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Starwood reports very strong fourth quarter

starwood fritsvanpaasschen EDITED

Starwood has reported a very strong fourth quarter, with income almost doubling year-on-year.

Starwood Hotels and Resorts Worldwide has reported EPS from continuing operations for the fourth quarter of 2014 of USD$1.40 compared to USD$0.67 in the fourth quarter of 2013.

Excluding special items, EPS from continuing operations was USD$0.97 for the fourth quarter of 2014 compared to USD$0.73 in the fourth quarter of 2013.

Special items in the fourth quarter of 2014, which totalled an after-tax benefit of USD$74 million, primarily related to net gains on the sales of hotels. Special items in the fourth quarter of 2013 totalled an after-tax charge of USD$13 million.

Excluding special items, the effective income tax rate in the fourth quarter of 2014 was 24.5% compared to 33.0% in the fourth quarter of 2013. The decrease is primarily related to the geographical mix of operational results.

Income from continuing operations was USD$245 million in the fourth quarter of 2014, compared to USD$128 million in the fourth quarter of 2013. Excluding special items, income from continuing operations was USD$171 million in the fourth quarter of 2014, compared to USD$141 million in the fourth quarter of 2013.

Net income was USD$234 million and USD$1.33 per share in the fourth quarter of 2014, compared to USD$128 million and USD$0.67 per share in the fourth quarter of 2013.

Starwood’s CEO, Frits van Paasschen, said: “We delivered another solid year of performance. Worldwide RevPAR was up nearly 6% in constant dollars, and both Adjusted EBITDA and EPS were ahead of our expectations. We posted another year of rising REVPAR index, a sign of the global strength of our brands and platform. We signed 175 deals for new hotels, our second best signing year in Starwood’s history. Around the world, we opened nearly 15,000 rooms, including our 200th Westin.

“In 2014, we returned USD$2.4 billion to shareholders through our dividends and stock repurchases. We were able to deliver this amount by reaching our long-term target leverage, with cash flow from operations, and asset sales. During the year, we sold eight hotels for gross proceeds of over USD$800 million.

“As a further step in our asset-light strategy, we announced today our plans to spin-off our vacation ownership business in 2015. This transaction will create a new pure-play vacation ownership company with a seasoned management team, strong balance sheet, and great prospects for growth.

“Looking ahead to 2015, we expect more strong growth in global lodging. The U.S. economy looks set to continue its growth, and in the U.S. hotel business, limited new supply points to rising rates for some time to come. In Europe, we are optimistic that hotel performance will improve modestly. In other markets around the world, conditions are mixed. However, the underlying secular growth in demand for high-end hotels continues, and we are bullish on the prospects for our business and industry over the long-term.”

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