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Starwood Posts a First Quarter Net Profit of $34 million Compared with a Loss of $116 million in 2003; 
Anticipating a Full Year Net Income of $265 million
>
Plans to Convert a Portion of St. Regis New York
into Residential Condominiums 

Hotel Operating Statistics

.
WHITE PLAINS, N.Y. - April 22, 2004 -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT):

First quarter 2004 Highlights:

  • REVPAR at Same-Store Owned Hotels worldwide and in North America increased 11.6% and 9.4%, respectively, when compared to 2003. ADR increased 4.6% and 2.4% worldwide and in North America, respectively.
  • Globally, for Same-Store Owned Hotels, St. Regis/Luxury Collection REVPAR grew (+14.8%), followed by Sheraton (+13.6%), W Hotels (+11.8%), and Westin (+6.6%), with each of these brands experiencing both ADR and occupancy gains.
  • Total Company Adjusted EBITDA increased 18.7% when compared to 2003.
  • REVPAR growth at North America Same-Store Owned Hotels was +6.5% in January, +4.8% in February and +16.1% in March of 2004.
  • Total Company Adjusted EBITDA margins improved during the quarter despite significant increases in workers compensation and other healthcare related costs.
  • Total Company market share increased during the quarter. At proprietary branded owned hotels in North America, according to Smith Travel Research, market share increased 140 basis points when compared to 2003.
  • Management and franchise fees increased approximately 32.0% when compared to 2003.
  • Starwood Vacation Ownership revenues, which exclude gains on sales of notes receivable, increased 39.1% as contract sales were up 64.3% when compared to 2003.
Starwood Hotels & Resorts Worldwide, Inc. ("Starwood" or the "Company") today reported EPS from continuing operations for the first quarter of 2004 of $0.16 compared to a loss of $0.58 in the first quarter of 2003. Excluding special items, EPS from continuing operations was $0.16 for the first quarter of 2004 compared to a loss of $0.08 in the first quarter of 2003. Income from continuing operations was $33 million in the first quarter of 2004 compared to a loss of $117 million in 2003. Excluding special items, income from continuing operations was $33 million for the first quarter of 2004 compared to a loss of $17 million in 2003. Net income (including discontinued operations) was $34 million and EPS was $0.16 in the first quarter of 2004 compared to net loss of $116 million and loss per share of $0.58 in the first quarter of 2003. Selling, general, administrative and other in the first quarter of 2004 as reflected in our new income statement format includes cost of sales from our new Bliss spa and beauty products business (the revenue from this business is included in management fees, franchise fees and other income), legal settlements, costs associated with our World Conference in January 2004 (the Company did not have a conference in 2003) and an accrual, not payment, for Mr. Sternlicht's contractual separation payment. First quarter results reflect a 6.3% tax rate. The tax rate for the first quarter of 2004 includes a $3 million net benefit primarily related to the favorable settlement of certain international tax matters.

Barry S. Sternlicht, Chairman and CEO said, "This quarter continues the momentum we saw building in our company the past six months especially now as the world returns to an accelerated travel pattern."

"It is gratifying to see the strategies and investments we have made in the recession drive our performance now. Powered by our unique global urban and resort footprint, our RevPar rebound exceeded our own "top-of-the-industry" estimates. Our results were further driven by strong growth in our franchise and management fees, by outstanding results at Starwood Vacation Ownership, and by our brands' market share gains. Our major brands, led by W, Westin and Sheraton, are gaining material market share driven by product and technology innovations, careful property renovations, and by the passion of our associates."

"I am pleased to once again be able to raise our EBITDA targets for 2004. Reflecting this expectation of a sustained recovery, 81% of our debt is now fixed rate. Our balance sheet is a major corporate asset."

"Looking forward, we have a robust pipeline of new products to further bolster our brand strength. Sheraton begins a new ad campaign on May 1st. Six Sigma will drive productivity and e-purchasing will continue to drive down our cost of goods sold. I am very pleased with our expanding and global development pipeline. Sheraton is expanding rapidly in Asia, Westin in the domestic and suburban markets, W internationally and into the resort markets, and St. Regis into the residential and resort arena. W will soon announce its first resorts in Maui, Hawaii and the Indian Ocean and its expansion into Europe and Asia. W has more than a dozen significant projects in various stages of development."

"With the economy stabilizing and our balance sheet strength, we have refocused our efforts on mining the extraordinary value of our asset base. We intend to take advantage of the property sales markets and sell additional noncore assets as the year progresses. In addition, we will embark on a series of important real estate value enhancing projects. These include the conversion of a portion of our flagship St. Regis New York into residential condominiums and the demolition of the low rise south building at the Sheraton Bal Harbour in Miami, Florida for the construction and sale (in joint venture) of a St. Regis Condo/Hotel and Residences on the four acre site. We are also planning a joint venture to build a W Hotel & Residences on our nine owned acres in the Buckhead area of Atlanta. Other major projects may include the demolition of a low rise building at the Sheraton Toronto to construct a W Condo/Hotel, a similar project in Portland, Oregon on owned land, maximization of our interest in land at the Sheraton Steamboat Springs and the aggressive repositioning of the Sheraton Hyannis and Sheraton Key West. We anticipate these projects being done through joint ventures with our partners providing the majority of the capital. We will also reinvest capital for additional interval ownership projects on our oceanfront 20 acres on Princeville, Kauai, Hawaii and in our recently acquired Sheraton in Poipu, Kauai, as well as the expected conversion of a tower at the Sheraton Cancun, a fractional product on our substantial excess land at the Phoenician as well as the anticipated expansion of timeshare operations into Europe."

Concluding, Mr. Sternlicht said, "With internal growth intact and our diverse external engines, this is an exciting time for Starwood and our shareholders."

First Quarter 2004 Operating Results:

Cash flow from operations was $63 million compared to $141 million in 2003. Total Company Adjusted EBITDA was $222 million compared to $187 million in 2003. Total management and franchise fees were $66 million, up $16 million, or 32.0%, from last year and vacation ownership revenue, which exclude gains on sales of notes receivable, was up $36 million when compared to 2003.

REVPAR for Same-Store Owned Hotels worldwide and in North America increased 11.6% and 9.4%, respectively, when compared to 2003. Revenue from transient travel was up 14.9% in North America when compared to 2003. For the sixth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as system-wide (owned, managed and franchised) hotels. REVPAR at Same-Store Owned Hotels in North America increased 12.2% at St. Regis/Luxury Collection, 11.8% at W, 10.3% at Sheraton, and 5.8% at Westin. REVPAR growth was particularly strong at the Company's owned hotels in New York, San Francisco, Houston, Washington D.C., Maui and Philadelphia. REVPAR was weaker at owned hotels in San Diego, Chicago and New Orleans. Internationally, Same-Store Owned Hotel REVPAR increased 18.8%, with Europe up 13.7%, Asia Pacific up 50.9%, and Latin America up 17.6%. Excluding the favorable effects of foreign exchange, REVPAR increased 3.9% internationally.

System-wide branded REVPAR for Same-Store Hotels in North America increased 8.7%: W Hotels +11.9%, Westin +10.8%, St. Regis/Luxury Collection +10.3%, Sheraton +7.5%, and Four Points by Sheraton +3.7%.

Starwood Vacation Ownership:

Revenues from the vacation ownership business increased 39.1% to $128 million in the first quarter of 2004 when compared to 2003 as contract sales were up 64.3% reflecting strong demand at our resorts in Maui, Scottsdale, Mission Hills and Orlando. The average price per timeshare unit sold increased approximately 14.8% to $22,756, and the number of contracts sold increased approximately 43.1% in the first quarter of 2004 when compared to 2003. During the first quarters of 2004 and 2003, the Company did not have any sales of vacation ownership receivables.

Development:

During the first quarter, the Company signed 10 hotel management and franchise contracts (representing approximately 2,000 rooms), including the Sheraton Shenzhen in Shenzhen, China (320 rooms), and the Westin Camporeal Golf & Spa Resort in Turcifal, Portugal (150 rooms), and opened eight new hotels and resorts including: the Sheraton Tunis Hotel (Tunis, Tunisia, 271 rooms), and the Sheraton Hanoi (Hanoi, Vietnam, 156 rooms). The Company expects to open 18 new full service hotels and resorts (approximately 6,000 rooms) around the world in 2004. The Company had approximately 56 hotels and approximately 15,000 rooms in its active global development pipeline at March 31, 2004 with roughly one half of that number in international locations.

Capital:

Gross capital spending during the quarter included approximately $50 million in hotel assets including $7 million for the renovation of the Company's flagship Sheraton Hotel and Towers in New York and $5 million for the continued renovation of the Phoenician in Phoenix, Arizona; $19 million in VOI capital assets (primarily inventory build), including VOI construction at Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii. Additionally during the quarter, development capital of $132 million included the acquisition of the 413-room Sheraton Kauai Resort for approximately $40 million, the acquisition of Bliss World, LLC for approximately $25 million, a $20 million investment in the St. Regis Anguilla, an approximate $24 million investment for approximately 25% of the limited partnership interests in the Westin Hotels Limited Partnership (which owns the Westin Michigan Avenue in Chicago, IL) and the ongoing development of the St. Regis Museum Tower in San Francisco (269 rooms and 102 condominium units). To date, the Company has invested $155 million in the St. Regis Museum Tower Project, a mixed-use project, which is expected to open in mid-2005. The Company expects to realize gross proceeds of approximately $200 million from the sale of the project's condominiums. The Company expects to begin taking reservations for these condominiums this quarter.

Dividend:

On January 21, 2004 the Company paid its annual dividend of $0.84 per share to shareholders of record on December 31, 2003.

Balance Sheet:

At March 31, 2004, the Company had total debt of $4.602 billion and cash and cash equivalents (including restricted cash) of $402 million, or net debt of $4.200 billion, compared to net debt of $4.118 billion at the end of the fourth quarter of 2003. In addition, the Company has an approximate $200 million debt investment in Le Meridien hotels.

In order to increase the Company's fixed to floating debt ratio, during the quarter, the Company terminated approximately $1 billion of fixed to floating interest rate swaps and entered into $300 million of new fixed to floating interest rate swaps. The Company received $33 million from the termination of the $1 billion of interest rate swaps. After giving effect to these new swaps, at March 31, 2004, debt was approximately 81% fixed rate and 19% floating rate and its weighted average maturity was 5.8 years with a weighted average interest rate of 5.55%. The Company had cash (including restricted cash) and availability under domestic and international revolving credit facilities of approximately $1.3 billion.

Outlook:

All comments in the following paragraphs and certain comments in this release above are deemed to be forward-looking statements. These statements reflect expectations of the Company's performance given its current base of assets and its current understanding of external economic and geo-political environments. Actual results may differ materially.

For the second quarter of 2004, if REVPAR at Same-Store Owned Hotels in North America is up 11% - 12% versus the same period a year ago:

  • EBITDA would be expected to be approximately $280 million.
  • Net income would be expected to be approximately $76 million.
  • EPS would be expected to be approximately $0.35.


For the full year 2004, if REVPAR at Same-Store Owned Hotels in North America increases approximately 8% - 9% versus the full year 2003:

  • Full year revenues, including other revenues from managed and franchised properties, would be expected to be approximately $5.200 billion.
  • Full year Adjusted EBITDA would be expected to increase approximately 16% to approximately $1.065 billion, when compared to 2003 Adjusted EBITDA of $917 million, after adjusting for the 2003 hotel sales.
  • Full year net income would be expected to be approximately $265 million. Full year EPS would be expected to be approximately $1.23 at a 15% effective tax rate, which assumes an annual dividend of $0.84 per Share (payable in January 2005).
  • Full year capital expenditures (excluding timeshare inventory) would be approximately $450 million, including approximately $100 million for the St. Regis San Francisco multi-use project under construction, $150 million for other growth initiatives and $200 million for maintenance capital. Additionally, net capital expenditures for timeshare inventory would be approximately $50 million focusing on projects in Aspen, Maui, Scottsdale and Orlando.
  • For the full year the Company expects cash interest expense of approximately $285 million and cash taxes of approximately $75 million.
Special Items:
The Company had two special items in the first quarter of 2004 which, when considered together, had no impact on the Company's results. In the first quarter of 2003, the Company recorded $100 million of net charges (after-tax) for special items.
The following represents a reconciliation of income (loss) from continuing operations before special items to income (loss) from continuing operations after special items (in millions, except per share data):
 
                                                         Three Months
                                                            Ended
                                                           March 31,
                                                         2004    2003
                                                        ------ -------
Income (loss) from continuing operations
 before special items                                     $33    $(17)
                                                        ------ -------
EPS before special items                                $0.16  $(0.08)
                                                        ------ -------

Special Items:
Adjustment to costs associated with construction
 remediation   (a)                                          1       -
Loss on asset dispositions and impairments, net(b)         (1)   (170)
                                                        ------ -------
Total special items - pre-tax                               -    (170)
Income tax benefit for special items(c)                     -      66
Favorable settlement of tax matters(d)                      -       4
                                                        ------ -------
Total special items - after-tax                             -    (100)
                                                        ------ -------

Income (loss) from continuing operations                  $33   $(117)
                                                        ------ -------

EPS including special items                             $0.16  $(0.58)
                                                        ------ -------

(a) Represents an adjustment to the Company's previously recorded share of costs for construction remediation efforts at a property owned by a vacation ownership unconsolidated joint venture.
(b) Loss of $1 million for the three months ended March 31, 2004 reflects the aggregate of various insignificant charges. Loss for the three months ended March 31, 2003 primarily represents the impairment charge recorded due to the classification of a portfolio of 18 domestic non-core hotels as held for sale, 16 of which were subsequently sold in 2003.
(c) Represents taxes on special items at the Company's incremental tax rate.
(d) Reversal relates to various tax matters that existed prior to the ITT merger and were successfully settled during 2003.


STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
(In millions, except per Share data)
                                                 Three Months Ended
                                                     March 31,
                                                                %
                                               2004    2003   Variance
                                              ------ ------- ---------
Revenues
Owned, leased and consolidated joint venture
 hotels                                        $769    $732       5.1%
Vacation ownership sales and services           128      92      39.1%
Management fees, franchise fees and other
 income                                          90      52      73.1%
Other revenues from managed and franchised
 properties(a)                                  240     210      14.3%
                                              ------ ------- ---------
                                              1,227   1,086      13.0%
Costs and Expenses
Owned, leased and consolidated joint venture
 hotels                                         607     586     (3.6%)
Vacation ownership                               97      71    (36.6%)
Selling, general, administrative and other       82      50    (64.0%)
Depreciation                                    102     111       8.1%
Amortization                                      4       4         -
Other expenses from managed and franchised
 properties(a)                                  240     210    (14.3%)
                                              ------ ------- ---------
                                              1,132   1,032     (9.7%)
Operating income                                 95      54      75.9%
Gain on sale of VOI notes receivable              -       1       n/m
Equity earnings from unconsolidated ventures      4       4         -
Interest expense, net of interest income of
 $0 and $0(b)                                   (64)    (77)     16.9%
Loss on asset dispositions and impairments,
 net                                             (1)   (170)      n/m
                                              ------ ------- ---------
Income (loss) from continuing operations
 before taxes and    minority equity             34    (188)      n/m
Income tax benefit (expense)                     (2)     70       n/m
Minority equity in net loss                       1       1         -
                                              ------ ------- ---------
Income (loss) from continuing operations         33    (117)      n/m
Discontinued operations:
     Loss from operations, net of taxes of $0
      and $0(c)                                   -      (1)      n/m
     Gain on disposition, net of taxes of $0
      and $1(d)                                   1       2    (50.0%)
                                              ------ ------- ---------
Net income (loss)                               $34   $(116)      n/m
                                              ====== ======= =========

Earnings (Loss) Per Share -- Basic
Continuing operations                         $0.16  $(0.58)      n/m
Discontinued operations                           -       -         -
                                              ------ ------- ---------
Net income (loss)                             $0.16  $(0.58)      n/m
                                              ====== ======= =========

Earnings (Loss) Per Share -- Diluted
Continuing operations                         $0.16  $(0.58)      n/m
Discontinued operations                           -       -         -
                                              ------ ------- ---------
Net income (loss)                             $0.16  $(0.58)      n/m
                                              ====== ======= =========

Weighted average number of Shares               205     200
                                              ====== =======
Weighted average number of Shares assuming
 dilution                                       211     200
                                              ====== =======

(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.
(b) Interest expense is net of $0 and $4 million of discontinued
    operations allocations for the three months ended March 31, 2004
    and 2003, respectively.
(c) For 2003, the Hotel Principe di Savoia in Milan, Italy
    ("Principe") is reported as a discontinued operation as a result
    of the sale of this hotel in June 2003 with no continuing
    involvement.
(d) For 2003 and 2004, the gain on disposition relates to the reversal
    of a reserve relating to the 1999 divestiture of the Company's
    gaming business that is no longer required as the related
    contingencies have been resolved.

n/m = not meaningful
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                      CONSOLIDATED BALANCE SHEETS
                   (In millions, except share data)
                                                    March    December
                                                      31,       31,
                                                     2004      2003
                                                  ---------- --------
                                                 (unaudited)
Assets
Current assets:
    Cash and cash equivalents                           $237     $427
    Restricted cash                                      165       81
    Accounts receivable, net of allowance for
     doubtful accounts of $54 and $53                    443      418
    Inventories                                          297      232
    Prepaid expenses and other                           142      104
                                                  ----------- --------
       Total current assets                            1,284    1,262
  Investments                                            432      415
  Plant, property and equipment, net                   7,025    7,106
  Goodwill and intangible assets, net                  2,515    2,488
  Other assets                                           669      623
                                                  ----------- --------
                                                     $11,925  $11,894
                                                  =========== ========

Liabilities and Stockholders' Equity
Current liabilities:
  Short-term borrowings and current maturities of
   long-term debt     (a)                               $240     $233
  Accounts payable                                       163      171
  Accrued expenses                                       739      836
  Accrued salaries, wages and benefits                   220      228
  Accrued taxes and other                                187      176
                                                  ----------- --------
    Total current liabilities                          1,549    1,644
Long-term debt   (a)                                   4,362    4,393
Deferred income taxes                                    880      898
Other liabilities                                        616      574
                                                  ----------- --------
                                                       7,407    7,509
                                                  ----------- --------
Minority interest                                         28       28
                                                  ----------- --------
Exchangeable units and Class B preferred shares,
 at redemption value of $38.50                             -       31
                                                  ----------- --------
Commitments and contingencies
Stockholders' equity:
     Class A exchangeable preferred shares of the
      Trust; $0.01 par value; authorized
      30,000,000 shares; outstanding 600,027 and
      480,880 shares at March 31, 2004 and
      December 31, 2003, respectively                      -        -
     Corporation common stock; $0.01 par value;
      authorized 1,050,000,000 shares; outstanding
      206,820,250 and 201,812,126 shares at March
      31, 2004 and December 31, 2003, respectively         2        2
     Trust Class B shares of beneficial interest;
      $0.01 par value; authorized 1,000,000,000
      shares; outstanding 206,820,250 and
      201,812,126 shares at March 31, 2004 and
      December 31, 2003, respectively                      2        2
  Additional paid-in capital                           5,102    4,952
  Deferred compensation                                  (23)      (9)
  Accumulated other comprehensive income                (340)    (334)
  Accumulated deficit                                   (253)    (287)
                                                  ----------- --------
    Total stockholders' equity                         4,490    4,326
                                                  ----------- --------
                                                     $11,925  $11,894
                                                  =========== ========

(a) Excludes Starwood's share of unconsolidated joint venture debt aggregating approximately $416 million and $410 million at March 31, 2004 and December 31, 2003, respectively.

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
          Non-GAAP to GAAP Reconciliations - Historical Data
                             (In millions)
                                                 Three Months Ended
                                                      March 31,
                                                                 %
                                                2004   2003   Variance
                                               ------ ------ ---------
Reconciliation of Net Income (loss) to EBITDA
 and Adjusted EBITDA
Net income (loss)                                $34  $(116)      n/m
Interest expense(a)                               71     85    (16.5%)
Income tax benefit (expense)(b)                    2    (69)      n/m
Depreciation(c)                                  110    118     (6.8%)
Amortization   (d)                                 6      6         -
                                               ------ ------ ---------
EBITDA                                           223     24       n/m
Adjustment to costs associated with
 construction remediation                         (1)     -       n/m
Loss on asset dispositions and impairments,
 net                                               1    170       n/m
Discontinued operations(e)                        (1)    (7)     85.7%
                                               ------ ------ ---------
Adjusted EBITDA                                 $222   $187      18.7%
                                               ====== ====== =========

(a) Includes $7 million and $4 million of interest expense,
    respectively, related to unconsolidated joint ventures for the
    three months ended March 31, 2004 and 2003. Also includes $0 and
    $4 million of interest expense allocated to discontinued
    operations for the three months ended March 31, 2004 and 2003,
    respectively.
(b) Includes $0 million and $1 million of tax expense recorded,
    respectively, in discontinued operations for the three months
    ended March 31, 2004 and 2003, respectively.

(c) Includes $8 million and $6 million of Starwood's share of
    depreciation expense of unconsolidated joint ventures for the
    three months ended March 31, 2004 and 2003. Also includes $0 and
    $1 million of depreciation expense included in discontinued
    operations for the three months ended March 31, 2004 and 2003.
(d) Includes $2 million of Starwood's share of amortization expense of unconsolidated joint ventures for both of the three month periods ended March 31, 2004 and 2003.
(e) Excludes the interest expense, taxes, and depreciation balances already added back as noted in (a), (b) and (c) above.

                                                         Three Months
                                                             Ended
                                                            March 31,
                                                          2004   2003
                                                         ------ ------
Cash Flow Data
Net income (loss)                                          $34  $(116)
Exclude:
     Discontinued operations, net                           (1)    (1)
                                                         ------ ------
Income (loss) from continuing operations                    33   (117)
Increase in restricted cash                                (84)   (38)
Adjustment to income (loss) from continuing operations
 and changes in working capital                            113    289
                                                         ------ ------
     Cash from continuing operations                        62    134
     Cash from discontinued operations                       1      7
                                                         ------ ------
Cash from operating activities                             $63   $141
                                                         ====== ======
Cash used for investing activities                       $(180)  $(66)
                                                         ====== ======
Cash used for financing activities                        $(73)  $(28)
                                                         ====== ======

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
         Non-GAAP to GAAP Reconciliations - Future Performance
                             (In millions)

                                           Three Months Twelve Months
                                               Ended        Ended
                                               June        December 
                                                30,           31,
                                               2004          2004
                                             ----------- -------------
 

Net income                                          $76          $265
Interest expense                                     72           285
Income tax expense                                   15            46
Depreciation and amortization                       117           470
                                             -----------   -----------
EBITDA                                              280         1,066
Loss on asset dispositions, net                       -             1
Discontinued operations                               -            (1)
Costs associated with construction
 remediation                                          -            (1)
                                             -----------   -----------
Adjusted EBITDA                                    $280        $1,065
                                             ===========   ===========
 

                                                       Twelve Months
                                                           Ended
                                                     December 31, 2003

Net income                                                       $309
 Interest expense                                                 312
 Income tax benefit                                               (73)
 Depreciation                                                     438
Amortization                                                       26
EBITDA                                                          1,012
Loss on asset dispositions and impairments, net                   183
 Discontinued operations                                         (252)
Restructuring and other special credits, net                       (9)
Costs associated with construction remediation                      4
Adjusted EBITDA                                                   938
Hotels sold in 2003                                               (21)
Adjusted EBITDA excluding hotels sold in 2003                    $917

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                    Hotel Results - Same Store (1)
               For the Three Months Ended March 31, 2004
                               UNAUDITED
                                WORLDWIDE            NORTH AMERICA
                            ----------------       ----------------
                           2004    2003   Var.     2004    2003  Var.
                         -------- ------- ----- -------- ------- -----
                                138 Hotels              95 Hotels
                         ---------------------- ----------------------
OWNED HOTELS
        REVPAR ($)        102.73   92.07  11.6%  103.50   94.63   9.4%
        ADR ($)           159.06  152.08   4.6%  156.41  152.78   2.4%
        OCCUPANCY (%)       64.6%   60.5%  4.1     66.2%   61.9%  4.3

                                     60                     37
                         ---------------------- ----------------------
SHERATON
        REVPAR ($)         83.88   73.82  13.6%   85.88   77.83  10.3%
        ADR ($)           132.95  127.19   4.5%  132.80  130.66   1.6%
        OCCUPANCY (%)       63.1%   58.0%  5.1     64.7%   59.6%  5.1

                                     35                     22
                         ---------------------- ----------------------
WESTIN
        REVPAR ($)        114.66  107.52   6.6%  108.85  102.90   5.8%
        ADR ($)           164.73  158.77   3.8%  149.53  146.31   2.2%
        OCCUPANCY (%)       69.6%   67.7%  1.9     72.8%   70.3%  2.5

                                     11                      5
                         ---------------------- ----------------------
ST. REGIS / LUXURY
 COLLECTION
        REVPAR ($)        232.91  202.85  14.8%  260.44  232.06  12.2%
        ADR ($)           387.76  367.06   5.6%  380.58  372.03   2.3%
        OCCUPANCY (%)       60.1%   55.3%  4.8     68.4%   62.4%  6.0

                                     12                     12
                         ---------------------- ----------------------
W
        REVPAR ($)        137.01  122.51  11.8%  137.01  122.51  11.8%
        ADR ($)           205.52  199.74   2.9%  205.52  199.74   2.9%
        OCCUPANCY (%)       66.7%   61.3%  5.4     66.7%   61.3%  5.4

                                     20                     19
                         ---------------------- ----------------------
OTHER
        REVPAR ($)         68.16   59.27  15.0%   62.39   57.98   7.6%
        ADR ($)           116.35  106.89   8.9%  114.93  112.85   1.8%
        OCCUPANCY (%)       58.6%   55.5%  3.1     54.3%   51.4%  2.9

                                                    INTERNATIONAL(2)
                                                    ----------------
                                                   2004    2003  Var.
                                                -------- ------- -----
                                                        43 Hotels
OWNED HOTELS
        REVPAR ($)                               100.51   84.57  18.8%
        ADR ($)                                  167.50  149.84  11.8%
        OCCUPANCY (%)                              60.0%   56.4%  3.6

                                                            23
SHERATON
        REVPAR ($)                                79.89   65.83  21.4%
        ADR ($)                                  133.28  119.71  11.3%
        OCCUPANCY (%)                              59.9%   55.0%  4.9

                                                            13
WESTIN
        REVPAR ($)                               133.84  123.20   8.6%
        ADR ($)                                  226.59  209.40   8.2%
        OCCUPANCY (%)                              59.1%   58.8%  0.3

                                                             6
ST. REGIS / LUXURY COLLECTION
        REVPAR ($)                               176.28  142.48  23.7%
        ADR ($)                                  411.33  351.27  17.1%
        OCCUPANCY (%)                              42.9%   40.6%  2.3

                                                             0
W
        REVPAR ($)                                 0.00    0.00   0.0%
        ADR ($)                                    0.00    0.00   0.0%
        OCCUPANCY (%)                               0.0%    0.0%  n/a

                                                             1
OTHER
        REVPAR ($)                               106.54   68.11  56.4%
        ADR ($)                                  122.20   81.79  49.4%
        OCCUPANCY (%)                              87.2%   83.3%  3.9
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 3
    hotels without comparable results
(2) See next page for breakdown by division

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                    Hotel Results - Same Store (1)
               For the Three Months Ended March 31, 2004
                               UNAUDITED
                                  EUROPE             LATIN AMERICA
                                 --------           ----------------
                            2004    2003  Var.    2004    2003    Var.
                         -------- ------- ----- -------- ------- -----
                                 27  Hotels             12 Hotels
                         ---------------------- ----------------------
OWNED HOTELS
        REVPAR ($)        121.04  106.45  13.7%   71.11   60.46  17.6%
        ADR ($)           223.92  199.05  12.5%  113.79  109.04   4.4%
        OCCUPANCY (%)       54.1%   53.5%  0.6     62.5%   55.4%  7.1

                                     11                      9
                         ---------------------- ----------------------
SHERATON
        REVPAR ($)         94.42   82.60  14.3%   60.23   49.80  20.9%
        ADR ($)           163.64  146.93  11.4%  100.97   95.68   5.5%
        OCCUPANCY (%)       57.7%   56.2%  1.5     59.6%   52.0%  7.6

                                     10                      3
                         ---------------------- ----------------------
WESTIN
        REVPAR ($)        140.19  128.87   8.8%  118.10  108.75   8.6%
        ADR ($)           265.87  238.18  11.6%  157.95  153.48   2.9%
        OCCUPANCY (%)       52.7%   54.1% (1.4)    74.8%   70.9%  3.9

                                      6                      0
ST. REGIS / LUXURY
 COLLECTION
        REVPAR ($)        176.28  142.48  23.7%    0.00    0.00   0.0%
        ADR ($)           411.33  351.27  17.1%    0.00    0.00   0.0%
        OCCUPANCY (%)       42.9%   40.6%  2.3      0.0%    0.0%  n/a

                                      0                      0
OTHER
        REVPAR ($)          0.00    0.00   0.0%    0.00    0.00   0.0%
        ADR ($)             0.00    0.00   0.0%    0.00    0.00   0.0%
        OCCUPANCY (%)        0.0%    0.0%  n/a      0.0%    0.0%  n/a
 

                                                      ASIA PACIFIC
                                                    ----------------
                                                  2004    2003    Var.
                                                -------- ------- -----
                                                        4 Hotels
OWNED HOTELS
        REVPAR ($)                               107.56   71.29  50.9%
        ADR ($)                                  142.64  101.33  40.8%
        OCCUPANCY (%)                              75.4%   70.4%  5.0

                                                             3
SHERATON
        REVPAR ($)                               108.19   73.28  47.6%
        ADR ($)                                  158.67  117.69  34.8%
        OCCUPANCY (%)                              68.2%   62.3%  5.9

                                                             0
WESTIN
        REVPAR ($)                                 0.00    0.00   0.0%
        ADR ($)                                    0.00    0.00   0.0%
        OCCUPANCY (%)                               0.0%    0.0%  n/a

                                                             0
ST. REGIS / LUXURY COLLECTION
        REVPAR ($)                                 0.00    0.00   0.0%
        ADR ($)                                    0.00    0.00   0.0%
        OCCUPANCY (%)                               0.0%    0.0%  n/a

                                                             1
OTHER
        REVPAR ($)                               106.54   68.11  56.4%
        ADR ($)                                  122.20   81.79  49.4%
        OCCUPANCY (%)                              87.2%   83.3%  3.9
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 3
    hotels without comparable results
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                        Debt Portfolio Summary
                         As of March 31, 2004
                               UNAUDITED
 

                                                              Avg
               Interest    Balance     % of      Interest   Maturity 
   Debt         Terms  (in millions) Portfolio     Rate    (in years)
-------------  --------  ----------  ---------- ---------- ---------

Floating Rate
 Debt:
Senior credit
 facility
Revolving 
 credit 
 facility      CBA + 162.5     $14          -       3.82%      2.5
Term loan    LIBOR + 162.5     300          7%      2.72%      1.8
                           ---------- ---------- ---------- ---------
                               314          7%      2.76%      1.8

Mortgages and 
 other           Various       244          5%      5.22%      1.5

Interest rate 
 swaps           Various       300          7%      5.34%
                           ---------- ---------- ----------

Total
 Floating                      858         19%      4.36%      1.6

Fixed Rate
 Debt:
Sheraton
 Holding
 public debt
 (1)                         1,068         23%      6.00%      8.8

Senior notes
 (2)                         1,532         33%      6.70%      5.8

Convertible
 debt -
 Series B                      329          7%      3.25%      2.5 (3)

Convertible
 debt - 2003                   360          8%      3.50%      2.1

Mortgages and
 other                         755         17%      7.24%      8.1

Interest rate
 swaps                        (300)        -7%      7.88%
                         ---------- ---------- ----------
Total Fixed                  3,744         81%      5.82%      6.4
                         ---------- ---------- ----------
Total Debt                  $4,602        100%      5.55%      5.8
                         ========== ========== ==========
 

                               Maturities
                        (less than)1 year     $240
                                2-3 years    1,510
                                4-5 years    1,223
                    (greater than)5 years    1,629
                                            $4,602

(1) Balance consists of outstanding public debt of $1.047
    billion and a $21 million fair value adjustment related to the
    unamortized gain on fixed to floating interest rate swaps
    terminated in September 2002 and March 2004.

(2) Balance consists of outstanding public debt of $1.495 billion and
    a $45 million fair value adjustment related to the unamortized
    gain on fixed to floating interest rate swaps terminated in
    September 2002 and March 2004 and an ($8) million fair value
    adjustment related to current fixed to floating interest rate
    swaps.
(3) Average maturity reflects the maturity date of the revolving
    credit facility which would be used to refinance the amount put to
    the Company.
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
        Hotels Without Comparable Results Other Selected Items
                         As of March 31, 2004
                        UNAUDITED ($ millions)

Properties without comparable results in 2004:
Property                            Location
----------------------------------  ---------------------------------
Sheraton Kauai Resort (acquired in  Koloa, HI
 2004)
Hotel Des Bains (seasonal)          Venice, Italy
Westin Excelsior (seasonal)         Venice, Italy

Properties sold or closed in 2003:
Property                            Location
----------------------------------  ---------------------------------
Arlington Marriott                  Arlington, VA
Baltimore Marriott                  Baltimore, MD
Cervo Hotel & Conference Center     Costa Smeralda, Italy
Hilton Novi                         Novi, MI
Hilton Sonoma County                Santa Rosa, CA
Hotel Cala di Volpe                 Costa Smeralda, Italy
Hotel Pitrizza                      Costa Smeralda, Italy
Hotel Principe di Savoia            Milan, Italy
Hotel Romazzino                     Costa Smeralda, Italy
Lenox Inn                           Atlanta, GA
North Charleston Sheraton           Charleston, SC
Residence Inn Tyson's Corner        Vienna, VA
Sheraton Buckhead                   Atlanta, GA
Sheraton Chicago Northwest          Arlington Heights, IL
Sheraton College Park               Beltsville, MD
Sheraton Danbury                    Danbury, CT
Sheraton Ferncroft                  Danvers, MA
Sheraton Gainesville                Gainesville, FL
Sheraton Mofarrej                   Sao Paulo, Brazil
Sheraton Norfolk                    Norfolk, VA
Wayfarer Inn                        Bedford, NH
Westin Southfield                   Southfield, MI
Westin Stamford                     Stamford, CT
 

Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents (including restricted cash
 of $165 million)                                               $402
Debt level                                                    $4,602

Revenues and Expenses Associated with Assets
 Sold in 2003 (1):
                                Q1      Q2     Q3     Q4    Full Year
2003
Revenues                       $42     $61     $7    $ -       $110
Expenses                       $38     $45     $6    $ -        $89

(1) Results consist of 20 hotels (excludes the Hotel Principe di
    Savoia reported in discontinued operations) that were sold in
    2003. These amounts are included in the revenues and expenses from
    owned, leased and consolidated joint venture hotels in 2003.
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                         Capital Expenditures
               For the Three Months Ended March 31, 2004
                        UNAUDITED ($ millions)
 Capital Expenditures:
 Owned, Leased and Consolidated Joint Venture Hotels              $50
 Corporate/IT                                                       4
 Subtotal                                                          54
 Vacation Ownership Capital Expenditures:
 Capital expenditures (includes land acquisition)                   4
 Inventory                                                         15
                                                                 -----
 Subtotal                                                          19

 Development Capital (1)                                          132

 Total Capital Expenditures                                      $205

(1) Includes Sheraton Kauai Resort acquisition of $40 million, Bliss
    World LLC acquisition of approximately $25 million, WHLP
    investment of $24 million, St. Regis Anguilla investment of $20
    million, and St. Regis San Francisco additions of $10 million.
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                Summary of Portfolio by Ownership Brand
                         As of March 31, 2004
                               UNAUDITED

                                          North America     Europe,
                                                            Africa &
                                                          Middle East
Owned                                     Hotels Rooms   Hotels Rooms
                                         -----------------------------
Sheraton                                     38  16,706     12  3,471
Westin                                       22  10,352     11  2,385
Four Points                                   6   1,138      -      -
W                                            12   4,369      -      -
Luxury Collection                             1     654      5    638
St. Regis                                     4     997      1    161
Other                                        13   3,061      -      -
Total Owned                                  96  37,277     29  6,655

Managed & UJV
Sheraton                                     43  20,411     77 22,321
Westin                                       38  21,416      6  1,464
Four Points                                  14   2,853      6    903
W                                             4     750      -      -
Luxury Collection                             6   1,508      5    621
St. Regis                                     2     697      1     95
Other                                         1     132      1    405
Total Managed & UJV                         108  47,767     96 25,809

Franchised
Sheraton                                    114  36,419     30  7,278
Westin                                       19   7,502      3  1,127
Four Points                                  88  15,912     10  1,376
Luxury Collection                             2     351     10  1,084
Total Franchised                            223  60,184     53 10,865

Systemwide
Sheraton                                    195  73,536    119 33,070
Westin                                       79  39,270     20  4,976
Four Points                                 108  19,903     16  2,279
W                                            16   5,119      -      -
Luxury Collection                             9   2,513     20  2,343
St. Regis                                     6   1,694      2    256
Other                                        14   3,193      1    405
Total Systemwide                            427 145,228    178 43,329

                          Latin America    Asia Pacific     Total
Owned                     Hotels Rooms     Hotels Rooms  Hotels Rooms
                         ---------------------------------------------
Sheraton                      7  3,573        3  1,028     60  24,778
Westin                        3    901        -      -     36  13,638
Four Points                   -      -        1    630      7   1,768
W                             -      -        -      -     12   4,369
Luxury Collection             2    320        -      -      8   1,612
St. Regis                     -      -        -      -      5   1,158
Other                         -      -        -      -     13   3,061
Total Owned                  12  4,794        4  1,658    141  50,384

Managed & UJV
Sheraton                      9  1,811       48 17,338    177  61,881
Westin                        -      -       13  5,121     57  28,001
Four Points                   1    128        2    207     23   4,091
W                             1    237        1    100      6   1,087
Luxury Collection             6    143        -      -     17   2,272
St. Regis                     -      -        2    591      5   1,383
Other                         -      -        2    315      4     852
Total Managed & UJV          17  2,319       68 23,672    289  99,567

Franchised
Sheraton                      3  1,087       16  5,453    163  50,237
Westin                        3    598        4  1,018     29  10,245
Four Points                   8  1,244        1    126    107  18,658
Luxury Collection             -      -        -      -     12   1,435
Total Franchised             14  2,929       21  6,597    311  80,575

Systemwide
Sheraton                     19  6,471       67 23,819    400 136,896
Westin                        6  1,499       17  6,139    122  51,884
Four Points                   9  1,372        4    963    137  24,517
W                             1    237        1    100     18   5,456
Luxury Collection             8    463        -      -     37   5,319
St. Regis                     -      -        2    591     10   2,541
Other                         -      -        2    315     17   3,913
Total Systemwide             43 10,042       93 31,927    741 230,526

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              2003 CONSOLIDATED STATEMENTS OF OPERATIONS
                 (In millions, except per Share data)

                                               (Unaudited)
                                            Three Months Ended
                                       March  June  Sept. Dec.  Year
                                        31     30    30    31
Revenues
Owned, leased and consolidated
 joint venture hotels                   $732  $821  $735  $797 $3,085
Vacation ownership sales and
 services (a)                             92   106   129   112    439
Management fees, franchise fees
 and other income                         52    64    68    71    255
      Other revenues from managed
       and franchised properties         210   220   204   217    851
                                       1,086 1,211 1,136 1,197  4,630
Costs and Expenses
Owned, leased and consolidated
 joint venture hotels                    586   618   577   611  2,392
Vacation ownership (a)                    71    83    98    88    340
Selling, general, administrative
 and other                                50    64    45    41    200
Restructuring and other special
 charges (credits), net                    -     -    (1)   (8)    (9)
Depreciation                             111    98   100   101    410
Amortization                               4     6     4     5     19
Other expenses from managed and
 franchised properties                   210   220   204   217    851
                                       1,032 1,089 1,027 1,055  4,203
Operating income                          54   122   109   142    427
Gain on sale of VOI notes
 receivable (b)                            1     4     1     9     15
Equity earnings from
 unconsolidated ventures, net (c)          4     4     2     2     12
Interest expense, net of interest
 income                                  (77)  (73)  (69)  (63)  (282)
Loss on asset dispositions and
 impairments, net                       (170)   (6)   (3)   (4)  (183)
Income (loss) from continuing
 operations before taxes and
 minority equity                        (188)   51    40    86    (11)
Income tax benefit (expense)              70    36     7     -    113
Minority equity in net loss
 (income)                                  1     -     -     2      3
Income (loss) from continuing
 operations                             (117)   87    47    88    105
Discontinued operations:
Loss from operations, net of tax          (1)    -     -    (1)    (2)
Gain on dispositions, net of tax           2   203     1     -    206
Net income                             $(116) $290   $48   $87   $309

Earnings Per Share -- Basic
Continuing operations                 $(0.58)$0.43 $0.23 $0.43  $0.52
        Discontinued operations            -  1.00  0.01     -   1.01
Net income                            $(0.58)$1.43 $0.24 $0.43  $1.53

Earnings Per Share -- Diluted
Continuing operations                 $(0.58)$0.42 $0.23 $0.42  $0.51
Discontinued operations                    -  0.99     -     -   0.99
Net income                            $(0.58)$1.41 $0.23 $0.42  $1.50

Weighted average number of Shares        200   202   203   202    203
Weighted average number of Shares
 assuming dilution                       200   205   208   209    207

The following classifications have been made to the above consolidated
statements of income to conform to the current year presentation:
(a) Vacation ownership revenues were previously a component of other hotel and leisure. Vacation ownership expenses were previously a component of selling, general, administrative and other expenses.  These revenues and expenses are now separately disclosed.
(b) Gain on sale of VOI notes receivable was previously a component of vacation ownership revenues recorded in other hotel and leisure.  These gains are now separately disclosed.
(c) Equity earnings from unconsolidated ventures, net were previously a component of other hotel and leisure. These earnings are now separately disclosed.

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.

Definitions:
All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations. EBITDA represents net income before interest expense, taxes, depreciation and amortization. The Company believes that EBITDA is a useful measure of the Company's operating performance due to the significance of the Company's long-lived assets and level of indebtedness. EBITDA is a commonly used measure of performance in its industry which, when considered with GAAP measures, the Company believes gives a more complete understanding of the Company's ability to service debt, fund capital expenditures, pay income taxes and pay cash distributions. It also facilitates comparisons between the Company and its competitors. The Company's management has historically adjusted EBITDA ("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 the special items described on page 6 of this release, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. The Company's management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions and it is used in the annual budget process. Due to recent guidance from the Securities and Exchange Commission, the Company now does not reflect such items when calculating EBITDA, however the Company continues to adjust for these special items and refers to this measure as Adjusted EBITDA. The Company has historically reported this measure to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more meaningful comparisons of past, present and future operating results and provides a means to evaluate the results of its core on-going operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by GAAP and such metrics should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by GAAP. The Company's calculation of EBITDA and Adjusted EBITDA may be different from the calculations used by other companies and, therefore, comparability may be limited.
All references to Same-Store Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels, excluding hotels sold to date and under significant renovation or for which comparable results are not available. REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
All references to contract sales reflect vacation ownership sales before revenue adjustments for percentage of completion accounting methodology.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 740 properties in more than 80 countries and 110,000 employees at its owned and managed properties.

This press release contains forward-looking statements within the meaning of federal securities regulations. 


 
Contact:
Starwood Hotels & Resorts Worldwide, Inc.
Allison Reid
914-640-8514

 
Also See: Starwood Reports 2003 Full Year Net Income Down 13% to $309 million from $355 million in 2002; Worldwide 4th Qtr RevPAR Up 6.6% and 4.7% in North America / Hotel Operating Statistics / February 2004
Starwood Reports Loss of $117 million Compared with a profit of $32 million for Last Year 1st Qtr/ Hotel Operating Statistics / April 2003


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