STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per Share data)
Three Months Ended
March 31,
----------------------------
%
2007 2006 Variance
--------- --------- --------
Revenues
Owned, leased and consolidated joint
venture hotels
$559 $822 (32.0)
Vacation ownership and residential sales
and services
232 194 19.6
Management fees, franchise fees and other
income
192 132 45.5
Other revenues from managed and
franchised properties (a)
448 293 52.9
--------- --------- --------
1,431 1,441 (0.7)
Costs and Expenses
Owned, leased and consolidated joint
venture hotels
436 640 31.9
Vacation ownership and residential
179 165 (8.5)
Selling, general, administrative and
other
116 106 (9.4)
Restructuring and other special (credits)
charges, net
(2) 9
n/m
Depreciation
67 68
1.5
Amortization
6 5 (20.0)
Other expenses from managed and
franchised properties (a)
448 293 (52.9)
--------- --------- --------
1,250 1,286 2.8
Operating income
181 155 16.8
Equity earnings and gains and losses from
unconsolidated ventures, net
12 6
100.0
Interest expense, net of interest income
of $7 and $6
(32) (97) 67.0
Gain on asset dispositions and
impairments, net
11 25 (56.0)
--------- --------- --------
Income from continuing operations before
taxes and minority equity
172 89
93.3
Income tax expense
(51) (14) n/m
Minority equity in net loss
2 2
--
--------- --------- --------
Income from continuing operations
123 77
59.7
Discontinued Operations:
Loss from operations
-- --
--
Net loss on dispositions
( (1) --
n/m
Cumulative effect of accounting change
( -- (72) 100.0
--------- --------- --------
Net income
$122 $5
n/m
========= ========= ========
Earnings (Loss) Per Share - Basic
Continuing operations
$0.58 $0.35 65.7
Discontinued operations
-- --
--
Cumulative effect of accounting change
-- (0.33) 100.0
--------- --------- --------
Net income
$0.58 $0.02 n/m
========= ========= ========
Earnings (Loss) Per Share - Diluted
Continuing operations
$0.56 $0.34 64.7
Discontinued operations
-- -- 100.0
Cumulative effect of accounting change
-- (0.32) n/m
--------- --------- --------
Net income
$0.56 $0.02
========= ========= ========
Weighted average number of Shares
211 215
========= =========
Weighted average number of Shares
assuming dilution
219 225
========= =========
(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)
March 31, December 31,
2007 2006
------------ -------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents
$183 $183
Restricted cash
284 329
Accounts receivable, net of allowance for
doubtful accounts of $55 and $49
600 593
Inventories
602 566
Prepaid expenses and other
152 139
------------ -------------
Total current assets
1,821 1,810
Investments
463 436
Plant, property and equipment, net
3,783 3,831
Assets held for sale (a)
2
2
Goodwill and intangible assets, net
2,287 2,302
Deferred tax assets
583 518
Other assets (b)
389 381
------------ -------------
$9,328 $9,280
============ =============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (c)
$797 $805
Accounts payable
179 179
Accrued expenses
973 955
Accrued salaries, wages and benefits
310 383
Accrued taxes and other
172 139
------------ -------------
Total current liabilities
2,431 2,461
Long-term debt (c)
1,809 1,827
Deferred tax liabilities
30
31
Other liabilities
1,928 1,928
------------ -------------
6,198 6,247
Minority interest
24
25
Commitments and contingencies
Stockholders' equity:
Corporation common stock; $0.01 par
value; authorized 1,050,000,000 shares;
outstanding 214,991,493 and 213,484,439
shares at March 31, 2007 and December
31, 2006, respectively
2
2
Additional paid-in capital
2,244 2,286
Accumulated other comprehensive loss
(245) (228)
Retained earnings
1,105
948
------------ -------------
Total stockholders' equity
3,106 3,008
------------ -------------
$9,328 $9,280
============ =============
(a) Reflects land that is held for sale.
(b) Includes restricted cash of $5 million and $7 million
at March 31,
2007 and December 31, 2006, respectively.
(c) Excludes Starwood's share of unconsolidated joint
venture debt
aggregating approximately $558 million and $484
million at March 31,
2007 and December 31, 2006, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Historical Data
(in millions)
Three Months Ended
March 31,
----------------------------
%
2007 2006 Variance
--------- --------- --------
Reconciliation of Net Income to EBITDA
and Adjusted EBITDA
Net income
$122 $5
n/m
Interest expense(a)
43 108 (60.2)
Income tax expense(b)
52 14
n/m
Depreciation(c)
74 76
(2.6)
Amortization (d)
7 7
--
--------- --------- --------
EBITDA
298 210 41.9
Gain on asset dispositions and
impairments, net
(11) (25) 56.0
Restructuring and other special
(credits) charges, net
(2) 9
n/m
Discontinued operations
-- --
--
Cumulative effect of accounting change
-- 72 (100.0)
--------- --------- --------
Adjusted EBITDA
$285 $266 7.1
========= ========= ========
(a) Includes $4 million and $5 million of interest
expense related to
unconsolidated joint ventures for the three months
ended March 31,
2007 and 2006, respectively.
(b) Includes $1 million and $0 of tax expense recorded
in
discontinued operations for the three months ended
March 31, 2007
and 2006, respectively.
(c) Includes $7 million and $8 million of Starwood's
share of
depreciation expense of unconsolidated joint ventures
for the three
months ended March 31, 2007 and 2006, respectively.
(d) Includes $1 million and $2 million of Starwood's
share of
amortization expense of unconsolidated joint ventures
for the three
months ended March 31, 2007 and 2006, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to
GAAP Reconciliations - Future Performance
(In millions)
Three Months Ended
Year Ended
June 30, 2007
December 31, 2007
------------------
-----------------
$135 Net income
$577
43 Interest expense
181
67 Income tax expense
273
85 Depreciation and amortization
339
----------------
-----------------
330 EBITDA
1,370
Gain on asset disposition and
-- impairments, net
(11)
Restructuring and other special
-- charges, net
(2)
----------------
-----------------
$330 Adjusted EBITDA
$1,357
================
=================
Three Months Ended
Year Ended
June 30, 2007
December 31, 2007
------------------
-----------------
Income from continuing
$135 operations
$577
----------------
-----------------
$0.62 EPS
$2.65
----------------
-----------------
Special Items
Restructuring and other special
-- charges, net
(2)
Gain on asset dispositions and
-- impairments, net
(11)
----------------
-----------------
-- Total special items - pre-tax
(13)
Income tax (benefit) expense on
-- special items
(2)
Reserves and credits associated
-- with tax matters
(4)
----------------
-----------------
-- Total special items - after-tax
(19)
----------------
-----------------
Income from continuing
operations excluding special
$135 items
$558
----------------
-----------------
$0.62 EPS excluding special items
$2.57
================
=================
Three Months Ended
Year Ended
June 30, 2006
December 31, 2006
------------------
-----------------
$680 Net income
$1,043
58 Interest expense
263
(501) Income tax benefit
(432)
86 Depreciation and amortization
342
----------------
-----------------
323 EBITDA
1,216
Loss on asset disposition and
6 impairments, net
3
Restructuring and other special
3 charges, net
20
Cumulative effect of accounting
-- change
70
----------------
-----------------
$332 Adjusted EBITDA
$1,309
================
=================
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations -
Same Store Owned Hotel Revenue and Expenses
(In millions)
Three Months Ended
March 31,
----------------------------
Same-Store Owned
Hotels (1)
%
Worldwide
2007 2006 Variance
--------- --------- --------
Revenue
Same-Store Owned Hotels
$485 $451 7.6
Hotels Sold or Closed in 2007 and 2006
(46 hotels)
5 301 (98.3)
Hotels Without Comparable Results (8
hotels)
69 70
(1.0)
Other ancillary hotel operations
-- --
--
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Revenue
$559 $822 (31.9)
========= ========= ========
Costs and Expenses
Same-Store Owned Hotels
$380 $359 (6.2)
Hotels Sold or Closed in 2007 and 2006
(46 hotels)
2 231 99.1
Hotels Without Comparable Results (8
hotels)
54 50
6.9
Other ancillary hotel operations
-- --
--
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Costs and Expenses
$436 $640 31.8
========= ========= ========
Three Months Ended
March 31,
----------------------------
Same-Store Owned Hotels
%
North America
2007 2006 Variance
--------- --------- --------
Revenue
Same-Store Owned Hotels
$326 $306 6.8
Hotels Sold or Closed in 2007 and 2006
(37 hotels)
5 252 (98.0)
Hotels Without Comparable Results (5
hotels)
59 63
(5.2)
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Revenue
$390 $621 (37.0)
========= ========= ========
Costs and Expenses
Same-Store Owned Hotels
$252 $239 (5.8)
Hotels Sold or Closed in 2007 and 2006
(37 hotels)
3 194 (98.5)
Hotels Without Comparable Results (5
hotels)
45 44
2.5
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Costs and Expenses
$300 $477 36.9
========= ========= ========
Three Months Ended
March 31,
----------------------------
Same-Store
Owned Hotels
%
International
2007 2006 Variance
--------- --------- --------
Revenue
Same-Store Owned Hotels
$159 $145 9.4
Hotels Sold or Closed in 2007
and
2006 (9 hotels)
-- 49 (100.0)
Hotels Without Comparable Results
(3
hotels)
10 7
33.5
Other ancillary hotel operations
-- --
--
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Revenue
$169 $201 (16.3)
========= ========= ========
Costs and Expenses
Same-Store Owned Hotels
$128 $120 (7.0)
Hotels Sold or Closed in 2007
and
2006 (9 hotels)
(1) 37 (102.4)
Hotels Without Comparable Results
(3
hotels)
9 6
36.9
Other ancillary hotel operations
-- --
--
--------- --------- --------
Total Owned, Leased and Consolidated
Joint Venture Hotels Costs and Expenses
$136 $163 16.8
========= ========= ========
(1) Same-Store Owned Hotel Results exclude 46 hotels
sold or closed
in 2007 and 2006 and 8 hotels without comparable
results.
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Three Months Ended March 31, 2007
UNAUDITED
System Wide (1) - System Wide (1) -
Worldwide North
America
--------------------- ---------------------
2007 2006 Var. 2007
2006 Var.
------- ------- ----- ------- ------- -----
TOTAL HOTELS
REVPAR ($)
113.10 102.65 10.2% 112.87 106.40 6.1%
ADR ($)
166.85 153.81 8.5% 163.65 155.22 5.4%
OCCUPANCY (%)
67.8% 66.7% 1.1 69.0% 68.5%
0.5
SHERATON
REVPAR ($)
101.49 92.72 9.5% 98.49 92.98
5.9%
ADR ($)
152.16 140.69 8.2% 146.13 139.11 5.0%
OCCUPANCY (%)
66.7% 65.9% 0.8 67.4% 66.8%
0.6
WESTIN
REVPAR ($)
132.82 122.87 8.1% 134.14 125.99 6.5%
ADR ($)
187.77 176.76 6.2% 185.58 176.37 5.2%
OCCUPANCY (%)
70.7% 69.5% 1.2 72.3% 71.4%
0.9
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
208.85 188.80 10.6% 239.23 230.15 3.9%
ADR ($)
340.42 307.92 10.6% 348.13 323.57 7.6%
OCCUPANCY (%)
61.4% 61.3% 0.1 68.7% 71.1%
-2.4
LE MERIDIEN
REVPAR ($)
125.49 103.65 21.1% 194.07 159.16 21.9%
ADR ($)
181.35 157.43 15.2% 268.35 232.84 15.3%
OCCUPANCY (%)
69.2% 65.8% 3.4 72.3% 68.4%
3.9
W
REVPAR ($)
194.08 179.15 8.3% 200.13 185.04 8.2%
ADR ($)
271.86 255.51 6.4% 272.81 256.84 6.2%
OCCUPANCY (%)
71.4% 70.1% 1.3 73.4% 72.0%
1.4
FOUR POINTS
REVPAR ($)
66.98 62.49 7.2% 64.02 61.15
4.7%
ADR ($)
102.34 96.62 5.9% 99.34 95.66
3.8%
OCCUPANCY (%)
65.4% 64.7% 0.7 64.4% 63.9%
0.5
OTHER
REVPAR ($)
97.07 99.96 -2.9% 97.07 99.96
-2.9%
ADR ($)
130.79 126.25 3.6% 130.79 126.25 3.6%
OCCUPANCY (%)
74.2% 79.2% -5.0 74.2% 79.2%
-5.0
System Wide (1) -
International
---------------------
2007 2006 Var.
------- ------- -----
TOTAL HOTELS
REVPAR ($)
113.40 97.76 16.0%
ADR ($)
171.20 151.84 12.8%
OCCUPANCY (%)
66.2% 64.4% 1.8
SHERATON
REVPAR ($)
105.12 92.40 13.8%
ADR ($)
159.65 142.69 11.9%
OCCUPANCY (%)
65.8% 64.8% 1.0
WESTIN
REVPAR ($)
128.38 112.45 14.2%
ADR ($)
195.89 178.25 9.9%
OCCUPANCY (%)
65.5% 63.1% 2.4
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
183.08 153.74 19.1%
ADR ($)
332.26 290.11 14.5%
OCCUPANCY (%)
55.1% 53.0% 2.1
LE MERIDIEN
REVPAR ($)
120.63 99.70 21.0%
ADR ($)
174.88 151.85 15.2%
OCCUPANCY (%)
69.0% 65.7% 3.3
W
REVPAR ($)
136.21 122.99 10.7%
ADR ($)
259.13 237.87 8.9%
OCCUPANCY (%)
52.6% 51.7% 0.9
FOUR POINTS
REVPAR ($)
75.99 66.58 14.1%
ADR ($)
110.95 99.43 11.6%
OCCUPANCY (%)
68.5% 67.0% 1.5
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
(1) Includes same store owned, leased, managed, and franchised
hotels
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Three Months Ended March 31, 2007
UNAUDITED
System Wide (1) Company Operated (2)
--------------------- ----------------------
2007 2006 Var. 2007
2006 Var.
------- ------- ----- -------- ------- -----
TOTAL WORLDWIDE
REVPAR ($)
113.10 102.65 10.2% 125.95 113.42 11.0%
ADR ($)
166.85 153.81 8.5% 182.20 167.99
8.5%
OCCUPANCY (%)
67.8% 66.7% 1.1 69.1%
67.5% 1.6
NORTH AMERICA
REVPAR ($)
112.87 106.40 6.1% 134.23 126.54
6.1%
ADR ($)
163.65 155.22 5.4% 187.37 178.01
5.3%
OCCUPANCY (%)
69.0% 68.5% 0.5 71.6%
71.1% 0.5
EUROPE
REVPAR ($)
118.33 100.62 17.6% 128.86 109.54 17.6%
ADR ($)
192.89 166.21 16.1% 205.92 178.05 15.7%
OCCUPANCY (%)
61.3% 60.5% 0.8 62.6%
61.5% 1.1
AFRICA & MIDDLE EAST
REVPAR ($)
123.27 104.53 17.9% 129.79 109.51 18.5%
ADR ($)
176.29 159.43 10.6% 184.27 165.65 11.2%
OCCUPANCY (%)
69.9% 65.6% 4.3 70.4%
66.1% 4.3
ASIA PACIFIC
REVPAR ($)
108.76 93.83 15.9% 101.84 85.94
18.5%
ADR ($)
157.64 141.18 11.7% 149.63 134.15 11.5%
OCCUPANCY (%)
69.0% 66.5% 2.5 68.1%
64.1% 4.0
LATIN AMERICA
REVPAR ($)
93.54 88.34 5.9% 103.28 96.20
7.4%
ADR ($)
140.58 129.61 8.5% 155.30 142.83
8.7%
OCCUPANCY (%)
66.5% 68.2% -1.7 66.5%
67.4% -0.9
(1) Includes same store owned, leased, managed, and franchised
hotels
(2) Includes same store owned, leased, and managed hotels
Starwood Hotels & Resorts Worldwide, Inc.
Owned Hotel Results - Same Store (1)
For the Three Months Ended March 31, 2007
UNAUDITED
WORLDWIDE
NORTH AMERICA
---------------------- ----------------------
2007 2006 Var. 2007
2006 Var.
-------- -------- ---- -------- -------- ----
75 Hotels
44 Hotels
---------------------- ----------------------
TOTAL HOTELS
REVPAR ($)
134.73 124.64 8.1% 135.20 127.08
6.4%
ADR ($)
199.15 187.38 6.3% 198.74 191.18
4.0%
OCCUPANCY (%)
67.7% 66.5% 1.2 68.0%
66.5% 1.5
Total REVENUE
484,711 450,268 7.6% 326,071 305,265 6.8%
Total EXPENSES
380,468 358,221 6.2% 252,382 238,495 5.8%
65 Hotels
34 Hotels
---------------------- ----------------------
BRANDED HOTELS
REVPAR ($)
141.46 129.43 9.3% 145.82 135.02
8.0%
ADR ($)
204.08 191.53 6.6% 206.26 198.19
4.1%
OCCUPANCY (%)
69.3% 67.6% 1.7 70.7%
68.1% 2.6
Total REVENUE
455,210 418,712 8.7% 296,570 273,709 8.4%
Total EXPENSES
351,225 328,487 6.9% 223,139 208,761 6.9%
INTERNATIONAL
-----------------------
2007 2006 Var.
-------- -------- -----
31 Hotels
-----------------------
TOTAL HOTELS
REVPAR ($)
133.75 119.59 11.8%
ADR ($)
200.01 179.55 11.4%
OCCUPANCY (%)
66.9% 66.6% 0.3
Total REVENUE
158,640 145,003 9.4%
Total EXPENSES
128,086 119,726 7.0%
31 Hotels
-----------------------
BRANDED HOTELS
REVPAR ($)
133.75 119.59 11.8%
ADR ($)
200.01 179.55 11.4%
OCCUPANCY (%)
66.9% 66.6% 0.3
Total REVENUE
158,640 145,003 9.4%
Total EXPENSES
128,086 119,726 7.0%
(1) Hotel Results exclude 46 hotels sold and 8 hotels
without
comparable results during 2007 and 2006
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended March 31, 2007
UNAUDITED ($ millions)
Worldwide
---------------------------------
%
2007 2006 Variance Variance
------- ------- -------- --------
Management Fees:
Base Fees
62 43
19 44.2%
Incentive Fees
29 24
5 20.8%
------- ------- -------- --------
Total Management Fees
91 67
24 35.8%
Franchise Fees
33 25
8 32.0%
------- ------- -------- --------
Total Management & Franchise Fees
124 92
32 34.8%
Other Management & Franchise
Revenues (1)
23 10
13 130.0%
------- ------- -------- --------
Total Management & Franchise
Revenues
147 102 45
44.1%
======= ======= ======== ========
Other (2)
45 30
15 50.0%
------- ------- -------- --------
Management Fees, Franchise Fees and
Other Income
192 132 60
45.5%
======= ======= ======== ========
(1) Other Management & Franchise Revenues primarily
includes the
amortization of deferred gains of approximately
$20 million in 2007
and $7 million in 2006 resulting from the sales
of hotels subject to
long-term management contracts and termination
fees.
(2) In 2007, Other includes $18 million of income earned
from the
Company's carried interests in the Westin Boston
Waterfront Hotel
which was earned when the hotel was sold by its
owners in January
2007. The remaining amount includes revenues from
the Company's Bliss
spa and product business and other miscellaneous
revenue.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership
& Residential Revenues and Expenses
For the Three Months Ended March 31, 2007
UNAUDITED ($ millions)
2007 2006 % Variance
------- ------- ----------
Originated Sales Revenues (1) -- Vacation
Ownership Sales
175 192 (8.9%)
Other Sales and Services Revenues (2)
44 33
33.3%
Deferred Revenues -- Percentage of
Completion
5 (64) n/m
Deferred Revenues -- Other (3)
4 (6)
n/m
------- ------- ----------
Vacation Ownership Sales and Services
Revenues
228 155 47.1%
Residential Sales and Services Revenues
4 39 (89.7%)
------- ------- ----------
Total Vacation Ownership & Residential
Sales and Services Revenues
232 194 19.6%
======= ======= ==========
Originated Sales Expenses (4) -- Vacation
Ownership Sales
114 125
8.8%
Other Expenses (5)
49 39 (25.6%)
Deferred Expenses -- Percentage of
Completion
3 (31) n/m
Deferred Expenses -- Other
8 3
n/m
------- ------- ----------
Vacation Ownership Expenses
174 136 (27.9%)
Residential Expenses
5 29
82.8%
------- ------- ----------
Total Vacation Ownership & Residential
Expenses
179 165 (8.5%)
======= ======= ==========
(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, and miscellaneous
other
revenues
(3) Includes deferral of revenue for contracts still in
rescission
period, contracts that do not yet meet the revenue
recognition
requirements under SFAS No. 66 or SFAS No. 152,
and 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 not deferred
per SFAS No. 152.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Comparable
Results & Other Selected Items
As of March 31, 2007
UNAUDITED ($ millions)
Properties without comparable results in 2007:
Property
Location
--------------------------------------- -----------------------------
W New Orleans - French Quarter
New Orleans, LA
W New Orleans
New Orleans, LA
Sheraton Bal Harbour Beach Resort
Bal Harbour, FL
St. Regis New York
New York, NY
Westin St. John Resort & Villas
St. John, Virgin Islands
The Westin Resort & Spa, Cancun
Cancun, Mexico
Sheraton Fiji
Nadi, Fiji
Westin Royal Denarau
Nadi, Fiji
Properties sold or closed in 2007 and 2006:
Property
Location
--------------------------------------- -----------------------------
33 Hotels Sold to Host Hotels & Resorts Various
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
Sheraton Cancun Resort & Towers
Cancun, Mexico
Sheraton Inn Lexington
Lexington, MA
Sheraton Omaha Hotel
Omaha, NE
Westin Fort Lauderdale
Ft. Lauderdale, FL
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents
(including restricted cash of $289 million)
$472
Debt
$2,606
Revenues and Expenses Associated with Assets Sold or Closed
in 2006
and 2007 (1):
Q1 Q2 Q3 Q4
Full Year
----------------------------------
Hotels Sold in 2006:
2006
Revenues
$295 $71 $16 $2
$384
Expenses (excluding depreciation) $227
$53 $12 $1
$293
Hotels Sold in 2007:
2007
Revenues
$5 $- $- $-
$-
Expenses (excluding depreciation)
$2 $- $- $-
$-
2006
Revenues
$6 $4 $3 $5
$18
Expenses (excluding depreciation)
$4 $4 $3 $3
$14
(1) Results consist of 45 hotels sold in 2006, 1 hotel
sold in 2007.
There are no hotels classifed as held for sale
at March 31, 2007.
These amounts are included in the revenues and
expenses from owned,
leased and consolidated joint venture hotels in
2007 and 2006.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three Months Ended March 31, 2007
UNAUDITED ($ millions)
Capital Expenditures:
Owned, Leased and Consolidated Joint Venture
Hotels
30
Corporate/IT
14
----------
Subtotal
44
Vacation Ownership Capital Expenditures:
Capital expenditures (includes land acquisitions)
19
Net capital expenditures for inventory (1)
31
----------
Subtotal
50
Development Capital
37
----------
Total Capital Expenditures
131
==========
(1) Represents gross inventory capital expenditures of
$85 less cost
of sales of $54 for the three months ended March
31, 2007.
Starwood Hotels & Resorts Worldwide, Inc.
2007 Divisional Hotel Inventory Summary by Ownership
by Brand
March 31, 2007
NAD
EAME
LAD
---------------- --------------- ---------------
Owned
Hotels Rooms Hotels Rooms Hotels
Rooms
------- -------- ------- ------- ------- -------
Sheraton
13 6,298 8
1,721 5 2,713
Westin
7 3,741 5
1,068 3 901
Four Points
6 1,153 -
- -
-
W
9 3,178 -
- -
-
Luxury Collection
1 653
7 828 1
181
St. Regis
3 668
1 161 -
-
Other
10 2,482 -
- -
-
------- -------- ------- ------- ------- -------
Total Owned
49 18,173 21 3,778
9 3,795
Managed & UJV
Sheraton
53 28,133 73 21,893
14 2,749
Westin
47 25,617 14 3,706
- -
Four Points
1 475
6 899 3
428
W
8 2,269 -
- 1 237
Luxury Collection
7 1,697 9
1,468 7 250
St. Regis
5 728
1 95
- -
Le Meridien
5 1,058 70 16,852
1 130
Other
2 2,672 1
- -
-
------- -------- ------- ------- ------- -------
Total Managed & UJV
128 62,649 174 44,913
26 3,794
Franchised
Sheraton
133 40,964 28 7,134
5 1,655
Westin
34 12,020 3
1,135 3 598
Four Points
82 13,929 12 1,671
9 1,384
Luxury Collection
1 249 14
1,746 -
-
Le Meridien
4 1,342 11
3,919 1 213
------- -------- ------- ------- ------- -------
Total Franchised
254 68,504 68 15,605
18 3,850
----------------------------------------------------------------------
Systemwide
Sheraton
199 75,395 109 30,748
24 7,117
Westin
88 41,378 22 5,909
6 1,499
Four Points
89 15,557 18 2,570
12 1,812
W
17 5,447 -
- 1 237
Luxury Collection
9 2,599 30
4,042 8 431
St. Regis
8 1,396 2
256 -
-
Le Meridien
9 2,400 81 20,771
2 343
Other
12 5,154 1
- -
-
------- -------- ------- ------- ------- -------
Total Systemwide
431 149,326 263 64,296
53 11,439
======= ======== ======= ======= ======= =======
----------------------------------------------------------------------
ASIA
Total
--------------- ----------------
Owned
Hotels Rooms Hotels Rooms
------- ------- ------- --------
Sheraton
2 821 28
11,553
Westin
1 273 16
5,983
Four Points
1 630 7
1,783
W
- -
9 3,178
Luxury Collection
- -
9 1,662
St. Regis
- -
4 829
Other
- - 10
2,482
------- ------- ------- --------
Total Owned
4 1,724 83 27,470
Managed & UJV
Sheraton
46 16,371 186 69,146
Westin
13 5,206 74 34,529
Four Points
2 604 12
2,406
W
2 330 11
2,836
Luxury Collection
- - 23
3,415
St. Regis
2 601 8
1,424
Le Meridien
23 5,905 99 23,945
Other
- -
3 2,672
------- ------- ------- --------
Total Managed & UJV
88 29,017 416 140,373
Franchised
Sheraton
18 6,571 184 56,324
Westin
5 1,226 45 14,979
Four Points
2 235 105 17,219
Luxury Collection
- - 15
1,995
Le Meridien
4 2,392 20
7,866
------- ------- ------- --------
Total Franchised
29 10,424 369 98,383
----------------------------------------------------------------------
Systemwide
Sheraton
66 23,763 398 137,023
Westin
19 6,705 135 55,491
Four Points
5 1,469 124 21,408
W
2 330 20
6,014
Luxury Collection
- - 47
7,072
St. Regis
2 601 12
2,253
Le Meridien
27 8,297 119 31,811
Other
- - 13
5,154
------- ------- ------- --------
Total Systemwide
121 41,165 868 266,226
======= ======= ======= ========
----------------------------------------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of March 31, 2007
UNAUDITED
---------------------------------------------------------------------
# Resorts
--------------------------------
In In Active
Brand
Total (2) Operations Sales
---------------------------------------------------------------------
Sheraton
7 6
6
Westin
11 4
6
St. Regis
2 2
2
The Luxury Collection
1 -
-
Unbranded
3 3
-
--------------------------------
Total SVO, Inc.
24 15
14
--------------------------------
Unconsolidated Joint Ventures
(UJV's)
2 1
1
--------------------------------
Total including UJV's
26 16
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
2,711
358 1,353 4,422
Westin
751
497 896 2,144
St. Regis
47
- -
47
The Luxury Collection
-
7 5
12
Unbranded
124
- 1
125
------------------------------------------------
Total SVO, Inc.
3,633
862 2,255 6,750
------------------------------------------------
Unconsolidated Joint
Ventures (UJV's)
198
- 40
238
------------------------------------------------
Total including UJV's
3,831
862 2,295 6,988
---------------------------------------------------------------------
---------------------------------------------------------------------
Total Intervals
Including UJV's (7)
199,212 44,824
119,340 363,376
---------------------------------------------------------------------
(1) Lockoff units are considered as one unit for
this analysis.
(2) Includes resorts in operation, active sales,
and an announced new
resort, The Luxury Collection Residence Club at
The Phoenician
(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.
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 first quarter financial results at 10:30 a.m. (EST) today at (913)
312-1300. 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, May 3,
2007 at 12:00 midnight (EST) on both the Company's website and via telephone
replay at (719) 457-0820 (access code 5740724).
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
condo hotels, hotels sold to date and hotels 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). References to Company Operated Hotel metrics (e.g. REVPAR) reflect
metrics for the Company's owned and managed hotels. References to System-Wide
metrics (e.g. REVPAR) reflect metrics for the Company's owned, managed
and franchised hotels. 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
870 properties in more than 100 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®,
W®, Westin®, Le Meridien®, Sheraton®, Four Points®
by Sheraton, 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.
** Please contact Starwood's new, toll-free media hotline
at
(866) 4-STAR-PR (866-478-2777)
for photography
or additional information.**
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 (including residential) and the hotel and vacation ownership
businesses, operating risks associated with the hotel, vacation ownership
and residential 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 the introduction of new brand concepts 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
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