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Press Release: Starwood Hotels & Resorts Worldwide, Inc.
October 27, 2006
WHITE PLAINS, NY -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT):
Third Quarter 2006 Highlights
Starwood Hotels & Resorts Worldwide, Inc. ("Starwood" or the "Company") yesterday reported
EPS from continuing operations for the third quarter of 2006 of $0.71 compared to $0.18 in the third quarter of
2005. Excluding special items, EPS from continuing operations was $0.68 for the third quarter of 2006 compared
to $0.58 in the third quarter of 2005. Excluding special items, the effective income tax rate in the third quarter
of 2006 was 21.2%. The effective tax rate includes benefits realized in connection with the sales of several hotels
in unconsolidated joint ventures.
Income from continuing operations was $155 million in the third quarter of 2006 compared to $40 million in 2005.
Excluding special items, which net to a $7 million benefit in 2006, income from continuing operations was $148
million for the third quarter of 2006 compared to $131 million in 2005.
Income from continuing operations for the third quarter of 2006 as compared to 2005 was impacted by four major
items:
Net income was $155 million and EPS was $0.71 in the third quarter of 2006 compared to net income of $39 million
and EPS of $0.17 in the third quarter of 2005.
Steven J. Heyer, CEO, said, "I am extremely pleased with our results for the third quarter. All of our business
units are performing on all cylinders and we expect this strength to continue into 2007 and beyond.
Systemwide REVPAR increased 9.2% in the quarter, with strength across all our brands. At our owned hotels, North
America branded REVPAR was up an industry-leading 10.6% and margins improved 190 basis points as strong ADR growth
coupled with productivity improvements drove strong flowthrough. Our fee business continues its impressive growth,
with managed and franchise revenues up 71.4%. Even after adjusting for the Host and Le Meridien transactions, we
delivered 24.2% growth. Our vacation ownership business also exceeded our guidance as contract sales were up 13.5%,
and reported revenues increased 43.1%.
Just as our brand initiatives resonate with the consumer, they are resonating with developers around the world,
helping drive our pipeline growth as they increasingly turn to Starwood's brands for their hotel projects. We have
signed 94 hotel deals, and opened 41 hotels year-to-date. We are on track to exceed our target for 50 hotel openings
in 2006.
During the third quarter, we bought back 9 million shares of our stock, and since announcing the Host transaction
last November, we have bought back $1.5 billion in stock. This is in addition to the $2.8 billion we returned through
the Host transaction earlier this year and $276 million in dividends. With our impressive free cash flow generation
and balance sheet strength, we have significant capacity to continue returning value to shareholders through our
dividend policy and share buybacks while continuing to invest in the growth of our business.
We are optimistic that we will turn in another year of strong growth in 2007: Supply growth remains below its long-term
trendline and the demand outlook is favorable, our business fundamentals remain very strong, and we expect these
trends to continue."
Operating Results
Third Quarter Ended September 30, 2006
Owned, Leased and Consolidated Joint Venture Hotels
Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 11.7%. REVPAR at Starwood branded Same-Store
Owned Hotels in North America increased 10.6%. REVPAR growth was particularly strong at the Company's owned hotels
in Toronto, Chicago, Atlanta, and Philadelphia. Internationally, Starwood branded Same-Store Owned Hotel REVPAR
increased 10.2% excluding the impact of foreign exchange, and as reported, in US dollars, branded Same-Store Owned
Hotel REVPAR increased 13.6%.
Revenues at Starwood branded Same-Store Owned Hotels in North America increased 9.4% while costs and expenses increased
6.6% when compared to 2005. Margins at Starwood branded Same-Store Owned Hotels increased 190 basis points.
Revenues at Starwood branded Same-Store Owned Hotels Worldwide increased 9.4% while costs and expenses increased
7.7% when compared to 2005. Margins at Starwood branded Same-Store Owned Hotels increased 110 basis points.
Reported revenues at owned, leased and consolidated joint venture hotels were $594 million when compared to $871
million in 2005. Reported revenues and operating income were impacted by the sale of 51 hotels since the beginning
of the third quarter of 2005. These hotels had $14 million of revenues and $11 million of expenses (before depreciation)
in 2006 as compared to $344 million of revenues and $247 million of expenses (before depreciation) in the same
quarter of 2005.
Management and Franchise Revenues
Worldwide System-wide (owned, managed and franchised) REVPAR for Same-Store Hotels increased 9.2% compared to the
third quarter of 2005 including 16.8% in Europe, 10.5% in Africa & the Middle East, 8.6% in Latin America,
7.5% in North America, and 6.1% in Asia Pacific. The 7.5% increase in System-wide REVPAR for Same-Store Hotels
in North America by brand was: St. Regis/Luxury Collection 12.8%, W Hotels 11.2%, Westin 8.5% and Sheraton 6.8%.
Management fees, franchise fees and other income were $182 million, up $56 million, or 44.4%, from the third quarter
of 2005. Management fees grew 67.8% to $99 million and franchise fees grew 24.0% to $31 million. The increases
are related to the addition of new hotels (including Le Meridien hotels and the hotels sold to third parties, including
Host Hotels & Resorts, Inc. ("Host")), and growth in REVPAR of existing hotels under management,
offset in part by fees associated with hotels that left the system.
The hotels sold to Host and the Le Meridien hotels contributed $27 million and $16 million, respectively, of management
and franchise revenues during the third quarter of 2006. Worldwide Le Meridien hotels that were in operation during
both periods had REVPAR growth of 13.2% in the third quarter of 2006 when compared to 2005 with ADR increasing
13.1% and occupancy increasing 10 basis points.
During the third quarter of 2006, the Company signed 33 hotel management and franchise contracts (representing
approximately 7,400 rooms: 10 Sheraton, 7 Westin, 6 aloft, 4 Four Points by Sheraton, 3 Le Meridien, 2 W Hotels,
and 1 Luxury Collection). Of the hotels signed in the quarter, 28 were new builds and 5 were conversions from other
brands. Through the first nine months of 2006, the Company signed 94 hotel management and franchise contracts (representing
approximately 23,800 rooms). The Company's active global development pipeline grew to approximately 330 hotels
with almost 90,000 rooms at September 30, 2006, driven by strong interest in all Starwood brands. Approximately
half of its pipeline is in international locations.
During the third quarter of 2006, 18 new hotels and resorts (representing approximately 3,700 rooms) entered the
system, including the Le Royal Meridien Shanghai (Shanghai, China, 600 rooms), the Sheraton Orlando North (Orlando,
Florida, 394 rooms) and the W Maldives (Male, Maldives, 78 rooms). Eight properties (representing approximately
2,300 rooms) were removed from the system during the quarter. The Company expects to open more than 50 hotels (representing
approximately 14,000 rooms) in 2006.
Vacation Ownership
While contract sales of vacation ownership intervals were up 13.5%, total vacation ownership reported revenues
increased 43.1% to $249 million when compared to 2005 due primarily to the timing of the recognition of deferred
revenues under percentage of completion accounting for pre-sales at projects under construction. The average price
per vacation ownership unit sold increased 8.8% to approximately $25,000, and the number of contracts signed increased
4.4% when compared to 2005.
During the third quarter of 2006, the Company was actively selling vacation ownership interests at 15 resorts.
Starwood Vacation Ownership is also in the predevelopment phase of several other new vacation ownership resorts
in Hawaii, California, Mexico, and Aruba.
Residential
During the third quarter of 2006, the Company recognized residential revenues of approximately $6.0 million primarily
from sales at the St. Regis in New York. To date, the Company has recognized approximately $34.1 million in revenues
from the sale of condominiums at the St. Regis in New York. In the third quarter of 2005, the Company recognized
residential revenues of $59 million primarily associated with sales at the St. Regis Museum Tower in San Francisco.
Selling, General, Administrative and Other
Selling, general, administrative and other expenses increased 17.3% to $115 million compared to the third quarter
of 2005. The increase primarily relates to stock based compensation, including approximately $10 million of stock
option expense.
Asset Sales
During the third quarter of 2006, the Company sold two wholly-owned hotels for cash proceeds of approximately $86
million. It is anticipated that two hotels will be sold in the fourth quarter of 2006 for cash proceeds of approximately
$30 million.
Capital
Gross capital spending during the quarter included approximately $47 million in renovations of hotel assets including
construction capital at the Sheraton Centre Toronto Hotel, the Westin Resort & Spa, Cancun, and the Sheraton
Kauai Resort. Investment spending on gross vacation ownership interest ("VOI") inventory was $88 million,
which was offset by cost of sales of $64 million associated with VOI sales during the quarter. The inventory spend
included VOI construction at the Westin Ka'anapali Ocean Resort Villas North in Maui, the Westin Princeville Resort
in Kauai, the Desert Willow Villas in Palm Desert, and the Westin Lagunamar Resort in Cancun.
Share Repurchase
During the third quarter of 2006, the Company repurchased approximately 9 million shares at a total cost of approximately
$477 million. Since January 1, 2006, the Company has returned more than $4.3 billion to shareholders, including
$2.8 billion in connection with the sale of 33 hotels to Host Hotels & Resorts, Inc., approximately $1.229
billion for the repurchase of approximately 21.1 million shares of its stock and $276 million in dividends. At
September 30, 2006, approximately $414 million remained available under the Company's share repurchase authorization.
Starwood had approximately 212 million shares outstanding (including partnership units) at September 30, 2006.
Dividend
The Company's former REIT subsidiary paid dividends of $0.21 per share for each of the first and second quarters
of 2006. It is currently expected that, subject to the approval of the Board of Directors, the remaining 2006 dividend
of $0.42 per share will be declared by the Company in December 2006 to be paid in January 2007, as set forth in
the dividend policy that was adopted by the Board of Directors.
Balance Sheet
At September 30, 2006, the Company had total debt of $3.074 billion and cash and cash equivalents (including $322
million of restricted cash) of $637 million, or net debt of $2.437 billion, compared to net debt of $2.185 billion
at the end of the second quarter of 2006.
At September 30, 2006, debt was approximately 58% fixed rate and 42% floating rate and its weighted average maturity
was 4.6 years with a weighted average interest rate of 6.76%. The Company had cash (including total restricted
cash) and availability under domestic and international revolving credit facilities of approximately $1.583 billion.
Results for the Nine Months Ended September 30, 2006
EPS from continuing operations increased to $4.06 compared to $1.18 in 2005. Excluding special items, EPS from
continuing operations was $1.82 compared to $1.63 in 2005. Excluding special items, income from continuing operations
was $408 million compared to $364 million in 2005. Net income was $840 million and EPS was $3.74 compared to $263
million and $1.18, respectively, in 2005. Total Company Adjusted EBITDA, which was significantly impacted by the
sale of 54 hotels since the beginning of 2005, was $926 million compared to $1.026 billion in 2005.
Outlook
The Company's guidance for 2006 assumes the following change since the last time we provided estimates:
For the three months ending December 31, 2006:
Adjusted EBITDA would be expected to be approximately $374 million assuming:
-- REVPAR at Same-store Owned Hotels in North America
increases approximately 7%-9% versus the same period in
2005 due to renovations at the Westin Maui and Hurricane
Katrina related impact at owned hotels in Atlanta and
Houston. Excluding these hotels, the fourth quarter assumed
growth trends would be 9%-11%.
-- North America Same-Store Owned Hotel EBITDA growth of
11%-13% with owned hotel margin improvement of
approximately 150-200 basis points.
-- Growth from management and franchise revenues of
approximately 45% to 50% including revenues earned from the
hotels sold to Host, and 20% to 25%, excluding the hotels
sold to Host.
-- An increase in operating income from our vacation ownership
and residential business of $55-$60 million (including
gains on sale of vacation ownership notes receivable of
$10-$15 million).
For the full year 2006:
Adjusted EBITDA would be expected to be approximately $1.300 billion assuming:
-- REVPAR at Same-Store Owned Hotels in North America
increases approximately 11% versus 2005.
-- North America Same-Store Owned Hotel EBITDA growth of
approximately 19% with owned hotel margin improvement of
approximately 200-250 basis points.
-- Growth from management and franchise revenues of over
50%-55% including revenues from the hotels sold to Host and
approximately 30%-35%, excluding revenues from the hotels
sold to Host.
-- An increase in operating income from our vacation ownership
and residential business of approximately $10 million to
$15 million (including gains on sales of vacation ownership
notes receivable of $10 million to $15 million in the
fourth quarter of 2006).
For the full year 2007:
The Company expects 2007 Adjusted EBITDA to be between $1.355 billion and $1.375 billion. This represents 13%-15%
growth on a comparable basis over 2006 (see reconciliation below). The Company expects 2007 EPS to be between $2.40
and $2.46. This represents 20%-23% growth on a comparable basis over 2006. This is consistent with the Company's
growth plans and 3 year outlook discussed at its investor day meetings earlier this year.
3 Year Outlook 2007 Guidance
-------------------- ---------------
North America Same-Store Owned
Hotels REVPAR growth 7-9% 7-9%
North America Same-Store Owned
Hotels margin improvement 300-400 bps by 2009 100-150 bps
North America Same-Store Owned
Hotels EBITDA growth 12-14% 12-14%
Management and franchise revenue
growth 13-15% 13-15%
SVO growth 18-20% ('06-'09)
25-30% ('07) 25-30%
Residential Not Provided(1) Down $10-15M
Adjusted EBITDA growth 13-15% 13-15%
EPS growth 20-23% 20-23%
-------------------------------
(1) No three year guidance was provided for the residential business
at the Company's investor day meetings.
The EPS outlook is based on 2007 depreciation and amortization expense of approximately $340 million, interest
expense of approximately $215 million, a tax rate of 35% and fully diluted shares outstanding of approximately
217 million.
Reconciliation to reflect the sale or closure of assets assuming the
closing occurred on January 1, 2006
(in millions)
2006 Adjusted EBITDA guidance (1) $1,300
Adjustments to estimate the full year impact of 44 owned
hotels sold or expected to be sold during 2006
Less: Revenues from hotels sold or expected to sell in
2006 (375)
Add: Expenses from hotels sold or expected to sell in
2006 291
Add: Expected fees from hotels sold encumbered by
management or franchise contracts as if managed or
franchised from January 1, 2006 17
Add: Expected amortization of gains from hotels sold,
subject to long-term management contracts, as if the
transactions closed on January 1, 2006 13
Adjustments to estimate the JV hotels sold as if the
transactions closed on January 1, 2006
Less: Earnings in 2006 from unconsolidated JV hotels sold (32)
Adjustments for two hotels which have closed or are expected
to close for redevelopment
Less: Revenues from hotels expected to close for
redevelopment (57)
Add: Expenses from hotels expected to close for
redevelopment 45
---------
Estimated 2006 Adjusted EBITDA to reflect the full-year
effect of assets sold or closed $1,202
=========
(1) See page 14 for the non-GAAP to GAAP reconciliation of EBITDA
guidance.
Special Items
The Company recorded net credits of $7 million (after-tax) for special items in the third quarter of 2006 compared
to $91 million of net charges (after-tax) in the same period of 2005.
Special items in the third quarter of 2006 primarily relate to losses on asset dispositions and additional one-time
income tax benefits realized in connection with the Host transaction.
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):
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ -----------------
2006 2005 2006 2005
------- --------- -------- -------
Income from continuing operations
$148 $131 before special items $408 $364
------- --------- -------- -------
$0.68 $0.58 EPS before special items $1.82 $1.63
------- --------- -------- -------
Special Items
Restructuring and other special
1 -- credits (charges), net (a) (11) --
-- -- Debt defeasance costs (b) (37) --
-- -- Debt extinguishment costs (c) (7) --
(Loss) gain on asset dispositions
(18) (16) and impairments, net (d) 1 (32)
------- --------- -------- -------
(17) (16) Total special items - pre-tax (54) (32)
Income tax benefit for special
5 6 items (e) 21 11
Income tax benefits related to
18 -- the transaction with Host (f) 514 --
Tax expense and repatriation of
-- (47) foreign earnings -- (47)
Reserves and credits associated
1 (34) with tax matters (g) 23 (32)
------- --------- -------- -------
7 (91) Total special items - after-tax 504 (100)
------- --------- -------- -------
$155 $40 Income from continuing operations $912 $264
------- --------- -------- -------
$0.71 $0.18 EPS including special items $4.06 $1.18
======= ========= ======== =======
(a) Restructuring and other special credits (charges), net primarily
related to transition costs associated with the Le Meridien
transaction.
(b) During the three months ended March 31, 2006, the Company
completed two transactions whereby it was released from certain
debt obligations that allowed Starwood to sell certain hotels
that previously served as collateral for such debt. The Company
incurred expenses totaling $37 million in connection with the
early extinguishment of these debt obligations. These expenses
are reflected in interest expense in the Company's consolidated
statement of income.
(c) During the three months ended June 30, 2006, the Company incurred
costs of approximately $7 million related to the early
extinguishment of $150 million of debentures issued by its former
subsidiary, Sheraton Holding Corporation. These expenses are
reflected in interest expense in the Company's consolidated
statement of income.
(d) For the three months ended September 30, 2006, primarily reflects
$36 million in losses recognized in connection with the sale of
the Sheraton Colony Square and the Sheraton Colonial, offset by a
$13 million gain on the sale of Starwood's interest in the joint
venture that owns the Westin La Cantera and a $6 million gain as
a result of insurance proceeds received for the Sheraton Cancun
as reimbursement for property damage from Hurricane Wilma.
(e) Represents taxes on special items at the Company's incremental
tax rate.
(f) Primarily relates to a deferred tax asset recognized on the
deferred gain and other one-time tax benefits realized in
connection with the Host sale.
(g) Income tax benefit in the nine months ended September 30, 2006
primarily relates to the reversal of tax reserves no longer
deemed necessary as the related contingencies have been resolved.
Income tax expense in the three and nine months ended September
30, 2005 is due to increases in tax reserves related to the
Company's 1998 disposition of the World Directories business,
offset by tax refunds related to the 1995 split-up of ITT
Corporation.
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 will be conducting a conference call to discuss the third quarter financial results at 10:30 a.m. (EST)
today. The conference call will be available through simultaneous webcast in the Investor Relations/Press Releases
section of the Company's website at http://www.starwoodhotels.com.
A replay of the conference call will also be available from 12:30 p.m. (EST) today through Thursday, October 26
at 12:00 midnight (EST) on both the Company's website and via telephone replay at (719) 457-0820 (access code 4870671).
Definitions
All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations. All
references to "net capital expenditures" mean gross capital expenditures for timeshare and fractional
inventory net of cost of sales. 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 operating performance. It also facilitates comparisons between the Company and its competitors.
The Company's management has historically adjusted EBITDA (i.e., "Adjusted EBITDA") 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 revenues and costs
and expenses from hotels sold, restructuring and other special charges and gains and losses on asset dispositions
and impairments, 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 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, undergoing significant repositionings or for which comparable results are not available
(i.e., hotels not owned during the entire periods presented or closed due to seasonality or hurricane damage).
REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
All references to contract sales or originated sales reflect vacation ownership sales before revenue adjustments
for percentage of completion accounting methodology.
All references to management and franchise revenues represent base and incentive fees, franchise fees, amortization
of deferred gains resulting from the sales of hotels subject to long-term management contracts and termination
fees offset by payments by Starwood under performance and other guarantees.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with
approximately 850 properties in more than 95 countries and 145,000 employees at its owned and managed properties.
Starwood® Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following
internationally renowned brands: St. Regis®, The Luxury Collection®, Sheraton®, Westin®, Four Points®
by Sheraton, W®, Le Meridien® and the recently announced aloft(SM) and Element(SM). Starwood Hotels also
owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval
ownership resorts. For more information, please visit www.starwoodhotels.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 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 and labor unions, 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 risks and uncertainties. These risks and uncertainties are presented in detail in our filings with the
Securities and Exchange Commission. Future vacation ownership units indicated in this press release include planned
units on land owned by the Company or by joint ventures in which the Company has an interest that have received
all major governmental land use approvals for the development of vacation ownership resorts. There can be no assurance
that such units will in fact be developed and, if developed, the time period of such development (which may be
more than several years in the future). Some of the projects may require additional third-party approvals or permits
for development and build out and may also be subject to legal challenges as well as a commitment of capital by
the Company. The actual number of units to be constructed may be significantly lower than the number of future
units indicated. 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,
------------------------ ------------------------
% %
2006 2005 Variance 2006 2005 Variance
------- ------- -------- ------- ------- --------
Revenues
Owned, leased and
consolidated joint
$594 $871 (31.8) venture hotels $2,090 $2,623 (20.3)
Vacation ownership
and residential
255 233 9.4 sales and services 683 697 (2.0)
Management fees,
franchise fees and
182 126 44.4 other income 488 349 39.8
Other revenues from
managed and
franchised
430 266 61.7 properties (a) 1,146 792 44.7
------- ------- -------- ------- ------- --------
1,461 1,496 (2.3) 4,407 4,461 (1.2)
Costs and Expenses
Owned, leased and
consolidated joint
443 646 31.4 venture hotels 1,575 1,962 19.7
Vacation ownership
183 169 (8.3) and residential 532 503 (5.8)
Selling, general,
administrative and
115 98 (17.3) other 342 274 (24.8)
Restructuring and
other special
(credits) charges,
(1) -- 100.0 net 11 -- (100.0)
70 99 29.3 Depreciation 210 305 31.1
11 4 (175.0) Amortization 21 13 (61.5)
Other expenses from
managed and
franchised
430 266 (61.7) properties (a) 1,146 792 (44.7)
------- ------- -------- ------- ------- --------
1,251 1,282 2.4 3,837 3,849 (0.3)
210 214 (1.9) Operating income 570 612 (6.9)
Equity earnings and
gains and losses
from unconsolidated
8 9 (11.1) ventures, net 46 40 15.0
Interest expense,
net of interest
income of $17, $6,
(28) (59) 52.5 $26 and $11 (175) (181) 3.3
(Loss) gain on asset
dispositions and
(18) (16) (12.5) impairments, net 1 (32) 103.1
------- ------- -------- ------- ------- --------
Income from
continuing
operations before
taxes and minority
172 148 16.2 equity 442 439 0.7
Income tax (expense)
(17) (107) n/m benefit 470 (175) n/m
Minority equity in
-- (1) n/m net income -- -- --
------- ------- -------- ------- ------- --------
Income from
continuing
155 40 n/m operations 912 264 n/m
Discontinued
Operations:
Loss from
-- (1) n/m operations -- (1) n/m
Cumulative effect of
-- -- -- accounting change ( (72) -- n/m
------- ------- -------- ------- ------- --------
$155 $39 n/m Net income $840 $263 n/m
======= ======= ======== ======= ======= ========
Earnings (Loss) Per
Share - Basic
Continuing
$0.73 $0.19 n/m operations $4.26 $1.22 n/m
Discontinued
-- (0.01) n/m operations -- -- --
Cumulative effect of
-- -- -- accounting change (0.33) -- --
------- ------- -------- ------- ------- --------
$0.73 $0.18 n/m Net income $3.93 $1.22 n/m
======= ======= ======== ======= ======= ========
Earnings (Loss) Per
Share - Diluted
Continuing
$0.71 $0.18 n/m operations $4.06 $1.18 n/m
Discontinued
-- (0.01) n/m operations -- -- --
Cumulative effect of
-- -- -- accounting change (0.32) -- --
------- ------- -------- ------- ------- --------
$0.71 $0.17 n/m Net income $3.74 $1.18 n/m
======= ======= ======== ======= ======= ========
Weighted average
212 218 number of Shares 214 216
======= ======= ======= =======
Weighted average
number of Shares
220 226 assuming dilution 224 223
======= ======= ======= =======
(a) The Company includes in revenues the reimbursement of costs
incurred on behalf of managed hotel property owners and
franchisees with no added margin and includes in costs and
expenses these reimbursed costs. These costs relate primarily to
payroll costs at managed properties where the Company is the
employer.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 30, December 31,
2006 2005
------------- ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $315 $897
Restricted cash 312 295
Accounts receivable, net of allowance
for doubtful accounts of $46 and $50 644 642
Inventories 516 280
Prepaid expenses and other 179 169
------------- ------------
Total current assets 1,966 2,283
Investments 415 403
Plant, property and equipment, net 3,816 4,169
Assets held for sale (a) 23 2,882
Goodwill and intangible assets, net 2,331 2,315
Deferred tax assets 375 40
Other assets (b) 440 402
------------- ------------
$9,366 $12,494
============= ============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (c) $729 $1,219
Accounts payable 151 156
Accrued expenses 339 1,049
Accrued salaries, wages and benefits 904 297
Accrued taxes and other 72 158
------------- ------------
Total current liabilities 2,195 2,879
Long-term debt (c) 2,345 2,849
Long-term debt held for sale (d) -- 77
Deferred tax liabilities 65 602
Other liabilities 1,986 851
------------- ------------
6,591 7,258
Minority interest 25 25
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares of
the Trust; $0.01 par value; authorized
30,000,000 shares; outstanding 0 and
562,222 shares at September 30, 2006
and December 31, 2005, respectively -- --
Class B exchangeable preferred shares of
the Trust; $0.01 par value; authorized
15,000,000 shares; outstanding 0 and
24,627 shares at September 30, 2006 and
December 31, 2005, respectively -- --
Corporation common stock; $0.01 par
value; authorized 1,050,000,000 shares;
outstanding 211,798,871 and 217,218,781
shares at September 30, 2006 and
December 31, 2005, respectively 2 2
Trust Class B shares of beneficial
interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding 0 and
217,218,781 shares at September 30,
2006 and December 31, 2005,
respectively -- 2
Additional paid-in capital 2,162 5,412
Deferred compensation -- (53)
Accumulated other comprehensive loss (249) (322)
Retained earnings 835 170
------------- ------------
Total stockholders' equity 2,750 5,211
---------------------------
$9,366 $12,494
===========================
(a) At September 30, 2006, includes 2 hotels expected to be sold in
the fourth quarter of 2006. At December 31, 2005, includes 33
hotels that were sold in the second quarter of 2006 in connection
with the definitive agreement signed on November 14, 2005 with
Host Hotels & Resorts, Inc. and 3 hotels that had signed
definitive agreements at December 31, 2005 and were sold in the
first quarter of 2006.
(b) Includes restricted cash of $10 million and $12 million at
September 30, 2006 and December 31, 2005, respectively.
(c) Excludes Starwood's share of unconsolidated joint venture debt
aggregating approximately $390 million and $469 million at
September 30, 2006 and December 31, 2005, respectively.
(d) Represents the debt that was assumed by Host in connection with
the definitive agreement signed on November 14, 2005.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Historical Data
(in millions)
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -----------------------
% %
2006 2005 Variance 2006 2005 Variance
----- ------- --------- ----- ------- ---------
Reconciliation of Net
Income to EBITDA and
Adjusted EBITDA
$155 $39 n/m Net income $840 $263 n/m
50 70 (28.6) Interest expense(a) 216 207 4.3
Income tax (benefit)
17 107 n/m expense (470) 175 n/m
77 108 (28.7) Depreciation(b) 233 330 (29.4)
12 6 100.0 Amortization (c) 25 18 38.9
----- ------- --------- ----- ------- ---------
311 330 (5.8) EBITDA 844 993 (15.0)
Loss (gain) on asset
dispositions and
18 16 12.5 impairments, net (1) 32 (103.1)
Restructuring and
other special
(1) -- n/m charges, net 11 -- n/m
Discontinued
-- 1 n/m operations -- 1 n/m
Cumulative effect of
-- -- -- accounting change 72 -- n/m
----- ------- --------- ----- ------- ---------
$328 $347 (5.5) Adjusted EBITDA $926 $1,026 (9.7)
===== ======= ========= ===== ======= =========
(a) Includes $5 million and $5 million of interest expense related to
unconsolidated joint ventures for the three months ended September
30, 2006 and 2005, respectively, and $15 million and $15 million
for the nine months ended September 30, 2006 and 2005,
respectively.
(b) Includes $7 million and $9 million of Starwood's share of
depreciation expense of unconsolidated joint ventures for the
three months ended September 30, 2006 and 2005, respectively, and
$23 million and $25 million for the nine months ended September
30, 2006 and 2005, respectively.
(c) Includes $1 million and $2 million of Starwood's share of
amortization expense of unconsolidated joint ventures for the
three months ended September 30, 2006 and 2005, respectively, and
$4 million and $5 million for the nine months ended September 30,
2006 and 2005, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Future Performance
(In millions)
Three Months Ended Year Ended
December 31, 2006 December 31, 2006
------------------ -----------------
$158 Net income $994
52 Interest expense 266
76 Income tax expense (388)
88 Depreciation and amortization 346
------------------ -----------------
374 EBITDA 1,218
Gain on asset disposition and
-- impairments, net (1)
Restructuring and other special
-- charges, net 11
Cumulative effect of accounting
-- change 72
------------------ -----------------
$374 Adjusted EBITDA $1,300
================== =================
Three Months Ended Year Ended
December 31, 2006 December 31, 2006
------------------ -----------------
Income from continuing
$158 operations 1,066
------------------ -----------------
$0.73 EPS $4.81
------------------ -----------------
Special Items
Restructuring and other special
-- charges, net 11
-- Debt defeasance costs 37
-- Debt extinguishment costs 7
Gain on asset dispositions and
-- impairments, net (1)
------------------ -----------------
-- Total special items - pre-tax 54
Income tax benefit on special
-- items (18)
Income tax benefit related to
-- the transaction with Host (514)
Reserves and credits associated
-- with tax matters (23)
------------------ -----------------
-- Total special items - after-tax (501)
------------------ -----------------
Income from continuing
operations excluding special
$158 items $565
------------------ -----------------
$0.73 EPS excluding special items $2.55
================== =================
Three Months Ended Year Ended
December 31, 2005 December 31, 2005
------------------ -----------------
$159 Net income $422
76 Interest expense 283
44 Income tax expense 218
93 Depreciation 423
8 Amortization 26
------------------ -----------------
380 EBITDA 1,372
Loss on asset dispositions and
(2) impairments, net 30
-- Discontinued operations 2
Restructuring and other special
13 charges, net 13
------------------ -----------------
$391 Adjusted EBITDA $1,417
================== =================
Year Ended December 31, 2007
----------------------------
Low High
------------- -------------
Net income $520 $533
Interest expense 215 215
Income tax expense 280 287
Depreciation and amortization 340 340
------------- -------------
EBITDA $1,355 $1,375
============= =============
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
Variance Hotels (1) %
2006 2005 Worldwide 2006 2005 Variance
----- ----- --------- ------- ------- ---------
Revenue
Same-Store Owned
$500 $462 8.1 Hotels $1,434 $1,321 8.5
Hotels Sold or
Closed in 2006
and 2005 (54
14 344 (95.9) hotels) 376 1,058 (64.5)
Hotels Without
Comparable
Results (12
75 60 25.4 hotels) 274 238 14.8
Other ancillary
5 5 7.3 hotel operations 6 6 7.2
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
$594 $871 (31.8) Hotels Revenue $2,090 $2,623 (20.3)
===== ===== ========= ======= ======= =========
Costs and Expenses
Same-Store Owned
$366 $343 6.8 Hotels $1,069 $1,008 6.0
Hotels Sold or
Closed in 2006
and 2005 (54
11 247 95.5 hotels) 288 765 62.4
Hotels Without
Comparable
Results (12
64 55 n/a hotels) 215 185 (16.3)
Other ancillary
2 1 (24.5) hotel operations 3 4 (2.9)
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
Hotels Costs and
$443 $646 31.4 Expenses $1,575 $1,962 19.7
===== ===== ========= ======= ======= =========
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -------------------------
Same-Store Owned
% Hotels %
2006 2005 Variance North America 2006 2005 Variance
----- ----- --------- ------- ------- ---------
Revenue
Same-Store Owned
$321 $299 7.3 Hotels $936 $850 10.1
Hotels Sold or
Closed in 2006
and 2005 (43
13 287 (95.6) hotels) 304 863 (64.8)
Hotels Without
Comparable
Results (8
59 43 36.5 hotels) 232 188 23.3
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
$393 $629 (37.5) Hotels Revenue $1,472 $1,901 (22.6)
===== ===== ========= ======= ======= =========
Costs and Expenses
Same-Store Owned
$236 $224 5.4 Hotels $691 $647 6.8
Hotels Sold or
Closed in 2006
and 2005 (43
11 207 (94.7) hotels) 237 629 (62.5)
Hotels Without
Comparable
Results (8
53 43 21.5 hotels) 183 149 23.2
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
Hotels Costs and
$300 $474 36.9 Expenses $1,111 $1,425 22.1
===== ===== ========= ======= ======= =========
Three Months Ended Nine Months Ended
September 30, September 30,
----------------------- -------------------------
Same-Store Owned
% Hotels %
2006 2005 Variance International 2006 2005 Variance
----- ----- --------- ------- ------- ---------
Revenue
Same-Store Owned
$179 $163 9.5 Hotels $498 $471 5.8
Hotels Sold or
Closed in 2006
and 2005 (11
1 57 (97.3) hotels) 72 195 (62.9)
Hotels Without
Comparable
Results (4
16 17 (3.7) hotels) 42 50 (16.9)
Other ancillary
5 5 7.3 hotel operations 6 6 7.2
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
$201 $242 (16.8) Hotels Revenue $618 $722 (14.3)
===== ===== ========= ======= ======= =========
Costs and Expenses
Same-Store Owned
$130 $119 9.6 Hotels $378 $361 4.5
Hotels Sold or
Closed in 2006
and 2005 (11
-- 40 (99.7) hotels) 51 136 (62.2)
Hotels Without
Comparable
Results (4
11 12 (6.8) hotels) 32 36 (12.4)
Other ancillary
2 1 24.5 hotel operations 3 4 2.9
----- ----- --------- ------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture
Hotels Costs and
$143 $172 16.5 Expenses $464 $537 13.5
===== ===== ========= ======= ======= =========
(1) Same-Store Owned Hotel Results exclude 54 hotels sold or closed in
2006 and 2005 and 12 hotels without comparable results;
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Three Months Ended September 30, 2006
UNAUDITED
System Wide (1) - System Wide (1) -
Worldwide North America
--------------------- ---------------------
2006 2005 Var. 2006 2005 Var.
------- ------- ----- ------- ------- -----
TOTAL HOTELS
REVPAR ($) 112.54 103.07 9.2% 112.40 104.55 7.5%
ADR ($) 155.31 142.43 9.0% 149.66 139.30 7.4%
OCCUPANCY (%) 72.5% 72.4% 0.1 75.1% 75.1% 0.0
SHERATON
REVPAR ($) 99.73 91.79 8.7% 105.61 98.91 6.8%
ADR ($) 140.27 128.41 9.2% 141.27 131.48 7.4%
OCCUPANCY (%) 71.1% 71.5% -0.4 74.8% 75.2% -0.4
WESTIN
REVPAR ($) 124.37 114.60 8.5% 120.50 111.11 8.5%
ADR ($) 169.82 157.24 8.0% 163.28 151.60 7.7%
OCCUPANCY (%) 73.2% 72.9% 0.3 73.8% 73.3% 0.5
ST. REGIS/LUXURY
COLLECTION
REVPAR ($) 277.27 235.77 17.6% 186.94 165.79 12.8%
ADR ($) 385.41 346.40 11.3% 261.99 244.91 7.0%
OCCUPANCY (%) 71.9% 68.1% 3.8 71.4% 67.7% 3.7
W
REVPAR ($) 216.80 195.57 10.9% 225.80 203.10 11.2%
ADR ($) 272.15 248.38 9.6% 274.28 250.28 9.6%
OCCUPANCY (%) 79.7% 78.7% 1.0 82.3% 81.1% 1.2
FOUR POINTS
REVPAR ($) 73.19 67.02 9.2% 73.19 67.64 8.2%
ADR ($) 99.26 92.54 7.3% 98.49 92.14 6.9%
OCCUPANCY (%) 73.7% 72.4% 1.3 74.3% 73.4% 0.9
OTHER
REVPAR ($) 109.81 111.72 -1.7% 109.81 111.72 -1.7%
ADR ($) 126.30 125.28 0.8% 126.30 125.28 0.8%
OCCUPANCY (%) 86.9% 89.2% -2.3 86.9% 89.2% -2.3
System Wide (1) -
International
---------------------
2006 2005 Var.
------- ------- -----
TOTAL HOTELS
REVPAR ($) 112.78 100.62 12.1%
ADR ($) 165.66 148.17 11.8%
OCCUPANCY (%) 68.1% 67.9% 0.2
SHERATON
REVPAR ($) 92.92 83.56 11.2%
ADR ($) 138.97 124.45 11.7%
OCCUPANCY (%) 66.9% 67.1% -0.2
WESTIN
REVPAR ($) 136.89 125.82 8.8%
ADR ($) 191.62 175.84 9.0%
OCCUPANCY (%) 71.4% 71.6% -0.2
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 337.57 283.32 19.1%
ADR ($) 466.69 414.75 12.5%
OCCUPANCY (%) 72.3% 68.3% 4.0
W
REVPAR ($) 130.84 123.73 5.7%
ADR ($) 241.20 221.93 8.7%
OCCUPANCY (%) 54.2% 55.8% -1.6
FOUR POINTS
REVPAR ($) 73.19 65.07 12.5%
ADR ($) 101.72 93.87 8.4%
OCCUPANCY (%) 71.9% 69.3% 2.6
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
(1) Includes same store owned, leased, managed, and franchised hotels
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Three Months Ended September 30, 2006
UNAUDITED
System Wide (1) Company Operated (2)
--------------------- ---------------------
2006 2005 Var. 2006 2005 Var.
------- ------- ----- ------- ------- -----
TOTAL WORLDWIDE
REVPAR ($) 112.54 103.07 9.2% 126.26 115.61 9.2%
ADR ($) 155.31 142.43 9.0% 171.73 156.90 9.5%
OCCUPANCY (%) 72.5% 72.4% 0.1 73.5% 73.7% -0.2
NORTH AMERICA
REVPAR ($) 112.40 104.55 7.5% 132.53 122.93 7.8%
ADR ($) 149.66 139.30 7.4% 171.55 159.13 7.8%
OCCUPANCY (%) 75.1% 75.1% 0.0 77.3% 77.3% 0.0
EUROPE
REVPAR ($) 157.54 134.87 16.8% 180.76 155.22 16.5%
ADR ($) 221.82 197.27 12.4% 250.18 224.06 11.7%
OCCUPANCY (%) 71.0% 68.4% 2.6 72.3% 69.3% 3.0
AFRICA & MIDDLE EAST
REVPAR ($) 85.45 77.33 10.5% 86.87 79.18 9.7%
ADR ($) 129.77 114.80 13.0% 131.34 114.93 14.3%
OCCUPANCY (%) 65.8% 67.4% -1.6 66.1% 68.9% -2.8
ASIA PACIFIC
REVPAR ($) 97.29 91.73 6.1% 96.89 91.74 5.6%
ADR ($) 140.48 129.49 8.5% 136.54 126.60 7.9%
OCCUPANCY (%) 69.3% 70.8% -1.5 71.0% 72.5% -1.5
LATIN AMERICA
REVPAR ($) 63.47 58.47 8.6% 67.36 63.78 5.6%
ADR ($) 108.15 99.66 8.5% 120.41 110.17 9.3%
OCCUPANCY (%) 58.7% 58.7% 0.0 55.9% 57.9% -2.0
(1) Includes same store owned, leased, managed, and franchised hotels
(2) Includes same store owned, leased, and managed hotels
Starwood Hotels & Resorts Worldwide, Inc.
Owned Hotel Results - Same Store (1)
For the Three Months Ended September 30, 2006
UNAUDITED
WORLDWIDE NORTH AMERICA
----------------------- -----------------------
2006 2005 Var. 2006 2005 Var.
-------- -------- ----- -------- -------- -----
76 Hotels 46 Hotels
----------------------- -----------------------
TOTAL HOTELS
REVPAR ($) 142.08 128.52 10.6% 140.50 128.85 9.0%
ADR ($) 190.53 175.81 8.4% 178.87 166.54 7.4%
OCCUPANCY (%) 74.6% 73.1% 1.5 78.5% 77.4% 1.1
Total REVENUE 499,899 462,517 8.1% 321,437 299,482 7.3%
Total EXPENSES 366,476 343,069 6.8% 235,783 223,789 5.4%
67 Hotels 37 Hotels
----------------------- -----------------------
BRANDED HOTELS
REVPAR ($) 144.66 129.49 11.7% 144.28 130.43 10.6%
ADR ($) 194.49 178.88 8.7% 182.91 169.53 7.9%
OCCUPANCY (%) 74.4% 72.4% 2.0 78.9% 76.9% 2.0
Total REVENUE 462,066 422,356 9.4% 283,604 259,321 9.4%
Total EXPENSES 338,458 314,141 7.7% 207,765 194,861 6.6%
INTERNATIONAL
-----------------------
2006 2005 Var.
-------- -------- -----
30 Hotels
-----------------------
TOTAL HOTELS
REVPAR ($) 145.31 127.86 13.6%
ADR ($) 218.45 198.29 10.2%
OCCUPANCY (%) 66.5% 64.5% 2.0
Total REVENUE 178,462 163,035 9.5%
Total EXPENSES 130,693 119,280 9.6%
30 Hotels
-----------------------
BRANDED HOTELS
REVPAR ($) 145.31 127.86 13.6%
ADR ($) 218.45 198.29 10.2%
OCCUPANCY (%) 66.5% 64.5% 2.0
Total REVENUE 178,462 163,035 9.5%
Total EXPENSES 130,693 119,280 9.6%
(1) Hotel Results exclude 51 hotels sold and 11 hotels without
comparable results during 2005 & 2006
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended September 30, 2006
UNAUDITED ($ millions)
Worldwide
--------------------------------------
2006 2005 Variance % Variance
------- ------- -------- ----------
Management Fees:
Base Fees 65 37 28 75.7%
Incentive Fees 34 22 12 54.5%
------- ------- -------- ----------
Total Management Fees 99 59 40 67.8%
Franchise Fees 31 25 6 24.0%
------- ------- -------- ----------
Total Management & Franchise
Fees 130 84 46 54.8%
Other Management & Franchise
Revenues (1) 26 7 19 271.4%
------- ------- -------- ----------
Total Management & Franchise
Revenues 156 91 65 71.4%
======= ======= ======== ==========
Other (2) 26 35 (9) (25.7)%
------- ------- -------- ----------
Management Fees, Franchise
Fees and Other Income 182 126 56 44.4%
======= ======= ======== ==========
(1) Other Management & Franchise Fees primarily includes the
amortization of deferred gains of approximately $19 million in 2006
and $3 million in 2005 resulting from the sales of hotels subject to
long-term management contracts and termination fees.
(2) Other primarily includes revenues from Bliss and other
miscellaneous revenue.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership & Residential Revenues and Expenses
For the Three Months Ended September 30, 2006
UNAUDITED ($ millions)
2006 2005 % Variance
------- ------- ----------
Originated Sales Revenues (1) -- Vacation
Ownership Sales 185 163 13.5%
Other Sales and Services Revenues (2) 34 28 21.4%
Deferred Revenues -- Percentage of
Completion 20 (23) n/m
Deferred Revenues -- Other (3) 10 6 n/m
------- ------- ----------
Vacation Ownership Sales and Services
Revenues 249 174 43.1%
Residential Sales and Services Revenues 6 59 (89.8%)
------- ------- ----------
Total Vacation Ownership & Residential
Sales and Services Revenues 255 233 9.4%
======= ======= ==========
Originated Sales Expenses (4) -- Vacation
Ownership Sales 113 107 (5.6%)
Other Expenses (5) 39 29 (34.5%)
Deferred Expenses -- Percentage of
Completion 14 (13) n/m
Deferred Expenses -- Other 12 3 (33.3%)
------- ------- ----------
Vacation Ownership Expenses 178 126 (41.3%)
Residential Expenses 5 43 88.4%
------- ------- ----------
Total Vacation Ownership & Residential
Expenses 183 169 (8.3%)
======= ======= ==========
(1) Timeshare sales revenue originated at each sales location before
deferrals of revenue for U.S. GAAP reporting purposes
(2) Includes resort income, interest income, gain on sale of notes
receivable, and miscellaneous other revenues
(3) Includes deferral of revenue for contracts still in rescission
period, contracts that do not yet meet the requirements of SFAS No.
66 or SFAS No. 152 and, in 2006, provision for loan loss
(4) Timeshare cost of sales and sales & marketing expenses before
deferrals of sales expenses for U.S. GAAP reporting purposes
(5) Includes resort, general and administrative, and other
miscellaneous expenses
Note: Deferred revenue is calculated based on the Percentage of
Completion ("POC") of the project. Deferred expenses, also based on
POC, include product costs and direct sales and marketing costs only.
Indirect sales and marketing costs are no longer deferred per SFAS
152 as of January 1, 2006.
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Nine Months Ended September 30, 2006
UNAUDITED
System Wide (1) - System Wide (1) -
Worldwide North America
--------------------- ---------------------
2006 2005 Var. 2006 2005 Var.
------- ------- ----- ------- ------- -----
TOTAL HOTELS
REVPAR ($) 109.33 99.84 9.5% 111.42 101.63 9.6%
ADR ($) 154.87 143.21 8.1% 152.71 141.08 8.2%
OCCUPANCY (%) 70.6% 69.7% 0.9 73.0% 72.0% 1.0
SHERATON
REVPAR ($) 97.49 89.12 9.4% 102.13 93.62 9.1%
ADR ($) 140.52 129.02 8.9% 141.54 130.20 8.7%
OCCUPANCY (%) 69.4% 69.1% 0.3 72.2% 71.9% 0.3
WESTIN
REVPAR ($) 126.39 115.98 9.0% 125.57 113.90 10.2%
ADR ($) 175.35 163.36 7.3% 171.45 158.05 8.5%
OCCUPANCY (%) 72.1% 71.0% 1.1 73.2% 72.1% 1.1
ST. REGIS/LUXURY
COLLECTION
REVPAR ($) 237.68 211.21 12.5% 208.71 183.47 13.8%
ADR ($) 343.41 321.14 6.9% 284.38 265.38 7.2%
OCCUPANCY (%) 69.2% 65.8% 3.4 73.4% 69.1% 4.3
W
REVPAR ($) 205.34 181.86 12.9% 213.38 189.76 12.4%
ADR ($) 270.01 246.16 9.7% 272.22 247.85 9.8%
OCCUPANCY (%) 76.0% 73.9% 2.1 78.4% 76.6% 1.8
FOUR POINTS
REVPAR ($) 68.28 61.93 10.3% 66.97 60.69 10.3%
ADR ($) 97.41 90.59 7.5% 95.47 88.07 8.4%
OCCUPANCY (%) 70.1% 68.4% 1.7 70.1% 68.9% 1.2
OTHER
REVPAR ($) 110.31 106.45 3.6% 110.31 106.45 3.6%
ADR ($) 131.00 131.47 -0.4% 131.00 131.47 -0.4%
OCCUPANCY (%) 84.2% 81.0% 3.2 84.2% 81.0% 3.2
System Wide (1) -
International
---------------------
2006 2005 Var.
------- ------- -----
TOTAL HOTELS
REVPAR ($) 105.85 96.87 9.3%
ADR ($) 158.82 147.09 8.0%
OCCUPANCY (%) 66.6% 65.9% 0.7
SHERATON
REVPAR ($) 92.10 83.89 9.8%
ADR ($) 139.24 127.52 9.2%
OCCUPANCY (%) 66.1% 65.8% 0.3
WESTIN
REVPAR ($) 129.07 122.75 5.1%
ADR ($) 188.91 181.72 4.0%
OCCUPANCY (%) 68.3% 67.6% 0.7
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 255.51 229.22 11.5%
ADR ($) 383.44 360.48 6.4%
OCCUPANCY (%) 66.6% 63.6% 3.0
W
REVPAR ($) 128.56 106.47 20.7%
ADR ($) 239.28 220.63 8.5%
OCCUPANCY (%) 53.7% 48.3% 5.4
FOUR POINTS
REVPAR ($) 72.27 65.73 9.9%
ADR ($) 103.35 98.62 4.8%
OCCUPANCY (%) 69.9% 66.7% 3.2
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
(1) Includes same store owned, leased, managed, and franchised hotels
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Nine Months Ended September 30, 2006
UNAUDITED
System Wide (1) Company Operated (2)
--------------------- ---------------------
2006 2005 Var. 2006 2005 Var.
------- ------- ----- ------- ------- -----
TOTAL WORLDWIDE
REVPAR ($) 109.33 99.84 9.5% 122.39 111.74 9.5%
ADR ($) 154.87 143.21 8.1% 171.15 157.83 8.4%
OCCUPANCY (%) 70.6% 69.7% 0.9 71.5% 70.8% 0.7
NORTH AMERICA
REVPAR ($) 111.42 101.63 9.6% 131.38 119.56 9.9%
ADR ($) 152.71 141.08 8.2% 175.15 161.80 8.3%
OCCUPANCY (%) 73.0% 72.0% 1.0 75.0% 73.9% 1.1
EUROPE
REVPAR ($) 133.48 122.11 9.3% 151.89 138.66 9.5%
ADR ($) 198.21 187.77 5.6% 220.83 210.54 4.9%
OCCUPANCY (%) 67.3% 65.0% 2.3 68.8% 65.9% 2.9
AFRICA & MIDDLE EAST
REVPAR ($) 92.33 83.14 11.1% 93.31 84.02 11.1%
ADR ($) 136.46 121.69 12.1% 140.48 121.14 16.0%
OCCUPANCY (%) 67.7% 68.3% -0.6 66.4% 69.4% -3.0
ASIA PACIFIC
REVPAR ($) 95.34 89.59 6.4% 93.02 88.49 5.1%
ADR ($) 143.36 133.67 7.2% 139.07 131.39 5.8%
OCCUPANCY (%) 66.5% 67.0% -0.5 66.9% 67.4% -0.5
LATIN AMERICA
REVPAR ($) 75.36 64.86 16.2% 83.40 72.29 15.4%
ADR ($) 118.11 105.03 12.5% 133.15 115.73 15.1%
OCCUPANCY (%) 63.8% 61.8% 2.0 62.6% 62.5% 0.1
(1) Includes same store owned, leased, managed, and franchised hotels
(2) Includes same store owned, leased, and managed hotels
Starwood Hotels & Resorts Worldwide, Inc.
Owned Hotel Results - Same Store (1)
For the Nine Months Ended September 30, 2006
UNAUDITED
WORLDWIDE NORTH AMERICA
--------------------------- -----------------------
2006 2005 Var. 2006 2005 Var.
---------- ---------- ----- -------- -------- -----
75 Hotels 45 Hotels
--------------------------- -----------------------
TOTAL HOTELS
REVPAR ($) 134.65 122.48 9.9% 134.01 120.62 11.1%
ADR ($) 188.27 174.10 8.1% 181.28 165.62 9.5%
OCCUPANCY (%) 71.5% 70.3% 1.2 73.9% 72.8% 1.1
Total REVENUE 1,433,521 1,320,629 8.5% 935,787 850,001 10.1%
Total EXPENSES 1,068,727 1,008,270 6.0% 690,532 646,526 6.8%
66 Hotels 36 Hotels
--------------------------- -----------------------
BRANDED HOTELS
REVPAR ($) 138.09 125.33 10.2% 139.32 124.81 11.6%
ADR ($) 192.29 177.29 8.5% 186.30 169.16 10.1%
OCCUPANCY (%) 71.8% 70.7% 1.1 74.8% 73.8% 1.0
Total REVENUE 1,330,461 1,220,019 9.1% 832,727 749,391 11.1%
Total EXPENSES 985,929 928,622 6.2% 607,734 566,878 7.2%
INTERNATIONAL
----------------------
2006 2005 Var.
-------- -------- ----
30 Hotels
----------------------
TOTAL HOTELS
REVPAR ($) 135.95 126.25 7.7%
ADR ($) 204.01 193.32 5.5%
OCCUPANCY (%) 66.6% 65.3% 1.3
Total REVENUE 497,734 470,628 5.8%
Total EXPENSES 378,195 361,744 4.5%
30 Hotels
----------------------
BRANDED HOTELS
REVPAR ($) 135.95 126.25 7.7%
ADR ($) 204.01 193.32 5.5%
OCCUPANCY (%) 66.6% 65.3% 1.3
Total REVENUE 497,734 470,628 5.8%
Total EXPENSES 378,195 361,744 4.5%
(1) Hotel Results exclude 54 hotels sold and 12 hotels without
comparable results during 2005 & 2006
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Nine Months Ended September 30, 2006
UNAUDITED ($ millions)
Worldwide
--------------------------------------
2006 2005 Variance % Variance
------- ------- -------- ----------
Management Fees:
Base Fees 169 105 64 61.0%
Incentive Fees 91 54 37 68.5%
------- ------- -------- ----------
Total Management Fees 260 159 101 63.5%
Franchise Fees 87 72 15 20.8%
------- ------- -------- ----------
Total Management & Franchise
Fees 347 231 116 50.2%
Other Management & Franchise
Revenues (1) 56 27 29 107.4%
------- ------- -------- ----------
Total Management & Franchise
Revenues 403 258 145 56.2%
======= ======= ======== ==========
Other (2) 85 91 (6) (6.6)%
------- ------- -------- ----------
Management Fees, Franchise Fees
and Other Income 488 349 139 39.8%
======= ======= ======== ==========
(1) Other Management & Franchise Fees primarily includes the
amortization of deferred gains of approximately $42 million in 2006
and $9 million in 2005 resulting from the sales of hotels subject to
long-term management contracts and termination fees.
(2) Other primarily includes revenues from Bliss and other
miscellaneous revenue.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership & Residential Revenues and Expenses
For the Nine Months Ended September 30, 2006
UNAUDITED ($ millions)
2006 2005 % Variance
------- ------- ----------
Originated Sales Revenues (1) -- Vacation
Ownership Sales 563 467 20.6%
Other Sales and Services Revenues (2) 104 83 25.3%
Deferred Revenues -- Percentage of
Completion (70) 2 n/m
Deferred Revenues -- Other (3) (2) 2 n/m
------- ------- ----------
Vacation Ownership Sales and Services
Revenues 595 554 7.4%
Residential Sales and Services Revenues 88 143 (38.5%)
------- ------- ----------
Total Vacation Ownership & Residential
Sales and Services Revenues 683 697 (2.0%)
======= ======= ==========
Originated Sales Expenses (4) -- Vacation
Ownership Sales 362 301 (20.3%)
Other Expenses (5) 118 91 (29.7%)
Deferred Expenses -- Percentage of
Completion (33) 1 n/m
Deferred Expenses -- Other 19 1 n/m
------- ------- ----------
Vacation Ownership Expenses 466 394 (18.3%)
Residential Expenses 66 109 39.4%
------- ------- ----------
Total Vacation Ownership & Residential
Expenses 532 503 (5.8%)
======= ======= ==========
(1) Timeshare sales revenue originated at each sales location before
deferrals of revenue for U.S. GAAP reporting purposes
(2) Includes resort income, interest income, gain on sale of notes
receivable, and miscellaneous other revenues
(3) Includes deferral of revenue for contracts still in rescission
period, contracts that do not yet meet the requirements of SFAS No.
66 or SFAS No. 152 and, in 2006, provision for loan loss
(4) Timeshare cost of sales and sales & marketing expenses before
deferrals of sales expenses for U.S. GAAP reporting purposes
(5) Includes resort, general and administrative, and other
miscellaneous expenses
Note: Deferred revenue is calculated based on the Percentage of
Completion ("POC") of the project. Deferred expenses, also based on
POC, include product costs and direct sales and marketing costs only.
Indirect sales and marketing costs are no longer deferred per SFAS
152 as of January 1, 2006.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Debt Portfolio Summary
As of September 30, 2006
UNAUDITED
Interest Balance % of Interest Avg Maturity
Debt Terms (in millions) Portfolio Rate (in years)
--------------- -------- ------------- --------- -------- ------------
Floating Rate
Debt:
Senior credit
facility
Revolving
credit Various
facility + .525% $872 28% 5.83% 4.4
------------- --------- -------- ------------
872 28% 5.83% 4.4
Mortgages and
other Various 134 4% 6.08% 1.7
Interest rate LIBOR
swaps + 4.23% 300 10% 9.60%
------------- --------- --------
Total Floating 1,306 42% 6.72% 4.0
Fixed Rate
Debt:
Sheraton
Holding public
debt 449 15% 7.38% 9.1
Senior notes
(1) 1,483 48% 6.70% 3.2
Mortgages and
other 136 5% 7.46% 8.5
Interest rate
swaps (300) -(10%) 7.88%
------------- --------- --------
Total Fixed 1,768 58% 6.80% 4.8
------------- --------- --------
Total Debt $3,074 100% 6.76% 4.6
============= ========= ========
(1) Balance consists of outstanding public debt of $1.497 billion and
a $8 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 ($22) million fair value adjustment related to
current fixed to floating interest rate swaps.
Maturities
----------------------------------------
less than 1 year $729
2-3 years 92
4-5 years 918
greater than 5 years 1,335
-------------------
$3,074
===================
----------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Comparable Results & Other Selected Items
As of September 30, 2006
UNAUDITED ($ millions)
Properties without comparable results in 2006:
Property Location
-------- --------
W New Orleans - French Quarter New Orleans, LA
W New Orleans New Orleans, LA
St. Regis Aspen Aspen, CO
Sheraton Bal Harbour Beach Resort Bal Harbour, FL
St. Regis New York New York, NY
Caesars Paradise Stream Mount Pocono, PA
St. Regis Hotel, San Francisco San Francisco, CA
Westin St. John Resort & Villas St. John, Virgin Islands
The Westin Resort & Spa, Cancun Cancun, Mexico
Sheraton Diana Majestic Hotel Milan, Italy
Sheraton Fiji Nadi, Fiji
Westin Royal Denarau Nadi, Fiji
Properties sold or closed in 2006 and 2005:
Property Location
-------- --------
33 Hotels Sold to Host Hotels & Resorts Various
Sheraton Denver Tech Center Englewood, CO
Deerfield Beach Hilton Ft. Lauderdale, FL
Raphael Chicago, IL
Sheraton Chapel Hill Chapel Hill, NC
St. Regis Washington, DC Washington, DC
Sheraton Russell Hotel New York, NY
Westin Philadelphia Philadelphia, PA
Westin Princeton at Forrestal Village Princeton, NJ
Sheraton Ft. Lauderdale Airport Hotel Dania, FL
Westin Hotel Long Beach Long Beach, CA
Sheraton Suites San Diego San Diego, CA
Sheraton Framingham Hotel Framingham, MA
Westin Embassy Row, Washington D.C. Washington, DC
Westin Atlanta North at Perimeter Atlanta, GA
Sheraton Suites Key West Key West, FL
Sheraton Colony Square Atlanta, GA
Sheraton Colonial Hotel & Golf Club Lynnfield, MA
Sheraton Universal Hotel Universal City, CA
Hotel Danieli Venice, Italy
Sheraton Lisboa Hotel & Towers Lisbon, Portugal
Sheraton Cancun Resort & Towers Cancun, Mexico
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents
(including restricted cash of $322 million) $637
Debt $3,074
Revenues and Expenses Associated with Assets Sold or Closed in 2005
and 2006 or Expected to be Sold in the Fourth Quarter of 2006 (1):
Q1 Q2 Q3 Q4 Full Year
----- ----- ----- ----- ---------
Hotels Sold in 2005:
2005
Revenues $36 $41 $28 $18 $123
Expenses (excluding
depreciation) $29 $27 $20 $14 $90
Hotels Sold in the First Nine Months of 2006:
2006
Revenues $294 $68 $14 $- $376
Expenses (excluding
depreciation) $225 $52 $11 $- $288
2005
Revenues $286 $351 $316 $339 $1,292
Expenses (excluding
depreciation) $223 $239 $227 $239 $928
Hotels Classified as Held for Sale at September 30, 2006:
2006
Revenues $1 $1 $1 $- $3
Expenses (excluding
depreciation) $1 $1 $1 $- $3
2005
Revenues $1 $1 $1 $1 $4
Expenses (excluding
depreciation) $1 $1 $1 $1 $4
(1) Results consist of 11 hotels sold in 2005, 43 hotels sold in 2006
and 2 hotels which are classifed as held for sale at September 30,
2006. These amounts are included in the revenues and expenses from
owned, leased and consolidated joint venture hotels in 2006 and 2005.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three and Nine Months Ended September 30, 2006
UNAUDITED ($ millions)
Q3 YTD
------ -------
Capital Expenditures:
Owned, Leased and Consolidated Joint Venture Hotels 47 186
Corporate/IT 10 32
------ -------
Subtotal 57 218
Vacation Ownership Capital Expenditures:
Capital expenditures (includes land acquisitions) 19 50
Net capital expenditures for inventory (1) 24 85
------ -------
Subtotal 43 135
Development Capital 19 109
------ -------
Total Capital Expenditures 119 462
====== =======
(1) Represents gross inventory capital expenditures of $88 and $229 in
the three and nine months ended September 30, 2006, respectively,
less cost of sales of $64 and $144 in the three and nine months ended
September 30, 2006, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
2006 Divisional Hotel Inventory Summary by Ownership by Brand
As of September 30, 2006
NAD EAME LAD
---------------- --------------- ---------------
Owned Hotels Rooms Hotels Rooms Hotels Rooms
------- -------- ------- ------- ------- -------
Sheraton 15 6,562 8 1,711 5 2,713
Westin 8 4,030 5 1,068 3 901
Four Points 6 1,153 - - - -
W 10 3,178 - - - -
Luxury Collection 1 654 7 828 1 181
St. Regis 3 668 1 161 - -
Other 10 2,482 - - - -
------- -------- ------- ------- ------- -------
Total Owned 53 18,727 21 3,768 9 3,795
Managed & UJV
Sheraton 55 28,541 76 22,516 14 2,749
Westin 46 25,328 14 3,709 - -
Four Points 1 475 6 899 3 428
W 8 2,269 - - 1 237
Luxury Collection 6 1,427 9 1,545 8 298
St. Regis 5 728 1 95 - -
Le Meridien 5 1,058 69 16,348 3 839
Other 4 3,305 1 165 - -
------- -------- ------- ------- ------- -------
Total Managed & UJV 130 63,131 176 45,277 29 4,551
Franchised
Sheraton 122 37,895 26 6,663 4 1,294
Westin 29 10,311 3 1,131 3 598
Four Points 84 14,610 11 1,539 9 1,384
Luxury Collection 1 249 14 1,746 - -
Le Meridien 4 1,342 11 3,793 - -
------- -------- ------- ------- ------- -------
Total Franchised 240 64,407 65 14,872 16 3,276
----------------------------------------------------------------------
Systemwide
Sheraton 192 72,998 110 30,890 23 6,756
Westin 83 39,669 22 5,908 6 1,499
Four Points 91 16,238 17 2,438 12 1,812
W 18 5,447 - - 1 237
Luxury Collection 8 2,330 30 4,119 9 479
St. Regis 8 1,396 2 256 - -
Le Meridien 9 2,400 80 20,141 3 839
Other 14 5,787 1 165 - -
------- -------- ------- ------- ------- -------
Total Systemwide 423 146,265 262 63,917 54 11,622
======= ======== ======= ======= ======= =======
----------------------------------------------------------------------
ASIA Total
--------------- ----------------
Owned Hotels Rooms Hotels Rooms
------- ------- ------- --------
Sheraton 2 831 30 11,817
Westin 1 273 17 6,272
Four Points 1 630 7 1,783
W - - 10 3,178
Luxury Collection - - 9 1,663
St. Regis - - 4 829
Other - - 10 2,482
------- ------- ------- --------
Total Owned 4 1,734 87 28,024
Managed & UJV
Sheraton 47 16,103 192 69,909
Westin 11 4,383 71 33,420
Four Points 2 614 12 2,416
W 2 330 11 2,836
Luxury Collection - - 23 3,270
St. Regis 2 591 8 1,414
Le Meridien 24 5,832 101 24,077
Other - - 5 3,470
------- ------- ------- --------
Total Managed & UJV 88 27,853 423 140,812
Franchised
Sheraton 18 6,719 170 52,571
Westin 5 1,226 40 13,266
Four Points 2 235 106 17,768
Luxury Collection - - 15 1,995
Le Meridien 5 2,772 20 7,907
------- ------- ------- --------
Total Franchised 30 10,952 351 93,507
----------------------------------------------------------------------
Systemwide
Sheraton 67 23,653 392 134,297
Westin 17 5,882 128 52,958
Four Points 5 1,479 125 21,967
W 2 330 21 6,014
Luxury Collection - - 47 6,928
St. Regis 2 591 12 2,243
Le Meridien 29 8,604 121 31,984
Other - - 15 5,952
------- ------- ------- --------
Total Systemwide 122 40,539 861 262,343
======= ======= ======= ========
----------------------------------------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of September 30, 2006
UNAUDITED
---------------------------------------------------------------------
# Resorts
--------------------------------
In In Active
Brand Total (2) Operations Sales
---------------------------------------------------------------------
Sheraton 7 6 6
Westin 9 4 6
St. Regis 2 1 2
Unbranded 3 3 -
--------------------------------
Total SVO, Inc. 21 14 14
--------------------------------
Unconsolidated Joint Ventures
(UJV's) 2 1 1
--------------------------------
Total including UJV's 23 15 15
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Intervals Including UJV's (7)
---------------------------------------------------------------------
---------------------------------------------------------------------
# of Units (1)
--------------------------------------------------
Future
Pre-sales/ Capacity Total at
Brand Completed (3) Development (4) (5),(6) Buildout
---------------------------------------------------------------------
Sheraton 2,596 135 1,683 4,414
Westin 657 591 636 1,884
St. Regis 25 22 - 47
Unbranded 124 - 1 125
---------------------------------------------------
Total SVO, Inc. 3,402 748 2,320 6,470
---------------------------------------------------
Unconsolidated
Joint Ventures
(UJV's) 198 - 36 234
---------------------------------------------------
Total including
UJV's 3,600 748 2,356 6,704
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Intervals
Including UJV's
(7) 187,200 38,896 122,512 348,608
---------------------------------------------------------------------
(1) Lockoff units are considered as one unit for this analysis.
(2) Includes resorts in operation, active sales, and announced new
resorts, Sheraton Kauai and St. Regis Punta Mita (UJV)
(3) Completed units include those units that have a certificate of
occupancy.
(4) Units in Pre-sales/Development are in various stages of
development (including the permitting stage), most of which are
currently being offered for sale to customers.
(5) Based on owned land and average density in existing marketplaces
(6) Future units indicated above include planned timeshare units on
land owned by the Company or applicable UJV that have received all
major governmental land use approvals for the development of
timeshare. There can be no assurance that such units will in fact be
developed and, if developed, the time period of such development
(which may be more than several years in the future). Some of the
projects may require additional third-party approvals or permits for
development and build out and may also be subject to legal challenges
as well as a commitment of capital by the Company. The actual number
of units to be constructed may be significantly lower than the number
of future units indicated.
(7) Assumes 52 intervals per unit.
------------------------------
Contact: Starwood Hotels & Resorts Worldwide, Inc. Alisa Rosenberg, 914-640-5214
Source: Starwood Hotels & Resorts Worldwide, Inc.