WHITE PLAINS, N.Y. - Starwood Hotels & Resorts Worldwide, Inc.
[NYSE: HOT]
("Starwood" or the "Company") today reported EPS from continuing operations for the third quarter of 2003 of $0.23, compared to $0.26 in 2002, a decrease of 11.5%. Excluding special items, EPS from continuing operations was $0.24 in 2003 compared to $0.27 in 2002.
Income from continuing operations was $47 million in 2003 compared to $53 million in 2002, a decrease of 11.3%. Excluding special items, income from continuing operations was $49 million in 2003 compared to $55 million in 2002. Net income (including discontinued operations) was $48 million and EPS was $0.23 in 2003 compared to net income of $52 million and EPS of $0.26 in 2002. The third quarter results reflect a 5% tax benefit as compared to a 0% tax rate at the end of the second quarter of 2003. The decline in the tax rate is due to lower than had been expected pre-tax earnings for 2003 and contributed approximately $0.02 of EPS, excluding special items, in the third quarter of 2003.
Third quarter 2003 Highlights:
Barry S. Sternlicht, Chairman and CEO said, "Though our expectations for this third quarter were modest, we were pleased with our operating performance and with recent trends. Our REVPAR gains in each month of the quarter of 2003 (July +2.9%, August +1.1% and September +5.7%) reflected steady market share gains by nearly every brand in North America as well as the general economic recovery. In addition, in September, we saw modest but uneven rate increases as occupancies rose, and the beginnings of a recovery in the Latin American and Asian markets.
Highlights of the quarter included the strength of our interval ownership business, particularly in the Western US and Hawaii, the 13.5% increase in REVPAR at our W Hotels, the strengthening of the Sheraton brand, which excluding the downtown Toronto hotel affected by SARS, showed a year-over-year 4.4% REVPAR increase in North America as our products and service innovations like our Sheraton Sweet Sleeper and the Sheraton Service Promise begin to resonate with the consumer.
Concluding, Mr. Sternlicht said, "We ended the quarter with net debt of approximately $4 billion as we very successfully managed our capital expenditures and investment programs and retained the cash proceeds from asset sales. Included in our capital spending are substantial timeshare inventory development and the construction of the St. Regis San Francisco, as well as investments in the Boston Convention Center hotel and several other projects that will generate future earnings. With recovery in corporate earnings and the dissipation of the SARS outbreak, we remain optimistic that our industry and our company will see brighter days ahead."
Operating Results:
Cash flow from operations in the third quarter of 2003 was $296 million compared to $252 million in the third quarter of 2002. Total Company Adjusted EBITDA in the third quarter of 2003 was $233 million, compared to $272 million in 2002. The decrease in EBITDA is substantially due to the loss of revenues as a result of the sale of 15 non-strategic domestic hotels and four hotels in Costa Smeralda, Italy sold at the end of the second quarter and during the third quarter of 2003. EBITDA from these hotels in the third quarter of 2002, was approximately $41 million, compared to $4 million in 2003. Total management and franchise fees in the third quarter were $70 million, up $8 million from last year and vacation ownership results were up $11 million despite the absence of vacation ownership notes receivable sale gains in the third quarter of 2003 versus $3 million in the same period of 2002.
REVPAR for Same-Store Owned Hotels worldwide and in the U.S. increased 4.4% and 3.2% respectively, when compared to 2002. For the fourth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as system-wide hotels. Internationally, Same-Store Owned Hotel REVPAR increased 7.8%, with Europe up 6.1% and Asia Pacific up 40.7%, offset by slight declines in Latin America of 1.9%. Excluding the favorable effects of foreign exchange, REVPAR declined 3.3% internationally.
Vacation Ownership:
Revenues from the vacation ownership business increased 47.9% to $133 million as contract sales were up 26.5% reflecting strong demand at our resorts in Maui and Mission Hills. The average price per timeshare unit sold increased 19.6% to $18,574 in the third quarter of 2003 when compared to 2002. While the Company did not have any vacation ownership notes receivable sales in the third quarter of 2003, it expects to complete a securitization of vacation ownership notes receivable during the fourth quarter of 2003, subject to market conditions.
Development:
During the third quarter, the Company signed four hotel management and franchise contracts (approximately 1,100 rooms) and opened seven new hotels and resorts including: the Westin Kuala Lampur (Kuala Lampur, Malaysia, 452 rooms), the Arabella Sheraton Grand Hotel Cape Town (Cape Town, South Africa, 483 rooms), and the Westin City Center Dallas (Dallas, Texas, 407 rooms). Fourteen new hotel openings scheduled for the fourth quarter of 2003 include: Sheraton Tunis (Tunis, Tunisia, 242 rooms), the Sheraton Porto (Porto, Portugal, 273 rooms), the Westin Zagreb Hotel, (Zagreb, Croatia,367 rooms), the W Mexico City (Mexico City, Mexico, 237 rooms) and the Westin Casuarina Hotel (Las Vegas, Nevada, 795 rooms). Including these properties, through the end of 2004, the Company expects to open 36 new full service hotels and resorts (approximately 10,000 rooms) around the world. Additionally, the development pipeline includes more than a dozen W Hotel projects (3,900 rooms), including the two hotel and residence projects in Dallas and Fort Lauderdale.
Dispositions:
In late June and during the third quarter of 2003, the Company completed the sale of 15 non-strategic domestic hotels for gross proceeds of $404 million. The majority of these hotels continue to be part of the Starwood system pursuant to franchise agreements. The Company completed the sale of one additional hotel (the Sheraton North Charleston) in October 2003 and continues to work toward the sale of two additional non-core domestic hotels and expects to close these sales in 2003. The Company incurred a $174 million (pre-tax) charge in the first half of 2003 and an additional $3 million (pre-tax) charge in the third quarter of 2003, primarily related to post-closing adjustments to the sales price of these non-core domestic hotels. The Company has realized approximately $1.1 billion in cash proceeds from the sale of these hotels and the sales in the second quarter of 2003 of the Hotel Principe di Savoia ("Principe") in Milan, Italy and four hotels and a 51% interest in undeveloped land in Costa Smeralda, Italy ("Sardinia Assets").
Capital:
Investment spending during the quarter included approximately $43 million in hotel assets; $32 million in VOI capital assets (primarily inventory build), including VOI construction at Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii; Westin Mission Hills Resort Villas in Rancho Mirage, California and Sheraton's Vistana Villages in Orlando, Florida; and $19 million in other development/corporate capital, including the ongoing development of the St. Regis Museum Tower in San Francisco (269 rooms and 102 condominium units). To date, the Company has invested $126 million in the St. Regis Museum Tower Project, a mixed-use project, which is expected to open in late 2005 or in early 2006. The Company expects to realize gross proceeds of $180 - $200 million from the sale of the project's condominiums.
Balance Sheet:
At September 30, 2003, the Company had total debt of $4.885 billion and cash and cash equivalents (including restricted cash) of $871 million, or net debt of $4.014 billion, compared to net debt of $4.571 billion at the end of the second quarter of 2003.
At September 30, 2003, debt was approximately 68% fixed rate and 32% floating rate and its weighted average maturity was 6.0 years with a weighted average interest rate of 5.50%. The Company had cash (including restricted cash) and availability under domestic and international revolving credit facilities of approximately $1.8 billion.
Special Items:
The Company recorded net charges of $2 million (after-tax) for special items in the third quarter of 2003 comparable to $2 million of net charges (after-tax) in the same period of 2002.
Special items in the third quarter of 2003 primarily relate to the additional loss on 18 domestic non-core hotels held for sale and construction remediation costs at an unconsolidated vacation ownership joint venture.
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,
2003 2002 2003 2002
------- -------
Income from continuing operations
$49 $55 before special items $89 $158
------- -------
$0.24 $0.27 EPS before special items $0.43 $0.77
------- -------
Special Items:
Restructuring and other special
1 2 credits, net(a) 1 5
Gain (loss) on asset dispositions and
(3) 6 impairments, net(b) (179) 2
Foreign exchange gain (loss) from
- (3) Argentina(c) - 30
- - Debt extinguishment costs(d) - (29)
Costs associated with construction
(3) (5) remediation (e) (3) (5)
- - State tax refund - 6
------- -------
(5) - Total special items - pre-tax (181) 9
Income tax benefit/(expense) for
3 (2) special items(f) 109 (5)
------- -------
(2) (2) Total special items - after-tax (72) 4
------- -------
$47 $53 Income from continuing operations $17 $162
------- -------
$0.23 $0.26 EPS including special items $0.08 $0.79
------- -------
(a) During the three and nine month periods ending September 30, 2003,
the Company collected receivables which were previously deemed
uncollectible. During the three and nine months ended September
30, 2002, the Company sold its investments in e-business ventures
previously deemed impaired and collected receivables which were
previously deemed uncollectible. Accordingly, the previously
recorded impairment reserves associated with these assets were
reversed.
(b) Loss for the three and nine months ended September 30, 2003
primarily represents the impairment charges recorded due to the
classification of a portfolio of 18 domestic non-core hotels as
held for sale, 16 of which have been sold to date, offset in part
by the gain on the sale of undeveloped land in Sardinia, Italy.
Gain for the three months ended September 30, 2002 primarily
represents a gain recorded in connection with the sale of the
Company's investment in Interval International. For the nine
months ended September 30, 2002, this gain is partially offset by
an impairment charge to reduce the carrying value of a hotel,
which was later sold, to its fair market value.
(c) Amount represents foreign exchange gains and losses resulting from
the initial devaluation of the Argentine Peso and subsequent
exchange rate volatility and is reflected in selling, general and
administrative and other expenses.
(d) In the second quarter of 2002, the Company early adopted Statement
of Financial Accounting Standards ("SFAS") No. 145, requiring
costs associated with the early extinguishment of debt to be
included in income from continuing operations, rather than
reported as an extraordinary item. This resulted in the inclusion
of costs related to the early extinguishment of debt and the
unwinding of the associated interest rate swaps in 2002 in
interest expense.
(e) Represents the Company's share of costs for construction
remediation efforts at a property owned by a vacation ownership
unconsolidated joint venture. Amounts in 2003 and 2002 are
reflected as a reduction to other hotel and leisure revenues.
(f) In 2003, amount primarily represents various adjustments to tax
liabilities due to the successful resolution of certain income tax
matters and taxes on special items at the Company's incremental
tax rate, primarily associated with the 2003 asset sales. In 2002,
amount represents taxes on special items at the Company's
incremental tax rate, with the exception of the construction
remediation charge which is not tax-effected as the joint-venture
is in a tax-exempt jurisdiction.
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.
Outlook:
All comments in the following paragraphs and certain comments in this release above are deemed to be forward-looking statements. These statements reflect expectations of the Company's performance given its current base of assets and its current understanding of external economic and geo-political environments. Actual results may differ materially.
The situation in the Middle East, continued weakness in global economies and the threat of terrorist events and their consequent impact on travel make it extremely difficult to predict future results with any degree of precision.
For the fourth quarter of 2003, if REVPAR at Same-Store Owned Hotels in North America is up 2% versus the same period a year ago:
For the full year 2003, assuming the sale of the 2 remaining domestic non-core hotels at the end of 2003, if REVPAR at Same-Store Owned Hotels in North America declined approximately 1% versus the full year 2002:
For the full year 2004, assuming the sale of the 2 remaining domestic non-core hotels by the end of 2003, if REVPAR at Same-Store Owned Hotels in North America increases approximately 4% to 5% versus the full year 2003:
Starwood will be conducting a conference call to discuss the third quarter financial results at 10:30 a.m. (ET) today. The conference call will be available through simultaneous webcast in the Investor Relations/Press Releases section of the Company's website at www.starwood.com. A replay of the conference call will also be available from 1:30 p.m. (ET) today through 8:00 p.m. (ET) Thursday, November 6, on both the Company's website and via telephone replay at 719-457-0820 (access code: 636297).
Definitions:
All references to EPS, unless otherwise noted, reflect earnings (losses) per diluted share from continuing operations. EBITDA represents net income before interest expense, taxes, depreciation and amortization. The Company believes that EBITDA is a useful measure of the Company's operating performance due to the significance of the Company's long-lived assets and level of indebtedness. EBITDA is a commonly used measure of performance in its industry which, when considered with GAAP measures, the Company believes gives a more complete understanding of the Company's ability to service debt, fund capital expenditures, pay income taxes and pay cash distributions. It also facilitates comparisons between the Company and its competitors. The Company's management has historically adjusted EBITDA ("Adjusted EBITDA") when evaluating operating performance for the total Company as well as for individual properties or groups of properties because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items, such as the special items described on page 3 and 4 of this release, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. The Company's management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions and it is used in the annual budget process. Due to recent guidance from the Securities and Exchange Commission, the Company now does not reflect such items when calculating EBITDA, however the Company continues to adjust for these special items and refers to this measure as Adjusted EBITDA. The Company has historically reported this measure to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more meaningful comparisons of past, present and future operating results and provides a means to evaluate the results of its core on-going operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by accounting principles generally accepted in the United States (GAAP) and such metrics should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by GAAP. The Company's calculation of EBITDA and Adjusted EBITDA may be different from the calculations used by other companies and, therefore, comparability may be limited.
All references to Same-Store Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels, excluding hotels sold to date and under significant renovation or for which comparable results are not available. REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
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,
% %
2003 2002 Variance 2003 2002 Variance
------- --------- ------- -------
Revenues
Owned, leased and
consolidated
joint venture
$735 $796 (7.7) hotels $2,288 $2,386 (4.1)
Other hotel and
201 164 22.6 leisure(a) 531 478 11.1
------- --------- ------- -------
936 960 (2.5) 2,819 2,864 (1.6)
Other revenues
from managed and
franchised
204 187 9.1 properties(b) 634 589 7.6
------- --------- ------- -------
1,140 1,147 (0.6) 3,453 3,453
------- --------- ------- -------
Costs and Expenses
Owned, leased and
consolidated
joint venture
577 583 1.0 hotels 1,781 1,739 (2.4)
Selling, general,
administrative
143 123 (16.3) and other(c) 411 318 (29.2)
Restructuring and
other special
(1) (2) (50.0) credits, net (1) (5) (80.0)
100 123 18.7 Depreciation 309 349 11.5
5 6 16.7 Amortization 18 16 (12.5)
------- --------- ------- -------
824 833 1.1 2,518 2,417 (4.2)
Other expenses
from managed and
franchised
204 187 (9.1) properties(b) 634 589 (7.6)
------- --------- ------- -------
1,028 1,020 (0.8) 3,152 3,006 (4.9)
112 127 (11.8) Operating income 301 447 (32.7)
Interest expense,
net of interest
income of $2, $0,
(69) (77) 10.4 $3, $1(d) (219) (260) 15.8
Gain (loss) on
asset
dispositions and
(3) 6 n/m impairments, net (179) 2 n/m
------- --------- ------- -------
40 56 (28.6) (97) 189 n/m
Income tax benefit
7 (3) n/m (expense) 113 (27) n/m
Minority equity in
- - - net income 1 - n/m
------- --------- ------- -------
Income from
continuing
47 53 (11.3) operations 17 162 (89.5)
Discontinued
operations:
Loss from
operations, net
of taxes of $0,
$(1), $1
- (1) n/m and $0 (e) (1) (2) 50.0
Gain on
disposition, net
of taxes of $0,
$0, $40 and
1 - n/m $(104) 206 104 98.1
------- --------- ------- -------
$48 $52 (7.7) Net income $222 $264 (15.9)
======= ======= ========= ======= ======= =========
Earnings Per Share
-- Basic
Continuing
$0.23 $0.27 (14.8) operations $0.09 $0.81 (88.9)
Discontinued
0.01 (0.01) n/m operations 1.01 0.50 n/m
------- --------- ------- -------
$0.24 $0.26 (7.7) Net income $1.10 $1.31 (16.0)
======= ======= ========= ======= ======= =========
Earnings Per Share
-- Diluted
Continuing
$0.23 $0.26 (11.5) operations $0.08 $0.79 (89.9)
Discontinued
- - - operations 1.00 0.50 n/m
------- --------- ------- -------
$0.23 $0.26 (11.5) Net income $1.08 $1.29 (16.3)
======= ======= ========= ======= ======= =========
Weighted average
203 201 number of Shares 202 201
======= ======= ======= =======
Weighted average
number of Shares
208 204 assuming dilution 205 205
======= ======= ======= =======
(a) Other hotel and leisure revenues include management and franchise
fees earned from third party hotel owners, the Company's interest
in unconsolidated joint ventures and the sale and financing of
VOIs.
(b) 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.
(c) Selling, general, administrative and other expenses include the
cost of sales of VOIs and other costs of vacation ownership
operations.
(d) Interest expense is net of $0 and $7 million of discontinued
operations allocations for the three and nine month periods ended
September 30, 2003, respectively. Interest expense is net of $4
million and $11 million of discontinued operations allocations for
the three and nine month periods ended September 30, 2002,
respectively. Interest expense for the nine-months ended September
30, 2002 also includes $29 million of early debt termination
costs.
(e) For the periods presented, the Principe is reported as a
discontinued operation as a result of the sale of this hotel with
no continuing involvement.
n/m = not meaningful
0
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
September 30, December 31,
2003 2002
-------------
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $ 787 $ 108
Restricted cash 84 108
Accounts receivable, net of allowance for
doubtful accounts of $52 and $45 398 398
Inventories 201 214
Prepaid expenses and other 123 108
------------
Total current assets 1,593 936
Investments 400 434
Plant, property and equipment, net 6,946 6,911
Assets held for sale (a) 72 839
Goodwill and intangible assets, net 2,476 2,570
Other assets 433 500
------------
$ 11,920 $ 12,190
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Short-term borrowings and current
maturities of long-term debt (b) $ 442 $ 870
Accounts payable 140 171
Accrued expenses 618 723
Accrued salaries, wages and benefits 224 178
Accrued taxes and other 139 188
------------
Total current liabilities 1,563 2,130
Long-term debt (b) 4,443 4,449
Deferred income taxes 920 986
Other liabilities 568 538
------------
7,494 8,103
------------
Minority interest 38 39
------------
Exchangeable units and Class B preferred
shares, at redemption value of $38.50 33 51
------------
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares of
the Trust; $0.01 par value; authorized
30,000,000 shares; outstanding 481,088
and 493,968 shares at September 30, 2003
and December 31, 2002, respectively --
Corporation common stock; $0.01 par
value; authorized 1,050,000,000 shares;
outstanding 202,094,054 and 199,579,542
shares at September 30, 2003 and
December 31, 2002, respectively 2 2
Trust Class B shares of beneficial
interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding
202,094,054 and 199,579,542 shares at
September 30, 2003 and December 31,
2002, respectively 2 2
Additional paid-in capital 4,962 4,905
Deferred compensation (13) (14)
Accumulated other comprehensive income (396) (474)
Accumulated deficit (202) (424)
------------
Total stockholders' equity 4,355 3,997
------------
$ 11,920 $ 12,190
============ ============
(a) Represents the carrying value of the plant, property and equipment
for the Principe, Sardinia Assets and the 18 non-core domestic
hotels at December 31, 2002 and the three remaining hotels in the
portfolio that were not sold as of September 30, 2003.
(b) Excludes Starwood's share of unconsolidated joint venture debt
aggregating approximately $413 million and $355 million at
September 30, 2003 and December 31, 2002, 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,
%
2003 2002 % Variance 2003 2002 Variance
------- ----------- ------- ------
Reconciliation of
Net Income to
EBITDA and
Adjusted EBITDA
$48 $52 (7.7) Net income $222 $264 (15.9)
Interest
76 85 (10.6) expense(a) 242 284 (14.8)
Income tax
(benefit)
(7) 2 n/m expense (b) (72) (77) 6.5
107 131 (18.3) Depreciation(c) 330 369 (10.6)
5 6 (16.7) Amortization 18 16 12.5
------- ----------- ------- ------
229 276 (17.0) EBITDA 740 856 (13.6)
(Gain) loss on
asset
dispositions and
3 (6) n/m impairments, net 179 (2) n/m
Discontinued
(1) (4) 75.0 operations(d) (254) (12) n/m
Restructuring and
other special
(1) (2) 50.0 credits, net (1) (5) 80.0
Foreign exchange
gains from
- 3 n/m Argentina - (30) n/m
Costs associated
with construction
3 5 (40.0) remediation 3 5 (40.0)
------- ----------- ------- ------
$233 $272 (14.3) Adjusted EBITDA $667 $812 (17.9)
======= ======= =========== ======= ====== =========
(a) Includes $5 and $13 million of interest expense related to
unconsolidated joint ventures for the three and nine month periods
ended September 30, 2003 and $4 and $12 million for the three and
nine month periods ended September 30, 2002. Also includes $0 and
$7 million of interest expense allocated to discontinued
operations for the three and nine month periods ended September
30, 2003 and $4 million and $11 million of interest expense
allocated to discontinued operations for the three and nine month
periods ended September 30, 2002, respectively.
(b) Includes $0 million and $41 million of taxes recorded,
respectively, in discontinued operations for the three and nine
months ended September 30, 2003 and $(1) and $(104) of taxes/(tax
benefits) recorded in discontinued operations for the three and
nine months ended September 30, 2002, respectively.
(c) Includes $7 million and $20 million of Starwood's share of
depreciation expense of unconsolidated joint ventures for the
three and nine month periods ended September 30, 2003 and $6
million and $17 million for the three and nine month periods ended
September 30, 2002. Also includes $0 million and $1 million of
depreciation expense included in discontinued operations for the
three and nine months ended September 30, 2003 and $2 million and
$3 million for the three and nine month periods ended September
30, 2002.
(d) Excludes the interest expense, taxes, and depreciation balances
already added back as noted in (a), (b) and (c) above. Includes
the reversal of a $49 million (pre-tax) liability, in the nine
months ended September 30, 2003, related to the 1999 divestiture
of the Company's gaming business which is no longer deemed
necessary.
0
Three Months Nine Months
Ended Ended
September 30, September 30,
----------------
2003 2002 2003 2002
------- ------ -------
Cash Flow Data
Net income $ 48 $ 52 $ 222 $ 264
Exclude:
Discontinued operations, net (1) 1 (205) (102)
------- ------ -------
Income from continuing operations 47 53 17 162
Adjustment to income from continuing
operations and changes in working
capital 249 195 499 387
------- ------ -------
Cash from continuing operations 296 248 516 549
Cash from discontinued
operations - 4 10 12
------- ------ -------
Cash from operating activities $ 296 $ 252 $ 526 $ 561
======= ====== ======= ======
Cash from (used for) investing
activities $ 305 $ (109) $ 834 $ (227)
======= ====== ======= ======
Cash used for financing activities $ (136) $ (127) $ (690) $ (319)
======= ====== ======= ======
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations - Future Performance
(In millions)
Twelve
Twelve Months
Months Ended
Three Months Twelve Months Ended December
Ended Ended December 31,
December 31, December 31, 31, 2004 2004
2003 2003 (Low End) (High End)
------------ ------------- -----------
Net income $ 68 $ 290 $ 180 $ 200
Interest expense 77 319 295 295
Income tax expense
(benefit) (3) (75) 10 15
Depreciation and
amortization 118 464 465 465
----------- ------------ ----------
EBITDA 260 998 950 975
Loss on asset
dispositions and
impairments, net - 179 --
Discontinued
operations - (254) --
Restructuring and
other special
credits - (1) -
Costs associated
with construction
remediation - 3 -
----------- ------------ ----------
Adjusted EBITDA $ 260 $ 925 $ 950 $ 975
=========== ============ ========== ==========
0
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Resorts - Same Store (1)
For the Three Months Ended September 30, 2003
UNAUDITED
WORLDWIDE
2003 2002 Var.
---------- --------
140 Hotels
OWNED HOTELS
REVPAR ($) 99.43 95.25 4.4%
ADR ($) 144.81 145.23 -0.3%
OCCUPANCY (%) 68.7% 65.6% 3.1
60
SHERATON
REVPAR ($) 81.34 78.95 3.0%
ADR ($) 122.23 124.19 -1.6%
OCCUPANCY (%) 66.6% 63.6% 3.0
36
WESTIN
REVPAR ($) 111.57 107.08 4.2%
ADR ($) 152.92 151.82 0.7%
OCCUPANCY (%) 73.0% 70.5% 2.5
12
LUXURY COLLECTION
REVPAR ($) 169.67 161.33 5.2%
ADR ($) 305.48 309.79 -1.4%
OCCUPANCY (%) 55.5% 52.1% 3.4
12
W
REVPAR ($) 142.52 125.56 13.5%
ADR ($) 192.61 190.81 0.9%
OCCUPANCY (%) 74.0% 65.8% 8.2
20
OTHER
REVPAR ($) 78.44 80.05 -2.0%
ADR ($) 112.50 115.63 -2.7%
OCCUPANCY (%) 69.7% 69.2% 0.5
NORTH AMERICA
2003 2002 Var.
---------- --------
95 Hotels
OWNED HOTELS
REVPAR ($) 98.81 95.75 3.2%
ADR ($) 138.20 140.81 -1.9%
OCCUPANCY (%) 71.5% 68.0% 3.5
37
SHERATON
REVPAR ($) 86.46 85.23 1.4%
ADR ($) 121.85 125.97 -3.3%
OCCUPANCY (%) 71.0% 67.7% 3.3
22
WESTIN
REVPAR ($) 99.67 96.45 3.3%
ADR ($) 132.22 133.63 -1.1%
OCCUPANCY (%) 75.4% 72.2% 3.2
5
LUXURY COLLECTION
REVPAR ($) 155.56 148.10 5.0%
ADR ($) 274.46 296.11 -7.3%
OCCUPANCY (%) 56.7% 50.0% 6.7
12
W
REVPAR ($) 142.52 125.56 13.5%
ADR ($) 192.61 190.81 0.9%
OCCUPANCY (%) 74.0% 65.8% 8.2
19
OTHER
REVPAR ($) 77.72 83.62 -7.1%
ADR ($) 115.23 122.45 -5.9%
OCCUPANCY (%) 67.5% 68.3% -0.8
INTERNATIONAL(2)
2003 2002 Var.
---------- --------
45 Hotels
OWNED HOTELS
REVPAR ($) 101.16 93.84 7.8%
ADR ($) 166.90 159.95 4.3%
OCCUPANCY (%) 60.6% 58.7% 1.9
23
SHERATON
REVPAR ($) 71.03 66.28 7.2%
ADR ($) 123.16 119.82 2.8%
OCCUPANCY (%) 57.7% 55.3% 2.4
14
WESTIN
REVPAR ($) 149.03 142.55 4.5%
ADR ($) 228.23 219.16 4.1%
OCCUPANCY (%) 65.3% 65.0% 0.3
7
LUXURY COLLECTION
REVPAR ($) 191.14 181.48 5.3%
ADR ($) 355.21 328.65 8.1%
OCCUPANCY (%) 53.8% 55.2% -1.4
W
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
OTHER
REVPAR ($) 83.44 55.71 49.8%
ADR ($) 97.57 73.63 32.5%
OCCUPANCY (%) 85.5% 75.7% 9.8
(1) Hotel Results exclude 25 hotels sold or closed during 2002 and
2003
(2) See next page for breakdown by division.
0
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Resorts - Same Store (1)
For the Three Months Ended September 30, 2003
UNAUDITED
EUROPE
2003 2002 Var.
---------- ----------
29 Hotels
OWNED HOTELS
REVPAR ($) 143.45 135.22 6.1%
ADR ($) 227.76 214.20 6.3%
OCCUPANCY (%) 63.0% 63.1% -0.1
11
SHERATON
REVPAR ($) 98.68 92.31 6.9%
ADR ($) 151.26 146.01 3.6%
OCCUPANCY (%) 65.2% 63.2% 2.0
11
WESTIN
REVPAR ($) 181.26 172.21 5.3%
ADR ($) 282.51 258.11 9.5%
OCCUPANCY (%) 64.2% 66.7% -2.5
7
LUXURY COLLECTION
REVPAR ($) 191.14 181.48 5.3%
ADR ($) 355.21 328.65 8.1%
OCCUPANCY (%) 53.8% 55.2% -1.4
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LATIN AMERICA
2003 2002 Var.
---------- ----------
12 Hotels
OWNED HOTELS
REVPAR ($) 44.84 45.72 -1.9%
ADR ($) 88.77 93.87 -5.4%
OCCUPANCY (%) 50.5% 48.7% 1.8
9
SHERATON
REVPAR ($) 40.47 42.99 -5.9%
ADR ($) 87.22 92.92 -6.1%
OCCUPANCY (%) 46.4% 46.3% 0.1
3
WESTIN
REVPAR ($) 63.76 58.71 8.6%
ADR ($) 93.32 97.34 -4.1%
OCCUPANCY (%) 68.3% 60.3% 8.0
LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ASIA PACIFIC
2003 2002 Var.
---------- ----------
4 Hotels
OWNED HOTELS
REVPAR ($) 94.65 67.26 40.7%
ADR ($) 117.91 97.08 21.5%
OCCUPANCY (%) 80.3% 69.3% 11.0
3
SHERATON
REVPAR ($) 101.53 74.48 36.3%
ADR ($) 131.78 114.08 15.5%
OCCUPANCY (%) 77.0% 65.3% 11.7
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
OTHER
REVPAR ($) 83.44 55.71 49.8%
ADR ($) 97.57 73.63 32.5%
OCCUPANCY (%) 85.5% 75.7% 9.8
(1) Hotel Results exclude 25 hotels sold or closed during 2002 and
2003
0
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Resorts - Same Store (1)
For the Nine Months Ended September 30, 2003
UNAUDITED
WORLDWIDE
2003 2002 Var.
---------- ----------
140 Hotels
OWNED HOTELS
REVPAR ($) 96.91 97.38 -0.5%
ADR ($) 149.83 151.04 -0.8%
OCCUPANCY (%) 64.7% 64.5% 0.2
60
SHERATON
REVPAR ($) 78.01 80.44 -3.0%
ADR ($) 125.38 129.00 -2.8%
OCCUPANCY (%) 62.2% 62.4% -0.2
36
WESTIN
REVPAR ($) 110.91 109.03 1.7%
ADR ($) 157.91 155.30 1.7%
OCCUPANCY (%) 70.2% 70.2% 0.0
12
LUXURY COLLECTION
REVPAR ($) 184.51 191.37 -3.6%
ADR ($) 327.12 328.86 -0.5%
OCCUPANCY (%) 56.4% 58.2% -1.8
12
W
REVPAR ($) 136.69 126.77 7.8%
ADR ($) 197.47 199.08 -0.8%
OCCUPANCY (%) 69.2% 63.7% 5.5
20
OTHER
REVPAR ($) 68.24 71.35 -4.4%
ADR ($) 109.86 112.45 -2.3%
OCCUPANCY (%) 62.1% 63.5% -1.4
NORTH AMERICA
2003 2002 Var.
---------- ----------
95 Hotels
OWNED HOTELS
REVPAR ($) 97.30 99.09 -1.8%
ADR ($) 145.43 149.85 -2.9%
OCCUPANCY (%) 66.9% 66.1% 0.8
37
SHERATON
REVPAR ($) 82.51 86.34 -4.4%
ADR ($) 126.31 132.75 -4.9%
OCCUPANCY (%) 65.3% 65.0% 0.3
22
WESTIN
REVPAR ($) 100.86 100.62 0.2%
ADR ($) 139.22 140.44 -0.9%
OCCUPANCY (%) 72.4% 71.6% 0.8
5
LUXURY COLLECTION
REVPAR ($) 193.75 208.88 -7.2%
ADR ($) 323.15 349.15 -7.4%
OCCUPANCY (%) 60.0% 59.8% 0.2
12
W
REVPAR ($) 136.69 126.77 7.8%
ADR ($) 197.47 199.08 -0.8%
OCCUPANCY (%) 69.2% 63.7% 5.5
19
OTHER
REVPAR ($) 68.24 73.87 -7.6%
ADR ($) 113.69 119.17 -4.6%
OCCUPANCY (%) 60.0% 62.0% -2.0
INTERNATIONAL(2)
2003 2002 Var.
---------- ----------
45 Hotels
OWNED HOTELS
REVPAR ($) 95.79 92.45 3.6%
ADR ($) 164.30 154.86 6.1%
OCCUPANCY (%) 58.3% 59.7% -1.4
23
SHERATON
REVPAR ($) 68.89 68.46 0.6%
ADR ($) 123.18 120.28 2.4%
OCCUPANCY (%) 55.9% 56.9% -1.0
14
WESTIN
REVPAR ($) 143.31 136.99 4.6%
ADR ($) 227.13 209.41 8.5%
OCCUPANCY (%) 63.1% 65.4% -2.3
7
LUXURY COLLECTION
REVPAR ($) 170.46 164.74 3.5%
ADR ($) 334.21 295.72 13.0%
OCCUPANCY (%) 51.0% 55.7% -4.7
W
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
OTHER
REVPAR ($) 68.19 54.21 25.8%
ADR ($) 89.13 73.80 20.8%
OCCUPANCY (%) 76.5% 73.5% 3.0
(1) Hotel Results exclude 25 hotels sold or closed during 2002 and
2003
(2) See next page for breakdown by division.
0
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Resorts - Same Store (1)
For the Nine Months Ended September 30, 2003
UNAUDITED
EUROPE
2003 2002 Var.
---------- ----------
29 Hotels
OWNED HOTELS
REVPAR ($) 132.86 126.07 5.4%
ADR ($) 224.32 200.34 12.0%
OCCUPANCY (%) 59.2% 62.9% -3.7
11
SHERATON
REVPAR ($) 94.88 91.57 3.6%
ADR ($) 155.17 141.79 9.4%
OCCUPANCY (%) 61.1% 64.6% -3.5
11
WESTIN
REVPAR ($) 166.07 154.42 7.5%
ADR ($) 274.54 240.92 14.0%
OCCUPANCY (%) 60.5% 64.1% -3.6
7
LUXURY COLLECTION
REVPAR ($) 170.46 164.74 3.5%
ADR ($) 334.21 295.72 13.0%
OCCUPANCY (%) 51.0% 55.7% -4.7
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LATIN AMERICA
2003 2002 Var.
---------- ----------
12 Hotels
OWNED HOTELS
REVPAR ($) 51.49 56.58 -9.0%
ADR ($) 97.61 106.73 -8.5%
OCCUPANCY (%) 52.7% 53.0% -0.3
9
SHERATON
REVPAR ($) 44.32 50.02 -11.4%
ADR ($) 90.73 100.79 -10.0%
OCCUPANCY (%) 48.8% 49.6% -0.8
3
WESTIN
REVPAR ($) 83.14 87.86 -5.4%
ADR ($) 118.80 127.05 -6.5%
OCCUPANCY (%) 70.0% 69.2% 0.8
LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
OTHER
REVPAR ($)
ADR ($)
OCCUPANCY (%)
ASIA PACIFIC
2003 2002 Var.
---------- ----------
4 Hotels
OWNED HOTELS
REVPAR ($) 77.53 62.95 23.2%
ADR ($) 109.80 95.38 15.1%
OCCUPANCY (%) 70.6% 66.0% 4.6
3
SHERATON
REVPAR ($) 83.30 68.42 21.7%
ADR ($) 124.39 111.56 11.5%
OCCUPANCY (%) 67.0% 61.3% 5.7
WESTIN
REVPAR ($)
ADR ($)
OCCUPANCY (%)
LUXURY COLLECTION
REVPAR ($)
ADR ($)
OCCUPANCY (%)
1
OTHER
REVPAR ($) 68.19 54.21 25.8%
ADR ($) 89.13 73.80 20.8%
OCCUPANCY (%) 76.5% 73.5% 3.0
(1) Hotel Results exclude 25 hotels sold or closed during 2002 and
2003ORGANIZATION
Starwood Hotels & Resorts Worldwide, Inc.
www.starwoodhotels.com
One StarPoint
USA
- Stamford, NY 06902
Phone: (203) 964-6000
