Starwood Reports Fourth Quarter 2010 Results
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Starwood Reports Fourth Quarter 2010 Results
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Category: Worldwide - Industry economy
- Figures / Studies
This is a press release selected by our editorial committee and published online for free on 2011-02-04
Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported fourth quarter 2010 financial results.
Fourth Quarter 2010 Highlights
Excluding special items, EPS from continuing operations was $0.52. Including special items, EPS from continuing operations was $1.08.
Adjusted EBITDA was $269 million.
Excluding special items, income from continuing operations was $99 million. Including special items, income from continuing operations was $206 million.
Worldwide System-wide REVPAR for Same-Store Hotels increased 10.1% (10.3% in constant dollars) compared to 2009. System-wide REVPAR for Same-Store Hotels in North America increased 10.2% (9.7% in constant dollars).
Management fees, franchise fees and other income increased 13.0% compared to 2009.
Worldwide Same-Store company-operated gross operating profit margins increased approximately 100 basis points compared to 2009.
Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 10.1% (10.9% in constant dollars) compared to 2009. REVPAR for Starwood branded Same-Store Owned Hotels in North America increased 9.1% (8.1% in constant dollars).
Margins at Starwood branded Same-Store Owned Hotels Worldwide increased 30 basis points compared to 2009. Adjusted for a non-recurring item recorded in 2009, margins increased approximately 170 basis points.
Operating income from vacation ownership and residential increased $13 million compared to 2009.
During the quarter, the Company signed 37 hotel management and franchise contracts representing approximately 8,000 rooms and opened 23 hotels and resorts with approximately 5,700 rooms.
During the quarter, the Company received a refund from the IRS of approximately $245 million primarily for previously paid taxes and related interest relating to the settlement of a dispute regarding the 1998 disposition of World Directories, Inc.
Fourth Quarter 2010 Earnings Summary
Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the fourth quarter of 2010 of $1.08 per share compared to a loss of $1.03 in the fourth quarter of 2009. Excluding special items, EPS from continuing operations was $0.52 for the fourth quarter of 2010 compared to $0.51 in the fourth quarter of 2009. Excluding special items, the effective income tax rate in the fourth quarter of 2010 was 24.9%, compared to 4.1% in the fourth quarter of 2009.
Special items in the fourth quarter of 2010 included an after-tax benefit of $107 million or $0.56 per share and were primarily related to the settlement with the IRS regarding the 1998 disposition of World Directories, Inc. and the favorable settlement of a lawsuit. Special items in the fourth quarter of 2009 included a $281 million after-tax charge or $1.54 per share primarily related to the impairment of vacation ownership projects, goodwill and owned hotels.
Income from continuing operations was $206 million in the fourth quarter of 2010 compared to a loss of $186 million in the fourth quarter of 2009. Excluding special items, income from continuing operations was $99 million in the fourth quarter of 2010 compared to $95 million in the fourth quarter of 2009.
Net income was $339 million and $1.78 per share in the fourth quarter of 2010 compared to a net loss of $107 million and $0.59 per share in the fourth quarter of 2009.
Frits van Paasschen, CEO said, “We ended 2010 with a strong fourth quarter, and momentum has continued into 2011. Our robust REVPAR growth is fueled by strong global brands along with sales and marketing initiatives. By containing costs we are translating these higher revenues into higher profits.”
“Starwood is well-positioned to capitalize on the rapid growth in emerging markets. In developed markets, tight supply should support rate increases. Our balance sheet is in great shape, with year-end net debt of just over $2 billion. We are making solid progress towards our investment grade objective.”
Fourth Quarter 2010 Operating Results
Management and Franchise Revenues
Worldwide System-wide REVPAR for Same-Store Hotels increased 10.1% (10.3% in constant dollars) compared to the fourth quarter of 2009. International System-wide REVPAR for Same-Store Hotels increased 10.1% (11.0% in constant dollars).
Worldwide System-wide REVPAR for Same-Store changes by region:
REVPAR
Region Reported Constant dollars
North America 10.2% 9.7%
Europe 4.6% 12.0%
Asia Pacific 20.3% 15.1%
Africa and the Middle East (2.2)% (0.1)%
Latin America 17.2% 17.2%
Increases in REVPAR for Worldwide System-wide Same-Store hotels by brand:
REVPAR
Brand Reported Constant dollars
St. Regis/Luxury Collection 8.0% 9.4%
W Hotels 19.9% 19.7%
Westin 9.1% 8.8%
Sheraton 10.8% 10.6%
Le Méridien 4.3% 6.7%
Four Points by Sheraton 11.8% 10.9%
Worldwide Same-Store company-operated gross operating profit margins increased approximately 100 basis points in the fourth quarter driven by REVPAR increases and cost controls. International gross operating profit margins for Same-Store company-operated properties increased approximately 20 basis points, and North American Same-Store company-operated gross operating profit margins increased approximately 200 basis points.
Management fees, franchise fees and other income were $209 million, up $24 million, or 13.0%, from the fourth quarter of 2009. Management fees increased 23.1% to $128 million and franchise fees increased 20.0% to $42 million.
During the fourth quarter of 2010, the Company signed 37 hotel management and franchise contracts, representing approximately 8,000 rooms, of which 29 are new builds and eight are conversions from other brands. At December 31, 2010, the Company had approximately 350 hotels in the active pipeline representing approximately 85,000 rooms.
During the fourth quarter of 2010, 23 new hotels and resorts (representing approximately 5,700 rooms) entered the system, including the St. Regis Osaka (Japan, 160 rooms), Sheraton Malpensa Airport (Italy, 433 rooms), Sheraton Tianjin Binhai (China, 325 rooms), Westin Gurgaon (India, 311 rooms), Sheraton Tribeca New York Hotel (New York, 369 rooms), Element New York Times Square (New York, 411 rooms), and Aloft Harlem (New York, 124 rooms). Seven properties (representing approximately 1,400 rooms) were removed from the system during the quarter.
Owned, Leased and Consolidated Joint Venture Hotels
Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 10.1% (10.9% in constant dollars) in the fourth quarter of 2010 when compared to 2009. REVPAR at Starwood branded Same-Store Owned Hotels in North America increased 9.1% (8.1% in constant dollars). Internationally, Starwood branded Same-Store Owned Hotel REVPAR increased 11.6% (15.0% in constant dollars).
Revenues at Starwood branded Same-Store Owned Hotels in North America increased 7.7% (6.7% in constant dollars) while costs and expenses increased 4.8% when compared to 2009. Margins at these hotels increased 220 basis points.
Revenues at Starwood branded Same-Store Owned Hotels Worldwide increased 5.9% (6.6% in constant dollars) while costs and expenses increased 5.5% when compared to 2009. Margins at these hotels increased 30 basis points. Adjusted for a non-recurring item recorded in 2009, margins increased approximately 170 basis points.
Revenues at owned, leased and consolidated joint venture hotels were $459 million, compared to $430 million in 2009.
Vacation Ownership
Total vacation ownership revenues of $135 million were flat compared to 2009. Originated contract sales of vacation ownership intervals decreased 1.2% primarily due to lower average prices. The number of contracts signed increased 7.6% when compared to 2009 and the average price per vacation ownership unit sold decreased 7.0% to approximately $14,000, driven by price reductions and inventory mix.
Selling, General, Administrative and Other
Selling, general, administrative and other expenses increased 8.9% to $86 million compared to 2009, due to higher incentive compensation, partially offset by the reimbursement of previously expensed legal fees following the favorable settlement of a lawsuit.
Capital
Gross capital spending during the quarter included approximately $79 million of maintenance capital and $31 million of development capital. Investment spending on net vacation ownership interest (“VOI”) and residential inventory was $24 million, primarily related to the St. Regis Bal Harbour project.
Dividends
In November 2010, the Company’s Board of Directors declared its annual dividend of $0.30 per share. The dividend was paid by the Company on December 30, 2010 to holders of record on December 16, 2010.
Balance Sheet
At December 31, 2010, the Company had gross debt of $2.857 billion, excluding $494 million of debt associated with securitized vacation ownership notes receivable that are required to be consolidated under ASU 2009-17. Additionally, the Company had cash and cash equivalents of $797 million (including $44 million of restricted cash), and net debt of $2.060 billion, compared to net debt of $2.455 billion as of September 30, 2010. Net debt at December 31, 2010 including debt and restricted cash ($19 million) associated with securitized vacation ownership notes receivables was $2.535 billion.
At December 31, 2010, debt was approximately 81% fixed rate and 19% floating rate and its weighted average maturity was 4.2 years with a weighted average interest rate of 6.86% excluding the securitized debt. The Company had cash (including current restricted cash) and availability under the domestic and international revolving credit facility of approximately $2.148 billion.
IRS Tax Settlement
In December 2010, the Company received a refund of approximately $245 million for previously paid taxes and related interest from the IRS relating to the 1998 disposition of World Directories, Inc.
Legal Settlement
In December 2010, the Company received $75 million in connection with a favorable settlement of a lawsuit. The cash payment to the Company included the reimbursement of legal fees in connection with the matter.
Outlook
For the Full Year 2011:
Macro-economic and geo-political environments remain uncertain. Booking windows, while improving, are short. We believe that several scenarios are possible. With low supply growth in developed markets and high demand growth in emerging markets, rate improvement will be the key driver of 2011 results. Based on trends to date, our outlook assumes a normal lodging recovery in 2011:
Adjusted EBITDA is expected to be approximately $975 million to $1 billion, assuming:
REVPAR increases at Same-Store Company Operated Hotels Worldwide of 7% to 9% in constant dollars (approximately 100 basis points higher in dollars at current exchange rates).
REVPAR increases at Branded Same-Store Owned Hotels Worldwide of 7% to 9% in constant dollars (approximately 100 basis points higher in dollars at current exchange rates).
Margin increases at Branded Same-Store Owned Hotels Worldwide of 150 to 200 basis points.
Management fees, franchise fees and other income increase of approximately 10% to 12%.
Operating income from our vacation ownership and residential business of approximately $125 million to $135 million.
Selling, General and Administrative expenses increase 2% to 3%.
Depreciation and amortization is expected to be approximately $325 million.
Interest Expense is expected to be approximately $245 million.
Full year effective tax rate is expected to be approximately 25%.
Assuming all of the above, EPS is expected to be approximately $1.55 to $1.65.
Full year capital expenditure (excluding vacation ownership and residential inventory) is expected to be approximately $300 million for maintenance, renovation and technology. In addition, in-flight investment projects and prior commitments for joint ventures and other investments are expected to total approximately $150 million. Vacation ownership (excluding Bal Harbour) is expected to generate approximately $165 million in positive cash flow.
The Company currently expects closings on Bal Harbour residential units to commence in late Q4 2011. The Company’s current outlook does not include any revenue recognition or cash flows associated with these potential closings. The Company does, however, expect there to be revenue recognition and cash flows from closings in Q4 2011 and the Company will provide updates as the year progresses. Bal Harbour capital expenditure for 2011 is expected to be approximately $150 million.
For the three months ended March 31, 2011:
Adjusted EBITDA is expected to be approximately $195 million to $205 million, assuming:
REVPAR increases at Same-Store Company Operated Hotels Worldwide of 8% to 10% in constant dollars (approximately 100 basis points higher in dollars at current exchange rates).
REVPAR increases at Branded Same-Store Owned Hotels Worldwide of 8% to 10% in constant dollars (approximately 100 basis points higher in dollars at current exchange rates).
Management fees, franchise fees and other income increase of approximately 12% to 14%.
Operating income from our vacation ownership and residential business of approximately $30 million to $35 million.
Depreciation and amortization is expected to be approximately $78 million.
Interest Expense is expected to be approximately $60 million.
Income from continuing operations is expected to be approximately $43 million to $51 million, reflecting an effective tax rate of approximately 25%.
Assuming all of the above, EPS is expected to be approximately $0.22 to $0.26.
Special Items
The Company’s special items netted to a benefit of $69 million ($107 million after-tax) in the fourth quarter of 2010 compared to a $431 million charge ($281 million after-tax) in the same period of 2009.
The following represents a reconciliation of income from continuing operations before special items to income from continuing operations including special items (in millions, except per share data):
Three Months Ended Year Ended
December 31, December 31,
2010 2009 2010 2009
$ 99 $ 95 Income from continuing operations before special items $ 237 $ 188
$ 0.52 $ 0.51 EPS before special items (a) $ 1.25 $ 1.02
Special Items
73
(355
) Restructuring, goodwill impairment and other special credits (charges), net (b) 75 (379 )
(4 ) (42 ) Loss on asset dispositions and impairments, net (c) (39 ) (91 )
— (17 ) Debt extinguishment (d) — (17 )
— (17 ) Cost of sales adjustments (e) — (17 )
69 (431 ) Total special items – pre-tax 36 (504 )
(4 ) 113 Income tax (expense) benefit for special items (f) (5 ) 158
42 — World Directories, Inc. refund (g) 42 —
— 37 Foreign tax credits (h) — 37
— — Italian tax incentive (i) — 120
107 (281 ) Total special items – after-tax 73 (189 )
$ 206 $ (186 ) Income (loss) from continuing operations $ 310 $ (1 )
$ 1.08 $ (1.03 ) EPS (loss per share) including special items $ 1.63 $ 0.00
(a) Diluted shares for the three months and year ended December 31, 2009 are 187 million and 184 million, respectively.
(b) During the three months ended December 31, 2010, the Company recorded restructuring and other special credits of $73 million primarily related to the favorable settlement of a lawsuit and the reversal of a reserve from a previous acquisition no longer deemed necessary. Additionally, the year ended December 31, 2010 includes $2 million of restructuring credits associated with the reversal of previous restructuring reserves no longer deemed necessary.
During the three months ended December 31, 2009, the Company recorded restructuring charges of $10 million, consisting primarily of severance and consulting charges related to its initiative to streamline operations and eliminate costs. The three months ended December 31, 2009, also included impairment charges of $255 million, following an in-depth review of the vacation ownership business which resulted in a decision not to develop certain vacation ownership sites and future phases of certain existing projects. Additionally, the three months ended December 31, 2009 included a $90 million charge related to the impairment of goodwill associated with the vacation ownership business.
The year ended December 31, 2009, includes additional restructuring costs associated with its initiative to streamline operations.
(c) During the three months ended December 31, 2010, the net loss primarily relates to the impairment of fixed assets at an owned hotel that is undergoing a significant renovation, offset by a gain on the sale of non-core assets. The year ended December 31, 2010 also includes a loss of $53 million on the sale of one wholly-owned hotel partially offset by a gain of $14 million from property insurance proceeds related to an owned hotel damaged by a tornado and a $5 million gain that resulted from the step acquisition of a controlling interest in a previously unconsolidated joint venture.
During the three months ended December 31, 2009, the Company recorded impairment charges of $42 million primarily related to five owned and leased hotels, where their carrying amounts exceeded their estimated fair values, as a result of the significant decline in the business at those hotels.
The year ended December 31, 2009 also includes impairment charges of $49 million primarily related to the Company’s retained interests in securitized vacation ownership notes receivable, certain fixed assets and an owned hotel.
(d) The three months and year ended December 31, 2009 include $17 million of charges associated with tender premiums and other costs related to the early extinguishment of approximately $600 million of the Company’s long-term debt. These charges were recorded in the interest expense line item.
(e) The three months and year ended December 31, 2009 include $17 million of charges in connection with the Company’s in-depth review of the vacation ownership business and the resulting decision to reduce pricing of certain inventory at existing projects. These charges were recorded in the vacation ownership and residential costs and expenses line item.
(f) During the three months and year ended December 31, 2010, the net expense primarily relates to tax expenses at the statutory rate for restructuring credits partially offset by a benefit related to a gain on the sale of a joint venture investment.
The three months and year ended December 31, 2009 reflect tax benefits at the statutory rate for the special items and a tax benefit for hotel sales with higher tax basis, partially offset by permanent tax charges associated with the loss on certain asset dispositions.
(g) During the three months ended December 31, 2010, the Company received a refund from the IRS of approximately $245 million primarily for previously paid taxes and related interest associated with the settlement of a dispute regarding the 1998 disposition of World Directories, Inc. An additional benefit of $134 million, associated with this settlement, was recorded in discontinued operations.
(h) During the three months and year ended December 31, 2009, the Company took steps including the completion of certain internal transactions that enabled the Company to change its election for several prior tax years to claim a foreign tax credit as opposed to a foreign tax deduction.
(i) During the year ended December 31, 2009, the Company realized benefits that related to an Italian tax incentive program through which the tax basis of Italian owned hotels were stepped up in exchange for paying a relatively minor tax.
The Company has included the above supplemental information concerning special items to assist investors in analyzing Starwood’s financial position and results of operations. The Company has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.
Starwood will be conducting a conference call to discuss the fourth quarter financial results at 10:30 a.m. (EST) today at (706) 758-8744. The conference call will be available through a simultaneous web cast in the Investor Relations/Press Releases section of the Company’s website at http://www.starwoodhotels.com. A replay of the conference call will also be available from 1:30 p.m. (EST) today through February 10, 2011 at 12:00 midnight (EDT) on both the Company’s website and via telephone replay at (706) 645-9291 (pass code #23162931).
Definitions
All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations attributable to Starwood’s common shareholders. All references to continuing operations, discontinued operations and net income reflect amounts attributable to Starwood’s common shareholders (i.e. excluding amounts attributable to noncontrolling interests). All references to “net capital expenditures” mean gross capital expenditures for timeshare and fractional inventory net of cost of sales. EBITDA represents net income before interest expense, taxes, depreciation and amortization. The Company believes that EBITDA is a useful measure of the Company’s operating performance due to the significance of the Company’s long-lived assets and level of indebtedness. EBITDA is a commonly used measure of performance in its industry which, when considered with GAAP measures, the Company believes gives a more complete understanding of the Company’s operating performance. It also facilitates comparisons between the Company and its competitors. The Company’s management has historically adjusted EBITDA (i.e., “Adjusted EBITDA”) when evaluating operating performance for the total Company as well as for individual properties or groups of properties because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items, such as restructuring, goodwill impairment and other special charges and gains and losses on asset dispositions and impairments, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. The Company’s management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions and it is used in the annual budget process. The Company has historically reported this measure to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more meaningful comparisons of past, present and future operating results and provides a means to evaluate the results of its core on-going operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by GAAP and such metrics should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by GAAP. The Company’s calculation of EBITDA and Adjusted EBITDA may be different from the calculations used by other companies and, therefore, comparability may be limited.
All references to Same-Store Owned Hotels reflect the Company’s owned, leased and consolidated joint venture hotels, excluding condo hotels, hotels sold to date and hotels undergoing significant repositionings or for which comparable results are not available (i.e., hotels not owned during the entire periods presented or closed due to seasonality or natural disasters). References to Company Operated Hotel metrics (e.g. REVPAR) reflect metrics for the Company’s owned and managed hotels. References to System-Wide metrics (e.g. REVPAR) reflect metrics for the Company’s owned, managed and franchised hotels. REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
All references to revenues in constant dollars represents revenues, excluding the impact of the movement of foreign exchange rates. The Company calculates revenues in constant dollars by calculating revenues for the current year using the prior year’s exchange rates. The Company uses this revenue measure to better understand the underlying results and trends of the business, excluding the impact of movements in foreign exchange rates.
All references to contract sales or originated sales reflect vacation ownership sales before revenue adjustments for percentage of completion accounting methodology.
All references to management and franchise revenues represent base and incentive fees, franchise fees, amortization of deferred gains resulting from the sales of hotels subject to long-term management contracts and termination fees.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with 1,041 properties in nearly 100 countries and 145,000 employees at its owned and managed properties. Starwood Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis®, The Luxury Collection®, W®, Westin®, Le Méridien®, Sheraton®, Four Points® by Sheraton, aloft(SM), and element(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.
** Please contact Starwood’s new, toll-free media hotline at (866) 4-STAR-PR
(866-478-2777) for photography or additional information.**
Note: This press release contains forward-looking statements within the meaning of federal securities regulations. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. Further results, performance and achievements may be affected by general economic conditions including the impact of war and terrorist activity, business and financing conditions, foreign exchange fluctuations, cyclicality of the real estate (including residential) and the hotel and vacation ownership businesses, operating risks associated with the hotel, vacation ownership and residential businesses, relationships with associates and labor unions, customers and property owners, the impact of the internet reservation channels, our reliance on technology, domestic and international political and geopolitical conditions, competition, governmental and regulatory actions (including the impact of changes in U.S. and foreign tax laws and their interpretation), travelers’ fears of exposure to contagious diseases, risk associated with the level of our indebtedness, risk associated with potential acquisitions and dispositions and the introduction of new brand concepts and other risks and uncertainties. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Future vacation ownership units indicated in this press release include planned units on land owned by the Company or by joint ventures in which the Company has an interest that have received all major governmental land use approvals for the development of vacation ownership resorts. There can also be no assurance that such units will in fact be developed and, if developed, the time period of such development (which may be more than several years in the future). Some of the projects may require additional third-party approvals or permits for development and build out and may also be subject to legal challenges as well as a commitment of capital by the Company. The actual number of units to be constructed may be significantly lower than the number of future units indicated. There can also be no assurance that agreements will be entered into for the hotels in the Company’s pipeline and, if entered into, the timing of any agreement and the opening of the related hotel. Although we believe the expectations reflected in forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per share data)
Three Months Ended Year Ended
December 31, December 31,
% %
2010 2009 Variance 2010 2009 Variance
Revenues
$ 459 $ 430 6.7 Owned, leased and consolidated joint venture hotels $ 1,704 $ 1,584 7.6
136 136 — Vacation ownership and residential sales and services 538 523 2.9
209 185 13.0 Management fees, franchise fees and other income 712 658 8.2
536 495 8.3 Other revenues from managed and franchised properties (a) 2,117 1,931 9.6
1,340 1,246 7.5 5,071 4,696 8.0
Costs and Expenses
367 343 (7.0 ) Owned, leased and consolidated joint venture hotels 1,395 1,315 (6.1 )
103 116 11.2 Vacation ownership and residential 405 422 4.0
86 79 (8.9 ) Selling, general, administrative and other 344 314 (9.6 )
(73
)
355
n/m Restructuring, goodwill impairment and other special (credits) charges, net (75 ) 379 n/m
56 68 17.6 Depreciation 252 274 8.0
9 10 10.0 Amortization 33 35 5.7
536 495 (8.3 ) Other expenses from managed and franchised properties (a) 2,117 1,931 (9.6 )
1,084 1,466 26.1 4,471 4,670 4.3
256 (220 ) n/m Operating income (loss) 600 26 n/m
5 1 n/m Equity earnings and gains and (losses) from unconsolidated ventures, net 10 (4 ) n/m
(56 ) (71 ) 21.1 Interest expense, net of interest income of $1, $1, $2 and $3 (236 ) (227 ) (4.0 )
(4 ) (42 ) 90.5 Loss on asset dispositions and impairments, net (39 ) (91 ) 57.1
201 (332 ) n/m Income (loss) from continuing operations before taxes 335 (296 ) n/m
5 146 (96.6 ) Income tax (expense) benefit (27 ) 293 n/m
206 (186 ) n/m Income (loss) from continuing operations 308 (3 ) n/m
Discontinued Operations: (
1 (1 ) n/m Net (loss) income from operations, net of tax (1 ) (2 ) 50.0
132 80 65.0 Net gain (loss) on dispositions, net of tax ( 168 76 n/m
339 (107 ) n/m Net income (loss) 475 71 n/m
— — — Net loss attributable to noncontrolling interests 2 2 —
$ 339 $ (107 ) n/m Net income (loss) attributable to Starwood $ 477 $ 73 n/m
Earnings (Loss) Per Share – Basic
$ 1.13 $ (1.03 ) n/m Continuing operations $ 1.70 $ 0.00 n/m
0.72 0.44 63.6 Discontinued operations 0.91 0.41 n/m
$ 1.85 $ (0.59 ) n/m Net income (loss) $ 2.61 $ 0.41 n/m
Earnings (Loss) Per Share – Diluted
$ 1.08 $ (1.03 ) n/m Continuing operations $ 1.63 $ 0.00 n/m
0.70 0.44 59.1 Discontinued operations 0.88 0.41 n/m
$ 1.78 $ (0.59 ) n/m Net income (loss) $ 2.51 $ 0.41 n/m
Amounts attributable to Starwood’s Common Shareholders
$ 206 $ (186 ) n/m Continuing operations $ 310 $ (1 ) n/m
133 79 68.4 Discontinued operations 167 74 n/m
$ 339 $ (107 ) n/m Net income (loss) $ 477 $ 73 n/m
185 180 Weighted average number of shares 183 180
192 180 Weighted average number of shares assuming dilution 190 180
(a) The Company includes in revenues the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees with no added margin and includes in costs and expenses these reimbursed costs. These costs relate primarily to payroll costs at managed properties where the Company is the employer.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31,
December 31,
2010
2009
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 753 $ 87
Restricted cash 53 47
Accounts receivable, net of allowance for doubtful accounts of $45 and $54 513 445
Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $10
59
—
Inventories 802 783
Prepaid expenses and other 126 127
Total current assets 2,306 1,489
Investments 321 368
Plant, property and equipment, net 3,323 3,350
Assets held for sale — 71
Goodwill and intangible assets, net 2,067 2,063
Deferred tax assets 979 982
Other assets (a) 381 438
Securitized vacation ownership notes receivable 408 —
$ 9,785 $ 8,761
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt (b) $ 9 $ 5
Current maturities of long-term securitized vacation ownership debt 127 —
Accounts payable 147 139
Accrued expenses 1,123 1,212
Accrued salaries, wages and benefits 410 303
Accrued taxes and other 373 368
Total current liabilities 2,189 2,027
Long-term debt (b) 2,848 2,955
Long-term securitized vacation ownership debt 367 —
Deferred income taxes 28 31
Other liabilities 1,867 1,903
7,299 6,916
Commitments and contingencies
Stockholders’ equity:
Corporation common stock; $0.01 par value; authorized 1,000,000,000 shares; outstanding 192,970,437 and 186,785,068 shares at December 31, 2010 and December 31, 2009, respectively 2 2
Additional paid-in capital 805 552
Accumulated other comprehensive loss (283 ) (283 )
Retained earnings 1,947 1,553
Total Starwood stockholders’ equity 2,471 1,824
Noncontrolling interest 15 21
Total equity 2,486 1,845
$ 9,785 $ 8,761
(a) Includes restricted cash of $10 million and $7 million at December 31, 2010 and December 31, 2009, respectively.
(b) Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $434 million and $581 million at December 31, 2010 and December 31, 2009, respectively.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Historical Data
(In millions)
Three Months Ended Year Ended
December 31, December 31,
% %
2010 2009 Variance 2010 2009 Variance
Reconciliation of Net Income to EBITDA and Adjusted EBITDA
$ 339 $ (107 ) n/m Net income $ 477 $ 73 n/m
61 75 (18.7 ) Interest expense (a) 255 249 2.4
(138) (169 ) 18.3 Income tax (benefit) expense (b) (139 ) (330 ) 57.9
66 80 (17.5 ) Depreciation (c) 288 317 (9.1 )
10 12 (16.7 ) Amortization (d) 36 38 (5.3 )
338 (109 ) n/m EBITDA 917 347 n/m
4 42 (90.5 ) Loss on asset dispositions and impairments, net 39 91 (57.1 )
—
(58
)
100.0 Discontinued operations pre-tax net gain on dispositions
(2
)
(41
)
95.1
(73)
355
n/m Restructuring, goodwill impairment and other special (credits) charges, net
(75
)
379
n/m
— 17 (100.0 ) Cost of sales price discount adjustments — 17 (100.0 )
$ 269 $ 247 8.9 Adjusted EBITDA $ 879 $ 793 10.8
(a) Includes $4 million and $3 million of Starwood’s share of interest expense of unconsolidated joint ventures for the three months ended December 31, 2010 and 2009, respectively, and $17 million and $19 million for the year ended December 31, 2010 and 2009, respectively.
(b) Includes $133 million and $23 million of tax benefit recorded in discontinued operations for the three months ended December 31, 2010 and 2009, respectively, and $166 million and $37 million for the year ended December 31, 2010 and 2009, respectively.
(c) Includes $10 million and $11 million of Starwood’s share of depreciation expense of unconsolidated joint ventures for the three months ended December 31, 2010 and 2009, respectively, and $36 million and $35 million for the year ended December 31, 2010 and 2009, respectively. Includes $0 million and $1 million of depreciation expense in discontinued operations for the three months ended December 31, 2010 and 2009, respectively, and $0 million and $8 million for the year ended December 31, 2010 and 2009, respectively.
(d) Includes $1 million of Starwood’s share of amortization expense of unconsolidated joint ventures for the three months ended December 31, 2010 and 2009, and $3 million and $2 million for the year ended December 31, 2010 and 2009, respectively. Includes $0 million and $1 million of amortization expense recorded in discontinued operations for the three months ended December 31, 2010 and 2009, respectively, and $0 million and $1 million for the year ended December 31, 2010 and 2009, respectively.
Non-GAAP to GAAP Reconciliations – Company Revenues Same Store
(In millions)
Three Months Ended
December 31, 2010
$ Change
% Variance
BRANDED HOTELS
Worldwide
Revenue Increase (GAAP) 21 5.9%
(Decrease) / Increase due to foreign exchange rates 2 0.7%
Revenue increase in constant dollars 23 6.6%
North America
Revenue Increase (GAAP) 15 7.7%
(Decrease) / Increase due to foreign exchange rates (2) (1.0)%
Revenue increase in constant dollars 13 6.7%
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Future Performance
(In millions, except per share data)
Low Case
Three Months Ended Year Ended
March 31, 2011 December 31, 2011
$ 43 Net income $ 304
60 Interest expense 245
14 Income tax expense 101
78 Depreciation and amortization 325
195 EBITDA 975
— Gain/loss on asset dispositions and impairments, net —
— Discontinued operations pre-tax net gain/loss on dispositions —
— Restructuring, goodwill impairment and other special credits, net —
$ 195 Adjusted EBITDA $ 975
Three Months Ended Year Ended
March 31, 2011 December 31, 2011
$ 43 Income from continuing operations before special items $ 304
$ 0.22 EPS before special items be $ 1.55
Special Items
— Restructuring, goodwill impairment and other special credits, net —
— Gain/loss on asset dispositions and impairments, net —
— Total special items – pre-tax —
—
Income tax expense on special items
—
— Total special items – after-tax —
$ 43 Income from continuing operations $ 304
$ 0.22 EPS including special items $ 1.55
High Case
Three Months Ended Year Ended
March 31, 2011 December 31, 2011
$ 51 Net income $ 323
60 Interest expense 245
16 Income tax expense 107
78 Depreciation and amortization 325
205 EBITDA 1,000
— Gain/loss on asset dispositions and impairments, net —
— Discontinued operations pre-tax net gain/loss on dispositions —
— Restructuring, goodwill impairment and other special credits, net —
$ 205 Adjusted EBITDA $ 1,000
Three Months Ended Year Ended
March 31, 2011 December 31, 2011
$ 51 Income from continuing operations before special items $ 323
$ 0.26 EPS before special items be $ 1.65
Special Items
— Restructuring, goodwill impairment and other special credits, net —
— Gain/loss on asset dispositions and impairments, net —
— Total special items – pre-tax —
— Income tax expense on special items —
— Total special items – after-tax —
$ 51 Income from continuing operations $ 323
$ 0.26 EPS including special items $ 1.65
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses
(In millions)
Three Months Ended Year Ended
December 31, December 31,
% Same-Store Owned Hotels %
2010 2009 Variance Worldwide 2010 2009 Variance
Revenue
$ 394 $ 373 5.6 Same-Store Owned Hotels (a) $ 1,421 $ 1,314 8.1
— 17 (100.0 ) Hotels Sold or Closed in 2010 and 2009 18 98 (81.6 )
59 45 31.1 Hotels Without Comparable Results 250 177 41.2
6 (5 ) n/m Other ancillary hotel operations 15 (5 ) n/m
$ 459 $ 430 6.7 Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 1,704 $ 1,584 7.6
Costs and Expenses
$ 307 $ 292 (5.1 ) Same-Store Owned Hotels (a) $ 1,147 $ 1,077 (6.5 )
— 14 100.0 Hotels Sold or Closed in 2010 and 2009 15 84 82.1
53 42 (26.2 ) Hotels Without Comparable Results 220 159 (38.4 )
7 (5 ) n/m Other ancillary hotel operations 13 (5 ) n/m
$ 367 $ 343 (7.0 ) Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 1,395 $ 1,315 (6.1 )
Three Months Ended Year Ended
December 31, December 31,
% Same-Store Owned Hotels %
2010 2009 Variance North America 2010 2009 Variance
Revenue
$ 242 $ 226 7.1 Same-Store Owned Hotels (a) $ 875 $ 806 8.6
— 6 (100.0 ) Hotels Sold or Closed in 2010 and 2009 18 59 (69.5 )
35 34 2.9 Hotels Without Comparable Results 172 159 8.2
6 — n/m Other ancillary hotel operations 15 — n/m
$ 283 $ 266 6.4 Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 1,080 $ 1,024 5.5
Costs and Expenses
$ 194 $ 186 (4.3 ) Same-Store Owned Hotels (a) $ 733 $ 692 (5.9 )
— 3 100.0 Hotels Sold or Closed in 2010 and 2009 15 45 66.7
30 28 (7.1 ) Hotels Without Comparable Results 139 133 (4.5 )
7 — n/m Other ancillary hotel operations 13 — n/m
$ 231 $ 217 (6.5 ) Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 900 $ 870 (3.4 )
Three Months Ended Year Ended
December 31, December 31,
% Same-Store Owned Hotels %
2010 2009 Variance International 2010 2009 Variance
Revenue
$ 152 $ 147 3.4 Same-Store Owned Hotels (a) $ 546 $ 508 7.5
— 11 (100.0 ) Hotels Sold or Closed in 2010 and 2009 — 39 (100.0 )
24 11 n/m Hotels Without Comparable Results 78 18 n/m
— (5 ) 100.0 Other ancillary hotel operations — (5 ) 100.0
$ 176 $ 164 7.3 Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 624 $ 560 11.4
Costs and Expenses
$ 113 $ 106 (6.6 ) Same-Store Owned Hotels (a) $ 414 $ 385 (7.5 )
— 11 100.0 Hotels Sold or Closed in 2010 and 2009 — 39 100.0
23 14 (64.3 ) Hotels Without Comparable Results 81 26 n/m
— (5 ) (100.0 ) Other ancillary hotel operations — (5 ) (100.0 )
$ 136 $ 126 (7.9 ) Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 495 $ 445 (11.2 )
(a) Same-Store Owned Hotel Results exclude three and nine hotels sold or closed for three months and year ended December 31, 2010 and 2009, respectively, and seven and eight hotels without comparable results for the three months and year ended December 31, 2010 and 2009, respectively.
n/m = not meaningful
Starwood Hotels & Resorts Worldwide, Inc.
Systemwide(1) Statistics - Same Store
For the Three Months Ended December 31,
UNAUDITED
Systemwide - Worldwide Systemwide - North America Systemwide - International
2010 2009 Variance 2010 2009 Variance 2010 2009 Variance
TOTAL HOTELS
REVPAR ($) 109.36 99.30 10.1% 98.83 89.69 10.2% 124.45 113.06 10.1%
ADR ($) 166.26 162.40 2.4% 153.63 150.66 2.0% 183.41 178.18 2.9%
Occupancy (%) 65.8% 61.1% 4.7 64.3% 59.5% 4.8 67.9% 63.5% 4.4
SHERATON
REVPAR ($) 96.34 86.96 10.8% 83.70 76.07 10.0% 112.96 101.25 11.6%
ADR ($) 147.98 144.50 2.4% 133.14 131.44 1.3% 166.00 160.17 3.6%
Occupancy (%) 65.1% 60.2% 4.9 62.9% 57.9% 5.0 68.0% 63.2% 4.8
WESTIN
REVPAR ($) 118.74 108.88 9.1% 109.14 101.04 8.0% 147.06 131.99 11.4%
ADR ($) 177.19 172.25 2.9% 164.83 162.47 1.5% 212.00 199.32 6.4%
Occupancy (%) 67.0% 63.2% 3.8 66.2% 62.2% 4.0 69.4% 66.2% 3.2
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 182.62 169.13 8.0% 195.94 177.07 10.7% 174.07 164.02 6.1%
ADR ($) 295.42 292.52 1.0% 308.02 300.23 2.6% 286.95 287.39 -0.2%
Occupancy (%) 61.8% 57.8% 4.0 63.6% 59.0% 4.6 60.7% 57.1% 3.6
LE MERIDIEN
REVPAR ($) 135.27 129.70 4.3% 200.63 179.14 12.0% 128.38 124.46 3.1%
ADR ($) 194.77 194.28 0.3% 253.24 235.19 7.7% 187.64 189.26 -0.9%
Occupancy (%) 69.5% 66.8% 2.7 79.2% 76.2% 3.0 68.4% 65.8% 2.6
W
REVPAR ($) 193.66 161.56 19.9% 186.55 159.98 16.6% 225.67 168.67 33.8%
ADR ($) 264.72 247.46 7.0% 257.52 242.17 6.3% 295.52 272.99 8.3%
Occupancy (%) 73.2% 65.3% 7.9 72.4% 66.1% 6.3 76.4% 61.8% 14.6
FOUR POINTS
REVPAR ($) 69.41 62.07 11.8% 61.85 57.12 8.3% 83.19 71.14 16.9%
ADR ($) 109.64 106.07 3.4% 101.24 99.75 1.5% 123.51 116.99 5.6%
Occupancy (%) 63.3% 58.5% 4.8 61.1% 57.3% 3.8 67.3% 60.8% 6.5
(1) Includes same store owned, leased, managed, and franchised hotels
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Three Months Ended December 31,
UNAUDITED
Systemwide (1)
Company Operated (2)
2010 2009 Variance 2010 2009 Variance
TOTAL WORLDWIDE
REVPAR ($) 109.36 99.30 10.1% 127.22 115.76 9.9%
ADR ($) 166.26 162.40 2.4% 187.36 182.49 2.7%
Occupancy (%) 65.8% 61.1% 4.7 67.9% 63.4% 4.5
NORTH AMERICA
REVPAR ($) 98.83 89.69 10.2% 125.31 113.93 10.0%
ADR ($) 153.63 150.66 2.0% 185.86 179.99 3.3%
Occupancy (%) 64.3% 59.5% 4.8 67.4% 63.3% 4.1
EUROPE
REVPAR ($) 133.40 127.59 4.6% 147.52 142.26 3.7%
ADR ($) 205.92 212.04 -2.9% 222.95 232.22 -4.0%
Occupancy (%) 64.8% 60.2% 4.6 66.2% 61.3% 4.9
AFRICA & MIDDLE EAST
REVPAR ($) 140.14 143.32 -2.2% 141.18 144.83 -2.5%
ADR ($) 191.08 200.90 -4.9% 191.71 203.02 -5.6%
Occupancy (%) 73.3% 71.3% 2.0 73.6% 71.3% 2.3
ASIA PACIFIC
REVPAR ($) 120.14 99.83 20.3% 118.32 96.70 22.4%
ADR ($) 173.47 154.70 12.1% 172.64 152.60 13.1%
Occupancy (%) 69.3% 64.5% 4.8 68.5% 63.4% 5.1
LATIN AMERICA
REVPAR ($) 92.65 79.08 17.2% 99.41 83.56 19.0%
ADR ($) 149.00 141.57 5.2% 160.01 153.76 4.1%
Occupancy (%) 62.2% 55.9% 6.3 62.1% 54.3% 7.8
(1) Includes same store owned, leased, managed, and franchised hotels
(2) Includes same store owned, leased, and managed hotels
Starwood Hotels & Resorts Worldwide, Inc.
Owned Hotel Results - Same Store (1)
For the Three Months Ended December 31,
UNAUDITED
WORLDWIDE NORTH AMERICA INTERNATIONAL (2)
2010 2009 Variance 2010 2009 Variance 2010 2009 Variance
TOTAL HOTELS 55 Hotels 29 Hotels 26 Hotels
REVPAR ($) 144.54 131.75 9.7% 146.75 135.16 8.6% 141.08 126.40 11.6%
ADR ($) 208.84 202.45 3.2% 206.75 197.61 4.6% 212.35 211.13 0.6%
Occupancy (%) 69.2% 65.1% 4.1 71.0% 68.4% 2.6 66.4% 59.9% 6.5
Total Revenue ($ 000's) 394,128 372,867 5.7% 241,868 225,811 7.1% 152,260 147,056 3.5%
Total Expenses ($ 000's) 307,333 291,830 -5.3% 194,288 185,807 -4.6% 113,045 106,023 -6.6%
BRANDED HOTELS 49 Hotels 23 Hotels 26 Hotels
REVPAR ($) 150.78 136.92 10.1% 158.26 145.02 9.1% 141.08 126.40 11.6%
ADR ($) 213.14 205.64 3.6% 213.69 202.11 5.7% 212.35 211.13 0.6%
Occupancy (%) 70.7% 66.6% 4.1 74.1% 71.8% 2.3 66.4% 59.9% 6.5
Total Revenue ($ 000's) 366,277 345,752 5.9% 214,017 198,695 7.7% 152,260 147,056 3.5%
Total Expenses ($ 000's) 281,823 267,083 -5.5% 168,778 161,059 -4.8% 113,045 106,023 -6.6%
(1) Hotel Results exclude 3 hotels sold and 7 hotels without comparable results during 2009 & 2010.
(2) International expenses for 2009 include a $5 million reduction to expenses at a wholly owned hotel in Latin America relating to a non-recurring refund from a local government agency.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended December 31,
UNAUDITED ($ millions)
Worldwide
2010 2009 $ Variance % Variance
Management Fees:
Base Fees 74 65 9 13.8%
Incentive Fees 54 39 15 38.5%
Total Management Fees 128 104 24 23.1%
Franchise Fees 42 35 7 20.0%
Total Management & Franchise Fees 170 139 31 22.3%
Other Management & Franchise Revenues (1) 29 42 -13 -31.0%
Total Management & Franchise Revenues 199 181 18 9.9%
Other 10 4 6 n/m
Management Fees, Franchise Fees & Other Income 209 185 24 13.0%
(1) Other Management & Franchise Revenues includes the amortization of deferred gains of approximately $21 million in 2010 and 2009 resulting from the sales of hotels subject to long-term management contracts and termination fees.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership & Residential Revenues and Expenses
For the Three Months Ended December 31,
UNAUDITED ($ millions)
2010 2009 % Variance
Originated Sales Revenues (1) -- Vacation Ownership Sales 81 82 (1.2 %)
Other Sales and Services Revenues (2) 64 69 (7.2 %)
Deferred Revenues -- Percentage of Completion - - -
Deferred Revenues -- Other (3) (10 ) (17 ) 41.2 %
Vacation Ownership Sales and Services Revenues 135 134 0.7 %
Residential Sales and Services Revenues 1 2 (50.0 %)
Total Vacation Ownership & Residential Sales and Services Revenues 136 136 0.0 %
Originated Sales Expenses (4) -- Vacation Ownership Sales 48 69 30.4 %
Other Expenses (5) 49 42 (16.7 %)
Deferred Expenses -- Percentage of Completion - - -
Deferred Expenses -- Other 2 2 -
Vacation Ownership Expenses 99 113 12.4 %
Residential Expenses 4 3 (33.3 %)
Total Vacation Ownership & Residential Expenses 103 116 11.2 %
(1) Timeshare sales revenue originated at each sales location before deferrals of revenue for U.S. GAAP reporting purposes
(2) Includes resort income, interest income, gain on sale of notes receivable, and miscellaneous other revenues
(3) Includes deferral of revenue for contracts still in rescission period, contracts that do not yet meet the requirements of ASC 978-605-25 and provision for loan loss
(4) Timeshare cost of sales and sales & marketing expenses before deferrals of sales expenses for U.S. GAAP reporting purposes
(5) Includes resort, general and administrative, and other miscellaneous expenses
Note: Deferred revenue is calculated based on the Percentage of Completion ("POC") of the project. Deferred expenses, also based on POC, include product costs and direct sales and marketing costs only. Indirect sales and marketing costs are not deferred per ASC 978-720-25 and ASC 978-340-25.
n/m = not meaningful
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Top 30 Owned, Leased and Consolidated Joint Venture Hotels
For the Year Ended December 31, 2010
US Hotels Location Rooms International Hotels Location Rooms
St. Regis New York New York, NY 229 St. Regis Grand Hotel, Rome Rome, Italy 161
The Phoenician Scottsdale, AZ 643 Park Tower, Buenos Aires Buenos Aires, Argentina 181
W New York - Times Square New York, NY 509 W Barcelona Barcelona, Spain 473
W Chicago - City Center Chicago, IL 369
W Chicago Lakeshore Chicago, IL 520 The Westin Excelsior, Florence Florence, Italy 171
W Los Angeles Westwood Los Angeles, CA 258 The Westin Excelsior, Rome Rome, Italy 316
W New Orleans New Orleans, LA 423 The Westin Denarau Island Resort Nadi, Fiji 267
The Westin Gaslamp Quarter, San Diego San Diego, CA 450 Le Centre Sheraton Hotel Montreal, Canada 825
Westin Maui Resort & Spa Lahaina, HI 759 Sheraton Rio Hotel & Towers Rio de Janeiro, Brazil 559
Westin Peachtree Plaza Atlanta, GA 1,068 Sheraton Buenos Aires Hotel & Convention Center Buenos Aires, Argentina 739
Westin San Francisco Airport San Francisco, CA 397 Sheraton Centre Toronto Hotel Toronto, Canada 1,377
Sheraton Gateway Hotel in Toronto International Hotel Toronto, Canada 474
Sheraton Kauai Resort Koloa, HI 394 Sheraton Maria Isabel Hotel & Towers Mexico City, Mexico 755
Sheraton On The Park Sydney, Australia 558
Boston Park Plaza Hotel Boston, MA 941 Sheraton Paris Airport Hotel Charles de Gaulle Roissy Aerogare, France 252
The Manhattan at Times Square Hotel New York, NY 665 The Park Lane Hotel London, England 305
Sheraton Fiji Resort Nadi, Fiji 292
Top 30 hotels represent approximately 93% of owned, leased and consolidated joint venture earnings before depreciation
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Top 20 Worldwide Markets - Owned
For the Year Ended December 31, 2010
UNAUDITED
% of 2010 % of 2010
US Markets Total Earnings 1 International Markets Total Earnings 1
New York, NY 9% Canada 15%
Chicago, IL 7% Australia 9%
Hawaii 7% Italy 9%
Atlanta, GA 4% Argentina 7%
Phoenix, AZ 4% Mexico 7%
San Diego, CA 3% United Kingdom 3%
Boston, MA 3% Spain 3%
Los Angeles-Long Beach, CA 2% Fiji 3%
New Orleans, LA 2% Brazil 1%
Colorado Area 1% France 1%
Total Top 10 US Markets 42% Total Top 10 International Markets 58%
1 Represents earnings before depreciation for owned, leased and consolidated joint venture hotels
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Total Management & Franchise Fees by Geographic Region
For the Year Ended December 31, 2010
UNAUDITED
Management Franchise Total Management
Geographical Region Fees Fees and Franchise Fees
United States 33% 63% 42%
Europe 16% 12% 15%
Asia Pacific 26% 10% 22%
Middle East and Africa 17% 1% 12%
Americas (Latin America & Canada) 8% 14% 9%
Total 100% 100% 100%
Starwood Hotels & Resorts Worldwide, Inc.
Systemwide(1) Statistics - Same Store
For the Year Ended December 31,
UNAUDITED
Systemwide - Worldwide Systemwide - North America Systemwide - International
2010 2009 Var. USD 2010 2009 Var. USD 2010 2009 Var. USD
TOTAL HOTELS
REVPAR ($) 106.57 97.45 9.4% 99.81 92.17 8.3% 115.90 104.75 10.6%
ADR ($) 160.00 158.51 0.9% 147.99 147.29 0.5% 177.08 174.68 1.4%
Occupancy (%) 66.6% 61.5% 5.1 67.4% 62.6% 4.8 65.5% 60.0% 5.5
SHERATON
REVPAR ($) 93.69 85.13 10.1% 87.08 80.63 8.0% 102.30 90.98 12.4%
ADR ($) 142.58 140.81 1.3% 131.25 131.09 0.1% 157.66 153.96 2.4%
Occupancy (%) 65.7% 60.5% 5.2 66.3% 61.5% 4.8 64.9% 59.1% 5.8
WESTIN
REVPAR ($) 117.57 108.62 8.2% 111.40 104.78 6.3% 135.16 119.59 13.0%
ADR ($) 170.82 169.37 0.9% 161.30 162.31 -0.6% 198.36 190.07 4.4%
Occupancy (%) 68.8% 64.1% 4.7 69.1% 64.6% 4.5 68.1% 62.9% 5.2
ST. REGIS/LUXURY COLLECTION
REVPAR ($) 186.09 173.34 7.4% 182.56 167.52 9.0% 188.18 176.78 6.4%
ADR ($) 295.65 301.25 -1.9% 276.19 277.98 -0.6% 308.12 316.03 -2.5%
Occupancy (%) 62.9% 57.5% 5.4 66.1% 60.3% 5.8 61.1% 55.9% 5.2
LE MERIDIEN
REVPAR ($) 126.43 118.96 6.3% 195.72 167.77 16.7% 119.77 114.28 4.8%
ADR ($) 186.78 187.37 -0.3% 242.65 219.39 10.6% 180.26 183.61 -1.8%
Occupancy (%) 67.7% 63.5% 4.2 80.7% 76.5% 4.2 66.4% 62.2% 4.2
W
REVPAR ($) 172.38 143.59 20.1% 164.12 140.41 16.9% 218.65 161.43 35.4%
ADR ($) 233.98 223.49 4.7% 222.55 215.54 3.3% 298.47 272.45 9.6%
Occupancy (%) 73.7% 64.3% 9.4 73.7% 65.1% 8.6 73.3% 59.3% 14.0
FOUR POINTS
REVPAR ($) 68.59 62.79 9.2% 64.56 60.84 6.1% 76.02 66.48 14.4%
ADR ($) 105.83 103.48 2.3% 99.56 98.60 1.0% 117.42 113.17 3.8%
Occupancy (%) 64.8% 60.7% 4.1 64.9% 61.7% 3.2 64.7% 58.7% 6.0
(1) Includes same store owned, leased, managed, and franchised hotels
Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Sto
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