Starwood Reports Fourth Quarter 2013 Results (United States)
Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) today reported fourth quarter 2013 financial results. |
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Starwood Reports Fourth Quarter 2013 Results (United States)
Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) today reported fourth quarter 2013 financial results. |
Category: North America & West Indies / Carribean islands - United States - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2014-02-17
Fourth Quarter 2013 Highlights
- Excluding special items, EPS from continuing operations was $0.73. Including special items, EPS from continuing operations was $0.67.
- Adjusted EBITDA was $314 million, which included $12 million of EBITDA from the St. Regis Bal Harbour residential project.
- Excluding special items, income from continuing operations was $141 million. Including special items, income from continuing operations was $128 million.
- Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.3% in constant dollars (4.3% in actual dollars) compared to 2012. Systemwide REVPAR for Same-Store Hotels in North America increased 6.1% in constant dollars (5.6% in actual dollars).
- Management fees, franchise fees and other income increased 7.7% compared to 2012.
- Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 116 basis points compared to 2012.
- Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 5.8% in constant dollars (4.8% in actual dollars) compared to 2012.
- Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 100 basis points compared to 2012.
- Earnings from Starwood’s vacation ownership and residential business decreased approximately $31 million compared to 2012, including a $20 million decrease in earnings from the St. Regis Bal Harbour residential project which was substantially sold out.
- During the quarter, the Company signed 58 hotel management and franchise contracts, representing approximately 11,700 rooms, and opened 23 hotels and resorts with approximately 5,400 rooms.
- During the quarter, the Company completed sales of hotels for gross cash proceeds of approximately $125 million, paid an annual dividend of $1.35 per share, and repurchased 1.18 million shares at a total cost of $78.6 million and an average price of $66.80 per share.
Full Year 2013 Highlights
- Excluding special items, EPS from continuing operations was $2.99. Including special items, EPS from continuing operations was $2.92.
- Adjusted EBITDA was $1.263 billion, which included $119 million of EBITDA from the St. Regis Bal Harbour residential project.
- Excluding special items, income from continuing operations was $579 million. Including special items, income from continuing operations was $565 million.
- Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.9% in constant dollars (4.2% in actual dollars) compared to 2012. Systemwide REVPAR for Same-Store Hotels in North America increased 6.0% in constant dollars (5.7% in actual dollars).
- Management fees, franchise fees and other income increased 8.7% compared to 2012.
- Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 79 basis points compared to 2012.
- Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 5.0% in constant dollars (4.2% in actual dollars) compared to 2012.
- Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 110 basis points compared to 2012.
- Earnings from Starwood’s vacation ownership and residential business decreased approximately $34 million compared to 2012, including a $38 million decrease in earnings from the St. Regis Bal Harbour residential project which was substantially sold out.
- During the year, the Company signed 152 hotel management and franchise contracts, representing approximately 32,200 rooms, and opened 74 hotels and resorts with approximately 16,200 rooms.
- During the year, the Company completed sales of hotels for gross cash proceeds of approximately $251 million, paid an annual dividend of $1.35 per share, and repurchased 4.9 million shares at a total cost of $315.6 million and an average price of $64.98 per share.
Fourth Quarter 2013 Earnings Summary
Starwood Hotels & Resorts Worldwide, Inc. today reported EPS from continuing operations for the fourth quarter of 2013 of $0.67 compared to $0.33 in the fourth quarter of 2012. Excluding special items, EPS from continuing operations was $0.73 for the fourth quarter of 2013 compared to $0.70 in the fourth quarter of 2012.
Special items in the fourth quarter of 2013, which totaled an after-tax charge of $13 million, included a pre-tax charge of $19 million related to certain technology development costs that the Company no longer intends to recover from its managed and franchised properties and a pre-tax impairment charge of $17 million associated with a wholly-owned hotel. Special items also included $8 million of net tax benefits primarily associated with the tax law change in Mexico in late 2013 and reversal of tax reserves associated with tax assets which are now deemed realizable. Special items in the fourth quarter of 2012, which totaled an after-tax charge of $72 million, included a pre-tax charge of $113 million primarily related to the early redemption of $725 million senior notes as well as pre-tax charges of $14 million associated with the impairment of certain hotels and investments. Excluding special items, the effective income tax rate in the fourth quarter of 2013 was 33.0% compared to 35.7% in the fourth quarter of 2012.
Income from continuing operations was $128 million in the fourth quarter of 2013, compared to $65 million in the fourth quarter of 2012. Excluding special items, income from continuing operations was $141 million in the fourth quarter of 2013, compared to $137 million in the fourth quarter of 2012.
Net income was $128 million and $0.67 per share in the fourth quarter of 2013, compared to $142 million and $0.72 per share in the fourth quarter of 2012.
Frits van Paasschen, CEO, said, “Starwood had a strong year in 2013. We exceeded our profit expectations, despite a tepid global business environment, exchange rate headwinds and the effect of having sold six hotels. Occupancies in North America reached record levels for the third straight quarter, and in a weak economic environment occupancies in Europe remained high. In Latin America, Asia Pacific, Africa, and the Middle East, we delivered strong footprint and fee growth.
“We made good progress towards our asset-light goals in 2013. Beyond selling six hotels in the year, we recently announced the sale of the St. Regis Bal Harbour. Our portfolio of managed and franchised hotels grew at a healthy clip, as we opened 74 new hotels. In addition, we signed over 150 new hotel agreements – more than any year since 2007.
“We ended 2013 with a balance sheet in the best shape it’s ever been, and during the year we returned over half a billion in capital to shareholders through share repurchases and our dividend.
“From what we are seeing, the year 2014 looks to be a better version of 2013. Early indications are that our U.S. and European hotels will see continued strong rate growth. In the fast-growing markets, our view is that – in spite of today's market uncertainty – the long-term trends in urbanization and rising wealth will fuel secular growth in demand for travel. As such, we remain bullish on the long term growth of the industry and on our ability to capture more than our fair share of that growth.”
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