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During the quarter, Hilton broke ground and began construction on its
$760 million "Paris Casino Resort," located adjacent to Bally's on the Las
Vegas Strip. The 2,900-room resort, which will feature an 85,000 square foot
casino, is scheduled for completion in mid-1999.
In Atlantic City, Bally's Park Place and The Atlantic City Hilton
generated EBITDA of $35 million and $7 million, respectively. While not
included in the company's consolidated results last year, EBITDA at these
properties totaled $37 million and $15 million, respectively, in the 1996
second quarter.
"The Wild Wild West," the company's new 70,000 square foot casino and
the first themed casino in Atlantic City, opened July 1 adjacent to Bally's
Park Place to enthusiastic crowds and outstanding preliminary results.
Disruptions from construction of a new 300-room tower at The Atlantic City
Hilton, along with a lower-than-normal table game win percentage, adversely
impacted results at that hotel. The tower will be completed in late July
1997.
Hilton's international gaming operations reported strong results in the
second quarter, with double-digit EBITDA increases at the company's
20-percent owned casinos in the Gold Coast and Brisbane, Australia.
The company's operations in Tunica, Laughlin and Kansas City continued
to be adversely impacted by generally soft conditions in those markets, while
the Reno Hilton rebounded as a result of the city's major bowling convention.
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SIX-MONTH RESULTS
For the six months ended June 30, 1997, Hilton reported net income of
$161 million, or $.62 per share, compared to $96 million, or $.49 per share,
for the same period a year ago -- a 27 percent increase in net income per
share. EBITDA for the six months totaled $509 million, compared with last
year's $285 million.
Hilton's lodging division reported six-month EBITDA of $273 million, a
48 percent increase from $184 million in 1996, while the company's gaming
operations showed EBITDA of $269 million, compared with last year's $120
million.
Between April and July, the company continued executing its strategy of
accessing the favorable capital markets, by issuing $1 billion of Senior
Unsecured Notes at an average rate of 7.5 percent and with an average life of
7.5 years.
"The outstanding results we achieved in the second quarter and first
half of 1997 were driven by the operating leverage inherent in owning
full-service hotels in key U.S. markets, our major, high-quality presence in
Las Vegas and Atlantic City and our ongoing commitment to our shareholders to
improving operating margins and EBITDA throughout our company," said Stephen
F. Bollenbach, president and chief executive officer of Hilton Hotels
Corporation.
He added, "While we have been very successful so far in 1997, we
continue to work diligently on behalf of our shareholders to maximize our
results for the remainder of this year and beyond."
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