STAMFORD, Conn. (October 24, 2013) – Starwood Hotels & Resorts Worldwide, Inc. reported third quarter 2013 financial results.
View the full press release with tables.
Third Quarter 2013 Highlights
- Excluding special items, EPS from continuing operations was $0.71. Including special items, EPS from continuing operations was $0.81.
- Adjusted EBITDA was $301 million, which included $19 million of EBITDA from the St. Regis Bal Harbour residential project (“Bal Harbour”).
- Excluding special items, income from continuing operations was $137 million. Including special items, income from continuing operations was $157 million.
- Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.7% in constant dollars (4.2% in actual dollars) compared to 2012.
- Systemwide REVPAR for Same-Store Hotels in North America increased 5.8% in constant dollars (5.4% in actual dollars).
- Management fees, franchise fees and other income increased 12.8% compared to 2012.
- Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 50 basis points compared to 2012.
- Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 5.2% in constant dollars (4.5% in actual dollars) compared to 2012.
- Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 130 basis points compared to 2012.
- Earnings from Starwood’s vacation ownership and residential business increased approximately $7 million compared to 2012.
- During the quarter, the Company signed 36 hotel management and franchise contracts, representing approximately 7,800 rooms, and opened 15 hotels and resorts with approximately 3,700 rooms.
- Starwood’s Board of Directors has declared the Company’s annual cash dividend of $1.35 per share. The Board of Directors has also decided to pay dividends to stockholders on a quarterly basis commencing in 2014.
Third Quarter 2013 Earnings Summary
Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the third quarter of 2013 of $0.81 compared to $0.75 in the third quarter of 2012. Excluding special items, EPS from continuing operations was $0.71 for the third quarter of 2013 compared to $0.58 in the third quarter of 2012. Special items in the third quarter of 2013, which totaled a benefit of $20 million (after tax), primarily related to a favorable adjustment to a legal reserve, tax benefits associated with a non-core asset sale and the reversal of a valuation allowance on deferred tax assets which are now deemed realizable. Special items in the third quarter of 2012, which totaled a benefit of $33 million (after-tax), primarily related to tax benefits from the sale of two hotels with high tax bases. Excluding special items, the effective income tax rate in the third quarter of 2013 was 31.3%, compared to 30.8% in the third quarter of 2012.
Income from continuing operations was $157 million in the third quarter of 2013, compared to $147 million in the third quarter of 2012. Excluding special items, income from continuing operations was $137 million in the third quarter of 2013 compared to $114 million in the third quarter of 2012.
Net income was $157 million and $0.81 per share in the third quarter of 2013, compared to $170 million and $0.87 per share in the third quarter of 2012. In addition to the $33 million of special items noted above, the 2012 results also included a gain of $23 million (net of tax) in discontinued operations, primarily related to the favorable settlement of certain liabilities associated with a former subsidiary of ITT Corporation, which the Company acquired in 1998.
Frits van Paasschen, CEO, said, “We delivered solid results in the face of an uncertain global economic environment. Globally, REVPAR grew by 4.7% in constant dollars, and our core management and franchise fees increased by 9.7%. In North America, where occupancies remained at all-time highs, REVPAR increased by 6.9% at our Company-Operated hotels. Our owned hotels in North America showed healthy margin increases fueled by 8.5% constant dollar REVPAR growth and ongoing cost controls.
“We remain bullish on the long-term trends of rising wealth and increasing demand for travel in fast growing economies, even in the face of slower growth in China, unrest in the Middle East, and economic challenges in Latin America.”
Nine Months Ended September 30, 2013 Earnings Summary
Income from continuing operations was $437 million in the nine months ended September 30, 2013 compared to $405 million in the same period in 2012. Excluding special items, income from continuing operations was $438 million in the nine months ended September 30, 2013 compared to $376 million in the same period in 2012.
Net income was $507 million and $2.61 per share in the nine months ended September 30, 2013 compared to $420 million and $2.14 per share in the same period in 2012. Net income in the nine months ended September 30, 2013 included a tax benefit of $70 million, in discontinued operations, as a result of the reversal of a reserve associated with an uncertain tax position related to a previous disposition. The applicable statute of limitation for this tax position lapsed during the first quarter of 2013.
Adjusted EBITDA was $949 million in the nine months ended September 30, 2013 compared to $895 million in the same period in 2012.