Starwood Hotels & Resorts Worldwide, Inc. (NYSE:
HOT) today reported strong first quarter 2007 financial results.
First Quarter 2007 Highlights
Excluding special items, EPS from continuing operations was $0.48 compared to
$0.41 for the first quarter of 2006. Including special items, EPS from continuing
operations was $0.56 compared to $0.34 in the first quarter of 2006.
Worldwide System-wide REVPAR for Same-Store Hotels increased 10.2%
compared to the first quarter of 2006. System-wide REVPAR for Same-Store Hotels
in North America increased 6.1% compared to the first quarter of 2006.
Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased
9.3% compared to the first quarter of 2006. REVPAR for Starwood branded Same-
Store Owned Hotels in North America increased 8.0% compared to the first quarter
of 2006.
Margins at Starwood branded Same-Store Owned Hotels Worldwide and in North
America improved 130 and 103 basis points, respectively, as compared to the first
quarter of 2006.
Management and franchise revenues increased 44.1% when compared to 2006,
including revenues from the hotels sold to Host Hotels & Resorts Inc. (“Host”).
The Company signed 65 hotel management and franchise contracts in the quarter
representing approximately 18,100 rooms.
Reported revenues from vacation ownership and residential sales increased 19.6%
when compared to 2006. Strong increases in revenues from vacation ownership
sales were partially offset by a decline in residential sales due to the sellout of the
St. Regis San Francisco Museum tower project in 2006.
Excluding special items, income from continuing operations was $104 million
compared to $91 million in the same period of 2006. Net income, including special
items, was $122 million compared to $5 million in the first quarter of 2006.
Total Company Adjusted EBITDA was $285 million when compared to $266 million
in 2006. The year over year increase is primarily due to an increase in the Company’s Management and Franchise fees and improved vacation ownership
results partially offset by results from hotels sold since the first quarter of 2006. The
results for 2007 include $18.3 million of income from the Company’s carried interest
in the Westin Boston Waterfront Hotel, which was earned when the hotel was sold
by its owners in January 2007.
During the first quarter, the Company repurchased approximately 3.2 million shares
at a cost of $208.9 million. In April of 2007, the Board of Directors authorized an
additional $1 billion in share repurchases.
Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported
EPS from continuing operations for the first quarter of 2007 of $0.56 compared to $0.34 in
the first quarter of 2006. Excluding special items, EPS from continuing operations was
$0.48 for the first quarter of 2007 compared to $0.41 in the first quarter of 2006. Excluding
special items, the effective income tax rate in the first quarter of 2007 was 35.7%.
Income from continuing operations was $123 million in the first quarter of 2007 compared
to $77 million in 2006. Excluding special items, which net to a $19 million benefit in 2007,
income from continuing operations was $104 million for the first quarter of 2007 compared
to $91 million in 2006.
Net income was $122 million and EPS was $0.56 in the first quarter of 2007 compared to
net income of $5 million and EPS of $0.02 in the first quarter of 2006 (after a one-time
expense of $72 million (after tax) related to the implementation of a new time-share
accounting rule).
Bruce W. Duncan, CEO, said, “This quarter’s excellent results underscore the strength of
Starwood’s brand strategy, operational capabilities, and owner relationships, as well as the
talent and dedication of our management team and our 145,000 associates around the
world. We remain focused on continuing to grow our managed and franchised business,
and according to Smith Travel data, our pipeline continues to lead the upper upscale and
luxury segments. Lodging business fundamentals remain sound and our vacation
ownership platform is well-positioned for future growth. Starwood is a well balanced,
globally diversified company that should continue to create shareholder value for many
years to come.”
