Starwood Reports First Quarter 2011 Results

April 28, 2011

Worldwide System-wide REVPAR for Same-Store Hotels increased 10.4% (9.1% in constant dollars) compared to 2010. System-wide REVPAR for Same-Store Hotels in North America increased 11.1% (10.4% in constant dollars).

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported first quarter 2011 financial results.

“We were able to exceed expectations despite turmoil in North Africa and the Middle East and the devastating earthquake in Japan. This is thanks to our laser-focus on growing faster than the market and flowing this outperformance down to the bottom-line.”

First Quarter 2011 Highlights

  • Excluding special items, EPS from continuing operations was $0.30. Including special items, EPS from continuing operations was $0.15.
  • Adjusted EBITDA was $208 million.
  • Excluding special items, income from continuing operations was $58 million. Including special items, income from continuing operations was $29 million.
  • Worldwide System-wide REVPAR for Same-Store Hotels increased 10.4% (9.1% in constant dollars) compared to 2010. System-wide REVPAR for Same-Store Hotels in North America increased 11.1% (10.4% in constant dollars).
  • Management fees, franchise fees and other income increased 15.7% compared to 2010.
  • Worldwide Same-Store company-operated gross operating profit margins increased approximately 90 basis points compared to 2010. Gross operating profits were negatively impacted by events in the Middle East, North Africa and Japan.
  • Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 11.9% (10.2% in constant dollars) compared to 2010. REVPAR for Starwood branded Same-Store Owned Hotels in North America increased 9.6% (7.9% in constant dollars).
  • Margins at Starwood branded Same-Store Owned Hotels Worldwide increased approximately 90 basis points compared to 2010. Excluding Latin America, which was impacted by the increasing gap between inflation and currency devaluation, margins increased over 210 basis points.
  • Earnings from our vacation ownership and residential business increased $10 million compared to 2010.
  • During the quarter, the Company signed 29 hotel management and franchise contracts representing approximately 8,700 rooms and opened 21 hotels and resorts with approximately 5,200 rooms.

First Quarter 2011 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the first quarter of 2011 of $0.15 per share compared to $0.16 in the first quarter of 2010. Excluding special items, EPS from continuing operations was $0.30 for the first quarter of 2011 compared to $0.13 in the first quarter of 2010. Special items in the first quarter of 2011, which totaled $33 million (pre-tax), primarily relate to a charge associated with the Company’s minority investment in a hotel in Tokyo, Japan following the earthquake in March 2011. Excluding special items, the effective income tax rate in the first quarter of 2011 was 21.0%, compared to 14.5% in the first quarter of 2010.

Income from continuing operations was $29 million in the first quarter of 2011 compared to $30 million in the first quarter of 2010. Excluding special items, income from continuing operations was $58 million in the first quarter of 2011 compared to $24 million in the first quarter of 2010.

Net income was $28 million and $0.14 per share in the first quarter of 2011 compared to $30 million and $0.16 per share in the first quarter of 2010.

Frits van Paasschen, CEO said, “We were able to exceed expectations despite turmoil in North Africa and the Middle East and the devastating earthquake in Japan. This is thanks to our laser-focus on growing faster than the market and flowing this outperformance down to the bottom-line.”

“The outlook for the rest of the year looks promising as we view the events of the past few months as not having derailed the overall global economic recovery. For example, our group and transient bookings remain robust. As such, we remain cautiously confident for 2011 and are bullish about our long-term prospects.”

First Quarter 2011 Operating Results

Management and Franchise Revenues

Worldwide System-wide REVPAR for Same-Store Hotels increased 10.4% (9.1% in constant dollars) compared to the first quarter of 2010. International System-wide REVPAR for Same-Store Hotels increased 9.5% (7.5% in constant dollars).

Worldwide System-wide REVPAR for Same-Store changes by region:

        REVPAR
Region       Reported   Constant dollars
North America       11.1 %   10.4 %
Europe       7.0 %   7.8 %
Asia Pacific       17.7 %   11.3 %
Africa and the Middle East       (4.2 )%   (3.1 )%
Latin America       16.7 %   16.7 %

Increases in REVPAR for Worldwide System-wide Same-Store hotels by brand:

        REVPAR  
Brand       Reported   Constant dollars  
St. Regis/Luxury Collection       13.5 %   12.6 %  
W Hotels       16.7 %   16.7 %  
Westin       10.8 %   9.3 %  
Sheraton       8.5 %   7.1 %  
Le Méridien       8.0 %   7.2 %  
Four Points by Sheraton       12.3 %   9.7 %  
Aloft       24.9 %   24.6 %  

Worldwide Same-Store company-operated gross operating profit margins increased approximately 90 basis points in the first quarter. International gross operating profit margins for Same-Store company-operated properties were flat, negatively impacted by the political unrest in the Middle East and North Africa, as well as the earthquake in Japan. North American Same-Store company-operated gross operating profit margins increased approximately 200 basis points, driven by REVPAR increases and cost controls.

Management fees, franchise fees and other income were $177 million, up $24 million, or 15.7% from the first quarter of 2010. Management fees increased 11.5% to $97 million and franchise fees increased 22.9% to $43 million.

During the first quarter of 2011, the Company signed 29 hotel management and franchise contracts, representing approximately 8,700 rooms, of which 19 are new builds and 10 are conversions from other brands. At March 31, 2011, the Company had approximately 350 hotels in the active pipeline representing approximately 85,000 rooms.

During the first quarter of 2011, 21 new hotels and resorts (representing approximately 5,200 rooms) entered the system, including the W London Leicester Square (England, 192 rooms), Sheraton Shanghai Hotel, Hongkou (China, 471 rooms), W Bali (Indonesia, 237 rooms), The Westin Phoenix Downtown (Arizona, 242 rooms), and The Liberty Hotel, a Luxury Collection Hotel (Boston, Massachusetts, 298 rooms). Eleven properties (representing approximately 3,400 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 11.9% (10.2% in constant dollars) in the first quarter of 2011 when compared to 2010. REVPAR at Starwood branded Same-Store Owned Hotels in North America increased 9.6% (7.9% in constant dollars). Internationally, Starwood branded Same-Store Owned Hotel REVPAR increased 14.9% (13.3% in constant dollars).

Revenues at Starwood branded Same-Store Owned Hotels in North America increased 6.5% while costs and expenses increased 4.6% when compared to 2010. Margins at these hotels increased approximately 150 basis points.

Revenues at Starwood branded Same-Store Owned Hotels Worldwide increased 8.5% (6.9% in constant dollars) while costs and expenses increased 7.4% (6.3% in constant dollars) when compared to 2010. Margins at these hotels increased approximately 90 basis points and were negatively impacted by approximately 120 basis points due to continued increase in the gap between inflation and currency devaluation at the Company’s Latin America hotels.

Revenues at owned, leased and consolidated joint venture hotels were $410 million, compared to $381 million in 2010. Expenses at owned, leased and consolidated joint venture hotels were $361 million compared to $329 million in 2010. First quarter results were negatively impacted by pre-opening costs at the new leased W London Leicester Square, the effect of the earthquake at the new leased St. Regis Osaka, one renovation and one asset sale.

Vacation Ownership

Total vacation ownership revenues increased 12.2% to $147 million compared to 2010. Originated contract sales of vacation ownership intervals increased 6.5% primarily due to improved sales performance on existing owner channels and increased tour flow from new buyer preview packages. The number of contracts signed increased 7.8% when compared to 2010 and the average price per vacation ownership unit sold decreased 1.4% to approximately $16,500, driven by inventory mix.

Selling, General, Administrative and Other

Selling, general, administrative and other expenses increased 5.3% to $80 million compared to $76 million in 2010.

Capital

Gross capital spending during the quarter included approximately $40 million of maintenance capital and $33 million of development capital. Net investment spending on vacation ownership interest (“VOI”) and residential inventory was $16 million, primarily related to the St. Regis Bal Harbour project.

Balance Sheet

At March 31, 2011, the Company had gross debt of $2.853 billion, excluding $459 million of debt associated with securitized vacation ownership notes receivable. Additionally, the Company had cash and cash equivalents of $732 million (including $57 million of restricted cash), and net debt of $2.121 billion, compared to net debt of $2.060 billion as of December 31, 2010. Net debt at March 31, 2011 including debt and restricted cash ($21 million) associated with securitized vacation ownership notes receivables was $2.559 billion.

At March 31, 2011, debt was approximately 78% fixed rate and 22% floating rate and its weighted average maturity was 4.0 years with a weighted average interest rate of 6.80% excluding the securitized debt. The Company had cash (including current restricted cash) and availability under the domestic and international revolving credit facility of approximately $2.091 billion.

On April 6, 2011, the Company completed the sale of one wholly-owned hotel for cash proceeds of approximately $110 million. This hotel was sold subject to a long-term management contract.

Outlook

For the three months ended June 30, 2011:

  • Adjusted EBITDA is expected to be approximately $245 million to $255 million, assuming:
    • REVPAR increases at Same-Store Company Operated Hotels Worldwide of 7% to 9% in constant dollars (approximately 200 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 400 basis points higher in dollars at current exchange rates).
    • Management fees, franchise fees and other income increase approximately 10% to 12%, negatively impacted by approximately 200 basis points by Japan and North Africa.
    • Earnings from our vacation ownership and residential business are flat.
  • Depreciation and amortization is expected to be approximately $79 million.
  • Interest expense is expected to be approximately $58 million.
  • Income from continuing operations is expected to be approximately $82 million to $90 million, reflecting an effective tax rate of approximately 24%.

  • Assuming all of the above, EPS is expected to be approximately $0.42 to $0.46.

For the Full Year 2011:

Macro-economic and geo-political environments remain uncertain. 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, negatively impacted by Japan, North Africa and Mexico:

  • 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 8% to 10% in constant dollars (approximately 200 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 approximately 10% to 12%, negatively impacted by approximately 200 basis points by Japan and North Africa.
    • Earnings from our vacation ownership and residential business of approximately $130 million to $140 million.
    • Selling, general and administrative expenses increase 4% to 5%.
  • Depreciation and amortization is expected to be approximately $320 million.
  • Interest expense is expected to be approximately $240 million and cash taxes will be approximately $80 million.
  • Full year effective tax rate is expected to be approximately 25%.
  • Assuming all of the above, EPS is expected to be approximately $1.60 to $1.70.
  • 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.

Special Items

The Company’s special items netted to a charge of $33 million ($29 million after-tax) in the first quarter of 2011 compared to a benefit of $1 million ($6 million after-tax) in the same period of 2010.

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
      March 31,
      2011   2010
           
Income from continuing operations before special items     $ 58     $ 24  
EPS before special items     $ 0.30     $

0.13

 
           
Special Items          
(Loss) gain on asset dispositions and impairments, net (a)       (33 )     1  
Total special items – pre-tax       (33 )     1  
Income tax benefit for special items (b)       —       5  
Income tax benefit associated with dispositions (c)       4       —  
Total special items – after-tax       (29 )     6  
           
Income from continuing operations     $ 29     $ 30  
EPS including special items     $ 0.15     $ 0.16  
(a) During the three months ended March 31, 2011, the net loss primarily relates to an impairment of a minority investment in a joint venture hotel located in Japan.
   
  During the three months ended March 31, 2010, the net gain relates to sales of two non-core assets partially offset by losses on the termination of two management contracts.
   
(b) During three months ended March 31, 2010, the benefit primarily relates to the adjustment of deferred tax assets associated with prior year impairment charges, due to a change in a foreign tax rate.
   
(c) During the three months ended March 31, 2011, the benefit relates to the reversal of income tax reserves associated with dispositions in prior years.

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 first quarter financial results at 10:30 a.m. (EDT) 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. (EDT) today through May 5, 2011 at 12:00 midnight (EDT) on both the Company’s website and via telephone replay at (706) 645-9291 (pass code #23166357).

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 represent 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 earnings from vacation ownership and residential represents operating income before depreciation expense.

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 1,051 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, including reconciliations of non-GAAP financial measures to GAAP financial measures, please visit www.starwoodhotels.com or contact Investor Relations at (914) 640-8165.

** 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, natural disasters, 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
March 31,
        2011   2010  

%
Variance
Revenues                
Owned, leased and consolidated joint venture hotels       $ 410     $ 381     7.6  
Vacation ownership and residential sales and services         153       133     15.0  
Management fees, franchise fees and other income         177       153     15.7  
Other revenues from managed and franchised properties (a)         555       520     6.7  
          1,295       1,187     9.1  
Costs and Expenses                
Owned, leased and consolidated joint venture hotels         361       329     (9.7 )
Vacation ownership and residential         111       101     (9.9 )
Selling, general, administrative and other         80       76     (5.3 )
Depreciation         60       66     9.1  
Amortization         8       10     20.0  
Other expenses from managed and franchised properties (a)         555       520     (6.7 )
          1,175       1,102     (6.6 )
Operating income         120       85     41.2  
Equity earnings and gains and (losses) from unconsolidated ventures, net         4       3     33.3  
Interest expense, net of interest income of $1 and $1         (54 )     (62 )   12.9  
(Loss) gain on asset dispositions and impairments, net         (33 )     1     n/m  
Income from continuing operations before taxes         37       27     37.0  
Income tax (expense) benefit         (10 )     1     n/m  
Income from continuing operations         27       28     (3.6 )
Discontinued Operations:        

 

          
Net loss on dispositions, net of tax        

(1

 )     —     n/m  
Net income         26       28     (7.1 )
Net loss attributable to noncontrolling interests         2       2     —  
Net income attributable to Starwood       $ 28     $ 30     (6.7 )
Earnings (Loss) Per Share – Basic                
Continuing operations       $ 0.16     $ 0.16     —  
Discontinued operations         (0.01 )     —     n/m  
Net income       $ 0.15     $ 0.16     (6.3 )
Earnings (Loss) Per Share – Diluted                
Continuing operations       $ 0.15     $ 0.16     (6.3 )
Discontinued operations         (0.01 )     —     n/m  
Net income       $ 0.14     $ 0.16     (12.5 )
Amounts attributable to Starwood’s Common Shareholders                
Continuing operations       $ 29     $ 30     (3.3 )
Discontinued operations         (1 )     —     n/m  
Net income       $ 28     $ 30     (6.7 )
                 
Weighted average number of shares         187       181      
Weighted average number of shares assuming dilution         194       187      
(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)
           
      March 31,

2011

   December 31,

2010
      (unaudited)    
Assets          
Current assets:          
Cash and cash equivalents     $ 675     $ 753  
Restricted cash       73       53  
Accounts receivable, net of allowance for doubtful accounts of $41 and $45       558       513  
Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $9 and $10      

58

      

59

  
Inventories       819       802  
Prepaid expenses and other       176       126  
Total current assets       2,359       2,306  
Investments       291       312  
Plant, property and equipment, net       3,273       3,323  
Assets held for sale       100       —  
Goodwill and intangible assets, net       2,068       2,067  
Deferred tax assets       988       979  
Other assets (a)       399       381  
Securitized vacation ownership notes receivable       381       408  
      $ 9,859     $ 9,776  
Liabilities and Stockholders’ Equity          
Current liabilities:          
Short-term borrowings and current maturities of long-term debt (b)     $ 8     $ 9  
Current maturities of long-term securitized vacation ownership debt       126       127  
Accounts payable       140       138  
Accrued expenses       1,185       1,104  
Accrued salaries, wages and benefits       314       410  
Accrued taxes and other       354       373  
Total current liabilities       2,127       2,161  
Long-term debt (b)       2,845       2,848  
Long-term securitized vacation ownership debt       333       367  
Deferred income taxes       29       28  
Other liabilities       1,905       1,886  
        7,239       7,290  
Commitments and contingencies          
Stockholders’ equity:          
Common stock; $0.01 par value; authorized 1,000,000,000 shares; outstanding 195,091,721 and 192,970,437 shares at March 31, 2011 and December 31, 2010, respectively       2       2  
Additional paid-in capital       861       805  
Accumulated other comprehensive loss       (232 )     (283 )
Retained earnings       1,975       1,947  
Total Starwood stockholders’ equity       2,606       2,471  
Noncontrolling interest       14       15  
Total equity       2,620       2,486  
      $ 9,859     $ 9,776  
(a) Includes restricted cash of $5 million and $10 million at March 31, 2011 and December 31, 2010, respectively.
(b) Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $430 million and $434 million at March 31, 2011 and December 31, 2010, respectively.
 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Historical Data
(In millions)
       
     

Three Months Ended
March 31,
     

2011

  

2010

  

%
Variance
               
Reconciliation of Net Income to EBITDA and Adjusted EBITDA              
Net income     $

28

 

   $ 30     (6.7 )
Interest expense (a)       59       66     (10.6 )
Income tax (benefit) expense (b)       11       (1 )   n/m  
Depreciation (c)       68       74     (8.1 )
Amortization (d)       9       11     (18.2 )
EBITDA       175       180     (2.8 )
Loss (gain) on asset dispositions and impairments, net       33       (1 )   n/m  
Adjusted EBITDA     $ 208     $ 179     16.2  
(a) Includes $4 million and $3 million of Starwood’s share of interest expense of unconsolidated joint ventures for the three months ended March 31, 2011 and 2010, respectively.
(b) Includes $1 million and $0 million of tax expense recorded in discontinued operations for the three months ended March 31, 2011 and 2010, respectively.
(c) Includes $8 million of Starwood’s share of depreciation expense of unconsolidated joint ventures for the three months ended March 31, 2011 and 2010.
(d) Includes $1 million of Starwood’s share of amortization expense of unconsolidated joint ventures for the three months ended March 31, 2011 and 2010.
 
 

Non-GAAP to GAAP Reconciliations – Branded Same-Store Owned Hotels Worldwide
(In millions)
         
       

Three Months Ended
March 31, 2011
       

$ Change

  

% Variance
Revenue            
Revenue increase (GAAP)       $ 25     8.5 %
Impact of changes in foreign exchange rates         (5 )   (1.6 )%
Revenue increase in constant dollars       $ 20     6.9 %
             
Expense            
Expense increase (GAAP)       $ 19     7.4 %
Impact of changes in foreign exchange rates         (3 )   (1.1 )%
Expense increase in constant dollars       $ 16     6.3 %
 
 

Non-GAAP to GAAP Reconciliation – Earnings from Vacation Ownership and Residential Business
(In millions)
         
       

Three Months Ended
March 31,
       

2011

  

2010

   $

Variance
                 
Earnings from vacation ownership and residential       $ 42     $ 32    

$

10

 
Depreciation expense         (7 )     (8 )     1  
Operating income from vacation ownership and residential       $ 35     $ 24     $ 11  
 
 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Future Performance
(In millions, except per share data)

Low Case

Three Months Ended
June 30, 2011

    

 

    

Year Ended
December 31, 2011
             
$

82

 

     Net income     $ 282  
  58       Interest expense       240  
  26       Income tax expense       100  
  79       Depreciation and amortization       320  
  245       EBITDA       942  
  —       Loss (gain) on asset dispositions and impairments, net       33  
$ 245       Adjusted EBITDA     $ 975  
             

Three Months Ended
June 30, 2011

          

Year Ended
December 31, 2011
$ 82       Income from continuing operations before special items     $ 312  
$ 0.42       EPS before special items be     $ 1.60  
             
      Special Items      
  —       (Loss) gain on asset dispositions and impairments, net       (33 )
  —       Total special items – pre-tax       (33 )
  —       Income tax benefit associated with dispositions .       4  
  —       Total special items – after-tax       (29 )
             
$ 82       Income from continuing operations     $ 283  
$ 0.42       EPS including special items     $ 1.45  
             
     

High Case

      

Three Months Ended
June 30, 2011

    

 

    

Year Ended
December 31, 2011
$ 90       Net income     $ 301  
  58       Interest expense       240  
  28       Income tax expense       106  
  79       Depreciation and amortization       320  
  255       EBITDA       967  
  —       Loss (gain) on asset dispositions and impairments, net       33  
$ 255       Adjusted EBITDA     $ 1,000  
             

Three Months Ended
June 30, 2011

          

Year Ended
December 31, 2011
$ 90       Income from continuing operations before special items     $ 331  
$ 0.46       EPS before special items be     $ 1.70  
             
      Special Items      
  —       (Loss) gain on asset dispositions and impairments, net       (33 )
  —       Total special items – pre-tax       (33 )
  —       Income tax benefit associated with dispositions       4  
  —       Total special items – after-tax       (29 )
             
$ 90       Income from continuing operations     $ 302  
$ 0.46       EPS including special items     $ 1.55  
                     
     
     

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations –
Future Earnings from Vacation Ownership and Residential Business
(In millions)
     
   

Three Months Ended
June 30,
   

2011

  

2010

   $

Variance
             
Earnings from vacation ownership and residential   $ 34     $ 34     $

—

 
Depreciation expense     (6 )     (7 )     1  
Operating income from vacation ownership and residential   $ 28     $ 27     $ 1  
         
 

Non-GAAP to GAAP Reconciliations –
Future Earnings from Vacation Ownership and Residential Business
(In millions)

Low Case

Three Months Ended
June 30, 2011

      

Year Ended
December 31, 2011
               
  $ 34       Earnings from vacation ownership and residential     $ 130  
    (6 )     Depreciation expense       (24 )
  $ 28       Operating income from vacation ownership and residential     $ 106  
         

Three Months Ended
June 30, 2011

   High Case  

Year Ended
December 31, 2011
               
  $ 34       Earnings from vacation ownership and residential     $ 140  
    (6 )     Depreciation expense       (24 )
  $ 28       Operating income from vacation ownership and residential     $ 116  
                       
 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses
(In millions)
     
    Three Months Ended
    March 31,

Same-Store Owned Hotels
Worldwide

   2011   2010  

%
Variance
             
Revenue            
Same-Store Owned Hotels (a)   $

351

 

   $

326

 

   7.7  
Hotels Sold or Closed in 2011 and 2010     —       8     (100.0 )
Hotels Without Comparable Results     53       47     12.8  
Other ancillary hotel operations     6       —     n/m  
Total Owned, Leased and Consolidated Joint Venture Hotels Revenue   $ 410     $ 381     7.6  
             
Costs and Expenses            
Same-Store Owned Hotels (a)   $ 306     $ 287     (6.6 )
Hotels Sold or Closed in 2011 and 2010     —       6     100.0  
Hotels Without Comparable Results     49       36     (36.1 )
Other ancillary hotel operations     6       —     n/m  
Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses   $ 361     $ 329     (9.7 )
             
             

 

  

Three Months Ended

March 31,

Same-Store Owned Hotels
North America

   2011   2010  

%
Variance
             
Revenue            
Same-Store Owned Hotels (a)   $ 210     $ 199     5.5  
Hotels Sold or Closed in 2011 and 2010     —       8     (100.0 )
Hotels Without Comparable Results     44       45     (2.2 )
Other ancillary hotel operations     6       —     n/m  
Total Owned, Leased and Consolidated Joint Venture Hotels Revenue   $ 260     $ 252     3.2  
             
Costs and Expenses            
Same-Store Owned Hotels (a)   $ 186     $ 179     (3.9 )
Hotels Sold or Closed in 2011 and 2010     —       6     100.0  
Hotels Without Comparable Results     35       34     (2.9 )
Other ancillary hotel operations     6       —     n/m  
Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses   $ 227     $ 219     (3.7 )
             
             

 

  

Three Months Ended
March 31,

Same-Store Owned Hotels
International

  

2011

  

2010

  

%
Variance
             
Revenue            
Same-Store Owned Hotels (a)   $ 141     $ 127     11.0  
Hotels Sold or Closed in 2011 and 2010     —       —     —  
Hotels Without Comparable Results     9       2     n/m  
Other ancillary hotel operations     —       —     —  
Total Owned, Leased and Consolidated Joint Venture Hotels Revenue   $ 150     $ 129     16.3  
             
Costs and Expenses            
Same-Store Owned Hotels (a)   $ 120     $ 108     (11.1 )
Hotels Sold or Closed in 2011 and 2010     —       —     —  
Hotels Without Comparable Results     14       2     n/m  
Other ancillary hotel operations     —       —     —  
Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses   $ 134     $ 110     (21.8 )
(a) Same-Store Owned Hotel Results exclude two hotels sold and nine hotels without comparable results.

n/m = not meaningful

   
Starwood Hotels & Resorts Worldwide, Inc.
Systemwide(1) Statistics – Same Store
For the Three Months Ended March 31,
UNAUDITED
                                       
      Systemwide – Worldwide   Systemwide – North America   Systemwide – International
      2011   2010   Variance   2011   2010   Variance   2011   2010   Variance
                                       
                                       
TOTAL HOTELS                                    
  REVPAR ($)   105.28   95.35   10.4%   99.73   89.75   11.1%   113.08   103.24   9.5%
  ADR ($)   165.22   156.56   5.5%   153.31   146.58   4.6%   182.87   170.77   7.1%
  Occupancy (%)   63.7%   60.9%   2.8   65.1%   61.2%   3.9   61.8%   60.5%   1.3
                                       
                                       
SHERATON                                    
  REVPAR ($)   89.93   82.90   8.5%   83.26   75.65   10.1%   98.70   92.43   6.8%
  ADR ($)   145.31   137.48   5.7%   132.08   126.42   4.5%   163.47   151.76   7.7%
  Occupancy (%)   61.9%   60.3%   1.6   63.0%   59.8%   3.2   60.4%   60.9%   (0.5)
                                       
                                       
WESTIN                                      
  REVPAR ($)   120.23   108.53   10.8%   116.75   105.98   10.2%   130.66   116.16   12.5%
  ADR ($)   179.64   170.42   5.4%   171.89   164.46   4.5%   204.24   189.09   8.0%
  Occupancy (%)   66.9%   63.7%   3.2   67.9%   64.4%   3.5   64.0%   61.4%   2.6
                                       
                                       
ST. REGIS/LUXURY COLLECTION                                    
  REVPAR ($)   172.38   151.90   13.5%   194.70   168.46   15.6%   161.82   144.03   12.4%
  ADR ($)   277.23   259.84   6.7%   289.62   273.01   6.1%   270.65   253.06   7.0%
  Occupancy (%)   62.2%   58.5%   3.7   67.2%   61.7%   5.5   59.8%   56.9%   2.9
                                       
                                       
LE MERIDIEN                                    
  REVPAR ($)   119.01   110.15   8.0%   162.32   142.16   14.2%   114.43   106.76   7.2%
  ADR ($)   183.95   177.87   3.4%   213.12   194.48   9.6%   180.25   175.76   2.6%
  Occupancy (%)   64.7%   61.9%   2.8   76.2%   73.1%   3.1   63.5%   60.7%   2.8
                                       
                                       
W                                      
  REVPAR ($)   180.15   154.31   16.7%   170.77   148.96   14.6%   213.95   173.66   23.2%
  ADR ($)   251.53   236.18   6.5%   236.81   223.32   6.0%   306.30   287.47   6.6%
  Occupancy (%)   71.6%   65.3%   6.3   72.1%   66.7%   5.4   69.9%   60.4%   9.5
                                       
                                       
FOUR POINTS                                    
  REVPAR ($)   69.49   61.89   12.3%   62.78   57.18   9.8%   82.13   70.72   16.1%
  ADR ($)   110.47   105.40   4.8%   100.53   98.83   1.7%   128.77   117.20   9.9%
  Occupancy (%)   62.9%   58.7%   4.2   62.4%   57.9%   4.5   63.8%   60.3%   3.5
                                       
                                       
ALOFT                                      
  REVPAR ($)   67.41   53.99   24.9%   65.92   52.03   26.7%            
  ADR ($)   109.01   102.43   6.4%   107.14   97.81   9.5%            
  Occupancy (%)   61.8%   52.7%   9.1   61.5%   53.2%   8.3            
                                       
                                       
                                       

(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 March 31,
UNAUDITED
                           
      Systemwide (1)   Company Operated (2)
      2011   2010   Variance   2011   2010   Variance
                           
                           
TOTAL WORLDWIDE                        
  REVPAR ($)   105.28   95.35   10.4%   119.69   108.19   10.6%
  ADR ($)   165.22   156.56   5.5%   184.08   173.95   5.8%
  Occupancy (%)   63.7%   60.9%   2.8   65.0%   62.2%   2.8
                           
                           
NORTH AMERICA                        
  REVPAR ($)   99.73   89.75   11.1%   123.11   110.09   11.8%
  ADR ($)   153.31   146.58   4.6%   180.36   171.61   5.1%
  Occupancy (%)   65.1%   61.2%   3.9   68.3%   64.2%   4.1
                           
                           
EUROPE                          
  REVPAR ($)   113.44   106.02   7.0%   125.04   117.77   6.2%
  ADR ($)   199.04   190.97   4.2%   212.91   207.63   2.5%
  Occupancy (%)   57.0%   55.5%   1.5   58.7%   56.7%   2.0
                           
                           
AFRICA & MIDDLE EAST                        
  REVPAR ($)   127.95   133.62   (4.2%)   128.84   134.69   (4.3%)
  ADR ($)   199.77   190.09   5.1%   202.10   191.94   5.3%
  Occupancy (%)   64.0%   70.3%   (6.3)   63.8%   70.2%   (6.4)
                           
                           
ASIA PACIFIC                        
  REVPAR ($)   111.23   94.53   17.7%   109.75   91.33   20.2%
  ADR ($)   173.09   155.49   11.3%   172.63   154.11   12.0%
  Occupancy (%)   64.3%   60.8%   3.5   63.6%   59.3%   4.3
                           
                           
LATIN AMERICA                        
  REVPAR ($)   95.75   82.05   16.7%   101.08   85.43   18.3%
  ADR ($)   154.16   143.40   7.5%   161.89   154.57   4.7%
  Occupancy (%)   62.1%   57.2%   4.9   62.4%   55.3%   7.1
                           
                           
                           

(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 March 31,
UNAUDITED
                                       
                                       
      WORLDWIDE   NORTH AMERICA   INTERNATIONAL
      2011   2010   Variance   2011   2010   Variance   2011   2010   Variance
                                       
TOTAL HOTELS   54 Hotels   27 Hotels   27 Hotels
  REVPAR ($)   132.37   119.37   10.9%   134.14   123.81   8.3%   129.82   112.98   14.9%
  ADR ($)   197.33   191.11   3.3%   192.81   186.55   3.4%   204.46   198.77   2.9%
  Occupancy (%)   67.1%   62.5%   4.6   69.6%   66.4%   3.2   63.5%   56.8%   6.7
                                       
  Total Revenue   351,275   326,078   7.7%   210,074   198,986   5.6%   141,201   127,092   11.1%
  Total Expenses   305,803   287,229   (6.5%)   186,150   179,470   (3.7%)   119,653   107,759   (11.0%)
                                       
                                       
                                       
                                       
BRANDED HOTELS   47 Hotels   20 Hotels   27 Hotels
  REVPAR ($)   140.61   125.68   11.9%   150.49   137.28   9.6%   129.82   112.98   14.9%
  ADR ($)   203.70   195.49   4.2%   203.10   193.10   5.2%   204.46   198.77   2.9%
  Occupancy (%)   69.0%   64.3%   4.7   74.1%   71.1%   3.0   63.5%   56.8%   6.7
                                       
  Total Revenue   320,535   295,526   8.5%   179,333   168,434   6.5%   141,201   127,092   11.1%
  Total Expenses   271,765   253,151   (7.4%)   152,112   145,392   (4.6%)   119,653   107,759   (11.0%)
                                       
                                       
                                       

(1) Hotel Results exclude 2 hotels sold and 9 hotels without comparable results during 2011 & 2010

* Revenues & Expenses above are represented in ‘000’s
 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended March 31,
UNAUDITED ($ millions)
                   
                   
      Worldwide
      2011   2010   $ Variance   % Variance
                   
Management Fees:                
Base Fees   67   60   7   11.7%
Incentive Fees   30   27   3   11.1%
Total Management Fees   97   87   10   11.5%
                   
Franchise Fees   43   35   8   22.9%
                   
Total Management & Franchise Fees   140   122   18   14.8%
                   
Other Management & Franchise Revenues (1)   32   29   3   10.3%
                   
Total Management & Franchise Revenues   172   151   21   13.9%
                   
Other   5   2   3   n/m
                   
Management Fees, Franchise Fees & Other Income   177   153   24   15.7%
                   
                   
(1) Other Management and Franchise Revenues includes the amortization of deferred gains of approximately $21 million in 2011 and $20 million in 2010 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 March 31,
UNAUDITED ($ millions)
                 
                 
                 
    2011   2010   $ Variance   % Variance
                 
Originated Sales Revenues (1) — Vacation Ownership Sales   82     77     5     6.5 %
Other Sales and Services Revenues (2)   66     62     4     6.5 %
Deferred Revenues — Percentage of Completion   –     –     –     0.0 %
Deferred Revenues — Other (3)   (1 )   (8 )   7     87.5 %
Vacation Ownership Sales and Services Revenues   147     131     16     12.2 %
Residential Sales and Services Revenues   6     2     4     n/m  
Total Vacation Ownership & Residential Sales and Services Revenues   153     133     20     15.0 %
                 
Originated Sales Expenses (4) — Vacation Ownership Sales   58     49     (9 )   (18.4 %)
Other Expenses (5)   48     45     (3 )   (6.7 %)
Deferred Expenses — Percentage of Completion   –     –     –     0.0 %
Deferred Expenses — Other   3     6     3     50.0 %
Vacation Ownership Expenses   109     100     (9 )   (9.0 %)
Residential Expenses   2     1     (1 )   (100.0 %)
Total Vacation Ownership & Residential Expenses   111     101     (10 )   (9.9 %)
                 
                 
(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.
Hotels Without Comparable Results & Other Selected Items
As of March 31, 2011
UNAUDITED ($ millions)
                                 
Properties without comparable results in 2011 and 2010:       Revenues and Expenses Associated with Assets Sold in 2011 and 2010: (1)
                                 

Property

  

Location

                            
Sheraton Steamboat Resort   Steamboat Springs, CO           Q1   Q2   Q3   Q4   Full Year
Westin Peachtree Plaza   Atlanta, GA       Hotels Sold in 2010:                    
W New Orleans – French Quarter   New Orleans, LA       2010                    
The Westin St. John Resort   St. John, Virgin Islands       Revenues   $ 8   $ 3   $ 7   $ –   $ 18
St. Regis Osaka   Osaka, Japan       Expenses (excluding depreciation)   $ 6   $ 4   $ 5   $ –   $ 15
W London Leicester Square   London, England                            
Grand Hotel, Florence   Florence, Italy       Hotels Sold in 2011:                    
Sheraton Kauai   Koloa, HI       2011                    
The Westin Gaslamp Quarter   San Diego, CA       Revenues   $ –   $ –   $ –   $ –   $ –
            Expenses (excluding depreciation)   $ –   $ –   $ –   $ –   $ –
Properties sold in 2011 and 2010:                                
            2010                    

Property

  

Location

       Revenues   $ –   $ –   $ –   $ –   $ –
W New York – The Court & Tuscany   New York, NY       Expenses (excluding depreciation)   $ –   $ –   $ –   $ –   $ –
St. Regis Aspen   Aspen, CO                            
            (1) Results consist of 1 hotel sold in 2010. These amounts are included in the revenues and expenses from owned, leased and consolidated joint venture hotels in 2010. These amounts do not include revenues and expenses from the W New York – The Court & Tuscany, which were reclassified to discontinued operations.
           
           
             
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three Months Ended March 31, 2011
UNAUDITED ($ millions)
     
     
Maintenance Capital Expenditures: (1)    
Owned, Leased and Consolidated Joint Venture Hotels   22
Corporate/IT   18
Subtotal   40
     
Vacation Ownership Capital Expenditures: (2)    
Net capital expenditures for inventory (excluding St.Regis Bal Harbour)   (16)
Net capital expenditures for inventory – St.Regis Bal Harbour   32
Subtotal   16
     
Development Capital   33
     
Total Capital Expenditures   89
     
(1) Maintenance capital expenditures include improvements, renewals and extraordinary repairs that extend the useful life of the asset.
 
(2) Represents gross inventory capital expenditures of $37 in the three months ended March 31, 2011, less cost of sales of $21 in the three months ended March 31, 2011.
 
 

Starwood Hotels & Resorts Worldwide, Inc.

2011 Divisional Hotel Inventory Summary by Ownership by Brand*

As of March 31, 2011
                                           
                                           
    NAD   EAME   LAD   ASIA   Total  
    Hotels   Rooms   Hotels   Rooms   Hotels   Rooms   Hotels   Rooms   Hotels   Rooms  
Owned                                          
Sheraton   6   3,528   4   705   5   2,713   2   821   17   7,767  
Westin   5   2,849   3   650   3   902   1   273   12   4,674  
Four Points   2   327   –   –   –   –   –   –   2   327  
W   7   2,427   2   665   –   –   –   –   9   3,092  
Luxury Collection   1   643   7   828   1   180   –   –   9   1,651  
St. Regis   2   489   1   161   –   –   1   160   4   810  
Aloft   2   272   –   –   –   –   –   –   2   272  
Element   1   123   –   –   –   –   –   –   1   123  
Other   7   2,594   –   –   –   –   –   –   7   2,594  
Total Owned   33   13,252   17   3,009   9   3,795   4   1,254   63   21,310  
                                           
Managed & UJV                                          
Sheraton   39   26,743   62   18,875   15   2,942   59   21,335   175   69,895  
Westin   54   28,259   12   3,569   1   259   26   8,860   93   40,947  
Four Points   1   171   10   1,971   4   517   13   4,274   28   6,933  
W   22   6,537   2   577   2   433   6   1,438   32   8,985  
Luxury Collection   4   1,648   20   3,924   7   290   5   1,464   36   7,326  
St. Regis   9   1,811   1   93   2   309   5   1,171   17   3,384  
Le Meridien   4   607   53   13,604   –   –   24   6,846   81   21,057  
Aloft   –   –   2   555   –   –   2   431   4   986  
Other   1   773   1   –   –   –   –   –   2   773  
Total Managed & UJV   134   66,549   163   43,168   31   4,750   140   45,819   468   160,286  
                                           
Franchised                                          
Sheraton   151   45,243   29   6,814   8   2,040   15   6,421   203   60,518  
Westin   58   18,628   6   2,657   2   396   8   2,231   74   23,912  
Four Points   103   16,355   11   1,542   8   1,276   7   1,227   129   20,400  
Luxury Collection   7   1,553   15   2,029   2   248   8   2,260   32   6,090  
St. Regis   –   –   1   133   –   –   –   –   1   133  
Le Meridien   7   2,007   5   1,455   2   324   3   714   17   4,500  
Aloft   40   5,644   –   –   –   –   2   301   42   5,945  
Element   8   1,309   –   –   –   –   –   –   8   1,309  
Total Franchised   374   90,739   67   14,630   22   4,284   43   13,154   506   122,807  
                                           
Systemwide                                          
Sheraton   196   75,514   95   26,394   28   7,695   76   28,577   395   138,180  
Westin   117   49,736   21   6,876   6   1,557   35   11,364   179   69,533  
Four Points   106   16,853   21   3,513   12   1,793   20   5,501   159   27,660  
W   29   8,964   4   1,242   2   433   6   1,438   41   12,077  
Luxury Collection   12   3,844   42   6,781   10   718   13   3,724   77   15,067  
St. Regis   11   2,300   3   387   2   309   6   1,331   22   4,327  
Le Meridien   11   2,614   58   15,059   2   324   27   7,560   98   25,557  
Aloft   42   5,916   2   555   –   –   4   732   48   7,203  
Element   9   1,432   –   –   –   –   –   –   9   1,432  
Other   8   3,367   1   –   –   –   –   –   9   3,367  
Vacation Ownership   13   6,618   –   –   1   382   –   –   14   7,000  
Total Systemwide   554   177,158   247   60,807   63   13,211   187   60,227   1,051   311,403  
                                           
                                           
*Includes Vacation Ownership properties  
   
                     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of March 31, 2011
UNAUDITED
                             
                             
    # Resorts   # of Units (1)
        In   In Active       Pre-sales/   Future   Total at
Brand  

Total(2)

   Operations   Sales  

Completed(3)

  

Development(4)

  

Capacity(5),(6)

   Buildout
                             
Sheraton   7   7   6   3,079   –   712   3,791
Westin   9   9   9   1,463   99   43   1,605
St. Regis   2   2   –   63   –   –   63
The Luxury Collection   1   1   –   6   –   –   6
Unbranded   3   3   1   124   –   1   125
Total SVO, Inc.   22   22   16   4,735   99   756   5,590
                             
Unconsolidated Joint Ventures (UJV’s)   1   1   1   198   –   –   198
Total including UJV’s   23   23   17   4,933   99   756   5,788
                             
Total Intervals Including UJV’s (7)               256,516   5,148   39,312   300,976
                             
                             
                             
(1) Lockoff units are considered as one unit for this analysis.
(2) Includes resorts in operation, active sales or future development.
(3) Completed units include those units that have a certificate of occupancy.
(4) Units in Pre-sales/Development are in various stages of development (including the permitting stage), most of which are currently being offered for sale to customers.
(5) Based on owned land and average density in existing marketplaces

(6) Future units indicated above include planned timeshare units on land owned by the Company or applicable UJV that have received all major governmental land use approvals for the development of timeshare. There can 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.

(7) Assumes 52 intervals per unit.

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