Starwood Reports First Quarter 2002 Results
WHITE PLAINS, N.Y. -- Starwood Hotels & Resorts Worldwide, Inc.
- EPS, excluding special items, was $0.08 compared to $0.30 in 2001. Including special items, EPS was $0.16 compared to $0.30 in 2001.
- Total revenues, excluding other revenues from managed and franchised properties, decreased 11.8%. Revenue per available room ("REVPAR") for Same-Store Owned Hotels decreased 15.3% in North America and 16.2% worldwide when compared to 2001.
- Total Company EBITDA was $228 million compared to $335 million in 2001. EBITDA at Comparable Owned Hotels worldwide decreased 29.8% to $190 million. EBITDA at Comparable Owned Hotels in North America decreased 29.0% to $152 million.
- Total Company EBITDA margin was approximately 25.5%. EBITDA margin at Comparable Owned Hotels in North America was 27.3%, up 270 basis points from the fourth quarter of 2001.
Excluding net benefits for special items of $23 million in 2002 and net benefits of $1 million in 2001, EPS was $0.08 compared to EPS of $0.30 in the corresponding period of 2001. Including these special items, EPS was $0.16 compared to EPS of $0.30 in 2001. Total revenues were down 11.8% to $894 million compared to the same period of 2001. Operating income, excluding special items, was $101 million compared to $192 million in the same period of 2001 and net income, excluding special items, was $17 million compared to $61 million in the same period of 2001. Though in line with the Company's expectations, results were adversely impacted by the weakened worldwide economic environment and the shift of the negative impact of the Passover/Easter holiday from the second quarter in 2001 to the first quarter in 2002. However, operating results were significantly improved when compared to the fourth quarter of 2001 as a result of an improving demand environment, a continued focus on cost control and a significant increase in vacation ownership interest ("VOI") results. Depreciation expense increased when compared to the first quarter of 2001 due to the continued renovation program and the repositioning and acquisition of certain hotels. Results further benefited from reduced interest expense resulting from a reduction in interest rates and the completion of financing transactions in the past year and a $16.0 million after-tax reduction in goodwill amortization as a result of a new accounting rule pertaining to goodwill and intangible assets.
Barry S. Sternlicht, Chairman and CEO said, "We were generally pleased with our first quarter performance. More importantly, trends are encouraging as REVPAR improved sequentially nearly every week up to the Passover/Easter holiday period and into April. Combined with tight cost controls, we now expect to exceed our earlier forecasts and feel comfortable raising our annual estimates. The important New York City market is recovering well and Europe and Asia appear likely to exceed our original expectations. Conditions remain challenging in South America. Our owned portfolio is concentrated in the larger urban markets which have been disproportionately impacted by the air travel situation and the continued slowdown in business and international travel. We are, however, very encouraged by the declining trends in new construction and perhaps the discipline for new supply that new investor scrutiny of off-balance-sheet financing will bring. Our brand momentum is strong, our guest satisfaction scores are increasing across all brands, our management and franchise business is expanding under difficult conditions and without much balance sheet support, particularly in the Asian markets where we have secured valuable contracts, the St. Regis' team is seasoning and we are very pleased with terrific results from our interval ownership projects. In the quarter, we also launched a new Westin advertising campaign and recently announced the launch of our latest initiatives behind Sheraton."
Concluding, Mr. Sternlicht said, "We are pleased to have completed the $1.5 billion senior notes offering and expect to complete a new bank facility in the coming months to refinance all remaining near-term maturities. We are actively working with potential buyers of CIGA assets and would expect to enter binding agreements in the next few months subject to tax and other structuring issues."
At the Company's Comparable Owned Hotels worldwide, revenues decreased approximately $136 million to $719 million from $855 million in 2001 and EBITDA decreased 29.8% to $190 million from $271 million in 2001. EBITDA at the Company's Comparable Owned Hotels in North America decreased 29.0% to $152 million when compared to the same period of 2001. EBITDA at the Company's Comparable Owned Hotels internationally decreased 32.6% to approximately $38 million when compared to the same period of 2001 (a 26.7% decrease excluding the unfavorable effects of foreign exchange). The decline in operating results at Comparable Owned Hotels in North America when compared to 2001 reflect the impact of lower REVPAR primarily attributable to the weakened global economies.
REVPAR at Same-Store Owned Hotels worldwide decreased 16.2% when compared to the same period of 2001 as a result of a decline in occupancy rates of 580 basis points to 60.9% and a decline in average daily rate ("ADR") of 8.3% from the prior year. REVPAR at Same-Store Owned Hotels in North America decreased 15.3% to $93.94 when compared to the same period of 2001 as a result of a decrease in occupancy rates to 61.6% from 67.1% in the prior year, while ADR decreased 7.8% to $152.43. Internationally, Same-Store Owned Hotel REVPAR decreased 19.5%.
EBITDA margins at Comparable Owned Hotels worldwide decreased to 26.5% when compared to 31.7% in the same period of 2001. In North America, EBITDA margins at Comparable Owned Hotels decreased to 27.3% when compared to 32.5% in the same period of 2001 but increased 270 basis points when compared to 24.6% in the fourth quarter of 2001. Internationally, EBITDA margins at Comparable Owned Hotels decreased to 23.8% when compared to 29.1% in the same period of 2001 but increased 170 basis points when compared to 22.1% in the fourth quarter of 2001.
During the first quarter of 2002, the Company added nine management and franchise contracts representing approximately 2,500 rooms, including the Sheraton Krabi Beach Resort (246 rooms) in Krabi, Thailand; the Westin Miyako Kyoto (516 rooms) in Kyoto, Japan; and the Four Points Seoul (269 rooms) in Seoul, Korea. Through the end of 2003, the Company's backlog of quality hotels and resorts around the world includes 47 new destinations with more than 14,000 rooms.
Starwood Vacation Ownership, Inc. ("SVO") currently has 15 interval ownership resorts in its portfolio. SVO is selling VOI inventory at ten resorts and engaged in pre-opening sales at two others currently under construction (Westin Mission Hills Resort Villas in Rancho Mirage, California and Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii). Sales in the first quarter were particularly strong at the Maui and Mission Hills resorts. SVO will begin construction of its fourth Westin-branded interval ownership resort later this year featuring 158 villas located adjacent to the Westin Kierland Resort & Spa in Scottsdale, Arizona. The resort is scheduled to open in late 2002. The Company did not sell any notes receivable originated by the vacation ownership operations in the first quarter of 2002.
The Company continues to review its portfolio for disposition candidates. In January, the Company announced that it had initiated the formal sale process for the CIGA portfolio of 25 luxury hotels, land, golf courses and marinas. The Company has reviewed indications of interest, is working toward binding agreements, and expects to enter into contracts for sale in the next few months.
During the first quarter of 2002, the Company invested approximately $58 million in capital assets, including completion of the W Times Square, the guest room and lobby renovation at the Westin Excelsior in Rome (316 rooms) and VOI construction at Westin Mission Hills Resort Villas in Rancho Mirage, California and Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii as well as the ongoing development of the St. Regis Museum Tower in San Francisco (269 rooms and 102 condominiums) scheduled for completion in 2004. Work also continues on the new Sheraton prototype. The Company spent an additional $14 million on other hotel investments including completion of the buyout of its minority partners at the W Los Angeles and minority investments in a number of new hotel projects including the W Mexico City (228 rooms) and the W San Diego (261 rooms).
On March 31, 2002, the Company had total debt of $5.566 billion and cash and cash equivalents of $174 million. At the end of the first quarter of 2002, after giving effect to the Senior Notes Offering and related termination of certain floating interest rate swaps and new fixed interest rate swaps described below, the Company's debt was approximately 56% fixed rate and 44% floating rate and its weighted average maturity was 6.1 years. As of March 31, 2002, the Company had cash and availability under its domestic and international revolving credit facilities of approximately $731 million and the Company's debt had a weighted average interest rate of 5.26% (5.47% after giving effect to the Senior Notes Offering).
In December 2001, the Company entered into an 18-month 450 million Euro loan with an interest rate of Euribor plus 195 basis points. The proceeds of the Euro loan were drawn down in two tranches; the first 270 million Euros was drawn down in December and used to repay the previously outstanding 270 million Euro facility and the remaining 180 million Euros was drawn down in January 2002 and the proceeds were used to pay down a portion of the Company's domestic revolving credit facility.
In April 2002, the Company sold $1.5 billion of senior notes in two tranches -- $700 million principal amount of 7-3/8% senior notes due 2007 and $800 million principal amount of 7-7/8% senior notes due 2012 (the "Senior Notes Offering"). The Company used the proceeds to repay all of its senior secured notes facility and a portion of its senior credit facility. The Company expects to refinance the senior credit facility over the coming months.
In connection with the repayment of debt with the senior notes offering proceeds and the anticipated refinancing of the remaining senior credit facility, the Company expects to incur approximately $30 million of one-time charges in the second quarter. These charges relate to the write-off of deferred financing costs, termination fees for the early extinguishment of debt, and terminated interest rate swaps associated with the repaid debt.
At March 31, 2002, Starwood had approximately 202 million shares outstanding (including partnership units and exchangeable preferred shares).
In January 2002, Starwood Hotels & Resorts paid a fourth quarter dividend of $0.20 per share, representing a 16% increase over the prior year quarterly dividend. In 2002, the Company has shifted from a quarterly dividend to an annual dividend. The final determination of the amount of the dividend will be subject to economic and financial considerations and Board approval in the fourth quarter of 2002.
The Company recorded net benefits of $23 million (pretax) for special items in the first quarter of 2002 when compared to net benefits of $1 million in the same period of 2001.
The net benefits in the first quarter of 2002 primarily represent a non-cash foreign exchange gain of approximately $24 million (pretax), which reduced selling, general, administrative and other costs, resulting from the devaluation of the Argentine Peso and a credit for the reversal of impairment charges for an e-business investment and certain receivables no longer deemed impaired, offset by a $3 million loss on asset dispositions primarily related to an impairment charge to reduce the carrying value of a hotel to its fair value. The foreign exchange gain represents the mark-to-market, in accordance with Statement of Financial Accounting Standards No. 52, of a U.S. dollar intercompany receivable in Argentina.
The following represents a reconciliation of net income before
special items to net income after special items:
Three Months Ended
March 31,
2002 2001
----------
Net income before special items...............$ 17 $ 61
---------
Special items:
Restructuring and other special credits, net.. 2(a) 1(b)
Loss on asset dispositions(c)................. (3)
Foreign exchange gain from Argentina(d)....... 24
---------
---------
Total special items - pretax.................. 23 1
Income tax expense - 35% incremental tax rate. 8
---------
---------
Total special items - after-tax............... 15 1
---------
Net income....................................$ 32 $ 62
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EPS before special items......................$ 0.08 $ 0.30
EPS $ 0.16 $ 0.30
(a) During the first quarter of 2002, the Company sold its
investment in an e-business venture previously deemed impaired
and collected receivables which were previously deemed
uncollectible.
(b) During the first quarter of 2001, the Company wrote down its
investments in various e-business ventures by approximately
$19 million based on the market conditions for the technology
sector at the time and management's assessment that these
investments were permanently impaired. This charge was offset
by the reversal of a $20 million bad debt restructuring charge
taken in 1998 relating to a note receivable which is now fully
performing.
(c) Balance primarily represents an impairment charge to reduce
the carrying value of a hotel to its fair market value.
(d) Reflected in selling, general, administrative and other
expenses.
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 political environments. Actual results may differ materially.
The weakness in North American and European economies, combined with the current political environment in Argentina and other parts of the world and their consequent impact on travel in their respective regions and on the rest of the world, make it difficult to predict results with any degree of precision.
- Assuming an economic recovery in the second half of 2002
resulting in annual REVPAR flat with 2001 levels, the Company
expects full-year EBITDA of approximately $1.26 billion (up
2.4% from 2001) and EPS of approximately $1.38 (up 38.0% from
2001), including the effect of the new accounting rule
pertaining to goodwill and intangible assets and assuming an
effective tax rate of approximately 23%. Based on these
assumptions and assuming no asset sales for modeling purposes,
approximate quarterly EPS for the remaining quarters of 2002
is expected to be as follows:
2002
First quarter (actual)........................... $ 0.08
Second quarter (estimate)........................ 0.40
Third quarter (estimate)......................... 0.43
Fourth quarter (estimate)........................ 0.47
Full year (estimate)............................. $ 1.38
============
- REVPAR at Same-Store Owned Hotels in North America for the second quarter of 2002 is now expected to decline approximately 4% - 6% when compared to the second quarter of 2001.
- The Company currently expects total capital expenditures in 2002 to be approximately $300 million. However, the Company is encouraged with current market trends and may increase capital expenditures for high return investment projects later in the year if operating trends continue to be positive.
- Discretionary free cash flow (after cash interest expense, cash taxes, and total planned capital expenditures) is expected to exceed $500 million.
- For full year 2003, the Company currently expects REVPAR increases of 6% - 8%, EBITDA of $1.40 billion - $1.45 billion and EPS of $1.65 - $1.75.
Starwood will be conducting a conference call to discuss the first 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
All references to EPS, unless otherwise noted, reflect earnings per diluted share from net income excluding special items. All references to total revenues exclude other revenues from managed and franchised properties. All references to total Company EBITDA and EBITDA margins exclude other revenues and expenses from managed and franchised properties. All references to Comparable Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels, excluding hotels sold during 2001 and 2002 and hotels without comparable prior year results. All references to Same-Store Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels, excluding hotels under significant renovation or for which comparable results are not available.
Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 740 properties in over 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchiser of hotels and resorts including: St. Regis(R), The Luxury Collection(R), Sheraton(R), Westin(R), W(R) and Four Points(R) by Sheraton brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership.
(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. General economic conditions including the duration and severity of the current global economic downturn and the terrorist attacks in New York, Washington, D.C. and Pennsylvania and their aftermath, business and financing conditions, cyclicality of the real estate and the hotel and leisure business, operating risks associated with the hotel and leisure business, domestic and international political conditions, competition, governmental and regulatory actions, risk associated with the level of our indebtedness, and other circumstances and uncertainties may affect future results, performance and achievements. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.)
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
(In millions, except per Share data)
Three Months Ended
March 31,
2002 2001 %
Variance
--------- ----------
Revenues
Owned, leased and consolidated joint
venture hotels $ 752 $ 865 (13.1)
Other hotel and leisure(a)........... 142 149 (4.7)
--------- ----------
--------- ----------
894 1,014 (11.8)
Other revenues from managed and
franchised properties(b). 202 195 3.6
--------- ----------
--------- ----------
1,096 1,209 (9.3)
--------- ----------
--------- ----------
Costs and Expenses
Owned, leased and consolidated joint
venture hotels 564 596 5.4
Selling, general, administrative and
other(c) 88 99 11.1
Restructuring and other special
credits, net (2) (1) 100.0
Depreciation......................... 112 105 (6.7)
Amortization......................... 5 22 77.3
--------- ----------
--------- ----------
767 821 6.6
Other expenses from managed and
franchised properties(b) 202 195 (3.6)
--------- ----------
969 1,016 4.6
--------- ----------
Operating income..................... 127 193 (34.2)
Interest expense, net of interest
income............................. (80) (100) 20.0
Loss on asset dispositions, net...... (3) --
--------- ----------
44 93 (52.7)
Income tax expense................... (13) (31) 58.1
Minority equity in net income........ 1 --
----------
--------- ----------
Net income...........................$ 32 $ 62 (48.4)
========= ========== ==========
========= ========== ==========
Earnings per Share-- basic...........$ 0.16 $ 0.31 (48.4)
========= ========== ==========
========= ========== ==========
Earnings per Share-- diluted.........$ 0.16 $ 0.30 (46.7)
========= ==========
========= ========== ==========
Weighted average number of Shares.... 200 201
==========
========= ==========
Weighted average number of Shares
assuming dilution.................. 205 207
========= ==========
========= ==========
Reconciliation of Operating Income to
EBITDA(d)
Operating income.....................$ 127 $ 193 (34.2)
Depreciation(e)...................... 118 112 5.4
Amortization(e)...................... 5 22 (77.3)
Interest expense of unconsolidated
joint ventures..................... 4 6 (33.3)
Interest income...................... -- 3
Restructuring and other special
credits, net....................... (2) (1) (100.0)
Foreign exchange gain from Argentina. (24) --
--------- ----------
EBITDA...............................$ 228 $ 335 (31.9)
========= ========== ==========
(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) In accordance with a Financial Accounting Standards Board staff
announcement, the Company has included in revenues the
reimbursement of costs incurred on behalf of managed hotel
property owners and franchisees and included in costs and
expenses these reimbursed costs. These costs relate primarily to
payroll costs at managed properties where the Company is the
employer. Since the reimbursements made are based upon costs
incurred with no added margin, the adoption of this guidance has
no effect on operating income, total or per Share net income,
cash flows or the financial position of the Company.
(c) Selling, general, administrative and other expenses includes the
cost of sales of VOIs and other costs of vacation ownership
operations.
(d) EBITDA is defined as income before interest expense, income tax
expense and depreciation and amortization. Special items and
gains and losses from sales of real estate and investments are
also excluded from EBITDA as these items do not impact operating
results on a recurring basis. Management considers EBITDA to be
one measure of the cash flows from operations of the Company
before debt service that provides a relevant basis for
comparison, and EBITDA is presented to assist investors in
analyzing the performance of the Company. This information should
not be considered as an alternative to any measure of performance
as promulgated under accounting principles generally accepted in
the United States, nor should it be considered as an indicator of
the overall financial performance of the Company. The Company's
calculation of EBITDA may be different from the calculation used
by other companies and, therefore, comparability may be limited.
(e) Includes Starwood's share of depreciation and amortization
expense of unconsolidated joint ventures.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED BALANCE SHEET INFORMATION
(In millions)
March 31, 2002
Total assets.......................................... $ 12,198
Cash and cash equivalents............................. $ 174
Total debt(a)......................................... $ 5,566
Shares outstanding(b)................................. 202
(a) Excludes Starwood's share of unconsolidated joint venture debt
aggregating approximately $311 million.
(b) Shares outstanding include partnership units and exchangeable
preferred shares.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store (1)
For the Quarter Ended March 31, 2002
UNAUDITED
WORLDWIDE NORTH AMERICA
--------- -------------
2002 2001 Var. 2002 2001 Var.
---- ---- ---- ---- ---- ----
152 Hotels 111 Hotels
------------------------ ------------------------
------------------------ ------------------------
OWNED HOTELS
REVPAR ($) 91.47 109.20 -16.2% 93.94 110.86 -15.3%
ADR ($) 150.25 163.86 -8.3% 152.43 165.24 -7.8%
OCCUPANCY (%)60.9% 66.6% -5.8 61.6% 67.1% -5.5
66 43
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SHERATON
REVPAR ($) 75.47 92.47 -18.4% 79.53 94.66 -16.0%
ADR ($) 129.65 143.34 -9.5% 134.22 146.26 -8.2%
OCCUPANCY (%)58.2% 64.5% -6.3 59.3% 64.7% -5.5
34 23
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WESTIN
REVPAR ($) 103.80 121.97 -14.9% 100.99 118.41 -14.7%
ADR ($) 155.42 166.06 -6.4% 148.63 157.93 -5.9%
OCCUPANCY (%)66.8% 73.4% -6.7 68.0% 75.0% -7.0
11 5
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LUXURY COLLECTION
REVPAR ($) 213.11 247.67 -14.0% 269.74 314.30 -14.2%
ADR ($) 332.73 348.64 -4.6% 403.35 415.75 -3.0%
OCCUPANCY (%)64.0% 71.0% -7.0 66.9% 75.6% -8.7
10 10
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------------------------
W
REVPAR ($) 121.29 147.99 -18.0% 121.29 147.99 -18.0%
ADR ($) 202.46 225.68 -10.3% 202.46 225.68 -10.3%
OCCUPANCY (%)59.9% 65.6% -5.7 59.9% 65.6% -5.7
31 30
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OTHER
REVPAR ($) 62.87 72.45 -13.2% 63.96 73.95 -13.5%
ADR ($) 107.55 119.86 -10.3% 111.80 124.32 -10.1%
OCCUPANCY (%)58.5% 60.4% -2.0 57.2% 59.5% -2.3
INTERNATIONAL(2)
2002 2001 Var.
---- ----
41 Hotels
OWNED HOTELS
REVPAR ($) 83.67 103.94 -19.5%
ADR ($) 142.97 159.36 -10.3%
OCCUPANCY (%) 58.5% 65.2% -6.7
23
SHERATON
REVPAR ($) 66.80 87.78 -23.9%
ADR ($) 119.34 137.03 -12.9%
OCCUPANCY (%) 56.0% 64.1% -8.1
11
WESTIN
REVPAR ($) 115.19 136.26 -15.5%
ADR ($) 185.64 202.37 -8.3%
OCCUPANCY (%) 62.0% 67.3% -5.3
6
LUXURY COLLECTION
REVPAR ($) 140.18 161.53 -13.2%
ADR ($) 232.04 247.96 -6.4%
OCCUPANCY (%) 60.4% 65.1% -4.7
W
REVPAR ($) n/a
ADR ($) n/a
OCCUPANCY (%) n/a
1
OTHER
REVPAR ($) 51.03 55.88 -8.7%
ADR ($) 70.92 78.65 -9.8%
OCCUPANCY (%) 72.0% 71.0% 0.9
(1) Hotel Results exclude 6 hotels under significant renovation or
without comparable results, 7 hotels without prior year
results and 3 hotels sold during 2001 and 2002.
(2) See next page for breakdown by division.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Same Store (1)
For the Quarter Ended March 31, 2002
UNAUDITED
EUROPE LATIN AMERICA
------ -------------
2002 2001 Var. 2002 2001 Var.
---- ---- ---- ---- ---- ----
25 Hotels 13 Hotels
----------------------
----------------------
OWNED HOTELS
REVPAR ($) 101.48 117.68 -13.8% 68.59 96.58 -29.0%
ADR ($) 172.96 186.01 -7.0% 122.06 147.57 -17.3%
OCCUPANCY (%) 58.7% 63.3% -4.6 56.2% 65.4% -9.3
11 10
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SHERATON
REVPAR ($) 79.19 92.19 -14.1% 57.84 85.65 -32.5%
ADR ($) 131.50 143.87 -8.6% 111.61 138.05 -19.2%
OCCUPANCY (%) 60.2% 64.1% -3.9 51.8% 62.0% -10.2
8 3
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----------------------
WESTIN
REVPAR ($) 111.74 129.69 -13.8% 123.09 151.22 -18.6%
ADR ($) 203.41 213.74 -4.8% 157.10 183.31 -14.3%
OCCUPANCY (%) 54.9% 60.7% -5.7 78.4% 82.5% -4.1
6
LUXURY COLLECTION
REVPAR ($) 140.18 161.53 -13.2% n/a
ADR ($) 232.04 247.96 -6.4% n/a
OCCUPANCY (%) 60.4% 65.1% -4.7 n/a
OTHER
REVPAR ($) n/a n/a
ADR ($) n/a n/a
OCCUPANCY (%) n/a n/a
ASIA PACIFIC
2002 2001 Var.
---- ----
3 Hotels
OWNED HOTELS
REVPAR ($) 59.12 70.70 -16.4%
ADR ($) 90.08 97.24 -7.4%
OCCUPANCY (%) 65.6% 72.7% -7.1
2
SHERATON
REVPAR ($) 65.35 82.10 -20.4%
ADR ($) 107.52 110.96 -3.1%
OCCUPANCY (%) 60.8% 74.0% -13.2
WESTIN
REVPAR ($) n/a
ADR ($) n/a
OCCUPANCY (%) n/a
LUXURY COLLECTION
REVPAR ($) n/a
ADR ($) n/a
OCCUPANCY (%) n/a
1
OTHER
REVPAR ($) 51.03 55.88 -8.7%
ADR ($) 70.92 78.65 -9.8%
OCCUPANCY (%) 72.0% 71.0% 0.9
(1) Hotel Results exclude 6 hotels under significant renovation or
without comparable results, 7 hotels without prior year
results and 3 hotels sold during 2001 and 2002.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results - Comparable (1)
For the Quarter Ended March 31, 2002
UNAUDITED ($ thousands)
WORLDWIDE NORTH AMERICA
--------- -------------
2002 2001 Var. 2002 2001 Var.
---- ---- ---- ---- ---- ----
158 Hotels 111 Hotels
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------------------------
OWNED HOTELS
Total REVENUE718,768 854,640 -15.9% 558,919 660,972 -15.4%
Total EBITDA 190,387 271,064 -29.8% 152,402 214,739 -29.0%
MARGIN % 26.5% 31.7% -5.2 27.3% 32.5% -5.2
68 43
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SHERATON
REVENUE 275,280 331,130 -16.9% 192,762 227,093 -15.1%
EBITDA 70,708 100,041 -29.3% 49,341 67,518 -26.9%
MARGIN % 25.7% 30.2% -4.5 25.6% 29.7% -4.1
35 23
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WESTIN
REVENUE 215,184 253,838 -15.2% 166,990 197,268 -15.3%
EBITDA 62,146 85,917 -27.7% 49,487 68,052 -27.3%
MARGIN % 28.9% 33.8% -5.0 29.6% 34.5% -4.9
14 5
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LUXURY COLLECTION
REVENUE 103,969 124,269 -16.3% 79,027 95,679 -17.4%
EBITDA 31,229 44,350 -29.6% 26,938 38,509 -30.0%
MARGIN % 30.0% 35.7% -5.7 34.1% 40.2% -6.2
10 10
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W
REVENUE 54,185 65,759 -17.6% 54,185 65,759 -17.6%
EBITDA 12,720 21,349 -40.4% 12,720 21,349 -40.4%
MARGIN % 23.5% 32.5% -9.0 23.5% 32.5% -9.0
31 30
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OTHER
REVENUE 70,149 79,644 -11.9% 65,954 75,174 -12.3%
EBITDA 13,584 19,407 -30.0% 13,917 19,311 -27.9%
MARGIN % 19.4% 24.4% -5.0 21.1% 25.7% -4.6
INTERNATIONAL(2)
2002 2001 Var.
---- ----
47 Hotels
OWNED HOTELS
Total REVENUE 159,849 193,667 -17.5%
Total EBITDA 37,984 56,324 -32.6%
MARGIN % 23.8% 29.1% -5.3
25
SHERATON
REVENUE 82,518 104,036 -20.7%
EBITDA 21,367 32,523 -34.3%
MARGIN % 25.9% 31.3% -5.4
12
WESTIN
REVENUE 48,194 56,570 -14.8%
EBITDA 12,659 17,865 -29.1%
MARGIN % 26.3% 31.6% -5.3
9
LUXURY COLLECTION
REVENUE 24,942 28,590 -12.8%
EBITDA 4,291 5,841 -26.5%
MARGIN % 17.2% 20.4% -3.2
0
W
REVENUE 0 0 n/a
EBITDA 0 0 n/a
MARGIN % n/a n/a n/a
1
OTHER
REVENUE 4,195 4,471 -6.2%
EBITDA (333) 96 -446.5%
MARGIN % -7.9% 2.1% -10.1
(1) Hotel Results exclude 7 hotels without prior year results and
3 hotels sold during 2001 and 2002.
(2) See next page for breakdown by division.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results -- Comparable (1)
For the Quarter Ended March 31, 2002
UNAUDITED ($ thousands)
EUROPE LATIN AMERICA
------------------------
2002 2001 Var. 2002 2001 Var.
------ ------- ------ ------- ------
30 Hotels 13 Hotels
------------------------
OWNED HOTELS
Total REVENUE 94,411 109,492 -13.8% 51,079 69,106 -26.1%
Total EBITDA 15,957 22,408 -28.8% 19,926 30,961 -35.6%
MARGIN % 16.9% 20.5% -3.6 39.0% 44.8% -5.8
12 10
------------------------
SHERATON
REVENUE 37,774 43,902 -14.0% 34,580 49,536 -30.2%
EBITDA 7,073 9,363 -24.5% 11,861 20,301 -41.6%
MARGIN % 18.7% 21.3% -2.6 34.3% 41.0% -6.7
9 3
------------------------
WESTIN
REVENUE 31,695 37,000 -14.3% 16,499 19,570 -15.7%
EBITDA 4,594 7,205 -36.2% 8,065 10,660 -24.3%
MARGIN % 14.5% 19.5% -5.0 48.9% 54.5% -5.6
9 0
------------------------
LUXURY COLLECTION
REVENUE 24,942 28,590 -12.8% 0 0 n/a
EBITDA 4,291 5,841 -26.5% 0 0 n/a
MARGIN % 17.2% 20.4% -3.2 n/a n/a n/a
(1) Hotel Results exclude 7 hotels without prior year results and 3
hotels sold during 2001 and 2002.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotel Results -- Comparable (1)
For the Quarter Ended March 31, 2002
UNAUDITED ($ thousands)
ASIA PACIFIC
------------
2002 2001 Var.
---- ---- ----
4 Hotels
OWNED HOTELS
Total REVENUE 14,358 15,069 -4.7%
Total EBITDA 2,101 2,956 -28.9%
MARGIN % 14.6% 19.6% -5.0
3
SHERATON
REVENUE 10,163 10,599 -4.1%
EBITDA 2,434 2,860 -14.9%
MARGIN % 23.9% 27.0% -3.0
0
----------------------------
WESTIN
REVENUE 0 0 n/a
EBITDA 0 0 n/a
MARGIN % n/a n/a n/a
0
----------------------------
LUXURY COLLECTION
REVENUE 0 0 n/a
EBITDA 0 0 n/a
MARGIN % n/a n/a n/a
1
OTHER
REVENUE 4,195 4,471 -6.2%
EBITDA (333) 96 -446.5%
MARGIN % -7.9% 2.1% -10.1
(1) Hotel Results exclude 7 hotels without prior year results and 3
hotels sold during 2001 and 2002.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Debt Portfolio Summary
As of March 31, 2002
UNAUDITED (in millions)
Balance % of Avg.
Interest (in Port- Interest Maturity
Debt Terms millions) folio Rate (in years)
------- ------- ------ ------
Floating Rate Debt:
Senior credit facility
Revolving credit
facility LIBOR + 72.5 $ 560 10% 2.60% 0.9
Term loan: tranche I LIBOR + 72.5 775 14% 2.60% 0.8(a)
Term loan: tranche II LIBOR + 125 423 8% 3.13% 0.9(a)
------- ------
1,758 32% 2.73% 0.9
Senior secured notes LIBOR + 275 500 9% 4.63% 0.9(a)
450M Euro facility EURIBOR + 195 392 7% 5.40% 1.2
Mortgages and other Various 296 5% 5.32% 2.3
Interest rate swaps (447) -8% 1.81%
------- ------
Total Floating 2,499 45% 4.00% 1.1
Fixed Rate Debt:
Sheraton Holdings
public debt 1,292(c) 23% 7.08% 9.0
Convertible debt
series A & B 510 9% 2.36% 1.7(d)
Mortgages and other 818 15% 7.36% 9.8
Interest rate swaps 447 8% 6.55%
------- ------
Total Fixed 3,067 55% 6.29% 7.8
------- ------
Total Debt $ 5,566 100% 5.26% 4.2
======= ======
Maturities
(a) (b)
(less than)1 year $ 2,566 $ 1,072
2-3 years 1,120 1,120
4-5 years 561 561
(more than)5 years 1,319 2,813
----------
$ 5,566 $ 5,566
========== ===========
(a) Reflects original maturities, before the effects of the $1.5
billion senior notes sold in April 2002 with two tranches,
maturing in 2007 and 2012, retiring all or a portion of the term
loans and senior secured notes. After giving effect to the $1.5
billion senior notes offering and related termination of certain
floating to fixed interest rate swaps and new fixed to floating
interest rate swaps, the Company's debt at March 31, 2002 was
approximately 56% fixed rate and 44% floating rate with a weighted
average maturity of 6.1 years at 5.47%.
(b) Reflects maturities after giving effect for the $1.5 billion
senior notes sold in April 2002 discussed in (a) above.
(c) Balance consists of outstanding public debt of $1.297 billion, net
of a $5 million fair value adjustment related to $450 million of
fixed to floating interest rate swaps.
(d) Maturity date reflects the earlier of the first put date or the
maturity date of the revolving credit facility which would be used
to refinance the amount put to the Company.
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels under Renovation and/or without Comparable Results
& Other Selected Items
For the Three Months Ended March 31, 2002
Properties under Significant Renovation or Without Comparable
Results during the 1st Quarter 2002
Property Location
W Chicago -- Lake Shore Chicago, IL
Sheraton Royal Denarau Resort Nadi, Fiji
Sheraton Centre Toronto Hotel Toronto, Canada
Hotel Goldener Hirsch Salzburg, Austria
Hotel Bristol Vienna, Austria
Hotel Imperial Vienna, Austria
Westin Dublin Hotel Dublin, Ireland
W New York -- Times Square New York, NY
Hotel Des Bains Venice Lido, Italy
Hotel Cala di Volpe Costa Smeralda, Italy
Hotel Pitrizza Costa Smeralda, Italy
Hotel Romazzino Costa Smeralda, Italy
Westin Excelsior Venice Lido Venice Lido, Italy
Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents $ 174
First quarter dividend per share $ --
Capital expenditures $ 58
Debt level $ 5,566
Shares Repurchased --
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Summary of Portfolio by Properties & Rooms
As of March 31, 2002
PROPERTIES
Sheraton Westin Lux.Col./ Four Points
St. Regis
Owned, leased & consolidated
JVs 67 37 18 7
Unconsolidated joint ventures 28 9 3 2
Equity interest properties 95 46 21 9
Managed (third-party owned) 135 37 24 20
Franchised, represented &
referral 154 26 13 114
Total 384 109 58 143
========================================
W Other Total
Owned, leased & consolidated
JVs 12 24 165
Unconsolidated joint ventures - 1 43
Equity interest properties 12 25 208
Managed (third-party owned) 4 5 225
Franchised, represented & referral - 1 308
Total 16 31 741
=======================================
ROOMS
Sheraton Westin Lux.Col./ Four Points
St. Regis
Owned, leased & consolidated
JVs 26,726 14,101 3,729 1,784
Unconsolidated joint
ventures 11,285 3,763 671 328
Equity interest properties 38,011 17,864 4,400 2,112
Managed (third-party owned) 45,492 18,279 5,376 3,734
Franchised, represented &
referral 45,782 8,599 1,815 20,827
Total 129,285 44,742 11,591 26,673
=========================================
W Other Total
Owned, leased & consolidated
JVs 4,391 5,885 56,616
Unconsolidated joint ventures - 132 16,179
Equity interest properties 4,391 6,017 72,795
Managed (third-party owned) 596 896 74,373
Franchised, represented &
referral - 491 77,514
Total 4,987 7,404 224,682
========================================