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Press Release: Starwood Hotels & Resorts Worldwide, Inc.
October 22, 2004
WHITE PLAINS, NY -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) ("Starwood" or the "Company")
yesterday reported EPS from continuing operations for the third quarter of 2004 of $0.49 compared to $0.23 in the
third quarter of 2003. Excluding special items, which primarily relate to a $37 million (pre-tax) reversal of a
reserve as a result of the favorable outcome of a litigation matter, EPS from continuing operations was $0.40 for
the third quarter of 2004 compared to $0.24 in the third quarter of 2003. Income from continuing operations was
$105 million in the third quarter of 2004 compared to $47 million in 2003. Excluding special items, income from
continuing operations was $85 million for the third quarter of 2004 compared to $49 million in 2003. Net income
(after discontinued operations) was $107 million and EPS was $0.50 in the third quarter of 2004 compared to $48
million and EPS of $0.23 in the third quarter of 2003. Selling, general, administrative and other in the third
quarter of 2004 includes cost of sales from our new Bliss spa and beauty products business (the revenue from this
business is included in management fees, franchise fees and other income). The effective tax rate for the third
quarter of 2004 was 19.5%.
Barry S. Sternlicht, Executive Chairman, said: "I am pleased with our industry leading results in the quarter,
particularly at the property margin level and the 8.5% gain in average rates in North America. For the fourth quarter
in a row, we are delighted to be able to raise our EBITDA and earnings guidance for the year once again. The travel
markets, both group and transient, remain strong. We remain optimistic. On the strength of our six brands, our
global development pipeline is gaining momentum. Starwood Vacation Ownership is producing superior results. Europe
and Latin America are beginning to join Asia in the global rebound. Based on our confidence in this year and next,
we repurchased significant stock in the quarter bringing total repurchases to $230 million year-to-date and through
careful capital spending, were still able to pay down our debt at the same time. Our company's balance sheet is
in its best shape ever."
"Entering 2005, our prospects remain bright, particularly given that several material one time costs absorbed
in 2004 are unlikely to be repeated. Most importantly, I am excited by the arrival of our new CEO, Steve Heyer,
who will take our great company to new places as he builds our team and our brands."
Steven J. Heyer, CEO, said "Clearly our brands, bolstered by our innovation leadership, have captured the
imagination and loyalty of travelers around the globe. Two years of uninterrupted share gains are a tribute to
Barry's leadership and our associate's dedication to excellence. And after just a short period of time here, I
already see an excitement level and a passion for creating even greater shareholder value and marketplace strength.
I look forward to working with Barry and the team to take our game to the next level."
Operating Results:
Third Quarter Ended September 30, 2004
Cash flow from operations was $195 million compared to $289 million in 2003. The decrease primarily relates to
the increase in restricted cash from pre-sales of vacation ownership interests. Total Company Adjusted EBITDA was
$291 million compared to $233 million in 2003.
Owned, Leased and Consolidated Joint Venture Hotels
REVPAR for Same-Store Owned Hotels worldwide and in North America increased 12.3% and 12.1%, respectively, when
compared to 2003. REVPAR at Same-Store Owned Hotels in North America increased 17.3% at Sheraton, 10.2% at St.
Regis/Luxury Collection, 6.8% at W, and 6.7% at Westin. REVPAR growth was particularly strong at the Company's
owned hotels in New York, Boston and Toronto. REVPAR was weaker at owned hotels in New Orleans and Indianapolis.
Revenue from transient travel was up 10.5% in North America when compared to 2003. Internationally, Same-Store
Owned Hotel REVPAR increased 12.8%, with Latin America up 16.8%, Asia Pacific up 15.2%, and Europe up 11.5%. Excluding
the favorable effects of foreign exchange, REVPAR increased 5.4% internationally.
Total revenues at Same-Store Owned Hotels worldwide increased 10.6% to $792 million when compared to $716 million
in 2003 while costs and expenses at these hotels increased 7.1% to $603 million in 2004 compared to $563 million
in 2003. Total revenues at Same-Store Owned Hotels in North America increased 10.4% to $567 million in 2004 when
compared to $513 million in 2003 while costs and expenses at these hotels increased 6.1% to $436 million when compared
to $411 million in 2003, resulting in significantly increased margins of approximately 312 basis points.
System-wide REVPAR; Management/Franchise Fees
System-wide (owned, managed and franchised) branded REVPAR for Same-Store Hotels in North America increased 10.5%:
Westin 12.0%, Sheraton 11.3%, W Hotels 6.4%, St. Regis/Luxury Collection 5.2%, and Four Points by Sheraton 5.1%.
For the eighth quarter in a row, total Company market share in North America increased for the Company's owned
and managed hotels as well as for system-wide hotels. Total management and franchise fees were $82 million, up
$13 million, or 18%, from last year. Base management fees (including license fees) increased approximately 19%
due to the strong top-line growth.
Starwood Vacation Ownership
Vacation ownership revenue, which excludes gains on sales of notes receivable, was up $46 million, or 36% to $175
million in the third quarter of 2004 when compared to 2003 primarily due to sales at our resorts in Aspen, Maui,
Orlando and Scottsdale. Contract sales, excluding fractional sales at the St. Regis Aspen, were up 30.6%. The average
price per timeshare unit sold increased approximately 7.9% to $20,049, and the number of contracts signed increased
approximately 21.0% in the third quarter of 2004 when compared to 2003. In May 2004, the Company began selling
fractional units at the St. Regis in Aspen, Colorado. The Company is in the process of converting 98 guest rooms
at this hotel into 25 fractional units, which will be sold in four week intervals, and 20 new hotel rooms. The
fractional project is expected to be completed towards the end of 2004. During the third quarter of 2004, the Company
sold $25 million of notes receivable and recognized a gain on sale of $3 million. During the third quarter of 2003,
the Company did not have any sales of vacation ownership receivables. New development planning continues for the
owned Sheraton Kauai, the owned land at the Princeville resort in Kauai, the owned Sheraton Cancun, as well as
other Mexico properties, and a second phase at the Westin Mission Hills Resort.
Brand Development/Unit Growth
During the third quarter, the Company signed 17 full service hotel management and franchise contracts (representing
approximately 4,900 rooms), including W Hong Kong (383 rooms), Sheraton Phoenix Convention Center (1,000 rooms),
Sheraton Sharonville (256 rooms), the Westin Lombard (500 rooms), Sheraton Changsha (330 rooms), and opened 5 new
hotels and resorts, including W Seoul Walkerhill (Seoul, South Korea, 253 rooms), and the Aladdin Resort &
Casino (Las Vegas, Nevada, 2,567 rooms). The Company had approximately 150 full service hotels and approximately
38,000 rooms in its active global development pipeline at September 30, 2004, with roughly one half of that number
in international locations. Additionally, plans are underway to develop eight new Bliss spas in W hotels, with
the first new Bliss spa opening at the W New York (20,000 square feet) in December 2004 and our first Remede spa
at the St. Regis in Aspen.
Results for the Nine Months Ended September 30, 2004:
EPS from continuing operations for the nine months ended September 30, 2004 was $1.21 compared to $0.08 in the
same period of 2003. Excluding special items, EPS from continuing operations was $1.05 in 2004 compared to $0.43
in 2003. Income from continuing operations was $258 million in 2004 compared to $17 million in 2003. Excluding
special items, income from the continuing operations was $225 million in 2004 compared to $89 million in 2003.
Net income (after discontinued operations) was $295 million and EPS was $1.38 in 2004 compared to $222 million
and $1.08 in 2003.
Cash flow from operations for the nine months ended September 30, 2004 was $377 million compared to $511 million
in the same period of 2003. The decrease primarily relates to the increase in restricted cash from pre-sales of
vacation ownership interests. Total Company Adjusted EBITDA for the nine months ended September 30, 2004 was $823
million compared to $667 million in the same period in 2003.
Capital:
Gross capital spending during the quarter included approximately $54 million in renovations of hotel assets including
construction capital at the St. Regis in Aspen, Colorado, the Boston Park Plaza, and the Sheraton Hotel and Towers
in New York. Investment spending on VOI capital assets (primarily inventory build) was $48 million, including VOI
construction at Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii and at Westin Mission Hills Resort in Rancho
Mirage, California and construction of fractional units at The St. Regis in Aspen, Colorado. Additionally during
the quarter, further investment spending of $55 million included the ongoing development of the St. Regis Museum
Tower in San Francisco (260 hotel rooms and 102 condominium units) and the investment in the Aladdin Resort &
Casino (2,500 rooms, to be converted to the Planet Hollywood Resort & Casino, a Sheraton hotel). To date, the
Company has invested $200 million in the St. Regis Museum Tower Project, which is expected to open in mid-2005.
The Company expects to realize gross proceeds of approximately $200 million from the sale of the project's condominiums.
The Company began taking reservations for the condominiums in September 2004 and expects to close on these sales
in the fourth quarter of 2004.
Share Repurchase:
For the quarter ended September 30, 2004, the Company repurchased 3,382,100 shares at a total cost of approximately
$146.0 million (an average cost of $43.14 per share). In the nine months ended September 30, 2004, the Company
repurchased 5,543,683 shares at a total cost of approximately $232.0 million (an average cost of $41.82 per share).
At September 30, 2004, approximately $374 million remained available under the Company's Board authorized share
repurchase program, and Starwood had approximately 208 million shares outstanding (including partnership units
and exchangeable preferred shares).
Balance Sheet:
At September 30, 2004, the Company had total debt of $4.501 billion and cash and cash equivalents (including total
restricted cash) of $528 million, or net debt of $3.973 billion, compared to net debt of $4.037 billion at the
end of the second quarter of 2004. In addition, the Company has an approximate $200 million investment in the senior
debt of Le Meridien hotels.
At September 30, 2004, debt was approximately 76% fixed rate and 24% floating rate and its weighted average maturity
was 5.1 years with a weighted average interest rate of 5.67%. The Company had cash (including total restricted
cash) and availability under domestic and international revolving credit facilities of approximately $1.482 billion.
In August 2004, the Company completed a $300 million addition to the term loan under its existing Senior Credit
Facility. The facility now consists of a $1.0 billion revolving loan and a $600 million term loan, each maturing
in 2006 with a one year extension option and a current interest rate of LIBOR plus 1.25%. The proceeds were used
to repay a portion of the existing revolving credit facility and for general corporate purposes. Over the next
twelve months the Company has approximately $243 million of debt maturing.
Outlook:
All comments in the following paragraphs and certain comments in this release above are deemed to be forward-looking
statements. These statements reflect expectations of the Company's performance given its current base of assets
and its current understanding of external economic and geo-political environments. Actual results may differ materially.
For the fourth quarter of 2004, if REVPAR at Same-Store Owned Hotels in North America is up 8% - 10% versus the
same period a year ago:
For the full year 2004, if REVPAR at Same-Store Owned Hotels in North America increases approximately 11% - 12% versus the full year 2003:
For the full year 2005, excluding the effects of the proposed Share-Based Payment amendment to FASB Statement No. 123, if REVPAR at Same-Store Owned Hotels in North America increases approximately 6% - 8% versus the full year 2004:
Special Items:
The Company recorded net credits of $20 million (after-tax) for special items in the third quarter of 2004 compared
to $2 million of net charges (after-tax) in the same period of 2003.
Special items in the third quarter of 2004 primarily relate to the reversal of a reserve due to a favorable judgment
in a litigation matter.
The following represents a reconciliation of income from continuing operations before special items to income from
continuing operations after special items (in millions, except per share data):
The Company has included the above supplemental information concerning special items to assist investors in
analyzing Starwood's financial position and results of operations. The Company has chosen to provide this information
to investors to enable them to perform meaningful comparisons of past, present and future operating results and
as a means to emphasize the results of core on-going operations.
Starwood conducted a conference call to discuss the third quarter financial results at 10:30 a.m. (EST) yesterday.
The conference call will be available through simultaneous webcast in the Investor Relations/Press Releases section
of the Company's website at www.starwood.com. A replay of the conference call will also be available from 1:30
p.m. (EST) yesterday through Thursday, October 28 at 12:00 midnight (EST) on both the Company's website and via
telephone replay at (719) 457-0820 (access code 951844).
Definitions:
All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations. All
references to "net capital expenditures" means gross capital expenditures for timeshare and fractional
inventory less cash inflows from the sale of inventory and receivables. EBITDA represents net income before interest
expense, taxes, depreciation and amortization. The Company believes that EBITDA is a useful measure of the Company's
operating performance due to the significance of the Company's long-lived assets and level of indebtedness. EBITDA
is a commonly used measure of performance in its industry which, when considered with GAAP measures, the Company
believes gives a more complete understanding of the Company's ability to service debt, fund capital expenditures,
pay income taxes and pay cash distributions. It also facilitates comparisons between the Company and its competitors.
The Company's management has historically adjusted EBITDA (i.e. "Adjusted EBITDA" and "Adjusted
EBITDA excluding assets sold in 2003") when evaluating operating performance for the total Company as well
as for individual properties or groups of properties because the Company believes that the inclusion or exclusion
of certain recurring and non-recurring items, such as the special items described on page 7 of this release and/or
revenues and costs and expenses from hotels sold, is necessary to provide the most accurate measure of core operating
results and as a means to evaluate comparative results. The Company's management also uses Adjusted EBITDA as a
measure in determining the value of acquisitions and dispositions and it is used in the annual budget process.
Due to recent guidance from the Securities and Exchange Commission, the Company now does not reflect such items
when calculating EBITDA, however the Company continues to adjust for these special items and refers to this measure
as Adjusted EBITDA. The Company has historically reported this measure to its investors and believes that the continued
inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more
meaningful comparisons of past, present and future operating results and provides a means to evaluate the results
of its core on-going operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations
as defined by GAAP and such metrics should not be considered as an alternative to net income, cash flow from operations
or any other performance measure prescribed by GAAP. The Company's calculation of EBITDA and Adjusted EBITDA may
be different from the calculations used by other companies and, therefore, comparability may be limited.
All references to Same-Store Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels,
excluding hotels sold to date and under significant renovation or for which comparable results are not available.
REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
All references to contract sales reflect vacation ownership sales before revenue adjustments for percentage of
completion accounting methodology.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with
more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With
internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts
including: St. Regis®, The Luxury Collection®, Sheraton®, Westin®, Four Points® by Sheraton,
W® brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high
quality vacation interval ownership resorts. For more information, please visit www.starwood.com.
(Note: This press release contains forward-looking statements within the meaning of federal securities regulations.
Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other
factors that may cause actual results to differ materially from those anticipated at the time the forward-looking
statements are made. Further results, performance and achievements may be affected by general economic conditions
including the timing and robustness of a recovery from the current global economic downturn, the impact of war
and terrorist activity, business and financing conditions, foreign exchange fluctuations, cyclicality of the real
estate and the hotel and vacation ownership businesses, operating risks associated with the hotel and vacation
ownership businesses, relationships with associates, customers and property owners, the impact of the internet
reservation channels, our reliance on technology, domestic and international political and geopolitical conditions,
competition, governmental and regulatory actions (including the impact of changes in U.S. and foreign tax laws
and their interpretation), travelers' fears of exposure to contagious diseases, risk associated with the level
of our indebtedness, risk associated with potential acquisitions and dispositions, and other circumstances and
uncertainties. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange
Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable
assumptions, we can give no assurance that our expectations will be attained or that results will not materially
differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result
of new information, future events or otherwise.)
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per Share data)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ --------------------------
2004 2003 % Variance 2004 2003 % Variance
------ ------ ---------- ------- ------- ----------
Revenues
Owned, leased and
consolidated
joint venture
$811 $735 10.3 hotels $2,448 $2,288 7.0
Vacation
ownership sales
175 129 35.7 and services 443 327 35.5
Management fees,
franchise fees
105 68 54.4 and other income 299 184 62.5
Other revenues
from managed and
franchised
245 204 20.1 properties(a) 736 634 16.1
------ ------ ---------- ------- ------- ----------
1,336 1,136 17.6 3,926 3,433 14.4
Costs and
Expenses
Owned, leased and
consolidated
joint venture
617 577 (6.9) hotels 1,864 1,781 (4.7)
Vacation
132 98 (34.7) ownership 334 252 (32.5)
Selling, general,
administrative
74 45 (64.4) and other 244 159 (53.5)
Restructuring and
other special
(37) (1) n/m credits, net (37) (1) n/m
103 100 (3.0) Depreciation 306 309 1.0
4 4 - Amortization 13 14 7.1
Other expenses
from managed and
franchised
245 204 (20.1) properties(a) 736 634 (16.1)
------ ------ ---------- ------- ------- ----------
1,138 1,027 (10.8) 3,460 3,148 (9.9)
198 109 81.7 Operating income 466 285 63.5
Gain on sale of
VOI notes
3 1 n/m receivable 11 6 83.3
Equity earnings
from
unconsolidated
6 2 n/m ventures 22 10 n/m
Interest expense,
net of interest
income of $1,
$2, $2 and $3
(64) (69) 7.2 (b) (193) (219) 11.9
Loss on asset
dispositions and
(4) (3) (33.3) impairments, net (8) (179) 95.5
------ ------ ---------- ------- ------- ----------
Income (loss)
from continuing
operations
before taxes and
139 40 n/m minority equity 298 (97) n/m
Income tax
benefit
(34) 7 n/m (expense) (41) 113 n/m
Minority equity
- - - in net loss 1 1 -
------ ------ ---------- ------- ------- ----------
Income from
continuing
105 47 n/m operations 258 17 n/m
Discontinued
operations:
Loss from
operations,
net of taxes
of $0, $0, $0
- - - and $1 (c) - (1) n/m
Gain on
disposition
2 1 n/m (d) 37 206 (82.0)
------ ------ ---------- ------- ------- ----------
$107 $48 n/m Net income $295 $222 32.9
====== ====== ========== ======= ======= ==========
Earnings Per
Share -- Basic
Continuing
$0.51 $0.23 n/m operations $1.25 $0.09 n/m
Discontinued
0.01 0.01 - operations 0.18 1.01 (82.2)
------ ------ ---------- ------- ------- ----------
$0.52 $0.24 n/m Net income $1.43 $1.10 30.0
====== ====== ========== ======= ======= ==========
Earnings Per
Share -- Diluted
Continuing
$0.49 $0.23 n/m operations $1.21 $0.08 n/m
Discontinued
0.01 - n/m operations 0.17 1.00 (83.0)
------ ------ ---------- ------- ------- ----------
$0.50 $0.23 n/m Net income $1.38 $1.08 27.8
====== ====== ========== ======= ======= ==========
Weighted average
208 203 number of Shares 207 202
====== ====== ======= =======
Weighted average
number of Shares
assuming
215 208 dilution 214 205
====== ====== ======= =======
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
September 30, December 31,
2004 2003
-------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $231 $427
Restricted cash 189 81
Accounts receivable, net of allowance
for doubtful accounts of $56 and $53 438 418
Inventories 320 232
Prepaid expenses and other 177 104
-------------- ------------
Total current assets 1,355 1,262
Investments 463 415
Plant, property and equipment, net 6,944 7,106
Goodwill and intangible assets, net 2,509 2,488
Other assets (a) 737 623
-------------- ------------
$12,008 $11,894
============== ============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (b) $243 $233
Accounts payable 154 171
Accrued expenses 688 836
Accrued salaries, wages and benefits 270 228
Accrued taxes and other 182 176
-------------- ------------
Total current liabilities 1,537 1,644
Long-term debt (b) 4,258 4,393
Deferred income taxes 840 898
Other liabilities 655 574
-------------- ------------
7,290 7,509
-------------- ------------
Minority interest 27 28
-------------- ------------
Exchangeable units and Class B preferred
shares, at redemption value of $38.50 - 31
-------------- ------------
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares
of the Trust; $0.01 par value;
authorized 30,000,000 shares;
outstanding 597,983 and 480,880
shares at September 30, 2004 and
December 31, 2003, respectively - -
Corporation common stock; $0.01 par
value; authorized 1,050,000,000
shares; outstanding 205,944,530 and
201,812,126 shares at September 30,
2004 and December 31, 2003,
respectively 2 2
Trust Class B shares of beneficial
interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding
205,944,530 and 201,812,126 shares at
September 30, 2004 and December 31,
2003, respectively 2 2
Additional paid-in capital 5,043 4,952
Deferred compensation (18) (9)
Accumulated other comprehensive loss (346) (334)
Retained earnings (accumulated deficit) 8 (287)
-------------- ------------
Total stockholders' equity 4,691 4,326
-------------- ------------
$12,008 $11,894
============== ============
_________
(a) Includes restricted cash of $108 million and $19 million at
September 30, 2004 and December 31, 2003, respectively.
(b) Excludes Starwood's share of unconsolidated joint venture debt
aggregating approximately $414 million and $410 million at
September 30, 2004 and December 31, 2003, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Historical Data
(In millions)
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ----------------------
2004 2003 % Variance 2004 2003 % Variance
------ ------ ---------- ----- ----- ----------
Reconciliation of Net
Income to EBITDA and
Adjusted EBITDA
$107 $48 n/m Net income $295 $222 32.9
68 76 (10.5) Interest expense(a) 209 242 (13.6)
Income tax (benefit)
35 (7) n/m expense(b) 8 (72) n/m
111 107 3.7 Depreciation(c) 330 330 -
6 5 20.0 Amortization (d) 18 18 -
------ ------ ---------- ----- ----- ----------
327 229 42.8 EBITDA 860 740 16.2
Adjustment to costs
associated with
construction
- 3 n/m remediation (4) 3 n/m
Loss on asset
dispositions and
4 3 33.3 impairments, net 8 179 (95.5)
Restructuring and
other special
(37) (1) n/m credits, net (37) (1) n/m
Discontinued
(3) (1) n/m operations(e) (4) (254) 98.4
------ ------ ---------- ----- ----- ----------
291 233 24.9 Adjusted EBITDA 823 667 23.4
Hotels Sold in 2003
(20 hotels) (f)
- (7) n/m Revenues - (110) n/m
- 6 n/m Costs and expenses - 89 n/m
------ ------ ---------- ----- ----- ----------
Adjusted EBITDA
excluding assets sold
$291 $232 25.4 in 2003 $823 $646 27.4
====== ====== ========== ===== ===== ==========
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2004 2003 2004 2003
-------- --------- -------- --------
Cash Flow Data
$107 $48 Net income $295 $222
Exclude:
(2) (1) Discontinued operations, net (37) (205)
-------- --------- -------- --------
105 47 Income from continuing operations 258 17
(Increase) decrease in restricted
(67) 64 cash (197) 13
Adjustments to income from
continuing operations, changes
157 178 in working capital and other 315 471
-------- --------- -------- --------
Cash from continuing
195 289 operations 376 501
Cash from discontinued
- - operations 1 10
-------- --------- -------- --------
$195 $289 Cash from operating activities $377 $511
======== ========= ======== ========
Cash from (used for) investing
$(80) $308 activities $(324) $837
======== ========= ======== ========
Cash used for financing
$(50) $(132) activities $(251) $(678)
======== ========= ======== ========
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Future Performance
(In millions)
Twelve Months Ended
December 31, 2004
--------------------
Income from continuing operations before special
items $317
Special items - after-tax (see page 7) 33
---------------
Income from continuing operations $350
===============
EPS from continuing operations before special
items $1.48
Special items - after-tax (see page 7) .15
---------------
EPS from continuing operations $1.63
===============
Three Months Twelve Months Twelve Months
Ended Ended Ended
December 31, December 31, December 31,
2004 2004 2005
------------ ------------- -------------
Net income $92 $387 $390
Interest expense 73 282 292
Income tax expense 22 30 138
Depreciation and amortization 120 468 480
------------ ------------- -------------
EBITDA $307 $1,167 $1,300
Loss on asset dispositions and
impairments, net - 8 -
Discontinued operations - (4) -
Restructuring and other
special credits, net - (37) -
Adjustment to costs associated
with construction remediation - (4) -
------------ ------------- -------------
Adjusted EBITDA $307 $1,130 $1,300
============ ============= =============
Twelve Months Ended
December 31, 2003
-------------------
Net income $309
Interest expense 312
Income tax benefit (73)
Depreciation 438
Amortization 26
----------
EBITDA 1,012
Loss on asset dispositions and impairments, net 183
Discontinued operations (252)
Restructuring and other special credits, net (9)
Costs associated with construction remediation 4
----------
Adjusted EBITDA 938
Hotels sold in 2003
Revenues (110)
Costs and expenses 89
----------
Adjusted EBITDA excluding hotels sold in 2003 $917
==========
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations -
Same Store Owned Hotel Revenue and Expenses
(In millions)
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------------
Same Store
Owned Hotels (1)
2004 2003 % Variance Worldwide 2004 2003 % Variance
----- --------------- ------- -----------------
Revenue
Same Store Owned
$792 $716 10.6 Hotels $2,403 $2,147 11.9
Hotels Sold or
Closed in 2003
- 7 n/m (23 hotels) - 110 n/m
Hotels without
Comparable
Results (2
14 7 n/m hotels) 39 23 69.6
Other ancillary
5 5 - hotel operations 6 8 (25.0)
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$811 $735 10.3 Revenue $2,448 $2,288 7.0
Costs and Expenses
Same Store Owned
$603 $563 (7.1) Hotels $1,829 $1,667 (9.7)
Hotels Sold or
Closed in 2003
1 6 83.3 (23 hotels) 1 92 98.9
Hotels without
Comparable
Results (2
12 6 n/m hotels) 30 17 (76.5)
Other ancillary
1 2 50.0 hotel operations 4 5 20.0
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$617 $577 (6.9) Costs and Expenses $1,864 $1,781 (4.7)
===== ===== ========= ======= ======= =========
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------------
Same Store Owned
Hotels
2004 2003 % Variance North America 2004 2003 % Variance
----- --------------- ------- -----------------
Revenue
Same Store Owned
$567 $514 10.3 Hotels $1,742 $1,577 10.5
Hotels Sold or
Closed in 2003
- 7 n/m (17 hotels) - 98 n/m
Hotels without
Comparable
Results (2
14 7 n/m hotels) 39 23 69.6
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$581 $528 10.0 Revenue $1,781 $1,698 4.9
Costs and Expenses
Same Store Owned
$435 $410 (6.1) Hotels $1,330 $1,232 (8.0)
Hotels Sold or
Closed in 2003
1 6 83.3 (17 hotels) 1 76 98.7
Hotels without
Comparable
Results (2
12 6 n/m hotels) 30 17 (76.5)
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$448 $422 (6.2) Costs and Expenses $1,361 $1,325 (2.7)
===== ===== ========= ======= ======= =========
Three Months Ended Nine Months Ended
September 30, September 30,
--------------------- -------------------------
Same Store Owned
Hotels
2004 2003 % Variance International 2004 2003 % Variance
----- --------------- ------- -----------------
Revenue
Same Store Owned
$225 $202 11.4 Hotels $661 $570 16.0
Hotels Sold or
Closed in 2003 (6
- - - hotels) - 12 n/m
Other ancillary
5 5 - hotel operations 6 8 (25.0)
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$230 $207 11.1 Revenue $667 $ 590 13.1
Costs and Expenses
Same Store Owned
$168 $153 (9.8) Hotels $499 $435 (14.7)
Hotels Sold or
Closed in 2003 (6
- - - hotels) - 16 n/m
Other ancillary
1 2 50.0 hotel operations 4 5 20.0
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$169 $155 (9.0) Costs and Expenses $503 $456 (10.3)
===== ===== ========= ======= ======= =========
(1) Same Store Owned Hotel Results exclude 23 hotels sold or closed in
2003 and 2 hotels without comparable results.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels (1)
For the Three Months Ended September 30, 2004
UNAUDITED
WORLDWIDE
--------------------------------
2004 2003 Var.
---------- ---------- ----------
139 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 111.15 98.98 12.3%
ADR ($) 155.55 144.06 8.0%
OCCUPANCY (%) 71.5% 68.7% 2.8
60
--------------------------------
SHERATON
REVPAR ($) 93.60 80.62 16.1%
ADR ($) 133.09 121.69 9.4%
OCCUPANCY (%) 70.3% 66.3% 4.0
36
--------------------------------
WESTIN
REVPAR ($) 120.07 111.57 7.6%
ADR ($) 164.36 152.92 7.5%
OCCUPANCY (%) 73.1% 73.0% 0.1
10
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 210.74 184.56 14.2%
ADR ($) 350.51 327.79 6.9%
OCCUPANCY (%) 60.1% 56.3% 3.8
12
--------------------------------
W
REVPAR ($) 152.28 142.52 6.8%
ADR ($) 203.47 192.61 5.6%
OCCUPANCY (%) 74.8% 74.0% 0.8
21
--------------------------------
OTHER
REVPAR ($) 93.34 79.68 17.1%
ADR ($) 125.05 114.03 9.7%
OCCUPANCY (%) 74.6% 69.9% 4.7
NORTH AMERICA
--------------------------------
2004 2003 Var.
---------- ---------- ----------
94 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 110.11 98.20 12.1%
ADR ($) 148.85 137.18 8.5%
OCCUPANCY (%) 74.0% 71.6% 2.4
36
--------------------------------
SHERATON
REVPAR ($) 101.11 86.17 17.3%
ADR ($) 135.72 121.49 11.7%
OCCUPANCY (%) 74.5% 70.9% 3.6
22
--------------------------------
WESTIN
REVPAR ($) 106.35 99.67 6.7%
ADR ($) 141.36 132.22 6.9%
OCCUPANCY (%) 75.2% 75.4% -0.2
4
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 165.09 149.81 10.2%
ADR ($) 282.88 266.78 6.0%
OCCUPANCY (%) 58.4% 56.2% 2.2
12
--------------------------------
W
REVPAR ($) 152.28 142.52 6.8%
ADR ($) 203.47 192.61 5.6%
OCCUPANCY (%) 74.8% 74.0% 0.8
20
--------------------------------
OTHER
REVPAR ($) 92.88 79.16 17.3%
ADR ($) 126.82 116.88 8.5%
OCCUPANCY (%) 73.2% 67.7% 5.5
INTERNATIONAL(2)
--------------------------------
2004 2003 Var.
---------- ---------- ----------
45 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 114.06 101.16 12.8%
ADR ($) 177.06 166.90 6.1%
OCCUPANCY (%) 64.4% 60.6% 3.8
24
--------------------------------
SHERATON
REVPAR ($) 79.18 69.97 13.2%
ADR ($) 127.03 122.17 4.0%
OCCUPANCY (%) 62.3% 57.3% 5.0
14
--------------------------------
WESTIN
REVPAR ($) 163.32 149.03 9.6%
ADR ($) 246.80 228.23 8.1%
OCCUPANCY (%) 66.2% 65.3% 0.9
6
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 290.39 245.19 18.4%
ADR ($) 459.46 433.44 6.0%
OCCUPANCY (%) 63.2% 56.6% 6.6
W
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
--------------------------------
OTHER
REVPAR ($) 96.62 83.44 15.8%
ADR ($) 114.35 97.57 17.2%
OCCUPANCY (%) 84.5% 85.5% (1.0)
(1) Hotel Results exclude 15 hotels sold or closed subsequent to June
30, 2003 and 2 hotels without comparable results
(2) See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Same Store Owned Hotels (1)
For the Three Months Ended September 30, 2004
UNAUDITED
EUROPE
--------------------------------
2004 2003 Var.
---------- ---------- ----------
29 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 159.97 143.45 11.5%
ADR ($) 241.30 227.76 5.9%
OCCUPANCY (%) 66.3% 63.0% 3.3
12
--------------------------------
SHERATON
REVPAR ($) 104.39 93.83 11.3%
ADR ($) 151.98 147.41 3.1%
OCCUPANCY (%) 68.7% 63.7% 5.0
11
--------------------------------
WESTIN
REVPAR ($) 196.51 181.26 8.4%
ADR ($) 307.66 282.51 8.9%
OCCUPANCY (%) 63.9% 64.2% (0.3)
6
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 290.39 245.19 18.4%
ADR ($) 459.46 433.44 6.0%
OCCUPANCY (%) 63.2% 56.6% 6.6
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LATIN AMERICA
--------------------------------
2004 2003 Var.
---------- ---------- ----------
12 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 52.37 44.84 16.8%
ADR ($) 91.78 88.77 3.4%
OCCUPANCY (%) 57.1% 50.5% 6.6
9
--------------------------------
SHERATON
REVPAR ($) 47.00 40.47 16.1%
ADR ($) 87.78 87.22 0.6%
OCCUPANCY (%) 53.5% 46.4% 7.1
3
--------------------------------
WESTIN
REVPAR ($) 75.56 63.76 18.5%
ADR ($) 104.58 93.32 12.1%
OCCUPANCY (%) 72.3% 68.3% 4.0
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ASIA PACIFIC
--------------------------------
2004 2003 Var.
---------- ---------- ----------
4 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 109.03 94.65 15.2%
ADR ($) 139.44 117.91 18.3%
OCCUPANCY (%) 78.2% 80.3% (2.1)
3
--------------------------------
SHERATON
REVPAR ($) 116.63 101.53 14.9%
ADR ($) 156.93 131.78 19.1%
OCCUPANCY (%) 74.3% 77.0% (2.7)
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
--------------------------------
OTHER
REVPAR ($) 96.62 83.44 15.8%
ADR ($) 114.35 97.57 17.2%
OCCUPANCY (%) 84.5% 85.5% (1.0)
(1) Hotel Results exclude 15 hotels sold or closed subsequent to June
30, 2003 and 2 hotels without comparable results
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Same Store Owned Hotels (1)
For the Three Months Ended September 30, 2004
UNAUDITED
EUROPE
--------------------------------
2004 2003 Var.
---------- ---------- ----------
29 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 159.97 143.45 11.5%
ADR ($) 241.30 227.76 5.9%
OCCUPANCY (%) 66.3% 63.0% 3.3
12
--------------------------------
SHERATON
REVPAR ($) 104.39 93.83 11.3%
ADR ($) 151.98 147.41 3.1%
OCCUPANCY (%) 68.7% 63.7% 5.0
11
--------------------------------
WESTIN
REVPAR ($) 196.51 181.26 8.4%
ADR ($) 307.66 282.51 8.9%
OCCUPANCY (%) 63.9% 64.2% (0.3)
6
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 290.39 245.19 18.4%
ADR ($) 459.46 433.44 6.0%
OCCUPANCY (%) 63.2% 56.6% 6.6
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LATIN AMERICA
--------------------------------
2004 2003 Var.
---------- ---------- ----------
12 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 52.37 44.84 16.8%
ADR ($) 91.78 88.77 3.4%
OCCUPANCY (%) 57.1% 50.5% 6.6
9
--------------------------------
SHERATON
REVPAR ($) 47.00 40.47 16.1%
ADR ($) 87.78 87.22 0.6%
OCCUPANCY (%) 53.5% 46.4% 7.1
3
--------------------------------
WESTIN
REVPAR ($) 75.56 63.76 18.5%
ADR ($) 104.58 93.32 12.1%
OCCUPANCY (%) 72.3% 68.3% 4.0
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ASIA PACIFIC
--------------------------------
2004 2003 Var.
---------- ---------- ----------
4 Hotels
--------------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 109.03 94.65 15.2%
ADR ($) 139.44 117.91 18.3%
OCCUPANCY (%) 78.2% 80.3% (2.1)
3
--------------------------------
SHERATON
REVPAR ($) 116.63 101.53 14.9%
ADR ($) 156.93 131.78 19.1%
OCCUPANCY (%) 74.3% 77.0% (2.7)
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
--------------------------------
OTHER
REVPAR ($) 96.62 83.44 15.8%
ADR ($) 114.35 97.57 17.2%
OCCUPANCY (%) 84.5% 85.5% (1.0)
(1) Hotel Results exclude 15 hotels sold or closed subsequent to June
30, 2003 and 2 hotels without comparable results
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels (1)
For the Three Months Ended September 30, 2004
UNAUDITED ($thousands)
WORLDWIDE
--------------------------------
2004 2003 Var.
---------- ---------- ----------
139 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 791,894 715,902 10.6%
Total EXPENSE(3) 603,176 563,210 (7.1%)
60
--------------------------------
SHERATON
REVENUE 321,157 279,351 15.0%
EXPENSE 240,431 218,690 (9.9%)
36
--------------------------------
WESTIN
REVENUE 242,290 226,279 7.1%
EXPENSE 181,798 172,351 (5.5%)
10
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVENUE 76,771 68,170 12.6%
EXPENSE 62,866 59,726 (5.3%)
12
--------------------------------
W(3)
REVENUE 87,379 84,152 3.8%
EXPENSE 70,369 67,801 (3.8%)
21
--------------------------------
OTHER
REVENUE 64,297 57,950 11.0%
EXPENSE 47,712 44,642 (6.9%)
NORTH AMERICA
--------------------------------
2004 2003 Var.
---------- ---------- ----------
94 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 566,728 513,495 10.4%
Total EXPENSE(3) 435,994 410,947 (6.1%)
36
--------------------------------
SHERATON
REVENUE 218,599 186,908 17.0%
EXPENSE 162,349 149,084 (8.9%)
22
--------------------------------
WESTIN
REVENUE 160,115 150,898 6.1%
EXPENSE 121,931 116,316 (4.8%)
4
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVENUE 44,330 40,508 9.4%
EXPENSE 41,072 39,792 (3.2%)
12
--------------------------------
W(3)
REVENUE 87,379 84,152 3.8%
EXPENSE 70,369 67,801 (3.8%)
20
--------------------------------
OTHER
REVENUE 56,305 51,029 10.3%
EXPENSE 40,273 37,954 (6.1%)
INTERNATIONAL(2)
--------------------------------
2004 2003 Var.
---------- ---------- ----------
45 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 225,166 202,407 11.2%
Total EXPENSE(3) 167,182 152,263 (9.8%)
24
--------------------------------
SHERATON
REVENUE 102,558 92,443 10.9%
EXPENSE 78,082 69,606 (12.2%)
14
--------------------------------
WESTIN
REVENUE 82,175 75,381 9.0%
EXPENSE 59,867 56,035 (6.8%)
6
--------------------------------
ST. REGIS/LUXURY COLLECTION
REVENUE 32,441 27,662 17.3%
EXPENSE 21,794 19,934 (9.3%)
W(3)
REVENUE
EXPENSE
1
--------------------------------
OTHER
REVENUE 7,992 6,921 15.5%
EXPENSE 7,439 6,688 (11.2%)
(1) Hotel Results exclude 15 hotels sold or closed subsequent to June
30, 2003 and 2 hotels without comparable results
(2) See next page for breakdown by division
(3) Includes lease expense of $4,288 in 2004 and 2003 related to the
lease of the W Times Square in New York
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Three Months Ended September 30, 2004
UNAUDITED ($thousands)
EUROPE LATIN AMERICA
-------------------------- -------------------------
2004 2003 Var. 2004 2003 Var.
--------- -------- ------- -------- ------- --------
29 Hotels 12 Hotels
-------------------------- -------------------------
SAME STORE OWNED
HOTELS
Total REVENUE 157,463 142,262 10.7% 40,109 34,927 14.8%
Total EXPENSE 116,320 107,361 (8.3%) 30,576 25,752 (18.7%)
12 9
-------------------------- -------------------------
SHERATON
REVENUE 54,389 49,354 10.2% 28,567 24,792 15.2%
EXPENSE 43,758 39,242 (11.5%) 21,477 17,902 (20.0%)
11 3
-------------------------- -------------------------
WESTIN
REVENUE 70,633 65,246 8.3% 11,542 10,135 13.9%
EXPENSE 50,768 48,185 (5.4%) 9,099 7,850 (15.9%)
6
--------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE 32,441 27,662 17.3% n/a
EXPENSE 21,794 19,934 (9.3%) n/a
OTHER
REVENUE
EXPENSE
ASIA PACIFIC
--------------------------
2004 2003 Var.
--------- -------- -------
4 Hotels
--------------------------
SAME STORE OWNED
HOTELS
Total REVENUE 27,594 25,218 9.4%
Total EXPENSE 20,286 19,150 (5.9%)
3
--------------------------
SHERATON
REVENUE 19,602 18,297 7.1%
EXPENSE 12,847 12,462 3.1%)
WESTIN
REVENUE
EXPENSE
ST. REGIS/LUXURY
COLLECTION
REVENUE n/a
EXPENSE n/a
1
--------------------------
OTHER
REVENUE 7,992 6,921 15.5%
EXPENSE 7,439 6,688 (11.2%)
(1)Hotel Results exclude 15 hotels sold or closed subsequent to June
30, 2003 and 2 hotels without comparable results
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels (1)
For the Nine Months Ended September 30, 2004
UNAUDITED
WORLDWIDE NORTH AMERICA
---------------------- -----------------------
2004 2003 Var. 2004 2003 Var.
-------- ------- ----- -------- ------- ------
139 Hotels 94 Hotels
---------------------- -----------------------
SAME STORE OWNED HOTELS
REVPAR ($) 109.56 96.38 13.7% 108.67 96.58 12.5%
ADR ($) 159.04 148.91 6.8% 152.89 144.19 6.0%
OCCUPANCY (%) 68.9% 64.7% 4.2 71.1% 67.0% 4.1
60 36
---------------------- -----------------------
SHERATON
REVPAR ($) 91.31 77.87 17.3% 96.81 82.75 17.0%
ADR ($) 134.91 125.15 7.8% 136.08 126.33 7.7%
OCCUPANCY (%) 67.7% 62.2% 5.5 71.1% 65.5% 5.6
36 22
---------------------- -----------------------
WESTIN
REVPAR ($) 120.30 110.91 8.5% 107.99 100.86 7.1%
ADR ($) 167.14 157.91 5.8% 145.59 139.22 4.6%
OCCUPANCY (%) 72.0% 70.2% 1.8 74.2% 72.4% 1.8
10 4
---------------------- -----------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR ($) 229.37 199.56 14.9% 213.63 192.63 10.9%
ADR ($) 373.19 352.03 6.0% 330.39 317.64 4.0%
OCCUPANCY (%) 61.5% 56.7% 4.8 64.7% 60.6% 4.1
12 12
---------------------- -----------------------
W
REVPAR ($) 152.24 136.69 11.4% 152.24 136.69 11.4%
ADR ($) 209.27 197.47 6.0% 209.27 197.47 6.0%
OCCUPANCY (%) 72.7% 69.2% 3.5 72.7% 69.2% 3.5
21 20
---------------------- -----------------------
OTHER
REVPAR ($) 80.00 68.09 17.5% 77.31 68.07 13.6%
ADR ($) 120.58 110.36 9.3% 120.87 114.11 5.9%
OCCUPANCY (%) 66.3% 61.7% 4.6 64.0% 59.7% 4.3
INTERNATIONAL(2)
-----------------
2004 2003 Var.
-------- ------- ------
45 Hotels
-----------------------
SAME STORE OWNED HOTELS
REVPAR ($) 112.09 95.79 17.0%
ADR ($) 178.68 164.30 8.8%
OCCUPANCY (%) 62.7% 58.3% 4.4
24
-----------------------
SHERATON
REVPAR ($) 80.67 68.43 17.9%
ADR ($) 132.28 122.46 8.0%
OCCUPANCY (%) 61.0% 55.9% 5.1
14
-----------------------
WESTIN
REVPAR ($) 159.73 143.31 11.5%
ADR ($) 245.92 227.13 8.3%
OCCUPANCY (%) 65.0% 63.1% 1.9
6
-----------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR ($) 256.82 211.64 21.3%
ADR ($) 459.62 425.13 8.1%
OCCUPANCY (%) 55.9% 49.8% 6.1
W
1
-----------------------
OTHER
REVPAR ($) 98.90 68.19 45.0%
ADR ($) 119.00 89.13 33.5%
OCCUPANCY (%) 83.1% 76.5% 6.6
(1)Hotel Results exclude 23 hotels sold or closed in 2003 and 2 hotels
without comparable results
(2)See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels (1)
For the Nine Months Ended September 30, 2004
UNAUDITED
EUROPE LATIN AMERICA
------------------------ ----------------------
2004 2003 Var. 2004 2003 Var.
------- -------- ------- ------- ------- ------
29 Hotels 12 Hotels
------------------------ ----------------------
SAME STORE OWNED HOTELS
REVPAR ($) 152.34 132.86 14.7% 59.67 51.49 15.9%
ADR ($) 243.98 224.32 8.8% 101.32 97.61 3.8%
OCCUPANCY (%) 62.4% 59.2% 3.2 58.9% 52.7% 6.2
12 9
------------------------ ----------------------
SHERATON
REVPAR ($) 104.87 91.56 14.5% 52.06 44.32 17.5%
ADR ($) 163.20 151.14 8.0% 93.39 90.73 2.9%
OCCUPANCY (%) 64.3% 60.6% 3.7 55.7% 48.8% 6.9
11 3
------------------------ ----------------------
WESTIN
REVPAR ($) 185.69 166.07 11.8% 92.53 83.14 11.3%
ADR ($) 299.29 274.54 9.0% 127.66 118.80 7.5%
OCCUPANCY (%) 62.0% 60.5% 1.5 72.5% 70.0% 2.5
6
------------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR ($) 256.82 211.64 21.3%
ADR ($) 459.62 425.13 8.1%
OCCUPANCY (%) 55.9% 49.8% 6.1
ASIA PACIFIC
-------------------------
2004 2003 Var.
------- -------- --------
4 Hotels
-------------------------
SAME STORE OWNED HOTELS
REVPAR ($) 105.21 77.53 35.7%
ADR ($) 140.28 109.80 27.8%
OCCUPANCY (%) 75.0% 70.6% 4.4
3
-------------------------
SHERATON
REVPAR ($) 109.09 83.30 31.0%
ADR ($) 155.75 124.39 25.2%
OCCUPANCY (%) 70.0% 67.0% 3.0
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
-------------------------
OTHER
REVPAR ($) 98.90 68.19 45.0%
ADR ($) 119.00 89.13 33.5%
OCCUPANCY (%) 83.1% 76.5% 6.6
(1)Hotel Results exclude 23 hotels sold or closed in 2003 and 2 hotels
without comparable results
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended September 30, 2004
UNAUDITED ($thousands)
WORLDWIDE
--------------------------------
2004 2003 Var.
---------- ---------- ----------
139 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 2,402,968 2,146,746 11.9%
Total EXPENSE(3) 1,828,765 1,666,799 (9.7%)
60
--------------------------------
SHERATON
REVENUE 961,069 828,052 16.1%
EXPENSE 723,315 642,639 (12.6%)
36
--------------------------------
WESTIN
REVENUE 747,143 689,552 8.4%
EXPENSE 554,577 512,799 (8.1%)
10
--------------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE 262,885 233,972 12.4%
EXPENSE 202,269 188,574 (7.3%)
12
--------------------------------
W(3)
REVENUE 261,141 240,753 8.5%
EXPENSE 209,986 196,222 (7.0%)
21
--------------------------------
OTHER
REVENUE 170,730 154,417 10.6%
EXPENSE 138,618 126,565 (9.5%)
NORTH AMERICA
--------------------------------
2004 2003 Var.
---------- ---------- ----------
94 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 1,741,869 1,576,668 10.5%
Total EXPENSE(3) 1,330,283 1,232,347 (7.9%)
36
--------------------------------
SHERATON
REVENUE 651,621 561,784 16.0%
EXPENSE 491,234 441,352 (11.3%)
22
--------------------------------
WESTIN
REVENUE 506,254 475,222 6.5%
EXPENSE 373,866 352,280 (6.1%)
4
--------------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE 176,056 161,297 9.2%
EXPENSE 138,776 132,762 (4.5%)
12
--------------------------------
W(3)
REVENUE 261,141 240,753 8.5%
EXPENSE 209,986 196,222 (7.0%)
20
--------------------------------
OTHER
REVENUE 146,797 137,612 6.7%
EXPENSE 116,421 109,731 (6.1%)
INTERNATIONAL(2)
--------------------------------
2004 2003 Var.
---------- ---------- ----------
45 Hotels
--------------------------------
SAME STORE OWNED HOTELS
Total REVENUE 661,099 570,078 16.0%
Total EXPENSE(3) 498,482 434,452 (14.7%)
24
--------------------------------
SHERATON
REVENUE 309,448 266,268 16.2%
EXPENSE 232,081 201,287 (15.3%)
14
--------------------------------
WESTIN
REVENUE 240,889 214,330 12.4%
EXPENSE 180,711 160,519 (12.6%)
6
--------------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE 86,829 72,675 19.5%
EXPENSE 63,493 55,812 (13.8%)
W(3)
REVENUE
EXPENSE
1
--------------------------------
OTHER
REVENUE 23,933 16,805 42.4%
EXPENSE 22,197 16,834 (31.9%)
(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
hotels without comparable results
(2) See next page for breakdown by division
(3) Includes lease expense of $12,863 in 2004 and 2003 related to the
lease of the W Times Square in New York
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended September 30, 2004
UNAUDITED ($thousands)
EUROPE LATIN AMERICA
------------------------- -------------------------
2004 2003 Var. 2004 2003 Var.
-------- -------- ------- -------- -------- -------
29 Hotels 12 Hotels
------------------------- -------------------------
SAME STORE OWNED
HOTELS
Total REVENUE 449,768 393,405 14.3% 132,635 116,059 14.3%
Total EXPENSE 349,043 306,235 (14.0%) 89,809 79,132 (13.5%)
12 9
------------------------- -------------------------
SHERATON
REVENUE 163,762 143,839 13.9% 90,923 78,620 15.6%
EXPENSE 132,612 114,298 (16.0%) 62,036 54,738 (13.3%)
11 3
------------------------- -------------------------
WESTIN
REVENUE 199,177 176,891 12.6% 41,712 37,439 11.4%
EXPENSE 152,938 136,125 (12.4%) 27,773 24,394 (13.9%)
6
-------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE 86,829 72,675 19.5%
EXPENSE 63,493 55,812 (13.8%)
OTHER
REVENUE
EXPENSE
ASIA PACIFIC
-------------------------
2004 2003 Var.
-------- -------- -------
4 Hotels
-------------------------
SAME STORE OWNED
HOTELS
Total REVENUE 78,696 60,614 29.8%
Total
EXPENSE 59,630 49,085 (21.5%)
3
-------------------------
SHERATON
REVENUE 54,763 43,809 25.0%
EXPENSE 37,433 32,251 (16.1%)
WESTIN
REVENUE
EXPENSE
ST. REGIS/LUXURY
COLLECTION
REVENUE
EXPENSE
1
-------------------------
OTHER
REVENUE 23,933 16,805 42.4%
EXPENSE 22,197 16,834 (31.9%)
(1)Hotel Results exclude 23 hotels sold or closed in 2003 and 2 hotels
without comparable results
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Debt Portfolio Summary
As of September 30, 2004
UNAUDITED
Interest Balance Interest Avg
Debt Terms (in % of Rate Maturity
millions) Portfolio (in years)
-------------------------------------------------------------------
Floating Rate
Debt:
Senior credit
facility
Revolving credit Various +
facility 125 $11 - 3.62% 2.0
Term loan LIBOR +
125 575 13% 3.05% 1.7
----------------------------------------
586 13% 3.06% 1.7
Mortgages and Various
other 208 4% 5.32% 1.1
Interest rate LIBOR +
swaps 423 300 7% 6.25%
-------------------------------
Total Floating 1,094 24% 4.36% 1.6
Fixed Rate Debt:
Sheraton Holding
public debt (1) 1,061 24% 6.00% 8.2
Senior notes (2) 1,519 34% 6.70% 5.2
Convertible debt
- Series B 20 - 3.25% 2.0 (3)
Convertible debt
- 2003 360 8% 3.50% 1.6
Mortgages and
other 747 17% 7.24% 6.4
Interest rate
swaps (300) (7%) 7.88%
-------------------------------
Total Fixed 3,407 76% 6.08% 5.9
-------------------------------
Total Debt $4,501 100% 5.67% 5.1
===============================
------------------------
Maturities (in millions)
------------------------
less than 1 year $243
1-3 years 2,169
3-5 years 472
greater than 5 years 1,617
---------
$4,501
=========
(1) Balance consists of outstanding public debt of $1.047 billion
and a $14 million fair value adjustment related to the unamortized
gain on fixed to floating interest rate swaps terminated in September
2002 and March 2004.
(2) Balance consists of outstanding public debt of $1.496 billion
and a $37 million fair value adjustment related to the unamortized
gain on fixed to floating interest rate swaps terminated in September
2002 and March 2004 and a ($14) million fair value adjustment related
to current fixed to floating interest rate swaps.
(3) Average maturity reflects the maturity date of the revolving
credit facility which would be used to refinance the amount put to the
Company.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Results & Other Selected Items
As of September 30, 2004
UNAUDITED ($ millions)
Properties without comparable results in 2004:
Property Location
--------------------------------- -----------------------------------
Sheraton Kauai Koloa, HI
St. Regis Aspen Aspen, CO
Properties sold or closed in
2003:
Property Location
--------------------------------- -----------------------------------
Lenox Inn Atlanta, GA
Sheraton Mofarrej Sao Paulo, Brazil
Hotel Cala di Volpe Costa Smeralda, Italy
Hotel Pitrizza Costa Smeralda, Italy
Hotel Romazzino Costa Smeralda, Italy
Cervo Hotel & Conference Center Costa Smeralda, Italy
Hotel Principe di Savoia Milan, Italy
Hilton Novi Novi, MI
Westin Southfield Southfield, MI
Residence Inn Tyson's Corner Vienna, VA
Sheraton Buckhead Atlanta, GA
Sheraton College Park Beltsville, MD
Sheraton Chicago Northwest Arlington Heights, IL
Sheraton Norfolk Norfolk, VA
Hilton Sonoma County Santa Rosa, CA
Westin Stamford Stamford, CT
Wayfarer Inn Bedford, NH
Sheraton Ferncroft Danvers, MA
Sheraton Danbury Danbury, CT
Sheraton Gainesville Gainesville, FL
Baltimore Marriott Baltimore, MD
Arlington Marriott Arlington, VA
North Charleston Sheraton Charleston, SC
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents (including total restricted
cash of $297 million) $528
Debt level $4,501
Revenues and Expenses Associated with Assets Sold in 2003 (1):
Q1 Q2 Q3 Q4 Full Year
---------------------------------------
2003
Revenues $42 $61 $7 $- $110
Expenses $38 $45 $6 $- $89
(1) Results consist of 20 hotels (excludes the Hotel Principe di
Savoia reported in discontinued operations)that were sold in
2003. These amounts are included in the revenues and expenses
from owned, leased and consolidated joint venture hotels in 2003.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three and Nine Months Ended September 30, 2004
UNAUDITED (% millions)
QTD YTD
Capital Expenditures:
Owned, Leased and Consolidated Joint Venture Hotels $54 $154
Corporate/IT 10 26
------- -------
Subtotal 64 180
Vacation Ownership Capital Expenditures:
Capital expenditures (includes land acquisition) 11 19
Inventory 37 74
------- -------
Subtotal 48 93
Development Capital 55 211
------- -------
Total Capital Expenditures $167 $484
======= =======
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Summary of Portfolio by Properties & Rooms
As of September 30, 2004
UNAUDITED
NAD EAME LAD
-------- -------- -------
Owned Hotels Rooms Hotels Rooms Hotels Rooms
-----------------------------------------------
Sheraton 37 16,483 12 3,468 7 3,573
Westin 22 10,352 11 2,385 3 901
Four Points 7 1,362 - - - -
W 12 4,344 - - - -
Luxury Collection 1 654 5 638 2 320
St. Regis 4 890 1 161 - -
Other 13 3,041 - - - -
-----------------------------------------------
Total Owned 96 37,126 29 6,652 12 4,794
Managed & UJV
Sheraton 41 19,939 75 21,708 10 1,911
Westin 38 21,454 6 1,464 - -
Four Points 14 3,188 6 903 1 128
W 4 750 - - 1 237
Luxury Collection 6 1,393 6 942 7 158
St. Regis 2 697 1 95 - -
Other 1 2,567 1 405 - -
-----------------------------------------------
Total Managed & UJV 106 49,988 95 25,517 19 2,434
Franchised
Sheraton 109 35,213 30 7,267 3 1,074
Westin 18 7,302 3 1,127 3 598
Four Points 87 15,758 10 1,376 8 1,261
Luxury Collection 2 351 11 1,291 - -
-----------------------------------------------
Total Franchised 216 58,624 54 11,061 14 2,933
----------------------------------------------------------------------
Systemwide
Sheraton 187 71,635 117 32,443 20 6,558
Westin 78 39,108 20 4,976 6 1,499
Four Points 108 20,308 16 2,279 9 1,389
W 16 5,094 - - 1 237
Luxury Collection 9 2,398 22 2,871 9 478
St. Regis 6 1,587 2 256 - -
Other 14 5,608 1 405 - -
-----------------------------------------------
Total Systemwide 418 145,738 178 43,230 45 10,161
===============================================
ASIA Total
-------------- -----------
Owned Hotels Rooms Hotels Rooms
-----------------------------------------------
Sheraton 3 1,028 59 24,552
Westin - - 36 13,638
Four Points 1 630 8 1,992
W - - 12 4,344
Luxury Collection - - 8 1,612
St. Regis - - 5 1,051
Other - - 13 3,041
-----------------------------------------------
Total Owned 4 1,658 141 50,230
Managed & UJV
Sheraton 48 17,333 174 60,891
Westin 12 4,912 56 27,830
Four Points 2 207 23 4,426
W 2 353 7 1,340
Luxury Collection - - 19 2,493
St. Regis 2 591 5 1,383
Other 2 315 4 3,287
-----------------------------------------------
Total Managed & UJV 68 23,711 288 101,650
Franchised
Sheraton 16 5,445 158 48,999
Westin 5 1,226 29 10,253
Four Points 1 126 106 18,521
Luxury Collection - - 13 1,642
-----------------------------------------------
Total Franchised 22 6,797 306 79,415
----------------------------------------------------------------------
Systemwide
Sheraton 67 23,806 391 134,442
Westin 17 6,138 121 51,721
Four Points 4 963 137 24,939
W 2 353 19 5,684
Luxury Collection - - 40 5,747
St. Regis 2 591 10 2,434
Other 2 315 17 6,328
-----------------------------------------------
Total Systemwide 94 32,166 735 231,295
===============================================
-------------------------------------------------------------
Contact:
Starwood Hotels & Resorts Worldwide, Inc.
Alisa Rosenberg, 914-640-5214
Source: Starwood Hotels & Resorts Worldwide, Inc.