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 THIRD QUARTER

2014 RESULTS

STAMFORD, Conn. (October 28, 2014) – Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported third quarter 2014 financial results.

Third Quarter 2014 Highlights

 

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Excluding special items, EPS from continuing operations was $0.66. Including special items, EPS from continuing operations was $0.59.

 

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Adjusted EBITDA was $298 million.

 

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Excluding special items, income from continuing operations was $121 million. Including special items, income from continuing operations was $109 million.

 

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Worldwide Systemwide REVPAR for Same-Store Hotels increased 7.4% in constant dollars (7.5% in actual dollars) compared to 2013. Systemwide REVPAR for Same-Store Hotels in North America increased 9.1% in constant dollars (8.8% in actual dollars).

 

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Management fees, franchise fees and other income increased 3.2% compared to 2013. Management and franchise fees increased 7.3% compared to 2013.

 

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Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 125 basis points compared to 2013.

 

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Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 7.2% in constant dollars (7.7% in actual dollars) compared to 2013.

 

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Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 120 basis points compared to 2013.

 

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Earnings from Starwood’s vacation ownership and residential business decreased approximately $21 million compared to 2013, including a $19 million decrease in earnings from the St. Regis Bal Harbour residential project (“Bal Harbour”) which is sold out.

 

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During the quarter, the Company signed 39 hotel management and franchise contracts, representing approximately 7,100 rooms, and opened 18 hotels and resorts with approximately 3,500 rooms.

 

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During the quarter, the Company issued $350 million of 3.75% Senior Notes due 2025, issued $300 million of 4.50% Senior Notes due 2034, and established a Commercial Paper Program under which the Company may issue up to $1.75 billion of short-term unsecured notes.

 

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During the quarter, the Company paid a regular quarterly dividend of $0.35 per share and a special dividend of $0.65 per share, increased its share repurchase authorization by $1.1 billion, and repurchased 10.4 million shares at a total cost of $857 million and an average price of $82.57 per share.

 

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During the nine months ended September 30, 2014, the Company returned approximately $1.6 billion to shareholders through dividends and share repurchases.

 

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Third Quarter 2014 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the third quarter of 2014 of $0.59 compared to $0.81 in the third quarter of 2013. Excluding special items, EPS from continuing operations was $0.66 for the third quarter of 2014 compared to $0.71 in the third quarter of 2013. Special items in the third quarter of 2014, which totaled a charge of $12 million (after-tax), included a $13 million pre-tax charge for the impairment of a wholly-owned hotel and a $7 million pre-tax charge associated with the termination of a leasehold interest in a hotel which is now franchised. Special items in the third quarter of 2013, which totaled a benefit of $20 million (after tax), primarily related to a favorable adjustment to a legal reserve, tax benefits associated with a non-core asset sale and the reversal of a valuation allowance on deferred tax assets which are now deemed realizable. Excluding special items, the effective income tax rate in the third quarter of 2014 was 34.7% compared to 31.3% in the third quarter of 2013.

Income from continuing operations was $109 million in the third quarter of 2014, compared to $157 million in the third quarter of 2013. Excluding special items, income from continuing operations was $121 million in the third quarter of 2014 compared to $137 million in the third quarter of 2013.

Net income was $109 million and $0.59 per share in the third quarter of 2014, compared to $157 million and $0.81 per share in the third quarter of 2013.

Frits van Paasschen, CEO, said, “We delivered strong results in the third quarter, with both EBITDA and EPS ahead of expectations. Worldwide REVPAR grew by over seven percent in constant dollars. In North America, occupancies reached record levels for the sixth consecutive quarter, and REVPAR was up over nine percent. During the quarter, we made significant progress in reaching our target leverage, having repurchased $857 million in stock. We also issued $650 million in long term debt at very favorable rates.

“Recent volatility in markets outside the U.S. along with a strengthening U.S. dollar are likely to be headwinds in the fourth quarter and into 2015. Despite these headwinds, we remain as bullish as ever about the long-term prospects of our business as rising global wealth, unprecedented growth in travel infrastructure, and a more interconnected business world continue to drive demand for high-end travel.”

Nine Months Ended September 30, 2014 Earnings Summary

Income from continuing operations was $398 million in the nine months ended September 30, 2014 compared to $437 million in the same period in 2013. Excluding special items, income from continuing operations was $390 million in the nine months ended September 30, 2014 compared to $438 million in the same period in 2013.

Net income was $399 million and $2.11 per share in the nine months ended September 30, 2014 compared to $507 million and $2.61 per share in the same period in 2013.

Adjusted EBITDA was $903 million in the nine months ended September 30, 2014 compared to $949 million in the same period in 2013.

 

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Third Quarter 2014 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 7.4% in constant dollars (7.5% in actual dollars) compared to the third quarter of 2013. International Systemwide REVPAR for Same-Store Hotels increased 5.4% in constant dollars (5.9% in actual dollars).

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

 

		REVPAR
Region		Constant Dollars				Actual Dollars
Americas:
North America			9.1	%			8.8	%
Latin America			6.1	%			6.1	%
Asia Pacific:
Greater China			8.7	%			8.2	%
Rest of Asia			0.3	%			—
Europe, Africa & Middle East:
Europe			6.1	%			8.2	%
Africa & Middle East			4.7	%			4.3	%

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

 

		REVPAR
Brand		Constant Dollars				Actual Dollars
St. Regis/Luxury Collection			8.2	%			9.1	%
W Hotels			8.0	%			8.1	%
Westin			9.0	%			8.9	%
Sheraton			6.4	%			6.2	%
Le Méridien			3.5	%			4.1	%
Four Points by Sheraton			7.4	%			6.9	%
Aloft			12.6	%			12.9	%

Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 125 basis points compared to 2013. International gross operating profit margins for Same-Store Company-Operated properties increased approximately 100 basis points. North American Same-Store Company-Operated gross operating profit margins increased approximately 165 basis points.

Management fees, franchise fees and other income were $255 million, up $8 million, or 3.2% compared to the third quarter of 2013. Management fees increased 5.1% to $143 million and franchise fees increased 12.5% to $63 million compared to the third quarter of 2013. Other management and franchise revenue was down 15.9% compared to the third quarter of 2013 primarily due to the inclusion, in 2013, of a significant fee associated with the termination of a management contract.

Development

During the third quarter of 2014, the Company signed 39 hotel management and franchise contracts, representing approximately 7,100 rooms, of which 34 are new builds and five are conversions from other brands. At September 30, 2014, the Company had approximately 470 hotels in the active pipeline representing approximately 105,000 rooms. In addition to its active pipeline, the Company holds a 74% equity stake in Design Hotels AG, a company that represents and markets a distinct selection of over 280 independent hotels with nearly 21,500 rooms globally. Starwood and Design Hotels have recently entered into an agreement that allows greater coordination and cooperation between the companies.

 

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During the third quarter of 2014, 18 new hotels and resorts (representing approximately 3,500 rooms) entered the system, including The Castle Hotel, a Luxury Collection Hotel, Dalian (China, 292 rooms), Aloft Tampa Downtown (Florida, 130 rooms), Le Méridien Bahrain City Centre (Bahrain, 260 rooms), Sheraton New Caledonia Deva Resort & Spa (New Caledonia, 180 rooms), and Element Frankfurt Airport (Germany, 133 rooms). During the quarter, five properties (representing approximately 1,200 rooms) were removed from the system.

Owned Hotels

Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 7.2% in constant dollars (7.7% in actual dollars) when compared to 2013. REVPAR at Starwood Same-Store Owned Hotels in North America increased 7.5% in constant dollars (6.1% actual dollars). Internationally, Starwood Same-Store Owned Hotel REVPAR increased 7.0% in constant dollars (9.0% in actual dollars).

Revenues at Starwood Same-Store Owned Hotels Worldwide increased 5.7% in constant dollars (6.3% in actual dollars) while costs and expenses increased 4.2% in constant dollars (4.6% in actual dollars) when compared to 2013. Margins at these hotels increased approximately 120 basis points compared to 2013.

Revenues at Starwood Same-Store Owned Hotels in North America increased 5.9% in constant dollars (4.5% in actual dollars) while costs and expenses increased 4.0% in constant dollars (2.8% in actual dollars) when compared to 2013. Margins at these hotels increased approximately 140 basis points compared to 2013.

Internationally, revenues at Starwood Same-Store Owned Hotels increased 5.6% in constant dollars (7.4% in actual dollars) while costs and expenses increased 4.3% in constant dollars (6.1% in actual dollars) when compared to 2013. Margins at these hotels increased approximately 100 basis points compared to 2013.

Revenues at Owned Hotels were $393 million, compared to $398 million in 2013. Expenses at Owned Hotels were $308 million compared to $318 million in 2013. Revenues in the third quarter of 2014 were negatively impacted by asset sales since the third quarter of 2013.

Vacation Ownership

Vacation ownership revenues were flat at $157 million for the third quarter of 2014, compared to the corresponding period in 2013. Originated contract sales of vacation ownership intervals decreased 2.4% during the third quarter of 2014, compared to the corresponding period in 2013, as the average price per vacation ownership unit sold decreased 2.6% to approximately $13,600, partially offset by a 0.6% increase in the number of contracts signed.

Residential

During the third quarter of 2014, the Company’s residential revenues were $2 million compared to $43 million in 2013. The Company realized residential revenues from Bal Harbour of $40 million and earnings of $19 million in the third quarter of 2013 compared to no revenue or earnings in the third quarter of 2014, as the Bal Harbour residential project sold out earlier this year.

Selling, General, Administrative and Other

During the third quarter of 2014, selling, general, administrative and other expenses decreased 4.0% to $96 million compared to $100 million in 2013, primarily due to higher bad debt expense in the prior year and the timing of incentives earned in 2014 in connection with the Company’s relocation of its corporate headquarters to Connecticut in 2012.

 

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Capital

Gross capital spending during the quarter included approximately $43 million of maintenance capital and $35 million of development capital.

Asset Sales

During the third quarter of 2014, the Company terminated its leasehold interest in the Westin Dublin Hotel in Dublin, Ireland, and converted the hotel to a franchise. On October 20, 2014, the Company completed the sale of the St. Regis Rome, Italy, for gross cash proceeds of approximately €110 million, subject to a long-term management agreement.

Dividends

In the third quarter of 2014, the Company declared a regular quarterly dividend of $0.35 per share, which was paid on September 26, 2014. In accordance with the Company’s intention to return to shareholders approximately $500 million in cash realized from the completion of the Bal Harbour residential project and sale of the hotel earlier this year, the Company paid a special dividend of $0.65 per share on September 26, 2014 and expects to declare an additional special dividend of $0.65 per share in the fourth quarter of 2014. The total dividends paid in the third quarter of 2014 were approximately $181 million.

Share Repurchases

In the third quarter of 2014, the Company’s Board of Directors increased its share repurchase authorization by $1.1 billion to approximately $1.5 billion. During the third quarter of 2014, the Company repurchased 10.4 million shares at a total cost of approximately $857 million and an average price of $82.57 per share. As of September 30, 2014, approximately $688 million remained available under the Company’s share repurchase authorization.

Balance Sheet

During the third quarter of 2014, the Company completed a public offering of $350 million of 3.75% Senior Notes due 2025 and $300 million of 4.50% Senior Notes due 2034. The Company also established a Commercial Paper Program, which gives it the ability to issue up to $1.75 billion of short-term unsecured notes. At September 30, 2014, the Company had borrowings of $106 million outstanding under the program. Finally, during the third quarter of 2014, the Company amended its Revolving Credit Facility, which extends the maturity by two years to 2020.

At September 30, 2014, the Company had gross debt of $2.2 billion, cash and cash equivalents of $506 million (including $52 million of restricted cash) and net debt of $1.7 billion, compared to net debt of $528 million as of December 31, 2013, in each case excluding debt and restricted cash associated with securitized vacation ownership notes receivable. Net debt at September 30, 2014, including $272 million of debt and $12 million of restricted cash associated with securitized vacation ownership notes receivable, was $1.9 billion.

 

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Outlook

For the full year 2014:

 

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Adjusted EBITDA is expected to be approximately $1.215 billion to $1.225 billion (based on the assumptions below).

 

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REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 5% to 6% in constant dollars (approximately 75 basis points lower in actual dollars at current exchange rates).

 

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REVPAR increases at Same-Store Owned Hotels Worldwide of 4% to 6% in constant dollars (approximately 125 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 8% to 10%.

 

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Earnings from the Company’s vacation ownership and residential business of approximately $170 million to $175 million.

 

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Selling, general and administrative expenses increase approximately 5% to 7%.

 

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Full year owned hotel earnings are negatively impacted by approximately $35 million due to 2013 and year-to-date 2014 asset sales, a closed hotel, and leased hotels that were converted to managed or franchised contracts in 2014.

 

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Shifts in exchange rates since our last outlook will negatively impact full year earnings by approximately $10 million if exchange rates stay at current levels.

 

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Depreciation and amortization is expected to be approximately $315 million.

 

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Interest expense is expected to be approximately $123 million.

 

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Full year effective tax rate is expected to be approximately 33%, and cash taxes from operating earnings are expected to be approximately $140 million (based on the assumptions above).

 

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EPS before special items is expected to be approximately $2.79 to $2.83 (based on the assumptions above).

 

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Full year capital expenditures (excluding vacation ownership and residential inventory) are expected to be approximately $200 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 $200 million.

 

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Vacation ownership is expected to generate approximately $65 million in positive cash flow. The Company does not expect a securitization of receivables in 2014.

 

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For the three months ended December 31, 2014:

 

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Adjusted EBITDA is expected to be approximately $310 million to $320 million (based on the assumptions below).

 

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REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 3% to 5% in constant dollars (approximately 200 basis points lower in actual dollars at current exchange rates).

 

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REVPAR increases at Same-Store Company Owned Hotels Worldwide of 3% to 5% in constant dollars (approximately 325 basis points lower in actual dollars at current exchange rates).

 

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Management fees, franchise fees and other income increase approximately 7% to 9% (including an approximately $8 million termination fee).

 

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Earnings from the Company’s vacation ownership and residential business of approximately $40 million to $45 million.

 

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Depreciation and amortization is expected to be approximately $84 million.

 

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Interest expense is expected to be approximately $37 million.

 

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The effective tax rate for the quarter is expected to be approximately 32% (based on the assumptions above).

 

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EPS is expected to be approximately $0.73 to $0.77 (based on the assumptions above).

For the Full Year 2015:

 

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At this point, the Company expects REVPAR at Same-Store Company-Operated Hotels Worldwide to increase 4% to 6% in constant dollars. Asset sales, a closed hotel, and leased hotels that were converted to managed and franchised contracts completed to date will reduce 2015 owned hotel earnings by approximately $9 million year over year. Additional significant non-recurring items in 2014 EBITDA include $30 million related to three large one-time termination fees received by the Company and $11 million from the Bal Harbour residential project, which is sold out. The Company will provide more details on its 2015 expectations in February.

 

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Special Items

The Company’s special items included a pre-tax charge of $23 million ($12 million charge after-tax) in the third quarter of 2014 compared to a pre-tax benefit of $21 million ($20 million benefit after-tax) in the same period of 2013.

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 September 30,										Nine Months Ended September 30,
2014				2013						2014				2013
$	121			$	137			Income from continuing operations before special items		$	390			$	438
$	0.66			$	0.71			EPS before special items		$	2.06			$	2.26
								Special Items
	—				22			Restructuring and other special (charges) credits, net (a)			3				23
	(22	)			3			Gain (loss) on asset dispositions and impairments, net (b)			(55	)			(5	)
	—				(4	)		Impairment of unconsolidated joint venture hotel (c)			—				(4	)
	(1	)			—			Loss on early extinguishment of debt (d)			(1	)			—
	(23	)			21			Total special items – pre-tax			(53	)			14
	11				(1	)		Income tax benefit (expense) for special items (e)			61				(15	)
	(12	)			20			Total special items – after-tax			8				(1	)
$	109			$	157			Income from continuing operations		$	398			$	437
$	0.59			$	0.81			EPS including special items		$	2.10			$	2.25

 

a)

During the nine months ended September 30, 2014, the net credit relates to the reversal of a reserve associated with a $3 million note receivable from a previous disposition. During the three and nine months ended September 30, 2013, the credit primarily related to a favorable adjustment to a legal reserve.

 

b)

During the three months ended September 30, 2014, the net loss primarily relates to a $13 million impairment charge associated with a wholly-owned hotel and a $7 million charge related to the termination of a leasehold interest in a hotel which is now franchised. During the nine months ended September 30, 2014, the net loss also includes the impairment of two hotels, one of which was sold subject to a long-term franchise contract and the other of which represents a leased hotel that was converted to a managed hotel. In addition, during the nine months ended September 30, 2014, the Company recorded an impairment charge associated with one of its foreign unconsolidated joint ventures. During the nine months ended September 30, 2013, the net loss primarily included charges related to the sale of three wholly-owned hotels.

 

c)	During the three and nine months ended September 30, 2013, the net loss related to an impairment charge associated with a hotel in which the Company owns a non-controlling joint venture interest.

 

d)	During the three and nine months ended September 30, 2014, the net charge relates to the write-off of certain deferred financing costs associated with amending the Company’s Revolving Credit Facility.

 

e)

During the three months ended September 30, 2014, the net benefit primarily relates to tax benefits on the pre-tax special items and provisions to return adjustments from prior years. During the nine months ended September 30, 2014, the net benefit also includes the recognition of $52 million for settlement of a foreign tax audit, partially offset by tax charges on the pre-tax special items. During the three months ended September 30, 2013, the net charge related to tax expense on the legal reserve adjustment discussed above, substantially offset by a $4 million tax benefit on a non-core asset disposition with a high tax basis and a $3 million deferred tax benefit associated with the reversal of the valuation allowance as the tax asset is now deemed realizable. The nine months ended September 30, 2013 include net tax charges associated with an asset disposition, interest on deferred income associated with vacation ownership sales, tax reserves and the resolution of certain tax positions.

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 third quarter financial results at 11:30 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 on the corporate website a few hours after the live event on Tuesday, October 28 and will run for one year. Alternatively, participants may dial into the live call at (866) 921-0636 with conference ID 10325720. Outside the U.S., participants may dial into the live call at (706) 758-8764. Please dial in fifteen minutes early to ensure a timely start. A call replay will be available a few hours after the live event on Tuesday, October 28 and will run for one week; the call replay can be accessed by dialing (855) 859-2056 with conference ID 10325720. Outside the U.S., the call replay can be accessed at (404) 537-3406.

 

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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 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 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 and other special charges (credits), 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 Owned or Owned Hotels reflect the Company’s owned, leased, and consolidated joint venture hotels. 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 Systemwide metrics (e.g., REVPAR) reflect metrics for the Company’s Owned, managed and franchised hotels. REVPAR is defined as revenue per available room; REVPAR metrics do not include revenue from Design Hotels AG. 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 more than 1,200 properties in 100 countries and 181,400 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. There can be no assurance as to the development of future hotels in the Company’s pipeline or additional vacation ownership units. 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 September 30														Nine Months Ended September 30,
2014				2013				% Variance						2014				2013				% Variance
												Revenues
$	393			$	398				(1.3	)		Owned, leased and consolidated joint venture hotels		$	1,171			$	1,196				(2.1	)
	159				200				(20.5	)		Vacation ownership and residential sales and services			504				748				(32.6	)
	255				247				3.2			Management fees, franchise fees and other income			763				700				9.0
	686				663				3.5			Other revenues from managed and franchised properties (a)			2,052				1,965				4.4
	1,493				1,508				(1.0	)					4,490				4,609				(2.6	)
												Costs and Expenses
	308				318				3.1			Owned, leased and consolidated joint venture hotels			923				966				4.5
	121				141				14.2			Vacation ownership and residential			374				503				25.6
	96				100				4.0			Selling, general, administrative and other			293				278				(5.4	)
	—				(22	)			(100.0	)		Restructuring and other special charges (credits), net			(3	)			(23	)			(87.0	)
	65				59				(10.2	)		Depreciation			188				174				(8.0	)
	7				6				(16.7	)		Amortization			22				21				(4.8	)
	686				663				(3.5	)		Other expenses from managed and franchised properties (a)			2,052				1,965				(4.4	)
	1,283				1,265				(1.4	)					3,849				3,884				0.9
	210				243				(13.6	)		Operating income			641				725				(11.6	)
	3				—				n/m			Equity earnings and gains from unconsolidated ventures, net			21				17				23.5
	(27	)			(25	)			(8.0	)		Interest expense, net of interest income of $0, $1, $2 and $2			(73	)			(77	)			5.2
	(1	)			—				n/m			Loss on early extinguishment of debt, net			(1	)			—				n/m
	(22	)			3				n/m			Gain (loss) on asset dispositions and impairments, net			(55	)			(5	)			n/m
	163				221				(26.2	)		Income from continuing operations before taxes and noncontrolling interests			533				660				(19.2	)
	(54	)			(64	)			15.6			Income tax expense			(135	)			(223	)			39.5
	109				157				(30.6	)		Income from continuing operations			398				437				(8.9	)
												Discontinued Operations:
	—				—				—			Gain on dispositions, net of tax			1				70				(98.6	)
	109				157				(30.6	)		Net income			399				507				(21.3	)
	—				—				—			Net loss (income) attributable to noncontrolling interests			—				—				—
$	109			$	157				(30.6	)		Net income attributable to Starwood		$	399			$	507				(21.3	)
												Earnings Per Share – Basic
$	0.60			$	0.82				(26.8	)		Continuing operations		$	2.12			$	2.28				(7.0	)
	—				—				—			Discontinued operations			0.01				0.37				(97.3	)
$	0.60			$	0.82				(26.8	)		Net income		$	2.13			$	2.65				(19.6	)
												Earnings Per Share – Diluted
$	0.59			$	0.81				(27.2	)		Continuing operations		$	2.10			$	2.25				(6.7	)
	—				—				—			Discontinued operations			0.01				0.36				(97.2	)
$	0.59			$	0.81				(27.2	)		Net income		$	2.11			$	2.61				(19.2	)
												Amounts attributable to Starwood’s Common Stockholders
$	109			$	157				(30.6	)		Continuing operations		$	398			$	437				(8.9	)
	—				—				—			Discontinued operations			1				70				(98.6	)
$	109			$	157				(30.6	)		Net income		$	399			$	507				(21.3	)
	185				192							Weighted average number of shares			188				192
	186				194							Weighted average number of shares assuming dilution			190				194

 

 

(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)

 

		September 30, 2014				December 31, 2013
		(unaudited)
Assets
Current assets:
Cash and cash equivalents		$	454			$	616
Restricted cash			60				134
Accounts receivable, net of allowance for doubtful accounts of $67 and $59			624				643
Inventories			198				217
Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $5 and $6			48				54
Deferred income taxes			202				211
Prepaid expenses and other			166				121
Total current assets			1,752				1,996
Investments			233				251
Plant, property and equipment, net			2,942				3,034
Goodwill and intangible assets, net			1,998				2,032
Deferred income taxes			575				591
Other assets (a)			680				543
Securitized vacation ownership notes receivable, net			246				315
Total assets		$	8,426			$	8,762
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt (b)		$	3			$	2
Accounts payable			90				105
Current maturities of long-term securitized vacation ownership debt			81				97
Accrued expenses			1,110				1,092
Accrued salaries, wages and benefits			396				404
Accrued taxes and other			251				224
Total current liabilities			1,931				1,924
Long-term debt (b)			2,163				1,265
Long-term securitized vacation ownership debt			191				258
Deferred income taxes			42				48
Other liabilities			1,949				1,904
Total liabilities			6,276				5,399
Commitments and contingencies
Stockholders’ equity:
Common stock; $0.01 par value; authorized 1,000,000,000 shares; 180,402,209 and 191,897,809 shares outstanding at September 30, 2014 and December 31, 2013, respectively			2				2
Additional paid-in capital			28				661
Accumulated other comprehensive loss			(417	)			(335	)
Retained earnings			2,535				3,032
Total Starwood stockholders’ equity			2,148				3,360
Noncontrolling interests			2				3
Total equity			2,150				3,363
Total liabilities and equity		$	8,426			$	8,762

 

(a)	Includes restricted cash of $4 million and $3 million at September 30, 2014 and December 31, 2013, respectively.

(b)	Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $212 million and $218 million at September 30, 2014 and December 31, 2013, respectively.

 

12

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Historical Data

(In millions)

 

Three Months Ended September 30,														Nine Months Ended September 30,
2014				2013				% Variance						2014				2013				% Variance
												Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA
$	109			$	157				(30.6	)		Net income		$	399			$	507				(21.3	)
	32				28				14.3			Interest expense (a)			86				88				(2.3	)
	1				—				n/m			Loss on early extinguishment of debt			1				—				n/m
	54				64				(15.6	)		Income tax expense (b)			134				153				(12.4	)
	72				66				9.1			Depreciation (c)			207				191				8.4
	8				7				14.3			Amortization (d)			24				24				—
	276				322				(14.3	)		EBITDA			851				963				(11.6	)
	22				(3	)			n/m			(Gain) loss on asset dispositions and impairments, net			55				5				n/m
	—				(22	)			100.0			Restructuring and other special charges (credits), net			(3	)			(23	)			87.0
	—				4				(100.0	)		Impairment of unconsolidated joint venture hotel (e)			—				4				(100.0	)
$	298			$	301				(1.0	)		Adjusted EBITDA		$	903			$	949				(4.8	)

 

(a)	Includes $5 million and $2 million of Starwood’s share of interest expense from unconsolidated joint ventures for the three months ended September 30, 2014 and 2013, respectively, and $11 million and $9 million for the nine months ended September 30, 2014 and 2013, respectively.

(b)	Includes $0 million of tax expense (benefit) recorded in discontinued operations for the three months ended September 30, 2014 and 2013, and $(1) million and $(70) million for the nine months ended September 30, 2014 and 2013, respectively.

(c)	Includes $7 million of Starwood’s share of depreciation expense from unconsolidated joint ventures for the three months ended September 30, 2014 and 2013, and $19 million and $17 million for the nine months ended September 30, 2014 and 2013, respectively.

(d)	Includes $1 million of Starwood’s share of amortization expense from unconsolidated joint ventures for the three months ended September 30, 2014 and 2013, and $2 million and $3 million for the nine months ended September 30, 2014 and 2013, respectively.

(e)	The impairment charge is included in the equity earnings and gain/(loss) from unconsolidated ventures, net line item in the statement of income.

 

13

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

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

(In millions)

 

		Three Months Ended September 30, 2014
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	18				6.3
Impact of changes in foreign exchange rates			(2	)			(0.6	)
Revenue increase/(decrease) in constant dollars		$	16				5.7
Expense
Expense increase/(decrease) (GAAP)		$	11				4.6
Impact of changes in foreign exchange rates			(1	)			(0.4	)
Expense increase/(decrease) in constant dollars		$	10				4.2

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

(In millions)

 

		Three Months Ended September 30, 2014
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	6				4.5
Impact of changes in foreign exchange rates			1				1.4
Revenue increase/(decrease) in constant dollars		$	7				5.9
Expense
Expense increase/(decrease) (GAAP)		$	3				2.8
Impact of changes in foreign exchange rates			1				1.2
Expense increase/(decrease) in constant dollars		$	4				4.0

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

(In millions)

 

		Three Months Ended September 30, 2014
		$ Change				% Variance
Revenue
Revenue increase/(decrease) (GAAP)		$	12				7.4
Impact of changes in foreign exchange rates			(3	)			(1.8	)
Revenue increase/(decrease) in constant dollars		$	9				5.6
Expense
Expense increase/(decrease) (GAAP)		$	8				6.1
Impact of changes in foreign exchange rates			(2	)			(1.8	)
Expense increase/(decrease) in constant dollars		$	6				4.3

 

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 September 30, 2014
		2014				2013				$ Variance
Vacation ownership and residential sales and services revenue		$	159			$	200				(41	)
Vacation ownership and residential expense			(121	)			(141	)			20
Earnings from vacation ownership and residential		$	38			$	59				(21	)
		Three Months Ended September 30, 2014
		2014				2013				$ Variance
Total Bal Harbour revenues		$	—			$	40				(40	)
Total Bal Harbour expenses			—				(21	)			21
Earnings from Bal Harbour		$	—			$	19				(19	)

 

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 December 31, 2014						Year Ended December 31, 2014
$	129			Net income		$	530
	37			Interest expense			123
	60			Income tax expense			194
	84			Depreciation and amortization			315
	—			Debt extinguishment			1
	310			EBITDA			1,163
	—			(Gain) loss on asset dispositions and impairments, net			55
	—			Restructuring and other special charges (credits), net			(3	)
$	310			Adjusted EBITDA		$	1,215
Three Months Ended December 31, 2014						Year Ended December 31, 2014
$	129			Income from continuing operations before special items		$	521
$	0.73			EPS before special items		$	2.79
				Special Items
	—			Restructuring and other special (charges) credits, net			3
	—			Gain (loss) on asset dispositions and impairments, net			(55	)
	—			Debt extinguishment			(1	)
	—			Total special items – pre-tax			(53	)
	—			Income tax benefit (expense) on special items			61
	—			Total special items – after-tax			8
$	129			Income from continuing operations		$	529
$	0.73			EPS including special items		$	2.84
				High Case
Three Months Ended December 31, 2014						Year Ended December 31, 2014
$	135			Net income		$	536
	37			Interest expense			123
	64			Income tax expense			198
	84			Depreciation and amortization			315
	—			Debt extinguishment			1
	320			EBITDA			1,173
	—			(Gain) loss on asset dispositions and impairments, net			55
	—			Restructuring and other special charges (credits), net			(3	)
$	320			Adjusted EBITDA		$	1,225
Three Months Ended December 31, 2014						Year Ended December 31, 2014
$	135			Income from continuing operations before special items		$	527
$	0.77			EPS before special items		$	2.83
				Special Items
	—			Restructuring and other special (charges) credits, net			3
	—			Gain (loss) on asset dispositions and impairments, net			(55	)
	—			Debt extinguishment			(1	)
	—			Total special items – pre-tax			(53	)
	—			Income tax benefit (expense) on special items			61
	—			Total special items – after-tax			8
$	135			Income from continuing operations		$	535
$	0.77			EPS including special items		$	2.87

 

16

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations –

Future Earnings from Vacation Ownership and Residential Business

(In millions)

Low Case

 

		Three Months Ended December 31, 2014
Vacation ownership and residential sales and services revenue		$	166
Vacation ownership and residential expenses			(126	)
Earnings from vacation ownership and residential		$	40
		Year Ended   December 31, 2014
Vacation ownership and residential sales and services revenues		$	670
Vacation ownership and residential expenses			(500	)
Earnings from vacation ownership and residential		$	170

High Case

 

		Three Months Ended December 31, 2014
Vacation ownership and residential sales and services revenue		$	171
Vacation ownership and residential expenses			(126	)
Earnings from vacation ownership and residential		$	45
		Year Ended   December 31, 2014
Vacation ownership and residential sales and services revenues		$	675
Vacation ownership and residential expenses			(500	)
Earnings from vacation ownership and residential		$	175

 

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 September 30,														Nine Months Ended September 30,
2014				2013				% Variance				Same-Store Owned Hotels Worldwide		2014				2013				% Variance
												Revenue
$	320			$	302				6.3			Same-Store Owned Hotels (a)		$	896			$	859				4.3
	3				40				(92.5	)		Hotels Sold or Closed in 2014 and 2013			31				133				(76.7	)
	64				49				30.6			Hotels Without Comparable Results			224				184				21.7
	6				7				(14.3	)		Other ancillary hotel operations			20				20				—
$	393			$	398				(1.3	)		Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	1,171			$	1,196				(2.1	)
												Costs and Expenses
$	248			$	237				(4.6	)		Same-Store Owned Hotels (a)		$	702			$	686				(2.4	)
	3				32				90.6			Hotels Sold or Closed in 2014 and 2013			27				105				74.3
	51				44				(15.9	)		Hotels Without Comparable Results			175				157				(11.5	)
	6				5				(20.0	)		Other ancillary hotel operations			19				18				(5.6	)
$	308			$	318				3.1			Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	923			$	966				4.5
Three Months Ended September 30,														Nine Months Ended September 30,
2014				2013				% Variance				Same-Store Owned Hotels North America		2014				2013				% Variance
												Revenue
$	129			$	123				4.5			Same-Store Owned Hotels (a)		$	411			$	401				2.5
	—				25				(100.0	)		Hotels Sold or Closed in 2014 and 2013			8				92				(91.3	)
	55				40				37.5			Hotels Without Comparable Results			158				123				28.5
	—				—				—			Other ancillary hotel operations			—				—				—
$	184			$	188				(2.1	)		Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	577			$	616				(6.3	)
												Costs and Expenses
$	110			$	107				(2.8	)		Same-Store Owned Hotels (a)		$	335			$	331				(1.3	)
	—				21				100.0			Hotels Sold or Closed in 2014 and 2013			5				72				93.1
	45				39				(15.4	)		Hotels Without Comparable Results			133				118				(12.7	)
	—				—				—			Other ancillary hotel operations			—				—				—
$	155			$	167				7.2			Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	473			$	521				9.2
Three Months Ended September 30,														Nine Months Ended September 30
2014				2013				% Variance				Same-Store Owned Hotels International		2014				2013				% Variance
												Revenue
$	191			$	179				7.4			Same-Store Owned Hotels (a)		$	485			$	458				5.9
	3				15				(80.0	)		Hotels Sold or Closed in 2014 and 2013			23				41				(43.9	)
	9				9				—			Hotels Without Comparable Results			66				61				8.2
	6				7				(14.3	)		Other ancillary hotel operations			20				20				—
$	209			$	210				(0.5	)		Total Owned, Leased and Consolidated Joint Venture Hotels Revenue		$	594			$	580				2.4
												Costs and Expenses
$	138			$	130				(6.1	)		Same-Store Owned Hotels (a)		$	367			$	355				(3.4	)
	3				11				72.7			Hotels Sold or Closed in 2014 and 2013			22				33				33.3
	6				5				(20.0	)		Hotels Without Comparable Results			42				39				(7.7	)
	6				5				(20.0	)		Other ancillary hotel operations			19				18				(5.6	)
$	153			$	151				(1.3	)		Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses		$	450			$	445				(1.1	)

 

(a)

Same-Store Owned Hotel results exclude five hotels sold or closed, two leased hotel converted to managed or franchised hotels and five hotels without comparable results for the three months ended September 30, 2014 and nine hotels sold or closed, two leased hotels converted to a managed or franchised hotel and seven hotels without comparable results for the nine months ended September 30, 2014.

 

18

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Systemwide⁽¹⁾ Statistics—Same Store

For the Three Months Ended September 30,

UNAUDITED

 

		Systemwide—Worldwide												Systemwide—North America												Systemwide—International
		2014				2013				Var. USD				2014				2013				Var. USD				2014				2013				Var. USD
TOTAL HOTELS
REVPAR ($)			129.09				120.13				7.5	%			133.85				123.07				8.8	%			123.68				116.77				5.9	%
ADR ($)			177.15				171.26				3.4	%			171.71				162.95				5.4	%			184.35				182.44				1.0	%
Occupancy (%)			72.9	%			70.1	%			2.8				78.0	%			75.5	%			2.5				67.1	%			64.0	%			3.1
SHERATON
REVPAR ($)			109.73				103.34				6.2	%			115.85				108.01				7.3	%			103.07				98.26				4.9	%
ADR ($)			152.80				149.07				2.5	%			151.64				145.38				4.3	%			154.24				153.73				0.3	%
Occupancy (%)			71.8	%			69.3	%			2.5				76.4	%			74.3	%			2.1				66.8	%			63.9	%			2.9
WESTIN
REVPAR ($)			140.39				128.95				8.9	%			141.05				128.14				10.1	%			139.01				130.61				6.4	%
ADR ($)			183.25				174.49				5.0	%			179.33				167.69				6.9	%			192.04				190.10				1.0	%
Occupancy (%)			76.6	%			73.9	%			2.7				78.7	%			76.4	%			2.3				72.4	%			68.7	%			3.7
ST. REGIS/LUXURY COLLECTION
REVPAR ($)			236.24				216.60				9.1	%			268.00				245.35				9.2	%			223.94				205.36				9.0	%
ADR ($)			346.28				333.03				4.0	%			348.14				322.95				7.8	%			345.42				337.96				2.2	%
Occupancy (%)			68.2	%			65.0	%			3.2				77.0	%			76.0	%			1.0				64.8	%			60.8	%			4.0
LE MERIDIEN
REVPAR ($)			136.05				130.67				4.1	%			218.13				202.35				7.8	%			121.25				117.75				3.0	%
ADR ($)			196.55				192.81				1.9	%			257.37				244.11				5.4	%			182.55				181.03				0.8	%
Occupancy (%)			69.2	%			67.8	%			1.4				84.8	%			82.9	%			1.9				66.4	%			65.0	%			1.4
W
REVPAR ($)			239.13				221.15				8.1	%			229.80				213.67				7.5	%			258.30				236.42				9.3	%
ADR ($)			295.75				281.90				4.9	%			278.17				262.10				6.1	%			334.37				327.57				2.1	%
Occupancy (%)			80.9	%			78.4	%			2.5				82.6	%			81.5	%			1.1				77.3	%			72.2	%			5.1
FOUR POINTS
REVPAR ($)			80.43				75.26				6.9	%			93.20				84.76				10.0	%			63.64				62.75				1.4	%
ADR ($)			113.19				111.96				1.1	%			119.76				114.62				4.5	%			102.38				107.52				-4.8	%
Occupancy (%)			71.1	%			67.2	%			3.9				77.8	%			73.9	%			3.9				62.2	%			58.4	%			3.8
ALOFT
REVPAR ($)			84.27				74.61				12.9	%			102.66				90.11				13.9	%			47.37				44.07				7.5	%
ADR ($)			116.93				109.71				6.6	%			129.74				121.44				6.8	%			81.82				78.97				3.6	%
Occupancy (%)			72.1	%			68.0	%			4.1				79.1	%			74.2	%			4.9				57.9	%			55.8	%			2.1

 

(1)	Includes same store Owned, managed, and franchised hotels.

 

19

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Worldwide Hotel Results—Same Store

For the Three Months Ended September 30,

UNAUDITED

 

		Systemwide (1)												Company Operated (2)
		2014				2013				Var. USD				2014				2013				Var. USD
TOTAL WORLDWIDE
REVPAR ($)			129.09				120.13				7.5	%			143.11				133.83				6.9	%
ADR ($)			177.15				171.26				3.4	%			198.41				192.98				2.8	%
Occupancy (%)			72.9	%			70.1	%			2.8				72.1	%			69.3	%			2.8
AMERICAS
REVPAR ($)			130.10				119.77				8.6	%			158.50				146.71				8.0	%
ADR ($)			170.45				162.08				5.2	%			205.56				195.61				5.1	%
Occupancy (%)			76.3	%			73.9	%			2.4				77.1	%			75.0	%			2.1
North America
REVPAR ($)			133.85				123.07				8.8	%			166.15				153.58				8.2	%
ADR ($)			171.71				162.95				5.4	%			209.39				198.83				5.3	%
Occupancy (%)			78.0	%			75.5	%			2.5				79.3	%			77.2	%			2.1
Latin America
REVPAR ($)			86.13				81.17				6.1	%			94.81				89.79				5.6	%
ADR ($)			150.42				148.05				1.6	%			162.31				159.13				2.0	%
Occupancy (%)			57.3	%			54.8	%			2.5				58.4	%			56.4	%			2.0
ASIA PACIFIC
REVPAR ($)			102.60				98.41				4.3	%			105.02				100.59				4.4	%
ADR ($)			153.40				154.04				-0.4	%			155.29				156.14				-0.5	%
Occupancy (%)			66.9	%			63.9	%			3.0				67.6	%			64.4	%			3.2
Greater China
REVPAR ($)			95.43				88.20				8.2	%			95.17				87.98				8.2	%
ADR ($)			144.61				147.17				-1.7	%			143.30				146.13				-1.9	%
Occupancy (%)			66.0	%			59.9	%			6.1				66.4	%			60.2	%			6.2
Rest of Asia Pacific
REVPAR ($)			112.29				112.29				0.0	%			125.32				126.79				-1.2	%
ADR ($)			164.91				162.12				1.7	%			178.71				173.27				3.1	%
Occupancy (%)			68.1	%			69.3	%			-1.2				70.1	%			73.2	%			-3.1
EAME
REVPAR ($)			164.78				153.39				7.4	%			170.94				159.01				7.5	%
ADR ($)			235.38				230.18				2.3	%			244.98				239.53				2.3	%
Occupancy (%)			70.0	%			66.6	%			3.4				69.8	%			66.4	%			3.4
Europe
REVPAR ($)			197.48				182.59				8.2	%			217.65				200.62				8.5	%
ADR ($)			258.58				247.55				4.5	%			278.61				265.34				5.0	%
Occupancy (%)			76.4	%			73.8	%			2.6				78.1	%			75.6	%			2.5
Africa & Middle East
REVPAR ($)			95.26				91.36				4.3	%			95.03				91.31				4.1	%
ADR ($)			168.70				177.36				-4.9	%			169.02				177.74				-4.9	%
Occupancy (%)			56.5	%			51.5	%			5.0				56.2	%			51.4	%			4.8

 

(1)	Includes same store Owned, managed, and franchised hotels.

(2)	Includes same store Owned and managed hotels.

 

20

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Owned Hotel Results—Same Store

For the Three Months Ended September 30,

UNAUDITED

 

		Worldwide												North America												International
		2014				2013				Var. USD				2014				2013				Var. USD				2014				2013				Var. USD
TOTAL HOTELS		37 Hotels												12 Hotels												25 Hotels
REVPAR ($)			181.76				168.71				7.7	%			152.89				144.16				6.1	%			209.27				192.01				9.0	%
ADR ($)			236.85				227.68				4.0	%			190.92				188.26				1.4	%			284.52				267.61				6.3	%
Occupancy (%)			76.7	%			74.1	%			2.6				80.1	%			76.6	%			3.5				73.6	%			71.8	%			1.8
Total Revenue*			320,493				301,620				6.3	%			128,793				123,195				4.5	%			191,700				178,425				7.4	%
Total Expenses*			247,752				236,811				-4.6	%			109,831				106,804				-2.8	%			137,920				130,007				-6.1	%

 

*	Revenues and 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 September 30,

UNAUDITED ($ millions)

 

		Worldwide
		2014				2013				Variance				% Variance
Management Fees
Base Fees			97				92				5				5.4	%
Incentive Fees			46				44				2				4.5	%
Total Management Fees			143				136				7				5.1	%
Franchise Fees			63				56				7				12.5	%
Total Management and Franchise Fees			206				192				14				7.3	%
Other Management and Franchise Revenues (1)			42				50				(8	)			(15.9	)%
Total Management and Franchise Revenues			248				242				6				2.5	%
Other			7				5				2				41.7	%
Management Fees, Franchise Fees and Other Income			255				247				8				3.2	%

 

(1)	Other Management and Franchise Revenues primarily includes the amortization of the deferred gains of approximately $22 million in 2014 and $23 million in 2013 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 and Residential Revenues and Expenses

For the Three Months Ended September 30,

UNAUDITED ($ millions)

 

		2014				2013				$ Variance				% Variance
Originated Sales Revenues (1)—Vacation Ownership Sales			80				82				(2	)			(2.4	%)
Other Sales and Services Revenues (2)			81				76				5				6.6	%
Deferred Revenues—Percentage of Completion			3				3				—				—
Deferred Revenues—Other (3)			(7	)			(4	)			(3	)			(75.0	%)
Vacation Ownership Sales and Services Revenues			157				157				—				—
Residential Sales and Services Revenues (4)			2				43				(41	)			(95.3	%)
Total Vacation Ownership and Residential Sales and Services Revenues			159				200				(41	)			(20.5	%)
Originated Sales Expenses (5)—Vacation Ownership Sales			52				55				3				5.5	%
Other Expenses (6)			63				62				(1	)			(1.6	%)
Deferred Expenses—Percentage of Completion			3				1				(2	)			n/m
Deferred Expenses—Other			2				2				—				—
Vacation Ownership Expenses			120				120				—				—
Residential Expenses (4)			1				21				20				95.2	%
Total Vacation Ownership and Residential Expenses			121				141				20				14.2	%

 

(1)	Timeshare sales revenue originated at each sales location before deferrals of revenue for U.S. GAAP reporting purposes.

(2)	Includes resort income, interest income, 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 2014 and 2013, includes $0 and $40 million of revenues and $0 and $21 million expenses associated with the St. Regis Bal Harbour residential project, respectively.

(5)	Timeshare cost of sales and sales and 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

 

23

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Systemwide⁽¹⁾ Statistics—Same Store

For the Nine Months Ended September 30,

UNAUDITED

 

		Systemwide—Worldwide												Systemwide—North America												Systemwide—International
		2014				2013				Var. USD				2014				2013				Var. USD				2014				2013				Var. USD
TOTAL HOTELS
REVPAR ($)			124.50				117.80				5.7	%			130.74				122.46				6.8	%			117.42				112.50				4.4	%
ADR ($)			176.45				172.33				2.4	%			172.92				166.28				4.0	%			181.12				180.48				0.4	%
Occupancy (%)			70.6	%			68.4	%			2.2				75.6	%			73.6	%			2.0				64.8	%			62.3	%			2.5
SHERATON
REVPAR ($)			106.14				100.56				5.5	%			112.03				105.62				6.1	%			99.71				95.02				4.9	%
ADR ($)			153.16				150.32				1.9	%			151.30				146.57				3.2	%			155.50				155.15				0.2	%
Occupancy (%)			69.3	%			66.9	%			2.4				74.0	%			72.1	%			1.9				64.1	%			61.2	%			2.9
WESTIN
REVPAR ($)			139.01				130.89				6.2	%			140.91				131.10				7.5	%			135.16				130.47				3.6	%
ADR ($)			186.57				181.00				3.1	%			183.51				174.86				4.9	%			193.38				194.91				-0.8	%
Occupancy (%)			74.5	%			72.3	%			2.2				76.8	%			75.0	%			1.8				69.9	%			66.9	%			3.0
ST. REGIS/LUXURY COLLECTION
REVPAR ($)			212.39				198.87				6.8	%			269.70				250.77				7.5	%			188.86				177.28				6.5	%
ADR ($)			320.87				312.38				2.7	%			358.84				336.38				6.7	%			302.12				299.80				0.8	%
Occupancy (%)			66.2	%			63.7	%			2.5				75.2	%			74.6	%			0.6				62.5	%			59.1	%			3.4
LE MERIDIEN
REVPAR ($)			128.50				125.36				2.5	%			218.96				206.02				6.3	%			114.04				112.48				1.4	%
ADR ($)			192.46				188.10				2.3	%			260.44				249.96				4.2	%			178.19				175.41				1.6	%
Occupancy (%)			66.8	%			66.6	%			0.2				84.1	%			82.4	%			1.7				64.0	%			64.1	%			-0.1
W
REVPAR ($)			237.21				223.68				6.0	%			228.73				216.34				5.7	%			253.34				237.62				6.6	%
ADR ($)			302.11				289.66				4.3	%			284.50				271.39				4.8	%			338.01				327.77				3.1	%
Occupancy (%)			78.5	%			77.2	%			1.3				80.4	%			79.7	%			0.7				74.9	%			72.5	%			2.4
FOUR POINTS
REVPAR ($)			78.74				75.58				4.2	%			86.78				81.54				6.4	%			67.53				67.24				0.4	%
ADR ($)			114.30				113.98				0.3	%			116.73				113.50				2.8	%			110.20				114.81				-4.0	%
Occupancy (%)			68.9	%			66.3	%			2.6				74.3	%			71.8	%			2.5				61.3	%			58.6	%			2.7
ALOFT
REVPAR ($)			80.73				74.32				8.6	%			94.96				85.40				11.2	%			49.15				49.90				-1.5	%
ADR ($)			113.50				109.33				3.8	%			124.04				117.76				5.3	%			83.19				86.11				-3.4	%
Occupancy (%)			71.1	%			68.0	%			3.1				76.6	%			72.5	%			4.1				59.1	%			58.0	%			1.1

 

(1)	Includes same store Owned, managed, and franchised hotels.

 

24

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Worldwide Hotel Results—Same Store

For the Nine Months Ended September 30,

UNAUDITED

 

		Systemwide (1)												Company Operated (2)
		2014				2013				Var. USD				2014				2013				Var. USD
TOTAL WORLDWIDE
REVPAR ($)			124.50				117.80				5.7	%			138.42				131.02				5.6	%
ADR ($)			176.45				172.33				2.4	%			197.93				193.72				2.2	%
Occupancy (%)			70.6	%			68.4	%			2.2				69.9	%			67.6	%			2.3
AMERICAS
REVPAR ($)			127.94				120.01				6.6	%			157.79				148.41				6.3	%
ADR ($)			172.26				165.77				3.9	%			209.48				200.88				4.3	%
Occupancy (%)			74.3	%			72.4	%			1.9				75.3	%			73.9	%			1.4
North America
REVPAR ($)			130.74				122.46				6.8	%			164.03				154.07				6.5	%
ADR ($)			172.92				166.28				4.0	%			212.55				203.69				4.3	%
Occupancy (%)			75.6	%			73.6	%			2.0				77.2	%			75.6	%			1.6
Latin America
REVPAR ($)			94.93				91.26				4.0	%			106.64				101.97				4.6	%
ADR ($)			162.21				158.09				2.6	%			177.23				171.55				3.3	%
Occupancy (%)			58.5	%			57.7	%			0.8				60.2	%			59.4	%			0.8
ASIA PACIFIC
REVPAR ($)			101.27				97.69				3.7	%			104.00				99.14				4.9	%
ADR ($)			156.73				159.90				-2.0	%			159.87				162.25				-1.5	%
Occupancy (%)			64.6	%			61.1	%			3.5				65.1	%			61.1	%			4.0
Greater China
REVPAR ($)			94.52				85.99				9.9	%			94.01				85.18				10.4	%
ADR ($)			151.04				153.90				-1.9	%			149.57				152.40				-1.9	%
Occupancy (%)			62.6	%			55.9	%			6.7				62.9	%			55.9	%			7.0
Rest of Asia Pacific
REVPAR ($)			110.30				113.41				-2.7	%			124.25				127.55				-2.6	%
ADR ($)			163.80				166.52				-1.6	%			178.72				177.86				0.5	%
Occupancy (%)			67.3	%			68.1	%			-0.8				69.5	%			71.7	%			-2.2
EAME
REVPAR ($)			147.43				140.10				5.2	%			154.05				146.22				5.4	%
ADR ($)			220.63				214.26				3.0	%			228.61				221.86				3.0	%
Occupancy (%)			66.8	%			65.4	%			1.4				67.4	%			65.9	%			1.5
Europe
REVPAR ($)			162.12				152.32				6.4	%			177.25				165.83				6.9	%
ADR ($)			232.86				223.80				4.0	%			247.75				237.46				4.3	%
Occupancy (%)			69.6	%			68.1	%			1.5				71.5	%			69.8	%			1.7
Africa & Middle East
REVPAR ($)			115.94				113.96				1.7	%			116.15				114.14				1.8	%
ADR ($)			190.64				190.98				-0.2	%			191.71				191.89				-0.1	%
Occupancy (%)			60.8	%			59.7	%			1.1				60.6	%			59.5	%			1.1

 

(1)	Includes same store Owned, managed, and franchised hotels.

(2)	Includes same store Owned and managed hotels.

 

25

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Owned Hotel Results—Same Store

For the Nine Months Ended September 30,

UNAUDITED

 

		Worldwide												North America												International
		2014				2013				Var. USD				2014				2013				Var. USD				2014				2013				Var. USD
TOTAL HOTELS		35 Hotels												12 Hotels												23 Hotels
REVPAR ($)			168.02				159.03				5.7	%			154.14				149.03				3.4	%			181.69				168.87				7.6	%
ADR ($)			228.39				220.30				3.7	%			200.62				196.20				2.3	%			258.24				246.60				4.7	%
Occupancy (%)			73.6	%			72.2	%			1.4				76.8	%			76.0	%			0.8				70.4	%			68.5	%			1.9
Total Revenue*			896,176				859,236				4.3	%			411,462				401,436				2.5	%			484,714				457,800				5.9	%
Total Expenses*			702,478				686,120				-2.4	%			334,836				330,668				-1.3	%			367,642				355,452				-3.4	%

 

*	Revenues and 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 Nine Months Ended September 30,

UNAUDITED ($ millions)

 

		Worldwide
		2014				2013				Variance				% Variance
Management Fees
Base Fees			281				264				17				6.6	%
Incentive Fees			143				133				10				7.7	%
Total Management Fees			424				397				27				6.8	%
Franchise Fees			178				160				18				11.2	%
Total Management and Franchise Fees			602				557				45				8.1	%
Other Management and Franchise Revenues (1)			143				126				17				13.5	%
Total Management and Franchise Revenues			745				683				62				9.1	%
Other			18				17				1				7.1	%
Management Fees, Franchise Fees and Other Income			763				700				63				9.0	%

 

(1)	Other Management and Franchise Revenues primarily includes the amortization of the deferred gains of approximately $65 million in 2014 and $68 million in 2013 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 and Residential Revenues and Expenses

For the Nine Months Ended September 30,

UNAUDITED ($ millions)

 

		2014				2013				$ Variance				% Variance
Originated Sales Revenues (1) — Vacation Ownership Sales			243				244				(1	)			(0.4	%)
Other Sales and Services Revenues (2)			253				247				6				2.4	%
Deferred Revenues — Percentage of Completion			(13	)			1				(14	)			n/m
Deferred Revenues — Other (3)			(7	)			1				(8	)			n/m
Vacation Ownership Sales and Services Revenues			476				493				(17	)			(3.4	%)
Residential Sales and Services Revenues (4)			28				255				(227	)			(89.0	%)
Total Vacation Ownership and Residential Sales and Services Revenues			504				748				(244	)			(32.6	%)
Originated Sales Expenses (5) — Vacation Ownership Sales			173				171				(2	)			(1.2	%)
Other Expenses (6)			191				189				(2	)			(1.1	%)
Deferred Expenses — Percentage of Completion			(7	)			—				7				100.0	%
Deferred Expenses — Other			7				7				—				—
Vacation Ownership Expenses			364				367				3				0.8	%
Residential Expenses (4)			10				136				126				92.6	%
Total Vacation Ownership and Residential Expenses			374				503				129				25.6	%

 

(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 2014 and 2013, includes $20 and $243 million of revenues and $9 and $136 million expenses associated with the St. Regis Bal Harbour residential project, respectively.

(5)	Timeshare cost of sales and sales and 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.

Owned Hotels without Comparable Results and Other Selected Items

As of September 30, 2014

UNAUDITED ($ millions)

Owned Hotels without comparable results in 2014 and 2013:

 

Hotel		Location
Element Denver Park Meadows		Denver, CO
Sheraton Maria Isabel Hotel & Towers		Mexico City, Mexico
Sheraton Steamboat Resort		Steamboat Springs, CO
The Gritti Palace, Venice		Venice, Italy
The St. Regis New York		New York, NY
The Westin Excelsior, Florence		Florence, Italy
The Westin Maui Resort & Spa, Ka’anapali		Maui, HI

Owned Hotels sold or closed in 2014 and 2013:

 

Hotel		Location
Aloft Lexington		Lexington, MA
Aloft San Francisco Airport		San Francisco, CA
Aloft Tucson University		Tucson, AZ
Element Lexington		Lexington, MA
Sheraton Santa Maria de El Paular		Madrid, Spain
The Park Lane Hotel		London, England
The St. Regis Bal Harbour Resort		Miami Beach, FL
The Westin San Francisco Airport		San Francisco, CA
The Westin Dublin Hotel		Dublin, Ireland
W New Orleans		New Orleans, LA
W New Orleans—French Quarter		New Orleans, LA

Revenues and Expenses Associated with Hotels Sold or Closed in 2014 and 2013: ⁽¹⁾

 

		Q1				Q2				Q3				Q4				Full Year
Hotels Sold in 2013:
2013
Revenues		$	19			$	12			$	12			$	4			$	47
Expenses (excluding depreciation)		$	15			$	9			$	8			$	3			$	35
Hotels Sold or Closed in 2014:
2014
Revenues		$	20			$	8			$	3				—			$	31
Expenses (excluding depreciation)		$	16			$	8			$	3				—			$	27
2013
Revenues		$	32			$	30			$	28			$	34			$	124
Expenses (excluding depreciation)		$	25			$	24			$	24			$	27			$	100

 

(1)

Results consist of three hotels sold or closed in 2014, two leased hotels converted to managed or franchised hotels in 2014, and six hotels sold in 2013. These amounts are included in the revenues and expenses from owned, leased and consolidated joint venture hotels in the statements of income for 2014 and 2013.

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Capital Expenditures

For the Three and Nine Months Ended September 30, 2014

UNAUDITED ($ millions)

 

		Q3				YTD
Maintenance Capital Expenditures: (1)
Owned, Leased and Consolidated Joint Venture Hotels			11				35
Corporate/IT			32				98
Subtotal			43				133
Net capital expenditures for Vacation Ownership inventory (2)			(3	)			(10	)
Development Capital			35				125
Total Capital Expenditures			75				248

 

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

(2)	Represents gross inventory capital expenditures of $14 million and $38 million in the three and nine months ended September 30, 2014, less cost of sales of $17 million and $48 million in the three and nine months ended September 30, 2014.

 

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

2014 Divisional Hotel Inventory Summary by Ownership by Brand

As of September 30, 2014

 

		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
Sheraton			11				6,273				6				3,579				5				2,694				2				854				—				—				2				854				2				358				2				358				—				—				15				7,485
Westin			5				2,734				2				1,832				3				902				1				243				—				—				1				243				2				487				2				487				—				—				8				3,464
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			2				498				2				498				—				—				1				160				—				—				1				160				2				261				2				261				—				—				5				919
Le Meridien			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Aloft			1				136				1				136				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				136
Element			1				123				1				123				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				123
Other			1				135				1				135				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				135
Total Owned			25				11,409				16				7,632				9				3,777				4				1,257				—				—				4				1,257				13				2,348				13				2,348				—				—				42				15,014
Managed & UJV
Sheraton			50				28,175				34				25,090				16				3,085				90				34,215				61				26,338				29				7,877				72				20,184				41				11,860				31				8,324				212				82,574
Westin			55				28,810				52				27,924				3				886				37				12,455				20				7,052				17				5,403				16				5,087				11				3,748				5				1,339				108				46,352
Four Points			3				426				—				—				3				426				30				8,361				21				6,057				9				2,304				12				2,270				4				499				8				1,771				45				11,057
W			27				8,106				25				7,673				2				433				9				2,393				3				1,115				6				1,278				5				937				4				495				1				442				41				11,436
Luxury Collection			11				1,938				4				1,648				7				290				12				2,480				6				1,308				6				1,172				27				5,261				22				3,671				5				1,590				50				9,679
St. Regis			12				2,347				10				2,038				2				309				9				2,297				6				1,647				3				650				8				1,774				4				607				4				1,167				29				6,418
Le Meridien			4				469				3				309				1				160				26				7,370				9				3,131				17				4,239				45				13,748				16				5,215				29				8,533				75				21,587
Aloft			2				322				—				—				2				322				10				2,606				7				1,636				3				970				4				943				3				535				1				408				16				3,871
Element			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Other			1				410				1				410				—				—				—				—				—				—				—				—				—				—				—				—				—				—				1				410
Total Managed & UJV			165				71,003				129				65,092				36				5,911				223				72,177				133				48,284				90				23,893				189				50,204				105				26,630				84				23,574				577				193,384
Franchised
Sheraton			175				51,193				163				48,173				12				3,020				13				6,124				3				1,836				10				4,288				18				4,718				16				4,315				2				403				206				62,035
Westin			75				23,500				70				21,973				5				1,527				8				2,531				1				288				7				2,243				5				1,688				5				1,688				—				—				88				27,719
Four Points			126				19,469				116				17,987				10				1,482				10				1,622				1				126				9				1,496				7				1,085				7				1,085				—				—				143				22,176
W			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Luxury Collection			11				2,102				8				1,651				3				451				10				3,069				—				—				10				3,069				12				1,783				12				1,783				—				—				33				6,954
St. Regis			—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—				—
Le Meridien			14				3,329				13				3,218				1				111				5				1,209				1				160				4				1,049				2				603				2				603				—				—				21				5,141
Aloft			63				9,604				60				9,009				3				595				5				813				—				—				5				813				—				—				—				—				—				—				68				10,417
Element			11				1,808				11				1,808				—				—				—				—				—				—				—				—				1				133				1				133				—				—				12				1,941
Other			2				384				2				384				—				—				—				—				—				—				—				—				—				—				—				—				—				—				2				384
Total Franchised			477				111,389				443				104,203				34				7,186				51				15,368				6				2,410				45				12,958				45				10,010				43				9,607				2				403				573				136,767
Systemwide
Sheraton			236				85,641				203				76,842				33				8,799				105				41,193				64				28,174				41				13,019				92				25,260				59				16,533				33				8,727				433				152,094
Westin			135				55,044				124				51,729				11				3,315				46				15,229				21				7,340				25				7,889				23				7,262				18				5,923				5				1,339				204				77,535
Four Points			130				20,072				117				18,164				13				1,908				40				9,983				22				6,183				18				3,800				19				3,355				11				1,584				8				1,771				189				33,410
W			28				8,615				26				8,182				2				433				9				2,393				3				1,115				6				1,278				7				1,602				6				1,160				1				442				44				12,610
Luxury Collection			24				4,864				13				3,942				11				922				22				5,549				6				1,308				16				4,241				44				7,621				39				6,031				5				1,590				90				18,034
St. Regis			14				2,845				12				2,536				2				309				10				2,457				6				1,647				4				810				10				2,035				6				868				4				1,167				34				7,337
Le Meridien			18				3,798				16				3,527				2				271				31				8,579				10				3,291				21				5,288				47				14,351				18				5,818				29				8,533				96				26,728
Aloft			66				10,062				61				9,145				5				917				15				3,419				7				1,636				8				1,783				4				943				3				535				1				408				85				14,424
Element			12				1,931				12				1,931				—				—				—				—				—				—				—				—				1				133				1				133				—				—				13				2,064
Other			4				929				4				929				—				—				—				—				—				—				—				—				—				—				—				—				—				—				4				929
Vacation Ownership			14				7,576				13				6,996				1				580				—				—				—				—				—				—				—				—				—				—				—				—				14				7,576
Total Systemwide			681				201,377				601				183,923				80				17,454				278				88,802				139				50,694				139				38,108				247				62,562				161				38,585				86				23,977				1,206				352,741

 

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Vacation Ownership Inventory Pipeline

As of September 30, 2014

UNAUDITED

 

		# Resorts												# of Units (1)
Brand		Total (2)				In Operations				In Active Sales				Completed  (3)				Pre-sales/ Development  (4)				Future Capacity  (5),(6)				Total at Buildout
Sheraton			7				7				6				3,079				—				712				3,791
Westin			9				9				9				1,606				92				21				1,719
St. Regis			2				2				—				56				—				—				56
The Luxury Collection			1				1				—				6				—				—				6
Unbranded			2				2				1				99				—				—				99
Total SVO, Inc.			21				21				16				4,846				92				733				5,671
Unconsolidated Joint Ventures (UJVs)			1				1				1				198				—				—				198
Total including UJVs			22				22				17				5,044				92				733				5,869
Total Intervals Including UJVs (7)															262,288				4,784				38,116				305,188

 

(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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