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

Third Quarter 2014 Highlights

  • Excluding special items, EPS from continuing operations was $0.66. Including special items, EPS from continuing operations was $0.59.
  • Adjusted EBITDA was $298 million.
  • Excluding special items, income from continuing operations was $121 million. Including special items, income from continuing operations was $109 million.
  • 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).
  • Management fees, franchise fees and other income increased 3.2% compared to 2013. Management and franchise fees increased 7.3% compared to 2013.
  • Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 125 basis points compared to 2013.
  • Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 7.2% in constant dollars (7.7% in actual dollars) compared to 2013.
  • Margins at Starwood Same-Store Owned Hotels Worldwide increased approximately 120 basis points compared to 2013.
  • 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.
  • 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.
  • 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.
  • 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.
  • During the nine months ended September 30, 2014, the Company returned approximately $1.6 billion to shareholders through dividends and share repurchases.

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.

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.

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.

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.

Outlook

For the full year 2014:

  • Adjusted EBITDA is expected to be approximately $1.215 billion to $1.225 billion (based on the assumptions below).
    • 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).
    • 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).
    • Margins at Same-Store Owned Hotels Worldwide increase 75 to 125 basis points.
    • Management fees, franchise fees and other income increase approximately 8% to 10%.
    • Earnings from the Company’s vacation ownership and residential business of approximately $170 million to $175 million.
    • Selling, general and administrative expenses increase approximately 5% to 7%.
    • 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.
  • 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.
  • Depreciation and amortization is expected to be approximately $315 million.
  • Interest expense is expected to be approximately $123 million.
  • 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).
  • EPS before special items is expected to be approximately $2.79 to $2.83 (based on the assumptions above).
  • 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.
  • Vacation ownership is expected to generate approximately $65 million in positive cash flow. The Company does not expect a securitization of receivables in 2014.

For the three months ended December 31, 2014:

  • Adjusted EBITDA is expected to be approximately $310 million to $320 million (based on the assumptions below).
    • 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).
    • 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).
    • Management fees, franchise fees and other income increase approximately 7% to 9% (including an approximately $8 million termination fee).
    • Earnings from the Company’s vacation ownership and residential business of approximately $40 million to $45 million.
  • Depreciation and amortization is expected to be approximately $84 million.
  • Interest expense is expected to be approximately $37 million.
  • The effective tax rate for the quarter is expected to be approximately 32% (based on the assumptions above).
  • EPS is expected to be approximately $0.73 to $0.77 (based on the assumptions above).

For the Full Year 2015:

  • 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.

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.

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.

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.

                     
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

 

 

                 
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.
 
                 
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.
 
         
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  
 
         
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 )
 
                   
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  
 
         
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    
 
             
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.
 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Systemwide(1) Statistics - Same Store
For the Three Months Ended September 30,
UNAUDITED
                                                                                   
Systemwide - WorldwideSystemwide - North AmericaSystemwide - International
20142013Var. USD20142013Var. USD20142013Var. 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.
 
   
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Three Months Ended September 30,
UNAUDITED
                                                           
Systemwide (1)Company Operated (2)
20142013Var. USD20142013Var. 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.
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.  
Owned Hotel Results - Same Store
For the Three Months Ended September 30,
UNAUDITED
                                                                                           
 
WorldwideNorth AmericaInternational
20142013Var. USD20142013Var. USD20142013Var. 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.
 
   
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended September 30,
UNAUDITED ($ millions)
                                             
 
  Worldwide
  2014   2013Variance% 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         56712.5%
 
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         24262.5%
 
Other         7         5 2 41.7%
 
Management Fees, Franchise Fees and Other Income         255         24783.2%
 

(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.

 
         
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

 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Systemwide(1) Statistics - Same Store
For the Nine Months Ended September 30,
UNAUDITED
                                                                                       
Systemwide - WorldwideSystemwide - North AmericaSystemwide - International
20142013Var. USD20142013Var. USD20142013Var. 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.
 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Nine Months Ended September 30,
UNAUDITED
                                                           
Systemwide (1)Company Operated (2)
20142013Var. USD20142013Var. 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.
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Owned Hotel Results - Same Store
For the Nine Months Ended September 30,
UNAUDITED
                                                           
 
WorldwideNorth AmericaInternational
20142013Var. USD20142013Var. USD20142013Var. 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.
 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Nine Months Ended September 30,
UNAUDITED ($ millions)
                                           
 
Worldwide
20142013Variance% 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       1601811.2%
 
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       683629.1%
 
Other       18       17 1 7.1%
 
Management Fees, Franchise Fees and Other Income       763       700639.0%
 

(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.

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

Hotel

Location

Element Denver Park Meadows Denver, CO Q1 Q2 Q3 Q4 Full Year
Sheraton Maria Isabel Hotel & Towers Mexico City, Mexico Hotels Sold in 2013:
Sheraton Steamboat Resort Steamboat Springs, CO 2013
The Gritti Palace, Venice Venice, Italy Revenues $19 $12 $12 $4 $47

The St. Regis New York

New York, NY

Expenses (excluding depreciation)

$15 $9 $8 $3 $35
The Westin Excelsior, Florence Florence, Italy
The Westin Maui Resort & Spa, Ka'anapali Maui, HI Hotels Sold or Closed in 2014:
2014
Revenues $20 $8 $3 - $31
Expenses (excluding depreciation) $16 $8 $3 - $27
 
Owned Hotels sold or closed in 2014 and 2013: 2013
Revenues $32 $30 $28 $34 $124

Hotel

Location

Expenses (excluding depreciation) $25 $24 $24 $27 $100
Aloft Lexington
Aloft San Francisco Airport
Aloft Tucson University
Element Lexington
Sheraton Santa Maria de El Paular
The Park Lane Hotel
The St. Regis Bal Harbour Resort
The Westin San Francisco Airport
The Westin Dublin Hotel
W New Orleans
W New Orleans - French Quarter

Lexington, MA

San Francisco, CA

Tucson, AZ
Lexington, MA
Madrid, Spain
London, England
Miami Beach, FL
San Francisco, CA
Dublin, Ireland
New Orleans, LA
New Orleans, LA

(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.

 
 
 
 
 
 
 
 
 
   
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.

 
 
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
 
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of September 30, 2014
UNAUDITED
                                             
                                                           
# Resorts # of Units (1)
Total (2)

In
Operations

In Active
Sales

Completed (3) Pre-sales/
Development (4)
Future
Capacity (5),(6)
Total at
Buildout
Brand                              
 
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.