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Starwood Reports First Quarter 2014 Results

Stocks in this article: HOT

Starwood Hotels & Resorts Worldwide, Inc. (NYSE:HOT) today reported first quarter 2014 financial results.

First Quarter 2014 Highlights

  • Excluding special items, EPS from continuing operations was $0.63. Including special items, EPS from continuing operations was $0.71.
  • Adjusted EBITDA was $281 million.
  • Excluding special items, income from continuing operations was $122 million. Including special items, income from continuing operations was $136 million.
  • Worldwide Systemwide REVPAR for Same-Store Hotels increased 6.3% in constant dollars (5.0% in actual dollars) compared to 2013. Systemwide REVPAR for Same-Store Hotels in North America increased 7.1% in constant dollars (6.4% in actual dollars).
  • Management fees, franchise fees and other income increased 14.3% compared to 2013.
  • Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 150 basis points compared to 2013.
  • Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 4.7% in constant dollars (2.9% in actual dollars) compared to 2013.
  • Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 150 basis points compared to 2013.
  • Earnings from Starwood’s vacation ownership and residential business decreased approximately $64 million compared to 2013, including a $48 million decrease in earnings from the St. Regis Bal Harbour residential project which is substantially sold out.
  • During the quarter, the Company signed 28 hotel management and franchise contracts, representing approximately 6,000 rooms, and opened 10 hotels and resorts with approximately 1,900 rooms.

First Quarter 2014 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the first quarter of 2014 of $0.71 compared to $0.73 in the first quarter of 2013. Excluding special items, EPS from continuing operations was $0.63 for the first quarter of 2014 compared to $0.76 in the first quarter of 2013. Special items in the first quarter of 2014, which totaled a benefit of $14 million (after-tax), included $50 million in tax benefits, primarily related to the settlement of a tax audit, partially offset by a pre-tax charge of $36 million primarily related to the impairment of two hotels, one of which was sold in early April subject to a long-term franchise contract and the other of which represents a leased hotel that will be converted to a managed hotel in the second quarter of 2014. Special items in the first quarter of 2013, which totaled a charge of $5 million (after-tax), included a loss of $8 million (pre-tax) primarily related to the sale of three wholly-owned hotels. Excluding special items, the effective income tax rate in the first quarter of 2014 was 32.2% compared to 31.3% in the first quarter of 2013.

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