STAMFORD, Connecticut—Starwood Hotels & Resorts Worldwide, Inc. reported second quarter 2013 financial results.
View the full press release with tables.
Second Quarter 2013 Highlights
- Excluding special items, EPS from continuing operations was $0.79. Including special items, EPS from continuing operations was $0.71.
- Adjusted EBITDA was $333 million, which included $30 million of EBITDA from the St. Regis Bal Harbour residential project.
- Excluding special items, income from continuing operations was $153 million. Including special items, income from continuing operations was $137 million.
- Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant dollars (3.9% in actual dollars) compared to 2012. Systemwide REVPAR for Same-Store Hotels in North America increased 5.2% in constant dollars (5.1% in actual dollars).
- Management fees, franchise fees and other income increased 6.3% compared to 2012.
- Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 94 basis points compared to 2012.
- Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 4.4% in constant dollars (3.7% in actual dollars) compared to 2012.
- Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 160 basis points compared to 2012.
- Earnings from Starwood’s vacation ownership and residential business increased approximately $1 million compared to 2012.
- During the quarter, the Company signed 32 hotel management and franchise contracts, representing approximately 6,500 rooms, and opened 18 hotels and resorts with approximately 3,100 rooms.
Second Quarter 2013 Earnings Summary
Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the second quarter of 2013 of $0.71 compared to $0.66 in the second quarter of 2012. Excluding special items, EPS from continuing operations was $0.79 for the second quarter of 2013 compared to $0.70 in the second quarter of 2012. Special items in the second quarter of 2013, which totaled a charge of $16 million (after tax), primarily related to certain non-recurring income tax charges associated with an asset disposition, interest on deferred income from sales of vacation ownership units, and the resolution of certain tax positions. Special items in the second quarter of 2012, which totaled a charge of $9 million (after-tax), primarily related to costs associated with the early extinguishment of debt. Excluding special items, the effective income tax rate in the second quarter of 2013 increased to 33.8%, compared to 31.5% in the second quarter of 2012, primarily due to the higher percentage of pretax income in the United States in 2013.
Income from continuing operations was $137 million in the second quarter of 2013, compared to $129 million in the second quarter of 2012. Excluding special items, income from continuing operations was $153 million in the second quarter of 2013 compared to $138 million in the second quarter of 2012.
Net income was $137 million and $0.71 per share in the second quarter of 2013, compared to $122 million and $0.62 per share in the second quarter of 2012.
Frits van Paasschen, CEO, said, “We exceeded our profit expectations -- despite slower revenue growth and exchange rate headwinds -- thanks to SG&A cost control and good margin performance at Owned and Managed hotels. The global recovery continues. Tight supply in North America and Europe is the order of the day, with virtually no new high-end hotels coming on stream. Our occupancies in Europe are close to 72%. In North America, they reached 76%, the highest Starwood has ever reported. In China, our hotels significantly outperformed the competition, demonstrating the value our brands bring to our hotel owners, even in soft market conditions.
Our global luxury business performed especially well in the second quarter, highlighting the strength of our global footprint of over 35,000 luxury rooms in nearly 40 countries. Rising wealth, global business demand, and interest in new destinations are set to fuel the growth in luxury travel for some time to come. With St. Regis, Luxury Collection and W Hotels, our three distinct approaches to luxury, we are well positioned to capture greater share in this profitable segment.”
Six Months Ended June 30, 2013 Earnings Summary
Income from continuing operations was $280 million in the six months ended June 30, 2013 compared to $258 million in the same period in 2012. Excluding special items, income from continuing operations was $301 million in the six months ended June 30, 2013 compared to $262 million in the same period in 2012.
Net income was $350 million and $1.80 per share in the six months ended June 30, 2013 compared to $250 million and $1.27 per share in the same period in 2012. Net income in the six months ended June 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 $648 million in the six months ended June 30, 2013 compared to $620 million in the same period in 2012.