WHITE PLAINS, N.Y.—(BUSINESS WIRE)—Jan. 29, 2003—Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) (“Starwood” or the “Company”) today reported results for the fourth quarter and full year 2002.
Fourth Quarter 2002 Financial Highlights:
—EPS was $0.42, compared to $0.28 loss per share in 2001. EPS excluding special items was $0.22 compared to $0.01 loss per share in 2001.—Total Revenues of $983 million, increased 12.0% when compared to 2001 levels. REVPAR for Same-Store Owned Hotels worldwide increased 9.4% when compared to 2001. REVPAR for owned and operated Same-Store Hotels in North America increased 10.6%. Westin, W Hotels and Sheraton owned and operated Same-Store REVPAR in North America increased 10.9%, 14.2% and 11.0%, respectively. Revenues from the vacation ownership business increased 28.7% to $93 million.—Total Company EBITDA was $271 million, an increase of 31.6% compared to $206 million in 2001. EBITDA at Same-Store Owned Hotels worldwide increased 8.4% to $191 million. EBITDA from the vacation ownership business increased to $27 million from $5 million in 2001.—Total Company EBITDA margin increased approximately 410 basis points to 27.6% when compared to 2001.—Excluding the impact of having leased the Sheraton Manhattan and part of the Sheraton New York Hotel and Towers to Lehman Brothers during the fourth quarter of 2001, North America Same-Store Owned Hotel EBITDA increased 13.7% and EBITDA margin increased 120 basis points in the fourth quarter of 2002.—Total Company market share in North America increased across owned and managed hotels.
Full Year 2002 Financial Results:
—Full year EPS was $1.20, an increase of 71.4% compared to $0.70 in 2001. Full year EPS excluding special items was $0.98 compared to $1.00 for 2001.—Full year total Company EBITDA was $1.095 billion, a decrease of 11.0% compared to $1.230 billion in 2001.
Fourth Quarter Ended December 31, 2002:
EPS was $0.42 in 2002, compared to a per share loss of $0.28 in 2001. EPS excluding special items was $0.22 in 2002 and a loss per share of $0.01 in 2001, and excludes net benefits of approximately $41 million (after-tax) in 2002 and net charges of $52 million (after-tax) in 2001. Total Revenues increased $105 million to $983 million when compared to the same period of 2001. Operating income was $131 million compared to $33 million in the same period of 2001 and income from continuing operations was $86 million as compared to a loss of $54 million in the same period of 2001. Results continued to be adversely impacted by the weak worldwide economic environment but reflect a significant improvement over the fourth quarter of 2001 which was impacted by the aftermath of the September 11 attacks. Results benefited from a $16 million after-tax reduction in goodwill amortization as a result of a new accounting rule pertaining to goodwill and intangible assets that became effective on January 1, 2002, offset by an increase in depreciation expense of $12 million pretax or 10.7% when compared to the fourth quarter of 2001 due to prior year`s renovation programs, the repositioning and acquisition of certain hotels and investments in technology. EPS including discontinued operations was $0.45 in the fourth quarter of 2002 compared to a loss of $0.28 in the same period of 2001.
Year Ended December 31, 2002:
For the year ended December 31, 2002, Total Revenues were $3.879 billion when compared to $3.967 billion in the same period in 2001. EPS was $1.20 compared to $0.70 in 2001. EPS excluding special items was $0.98 compared to $1.00 in the prior year, and excludes net benefits for special items of $45 million (after-tax) in 2002 and net charges of $60 million (after-tax) in 2001. Income from continuing operations increased to $246 million compared to $145 million in the same period of 2001. EPS including discontinued operations was $1.73 compared to $0.70 in 2001.
Comments from the CEO:
“2002 was a challenging year,” said Barry S. Sternlicht, Chairman and CEO. “The much anticipated global economic recovery never materialized and business travel remains subdued in the uncertain environment. Booking patterns remain extremely short and forecasting, as well as pricing, in this environment is extremely challenging.”
“Nonetheless, several positive trends emerged in the fourth quarter of 2002 which we expect to continue into 2003. First, our European and Asian operations are quite strong both before and after currency adjustments. REVPAR is and will likely remain higher in these divisions than in North America and we are rapidly expanding our distribution in key Asian markets, maintaining our combined #1 market share in the upscale travel segment. Latin America, challenged with economic and political unrest, remains profitable despite a very tough operating environment. Our vacation ownership division had an excellent year with significant momentum that we expect to extend well into 2003 and beyond. The strength in these areas, and a projected flat Latin America performance, will help offset the general weakness in domestic operations and continued pressures of health care costs, real estate taxes and insurance. Anticipating this, we have taken and continue to take costs out of our system while continuing to improve guest satisfaction in every one of our brands year over year driven by the Sheraton Service Promise and Westin`s product innovations. Several of our brands delivered systemwide double digit REVPAR increases, gaining important market share individually and for the Company as a whole.”
Concluding, Mr. Sternlicht said, “With the prospects of a war imminent, forecasting is a difficult exercise. Should the world`s economies recover earlier than is generally forecasted, our businesses are levered to the upside.”
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