Hilton Reports Solid 4Q Results

BEVERLY HILLS, CA— Hilton Hotels Corp. reported solid financial results for the fourth quarter and fiscal year that ended Dec. 31, 2002. The company noted increases in total revenue and net income for the fourth quarter of 2002 compared to that of 2001, with its owned hotels performing particularly well. In addition, all hotel brands reported increases in RevPAR for the fourth quarter 2002 as compared to 2001. Hilton reported fourth quarter net income of $40 million, versus $4 million in the 2001 quarter. Diluted net income per share was $.11, compared with $.01 in the fourth quarter 2001. Pro forma diluted EPS in the fourth quarter 2001 (including $.03 per share from the new accounting rules pertaining to non-amortization of goodwill and certain intangible assets) was $.04. For the full year 2002, Hilton reported net income of $198 million, versus $166 million in 2001. Diluted net income per share was $.53 for the year compared to $.45 in 2001. Hilton reported fourth quarter 2002 total revenue of $957 million, up 8% from $887 million in the 2001 period. Total company earnings before interest, taxes, depreciation, amortization and non-cash items (EBITDA) was $232 million, compared with $194 million in the 2001 quarter, a 20% increase. Total operating income was $136 million compared to $79 million in the 2001 fourth quarter. Across all brands, EBITDA and operating income from the companys owned hotels (majority owned and controlled hotels) totaled $163 million and $102 million, respectively, in the fourth quarter. Comparable EBITDA increased 29% from the 2001 period. RevPAR from comparable owned properties increased 13.2% in the quarter; occupancy at these hotels showed an increase of seven points to 68.3%, and average daily rate increased 1.6% to $151.76. Particularly strong results were posted by Hiltons owned properties in such key markets as New York, Chicago, Boston and Hawaii, with hotels in these markets showing both high occupancy levels and significant RevPAR growth. Comparable RevPAR at the companys U.S. owned-or-operated hotels increased 9.4% in the fourth quarter, compared to the 2001 period, which had an occupancy increase of 5.2 points to 65.4%, and an ADR increase of 0.6% to $126.45. Fourth quarter system-wide RevPAR at each of the Hilton brands increased. Hilton RevPAR climbed 10.7%; Doubletree rose 4.0%; Embassy Suites increased 3.8%; Hilton Garden Inn rose 3.8%; Homewood Suites by Hilton increased 3.1%; and Hampton Inn inched up 2.6%. Hilton also noted that in the fourth quarter, it added 35 properties and 4,256 rooms to its system. The company lowered its earnings outlook, however, noting it expects first-quarter earnings of about $.05 per share on revenue of $930 million. For the full year it expects to earn in the mid to high $.40-per-share range on revenue of about $4 billion.