STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per Share data)
Three Months Ended
Nine Months Ended
September 30,
September 30,
------------------------
-------------------------
%
%
2005 2004 Variance
2005 2004 Variance
------ ------ --------
------ ------ ---------
Revenues
Owned, leased and
consolidated joint
$ 871 $ 811
7.4 venture hotels $2,623 $2,448
7.1
Vacation ownership
and residential
233 175
33.1 sales and services 697
443 57.3
Management fees,
franchise fees and
126 105
20.0 other income
349 299 16.7
Other revenues from
managed and
franchised
266 245
8.6 properties (a)
792 736 7.6
------ ------ --------
------ ------ ---------
1,496 1,336
11.9
4,461 3,926 13.6
Costs and Expenses
Owned, leased and
consolidated joint
646 617
(4.7) venture hotels 1,962
1,864 (5.3)
Vacation ownership
169 132
(28.0) and residential 503
334 (50.6)
Selling, general,
administrative and
98 74
(32.4) other
274 244 (12.3)
-
Restructuring and
other special
(37) (100.0) credits, net
- (37) (100.0)
99 103
3.9 Depreciation
305 306 0.3
4
4 - Amortization
13 13
-
Other expenses from
managed and
franchised
266 245
(8.6) properties (a) 792
736 (7.6)
------ ------ --------
------ ------ ---------
1,282 1,138 (12.6)
3,849 3,460 (11.2)
214 198
8.1 Operating income 612
466 31.3
Gain on sale of VOI
-
3 (100.0) notes receivable
- 11 (100.0)
Equity earnings
from
unconsolidated
9
6 50.0 ventures, net
40 22 81.8
Interest expense,
net of interest
income of $6, $1,
(59) (64)
7.8 $11 and $2
(181) (193) 6.2
Loss on asset
dispositions and
(16) (4)
n/m impairments, net (32)
(8) n/m
------ ------ --------
------ ------ ---------
Income from
continuing
operations before
taxes and minority
148 139
6.5 equity
439 298 47.3
(60) (34)
(76.5) Income tax expense (128) (41)
n/m
Tax expense on
repatriation of
(47) -
n/m foreign earnings (47)
- n/m
Minority equity in
(1)
- n/m net (income) loss
- 1 (100.0)
------ ------- --------
------- ------ ---------
Income from
continuing
40 105
(61.9) operations
264 258 2.3
Discontinued
operations:
Loss from
(1)
- n/m operations (b)
(1) -
n/m
Gain on
-
2 (100.0) disposition (c)
- 37 (100.0)
------- ------ --------
------- ------ ---------
$ 39 $ 107
(63.6) Net income
$ 263 $ 295 (10.8)
====== ====== ========
====== ====== =========
Earnings Per
Share - Basic
Continuing
$ 0.19 $ 0.51 (62.7) operations
$ 1.22 $ 1.25 (2.4)
Discontinued
(0.01) 0.01
n/m operations
- 0.18 (100.0)
------ ------ --------
------- ------ ---------
$ 0.18 $ 0.52 (65.4) Net income
$ 1.22 $ 1.43 (14.7)
====== ====== ========
====== ====== =========
Earnings Per Share
- Diluted
Continuing
$ 0.18 $ 0.49 (63.3) operations
$ 1.18 $ 1.21 (2.5)
Discontinued
(0.01) 0.01
n/m operations
- 0.17 (100.0)
------ ------ --------
------- ------ ---------
$ 0.17 $ 0.50 (66.0) Net income
$ 1.18 $ 1.38 (14.5)
====== ====== ========
====== ====== =========
Weighted average
218 208
number of Shares 216
207
====== ======
====== ======
Weighted average
number of Shares
226 215
assuming dilution 223 214
====== ======
====== ======
(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) 2005 activity represents a sales and use tax assessment
related to
the Company's gaming business disposed
of in 1999 for periods
prior to its disposition.
(c) 2004 activity represents the reversal of reserves
that are no
longer required as the related contingencies
have been resolved
and the favorable resolution of certain
tax matters related to the
1999 divestiture of the Company's
gaming business.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
(in millions, except share data)
September 30, December 31,
2005 2004
------------- ------------
Assets
(unaudited)
-------------
Current assets:
Cash and cash equivalents
$ 909 $
326
Restricted cash
251 347
Accounts receivable, net of allowance for
doubtful accounts of $58 and $58
642 482
Inventories
281 371
Prepaid expenses and other
187 157
----------- -----------
Total current assets
2,270 1,683
Investments
408 453
Plant, property and equipment, net
6,777 6,997
Goodwill and intangible assets, net
2,539 2,544
Other assets (a)
745 621
----------- -----------
$ 12,739 $ 12,298
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (b)
$ 604 $
619
Accounts payable
149 200
Accrued expenses
802 872
Accrued salaries, wages and benefits
262 299
Accrued taxes and other
471 138
----------- -----------
Total current liabilities
2,288 2,128
Long-term debt (b)
3,703 3,823
Deferred income taxes
611 880
Other liabilities
682 652
----------- -----------
7,284 7,483
Minority interest
25 27
Exchangeable units and Class B preferred
shares, at redemption value of $38.50
- -
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares of
the Trust; $0.01 par value; authorized
30,000,000 shares; outstanding 562,222
and 597,825 shares at September 30, 2005
and December 31, 2004, respectively
- -
Corporation common stock; $0.01 par value;
authorized 1,050,000,000 shares;
outstanding 219,272,686 and 208,730,800
shares at September 30, 2005 and December
31, 2004, respectively
2 2
Trust Class B shares of beneficial
interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding
219,272,686 and 208,730,800 shares at
September 30, 2005 and December 31, 2004,
respectively
2 2
Additional paid-in capital
5,593 5,121
Deferred compensation
(64) (14)
Accumulated other comprehensive loss
(298) (255)
Retained earnings (accumulated deficit)
195 (68)
----------- -----------
Total stockholders' equity
5,430 4,788
----------- -----------
$ 12,739 $ 12,298
=========== ===========
(a) Includes restricted cash of $11 million and $10 million
at
September 30, 2005 and December 31,
2004, respectively.
(b) Excludes Starwood's share of unconsolidated joint
venture debt
aggregating approximately $421 million
and $438 million at
September 30, 2005 and December 31,
2004, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Historical Data
(in millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
-----------------------
-------------------------
%
%
2005 2004 Variance
2005 2004 Variance
----- ----- ---------
------ ------ ---------
Reconciliation of
Net Income to
EBITDA and
Adjusted EBITDA
$ 39 $ 107 (63.6)
Net income
$ 263 $ 295 (10.8)
70 68
(2.9) Interest expense(a) 207
209 1.0
Income tax
106 35
n/m expense(b)
174 8
n/m
108 111
2.7 Depreciation(c)
330 330
-
6 6
- Amortization(d)
18 18
-
----- ----- ---------
------ ------ ---------
329 327
0.6 EBITDA
992 860 15.3
Adjustment to costs
associated with
construction
- -
- remediation
- (4) (100.0)
Loss on asset
dispositions and
16 4
n/m impairments, net
32 8
n/m
Restructuring and
other special
- (37)
(100.0) credits, net
- (37) (100.0)
Discontinued
2 (3)
n/m operations(e)
2 (4) n/m
----- ----- ---------
------ ------ ---------
$ 347 $ 291 19.2
Adjusted EBITDA $1,026 $ 823
24.7
===== ===== =========
====== ====== =========
(a) Includes $5 and $3 million of interest expense related
to
unconsolidated joint ventures for
the three months ended September
30, 2005 and 2004, respectively, and
$15 and $14 million for the
nine months ended September 30, 2005
and 2004, respectively.
(b) Includes $47 million of tax expense on the repatriation
of foreign
earnings for the three and nine months
ended September 30, 2005.
Also includes $(1) and $1 million
of tax expense (benefit)
recorded in discontinued operations
for the three months ended
September 30, 2005 and 2004, respectively,
and $(1) and $(33)
million for the nine months ended
September 30, 2005 and 2004,
respectively.
(c) Includes $9 and $8 million of Starwood's share of
depreciation
expense of unconsolidated joint ventures
for the three months
ended September 30, 2005 and 2004,
respectively, and $25 and $24
million for the nine months ended
September 30, 2005 and 2004,
respectively.
(d) Includes $2 and $2 million of Starwood's share of
amortization
expense of unconsolidated joint ventures
for the three months
ended September 30, 2005 and 2004,
respectively, and $5 and $5
million for the nine months ended
September 30, 2005 and 2004,
respectively.
(e) Excludes the taxes already added back as noted in
(b) above.
Three Months
Nine Months
Ended
Ended
September 30,
September 30,
--------------
--------------
2005 2004
2005 2004
------ ------
------ ------
Cash Flow Data
$ 39 $ 107 Net income
$ 263 $ 295
Exclude:
1 (2)
Discontinued operations, net
1 (37)
----- -----
----- -----
40 105 Income from
continuing operations
264 258
258 (67) (Increase) decrease
in restricted cash 97
(197)
Adjustments to income from continuing
operations, changes in working capital,
290 157 and other
457 315
----- -----
588 195 Cash from
continuing operations
818 376
- -
Cash from discontinued operations
- 1
----- -----
----- -----
$ 588 $ 195 Cash from operating activities
$ 818 $ 377
===== =====
===== =====
$(103) $ (80) Cash used for investing activities
$ (254) $(324)
===== =====
===== =====
Cash from (used for) financing
$ 45 $ (50) activities
$ 34 $(251)
===== =====
===== =====
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP
to GAAP Reconciliations - Future Performance
(In millions)
Year Ended
December 31, 2005
-----------------
Net income before special items
$ 506
Special items (see page 8)
(100)
---------------
Net income
$ 406
===============
EPS before special items
$ 2.27
Special items (see page 8)
(0.45)
---------------
EPS
$ 1.82
===============
Three Months
Year Ended December
Ended
31,
December 31, 2005
2005 2006
-----------------
--------- ---------
$
143 Net Income
$ 406 $ 611
77 Interest expense
284 270
48 Income tax expense
222 226
116 Depreciation and amortization
464 453
--------------
--------- ---------
384 EBITDA
1,376 1,560
Loss on asset dispositions and
- impairments, net
32 -
- Discontinued operations
2 -
---------------
--------- ----------
$
384 Adjusted EBITDA
$ 1,410 $ 1,560
==============
========= =========
Three Months Ended
Year Ended
December 31, 2004
December 31, 2004
------------------
-----------------
$
100 Net income
$ 395
66 Interest expense
275
26 Income tax expense
34
115 Depreciation
445
8 Amortization
26
----------------
---------------
315 EBITDA
1,175
Loss on asset dispositions and
25 impairments, net
33
(13) Discontinued operations
(17)
Restructuring and other special
- credits, net
(37)
Adjustment to costs associated
- with construction remediation
(4)
----------------
---------------
$
327 Adjusted EBITDA
$ 1,150
================
===============
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Same
Store Owned Hotel Revenue
and Expenses
(In millions)
Three Months Ended
Nine Months Ended
September 30,
September 30,
----------------------
-------------------------
Same-Store Owned
% Hotels (1)
%
2005 2004 Variance
Worldwide 2005
2004 Variance
----- ----- --------
------ ------ ---------
Revenue
Same-Store Owned
$ 848 $ 769 10.3
Hotels
$2,498 $2,299 8.7
Hotels Sold or
Closed in 2005 and
3 17
(82.4) 2004 (7 hotels)
27 52 (48.1)
Hotels Without
Comparable Results
15 20
(25.0) (7 hotels)
92 91
1.1
Other ancillary
5 5
- hotel operations
6 6
-
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 871 $ 811 7.4
Revenue
$2,623 $2,448 7.1
===== ===== ========
====== ====== =========
Costs and Expenses
Same-Store Owned
$ 624 $ 583 (7.0)
Hotels
$1,864 $1,750 (6.5)
Hotels Sold or
Closed in 2005 and
2 15
86.7 2004 (7 hotels)
23 44 47.7
Hotels Without
Comparable Results
18 17
(5.9) (7 hotels)
72 66 (9.1)
Other ancillary
2 2
- hotel operations
3 4 25.0
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 646 $ 617 (4.7)
Costs and Expenses $1,962 $1,864
(5.3)
===== ===== ========
====== ====== =========
Three Months Ended
Nine Months Ended
September 30,
September 30,
----------------------
-------------------------
% Same-Store Owned
%
2005 2004 Variance Hotels
North America 2005 2004 Variance
------ ------ --------
------ ------ ---------
Revenue
Same-Store Owned
$ 613 $ 553 10.9
Hotels
$1,799 $1,665 8.0
Hotels Sold or
Closed in 2005 and
3 12
(75.0) 2004 (6 hotels)
23 38 (39.5)
Hotels Without
Comparable Results
14 16
(12.5) (6 hotels)
80 78
2.6
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 630 $ 581 8.4
Revenue
$1,902 $1,781 6.8
===== ===== ========
====== ====== =========
Costs and Expenses
Same-Store Owned
$ 454 $ 423 (7.4)
Hotels
$1,342 $1,272 (5.5)
Hotels Sold or
Closed in 2005 and
2 11
81.8 2004 (6 hotels)
18 32 43.8
Hotels Without
Comparable Results
17 14
(21.4) (6 hotels)
65 57 (14.0)
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 473 $ 448 (5.6)
Costs and Expenses $1,425 $1,361
(4.7)
===== ===== ========
====== ====== =========
Three Months Ended
Nine Months Ended
September 30,
September 30,
----------------------
-------------------------
Same-Store
% Owned Hotels
%
2005 2004 Variance
International 2005
2004 Variance
------ ------ --------
------ ------- ---------
Revenue
Same-Store Owned
$ 235 $ 216 8.8
Hotels
$ 699 $ 634 10.3
-
Hotels Sold or
Closed in 2005 and
5 (100.0) 2004 (1 hotel)
4 14 (71.4)
Hotels Without
Comparable Results
1 4
(75.0) (1 hotel)
12 13 (7.7)
Other ancillary
5 5
- hotel operations
6 6
-
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 241 $ 230 4.8
Revenue
$ 721 $ 667 8.1
===== ===== ========
====== ====== =========
Costs and Expenses
Same-Store Owned
$ 170 $ 160 (6.3)
Hotels
$ 522 $ 478 (9.2)
-
Hotels Sold or
Closed in 2005 and
4 100.0 2004 (1 hotel)
5 12 58.3
Hotels Without
Comparable Results
1 3
66.7 (1 hotel)
7 9 22.2
- Other ancillary
2 2
hotel operations 3
4 25.0
----- ----- --------
------ ------ ---------
Total Owned, Leased
and Consolidated
Joint Venture Hotels
$ 173 $ 169 (2.4)
Costs and Expenses $ 537 $ 503
(6.8)
===== ===== ========
====== ====== =========
(1) Same-Store Owned Hotel Results exclude 7 hotels sold
or closed in
2005 and 2004 and 7 hotels without
comparable results.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Three Months Ended
September 30, 2005
UNAUDITED
WORLDWIDE NORTH
AMERICA
--------------------- ---------------------
2005 2004 Var. 2005
2004 Var.
------- ------- ----- ------- ------- -----
128 Hotels
85 Hotels
--------------------- ---------------------
SAME STORE OWNED HOTELS
REVPAR
($) 126.76 113.29
11.9% 127.00 112.22 13.2%
ADR
($) 171.69
158.17 8.5% 165.65 150.49 10.1%
OCCUPANCY
(%) 73.8% 71.6% 2.2
76.7% 74.6% 2.1
56
34
--------------------- ---------------------
SHERATON
REVPAR
($) 105.60 95.78
10.3% 114.87 103.72 10.8%
ADR
($) 147.38
136.40 8.0% 151.26 138.35 9.3%
OCCUPANCY
(%) 71.6% 70.2% 1.4
75.9% 75.0% 0.9
36
22
--------------------- ---------------------
WESTIN
REVPAR
($) 132.48 120.07
10.3% 117.49 106.35 10.5%
ADR
($) 177.29
164.36 7.9% 154.43 141.36 9.2%
OCCUPANCY
(%) 74.7% 73.1% 1.6
76.1% 75.2% 0.9
9
3
--------------------- ---------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR
($) 239.32 215.30
11.2% 201.11 165.34 21.6%
ADR
($) 372.22
363.58 2.4% 318.04 292.31 8.8%
OCCUPANCY
(%) 64.3% 59.2% 5.1
63.2% 56.6% 6.6
10
10
--------------------- ---------------------
W
REVPAR
($) 202.21 162.38
24.5% 202.21 162.38 24.5%
ADR
($) 246.66
214.15 15.2% 246.66 214.15 15.2%
OCCUPANCY
(%) 82.0% 75.8% 6.2
82.0% 75.8% 6.2
17
16
--------------------- ---------------------
OTHER
REVPAR
($) 106.43 95.90
11.0% 105.72 95.78 10.4%
ADR
($) 132.95
124.84 6.5% 131.83 126.86 3.9%
OCCUPANCY
(%) 80.1% 76.8% 3.3
80.2% 75.5% 4.7
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
(2) See next page for breakdown by division
INTERNATIONAL(2)
----------------------
2005 2004 Var.
------- ------- ------
43 Hotels
----------------------
SAME STORE OWNED HOTELS
REVPAR
($) 126.09
116.37 8.4%
ADR
($)
191.79 184.02 4.2%
OCCUPANCY
(%) 65.7%
63.2% 2.5
22
----------------------
SHERATON
REVPAR
($)
85.94 79.01 8.8%
ADR
($)
137.41 131.30 4.7%
OCCUPANCY
(%) 62.5%
60.2% 2.3
14
----------------------
WESTIN
REVPAR
($) 179.93
163.32 10.2%
ADR
($)
255.42 246.80 3.5%
OCCUPANCY
(%) 70.4%
66.2% 4.2
6
----------------------
ST. REGIS/LUXURY COLLECTION
REVPAR
($) 293.93
290.39 1.2%
ADR
($)
446.63 459.46 (2.8%)
OCCUPANCY
(%) 65.8%
63.2% 2.6
W
REVPAR
($)
ADR
($)
OCCUPANCY
(%)
1
----------------------
OTHER
REVPAR
($) 110.56
96.62 14.4%
ADR
($)
139.49 114.35 22.0%
OCCUPANCY
(%) 79.3%
84.5% (5.2)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
(2) See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Three Months Ended
September 30, 2005
UNAUDITED
EUROPE
LATIN AMERICA
----------------------- ----------------------
2005 2004 Var. 2005
2004 Var.
-------- ------- ------ -------- ------- -----
28 Hotels
11 Hotels
----------------------- ----------------------
SAME STORE OWNED HOTELS
REVPAR
($) 175.42 164.10
6.9% 59.38 50.22 18.2%
ADR
($) 253.15 248.43
1.9% 102.98 93.98 9.6%
OCCUPANCY
(%) 69.3% 66.1% 3.2
57.7% 53.4% 4.3
11
8
----------------------- ----------------------
SHERATON
REVPAR
($) 112.51 105.99
6.2% 52.71 43.55 21.0%
ADR
($) 161.66 154.75
4.5% 97.55 89.82 8.6%
OCCUPANCY
(%) 69.6% 68.5% 1.1
54.0% 48.5% 5.5
11
3
----------------------- ----------------------
WESTIN
REVPAR
($) 216.09 196.51 10.0%
84.67 75.56 12.1%
ADR
($) 308.36 307.66
0.2% 118.57 104.58 13.4%
OCCUPANCY
(%) 70.1% 63.9% 6.2
71.4% 72.3% (0.9)
6
-----------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR
($) 293.93 290.39
1.2%
ADR
($) 446.63 459.46
(2.8%)
OCCUPANCY
(%) 65.8% 63.2% 2.6
OTHER
REVPAR
($)
ADR
($)
OCCUPANCY
(%)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
ASIA PACIFIC
---------------------
2005 2004 Var.
------- ------- -----
4 Hotels
---------------------
SAME STORE OWNED HOTELS
REVPAR
($) 115.11
109.03 5.6%
ADR
($)
156.56 139.44 12.3%
OCCUPANCY
(%) 73.5%
78.2% (4.7)
3
---------------------
SHERATON
REVPAR
($) 117.90
116.63 1.1%
ADR
($)
168.41 156.93 7.3%
OCCUPANCY
(%) 70.0%
74.3% (4.3)
WESTIN
REVPAR
($)
ADR
($)
OCCUPANCY
(%)
ST. REGIS/LUXURY COLLECTION
REVPAR
($)
ADR
($)
OCCUPANCY
(%)
1
---------------------
OTHER
REVPAR
($) 110.56
96.62 14.4%
ADR
($)
139.49 114.35 22.0%
OCCUPANCY
(%) 79.3%
84.5% (5.2)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Three Months Ended
September 30, 2005
UNAUDITED ($ thousands except variances)
WORLDWIDE(2)
NORTH AMERICA(2)
------------------------- -------------------------
2005 2004 Var.
2005 2004 Var.
-------- -------- ------- -------- -------- -------
128 Hotels
85 Hotels
------------------------- -------------------------
SAME STORE OWNED
HOTELS
Total
REVENUE
848,071 768,811 10.3% 612,926 552,764
10.9%
Total
EXPENSE
624,168 583,472 (7.0%) 454,523 423,369
(7.4%)
56
34
------------------------- -------------------------
SHERATON
REVENUE
341,211 315,104 8.3% 238,934 221,665
7.8%
EXPENSE
249,234 235,068 (6.0%) 173,201 164,065
(5.6%)
36
22
------------------------- -------------------------
WESTIN
REVENUE
268,047 242,290 10.6% 177,153 160,115
10.6%
EXPENSE
194,249 181,798 (6.8%) 130,014 121,931
(6.6%)
9
3
------------------------- -------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE
77,232 72,190 7.0% 44,233
39,749 11.3%
EXPENSE
61,559 58,838 (4.6%) 40,386 37,044
(9.0%)
10
10
------------------------- -------------------------
W(2)
REVENUE
99,977 82,683 20.9% 99,977
82,683 20.9%
EXPENSE
72,805 65,716 (10.8%) 72,805 65,716
(10.8%)
17
16
------------------------- -------------------------
OTHER
REVENUE
61,604 56,544 8.9% 52,629
48,552 8.4%
EXPENSE
46,321 42,052 (10.2%) 38,118 34,613
(10.1%)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
(2) Includes lease expense of $4,288 in 2005 and 2004
related to the
lease of the W Times Square in New
York
(3) See next page for breakdown by division
INTERNATIONAL(3)
-------------------------
2005 2004 Var.
-------- -------- -------
43 Hotels
-------------------------
SAME STORE OWNED HOTELS
Total REVENUE
235,145 216,047 8.8%
Total EXPENSE
169,644 160,103 (6.0%)
22
-------------------------
SHERATON
REVENUE
102,277 93,439 9.5%
EXPENSE
76,033 71,003 (7.1%)
14
-------------------------
WESTIN
REVENUE
90,894 82,175 10.6%
EXPENSE
64,235 59,867 (7.3%)
6
-------------------------
ST. REGIS/LUXURY COLLECTION
REVENUE
32,999 32,441 1.7%
EXPENSE
21,173 21,794 2.8%
W(2)
REVENUE
EXPENSE
1
-------------------------
OTHER
REVENUE
8,975 7,992 12.3%
EXPENSE
8,203 7,439 (10.3%)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
(2) Includes lease expense of $4,288 in 2005 and 2004
related to the
lease of the W Times Square in New
York
(3) See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Three Months Ended
September 30, 2005
UNAUDITED ($ thousands except variances)
EUROPE
LATIN AMERICA
------------------------ -----------------------
2005 2004 Var.
2005 2004 Var.
-------- -------- ------ ------- ------- -------
28 Hotels
11 Hotels
------------------------ -----------------------
SAME STORE OWNED HOTELS
Total REVENUE
162,546 152,450 6.6% 42,802 36,003
18.9%
Total EXPENSE
116,316 112,547 (3.3%) 30,840 27,270 (13.1%)
11
8
------------------------ -----------------------
SHERATON
REVENUE
52,354 49,376 6.0% 29,101 24,461
19.0%
EXPENSE
40,686 39,985 (1.8%) 21,062 18,171 (15.9%)
11
3
------------------------ -----------------------
WESTIN
REVENUE
77,193 70,633 9.3% 13,701 11,542
18.7%
EXPENSE
54,457 50,768 (7.3%) 9,778 9,099
(7.5%)
6
------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE
32,999 32,441 1.7%
EXPENSE
21,173 21,794 2.8%
OTHER
REVENUE
EXPENSE
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
ASIA PACIFIC
-----------------------
2005 2004 Var.
------- ------- -------
4 Hotels
-----------------------
SAME STORE OWNED HOTELS
Total REVENUE
29,797 27,594 8.0%
Total EXPENSE
22,488 20,286 (10.9%)
3
-----------------------
SHERATON
REVENUE
20,822 19,602 6.2%
EXPENSE
14,285 12,847 (11.2%)
WESTIN
REVENUE
EXPENSE
ST. REGIS/LUXURY COLLECTION
REVENUE
EXPENSE
1
-----------------------
OTHER
REVENUE
8,975 7,992 12.3%
EXPENSE
8,203 7,439 (10.3%)
(1) Hotel Results exclude 7 hotels sold or closed and
6 hotels without
comparable results during 2004 and
2005
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended
September 30, 2005
UNAUDITED
WORLDWIDE NORTH
AMERICA
--------------------- ---------------------
2005 2004 Var. 2005
2004 Var.
------- ------- ----- ------- ------- -----
127 Hotels
84 Hotels
--------------------- ---------------------
SAME STORE OWNED HOTELS
REVPAR ($)
123.31 110.67 11.4% 122.04 109.46 11.5%
ADR ($)
172.86 160.64 7.6% 167.10 153.41 8.9%
OCCUPANCY
(%) 71.3% 68.9%
2.4 73.0% 71.4% 1.6
55
33
--------------------- ---------------------
SHERATON
REVPAR ($)
100.83 91.89 9.7% 106.15 97.43
9.0%
ADR ($)
145.99 136.32 7.1% 149.01 136.76 9.0%
OCCUPANCY
(%) 69.1% 67.4%
1.7 71.2% 71.2% 0.0
36
22
--------------------- ---------------------
WESTIN
REVPAR ($)
134.15 120.30 11.5% 119.68 107.99 10.8%
ADR ($)
179.55 167.14 7.4% 157.31 145.59 8.1%
OCCUPANCY
(%) 74.7% 72.0%
2.7 76.1% 74.2% 1.9
9
3
--------------------- ---------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
260.27 233.95 11.3% 253.39 218.74 15.8%
ADR ($)
396.34 386.69 2.5% 362.02 344.05 5.2%
OCCUPANCY
(%) 65.7% 60.5%
5.2 70.0% 63.6% 6.4
10
10
--------------------- ---------------------
W
REVPAR ($)
188.49 158.12 19.2% 188.49 158.12 19.2%
ADR ($)
244.14 216.53 12.8% 244.14 216.53 12.8%
OCCUPANCY
(%) 77.2% 73.0%
4.2 77.2% 73.0% 4.2
17
16
--------------------- ---------------------
OTHER
REVPAR ($)
89.70 80.67 11.2% 86.21 77.53
11.2%
ADR ($)
127.81 119.78 6.7% 125.59 119.95 4.7%
OCCUPANCY
(%) 70.2% 67.3%
2.9 68.6% 64.6% 4.0
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
(2) See next page for breakdown by division
INTERNATIONAL(2)
----------------------
2005 2004 Var.
------- ------- ------
43 Hotels
----------------------
SAME STORE OWNED HOTELS
REVPAR ($)
126.92 114.13 11.2%
ADR ($)
190.84 184.31 3.5%
OCCUPANCY
(%) 66.5%
61.9% 4.6
22
----------------------
SHERATON
REVPAR ($)
89.79 80.42 11.7%
ADR ($)
139.10 135.23 2.9%
OCCUPANCY
(%) 64.5%
59.5% 5.0
14
----------------------
WESTIN
REVPAR ($)
180.86 159.73 13.2%
ADR ($)
257.17 245.92 4.6%
OCCUPANCY
(%) 70.3%
65.0% 5.3
6
----------------------
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
270.11 256.82 5.2%
ADR ($)
454.05 459.62 (1.2%)
OCCUPANCY
(%) 59.5%
55.9% 3.6
W
REVPAR ($)
ADR ($)
OCCUPANCY
(%)
1
----------------------
OTHER
REVPAR ($)
109.89 98.90 11.1%
ADR ($)
138.95 119.00 16.8%
OCCUPANCY
(%) 79.1%
83.1% (4.0)
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
(2) See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended
September 30, 2005
UNAUDITED
EUROPE
LATIN AMERICA
---------------------- ---------------------
2005 2004 Var. 2005
2004 Var.
------- ------- ------ ------- ------- -----
28 Hotels
11 Hotels
---------------------- ---------------------
SAME STORE OWNED HOTELS
REVPAR ($)
170.97 156.05 9.6% 68.59 57.89
18.5%
ADR ($)
255.98 249.22 2.7% 108.50 103.53
4.8%
OCCUPANCY
(%) 66.8% 62.6%
4.2 63.2% 55.9% 7.3
11
8
---------------------- ---------------------
SHERATON
REVPAR ($)
116.41 106.52 9.3% 57.10 48.77
17.1%
ADR ($)
169.03 164.28 2.9% 97.04 94.60
2.6%
OCCUPANCY
(%) 68.9% 64.8%
4.1 58.8% 51.6% 7.2
11
3
---------------------- ---------------------
WESTIN
REVPAR ($)
207.66 185.69 11.8% 112.21 92.53 21.3%
ADR ($)
311.73 299.29 4.2% 140.57 127.66 10.1%
OCCUPANCY
(%) 66.6% 62.0%
4.6 79.8% 72.5% 7.3
6
----------------------
ST. REGIS/LUXURY
COLLECTION
REVPAR ($)
270.11 256.82 5.2%
ADR ($)
454.05 459.62 (1.2%)
OCCUPANCY
(%) 59.5% 55.9%
3.6
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY
(%)
ASIA PACIFIC
---------------------
2005 2004 Var.
------- ------- -----
4 Hotels
---------------------
SAME STORE OWNED HOTELS
REVPAR ($)
116.64 105.21 10.9%
ADR ($)
157.58 140.28 12.3%
OCCUPANCY
(%) 74.0%
75.0% (1.0)
3
---------------------
SHERATON
REVPAR ($)
120.78 109.09 10.7%
ADR ($)
170.31 155.75 9.3%
OCCUPANCY
(%) 70.9%
70.0% 0.9
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY
(%)
ST. REGIS/LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY
(%)
1
---------------------
OTHER
REVPAR ($)
109.89 98.90 11.1%
ADR ($)
138.95 119.00 16.8%
OCCUPANCY
(%) 79.1%
83.1% (4.0)
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended
September 30, 2005
UNAUDITED ($ thousands except variances)
WORLDWIDE(2)
NORTH AMERICA(2)
---------------------------- ----------------------------
2005 2004
Var. 2005 2004
Var.
---------- ---------- ------ ---------- ---------- ------
127 Hotels
84 Hotels
---------------------------- ----------------------------
SAME STORE
OWNED HOTELS
Total
REVENUE 2,498,380 2,299,176
8.7% 1,798,755 1,665,250 8.0%
Total
EXPENSE 1,864,091 1,749,678
(6.5%) 1,342,264 1,271,410 (5.6%)
55
33
---------------------------- ----------------------------
SHERATON
REVENUE 973,977
915,620 6.4% 660,184 633,345
4.2%
EXPENSE 731,529
689,020 (6.2%) 494,558 477,154
(3.6%)
36
22
---------------------------- ----------------------------
WESTIN
REVENUE 824,520
747,143 10.4% 555,752 506,254
9.8%
EXPENSE 594,136
554,577 (7.1%) 397,893 373,866
(6.4%)
9
3
---------------------------- ----------------------------
ST. REGIS/
LUXURY
COLLECTION
REVENUE 261,899
246,837 6.1% 171,027 160,008
6.9%
EXPENSE 197,346
189,268 (4.3%) 132,826 125,775
(5.6%)
10
10
---------------------------- ----------------------------
W(3)
REVENUE 278,331
242,083 15.0% 278,331 242,083
15.0%
EXPENSE 211,247
196,125 (7.7%) 211,247 196,125
(7.7%)
17
16
---------------------------- ----------------------------
OTHER
REVENUE 159,653
147,493 8.2% 133,461 123,560
8.0%
EXPENSE 129,833
120,688 (7.6%) 105,740 98,491
(7.4%)
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
(2) Includes lease expense of $12,863 in 2005 and 2004
related to the
lease of the W Times Square in New
York
(3) See next page for breakdown by division
INTERNATIONAL(3)
-------------------------
2005 2004 Var.
-------- -------- -------
43 Hotels
-------------------------
SAME STORE OWNED HOTELS
Total REVENUE
699,625 633,926 10.4%
Total EXPENSE
521,827 478,267 (9.1%)
22
-------------------------
SHERATON
REVENUE
313,793 282,275 11.2%
EXPENSE
236,971 211,866 (11.8%)
14
-------------------------
WESTIN
REVENUE
268,768 240,889 11.6%
EXPENSE
196,243 180,711 (8.6%)
6
-------------------------
ST. REGIS/LUXURY COLLECTION
REVENUE
90,872 86,829 4.7%
EXPENSE
64,520 63,493 (1.6%)
W(3)
REVENUE
EXPENSE
1
-------------------------
OTHER
REVENUE
26,192 23,933 9.4%
EXPENSE
24,093 22,197 (8.5%)
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
(2) Includes lease expense of $12,863 in 2005 and 2004
related to the
lease of the W Times Square in New
York
(3) See next page for breakdown by division
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store Owned Hotels(1)
For the Nine Months Ended
September 30, 2005
UNAUDITED ($ thousands except variances)
EUROPE
LATIN AMERICA
------------------------ -------------------------
2005 2004 Var.
2005 2004 Var.
-------- -------- ------ -------- -------- -------
28 Hotels
11 Hotels
------------------------ -------------------------
SAME STORE OWNED HOTELS
Total REVENUE 470,684
435,574 8.1% 142,086 119,656
18.7%
Total EXPENSE 362,299
337,740 (7.2%) 93,683 80,897 (15.8%)
11
8
------------------------ -------------------------
SHERATON
REVENUE
162,646 149,568 8.7% 90,484 77,944
16.1%
EXPENSE
132,536 121,309 (9.3%) 62,683 53,124
(18.0%)
11
3
------------------------ -------------------------
WESTIN
REVENUE
217,166 199,177 9.0% 51,602 41,712
23.7%
EXPENSE
165,243 152,938 (8.0%) 31,000 27,773
(11.6%)
6
------------------------
ST. REGIS/LUXURY
COLLECTION
REVENUE
90,872 86,829 4.7%
EXPENSE
64,520 63,493 (1.6%)
OTHER
REVENUE
EXPENSE
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
ASIA PACIFIC
-----------------------
2005 2004 Var.
------- ------- -------
4 Hotels
-----------------------
SAME STORE OWNED HOTELS
Total REVENUE
86,855 78,696 10.4%
Total EXPENSE
65,845 59,630 (10.4%)
3
-----------------------
SHERATON
REVENUE
60,663 54,763 10.8%
EXPENSE
41,752 37,433 (11.5%)
WESTIN
REVENUE
EXPENSE
ST. REGIS/LUXURY COLLECTION
REVENUE
EXPENSE
1
-----------------------
OTHER
REVENUE
26,192 23,933 9.4%
EXPENSE
24,093 22,197 (8.5%)
(1) Hotel Results exclude 7 hotels sold or closed and
7 hotels without
comparable results during 2004 and
2005
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Debt Portfolio Summary
As of September 30, 2005
UNAUDITED
Avg
Interest Balance % of
Interest Maturity
Debt
Terms (in millions) Portfolio Rate
(in years)
---------------- -------- ------------- ---------- --------
----------
Floating Rate
Debt:
Senior credit
facility
Revolving
credit
Various
facility
+ 125
$9 0%
4.15% 1.0
LIBOR
Term loan
+ 125
475 11%
5.11% 0.9
------------- ---------- -------- ----------
484 11%
5.10% 0.9
Mortgages and
other
Various 183
4% 5.27% 2.0
Interest rate LIBOR
swaps
+ 423
300 7%
8.30%
------------- ---------- --------
Total Floating
967 22%
6.12% 1.2
Fixed Rate Debt:
Sheraton
Holding
public
debt(1)
1,049 24%
6.00% 7.2
Senior
notes(2)
1,500 35%
6.70% 4.2
Convertible
debt
360 8%
3.50% 0.6
Mortgages and
other
731 18%
7.26% 5.5
Interest rate
swaps
(300) (7%) 7.88%
------------- ---------- --------
Total Fixed
3,340 78%
6.15% 5.0
------------- ---------- --------
Total Debt
$4,307 100%
6.15% 4.4
============= ========== ========
(1) Balance consists of outstanding public debt of $1.048
billion and
a $1 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 $1.497
billion and
a $22 million fair value adjustment
related to the unamortized
gain on fixed to floating interest
rate swaps terminated in
September 2002 and March 2004 and
a ($19) million fair value
adjustment related to current fixed
to floating interest rate
swaps.
-------------------------------------
Maturities
-------------------------------------
less than 1 year $
604
1-3 years 1,624
4-5 years
480
greater than 5 years
1,599
-----------
$ 4,307
===========
-------------------------------------
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Comparable
Results & Other Selected Items
As of September 30, 2005
UNAUDITED ($ millions)
Properties without comparable results in 2005:
Property
Location
--------
--------
Sheraton Kauai
Koloa, HI
St. Regis Aspen
Aspen, CO
Paradise Streams Caesars
Mt. Pocono, PA
Sheraton Cancun
Cancun, Mexico
W New Orleans - French Quarter
New Orleans, LA
W New Orleans
New Orleans, LA
Sheraton Suites Key West
Key West, FL
Properties sold or closed in 2005 and 2004:
Property
Location
--------
--------
Sheraton Denver Tech Center
Englewood, CO
Deerfield Hilton
Ft. Lauderdale, FL
Rancho Bernardo Four Points by Sheraton
Rancho Bernardo, CA
Sheraton Lisboa Hotel & Towers
Lisbon, Portugal
Raphael
Chicago, IL
Sheraton Chapel Hill
Chapel Hill, NC
St. Regis Washington, DC
Washington, DC
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents
(including restricted cash of $262 million)
$1,171
Debt
$4,307
Revenues and Expenses Associated with Assets Sold in 2005
or Expected
to be Sold in the Fourth Quarter(1):
Q1 Q2 Q3
Q4 Full Year
-------------------------------------
Hotels Sold in 2005:
2005
Revenues
$13 $11 $3
$- $27
Expenses
$12 $8 $2
$- $22
2004
Revenues
$14 $19 $16 $16
$65
Expenses
$13 $14 $13 $14
$54
Hotels with a Signed Purchase & Sale Agreement:
2005
Revenues
$15 $21 $18
$- $54
Expenses
$11 $13 $11
$- $35
2004
Revenues
$15 $19 $17 $17
$68
Expenses
$11 $12 $11 $12
$46
(1) Results consist of 6 hotels sold in 2005 and 3 hotels
for which we
have signed a Purchase & Sale
agreement. These amounts are
included in the revenues and expenses
from owned, leased and
consolidated joint venture hotels
in 2005 and 2004.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three
and Nine Months Ended September 30, 2005
UNAUDITED ($ millions)
Q3 YTD
------ -------
Capital Expenditures:
Owned, Leased and Consolidated Joint Venture
Hotels 57 183
Corporate/IT
13 29
------ -------
Subtotal
70 212
Vacation Ownership Capital Expenditures:
Capital expenditures (includes land acquisitions)
80 88
Net capital expenditures for inventory (1)
(16) (36)
------ -------
Subtotal
64 52
Development Capital
85 183
------ -------
Total Capital Expenditures
219 447
====== =======
(1) Represents gross inventory capital expenditures of
$27 and $100 in
the three and nine months ended September
30, 2005, respectively,
less cost of sales of $43 and $136
in the three and nine months
ended September 30, 2005, respectively.
STARWOOD
HOTELS & RESORTS WORLDWIDE, INC.
Summary of Portfolio by Properties & Rooms
As of September 30, 2005
UNAUDITED
NAD
EAME
LAD
---------------- --------------- ---------------
Owned
Hotels Rooms Hotels Rooms Hotels
Rooms
------- -------- ------- ------- ------- -------
Sheraton
35 16,049 11 3,074
7 3,235
Westin
22 10,359 11 2,372
3 901
Four Points
6 1,153 -
- -
-
W
12 4,294 -
- -
-
Luxury Collection
1 654
5 638 2
320
St. Regis
3 667
1 161 -
-
Other
11 2,634 -
- -
-
------- -------- ------- ------- ------- -------
Total Owned
90 35,810 28 6,245
12 4,456
Managed & UJV
Sheraton
41 20,565 73 21,483
11 2,140
Westin
37 20,893 7
1,869 -
-
Four Points
1 475
7 1,019 2
263
W
5 904
- -
1 237
Luxury Collection
6 1,404 6
942 8 188
St. Regis
3 596
1 95
- -
Other
2 2,705 -
- -
-
------- -------- ------- ------- ------- -------
Total Managed & UJV
95 47,542 94 25,408
22 2,828
Franchised
Sheraton
113 35,787 29 6,953
3 1,074
Westin
18 7,289 3
1,141 3 598
Four Points
91 15,861 11 1,482
9 1,350
Luxury Collection
1 249 12
1,354 -
-
------- -------- ------- ------- ------- -------
Total Franchised
223 59,186 55 10,930
15 3,022
----------------------------------------------------------------------
Systemwide
Sheraton
189 72,401 113 31,510
21 6,449
Westin
77 38,541 21 5,382
6 1,499
Four Points
98 17,489 18 2,501
11 1,613
W
17 5,198 -
- 1 237
Luxury Collection
8 2,307 23
2,934 10 508
St. Regis
6 1,263 2
256 -
-
Other
13 5,339 -
- -
-
------- -------- ------- ------- ------- -------
Total Systemwide
408 142,538 177 42,583
49 10,306
======= ======== ======= ======= ======= =======
----------------------------------------------------------------------
ASIA
Total
--------------- ----------------
Owned
Hotels Rooms Hotels Rooms
------- ------- ------- --------
Sheraton
3 1,028 56 23,386
Westin
- - 36
13,632
Four Points
1 630 7
1,783
W
- - 12
4,294
Luxury Collection
- -
8 1,612
St. Regis
- -
4 828
Other
- - 11
2,634
------- ------- ------- --------
Total Owned
4 1,658 134 48,169
Managed & UJV
Sheraton
46 16,416 171 60,604
Westin
12 4,935 56 27,697
Four Points
2 387 12
2,144
W
2 353 8
1,494
Luxury Collection
- - 20
2,534
St. Regis
2 591 6
1,282
Other
2 296 4
3,001
------- ------- ------- --------
Total Managed & UJV
66 22,978 277 98,756
Franchised
Sheraton
17 6,050 162 49,864
Westin
5 1,226 29 10,254
Four Points
1 126 112 18,819
Luxury Collection
- - 13
1,603
------- ------- ------- --------
Total Franchised
23 7,402 316 80,540
----------------------------------------------------------------------
Systemwide
Sheraton
66 23,494 389 133,854
Westin
17 6,161 121 51,583
Four Points
4 1,143 131 22,746
W
2 353 20
5,788
Luxury Collection
- - 41
5,749
St. Regis
2 591 10
2,110
Other
2 296 15
5,635
------- ------- ------- --------
Total Systemwide
93 32,038 727 227,465
======= ======= ======= ========
----------------------------------------------------------------------
The following represents a reconciliation of income from
continuing operations before special items to income from continuing operations
after special items (in millions, except per share data):
Three Months
Nine Months
Ended
Ended
September 30,
September 30,
--------------
-------------
2005 2004
2005 2004
----- -----
----- -----
Income from continuing operations before
$ 131 $ 85 special items
$ 364 $ 225
----- -----
----- -----
$0.58 $0.40 EPS before special items
$1.63 $1.05
----- -----
----- -----
Special Items
Restructuring and other special credits,
- 37
net (a)
- 37
Adjustment to costs associated with
- -
construction remediation (b)
- 4
Loss on asset dispositions and
(16) (4) impairments,
net (c)
(32) (8)
----- -----
----- -----
(16) 33 Total special
items - pre-tax
(32) 33
Income tax benefit (expense) for special
6 (13) items
(d)
11 (12)
Tax expense on repatriation of foreign
(47) - earnings
(e)
(47) -
Reserves and settlements associated with
(34) - tax
matters (f)
(32) 12
----- ------
----- -----
(91) 20 Total special
items - after-tax
(100) 33
----- -----
----- -----
$ 40 $ 105 Income from continuing operations
$ 264 $ 258
----- -----
----- -----
$0.18 $0.49 EPS including special items
$1.18 $1.21
===== =====
===== =====
(a) During the three and nine months ended September 30,
2004, the
Company reversed a $37 million reserve
previously recorded through
restructuring and other special credits
due to a favorable
judgment in a litigation matter.
(b) Represents adjustments to the Company's share of costs
for
construction remediation efforts at
a property owned by a vacation
ownership unconsolidated joint venture
that were previously
recorded in 2002.
(c) For the three months ended September 30, 2005, primarily
reflects
the losses recorded on the sale of
two hotels. For the nine months
ended September 30, 2005, the loss
also reflects impairment
charges associated with the Sheraton
hotel in Cancun, Mexico that
is being partially demolished in order
to build vacation ownership
units. Loss of $4 million and $8 million
for the three and nine
months ended September 30, 2004, respectively,
reflects impairment
charges primarily associated with
the Company's investment in a
joint venture that owns a hotel managed
by the Company and the
renovation of a portion of the W New
York for the Bliss spa.
(d) Represents taxes on special items at the Company's
incremental tax
rate.
(e) Represents tax expense associated with the adoption
of a plan to
repatriate foreign earnings, in accordance
with the American Jobs
Creation Act of 2004.
(f) The Company recorded a tax charge of approximately
$40 million for
the three and nine months ended September
30, 2005 to increase its
tax reserves relating to the Company's
1998 disposition of World
Directories as a result of a recent
United States Tax Court
decision against another taxpayer.
This amount also includes tax
refunds of $6 million and $8 million
in the three and nine months
ended September 30, 2005, respectively,
related to tax years prior
to the 1995 split-up of ITT Corporation.
Tax benefit of $12
million in the nine months ended September
30, 2004 reflects the
favorable results of certain changes
to the Federal tax rules.
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. 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 ability to service debt, fund
capital expenditures, pay income taxes and pay cash distributions. It also
facilitates comparisons between the Company and its competitors. The Company's
management has historically adjusted EBITDA (i.e., "Adjusted EBITDA") 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 8 of this release and/or revenues
and costs and expenses from hotels sold, is necessary to provide the most
accurate measure of core operating results and as a means to evaluate comparative
results. The Company's management also used Adjusted EBITDA as a measure
in determining the value of acquisitions and dispositions and it is used
in the annual budget process. Due to guidance from the Securities and Exchange
Commission, the Company now does not reflect such items when calculating
EBITDA; however, the Company continues to adjust for these special items
and refers to this measure as Adjusted EBITDA. The Company has historically
reported this measure to its investors and believes that the continued
inclusion of Adjusted EBITDA provides consistency in its financial reporting
and enables investors to perform more meaningful comparisons of past, present
and future operating results and provides a means to evaluate the results
of its core on-going operations. EBITDA and Adjusted EBITDA are not intended
to represent cash flow from operations as defined by GAAP and such metrics
should not be considered as an alternative to net income, cash flow from
operations or any other performance measure prescribed by GAAP. The Company's
calculation of EBITDA and Adjusted EBITDA may be different from the calculations
used by other companies and, therefore, comparability may be limited.
All references to Same-Store Owned Hotels reflect the
Company's owned, leased and consolidated joint venture hotels, excluding
hotels sold to date, undergoing significant repositionings or for which
comparable results are not available (i.e., hotels not owned during the
entire periods presented or closed due to seasonality or hurricane damage.)
REVPAR is defined as revenue per available room. ADR is defined as average
daily rate.
All references to contract sales reflect vacation ownership
sales before revenue adjustments for percentage of completion accounting
methodology. |