EXHIBIT 12(1)
PROMUS HOTEL CORPORATION
COMPUTATIONS OF RATIOS
(IN THOUSANDS, EXCEPT RATIO AMOUNTS)
FISCAL YEAR
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1995 1994 1993
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RETURN ON REVENUES
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Revenues..................................................... 236,020 222,561 214,565
Return...................................................... 18.5% 16.3% 7.9%
RETURN ON AVERAGE INVESTED CAPITAL
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Add interest expense after tax............................... 18,029 17,686 18,184
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$ 61,789 $ 54,005 $ 35,110
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Average invested capital..................................... $ 424,861 $395,365 $441,401
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Return...................................................... 14.5% 13.7% 8.0%
RETURN ON AVERAGE EQUITY
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Average equity............................................... 155,188 161,765 196,376
Return...................................................... 28.2% 22.5% 8.6%
RATIO OF EARNINGS TO FIXED CHARGES
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Add
Provisions for income taxes................................. 31,819 26,798 13,869
Interest expense............................................ 31,138 30,759 33,061
Interest included in rental expense......................... 1,848 1,310 1,284
Amortization of capitalized interest........................ 610 319 469
Dividends received from equity investments.................. 877 790 441
Income from equity investments.............................. (1,452) (1,675) (1,540)
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Earnings as defined....................................... $ 108,600 $ 94,620 $ 64,510
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Fixed charges
Interest expense............................................ $ 31,138 $ 30,759 $ 33,061
Capitalized interest........................................ 1,428 4 -
Interest included in rental expense......................... 1,848 1,310 1,284
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Total fixed charges....................................... $ 34,414 $ 32,073 $ 34,345
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Ratio of earnings to fixed charges...................... 3.2 3.0 1.9
CURRENT RATIO
Current assets............................................... $ 23,426 $ 18,772 $ 17,471
Current liabilities.......................................... 54,851 28,544 32,050
Ratio....................................................... 0.4 0.7 0.5
RATIO OF BOOK EQUITY TO DEBT
Book equity as of December 31................................ $ 167,367 $143,008 $180,522
Total debt................................................... 229,757 189,258 173,378
Ratio....................................................... 0.7 0.8 1.0
RATIO OF MARKET EQUITY TO DEBT
Market equity as of December 31.............................. $1,143,008 - -
Total debt................................................... 229,757 - -
Ratio....................................................... 5.0 - -
EXHIBIT 12(1) (CONTINUED)
PROMUS HOTEL CORPORATION
COMPUTATIONS OF RATIOS
(IN THOUSANDS, EXCEPT RATIO AMOUNTS)
FISCAL YEAR
----------------------------------
1995 1994 1993
---------- -------- --------
RATIO OF EBITDA TO INTEREST PAID
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Add/(less)
Income tax provision........................................ 31,819 26,798 13,869
Interest expense............................................ 31,138 30,759 33,061
Interest expense of nonconsolidated affiliates.............. (12,899) (12,749) (12,707)
Depreciation and amortization............................... 25,263 21,326 25,028
Deferred finance charge amortization........................ (785) (733) (846)
Amortization of debt discounts and premiums................. (8) (45) (869)
Net earnings of and distributions from nonconsolidated
affiliates................................................ (61) 2,969 2,819
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Earnings before interest, taxes, depreciation and
amortization (EBITDA)................................... $ 118,227 $104,644 $ 77,281
========== ======== ========
Interest expense............................................. $ 31,138 $ 30,759 $ 33,061
Add/(less)
Interest expense of nonconsolidated affiliates.............. (12,899) (12,749) (12,707)
Capitalized interest........................................ 1,428 4 -
Net change in accruals...................................... (1,117) - 125
Deferred finance charge amortization........................ (785) (733) (846)
Amortization of debt discounts and premiums................. (8) (45) (869)
Other....................................................... (246) (143) (128)
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Interest paid............................................. $ 17,511 $ 17,093 $ 18,636
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Ratio of EBITDA to interest paid........................ 6.8 6.1 4.1
RATIO OF DEBT TO EBITDA
Total debt................................................... $ 229,757 $189,258 $173,378
========== ======== ========
Net income before extraordinary items........................ $ 43,760 $ 36,319 $ 16,926
Add/(less)
Income tax provision........................................ 31,819 26,798 13,869
Interest expense............................................ 31,138 30,759 33,061
Interest expense of nonconsolidated affiliates.............. (12,899) (12,749) (12,707)
Depreciation and amortization............................... 25,263 21,326 25,028
Deferred finance charge amortization........................ (785) (733) (846)
Amortization of debt discounts and premiums................. (8) (45) (869)
Net earnings of and distributions from nonconsolidated
affiliates................................................ (61) 2,969 2,819
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Earnings before interest, taxes, depreciation and
amortization (EBITDA)................................... $ 118,227 $104,644 $ 77,281
========== ======== ========
Ratio of total debt to EBITDA........................... 1.9 1.8 2.2