Hiltons_2006_Annual_Report - Hilton Hotels Corporation 2006...

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Hilton Hotels Corporation 2006 Annual Report | Growing Brands Globally
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Cover: Hilton Fiji Beach Resort and Spa
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(in millions, except per share amounts) Revenue Operating income Net income Net income per share – diluted 2005 $4,437 805 460 1.13 2006 $8,162 1,274 572 1.39 Percent Change 84 58 24 23 % Revenue (in millions) Operating Income (in millions) RevPAR (comparable domestic owned hotels) 02 03 04 05 06 $603 $515 $658 $805 $1,274 $3,816 $3,819 $4,146 $4,437 $8,162 $120 $118 $128 $144 $157 Financial Summary 1
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Dear Fellow Shareholders: For an organization with the long and storied history of Hilton Hotels Corporation, 10 years is but a blink of an eye. It is remarkable, then, to refl ect on our company’s last decade and the transfor- mation that has taken place in that relatively short time span. This period has seen a level of activity, accomplishment, growth and value creation unsurpassed in Hilton’s history. Consider: Acquisitions of Bally’s (and the subsequent spin-off of our gaming business), Promus, Hilton International and individual hotel properties that fundamentally changed the complexion of our company. The transformation from a company focused on a few hotel-casinos and big hotels in the US to a worldwide enterprise encompassing approximately 80 countries. Moving from 275 hotels to more than 2,900 around the world. Expanding from a single brand (albeit the most renowned in the world) to a collection of nine respected brand names serving a broad range of travelers. An emphasis on asset ownership that has given way to a focus on manage- ment and franchise fees. The development of a thriving vacation ownership business. And, perhaps most important, the building of the ± nancial and human resource strength that has enabled Hilton to emerge as the world’s premier lodging company. Consider this one last fact in thinking about the bottom line…shareholder value: in 1995, Hilton’s market capitalization was $3.5 billion; at year-end 2006, it was $13.5 billion. Adjusting for spin-offs and stock splits, the value of the company’s stock increased 240 percent during this period. 1 2 2 geographic mix (rooms)* Americas 80% Nordic 5% United Kingdom and Ireland 3% Europe and Africa 6% Middle East and Asia Paci± c 6% *at 12/31/06
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That was then. ..let’s talk about today, and tomorrow. We spent the last 10 years creating this leadership position; now, both our challenge and our opportunity is to build on it. Our strategy is to continue growing our fee-based business by expand- ing the number of our hotels and our hotel brands in new and existing markets both domestically and internationally, while maintaining a strong balance sheet. The power of our brands, the worldwide respect afforded the Hilton name, our presence in the world’s most in-demand markets, our F nancial resources, the strength of our systems and the talent and experience of our 105,000 team members give us a leg up on the competition.
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Hiltons_2006_Annual_Report - Hilton Hotels Corporation 2006...

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