<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): April 22, 1998
Hilton Hotels Corporation
------------------------------
(Exact Name of Registrant as
Specified in 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)
<PAGE>
ITEM 5. OTHER EVENTS
On April 22, 1998, the Registrant announced its earnings for its first fiscal
quarter ended March 31, 1998. A copy of the press release is attached hereto
as Exhibit 99 and incorporated herein by reference.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
7(c) Exhibits.
---------
99 Press Release of Hilton Hotels Corporation, dated April
22, 1998.
2
<PAGE>
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/ THOMAS E. GALLAGHER
-------------------------------------------
Name: Thomas E. Gallagher
Dated: April 22, 1998 Title: Executive Vice President and
General Counsel
3
<PAGE>
EXHIBIT 99
[LETTERHEAD]
CORPORATE NEWS
Contact: Marc Grossman
Sr. Vice President - Corporate Affairs
(310) 205-4030
HILTON REPORTS STRONG INCREASES IN
----------------------------------
FIRST QUARTER EARNINGS AND EBITDA
---------------------------------
Beverly Hills, Calif., April 22, 1998 -- Hilton Hotels Corporation
(NYSE: HLT) today reported results for the first quarter ended March 31, 1998.
Net income for the quarter totaled $77 million, or $.29 per share
on a diluted basis, compared to $68 million, or $.26 per diluted share last
year -- an increase of 12 percent in per share earnings.
First quarter earnings before interest, taxes, depreciation,
amortization and non-cash items (EBITDA) totaled $270 million, up 17 percent
from last year's $231 million. The increase was attributable primarily to
continued strength at the majority of the company's owned and partially owned
hotels, the addition of "The Wild Wild West" casino in Atlantic City and the
benefit of the newly opened hotel rooms at the company's casino in Punta del
Este, Uruguay.
Net income for the quarter was impacted by an increase in net
interest expense from $34 million to $45 million, primarily due to higher
average debt levels resulting from acquisition spending and a full quarter of
a higher average cost of debt resulting from the company issuing long-term
fixed notes to replace floating rate debt in 1997.
-more-
<PAGE>
1st Quarter Earnings
2-2-2-2
LODGING
EBITDA for Hilton's lodging division was $130 million, an increase
of 17 percent from $111 million a year ago. Double-digit EBITDA gains were
reported at the majority of Hilton's owned and partially owned hotels, with
properties in Chicago, New York, Washington, D.C. and San Francisco showing
particularly strong results.
In the first quarter, the company's "Top Ten" owned and partially
owned hotels -- located in New York, Chicago, San Francisco, New Orleans,
Washington and Honolulu -- contributed $79 million of EBITDA, compared to $65
million for the same period a year ago -- an increase of 22 percent. Average
daily rate (ADR) at these ten hotels was $173.13 in the first quarter,
compared with $160.81 last year, with occupancy showing a 1.1 point decline
to 72.8 percent, resulting in a revenue per available room (REVPAR) increase
of 6 percent. EBITDA margin at these properties increased 2.4 percentage
points. Impacting results at the "Top Ten" properties was the anticipated
softness at the Hilton Hawaiian Village in Honolulu as a result of adverse
economic conditions in Asia. Subtracting the impact of Hawaii from the "Top
Ten", EBITDA was up 27 percent, with REVPAR increasing 8 percent.
Overall occupancy for Hilton's comparable U.S. hotels -- including
owned, partially owned and managed properties -- was 71.9 percent, down from
last year's 73.0 percent, with ADR improving nearly 8 percent to $158.39.
REVPAR for this group of properties increased 6.2 percent from a year ago.
-more-
<PAGE>
1st Quarter Earnings
3-3-3-3
In the first quarter of 1998, Hilton continued its strategy of
acquiring full-service hotels in major markets seeing limited supply growth;
the company acquired the 458-room McLean (Virginia) Hilton and the 300-room
Hilton at Short Hills, a "Five Diamond" hotel in New Jersey.
The company's Hilton Garden Inn program also continued on track.
During the quarter, Hilton Garden Inn properties were either opened or under
construction in Florida, Georgia, Illinois, Texas, Nevada, Oregon,
California, Oklahoma and Mexico. The company is on pace to have 200 of these
hotels either open, under construction or in development by 2000.
GAMING
Gaming division EBITDA for the first quarter of $153 million
represented a 15 percent increase from 1997's $133 million. Driving this
improvement was the addition of "The Wild Wild West" casino at Bally's Park
Place in Atlantic City (which opened in July 1997), the late 1997
introduction of 300 hotel rooms at the Conrad International Punta del Este in
Uruguay and significantly improved results at the company's Reno
hotel-casinos.
Despite an increasingly competitive marketplace, each of the
company's three Las Vegas properties reported respectable
quarter-over-quarter results and performed generally in line with the
company's expectations.
The Flamingo Hilton-Las Vegas reported EBITDA of $25 million, down
7 percent from last year's $27 million. Occupancy dipped to 90.0 percent
from 92.2 percent a year ago, and ADR was down 5 percent to $77.95.
-more-
<PAGE>
1st Quarter Earnings
4-4-4-4
Bally's Las Vegas also showed an EBITDA decrease of 7 percent to
$25 million due principally to lower table game and slot hold percentages
when compared to the prior year. Occupancy declined 1.8 points to 88.5
percent, while ADR improved 3 percent to $100.58.
The Las Vegas Hilton reported EBITDA of $17 million, an 11 percent
decline from $19 million in 1997. Occupancy declined 2.1 points to 87.9
percent, while ADR showed a 4 percent increase to $110.46. The property
benefited from a significant increase in non-baccarat table game play, as
well as an above normal baccarat hold percentage of 36 percent. These
factors helped mitigate the effects of a decrease in international baccarat
play caused by the adverse economic conditions in Asia and a difficult
comparison due to the exceptionally high level of baccarat play recorded in
the 1997 period. Additionally, "Star Trek: The Experience" opened in January
and is meeting the company's expectations of generating increased traffic at
the hotel.
In Atlantic City, Bally's Park Place reported EBITDA of $37
million, an increase of 23 percent from last year's $30 million, attributable
to continued outstanding results at "The Wild Wild West." The Atlantic City
Hilton, which reported an EBITDA decrease of $1 million to $4 million, was
impacted by a below-average table game win percentage.
Hilton's gaming operations in other markets demonstrated improved
results, led by the Reno Hilton, which reported a significant EBITDA increase
due to strong casino revenues and a re-emphasis on the convention market.
Improved results were also reported at the Flamingo Hilton-Reno and the
company's casinos in Tunica, New Orleans and Kansas City. Internationally,
the Conrad International Punta del Este in Uruguay continued to exceed
expectations, while the company's operations in the Gold Coast and Brisbane,
Australia also reported strong EBITDA increases.
<PAGE>
1st Quarter Earnings
5-5-5-5
"Our first quarter results demonstrate the continued strength of
the domestic full-service hotel business and the favorable supply-demand
environment fueling it, as well as the benefits we've obtained from our new
gaming properties," said Stephen F. Bollenbach, president and chief executive
officer, Hilton Hotels Corporation. "We are also pleased with the ability of
our established hotel-casinos to perform admirably in competitive market
conditions and continue to be very positive about the future strength of the
industry. We are delighted to report to our shareholders that we are showing
strong operating results while also making progress on our growth strategies
of acquiring full-service hotels and maintaining the leading position in the
gaming industry."
# # #
<PAGE>
HILTON HOTELS CORPORATION
SUMMARY STATEMENTS OF INCOME
THREE MONTHS ENDED MARCH 31
(DOLLARS IN MILLIONS, EXCEPT PER SHARE AND AVERAGE RATE AMOUNTS)
<TABLE>
<CAPTION>
% / pt
1998 1997 Change
------- ------- ------
<S> <C> <C> <C>
REVENUE
Hotels $ 699 $ 667 5 %
Gaming 697 636 10
------- ------- ----
Total $ 1,396 $ 1,303 7 %
------- ------- ----
------- ------- ----
EBITDA (1)
Hotels $ 130 $ 111 17 %
Gaming 153 133 15
Corporate expense (13) (13) -
------- ------- ----
Total $ 270 $ 231 17 %
------- ------- ----
------- ------- ----
OPERATING INCOME
Hotels $ 102 $ 85 20 %
Gaming 97 85 14
Corporate expense (13) (13) -
------- ------- ----
Total operating income 186 157 18
Interest and dividend income 11 13 (15)
Interest expense (50) (43) 16
Net interest from equity investments (6) (4) 50
------- ------- ----
Net interest expense (45) (34) 32
INCOME BEFORE TAXES
AND MINORITY INTEREST 141 123 15
Provision for taxes (61) (51) 20
Minority interest, net (3) (4) (25)
------- ------- ----
NET INCOME $ 77 $ 68 13 %
------- ------- ----
------- ------- ----
NET INCOME PER SHARE
BASIC $ .30 $ .26 15 %
------- ------- ----
------- ------- ----
DILUTED $ .29 $ .26 12 %
------- ------- ----
------- ------- ----
SYSTEM-WIDE STATISTICS (OWNED OR MANAGED)
Occupancy
Hotels 70.5% 71.8% (1.3)pts
Gaming 85.3% 87.2% (1.9)pts
Average rate
Hotels $157.41 $146.66 7 %
Gaming $79.36 $77.38 3 %
Revpar
Hotels $110.90 $105.31 5 %
Gaming $67.68 $67.48 - %
</TABLE>
(1) EBITDA is earnings before interest, taxes, depreciation, amortization
and non-cash items.
