STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per Share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
----------------------
-------------------------
%
%
2006 2005 Variance
2006 2005 Variance
------ ------ --------
------- ------- ---------
Revenues
Owned, leased and
consolidated joint
$674 $939 (28.2)
venture hotels $1,496 $1,752
(14.6)
Vacation ownership
and residential
234 233
0.4 sales and services 428
464 (7.8)
Management fees,
franchise fees and
174 119
46.2 other income
306 223 37.2
Other revenues from
managed and
franchised
423 268
57.8 properties (a)
716 526 36.1
------ ------ --------
------- ------- ---------
1,505 1,559 (3.5)
2,946 2,965 (0.6)
Costs and Expenses
Owned, leased and
consolidated joint
492 675
27.1 venture hotels
1,132 1,316 14.0
Vacation ownership
184 167 (10.2)
and residential 349
334 (4.5)
Selling, general,
administrative and
121 94
(28.7) other
227 176 (29.0)
Restructuring and
other special
3 --
n/m charges, net
12 --
n/m
72 101
28.7 Depreciation
140 206 32.0
5 4
(25.0) Amortization
10 9 (11.1)
Other expenses from
managed and
franchised
423 268 (57.8)
properties (a) 716
526 (36.1)
------ ------ --------
------- ------- ---------
1,300 1,309 0.7
2,586 2,567 (0.7)
205 250 (18.0)
Operating income 360
398 (9.5)
Equity earnings and
gains and losses
from unconsolidated
32 18
77.8 ventures, net
38 31 22.6
Interest expense, net
of interest income
(50) (60) 16.7
of $3, $3, $9 and $5 (147) (122)
(20.5)
(Loss) gain on asset
dispositions and
(6) (17) 64.7
impairments, net 19
(16) n/m
------ ------ --------
------- ------- ---------
Income from
continuing
operations before
taxes and minority
181 191
(5.2) equity
270 291 (7.2)
Income tax benefit
501 (47)
n/m (expense)
487 (68) n/m
Minority equity in
(2) 1
n/m net (income) loss
-- 1 (100.0)
------ ------ --------
------- ------- ---------
Income from
continuing
680 145
n/m operations
757 224 n/m
Cumulative effect of
-- --
-- accounting change (72)
-- n/m
------ ------ --------
------- ------- ---------
$680 $145
n/m Net income
$685 $224 n/m
====== ====== ========
======= ======= =========
Earnings (Loss) Per
Share - Basic
$3.16 $0.67 n/m
Continuing operations $3.51 $1.04
n/m
Cumulative effect of
-- --
-- accounting change (0.33)
-- n/m
------ ------ --------
------- ------- ---------
$3.16 $0.67 n/m
Net income
$3.18 $1.04 n/m
====== ====== ========
======= ======= =========
Earnings (Loss) Per
Share - Diluted
$3.01 $0.65 n/m
Continuing operations $3.34 $1.01
n/m
Cumulative effect of
-- --
-- accounting change (0.32)
-- n/m
------ ------ --------
------- ------- ---------
$3.01 $0.65 n/m
Net income
$3.02 $1.01 n/m
====== ====== ========
======= ======= =========
Weighted average
215 216
number of Shares 215
214
====== ======
======= =======
Weighted average
number of Shares
226 223
assuming dilution 227
222
====== ======
======= =======
(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)
June 30, December 31,
2006 2005
------------ ------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$306 $897
Restricted cash
320 295
Accounts receivable, net of allowance for
doubtful accounts of $56 and $50
637 642
Inventories
407 280
Prepaid expenses and other
197 169
------------ ------------
Total current assets
1,867 2,283
Investments
411 403
Plant, property and equipment, net
4,014 4,169
Assets held for sale (a)
5 2,882
Goodwill and intangible assets, net
2,337 2,315
Deferred tax assets
328 40
Other assets (b)
410 402
------------ ------------
$9,372 $12,494
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (c)
$742 $1,219
Accounts payable
144 156
Accrued expenses
887 1,049
Accrued salaries, wages and benefits
316 297
Accrued taxes and other
202 158
------------ ------------
Total current liabilities
2,291 2,879
Long-term debt (c)
2,078 2,849
Long-term debt held for sale (d)
-- 77
Deferred tax liabilities
52 602
Other liabilities
1,972 851
------------ ------------
6,393 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 June 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 June 30, 2006 and
December 31, 2005, respectively
-- --
Corporation common stock; $0.01 par
value; authorized 1,050,000,000 shares;
outstanding 218,651,779 and 217,218,781
shares at June 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 June 30, 2006
and
December 31, 2005, respectively
--
2
Additional paid-in capital
2,521 5,412
Deferred compensation
-- (53)
Accumulated other comprehensive loss
(249) (322)
Retained earnings
680 170
------------ ------------
Total stockholders' equity
2,954 5,211
------------ ------------
$9,372 $12,494
============ ============
(a) At June 30, 2006, includes 1 hotel expected to be
sold in the
third 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 $9 million and $12 million
at June 30,
2006 and December 31, 2005, respectively.
(c) Excludes Starwood's share of unconsolidated joint
venture debt
aggregating approximately $449 million
and $469 million at June
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
Six Months Ended
June 30,
June 30,
--------------------
---------------------
%
%
2006 2005 Variance
2006 2005 Variance
----- ----- --------
----- ----- ---------
Reconciliation of Net
Income to EBITDA and
Adjusted EBITDA
$680 $145 n/m
Net income
$685 $224 n/m
58 68 (14.7)
Interest expense(a)
166 137 21.2
Income tax (benefit)
(501) 47 n/m
expense
(487) 68 n/m
80 108 (25.9) Depreciation(b)
156 222 (29.7)
6 6
-- Amortization (c)
13 12 8.3
----- ----- --------
----- ----- ---------
323 374 (13.6) EBITDA
533 663 (19.6)
Loss (gain) on asset
dispositions and
6 17
(64.7) impairments, net
(19) 16 n/m
Restructuring and other
3 --
n/m special charges, net
12 -- n/m
Cumulative effect of
-- --
-- accounting change
72 -- n/m
----- ----- --------
----- ----- ---------
$332 $391 (15.1) Adjusted EBITDA
$598 $679 (11.9)
===== ===== ========
===== ===== =========
(a) Includes $5 million and $5 million of interest expense
related to
unconsolidated joint ventures for
the three months ended June 30,
2006 and 2005, respectively, and $10
million and $10 million for
the six months ended June 30, 2006
and 2005, respectively.
(b) Includes $8 million and $7 million of Starwood's share
of
depreciation expense of unconsolidated
joint ventures for the
three months ended June 30, 2006 and
2005, respectively, and $16
million and $16 million for the six
months ended June 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 June 30, 2006 and
2005, respectively, and $3
million and $3 million for the six
months ended June 30, 2006 and
2005, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP
to GAAP Reconciliations - Future Performance
(In millions)
Three Months Ended
Year Ended
September 30, 2006
December 31, 2006
------------------
-----------------
$106 Net income
$952
46 Interest expense
256
60 Income tax expense
(342)
84 Depreciation and amortization
338
-----------------
-----------------
296 EBITDA
1,204
Gain on asset disposition and
-- impairments, net
(19)
Restructuring and other special
4 charges, net
18
Cumulative effect of accounting
-- change
72
-----------------
-----------------
$300 Adjusted EBITDA
$1,275
=================
=================
Three Months Ended
Year Ended
September 30, 2006
December 31, 2006
------------------
-----------------
$106 Income from continuing operations
1,024
-----------------
-----------------
$0.48 EPS.
$4.56
-----------------
-----------------
Special Items
Restructuring and other special
4 charges, net
18
-- Debt defeasance costs
37
-- Debt extinguishment costs
7
Gain on asset dispositions and
-- impairments, net
(19)
-----------------
-----------------
4 Total special items - pre-tax
43
Income tax benefit on special
(1) items.
(18)
Income tax benefit related to the
-- transaction with Host
(496)
Reserves and credits associated
-- with tax matters
(22)
-----------------
-----------------
3 Total special items - after-tax
(493)
-----------------
-----------------
Income from continuing operations
$109 excluding special items
$531
-----------------
-----------------
$0.49 EPS excluding special items
$2.37
=================
=================
Three Months Ended
Year Ended
September 30, 2005
December 31, 2005
------------------
-----------------
$39 Net income
$422
70 Interest expense
283
106 Income tax expense
218
108 Depreciation
423
6 Amortization
26
-----------------
-----------------
329 EBITDA
1,372
Loss on asset dispositions and
16 impairments, net
30
2 Discontinued operations
2
Restructuring and other special
-- charges, net
13
-----------------
-----------------
$347 Adjusted EBITDA
$1,417
=================
=================
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Future
Performance (continued)
(in millions)
Reconciliation from Previous Full Year Guidance to
Current Full Year Guidance
Previous full year 2006 EBITDA guidance (1)
$1,260
Second Quarter Impact
Add: Q2 performance above prior guidance
37
Add: Operating income from Fiji hotels retained
5
Less: Operating income from additional hotels sold and
earnings from unconsolidated JV hotels sold
(5)
Less: Business interruption insurance proceeds accelerated
into Q2 from Q3
(5)
------------
32
Less: Residential operating income shifted from 2006
to
2007
(17)
------------
Current full year 2006 EBITDA guidance
$1,275
============
Previous full year EPS guidance (1)
$2.28
Add: EPS associated with the net Q2 outperformance
0.09
Add: Tax benefit received in Q2
0.05
Less: Impact of residential shift
(0.05)
------------
Current full year 2006 EPS guidance
$2.37
============
(1) See Starwood's first quarter 2006 earnings release
for the
non-GAAP to GAAP reconciliation of
the previous EPS and EBITDA
guidance.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations -
Same Store Owned Hotel Revenue and Expenses
(In millions)
Three Months Ended
Six Months Ended
June 30,
June 30,
---------------------
-------------------------
Same-Store Owned
% Hotels (1)
%
2006 2005 Variance
Worldwide 2006
2005 Variance
----- ----- ---------
------- ------- ---------
Revenue
Same-Store Owned
$534 $487 9.8
Hotels
$986 $904 9.0
Hotels Sold or
Closed in 2006 and
47 371 (87.3)
2005 (50 hotels) 322
673 (52.2)
Hotels Without
Comparable Results
92 80
15.0 (12 hotels)
187 174 7.5
Other ancillary
1 1
-- hotel operations
1 1
--
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$674 $939 (28.2)
Revenue
$1,496 $1,752 (14.6)
===== ===== =========
======= ======= =========
Costs and Expenses
Same-Store Owned
$383 $363 (5.4)
Hotels
$743 $704 (5.6)
Hotels Sold or
Closed in 2006 and
36 250
85.6 2005 (50 hotels)
245 486 49.6
Hotels Without
Comparable Results
72 60
(20.0) (12 hotels)
142 124 (14.5)
Other ancillary
1 2
50.0 hotel operations
2 2
--
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$492 $675 27.1
Costs and Expenses $1,132 $1,316
14.0
===== ===== =========
======= ======= =========
Three Months Ended
Six Months Ended
June 30,
June 30,
---------------------
-------------------------
Same-Store Owned
%
Hotels
%
2006 2005 Variance
North America 2006
2005 Variance
----- ----- ---------
------- ------- ---------
Revenue
Same-Store Owned
$353 $315 12.2
Hotels
$660 $590 11.9
Hotels Sold or
Closed in 2006 and
27 300 (91.0)
2005 (40 hotels) 254
545 (53.4)
Hotels Without
Comparable Results
78 63
23.8 (8 hotels)
164 137 19.7
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$458 $678 (32.4)
Revenue
$1,078 $1,272 (15.3)
===== ===== =========
======= ======= =========
Costs and Expenses
Same-Store Owned
$250 $233 (7.1)
Hotels
$490 $456 (7.6)
Hotels Sold or
Closed in 2006 and
23 205
88.8 2005 (40 hotels)
195 396 50.8
Hotels Without
Comparable Results
63 49
(28.6) (8 hotels)
126 100 (26.0)
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$336 $487 31.0
Costs and Expenses $811
$952 14.8
===== ===== =========
======= ======= =========
Three Months Ended
Six Months Ended
June 30,
June 30,
---------------------
-------------------------
Same-Store Owned
%
Hotels
%
2006 2005 Variance
International 2006
2005 Variance
----- ----- ---------
------- ------- ---------
Revenue
Same-Store Owned
$181 $172 5.3
Hotels
$326 $314 3.6
Hotels Sold or
Closed in 2006
and 2005 (10
20 71
(71.8) hotels)
68 128 (46.9)
Hotels Without
Comparable
Results (4
14 17
(17.6) hotels)
23 37 (37.8)
Other ancillary
1 1
-- hotel operations
1 1
--
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$216 $261 (17.2)
Revenue
$418 $480 (12.9)
===== ===== =========
======= ======= =========
Costs and Expenses
Same-Store Owned
$133 $130 (2.5)
Hotels
$253 $248 (1.9)
Hotels Sold or
Closed in 2006
and 2005 (10
13 45
71.1 hotels)
50 90 44.4
Hotels Without
Comparable
Results (4
9 11
18.2 hotels)
16 24 33.3
Other ancillary
1 2
50.0 hotel operations
2 2
--
----- ----- ---------
------- ------- ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$156 $188 17.0
Costs and Expenses $321
$364 11.8
===== ===== =========
======= ======= =========
(1) Same-Store Owned Hotel Results exclude 50 hotels sold
or closed in
2006 and 2005 and 12 hotels without
comparable results.
STARWOOD
HOTELS & RESORTS WORLDWIDE, INC.
Owned Hotel Results - Same Store (1)
For the Three Months Ended June 30, 2006
UNAUDITED
WORLDWIDE
NORTH AMERICA
----------------------- -----------------------
2006 2005 Var. 2006
2005 Var.
-------- -------- ----- -------- -------- -----
79 Hotels
48 Hotels
----------------------- -----------------------
TOTAL HOTELS
REVPAR ($)
140.76 126.86 11.0% 139.32 123.53
12.8%
ADR ($)
191.90 176.55 8.7% 182.51 165.49
10.3%
OCCUPANCY (%)
73.3% 71.9% 1.4 76.3%
74.6% 1.7
Total REVENUE
534,217 486,696 9.8% 353,417 314,975 12.2%
Total EXPENSES
382,747 363,024 5.4% 249,851 233,367
7.1%
70 Hotels
39 Hotels
----------------------- -----------------------
BRANDED HOTELS
REVPAR ($)
143.86 129.69 10.9% 143.89 127.40
12.9%
ADR ($)
195.85 179.86 8.9% 186.99 168.82
10.8%
OCCUPANCY (%)
73.5% 72.1% 1.4 77.0%
75.5% 1.5
Total REVENUE
497,165 451,431 10.1% 316,365 279,710 13.1%
Total EXPENSES
355,039 336,101 5.6% 222,143 206,444
7.6%
INTERNATIONAL
------------------------
2006 2005 Var.
-------- -------- ----
31 Hotels
------------------------
TOTAL HOTELS
REVPAR ($)
143.82 133.90 7.4%
ADR ($)
214.59 203.05 5.7%
OCCUPANCY (%)
67.0% 65.9% 1.1
Total REVENUE
180,800 171,721 5.3%
Total EXPENSES
132,896 129,657 2.5%
31 Hotels
------------------------
BRANDED HOTELS
REVPAR ($)
143.82 133.90 7.4%
ADR ($)
214.59 203.05 5.7%
OCCUPANCY (%)
67.0% 65.9% 1.1
Total REVENUE
180,800 171,721 5.3%
Total EXPENSES
132,896 129,657 2.5%
(1) Hotel Results exclude 48 hotels sold and 12 hotels
without
comparable results during 2005 &
2006
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Three Months Ended June 30, 2006
UNAUDITED
System Wide (1) - System Wide (1) -
North America International
--------------------- ---------------------
2006 2005 Var. 2006
2005 Var.
------- ------- ----- ------- ------- -----
TOTAL HOTELS
REVPAR ($)
116.45 105.35 10.5% 108.39 100.10 8.3%
ADR ($)
155.01 142.15 9.0% 161.75 150.23 7.7%
OCCUPANCY (%)
75.1% 74.1% 1.0 67.0% 66.6%
0.4
SHERATON
REVPAR ($)
106.90 96.76 10.5% 93.07 85.15
9.3%
ADR ($)
143.15 130.50 9.7% 140.83 128.71 9.4%
OCCUPANCY (%)
74.7% 74.1% 0.6 66.1% 66.2%
(0.1)
WESTIN
REVPAR ($)
131.44 119.13 10.3% 140.34 134.39 4.4%
ADR ($)
174.74 160.96 8.6% 199.72 190.99 4.6%
OCCUPANCY (%)
75.2% 74.0% 1.2 70.3% 70.4%
(0.1)
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
211.49 181.81 16.3% 257.82 235.39 9.5%
ADR ($)
281.25 261.90 7.4% 368.78 346.35 6.5%
OCCUPANCY (%)
75.2% 69.4% 5.8 69.9% 68.0%
1.9
W
REVPAR ($)
228.87 205.01 11.6% 131.76 107.65 22.4%
ADR ($)
283.68 258.36 9.8% 238.69 221.55 7.7%
OCCUPANCY (%)
80.7% 79.3% 1.4 55.2% 48.6%
6.6
FOUR POINTS
REVPAR ($)
68.49 61.70 11.0% 70.84 66.03
7.3%
ADR ($)
95.92 88.30 8.6% 103.45 103.44
0.0%
OCCUPANCY (%)
71.4% 69.9% 1.5 68.5% 63.8%
4.7
OTHER
REVPAR ($)
121.91 115.53 5.5%
ADR ($)
141.28 136.18 3.7%
OCCUPANCY (%)
86.3% 84.8% 1.5
(1) Includes same store owned, leased, managed, and franchised
hotels
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Three Months Ended June 30, 2006
UNAUDITED
System Wide (1) Company Operated (2)
--------------------- ---------------------
2006 2005 Var. 2006
2005 Var.
------- ------- ----- ------- ------- -----
TOTAL WORLDWIDE
REVPAR ($)
113.45 103.40 9.7% 127.27 116.02
9.7%
ADR ($)
157.34 144.94 8.6% 174.45 160.28
8.8%
OCCUPANCY (%)
72.1% 71.3% 0.8 73.0%
72.4% 0.6
NORTH AMERICA
REVPAR ($)
116.45 105.35 10.5% 138.39 125.10 10.6%
ADR ($)
155.01 142.15 9.0% 179.88 164.58
9.3%
OCCUPANCY (%)
75.1% 74.1% 1.0 76.9%
76.0% 0.9
EUROPE
REVPAR ($)
142.97 131.65 8.6% 160.75 147.73
8.8%
ADR ($)
201.46 191.72 5.1% 220.24 210.95
4.4%
OCCUPANCY (%)
71.0% 68.7% 2.3 73.0%
70.0% 3.0
AFRICA & MIDDLE EAST
REVPAR ($)
90.66 80.56 12.5% 91.85 81.97
12.1%
ADR ($)
136.66 118.04 15.8% 136.31 117.93 15.6%
OCCUPANCY (%)
66.3% 68.2% (1.9) 67.4% 69.5%
(2.1)
ASIA PACIFIC
REVPAR ($)
93.86 89.38 5.0% 92.50
88.85 4.1%
ADR ($)
144.92 136.56 6.1% 141.28 133.99
5.4%
OCCUPANCY (%)
64.8% 65.5% (0.7) 65.5% 66.3%
(0.8)
LATIN AMERICA
REVPAR ($)
73.06 64.30 13.6% 80.28 70.51
13.9%
ADR ($)
116.05 104.06 11.5% 131.10 113.73 15.3%
OCCUPANCY (%)
63.0% 61.8% 1.2 61.2%
62.0% (0.8)
(1) Includes same store owned, leased, managed, and franchised
hotels
(2) Includes same store owned, leased, and managed hotels
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Owned Hotel Results - Same Store (1)
For the Six Months Ended June 30, 2006
UNAUDITED
WORLDWIDE
NORTH AMERICA
---------------------- -----------------------
2006 2005 Var. 2006
2005 Var.
-------- -------- ---- -------- -------- -----
79 Hotels
48 Hotels
---------------------- -----------------------
TOTAL HOTELS
REVPAR ($)
130.40 118.62 9.9% 129.66 115.06
12.7%
ADR ($)
186.02 172.20 8.0% 181.03 163.63
10.6%
OCCUPANCY (%)
70.1% 68.9% 1.2 71.6%
70.3% 1.3
Total REVENUE
985,789 904,312 9.0% 659,985 589,846 11.9%
Total EXPENSES
742,675 703,534 5.6% 490,054 455,516 7.6%
70 Hotels
39 Hotels
---------------------- -----------------------
BRANDED HOTELS
REVPAR ($)
134.02 122.16 9.7% 135.09 119.93
12.6%
ADR ($)
189.75 175.19 8.3% 185.91 166.98
11.3%
OCCUPANCY (%)
70.6% 69.7% 0.9 72.7%
71.8% 0.9
Total REVENUE
920,562 843,862 9.1% 594,758 529,396 12.3%
Total EXPENSES
688,074 652,627 5.4% 435,453 404,609 7.6%
INTERNATIONAL
----------------------
2006 2005 Var.
-------- -------- ----
31 Hotels
----------------------
TOTAL HOTELS
REVPAR ($)
132.02 126.34 4.5%
ADR ($)
197.58 192.05 2.9%
OCCUPANCY (%)
66.8% 65.8% 1.0
Total REVENUE
325,804 314,466 3.6%
Total EXPENSES
252,621 248,018 1.9%
31 Hotels
----------------------
BRANDED HOTELS
REVPAR ($)
132.02 126.34 4.5%
ADR ($)
197.58 192.05 2.9%
OCCUPANCY (%)
66.8% 65.8% 1.0
Total REVENUE
325,804 314,466 3.6%
Total EXPENSES
252,621 248,018 1.9%
(1) Hotel Results exclude 50 hotels sold and 12 hotels
without
comparable results during 2005 &
2006
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Six Months Ended June 30, 2006
UNAUDITED
System Wide (1) - System Wide (1) -
North America International
---------------------- ---------------------
2006 2005 Var. 2006
2005 Var.
------- ------- ------ ------- ------- -----
TOTAL HOTELS
REVPAR ($)
110.55 99.42 11.2% 102.61 95.20
7.8%
ADR ($)
154.12 141.39 9.0% 156.50 146.99
6.5%
OCCUPANCY (%)
71.7% 70.3% 1.4 65.6%
64.8% 0.8
SHERATON
REVPAR ($)
99.95 90.15 10.9% 91.88 84.16
9.2%
ADR ($)
141.30 128.70 9.8% 140.47 129.33
8.6%
OCCUPANCY (%)
70.7% 70.0% 0.7 65.4%
65.1% 0.3
WESTIN
REVPAR ($)
128.14 115.31 11.1% 127.42 123.48 3.2%
ADR ($)
175.64 161.41 8.8% 189.88 187.19
1.4%
OCCUPANCY (%)
73.0% 71.4% 1.6 67.1%
66.0% 1.1
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
219.98 192.00 14.6% 208.82 197.93 5.5%
ADR ($)
296.31 274.69 7.9% 336.63 325.68
3.4%
OCCUPANCY (%)
74.2% 69.9% 4.3 62.0%
60.8% 1.2
W
REVPAR ($)
207.07 182.99 13.2% 127.39 97.69 30.4%
ADR ($)
271.09 246.50 10.0% 238.29 219.80 8.4%
OCCUPANCY (%)
76.4% 74.2% 2.2 53.5%
44.4% 9.1
FOUR POINTS
REVPAR ($)
63.65 57.02 11.6% 70.38 64.34
9.4%
ADR ($)
94.35 86.30 9.3% 103.31 100.68
2.6%
OCCUPANCY (%)
67.5% 66.1% 1.4 68.1%
63.9% 4.2
OTHER
REVPAR ($)
110.56 103.22 7.1%
ADR ($)
133.50 135.93 (1.8%)
OCCUPANCY (%)
82.8% 75.9% 6.9
(1) Includes same store owned, leased, managed, and franchised
hotels
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Six Months Ended June 30, 2006
UNAUDITED
System Wide (1) Company Operated (2)
--------------------- ----------------------
2006 2005 Var. 2006
2005 Var.
------- ------- ----- -------- ------- -----
TOTAL WORLDWIDE
REVPAR ($)
107.62 97.86 10.0% 120.34 109.53
9.9%
ADR ($)
154.95 143.36 8.1% 170.88 158.26
8.0%
OCCUPANCY (%)
69.5% 68.3% 1.2 70.4%
69.2% 1.2
NORTH AMERICA
REVPAR ($)
110.55 99.42 11.2% 131.00 117.85 11.2%
ADR ($)
154.12 141.39 9.0% 177.65 163.46
8.7%
OCCUPANCY (%)
71.7% 70.3% 1.4 73.7%
72.1% 1.6
EUROPE
REVPAR ($)
121.37 115.47 5.1% 135.69 128.38
5.7%
ADR ($)
185.26 182.97 1.3% 202.44 201.47
0.5%
OCCUPANCY (%)
65.5% 63.1% 2.4 67.0%
63.7% 3.3
AFRICA & MIDDLE EAST
REVPAR ($)
94.32 84.55 11.6% 94.95 84.82
11.9%
ADR ($)
143.48 123.66 16.0% 143.10 122.73 16.6%
OCCUPANCY (%)
65.7% 68.4% (2.7) 66.4% 69.1%
(2.7)
ASIA PACIFIC
REVPAR ($)
95.10 89.12 6.7% 92.36
88.18 4.7%
ADR ($)
145.71 136.77 6.5% 141.86 135.43
4.7%
OCCUPANCY (%)
65.3% 65.2% 0.1 65.1%
65.1% 0.0
LATIN AMERICA
REVPAR ($)
81.26 68.02 19.5% 91.10 76.14
19.6%
ADR ($)
122.24 107.32 13.9% 137.94 117.68 17.2%
OCCUPANCY (%)
66.5% 63.4% 3.1 66.0%
64.7% 1.3
(1) Includes same store owned, leased, managed, and franchised
hotels
(2) Includes same store owned, leased, and managed hotels
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended June 30, 2006
UNAUDITED ($ millions)
Worldwide
--------------------------------------
2006 2005 Variance % Variance
------- ------- -------- ----------
Management Fees:
Base Fees
62 35
27 77.1%
Incentive Fees
32 20
12 60.0%
------- ------- -------- ----------
Total Management Fees
94 55
39 70.9%
Franchise Fees
31 26
5 19.2%
------- ------- -------- ----------
Total Management & Franchise
Fees
125 81
44 54.3%
Other Management & Franchise
Revenues (1)
20 10
10 100.0%
------- ------- -------- ----------
Total Management & Franchise
Revenues
145 91
54 59.3%
======= ======= ======== ==========
Other (2)
29 28
1 3.6%
------- ------- -------- ----------
Management Fees, Franchise Fees
and Other Income
174 119
55 46.2%
======= ======= ======== ==========
(1) Other Management & Franchise Fees primarily includes
the
amortization of deferred gains of
approximately $16 million in
2006 and $3 million in 2005 resulting
from the sales of hotels
subject to long-term management contracts
and termination fees.
(2) Other primarily includes revenues from Bliss and other
miscellaneous revenue.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Six Months Ended June 30, 2006
UNAUDITED ($ millions)
Worldwide
--------------------------------------
2006 2005 Variance % Variance
------- ------- -------- ----------
Management Fees:
Base Fees
104 68
36 52.9%
Incentive Fees
57 32
25 78.1%
------- ------- -------- ----------
Total Management Fees
161 100
61 61.0%
Franchise Fees
56 47
9 19.1%
------- ------- -------- ----------
Total Management & Franchise
Fees
217 147
70 47.6%
Other Management & Franchise
Revenues (1)
30 20
10 50.0%
------- ------- -------- ----------
Total Management & Franchise
Revenues
247 167
80 47.9%
======= ======= ======== ==========
Other (2)
59 56
3 5.4%
------- ------- -------- ----------
Management Fees, Franchise Fees
and Other Income
306 223
83 37.2%
======= ======= ======== ==========
(1) Other Management & Franchise Fees primarily includes
the
amortization of deferred gains of
approximately $23 million in
2006 and $6 million in 2005 resulting
from the sales of hotels
subject to long-term management contracts
and termination fees.
(2) Other primarily includes revenues from Bliss and other
miscellaneous revenue.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership
& Residential Revenues and Expenses
For the Three Months Ended June 30, 2006
UNAUDITED ($ millions)
2006 2005 % Variance
------- ------- ----------
Originated Sales Revenues (1) --
Vacation Ownership Sales
186 142
31.0%
Other Sales and Services Revenues (2)
37 27
37.0%
Deferred Revenues -- Percentage of
Completion
(26) 18
n/m
Deferred Revenues -- Other (3)
(6) 6
n/m
------- ------- ----------
Vacation Ownership Sales and Services
Revenues
191 193
(1.0%)
Residential Sales and Services Revenues
43 40
7.5%
------- ------- ----------
Total Vacation Ownership & Residential
Sales and Services Revenues
234 233
0.4%
======= ======= ==========
Originated Sales Expenses (4) --
Vacation Ownership Sales
124 90
(37.8%)
Other Expenses (5)
40 32
(25.0%)
Deferred Expenses -- Percentage of
Completion
(16) 10
n/m
Deferred Expenses -- Other
4 3
(33.3%)
------- ------- ----------
Vacation Ownership Expenses
152 135 (12.6%)
Residential Expenses
32 32
-
------- ------- ----------
Total Vacation Ownership & Residential
Expenses
184 167 (10.2%)
======= ======= ==========
(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, includes 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.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership
& Residential Revenues and Expenses
For the Six Months Ended June 30, 2006
UNAUDITED ($ millions)
2006 2005 % Variance
------- ------- ----------
Originated Sales Revenues (1) --
Vacation Ownership Sales
378 304
24.3%
Other Sales and Services Revenues (2)
70 55
27.3%
Deferred Revenues -- Percentage of
Completion
(90) 25
n/m
Deferred Revenues -- Other (3)
(12) (4)
n/m
------- ------- ----------
Vacation Ownership Sales and Services
Revenues
346 380
(8.9%)
Residential Sales and Services Revenues
82 84
(2.4%)
------- ------- ----------
Total Vacation Ownership & Residential
Sales and Services Revenues
428 464
(7.8%)
======= ======= ==========
Originated Sales Expenses (4) --
Vacation Ownership Sales
249 194 (28.4%)
Other Expenses (5)
79 63
(25.4%)
Deferred Expenses -- Percentage of
Completion
(47) 14
n/m
Deferred Expenses -- Other
7 (3)
n/m
------- ------- ----------
Vacation Ownership Expenses
288 268
(7.5%)
Residential Expenses
61 66
7.6%
------- ------- ----------
Total Vacation Ownership & Residential
Expenses
349 334
(4.5%)
======= ======= ==========
(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, includes 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.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Debt Portfolio Summary
As of June 30, 2006
UNAUDITED
Interest Balance % of
Interest Avg Maturity
Debt
Terms (in millions) Portfolio Rate
(in years)
--------------- -------- ------------- --------- --------
------------
Floating Rate
Debt:
Senior credit
facility
Revolving Various
credit
+ .525%
facility
$614 22% 5.81%
4.6
Mortgages and Various
other
144 5%
5.85% 1.8
Interest rate LIBOR
swaps
+ 4.23% 300
11% 9.71%
------------- --------- --------
Total Floating
1,058 38% 6.92%
4.1
Fixed Rate
Debt:
Sheraton
Holding public
debt
449 16% 7.38%
9.4
Senior notes
(1)
1,478 52% 6.70%
3.4
Mortgages and
other
135 5%
7.52% 8.8
Interest rate
swaps
(300) -(11%) 7.88%
------------- --------- --------
Total Fixed
1,762 62% 6.82%
5.1
------------- --------- --------
Total Debt
$2,820 100% 6.86%
4.8
============= ========= ========
(1) Balance consists of outstanding public debt of $1.497
billion and
a $12 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 ($31) million fair value
adjustment related to current fixed
to floating interest rate
swaps.
--------------------------------
Maturities
--------------------------------
less than 1 year $742
1-3 years 91
4-5 years 659
greater than 5 years 1,328
-----------
$2,820
===========
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Comparable
Results & Other Selected Items
As of June 30, 2006
UNAUDITED ($ 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 Cancun Resort & Towers
Cancun, Mexico
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
Hotel Danieli
Venice, Italy
Sheraton Lisboa Hotel & Towers
Lisbon, Portugal
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents
(including restricted cash of $329 million)
$635
Debt (including debt classified as held for sale)
$2,820
Revenues and Expenses Associated with Assets Sold in 2005
and 2006 or
Expected to be Sold in the Third 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 Six Months of 2006:
2006
Revenues
$275 $47 $-
$- $322
Expenses (excluding
depreciation)
$209 $36 $-
$- $245
2005
Revenues
$266 $330 $296 $321
$1,213
Expenses (excluding
depreciation)
$207 $223 $210 $224
$864
Hotels Classified as Held for Sale at June 30, 2006:
2006
Revenues
$1 $1 $-
$- $2
Expenses (excluding
depreciation)
$1 $1 $-
$- $2
2005
Revenues
$1 $1 $1
$1 $4
Expenses (excluding
depreciation)
$1 $1 $1
$1 $4
(1) Results consist of 11 hotels sold in 2005, 39 hotels
sold in 2006
and 1 hotel which is classifed as
held for sale at June 30, 2006.
These amounts are included in the
revenues and expenses from
owned, leased and consolidated joint
venture hotels in 2006 and
2005.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three and Six Months Ended June 30, 2006
UNAUDITED ($ millions)
Q2 YTD
---- -------
Capital Expenditures:
Owned, Leased and Consolidated Joint Venture Hotels
69 139
Corporate/IT
11 22
---- -------
Subtotal
80 161
Vacation Ownership Capital Expenditures:
Capital expenditures (includes land acquisitions)
7 31
Net capital expenditures for inventory (1)
56 61
---- -------
Subtotal
63 92
Development Capital
70 90
---- -------
Total Capital Expenditures
213 343
==== =======
(1) Represents gross inventory capital expenditures of
$102 and $141
in the three and six months ended June 30, 2006, respectively,
less
cost of sales of $46 and $80 in the three and six months
ended June
30, 2006, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
2006 Divisional Hotel Inventory
Summary by Ownership by Brand
As of June 30, 2006
NAD
EAME
LAD
---------------- --------------- ---------------
Owned
Hotels Rooms Hotels Rooms Hotels
Rooms
------- -------- ------- ------- ------- -------
Sheraton
18 7,763 8
1,728 6 2,856
Westin
8 4,138 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
56 20,036 21 3,785
10 3,938
Managed & UJV
Sheraton
53 27,636 75 22,383
14 2,749
Westin
46 25,308 11 3,184
- -
Four Points
1 475
6 899 2
263
W
8 2,275 -
- 1 237
Luxury Collection
6 1,427 7
1,303 8 298
St. Regis
5 921
1 95
- -
Le Meridien
5 1,058 71 16,561
3 839
Other
4 3,305 -
- -
-
------- -------- ------- ------- ------- -------
Total Managed & UJV 128
62,405 171 44,425
28 4,386
Franchised
Sheraton
121 38,444 26 6,693
4 1,294
Westin
27 10,096 3
1,131 3 598
Four Points
84 14,563 11 1,539
9 1,384
Luxury Collection
1 249 14
1,721 -
-
Le Meridien
4 1,342 11
3,793 -
-
------- -------- ------- ------- ------- -------
Total Franchised
237 64,694 65 14,877
16 3,276
---------------------------------------------------------------------
Systemwide
Sheraton
192 73,843 109 30,804
24 6,899
Westin
81 39,542 19 5,383
6 1,499
Four Points
91 16,191 17 2,438
11 1,647
W
18 5,453 -
- 1 237
Luxury Collection
8 2,330 28
3,852 9 479
St. Regis
8 1,589 2
256 -
-
Le Meridien
9 2,400 82 20,354
3 839
Other
14 5,787 -
- -
-
------- -------- ------- ------- ------- -------
Total Systemwide
421 147,135 257 63,087
54 11,600
======= ======== ======= ======= ======= =======
----------------------------------------------------------------------
ASIA
Total
--------------- ----------------
Owned
Hotels Rooms Hotels Rooms
------- ------- ------- --------
Sheraton
2 831 34
13,178
Westin
1 273 17
6,380
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 91 29,493
Managed & UJV
Sheraton
46 15,741 188 68,509
Westin
11 4,253 68 32,745
Four Points
3 723 12
2,360
W
1 252 10
2,764
Luxury Collection
- - 21
3,028
St. Regis
2 591 8
1,607
Le Meridien
23 5,232 102 23,690
Other
- -
4 3,305
------- ------- ------- --------
Total Managed & UJV
86 26,792 413 138,008
Franchised
Sheraton
18 6,719 169 53,150
Westin
5 1,226 38 13,051
Four Points
1 126 105 17,612
Luxury Collection
- - 15
1,970
Le Meridien
5 2,772 20
7,907
------- ------- ------- --------
Total Franchised
29 10,843 347 93,690
----------------------------------------------------------------------
Systemwide
Sheraton
66 23,291 391 134,837
Westin
17 5,752 123 52,176
Four Points
5 1,479 124 21,755
W
1 252 20
5,942
Luxury Collection
- - 45
6,661
St. Regis
2 591 12
2,436
Le Meridien
28 8,004 122 31,597
Other
- - 14
5,787
------- ------- ------- --------
Total Systemwide
119 39,369 851 261,191
======= ======= ======= ========
----------------------------------------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of June 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
625
618 641 1,884
St. Regis
25
22 -
47
Unbranded
124
- 1
125
--------------------------------------------------
Total SVO, Inc.
3,370
775 2,325 6,470
--------------------------------------------------
Unconsolidated
Joint Ventures
(UJV's)
198
- 36
234
--------------------------------------------------
Total including
UJV's
3,568
775 2,361 6,704
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Intervals
Including UJV's
(7)
185,536 40,300
122,772 348,608
------------------ --------------------------------------------------
(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.
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