Exhibit 99.1

 

Investor Contact Stephen Pettibone 203-351-3500
Media Contact KC Kavanagh 866-478-2777		One StarPoint                          Stamford, CT 06902                         United States

STARWOOD REPORTS SECOND QUARTER

2013 RESULTS

STAMFORD, Conn. (July 25, 2013) – Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported second quarter 2013 financial results.

Second Quarter 2013 Highlights

 

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Excluding special items, EPS from continuing operations was $0.79. Including special items, EPS from continuing operations was $0.71.

 

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Adjusted EBITDA was $333 million, which included $30 million of EBITDA from the St. Regis Bal Harbour residential project.

 

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Excluding special items, income from continuing operations was $153 million. Including special items, income from continuing operations was $137 million.

 

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Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant dollars (3.9% in actual dollars) compared to 2012. Systemwide REVPAR for Same-Store Hotels in North America increased 5.2% in constant dollars (5.1% in actual dollars).

 

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Management fees, franchise fees and other income increased 6.3% compared to 2012.

 

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Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 94 basis points compared to 2012.

 

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Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 4.4% in constant dollars (3.7% in actual dollars) compared to 2012.

 

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Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 160 basis points compared to 2012.

 

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Earnings from Starwood’s vacation ownership and residential business increased approximately $1 million compared to 2012.

 

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During the quarter, the Company signed 32 hotel management and franchise contracts, representing approximately 6,500 rooms, and opened 18 hotels and resorts with approximately 3,100 rooms.

 

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Second Quarter 2013 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the second quarter of 2013 of $0.71 compared to $0.66 in the second quarter of 2012. Excluding special items, EPS from continuing operations was $0.79 for the second quarter of 2013 compared to $0.70 in the second quarter of 2012. Special items in the second quarter of 2013, which totaled a charge of $16 million (after tax), primarily related to certain non-recurring income tax charges associated with an asset disposition, interest on deferred income from sales of vacation ownership units, and the resolution of certain tax positions. Special items in the second quarter of 2012, which totaled a charge of $9 million (after-tax), primarily related to costs associated with the early extinguishment of debt. Excluding special items, the effective income tax rate in the second quarter of 2013 increased to 33.8%, compared to 31.5% in the second quarter of 2012, primarily due to the higher percentage of pretax income in the United States in 2013.

Income from continuing operations was $137 million in the second quarter of 2013, compared to $129 million in the second quarter of 2012. Excluding special items, income from continuing operations was $153 million in the second quarter of 2013 compared to $138 million in the second quarter of 2012.

Net income was $137 million and $0.71 per share in the second quarter of 2013, compared to $122 million and $0.62 per share in the second quarter of 2012.

Frits van Paasschen, CEO, said, “We exceeded our profit expectations – despite slower revenue growth and exchange rate headwinds – thanks to SG&A cost control and good margin performance at Owned and Managed hotels. The global recovery continues. Tight supply in North America and Europe is the order of the day, with virtually no new high-end hotels coming on stream. Our occupancies in Europe are close to 72%. In North America, they reached 76%, the highest Starwood has ever reported. In China, our hotels significantly outperformed the competition, demonstrating the value our brands bring to our hotel owners, even in soft market conditions.

Our global luxury business performed especially well in the second quarter, highlighting the strength of our global footprint of over 35,000 luxury rooms in nearly 40 countries. Rising wealth, global business demand, and interest in new destinations are set to fuel the growth in luxury travel for some time to come. With St. Regis, Luxury Collection and W Hotels, our three distinct approaches to luxury, we are well positioned to capture greater share in this profitable segment.”

Six Months Ended June 30, 2013 Earnings Summary

Income from continuing operations was $280 million in the six months ended June 30, 2013 compared to $258 million in the same period in 2012. Excluding special items, income from continuing operations was $301 million in the six months ended June 30, 2013 compared to $262 million in the same period in 2012.

Net income was $350 million and $1.80 per share in the six months ended June 30, 2013 compared to $250 million and $1.27 per share in the same period in 2012. Net income in the six months ended June 30, 2013 included a tax benefit of $70 million, in discontinued operations, as a result of the reversal of a reserve associated with an uncertain tax position related to a previous disposition. The applicable statute of limitation for this tax position lapsed during the first quarter of 2013.

Adjusted EBITDA was $648 million in the six months ended June 30, 2013 compared to $620 million in the same period in 2012.

 

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Second Quarter 2013 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant dollars (3.9% in actual dollars) compared to the second quarter of 2012. International Systemwide REVPAR for Same-Store Hotels increased 3.3% in constant dollars (2.2% in actual dollars).

Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by region:

 

		REVPAR
Region		Constant Dollars				Actual Dollars
Americas:
North America			5.2	%			5.1	%
Latin America			0.7	%			0.7	%
Asia Pacific:
Greater China			0.9	%			2.7	%
Rest of Asia			5.3	%			0.3	%
Europe, Africa & Middle East:
Europe			2.5	%			2.4	%
Africa & Middle East			7.5	%			5.5	%

Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by brand:

 

		REVPAR
Brand		Constant Dollars				Actual Dollars
St. Regis/Luxury Collection			8.7	%			8.4	%
W Hotels			4.2	%			4.0	%
Westin			4.4	%			3.8	%
Sheraton			3.3	%			2.5	%
Le Méridien			1.8	%			1.9	%
Four Points by Sheraton			5.3	%			5.3	%
Aloft			8.2	%			8.2	%

Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 94 basis points compared to 2012. International gross operating profit margins for Same-Store Company-Operated properties increased 70 basis points. North American Same-Store Company-Operated gross operating profit margins increased approximately 123 basis points, driven by REVPAR increases and cost controls.

Management fees, franchise fees and other income were $236 million, up $14 million, or 6.3% compared to the second quarter of 2012. Management fees increased 8.7% to $137 million and franchise fees increased 7.7% to $56 million.

Development

During the second quarter of 2013, the Company signed 32 hotel management and franchise contracts, representing approximately 6,500 rooms, of which 23 are new builds and 9 are conversions from other brands. At June 30, 2013, the Company had approximately 400 hotels in the active pipeline representing approximately 100,000 rooms.

During the second quarter of 2013, 18 new hotels and resorts (representing approximately 3,100 rooms) entered the system, including Le Méridien Yixing (China, 280 rooms), Aloft Ahmedabad, SG Road (India, 178 rooms), King George, a Luxury Collection Hotel, Athens (Greece, 102 rooms), The Westin Sacramento (California, 101 rooms), Sheraton Pittsburgh Airport Hotel (Pennsylvania, 200 rooms), and Element Vaughan Southwest (Canada, 152 rooms). During the quarter, two properties (representing approximately 400 rooms) were removed from the system.

 

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Owned, Leased and Consolidated Joint Venture Hotels

Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 4.4% in constant dollars (3.7% in actual dollars) when compared to 2012. REVPAR at Starwood Same-Store Owned Hotels in North America increased 9.8% in constant dollars (9.2% in actual dollars). Internationally, Starwood Same-Store Owned Hotel REVPAR increased 0.7% in constant dollars (decreased 0.1% in actual dollars).

Revenues at Starwood Same-Store Owned Hotels Worldwide increased 5.5% in constant dollars (4.8% in actual dollars) while costs and expenses increased 3.6% in constant dollars (2.7% in actual dollars) when compared to 2012. Margins at these hotels increased approximately 160 basis points compared to 2012.

Revenues at Starwood Same-Store Owned Hotels in North America increased 11.1% in constant dollars (10.5% in actual dollars) while costs and expenses increased 6.2% in constant dollars (5.7% in actual dollars) when compared to 2012. Margins at these hotels increased approximately 360 basis points.

Internationally, revenues at Starwood Same-Store Owned Hotels increased 1.5% in constant dollars (0.7% in actual dollars) while costs and expenses increased 1.5% in constant dollars (0.2% in actual dollars) when compared to 2012. Margins at these hotels increased approximately 40 basis points.

Revenues at owned, leased and consolidated joint venture hotels were $419 million, compared to $453 million in 2012. Expenses at owned, leased and consolidated joint venture hotels were $328 million compared to $360 million in 2012. Second quarter 2013 results were negatively impacted by asset sales completed since the second quarter of 2012.

Vacation Ownership

Total vacation ownership revenues increased 7.4% to $159 million in the second quarter of 2013, when compared to 2012, primarily due to increased revenues from resort operations, which included the transfer of the Westin St. John’s revenues from owned hotels to vacation ownership. Originated contract sales of vacation ownership intervals and number of contracts signed increased 3.9% and 1.7%, respectively. The average price per vacation ownership unit sold increased 2.8% to approximately $14,800, driven by inventory mix and increased focus on sales through new buyer channels.

Residential

During the second quarter of 2013, the Company’s residential revenues were $80 million compared to $168 million in 2012. The Company realized residential revenues from Bal Harbour of $74 million and generated EBITDA of $30 million, compared to revenues of $167 million and EBITDA of $35 million in the same period of 2012. During the second quarter of 2013, the Company closed sales of 22 units at Bal Harbour and realized incremental cash proceeds of $71 million associated with these units. From project inception through June 30, 2013, the Company has closed contracts on approximately 93% of the total residential units available at Bal Harbour and realized residential revenue of $1.0 billion and EBITDA of $249 million.

Selling, General, Administrative and Other

During the second quarter of 2013, selling, general, administrative and other expenses increased 2.3% to $88 million for the three months ended June 30, 2013, when compared to the corresponding period of 2012, primarily due to an increase in reserves for uncollectible receivables and the unfavorable impact of foreign exchange. These increases were partially offset by approximately $7 million of favorable benefits from certain government incentives received in connection with the relocation of our corporate headquarters. These incentives were forecasted for 2013, but were anticipated in the back half of the year. The Company now forecasts selling, general, administrative, and other expenses to increase 2% to 3% for the full year.

Capital

Gross capital spending during the quarter included approximately $31 million of maintenance capital and $48 million of development capital.

 

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Asset Sales

During the second quarter of 2013, the Company completed the sale of the W New Orleans for cash proceeds of approximately $65 million. This hotel was sold subject to a long-term management contract and the Company recorded a deferred gain of approximately $3 million.

Share Repurchase

In the second quarter of 2013 the Company repurchased approximately 140,000 shares at a total cost of approximately $8 million and a weighted average price of $59.77 per share. As of June 30, 2013, approximately $624 million remained available under the Company’s share repurchase authorization.

Balance Sheet

At June 30, 2013, the Company had gross debt of $1.266 billion, cash and cash equivalents of $803 million (including $141 million of restricted cash) and net debt of approximately $463 million, compared to net debt of approximately $746 million as of March 31, 2013, in each case excluding debt and restricted cash associated with securitized vacation ownership notes receivable. Net debt at June 30, 2013, including $435 million of debt and $17 million of restricted cash associated with securitized vacation ownership notes receivable, was approximately $881 million.

 

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Outlook

For the Full Year 2013:

Including Bal Harbour, which is expected to contribute approximately $110 million of EBITDA, Adjusted EBITDA is expected to be approximately $1.230 billion to $1.250 billion (based on the assumptions below).

 

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Excluding Bal Harbour, Adjusted EBITDA is expected to be approximately $1.120 billion to $1.140 billion, assuming:

 

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REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 5% to 6% in constant dollars (approximately 50 basis points lower in actual dollars at current exchange rates).

 

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REVPAR increases at Same-Store Company-Owned Hotels Worldwide of 4% to 6% in constant dollars (approximately 100 basis points lower in actual dollars at current exchange rates).

 

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Margins at Same-Store Owned Hotels Worldwide increase 75 to 125 basis points.

 

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Management fees, franchise fees and other income increase approximately 7.5% to 9.5%.

 

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Earnings from the Company’s vacation ownership and residential business of approximately $165 million to $170 million.

 

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Selling, general and administrative expenses increase approximately 2% to 3%.

 

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Full year earnings from owned hotels are negatively impacted by approximately $8 million due to assets sold year to date in 2013.

 

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Shifts in exchange rates since we first provided our outlook will negatively impact full year earnings by $12 million if exchange rates stay at current levels.

 

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Depreciation and amortization is expected to be approximately $295 million.

 

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Interest expense is expected to be approximately $120 million.

 

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Full year effective tax rate is expected to be approximately 33%, and cash taxes are expected to be approximately $125 million.

 

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Including Bal Harbour, EPS before special items is expected to be approximately $2.81 to $2.88 (based on the assumptions above).

 

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Full year capital expenditures (excluding vacation ownership and residential inventory) are expected to be approximately $175 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 $300 million.

 

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Vacation ownership (excluding Bal Harbour) is expected to generate approximately $200 million in positive cash flow. Bal Harbour is expected to generate at least $175 million in net cash flow.

 

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For the three months ended September 30, 2013:

 

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Including Bal Harbour, which is expected to contribute approximately $15 million of EBITDA, Adjusted EBITDA is expected to be approximately $280 million to $290 million (based on the assumptions below).

 

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Excluding Bal Harbour, Adjusted EBITDA is expected to be approximately $265 million to $275 million, assuming:

 

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REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 5% to 6% in constant dollars (approximately 50 basis points lower in actual dollars at current exchange rates).

 

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REVPAR increases at Same-Store Company-Owned Hotels Worldwide of 4% to 6% in constant dollars (approximately 100 basis points lower in actual dollars at current exchange rates).

 

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Management fees, franchise fees and other income increase approximately 7.5% to 9.5%.

 

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Earnings from the Company’s vacation ownership and residential business are flat to up approximately $5 million year over year.

 

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Depreciation and amortization is expected to be approximately $75 million.

 

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Interest expense is expected to be approximately $30 million.

 

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Including Bal Harbour, income from continuing operations is expected to be approximately $117 million to $124 million, (based on the assumptions above).

 

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The effective tax rate is expected to be approximately 33%.

 

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Including Bal Harbour, EPS is expected to be approximately $0.60 to $0.64 (based on the assumptions above).

 

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Special Items

The Company’s special items included a pre-tax benefit of $1 million ($16 million charge after-tax) in the second quarter of 2013 compared to a pre-tax charge of $16 million ($9 million after-tax) in the same period of 2012.

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 June 30,										Six Months Ended June 30,
2013				2012						2013				2012
$	153			$	138			Income from continuing operations before special items		$	301			$	262
$	0.79			$	0.70			EPS before special items		$	1.55			$	1.33
								Special Items
	—				—			Restructuring and other special (charges) credits, net (a)			1				11
	1				(1	)		Gain (loss) on asset dispositions and impairments, net (b)			(8	)			(8	)
	—				(15	)		Debt Extinguishment (c)			—				(15	)
	1				(16	)		Total special items – pre-tax			(7	)			(12	)
	(17	)			7			Income tax benefit (expense) for special items (d)			(14	)			8
	(16	)			(9	)		Total special items – after-tax			(21	)			(4	)
$	137			$	129			Income from continuing operations		$	280			$	258
$	0.71			$	0.66			EPS including special items		$	1.44			$	1.31

 

a)	During the six months ended June 30, 2012, the Company recorded a favorable adjustment of $11 million to reverse a portion of a litigation reserve established in 2011.

 

b)

During the six months ended June 30, 2013, the net loss primarily related to the sale of three wholly-owned hotels. During the three months ended June 30, 2012, the net loss primarily related to various asset dispositions. The six months ended June 30, 2012 included a net loss primarily related to the sale of one wholly-owned hotel.

 

c)	During the three and six months ended June 30, 2012, the net charges were associated with the redemption of approximately $495 million of senior notes.

 

d)

During the three months ended June 30, 2013, the net charges included $4 million related to an asset disposition, $8 million to accrue interest on deferred income associated with vacation ownership sales, and approximately $5 million for charges associated with tax reserves and resolution of certain tax positions. The six months ended June 30, 2013, included a tax benefit of $3 million related to an asset sale. During the three and six months ended June 30, 2012, the benefit primarily represented income tax benefits on special items at the statutory rate.

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 ongoing operations.

Starwood will be conducting a conference call to discuss the second quarter financial results at 10:30 a.m. Eastern Time today, available via webcast on the Company’s website at http://www.starwoodhotels.com/corporate/about/investor/earnings.html. A webcast replay will be available at 1:30 p.m. Eastern Time on Thursday, July 25 and will run for one year. Alternatively, participants may call into (866) 921-0636 with conference ID 99326536; please dial in fifteen minutes early to ensure a timely start. A call replay will be available from 2:00 p.m. Eastern Time on Thursday, July 25, 2013 through Thursday, August 1, 2013 and can be accessed by dialing (855) 859-2056 with conference ID 99326536.

 

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Definitions

All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations attributable to Starwood’s common stockholders. All references to continuing operations, discontinued operations and net income reflect amounts attributable to Starwood’s common stockholders (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 the Company’s 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 the operating performance for the 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 ongoing 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, leased and managed hotels. References to Systemwide 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.

 

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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 1,162 properties in nearly 100 countries and 171,000 employees at its owned and managed properties. Starwood is a fully integrated owner, operator and franchisor of hotels, resorts and residences with the following internationally renowned brands: St. Regis^®, The Luxury Collection^®, W^®, Westin^®, Le Méridien^®, Sheraton^®, Four Points^® by Sheraton, Aloft^®, and Element^®. The Company boasts one of the industry’s leading loyalty programs, Starwood Preferred Guest (SPG), allowing members to earn and redeem points for room stays, room upgrades and flights, with no blackout dates. Starwood also owns Starwood Vacation Ownership, Inc., a premier provider of world-class vacation experiences through villa-style resorts and privileged access to Starwood brands. For more information, including reconciliations of non-GAAP financial measures to GAAP financial measures, please visit www.starwoodhotels.com or contact Investor Relations at (203) 351-3500.

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 (including the condition of credit markets in the U.S. and internationally), 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.

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Unaudited Consolidated Statements of Income

(In millions, except per share data)

 

Three Months Ended June 30,														Six Months Ended June 30,
2013				2012				% Variance						2013				2012				% Variance
												Revenues
$	419			$	453				(7.5	)		Owned, leased and consolidated joint venture hotels		$	798			$	855				(6.7	)
	239				316				(24.4	)		Vacation ownership and residential sales and services			548				830				(34.0	)
	236				222				6.3			Management fees, franchise fees and other income			453				423				7.1
	668				627				6.5			Other revenues from managed and franchised properties (a)			1,302				1,225				6.3
	1,562				1,618				(3.5	)					3,101				3,333				(7.0	)
												Costs and Expenses
	328				360				8.9			Owned, leased and consolidated joint venture hotels			648				709				8.6
	163				241				32.4			Vacation ownership and residential			362				634				42.9
	88				86				(2.3	)		Selling, general, administrative and other			178				182				2.2
	—				—				—			Restructuring and other special charges (credits), net			(1	)			(11	)			90.9
	57				56				(1.8	)		Depreciation			115				113				(1.8	)
	8				6				(33.3	)		Amortization			15				12				(25.0	)
	668				627				(6.5	)		Other expenses from managed and franchised properties (a)			1,302				1,225				(6.3	)
	1,312				1,376				4.7						2,619				2,864				8.6
	250				242				3.3			Operating income			482				469				2.8
	8				5				60.0			Equity (losses) earnings and gains (losses) from unconsolidated ventures, net			17				15				13.3
	(26	)			(46	)			43.5			Interest expense, net of interest income of $0, $1, $1 and $1			(52	)			(95	)			45.3
	—				(15	)			100.0			Loss on early extinguishment of debt, net			—				(15	)			100.0
	1				(1	)			(200.0	)		Gain (loss) on asset dispositions and impairments, net			(8	)			(8	)			—
	233				185				25.9			Income from continuing operations before taxes and noncontrolling interests			439				366				19.9
	(95	)			(56	)			69.6			Income tax benefit (expense)			(159	)			(108	)			47.2
	138				129				7.0			Income from continuing operations			280				258				8.5
												Discontinued Operations:
	—				(7	)			100.0			Gain (loss) on dispositions, net of tax			70				(8	)			n/m
	138				122				13.1			Net income			350				250				40.0
	(1	)			—				n/m			Net loss (income) attributable to noncontrolling interests			—				—				—
$	137			$	122				12.3			Net income attributable to Starwood		$	350			$	250				40.0
												Earnings (Losses) Per Share – Basic
$	0.72			$	0.67				7.5			Continuing operations		$	1.46			$	1.34				9.0
	—				(0.04	)			(100.0	)		Discontinued operations			0.37				(0.04	)			n/m
$	0.72			$	0.63				14.3			Net income (loss)		$	1.83			$	1.30				40.8
												Earnings (Losses) Per Share – Diluted
$	0.71			$	0.66				7.6			Continuing operations		$	1.44			$	1.31				9.9
	—				(0.04	)			(100.0	)		Discontinued operations			0.36				(0.04	)			n/m
$	0.71			$	0.62				14.5			Net income (loss)		$	1.80			$	1.27				41.7
												Amounts attributable to Starwood’s Common Stockholders
$	137			$	129				6.2			Continuing operations		$	280			$	258				8.5
	—				(7	)			(100.0	)		Discontinued operations			70				(8	)			n/m
$	137			$	122				12.3			Net income (loss)		$	350			$	250				40.0
	192				195							Weighted average number of shares			192				193
	194				198							Weighted average number of shares assuming dilution			194				197

 

(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

 

11

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Consolidated Balance Sheets

(In millions, except share data)

 

		June 30, 2013				December 31, 2012
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	662			$	305
Restricted cash			153				158
Accounts receivable, net of allowance for doubtful accounts of $56 and $59			616				586
Inventories			253				361
Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $7 and $9			61				65
Deferred income taxes			271				320
Prepaid expenses and other			174				124
Total current assets			2,190				1,919
Investments			266				260
Plant, property and equipment, net			3,039				3,162
Assets held for sale, net			8				36
Goodwill and intangible assets, net			2,031				2,025
Deferred income taxes			588				636
Other assets (a)			465				385
Securitized vacation ownership notes receivable			379				438
Total assets		$	8,966			$	8,861
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt (b)		$	2			$	2
Accounts payable			95				121
Current maturities of long-term securitized vacation ownership debt			113				150
Accrued expenses			1,171				1,074
Accrued salaries, wages and benefits			338				395
Accrued taxes and other			205				287
Total current liabilities			1,924				2,029
Long-term debt (b)			1,264				1,273
Long-term securitized vacation ownership debt			322				383
Deferred income taxes			76				78
Other liabilities			1,899				1,956
Total liabilities			5,485				5,719
Commitments and contingencies
Stockholders’ equity:
Common stock; $0.01 par value; authorized 1,000,000,000 shares; outstanding 194,935,452 and 193,121,094 shares at June 30, 2013 and December 31, 2012, respectively			2				2
Additional paid-in capital			853				816
Accumulated other comprehensive loss			(386	)			(338	)
Retained earnings			3,007				2,657
Total Starwood stockholders’ equity			3,476				3,137
Noncontrolling interest			5				5
Total stockholders’ equity			3,481				3,142
Total liabilities and stockholders’ equity		$	8,966			$	8,861

 

(a)	Includes restricted cash of $5 million and $6 million at June 30, 2013 and December 31, 2012, respectively.

(b)	Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $355 million and $389 million at June 30, 2013 and December 31, 2012, respectively.

 

12

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Historical Data

(In millions)

 

Three Months Ended June 30,														Six Months Ended June 30,
2013				2012				% Variance						2013				2012				% Variance
												Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
	$137			$	122				12.3			Net income		$	350			$	250				40.0
	32				52				(38.5	)		Interest expense (a)			60				101				(40.6	)
	—				15				(100.0	)		Loss on early extinguishment of debt, net			—				15				(100.0	)
	95				54				75.9			Income tax (benefit) expense (b)			89				107				(16.8	)
	61				63				(3.2	)		Depreciation (c)			125				127				(1.6	)
	9				7				28.6			Amortization (d)			17				14				21.4
	334				313				6.7			EBITDA			641				614				4.4
	(1)				1				(200.0	)		(Gain) loss on asset dispositions and impairments, net			8				8				—
	—				9				(100.0	)		Net (gain)/loss on dispositions (e)			—				9				(100.0	)
	—				—				—			Restructuring and other special charges (credits), net			(1	)			(11	)			(90.9	)
	$333			$	323				3.1			Adjusted EBITDA		$	648			$	620				4.5

 

(a)	Includes $6 million and $5 million of Starwood’s share of interest expense of unconsolidated joint ventures for the three months ended June 30, 2013 and 2012, respectively, and $7 million and $5 million for the six months ended June 30, 2013 and 2012, respectively.

(b)	Includes $0 million and $(2) million of tax expense (benefit) recorded in discontinued operations for the three months ended June 30, 2013 and 2012, respectively, and $(70) million and $(1) million for the six months ended June 30, 2013 and 2012, respectively.

(c)	Includes $4 million and $7 million of Starwood’s share of depreciation expense of unconsolidated joint ventures for the three months ended June 30, 2013 and 2012, respectively, and $10 million and $14 million for the six months ended June 30, 2013 and 2012, respectively.

(d)	Includes $1 million and $1 million of Starwood’s share of amortization expense of unconsolidated joint ventures for the three months ended June 30, 2013 and 2012, respectively, and $2 million and $2 million for the six months ended June 30, 2013 and 2012, respectively.

(e)	Excludes the taxes included in (b) above.

 

13

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels Worldwide

(In millions)

 

		Three Months Ended June 30, 2013
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	16				4.8
Impact of changes in foreign exchange rates			2				0.7
Revenue increase/(decrease) in constant dollars		$	18				5.5
Expense
Expense increase/(decrease) (GAAP)		$	7				2.7
Impact of changes in foreign exchange rates			2				0.9
Expense increase/(decrease) in constant dollars		$	9				3.6

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels North America

(In millions)

 

		Three Months Ended June 30, 2013
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	14				10.5
Impact of changes in foreign exchange rates			1				0.6
Revenue increase/(decrease) in constant dollars		$	15				11.1
Expense
Expense increase/(decrease) (GAAP)		$	6				5.7
Impact of changes in foreign exchange rates			1				0.5
Expense increase/(decrease) in constant dollars		$	7				6.2

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels International

(In millions)

 

		Three Months Ended June 30, 2013
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	1				0.7
Impact of changes in foreign exchange rates			2				0.8
Revenue increase/(decrease) in constant dollars		$	3				1.5
Expense
Expense increase/(decrease) (GAAP)		$	—				0.2
Impact of changes in foreign exchange rates			2				1.3
Expense increase/(decrease) in constant dollars		$	2				1.5

 

14

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliation – Earnings from Vacation Ownership and Residential Business

(In millions)

 

		Three Months Ended June 30,												Six Months Ended June 30,
		2013				2012				% Variance				2013				2012				% Variance
Vacation ownership and residential sales and services revenue		$	239			$	316				(24.4	)		$	548			$	830				(34.0	)
Vacation ownership and residential expenses			(163	)			(241	)			32.4				(362	)			(634	)			42.9
Earnings from vacation ownership and residential		$	76			$	75				1.3			$	186			$	196				(5.1	)

Non-GAAP to GAAP Reconciliation – Earnings from Bal Harbour

(In millions)

 

		Three Months Ended June 30
		2013				2012				% Variance
Total Bal Harbour revenues		$	74			$	167				(55.7	)
Total Bal Harbour expenses			(44	)			(132	)			66.7
Earnings from Bal Harbour		$	30			$	35				(14.3	)

 

15

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Future Performance

(In millions, except per share data)

Low Case

 

Three Months Ended September 30, 2013						Year Ended December 31, 2013
$	117			Net income (a)		$	595
	30			Interest expense			120
	58			Income tax expense (a)			213
	75			Depreciation and amortization			295
	280			EBITDA			1,223
	—			(Gain) loss on asset dispositions and impairments, net			8
	—			Restructuring and other special charges (credits)			(1	)
$	280			Adjusted EBITDA		$	1,230
Three Months Ended September 30, 2013						Year Ended December 31, 2013
$	117			Income from continuing operations before special items		$	546
$	0.60			EPS before special items		$	2.81
				Special Items
	—			Gain (loss) on asset dispositions and impairments, net			(8	)
	—			Restructuring and other special (charges) credits			1
	—			Total special items – pre-tax			(7	)
	—			Income tax (expense) benefit associated with special items			(14	)
	—			Total special items – after-tax			(21	)
$	117			Income from continuing operations		$	525
$	0.60			EPS including special items		$	2.70
				High Case
Three Months Ended September 30, 2013						Year Ended December 31, 2013
$	124			Net income (a)		$	608
	30			Interest expense			120
	61			Income tax expense (a)			220
	75			Depreciation and amortization			295
	290			EBITDA			1,243
	—			(Gain) loss on asset dispositions and impairments, net			8
	—			Restructuring and other special charges (credits)			(1	)
$	290			Adjusted EBITDA		$	1,250
Three Months Ended September 30, 2013						Year Ended December 31, 2013
$	124			Income from continuing operations before special items		$	559
$	0.64			EPS before special items		$	2.88
				Special Items
	—			Gain (loss) on asset dispositions and impairments, net			(8	)
	—			Restructuring and other special (charges) credits			1
	—			Total special items – pre-tax			(7	)
	—			Income tax (expense) benefit associated with special items			(14	)
	—			Total special items – after-tax			(21	)
$	124			Income from continuing operations		$	538
$	0.64			EPS including special items		$	2.77

 

(a)	The full year amounts include a tax benefit of $70 million recorded in discontinued operations.

 

16

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations –

Future Earnings from Vacation Ownership and Residential Business

Excluding Bal Harbour

(In millions)

Low Case

 

		Three Months Ended September 30,
		2013				2012				$ Variance
Vacation ownership and residential sales and services revenues		$	205			$	208			$	(3	)
Less: Bal Harbour revenues			(45	)			(62	)			17
Vacation ownership and residential sales and services revenue excluding Bal Harbour		$	160			$	146			$	14
Vacation ownership and residential expenses		$	150			$	156			$	(6	)
Less: Bal Harbour expenses			(30	)			(50	)			20
Vacation ownership and residential expenses excluding Bal Harbour		$	120			$	106			$	14
Earnings from vacation ownership and residential excluding Bal Harbour		$	40			$	40			$	—

 

		Year Ended December 31, 2013
Vacation ownership and residential sales and services revenues		$	930
Less: Bal Harbour revenues			(275	)
Vacation ownership and residential sales and services revenue excluding Bal Harbour		$	655
Vacation ownership and residential expenses		$	655
Less: Bal Harbour expenses			(165	)
Vacation ownership and residential expenses excluding Bal Harbour		$	490
Earnings from vacation ownership and residential excluding Bal Harbour		$	(165	)

High Case

 

		Three Months Ended September 30,
		2013				2012				$ Variance
Vacation ownership and residential sales and services revenues		$	215			$	208			$	7
Less: Bal Harbour revenues			(45	)			(62	)			17
Vacation ownership and residential sales and services revenue excluding Bal Harbour		$	170			$	146			$	24
Vacation ownership and residential expenses		$	155			$	156			$	(1	)
Less: Bal Harbour expenses			(30	)			(50	)			20
Vacation ownership and residential expenses excluding Bal Harbour		$	125			$	106			$	19
Earnings from vacation ownership and residential excluding Bal Harbour		$	45			$	40			$	5

 

		Year Ended December 31, 2013
Vacation ownership and residential sales and services revenues		$	940
Less: Bal Harbour revenues			(275	)
Vacation ownership and residential sales and services revenue excluding Bal Harbour		$	665
Vacation ownership and residential expenses		$	660
Less: Bal Harbour expenses			(165	)
Vacation ownership and residential expenses excluding Bal Harbour		$	495
Earnings from vacation ownership and residential excluding Bal Harbour		$	170

 

17

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses

(In millions)

 

Three Months Ended June 30,														Six Months Ended June 30,
2013				2012				%     Variance				Same-Store Owned Hotels Worldwide		2013				2012				% Variance
												Revenue
$	339			$	323				5.0			Same-Store Owned Hotels (a)		$	629			$	599				5.0
	2				54				(96.3	)		Hotels Sold or Closed in 2013 and 2012			12				100				(88.0	)
	71				69				2.9			Hotels Without Comparable Results			143				142				0.7
	7				7				—			Other ancillary hotel operations			14				14				—
$	419			$	453				(7.5	)		Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	798			$	855				(6.7	)
												Costs and Expenses
$	257			$	251				(2.4	)		Same-Store Owned Hotels (a)		$	494			$	481				(2.7	)
	2				40				95.0			Hotels Sold or Closed in 2013 and 2012			10				80				87.5
	62				62				—			Hotels Without Comparable Results			131				135				3.0
	7				7				—			Other ancillary hotel operations			13				13				—
$	328			$	360				8.9			Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	648			$	709				8.6
Three Months Ended June 30,														Six Months Ended June 30,
2013				2012				% Variance				Same-Store Owned Hotels North America		2013				2012				% Variance
												Revenue
$	149			$	135				10.4			Same-Store Owned Hotels (a)		$	300			$	267				12.4
	2				54				(96.3	)		Hotels Sold or Closed in 2013 and 2012			12				100				(88.0	)
	58				68				(14.7	)		Hotels Without Comparable Results			115				133				(13.5	)
	1				—				n/m						—				—				—
$	210			$	257				(18.3	)		Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	427			$	500				(14.6	)
												Costs and Expenses
$	118			$	112				(5.4	)		Same-Store Owned Hotels (a)		$	236			$	225				(4.9	)
	2				40				95.0			Hotels Sold or Closed in 2013 and 2012			10				80				87.5
	54				59				8.5			Hotels Without Comparable Results			108				119				9.2
	1				—				n/m			Other ancillary hotel operations			—				—				—
$	175			$	211				17.1			Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	354			$	424				16.5
Three Months Ended June 30,														Six Months Ended June 30,
2013				2012				% Variance				Same-Store Owned Hotels International		2013				2012				% Variance
												Revenue
$	190			$	188				1.1			Same-Store Owned Hotels (a)		$	329			$	332				(0.9	)
	—				—				—			Hotels Sold or Closed in 2013 and 2012			—				—				—
	13				1				n/m			Hotels Without Comparable Results			28				9				n/m
	6				7				(14.3	)		Other ancillary hotel operations			14				14				—
$	209			$	196				6.6			Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	371			$	355				4.5
												Costs and Expenses
$	139			$	139				—			Same-Store Owned Hotels (a)		$	258			$	256				(0.8	)
	—				—				—			Hotels Sold or Closed in 2013 and 2012			—				—				—
	8				3				n/m			Hotels Without Comparable Results			23				16				(43.8	)
	6				7				14.3			Other ancillary hotel operations			13				13				—
$	153			$	149				(2.7	)		Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	294			$	285				(3.2	)

 

(a)	Same-Store Owned Hotel results exclude one hotel sold and 11 hotels without comparable results for the three months ended June 30, 2013 and 12 hotels sold and 11 hotels without comparable results for the six months ended June 30, 2013.

 

18

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Systemwide⁽¹⁾ Statistics—Same Store

For the Three Months Ended June 30, 2013

UNAUDITED

 

		Systemwide—Worldwide												Systemwide—North America												Systemwide—International
		2013				2012				Var. USD				2013				2012				Var. USD				2013				2012				Var. USD
TOTAL HOTELS
REVPAR ($)			123.73				119.12				3.9	%			128.54				122.29				5.1	%			117.82				115.23				2.2	%
ADR ($)			174.43				170.33				2.4	%			168.83				162.31				4.0	%			182.54				182.05				0.3	%
Occupancy (%)			70.9	%			69.9	%			1.0				76.1	%			75.3	%			0.8				64.5	%			63.3	%			1.2
SHERATON
REVPAR ($)			104.34				101.78				2.5	%			110.26				105.28				4.7	%			97.16				97.52				-0.4	%
ADR ($)			150.67				148.10				1.7	%			147.79				141.47				4.5	%			154.82				157.80				-1.9	%
Occupancy (%)			69.3	%			68.7	%			0.6				74.6	%			74.4	%			0.2				62.8	%			61.8	%			1.0
WESTIN
REVPAR ($)			139.75				134.61				3.8	%			140.24				133.42				5.1	%			138.71				137.18				1.1	%
ADR ($)			186.66				182.74				2.1	%			180.14				174.49				3.2	%			202.63				202.91				-0.1	%
Occupancy (%)			74.9	%			73.7	%			1.2				77.8	%			76.5	%			1.3				68.5	%			67.6	%			0.9
ST. REGIS/LUXURY COLLECTION
REVPAR ($)			200.79				185.27				8.4	%			239.40				219.81				8.9	%			183.93				170.19				8.1	%
ADR ($)			302.79				296.65				2.1	%			323.56				304.38				6.3	%			292.13				292.46				-0.1	%
Occupancy (%)			66.3	%			62.5	%			3.8				74.0	%			72.2	%			1.8				63.0	%			58.2	%			4.8
LE MERIDIEN
REVPAR ($)			131.66				129.19				1.9	%			223.67				219.06				2.1	%			119.65				117.47				1.9	%
ADR ($)			191.49				185.73				3.1	%			267.69				260.17				2.9	%			179.05				173.64				3.1	%
Occupancy (%)			68.8	%			69.6	%			-0.8				83.6	%			84.2	%			-0.6				66.8	%			67.7	%			-0.9
W
REVPAR ($)			238.45				229.22				4.0	%			224.65				217.08				3.5	%			273.38				259.79				5.2	%
ADR ($)			295.90				287.66				2.9	%			274.69				267.66				2.6	%			352.54				341.33				3.3	%
Occupancy (%)			80.6	%			79.7	%			0.9				81.8	%			81.1	%			0.7				77.5	%			76.1	%			1.4
FOUR POINTS
REVPAR ($)			80.43				76.35				5.3	%			86.21				81.95				5.2	%			71.59				67.87				5.5	%
ADR ($)			115.96				113.01				2.6	%			116.26				113.34				2.6	%			115.40				112.40				2.7	%
Occupancy (%)			69.4	%			67.6	%			1.8				74.2	%			72.3	%			1.9				62.0	%			60.4	%			1.6
ALOFT
REVPAR ($)			79.38				73.39				8.2	%			89.91				84.41				6.5	%			54.64				47.41				15.2	%
ADR ($)			111.86				106.30				5.2	%			118.67				111.57				6.4	%			91.56				88.71				3.2	%
Occupancy (%)			71.0	%			69.0	%			2.0				75.8	%			75.7	%			0.1				59.7	%			53.4	%			6.3

 

(1)	Includes same store owned, leased, managed, and franchised hotels

 

19

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Worldwide Hotel Results—Same Store

For the Three Months Ended June 30, 2013

UNAUDITED

 

		Systemwide (1)												Company Operated (2)
		2013				2012				Var. USD				2013				2012				Var. USD
TOTAL WORLDWIDE
REVPAR ($)			123.73				119.12				3.9	%			138.46				132.47				4.5	%
ADR ($)			174.43				170.33				2.4	%			196.90				192.32				2.4	%
Occupancy (%)			70.9	%			69.9	%			1.0				70.3	%			68.9	%			1.4
AMERICAS
REVPAR ($)			125.76				119.96				4.8	%			153.92				145.97				5.4	%
ADR ($)			168.43				161.91				4.0	%			202.98				194.26				4.5	%
Occupancy (%)			74.7	%			74.1	%			0.6				75.8	%			75.1	%			0.7
North America
REVPAR ($)			128.54				122.29				5.1	%			161.04				151.93				6.0	%
ADR ($)			168.83				162.31				4.0	%			205.94				196.42				4.8	%
Occupancy (%)			76.1	%			75.3	%			0.8				78.2	%			77.4	%			0.8
Latin America
REVPAR ($)			93.33				92.71				0.7	%			99.47				100.30				-0.8	%
ADR ($)			162.27				155.94				4.1	%			172.34				172.34				0.0	%
Occupancy (%)			57.5	%			59.5	%			-2.0				57.7	%			58.2	%			-0.5
ASIA PACIFIC
REVPAR ($)			99.58				98.18				1.4	%			101.11				97.54				3.7	%
ADR ($)			159.80				162.52				-1.7	%			162.27				162.98				-0.4	%
Occupancy (%)			62.3	%			60.4	%			1.9				62.3	%			59.8	%			2.5
Greater China
REVPAR ($)			90.31				87.97				2.7	%			90.24				87.60				3.0	%
ADR ($)			155.58				157.89				-1.5	%			154.87				157.63				-1.8	%
Occupancy (%)			58.0	%			55.7	%			2.3				58.3	%			55.6	%			2.7
Rest of Asia
REVPAR ($)			110.01				109.65				0.3	%			118.35				113.26				4.5	%
ADR ($)			163.89				166.92				-1.8	%			172.23				170.03				1.3	%
Occupancy (%)			67.1	%			65.7	%			1.4				68.7	%			66.6	%			2.1
EAME
REVPAR ($)			146.21				141.63				3.2	%			154.46				149.14				3.6	%
ADR ($)			211.72				209.00				1.3	%			221.29				218.68				1.2	%
Occupancy (%)			69.1	%			67.8	%			1.3				69.8	%			68.2	%			1.6
Europe
REVPAR ($)			161.20				157.37				2.4	%			179.60				174.88				2.7	%
ADR ($)			224.13				224.05				0.0	%			242.27				242.91				-0.3	%
Occupancy (%)			71.9	%			70.2	%			1.7				74.1	%			72.0	%			2.1
Africa & Middle East
REVPAR ($)			117.49				111.36				5.5	%			117.54				111.22				5.7	%
ADR ($)			184.80				176.75				4.6	%			185.30				177.63				4.3	%
Occupancy (%)			63.6	%			63.0	%			0.6				63.4	%			62.6	%			0.8

 

(1)	Includes same store owned, leased, managed, and franchised hotels

(2)	Includes same store owned, leased, and managed hotels

 

20

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Owned/Leased Hotel Results—Same Store

For the Three Months Ended June 30, 2013

UNAUDITED

 

		Worldwide												North America												International
		2013				2012				Var. USD				2013				2012				Var. USD				2013				2012				Var. USD
TOTAL HOTELS		40 Hotels												13 Hotels												27 Hotels
REVPAR ($)			175.28				168.98				3.7	%			177.08				162.11				9.2	%			173.96				174.05				-0.1	%
ADR ($)			234.33				227.49				3.0	%			217.95				203.63				7.0	%			248.39				247.41				0.4	%
Occupancy (%)			74.8	%			74.3	%			0.5				81.2	%			79.6	%			1.6				70.0	%			70.3	%			-0.3
Total Revenue*			339,041				323,573				4.8	%			149,301				135,079				10.5	%			189,741				188,494				0.7	%
Total Expenses*			257,425				250,772				-2.7	%			118,116				111,696				-5.7	%			139,309				139,076				-0.2	%

 

*	Revenues & Expenses above are represented in ‘000’s

 

21

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Management Fees, Franchise Fees and Other Income

For the Three Months Ended June 30, 2013

UNAUDITED ($ millions)

 

		Worldwide
		2013				2012				Variance				% Variance
Management Fees
Base Fees			92				85				7				8.2
Incentive Fees			45				41				4				9.8
Total Management Fees			137				126				11				8.7
Franchise Fees			56				52				4				7.7
Total Management & Franchise Fees			193				178				15				8.4
Other Management & Franchise Revenues (1)			37				37				—				—
Total Management & Franchise Revenues			230				215				15				7.0
Other			6				7				(1	)			(14.3	)
Management Fees, Franchise Fees and Other Income			236				222				14				6.3

 

(1)	Other Management & Franchise Revenues primarily includes the amortization of the deferred gains of approximately $22 million in 2013 and 2012, resulting from the sales of hotels subject to long-term management contracts and termination fees.

 

22

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Vacation Ownership & Residential Revenues and Expenses

For the Three Months Ended June 30,

UNAUDITED ($ millions)

 

		2013				2012				$ Variance				% Variance
Originated Sales Revenues (1)—Vacation Ownership Sales			79				76				3				3.9
Other Sales and Services Revenues (2)			83				72				11				15.3
Deferred Revenues—Percentage of Completion			—				2				(2	)			(100.0	)
Deferred Revenues—Other (3)			(3	)			(2	)			(1	)			(50.0	)
Vacation Ownership Sales and Services Revenues			159				148				11				7.4
Residential Sales and Services Revenues (4)			80				168				(88	)			(52.4	)
Total Vacation Ownership & Residential Sales and Services Revenues			239				316				(77	)			(24.4	)
Originated Sales Expenses (5)—Vacation Ownership Sales			53				52				(1	)			(1.9	)
Other Expenses (6)			63				52				(11	)			(21.2	)
Deferred Expenses—Percentage of Completion			—				2				2				100.0
Deferred Expenses—Other			3				3				—				—
Vacation Ownership Expenses			119				109				(10	)			(9.2	)
Residential Expenses (4)			44				132				88				66.7
Total Vacation Ownership & Residential Expenses			163				241				78				32.4

 

(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, 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)	For 2012 and 2013, includes $167 million and $74 million of revenues and $132 million and $44 million expenses associated with the St. Regis Bal Harbour residential project, respectively.

(5)	Timeshare cost of sales and sales & marketing expenses before deferrals of sales expenses for U.S. GAAP reporting purposes

(6)	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.

 

23

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Systemwide⁽¹⁾ Statistics—Same Store

For the Six Months Ended June 30, 2013

UNAUDITED

 

		Systemwide—Worldwide												Systemwide—North America												Systemwide—International
		2013				2012				Var. USD				2013				2012				Var. USD				2013				2012				Var. USD
TOTAL HOTELS
REVPAR ($)			117.22				112.59				4.1	%			119.95				113.40				5.8	%			113.96				111.64				2.1	%
ADR ($)			172.45				168.45				2.4	%			165.87				158.99				4.3	%			181.50				181.57				0.0	%
Occupancy (%)			68.0	%			66.8	%			1.2				72.3	%			71.3	%			1.0				62.8	%			61.5	%			1.3
SHERATON
REVPAR ($)			98.85				96.42				2.5	%			100.87				96.14				4.9	%			96.51				96.74				-0.2	%
ADR ($)			149.68				147.75				1.3	%			143.30				137.62				4.1	%			158.23				161.47				-2.0	%
Occupancy (%)			66.0	%			65.3	%			0.7				70.4	%			69.9	%			0.5				61.0	%			59.9	%			1.1
WESTIN
REVPAR ($)			133.61				129.30				3.3	%			132.98				127.06				4.7	%			134.93				134.12				0.6	%
ADR ($)			184.97				180.83				2.3	%			178.29				172.62				3.3	%			200.72				200.16				0.3	%
Occupancy (%)			72.2	%			71.5	%			0.7				74.6	%			73.6	%			1.0				67.2	%			67.0	%			0.2
ST. REGIS/LUXURY COLLECTION
REVPAR ($)			198.54				180.70				9.9	%			253.53				223.44				13.5	%			173.28				161.18				7.5	%
ADR ($)			304.71				294.33				3.5	%			343.41				315.06				9.0	%			283.25				282.56				0.2	%
Occupancy (%)			65.2	%			61.4	%			3.8				73.8	%			70.9	%			2.9				61.2	%			57.0	%			4.2
LE MERIDIEN
REVPAR ($)			121.09				119.09				1.7	%			203.98				193.85				5.2	%			110.81				109.82				0.9	%
ADR ($)			183.30				179.55				2.1	%			254.57				243.74				4.4	%			172.28				169.76				1.5	%
Occupancy (%)			66.1	%			66.3	%			-0.2				80.1	%			79.5	%			0.6				64.3	%			64.7	%			-0.4
W
REVPAR ($)			221.21				208.28				6.2	%			205.29				194.93				5.3	%			257.94				238.88				8.0	%
ADR ($)			287.13				276.93				3.7	%			263.75				253.92				3.9	%			343.00				333.50				2.8	%
Occupancy (%)			77.0	%			75.2	%			1.8				77.8	%			76.8	%			1.0				75.2	%			71.6	%			3.6
FOUR POINTS
REVPAR ($)			75.69				71.23				6.3	%			78.35				73.53				6.6	%			71.54				67.64				5.8	%
ADR ($)			114.63				111.66				2.7	%			112.48				109.23				3.0	%			118.52				116.03				2.1	%
Occupancy (%)			66.0	%			63.8	%			2.2				69.7	%			67.3	%			2.4				60.4	%			58.3	%			2.1
ALOFT
REVPAR ($)			75.51				69.91				8.0	%			82.88				77.98				6.3	%			57.17				49.77				14.9	%
ADR ($)			110.59				106.43				3.9	%			115.79				109.93				5.3	%			95.15				94.66				0.5	%
Occupancy (%)			68.3	%			65.7	%			2.6				71.6	%			70.9	%			0.7				60.1	%			52.6	%			7.5

 

(1)	Includes same store owned, leased, managed, and franchised hotels

 

24

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Worldwide Hotel Results—Same Store

For the Six Months Ended June 30, 2013

UNAUDITED

 

		Systemwide (1)												Company Operated (2)
		2013				2012				Var. USD				2013				2012				Var. USD
TOTAL WORLDWIDE
REVPAR ($)			117.22				112.59				4.1	%			131.91				126.17				4.5	%
ADR ($)			172.45				168.45				2.4	%			194.81				190.40				2.3	%
Occupancy (%)			68.0	%			66.8	%			1.2				67.7	%			66.3	%			1.4
AMERICAS
REVPAR ($)			118.30				112.25				5.4	%			146.55				138.55				5.8	%
ADR ($)			165.94				159.34				4.1	%			200.85				191.78				4.7	%
Occupancy (%)			71.3	%			70.4	%			0.9				73.0	%			72.2	%			0.8
North America
REVPAR ($)			119.95				113.40				5.8	%			151.81				142.64				6.4	%
ADR ($)			165.87				158.99				4.3	%			203.31				193.40				5.1	%
Occupancy (%)			72.3	%			71.3	%			1.0				74.7	%			73.8	%			0.9
Latin America
REVPAR ($)			99.85				99.37				0.5	%			109.47				109.69				-0.2	%
ADR ($)			166.83				163.95				1.8	%			179.54				178.07				0.8	%
Occupancy (%)			59.9	%			60.6	%			-0.7				61.0	%			61.6	%			-0.6
ASIA PACIFIC
REVPAR ($)			102.81				100.63				2.2	%			104.32				99.93				4.4	%
ADR ($)			165.45				168.20				-1.6	%			168.37				169.36				-0.6	%
Occupancy (%)			62.1	%			59.8	%			2.3				62.0	%			59.0	%			3.0
Greater China
REVPAR ($)			90.40				86.94				4.0	%			90.10				86.59				4.1	%
ADR ($)			161.40				162.64				-0.8	%			160.63				162.91				-1.4	%
Occupancy (%)			56.0	%			53.5	%			2.5				56.1	%			53.2	%			2.9
Rest of Asia
REVPAR ($)			116.23				115.40				0.7	%			125.97				120.20				4.8	%
ADR ($)			169.03				173.00				-2.3	%			177.70				177.03				0.4	%
Occupancy (%)			68.8	%			66.7	%			2.1				70.9	%			67.9	%			3.0
EAME
REVPAR ($)			131.30				128.26				2.4	%			139.49				135.95				2.6	%
ADR ($)			204.00				201.27				1.4	%			212.84				210.45				1.1	%
Occupancy (%)			64.4	%			63.7	%			0.7				65.5	%			64.6	%			0.9
Europe
REVPAR ($)			134.84				133.38				1.1	%			149.71				147.90				1.2	%
ADR ($)			209.57				208.61				0.5	%			225.31				225.10				0.1	%
Occupancy (%)			64.3	%			63.9	%			0.4				66.4	%			65.7	%			0.7
Africa & Middle East
REVPAR ($)			124.65				118.62				5.1	%			124.89				118.86				5.1	%
ADR ($)			193.53				187.32				3.3	%			194.41				188.60				3.1	%
Occupancy (%)			64.4	%			63.3	%			1.1				64.2	%			63.0	%			1.2

 

(1)	Includes same store owned, leased, managed, and franchised hotels

(2)	Includes same store owned, leased, and managed hotels

 

25

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Owned Hotel Results—Same Store

For the Six Months Ended June 30, 2013

UNAUDITED

 

		Worldwide												North America												International
		2013				2012				Var. USD				2013				2012				Var. USD				2013				2012				Var. USD
TOTAL HOTELS		38 Hotels												13 Hotels												25 Hotels
REVPAR ($)			165.89				158.03				5.0	%			179.16				159.44				12.4	%			155.74				156.95				-0.8	%
ADR ($)			229.86				219.59				4.7	%			227.70				208.01				9.5	%			231.80				229.45				1.0	%
Occupancy (%)			72.2	%			72.0	%			0.2				78.7	%			76.6	%			2.1				67.2	%			68.4	%			-1.2
Total Revenue*			629,401				599,546				5.0	%			300,227				267,323				12.3	%			329,173				332,223				-0.9	%
Total Expenses*			494,416				480,942				-2.8	%			236,360				224,634				-5.2	%			258,056				256,308				-0.7	%

 

*	Revenues & Expenses above are represented in ‘000’s

 

26

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Management Fees, Franchise Fees and Other Income

For the Six Months Ended June 30, 2013

UNAUDITED ($ millions)

 

		Worldwide
		2013				2012				Variance				% Variance
Management Fees
Base Fees			172				161				11				6.8
Incentive Fees			89				80				9				11.3
Total Management Fees			261				241				20				8.3
Franchise Fees			104				97				7				7.2
Total Management & Franchise Fees			365				338				27				8.0
Other Management & Franchise Revenues (1)			76				73				3				4.1
Total Management & Franchise Revenues			441				411				30				7.3
Other			12				12				—				—
Management Fees, Franchise Fees and Other Income			453				423				30				7.1

 

(1)	Other Management & Franchise Revenues primarily includes the amortization of the deferred gains of approximately $45 million in 2013 and $43 million in 2012, resulting from the sales of hotels subject to long-term management contracts and termination fees.

 

27

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Vacation Ownership & Residential Revenues and Expenses

For the Six Months Ended June 30,

UNAUDITED ($ millions)

 

		2013				2012				$ Variance				% Variance
Originated Sales Revenues (1)—Vacation Ownership Sales			162				159				3				1.9
Other Sales and Services Revenues (2)			171				142				29				20.4
Deferred Revenues—Percentage of Completion			(2	)			3				(5	)			n/m
Deferred Revenues—Other (3)			5				(4	)			9				n/m
Vacation Ownership Sales and Services Revenues			336				300				36				12.0
Residential Sales and Services Revenues (4)			212				530				(318	)			(60.0	)
Total Vacation Ownership & Residential Sales and Services Revenues			548				830				(282	)			(34.0	)
Originated Sales Expenses (5)—Vacation Ownership Sales			116				111				(5	)			(4.5	)
Other Expenses (6)			127				105				(22	)			(21.0	)
Deferred Expenses—Percentage of Completion			(1	)			2				3				n/m
Deferred Expenses—Other			5				6				1				16.7
Vacation Ownership Expenses			247				224				(23	)			(10.3	)
Residential Expenses (4)			115				410				295				(72.0	)
Total Vacation Ownership & Residential Expenses			362				634				272				42.9

 

(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, 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)	For 2012 and 2013, includes $523 million and $203 million of revenues and $410 million and $115 million expenses associated with the St. Regis Bal Harbour residential project, respectively.

(5)	Timeshare cost of sales and sales & marketing expenses before deferrals of sales expenses for U.S. GAAP reporting purposes

(6)	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

 

28

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Hotels without Comparable Results & Other Selected Items

As of June 30, 2013

UNAUDITED ($ millions)

Properties without comparable results in 2013 and 2012:

 

Property		Location
The Westin Peachtree Plaza, Atlanta		Atlanta, GA
Sheraton Suites Philadelphia Airport		Philadelphia, PA
The St. Regis New York		New York, NY
The Westin Maui Resort & Spa, Ka’anapali		Maui, HI
Aloft San Francisco Airport		Millbrae, CA
Sheraton Santa Maria de El Paular		Madrid, Spain
Hotel Maria Cristina, San Sebastian		San Sebastian, Spain
Hotel Alfonso XIII, Seville		Seville, Spain
Aloft Tucson University		Tucson, AZ
The Gritti Palace, Venice		Venice, Italy
The Westin St. John		St. John, Virgin Islands

Properties sold or closed in 2013 and 2012:

 

Property		Location
Atlanta Perimeter		Atlanta, GA
W Los Angeles—Westwood		Los Angeles, CA
W Chicago—Lakeshore		Chicago, IL
Caesars Cove Haven		Lakeville, PA
New York—Manhattan at Times Square		New York, NY
Caesars Paradise Stream		Mount Pocono, PA
Caesars Pocono Palace		Marshalls Creek, PA
Caesars Brookdale		Scotrun, PA
Aloft Lexington		Lexington, MA
Element Lexington		Lexington, MA
W New Orleans		New Orleans, LA
W New Orleans—French Quarter		New Orleans, LA

Revenues and Expenses Associated with Assets Sold or Closed in 2013 and 2012: ⁽¹⁾ 

 

		Q1				Q2				Q3				Q4				Full Year
Hotels Sold or Closed in 2012:
2012
Revenues		$	35			$	43			$	36			$	—				$    114
Expenses (excluding depreciation)		$	32			$	32			$	28			$	1				$      93
Hotels Sold or Closed in 2013:
2013
Revenues		$	10			$	2			$	—			$	—				$      12
Expenses (excluding depreciation)		$	8			$	2			$	—			$	—				$      10
2012
Revenues		$	11			$	11			$	10			$	11				$      43
Expenses (excluding depreciation)		$	8			$	8			$	9			$	9				$      34

 

(1)

Results consist of four hotels sold in 2013 and eight hotels sold in 2012. These amounts are included in the revenues and expenses from owned, leased and consolidated joint venture hotels in the statements of income for 2013 and 2012. These amounts are not impacted from the sale of Caesars Brookdale because it was closed prior to 2012.

 

29

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Capital Expenditures

For the Three and Six Months Ended June 30, 2013

UNAUDITED ($ millions)

 

		Q2				YTD
Maintenance Capital Expenditures: (1)
Owned, Leased and Consolidated Joint Venture Hotels			6				13
Corporate/IT			25				35
Subtotal			31				48
Vacation Ownership and Residential Capital Expenditures:
Net capital expenditures for inventory (excluding St. Regis Bal Harbour) (2)			(8	)			(23	)
Capital expenditures for inventory—St. Regis Bal Harbour			1				3
Subtotal			(7	)			(20	)
Development Capital			48				129
Total Capital Expenditures			72				157

 

(1)	Maintenance capital expenditures include improvements that extend the useful life of the asset.

(2)	Represents gross inventory capital expenditures of $9 million and $16 million in the three and six months ended June 30, 2013, less cost of sales of $17 million and $39 million in the three and six months ended June 30, 2013.

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

2013 Divisional Hotel Inventory Summary by Ownership by Brand

As of June 30, 2013

 

		Americas								North America								Latin America								Asia Pacific								Greater China								Rest of Asia								Europe, Africa & Middle East								Europe								Africa & Middle East								TOTAL
		Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms				Hotels				Rooms
Owned & Leased
Sheraton			11				6,228				6				3,529				5				2,699				2				821				—				—				2				821				4				705				4				705				—				—				17				7,754
Westin			6				3,131				3				2,229				3				902				1				273				—				—				1				273				3				650				3				650				—				—				10				4,054
Four Points			1				177				1				177				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				177
W			1				509				1				509				—				—				—				—				—				—				—				—				2				665				2				665				—				—				3				1,174
Luxury Collection			2				824				1				643				1				181				—				—				—				—				—				—				5				577				5				577				—				—				7				1,401
St. Regis			3				716				3				716				—				—				1				160				—				—				1				160				2				261				2				261				—				—				6				1,137
Le Meridien			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Aloft			3				542				3				542				—				—				—				—				—				—				—				—				—				—				—				—				—				—				3				542
Element			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Other			1				135				1				135				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				135
Total Owned & Leased			28				12,262				19				8,480				9				3,782				4				1,254				—				—				4				1,254				16				2,858				16				2,858				—				—				48				16,374
Managed & UJV
Sheraton			53				29,505				37				26,426				16				3,079				82				32,505				54				24,404				28				8,101				72				20,735				40				11,517				32				9,218				207				82,745
Westin			60				30,796				57				29,910				3				886				31				10,340				15				5,341				16				4,999				15				5,046				12				4,097				3				949				106				46,182
Four Points			3				426				—				—				3				426				24				7,461				19				5,840				5				1,621				14				2,582				5				779				9				1,803				41				10,469
W			28				8,483				26				8,050				2				433				9				2,302				3				1,115				6				1,187				4				805				3				364				1				441				41				11,590
Luxury Collection			11				1,938				4				1,648				7				290				10				1,991				4				811				6				1,180				26				4,859				21				3,475				5				1,384				47				8,788
St. Regis			11				2,117				9				1,808				2				309				8				2,032				5				1,380				3				652				5				1,108				2				223				3				885				24				5,257
Le Meridien			4				469				3				309				1				160				27				7,568				8				2,796				19				4,772				47				12,984				19				5,808				28				7,176				78				21,021
Aloft			3				469				—				—				3				469				7				1,801				5				1,023				2				778				4				943				3				535				1				408				14				3,213
Element			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Other			1				151				1				151				—				—				—				—				—				—				—				—				1				165				1				165				—				—				2				316
Total Managed & UJV			174				74,354				137				68,302				37				6,052				198				66,000				113				42,710				85				23,290				188				49,227				106				26,963				82				22,264				560				189,581
Franchised
Sheraton			175				51,323				164				48,473				11				2,850				13				6,124				3				1,836				10				4,288				19				4,937				17				4,534				2				403				207				62,384
Westin			65				20,527				60				19,000				5				1,527				9				2,730				2				496				7				2,234				3				1,176				3				1,176				—				—				77				24,433
Four Points			125				19,649				116				18,320				9				1,329				8				1,441				1				126				7				1,315				6				971				6				971				—				—				139				22,061
W			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Luxury Collection			9				1,748				7				1,500				2				248				10				3,071				—				—				10				3,071				12				1,673				12				1,673				—				—				31				6,492
St. Regis			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Le Meridien			11				2,717				10				2,606				1				111				3				715				1				160				2				555				5				1,446				3				623				2				823				19				4,878
Aloft			51				7,528				51				7,528				—				—				5				742				—				—				5				742				—				—				—				—				—				—				56				8,270
Element			11				1,793				11				1,793				—				—				—				—				—				—				—				—				—				—				—				—				—				—				11				1,793
Other			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Total Franchised			447				105,285				419				99,220				28				6,065				48				14,823				7				2,618				41				12,205				45				10,203				41				8,977				4				1,226				540				130,311
Systemwide
Sheraton			239				87,056				207				78,428				32				8,628				97				39,450				57				26,240				40				13,210				95				26,377				61				16,756				34				9,621				431				152,883
Westin			131				54,454				120				51,139				11				3,315				41				13,343				17				5,837				24				7,506				21				6,872				18				5,923				3				949				193				74,669
Four Points			129				20,252				117				18,497				12				1,755				32				8,902				20				5,966				12				2,936				20				3,553				11				1,750				9				1,803				181				32,707
W			29				8,992				27				8,559				2				433				9				2,302				3				1,115				6				1,187				6				1,470				5				1,029				1				441				44				12,764
Luxury Collection			22				4,510				12				3,791				10				719				20				5,062				4				811				16				4,251				43				7,109				38				5,725				5				1,384				85				16,681
St. Regis			14				2,833				12				2,524				2				309				9				2,192				5				1,380				4				812				7				1,369				4				484				3				885				30				6,394
Le Meridien			15				3,186				13				2,915				2				271				30				8,283				9				2,956				21				5,327				52				14,430				22				6,431				30				7,999				97				25,899
Aloft			57				8,539				54				8,070				3				469				12				2,543				5				1,023				7				1,520				4				943				3				535				1				408				73				12,025
Element			11				1,793				11				1,793				—				—				—				—				—				—				—				—				—				—				—				—				—				—				11				1,793
Other			2				286				2				286				—				—				—				—				—				—				—				—				1				165				1				165				—				—				3				451
Vacation Ownership			14				7,532				13				6,952				1				580				—				—				—				—				—				—				—				—				—				—				—				—				14				7,532
Total Systemwide			663				199,433				588				182,954				75				16,479				250				82,077				120				45,328				130				36,749				249				62,288				163				38,798				86				23,490				1,162				343,798

Note: Includes Vacation Ownership properties

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Vacation Ownership Inventory Pipeline

As of June 30, 2013

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				1,584				22				37				1,643
St. Regis			2				2				—				56				—				—				56
The Luxury Collection			1				1				—				6				—				—				6
Unbranded			2				2				1				99				—				1				100
Total SVO, Inc.			21				21				16				4,824				22				750				5,596
Unconsolidated Joint Ventures (UJV’s)			1				1				1				198				—				—				198
Total including UJV’s			22				22				17				5,022				22				750				5,794
Total Intervals Including UJV’s (7)															261,144				1,144				39,000				301,288

 

(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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