<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
________________
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): JANUARY 21, 1997
HILTON HOTELS CORPORATION
(Exact Name of Registrant as
Specified in its Charter)
DELAWARE 1-3427 36-2058176
(State or Other (Commission (IRS Employer
Jurisdiction of File Identification
Incorporation) Number) No.)
9336 CIVIC CENTER DRIVE
BEVERLY HILLS, CALIFORNIA 90210
(Address of Principal
Executive Offices)
(310) 278-4321
(Registrant's telephone
number, including area code)
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ITEM 5. OTHER EVENTS.
On January 21, 1997, Hilton Hotels Corporation ("Hilton" or the
"Company") reported results for both the fourth quarter and the year ended
December 31, 1996. The Company reported fourth quarter income, before an
extraordinary item, of $6.0 million, or $.03 per share, compared to $63.1
million, or $.32 per share, for the same period a year ago. The extraordinary
item related to costs and expenses incurred to extinguish or acquire
approximately $1.1 billion of Bally debt securities, and resulted in a charge to
earnings of $74.1 million, net of tax, or $.36 per share. In December, Hilton
successfully completed its tender offers and consent solicitation for the Bally
debt.
For the year, Hilton reported income, before the extraordinary item,
of $156.3 million, or $.79 per share compared to $172.8 million, or $.89 per
share, in 1995.
Fourth quarter earnings from operations were adversely affected by
abnormally low baccarat drop and win percentage at the Las Vegas Hilton,
resulting in a negative impact of approximately $.11 per share, along with
sluggish conditions in Laughlin and Reno. The Company's hotel operations,
however, continued to post strong results, including a double-digit gain in
EBITDA (as defined below).
Hilton also incurred other non-recurring charges in the fourth
quarter, totaling, on a pre-tax basis, $73.1 million, or $.22 per share on an
after tax basis. These charges included the write-off of pre-opening expenses
for the Flamingo Casino-Kansas City, which opened in October; costs associated
with the relocation of the Flamingo Casino-New Orleans to Shreveport, Louisiana,
which received approval in October, and costs associated with changes to the
Company's defined benefit pension plan.
The Company's earnings before interest, taxes, depreciation,
amortization and non-cash charges (EBITDA) for the fourth quarter was $144.5
million. For the year, EBITDA showed a 6 percent improvement to $576.9 million
from 1995's $542.5 million, primarily due to significant gains at Hilton's
full-service, owned and partially owned hotel properties.(1)
____________________
(1) Management believes the presentation of EBITDA allows for a more complete
analysis of the results of operations. EBITDA information should not be
considered as an alternative to any measure of performance or liquidity as
promulgated under generally accepted accounting principles (such as net income
or cash provided by or used in operating, investing and financing activities)
nor should it be considered as an indicator of the overall financial performance
of the Company.
2
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Hilton Hotels Corporation
Summary Statements of Income
(dollars in millions, except per share and average rate amounts)
<TABLE>
<CAPTION>
Three Months Ended Twelve Months Ended
December 31 % / pt December 31 % / pt
1996 1995 Change 1996 1995 Change
----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Revenue
Hotels $ 292.6 200.3 46 % $ 937.1 708.8 32 %
Gaming 254.1 257.3 (1) 963.0 940.6 2
----------- ----------- ----------- ----------- ----------- -----------
Total $ 546.7 457.6 19 % $ 1,900.1 1,649.4 15 %
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
EBITDA (1)
Hotels $ 112.6 91.4 23 % $ 392.1 300.4 31 %
Gaming 47.0 88.4 (47) 233.0 266.6 (13)
Corporate expense (15.1) (4.8) 215 (48.2) (24.5) 97
----------- ----------- ----------- ----------- ----------- -----------
Total $ 144.5 175.0 (17) % $ 576.9 542.5 6 %
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Operating Income
Hotels 63.2 66.9 (6) % 272.9 207.7 31 %
Gaming (11.5) 62.8 (118) 108.7 179.3 (39)
Corporate expense (15.0) (7.4) 103 (52.0) (31.9) 63
----------- ----------- ----------- ----------- ----------- -----------
Total operating income 36.7 122.3 (70) 329.6 355.1 (7)
Interest and dividend income 12.3 10.1 22 37.7 35.2 7
Interest expense (32.7) (22.2) 47 (87.9) (93.5) (6)
Net interest from affiliates (2.6) (4.7) (45) (12.0) (16.5) (27)
Income before taxes ----------- ----------- ----------- ----------- ----------- -----------
and minority interest 13.7 105.5 (87) 267.4 280.3 (5)
Provision for taxes (6.3) (41.0) (85) (106.2) (102.6) 4
Minority interest, net (1.4) (1.4) - (4.9) (4.9) -
----------- ----------- ----------- ----------- ----------- -----------
Income before extraordinary item 6.0 63.1 (90) 156.3 172.8 (10)
Extraordinary loss on extinguishment
of debt, net of tax benefit (74.1) - - (74.1) - -
----------- ----------- ----------- ----------- ----------- -----------
Net Income (loss) $ (68.1) 63.1 (208) % $ 82.2 172.8 (52) %
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Preferred stock dividend requirement (0.5) - - (0.5) - -
Net income (loss) available ----------- ----------- ----------- ----------- ----------- -----------
to common shareholders $ (68.6) 63.1 (209) % $ 81.7 172.8 (53) %
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) per share (2)
Before extraordinary loss $ 0.03 0.32 (91) % $ 0.79 0.89 (11) %
Extraordinary loss (0.36) - - (0.38) - -
----------- ----------- ----------- ----------- ----------- -----------
Net income (loss) $ (0.33) 0.32 (203) % $ 0.41 0.89 (54) %
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Average number of shares 205.3 194.6 - 197.1 194.1 -
----------- ----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- ----------- -----------
Occupancy (owned or managed)
Hotels 72% 71% 1 pt 74% 73% 1 pt
Gaming 84% 87% (3)pts 88% 86% 2 pts
Average rate (owned or managed)
Hotels $142 $133 7 % $135 $127 7 %
Gaming $75 $68 10 % $73 $69 6 %
</TABLE>
(1) EBITDA is earnings before interest, taxes, depreciation, amortization and
non-cash charges.
(2) The sum of net income (loss) per share for the four quarters in 1996
differs from the annual net income (loss) per share due to the required
method of computing the weighted average number of shares in the respective
periods.
3
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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 LaPorta
------------------------------------
Name: Scott LaPorta
Dated: January 23, 1997 Title: Senior Vice President and Treasurer
S-1
