Starwood Results

Starwood Reports Third Quarter 2015 $0.74 in Earnings Per Share (EPS)

Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.4% in constant dollars (decreased 0.3% in actual dollars) compared to 2014. Systemwide REVPAR for Same-Store Hotels in North America increased 5.3% in constant dollars (increased 3.6% in actual dollars).

Starwood

Starwood Hotels & Resorts Worldwide, Inc. (HOT) today reported third quarter 2015 financial results.

Third Quarter 2015 Highlights

  • Excluding special items, EPS from continuing operations was $0.74. Including special items, EPS from continuing operations was $0.53.
  • Adjusted EBITDA was $294 million.
  • Excluding special items, income from continuing operations was $125 million. Including special items, income from continuing operations was $88 million.
  • Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.4% in constant dollars (decreased 0.3% in actual dollars) compared to 2014. Systemwide REVPAR for Same-Store Hotels in North America increased 5.3% in constant dollars (increased 3.6% in actual dollars).
  • Management fees, franchise fees and other income increased 3.1% compared to 2014. Core fees increased 1.9% compared to 2014.
  • Earnings from Starwood’s vacation ownership and residential business increased approximately $8 million compared to 2014.
  • During the quarter, the Company signed 44 hotel management and franchise contracts, representing approximately 8,600 rooms and opened 27 hotels and resorts with approximately 4,800 rooms.
  • During the quarter, the Company paid a quarterly dividend of $0.375 per share and repurchased 1.3 million shares at a total cost of $100 million and a weighted average price of $76.64 per share.
  • During the quarter, the Company completed the sale of The Westin Excelsior Rome for gross cash proceeds of $251 million subject to a long-term management agreement.
  • Today, the Company announced that it had entered into definitive agreements with Interval Leisure Group, Inc. (“Interval”) pursuant to which the Company’s vacation ownership business will be distributed on a pro rata basis to stockholders and immediately after will merge with a wholly-owned subsidiary of Interval. The transaction has a total value to Starwood of approximately $1.5 billion.

Third Quarter 2015 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported EPS from continuing operations for the third quarter of 2015 of $0.53 compared to $0.59 in the third quarter of 2014. Excluding special items, EPS from continuing operations was $0.74 for the third quarter of 2015 compared to $0.66 in the third quarter of 2014.

Special items in the third quarter of 2015 consisted primarily of losses on asset dispositions and impairments of $46 million ($34 million after-tax) and restructuring and other special charges of $9 million ($7 million after-tax). Special items in the third quarter of 2014 totaled a charge of $12 million (after-tax). Excluding special items, the effective income tax rate in the third quarter of 2015 was 32.0% compared to 34.7% in the third quarter of 2014.

Income from continuing operations was $88 million in the third quarter of 2015, compared to $109 million in the third quarter of 2014. Excluding special items, income from continuing operations was $125 million in the third quarter of 2015 compared to $121 million in the third quarter of 2014.

Net income was $88 million and $0.53 per share in the third quarter of 2015, compared to $109 million and $0.59 per share in the third quarter of 2014.

Adam Aron, Chief Executive Officer of the Company on an interim basis, said, “As we expected, the results for the completed third quarter were encouraging. Our performance is yet another indication that Starwood has been making progress on the sharply-focused strategy we launched in February 2015 to strengthen our brands, drive operational excellence, and accelerate the pace of our growth. Collectively these efforts have also yielded better growth in our new hotel signings, with rooms up 33% year-to-date through the end of the third quarter. These results on both operations and development give us optimism to have a bullish outlook for 2016 as well as the future of our brands and hotels.”

Nine Months Ended September 30, 2015 Earnings Summary

Income from continuing operations was $323 million in the nine months ended September 30, 2015 compared to $398 million in the same period in 2014. Excluding special items, income from continuing operations was $378 million in the nine months ended September 30, 2015 compared to $390 million in the same period in 2014. The decline in income from continuing operations primarily reflects the impact of the sales of ten hotels since the third quarter of 2014.

Net income was $323 million and $1.90 per share in the nine months ended September 30, 2015 compared to $399 million and $2.11 per share in the same period in 2014.

Adjusted EBITDA was $879 million in the nine months ended September 30, 2015 compared to $903 million in the same period in 2014.

Third Quarter 2015 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.4% in constant dollars (decreased 0.3% in actual dollars) compared to the third quarter of 2014. International Systemwide REVPAR for Same-Store Hotels increased 5.5% in constant dollars (decreased 4.9% in actual dollars).

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

            REVPAR  
Region          

  Constant  

  Dollars  

     

   Actual    

   Dollars    

 
Americas:                      
North America           5.3 %     3.6 %
Latin America           (5.6 )%     (5.6 )%
Asia Pacific:                      
Greater China           (2.6 )%     (4.0 )%
Rest of Asia           10.7 %     (3.0 )%
Europe, Africa & Middle East:                      
Europe           10.1 %     (8.0 )%
Africa & Middle East           5.9 %     1.2 %
                       

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

            REVPAR  
Brand          

  Constant  

  Dollars  

     

   Actual     

  Dollars   

 
St. Regis/Luxury Collection           8.2 %     (1.2 )%
W Hotels           2.9 %     (1.0 )%
Westin           6.2 %     1.1 %
Sheraton           3.8 %     (1.1 )%
Le Méridien           6.0 %     (2.7 )%
Four Points by Sheraton           5.2 %     (0.3 )%
Aloft           10.2 %     7.9 %
                       

Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 30 basis points compared to 2014. International gross operating profit margins for Same-Store Company-Operated properties increased approximately 30 basis points. North American Same-Store Company-Operated gross operating profit margins increased approximately 25 basis points.

Management fees, franchise fees and other income were $263 million, up $8 million, or 3.1% compared to the third quarter of 2014. Core fees increased 1.9% to $210 million. Other management and franchise revenues increased 19.0% or $8 million.

Development

During the third quarter of 2015, the Company signed 44 hotel management and franchise contracts, representing approximately 8,600 rooms, of which 32 are new builds and 12 are conversions from other brands. At September 30, 2015, the Company had approximately 510 hotels in the active pipeline representing approximately 113,000 rooms.

During the third quarter of 2015, 27 new hotels and resorts (representing approximately 4,800 rooms) entered the system, including The Gwen, a Luxury Collection Hotel, Chicago (Illinois, 300 rooms), St. Regis Mumbai (India, 335 rooms), The Grand Mansion, a Luxury Collection Hotel (China, 158 rooms), The Westin Austin Downtown (Texas, 366 rooms), and Great Northern Hotel, a Tribute Portfolio Hotel, London (England, 91 rooms). During the quarter, five properties (representing approximately 900 rooms) were removed from the system.

Owned Hotels

Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 5.5% in constant dollars (decreased 2.6% in actual dollars) when compared to 2014. REVPAR at Starwood Same-Store Owned Hotels in North America increased 4.7% in constant dollars (increased 1.8% in actual dollars). Internationally, Starwood Same-Store Owned Hotel REVPAR increased 6.3% in constant dollars (decreased 7.2% in actual dollars).

Revenues at Starwood Same-Store Owned Hotels Worldwide increased 5.2% in constant dollars (decreased 2.8% in actual dollars) while costs and expenses increased 4.2% in constant dollars (decreased 3.1% in actual dollars) when compared to 2014. Margins at these hotels increased approximately 20 basis points compared to 2014.

Revenues at Starwood Same-Store Owned Hotels in North America increased 5.6% in constant dollars (increased 2.9% in actual dollars) while costs and expenses increased 3.8% in constant dollars (increased 1.4% in actual dollars) when compared to 2014. Margins at these hotels increased approximately 120 basis points compared to 2014.

Internationally, revenues at Starwood Same-Store Owned Hotels increased 4.8% in constant dollars (decreased 8.3% in actual dollars) while costs and expenses increased 4.6% in constant dollars (decreased 8.0% in actual dollars) when compared to 2014. Margins at these hotels decreased approximately 30 basis points compared to 2014.

Revenues at Owned Hotels, which were negatively impacted by asset sales since the third quarter of 2014, were $312 million, compared to $393 million in 2014. Expenses at Owned Hotels were $241 million compared to $308 million in 2014.

Vacation Ownership

Vacation ownership revenues for the three months ended September 30, 2015 increased 7.6%, to $169 million, compared to the corresponding period in 2014. Originated contract sales of vacation ownership intervals increased 10.0% for the three months ended September 30, 2015, compared to the corresponding period in 2014, due to a 3.5% increase in the number of contracts signed and a 7.0% increase in the average price per vacation ownership unit sold to approximately $14,600.

Today, the Company announced that it had entered into an agreement with Interval and Vistana Signature Experiences, Inc., its wholly-owned subsidiary (“Vistana”), through a Reverse Morris Trust transaction pursuant to which, subject to the terms and conditions of certain definitive agreements, a wholly-owned subsidiary of Interval will acquire and then merge with and into Vistana. The transaction, which will follow an internal reorganization and spin-off of all of the issued and outstanding Vistana shares by Starwood to Starwood stockholders on a pro rata basis, has a total value to Starwood of approximately $1.5 billion. The transaction is expected to close in the second quarter of 2016, subject to customary closing conditions, including regulatory and Interval shareholder approvals.

Residential

During the third quarter of 2015, the Company’s residential revenues were $4 million compared to $2 million in 2014.

Selling, General, Administrative and Other

During the third quarter of 2015, selling, general, administrative and other expenses (“SG&A”) increased 6.3% to $102 million compared to $96 million in 2014, primarily due to an $11 million reserve for the potential funding of a performance guarantee at two hotels in Greece as a result of the economic crisis in Greece. This charge was partially offset by savings associated with the implementation of the Company’s previously announced cost savings initiatives and timing of expenses. The Company continues to target a decrease of 2% to 4% for the full year based on additional cost saving initiatives.

Capital

Gross capital spending during the quarter included approximately $42 million of maintenance capital and $38 million of development capital.

Asset Sales

During the third quarter of 2015, the Company completed the sale of The Westin Excelsior Rome for gross cash proceeds of $251 million. The sale was completed subject to a long-term management agreement. Year to date through September 30, 2015, the Company has received gross cash proceeds from asset sales of approximately $817 million.

Restructuring and Other Special Charges

During the third quarter of 2015, the Company recorded a $4 million restructuring credit primarily due to an $8 million reversal of a reserve as a result of the favorable resolution of a funding commitment associated with a vacation ownership project. This credit was partially offset by charges related to the Company’s previously announced cost savings initiatives. The Company also recorded $13 million of other special charges primarily consisting of costs associated with the planned spin-off of the Company’s vacation ownership business.

Dividend

On August 12, 2015, the Company declared a regular quarterly dividend of $0.375 per share, which was paid on September 25, 2015 to stockholders of record as of September 11, 2015. The total dividends paid in the third quarter of 2015 were approximately $64 million. Year to date through September 30, 2015, the Company has paid approximately $192 million in total dividends.

Share Repurchase

In the third quarter of 2015, the Company repurchased 1.3 million shares at a total cost of approximately $100 million and a weighted average price of $76.64 per share. As of September 30, 2015, approximately $501 million remained available under the Company’s share repurchase authorization. Year to date through September 30, 2015, the Company has repurchased 4.1 million shares at a total cost of $328 million and an average price of $79.55.

Balance Sheet

At September 30, 2015, the Company had gross debt of $2.2 billion, cash and cash equivalents of $1.1 billion (including $22 million of restricted cash) and net debt of $1.1 billion, compared to net debt of $1.7 billion as of December 31, 2014, in each case excluding debt and restricted cash associated with securitized vacation ownership notes receivable. Net debt at September 30, 2015, including $188 million of debt and $8 million of restricted cash associated with securitized vacation ownership notes receivable, was $1.3 billion.

Outlook

  • The following outlook assumes the planned spin-off of the vacation ownership business occurs on December 31, 2015. Transaction costs related to the planned spin-off are not included in full year SG&A guidance.

For the full year 2015:

  • Adjusted EBITDA is expected to be approximately $1.180 billion to $1.195 billion (based on the assumptions below).
    • REVPAR increases at Same-Store Systemwide Hotels Worldwide of 4% to 5% in constant dollars (approximately 450 basis points lower in actual dollars at current exchange rates).
    • REVPAR increases at Same-Store Owned Hotels Worldwide of 5% to 7% in constant dollars (approximately 650 basis points lower in actual dollars at current exchange rates).
    • Margins at Same-Store Owned Hotels Worldwide increase 50 to 100 basis points.
    • Core fees approximately flat to up 1%.
    • Management fees, franchise fees and other income are expected to be approximately down 1% to up 1%.
    • Earnings from the Company’s vacation ownership and residential business of approximately $165 million to $170 million.
    • SG&A decreases approximately 2% to 4%.
    • Significant non-recurring items in 2014 Adjusted EBITDA include $35 million related to five large one-time termination fees received by the Company and $11 million from the St. Regis Bal Harbour residential project, which is sold out.
    • Shifts in exchange rates since 2014 will negatively impact full year earnings by approximately $46 million if exchange rates stay at current levels.
  • Depreciation and amortization is expected to be approximately $305 million.
  • Interest expense is expected to be approximately $135 million.
  • Full year effective tax rate is expected to be approximately 32%, and cash taxes from operating earnings are expected to be approximately $115 million.
  • EPS before special items is expected to be approximately $2.96 to $3.02 (based on the assumptions above).
  • Cash flow from operations is expected to be approximately $800 million to $900 million (based on the assumptions above). Cash flow from operations includes vacation ownership investment in inventory expected to be approximately $155 million which includes approximately $80 million related to the development of the Westin Nanea Ocean Villas, the third phase of the Westin Ka’anapali Ocean Resort Villas.
  • Full year capital expenditures (excluding vacation ownership inventory) are expected to be approximately $175 million for maintenance, renovation and technology. In addition, in-flight investment projects and prior commitments for joint ventures and other investments are expected to total approximately $175 million.

For the three months ended December 31, 2015:

  • Adjusted EBITDA is expected to be approximately $300 million to $315 million (based on the assumptions below).
    • REVPAR increases at Same-Store Systemwide Hotels Worldwide of 3% to 5% in constant dollars (approximately 400 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 525 basis points lower in actual dollars at current exchange rates).
    • Core fees approximately flat.
    • Management fees, franchise fees and other income are expected to be approximately down 1% to up 1%.
    • Earnings from the Company’s vacation ownership and residential business of approximately $25 million to $30 million.
    • Shifts in exchange rates since the fourth quarter of 2014 will negatively impact fourth quarter 2015 earnings by approximately $14 million if exchange rates stay at current levels.
  • EPS is expected to be approximately $0.76 to $0.82 (based on the assumptions above).

For the full year 2016:

  • At this point, the Company expects REVPAR at Same-Store Systemwide Hotels Worldwide to increase 4% to 6% in constant dollars. Asset sales completed to date will reduce 2016 owned hotel earnings by approximately $38 million compared to full year 2015.

Special Items

The Company’s special items included a pre-tax charge of $55 million ($37 million after-tax) in the third quarter of 2015 compared to a pre-tax charge of $23 million ($12 million after-tax) in the same period of 2014.

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               Nine Months Ended  
September 30,               September 30,  

     2015     

   

     2014     

             

    2015    

   

     2014     

 
$ 125     $ 121       Income from continuing operations before special items       $ 378     $ 390  
$ 0.74     $ 0.66       EPS before special items       $ 2.22     $ 2.06  
                  Special Items                    
  (9 )           Restructuring and other special (charges) credits, net (a)         (63 )     3  
  (46 )     (22 )     Loss on asset dispositions and impairments, net (b)         (32 )     (55 )
              Gain on sale of an unconsolidated joint venture hotel (c)         4        
        (1 )     Loss on early extinguishment of debt (d)               (1 )
  (55 )     (23 )     Total special items – pre-tax         (91 )     (53 )
  15       8       Income tax benefit for special items (e)         28       7  
  3       3       Income tax benefit - other non-recurring items (f)         8       54  
  (37 )     (12 )     Total special items – after-tax         (55 )     8  
$ 88     $ 109       Income from continuing operations       $ 323     $ 398  
$ 0.53     $ 0.59       EPS including special items       $ 1.90     $ 2.10  
                                       
a)   During the three months ended September 30, 2015, the net charge primarily relates to costs of $10 million associated with the planned spin-off of the Company’s vacation ownership business and $3 million in costs related to the Company’s previously announced cost savings initiatives, partially offset by the reversal of an $8 million reserve as a result of the favorable resolution of a funding commitment associated with a vacation ownership project. During the nine months ended September 30, 2015, the net charge further includes $16 million in costs associated with the planned spin-off of the Company’s vacation ownership business, $15 million in severance costs, $12 million in costs associated with the Company’s previously announced cost savings initiatives, and a $6 million charge for technology-related costs and expenses that the Company no longer deems recoverable. During the nine months ended September 30, 2014, the net credit relates to a reversal of a reserve associated with a $3 million note receivable from a previous disposition.  
b)   During the three months ended September 30, 2015, the net charge primarily relates to the impairment of an owned hotel of $31 million and a $12 million charge related to an obligation associated with a previous disposition. During the nine months ended September 30, 2015, the net charge discussed above is partially offset by a benefit associated with the sale of a minority partnership interest in a hotel. 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.  
c)   During the nine months ended September 30, 2015, the net benefit relates to a gain recognized on the sale of a hotel by a joint venture in which the Company holds a minority interest. This gain is included in the equity earnings and gains from unconsolidated ventures, net line item in the statement of income.  
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 and nine months ended September 30, 2015 and 2014, the amounts primarily relate to the tax benefit on the pre-tax special items.  
f)   During the three months ended September 30, 2015, the net benefit is primarily due to a provision to return adjustment. During the nine months ended September 30, 2015, the net benefit further includes adjustments to tax reserves and the impacts of favorable tax law changes. During the three months ended September 30, 2014, the net benefit primarily relates to provisions to return adjustments in 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.  
       

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.

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. 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. All references to core fees represent total management and franchise fees.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 1,270 properties in some 100 countries and over 180,000 employees at its owned and managed properties. Starwood is a fully integrated owner, operator and franchisor of hotels, resorts and residences under the renowned brands: St. Regis®, The Luxury Collection®, W®, Westin®, Le Méridien®, Sheraton®, Four Points® by Sheraton, Aloft®, Element® and the recently introduced Tribute Portfolio™. The Company also boasts one of the industry’s leading loyalty programs, Starwood Preferred Guest (SPG®)

 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Unaudited Consolidated Statements of Income
(In millions, except per share data)
 
Three Months Ended                         Nine Months Ended  
September 30,                         September 30,  

     2015     

     

     2014     

     

  %

  Variance  

                       

     2015     

     

     2014     

     

  %

  Variance  

 
                                    Revenues                                    
$ 312       $ 393         (20.6 )           Owned, leased and consolidated joint venture hotels           $ 984       $ 1,171         (16.0 )
                                   

Vacation ownership and residential sales and

                                   
  173         159         8.8             services             530         504         5.2  
  263         255         3.1             Management fees, franchise fees and other income             759         763         (0.5 )
                                    Other revenues from managed and franchised                                    
  686         686                    

properties (a)

            2,057         2,052         0.2  
  1,434         1,493         (4.0 )                         4,330         4,490         (3.6 )
                                    Costs and Expenses                                    
  241         308         21.8             Owned, leased and consolidated joint venture hotels             768         923         16.8  
  127         121         (5.0 )           Vacation ownership and residential             390         374         (4.3 )
  102         96         (6.3 )           Selling, general, administrative and other             292         293         0.3  
  9               n/m             Restructuring and other special charges (credits), net             63         (3 )     n/m  
  62         65         4.6             Depreciation             189         188         (0.5 )
  7         7                     Amortization             22         22          
                                    Other expenses from managed and franchised                                    
  686         686                    

properties (a)

            2,057         2,052         (0.2 )
  1,234         1,283         3.8                           3,781         3,849         1.8  
  200         210         (4.8 )           Operating income             549         641         (14.4 )
                                   

Equity earnings and gains from unconsolidated

                                   
  5         3         66.7             ventures, net             31         21         47.6  
                                   

Interest expense, net of interest income of $1, $0, $3

                                   
  (29 )       (27 )       (7.4 )           and $2             (87 )       (73 )       (19.2 )
          (1 )       100.0            

Loss on early extinguishment of debt, net

                    (1 )       100.0  
                                  Loss on asset dispositions and impairments,                                  
  (46 )       (22 )     n/m             net           (32 )       (55 )       41.8  
                                   

Income from continuing operations before taxes and

                                   
  130         163         (20.2 )           noncontrolling interests             461         533         (13.5 )
  (42 )       (54 )       22.2             Income tax expense             (138 )       (135 )       (2.2 )
  88         109         (19.3 )           Income from continuing operations             323         398         (18.8 )
                                    Discontinued Operations:                                    
                              Gain on dispositions, net of tax                     1         (100.0 )
$ 88       $ 109         (19.3 )           Net income attributable to Starwood           $ 323       $ 399         (19.0 )
                                    Earnings Per Share – Basic                                    
$ 0.53       $ 0.60         (11.7 )           Continuing operations           $ 1.91       $ 2.12         (9.9 )
                              Discontinued operations                     0.01         (100.0 )
$ 0.53       $ 0.60         (11.7 )           Net income           $ 1.91       $ 2.13         (10.3 )
                                    Earnings Per Share – Diluted                                    
$ 0.53       $ 0.59         (10.2 )           Continuing operations           $ 1.90       $ 2.10         (9.5 )
                              Discontinued operations                     0.01         (100.0 )
$ 0.53       $ 0.59         (10.2 )           Net income           $ 1.90       $ 2.11         (10.0 )
  168         185                       Weighted average number of shares             169         188            
                                    Weighted average number of shares assuming                                    
  169         186                       dilution             170         190            
                                                                         
(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,         December 31,      
         

     2015     

       

     2014     

     
          (unaudited)                  
Assets                              
Current assets:                              
Cash and cash equivalents         $ 1,066         $ 935      
Restricted cash           27           84      
Accounts receivable, net of allowance for doubtful accounts of $85 and $63           660           661      
Inventories           256           236      
Securitized vacation ownership notes receivable, net of allowance for

doubtful accounts of $3 and $4

          33           47      
Deferred income taxes           178           199      
Prepaid expenses and other           148           159      
Total current assets           2,368           2,321      
Investments           187           214      
Plant, property and equipment, net           2,185           2,634      
Goodwill and intangible assets, net           1,894           1,956      
Deferred income taxes           592           596      
Other assets (a)           805           711      
Securitized vacation ownership notes receivable, net           154           227      
Total assets         $ 8,185         $ 8,659      
Liabilities and Stockholders’ Equity                              
Current liabilities:                              
Short-term borrowings and current maturities of long-term debt (b)         $ 299         $ 297      
Accounts payable           102           101      
Current maturities of long-term securitized vacation ownership debt           51           73      
Accrued expenses           1,331           1,307      
Accrued salaries, wages and benefits           397           416      
Accrued taxes and other           299           256      
Total current liabilities           2,479           2,450      
Long-term debt (b)           1,874           2,398      
Long-term securitized vacation ownership debt           137           176      
Deferred income taxes           41           38      
Other liabilities           2,400           2,069      
Total liabilities           6,931           7,131      
Commitments and contingencies                              
Stockholders’ equity:                              

Common stock; $0.01 par value; authorized 1,000,000,000 shares; 169,307,152

   and 172,694,299 shares outstanding at September 30, 2015 and

   December 31, 2014, respectively

          2           2      
Additional paid-in capital           98           47      
Accumulated other comprehensive loss           (636 )         (508 )    
Retained earnings           1,787           1,984      
Total Starwood stockholders’ equity           1,251           1,525      
Noncontrolling interests           3           3      
Total equity           1,254           1,528      
Total liabilities and equity         $ 8,185         $ 8,659      
                               
(a)   Includes restricted cash of $3 million and $3 million at September 30, 2015 and December 31, 2014, respectively.
(b)   Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $197 million and $200 million at September 30, 2015 and December 31, 2014, respectively.
     
   
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.  
Non-GAAP to GAAP Reconciliations – Historical Data  
(In millions)  

 

 
Three Months Ended                         Nine Months Ended    
September 30,                         September 30,    

      2015      

   

 

      2014      

     

  %

  Variance  

                       

      2015      

     

      2014      

     

  %

  Variance  

   
                                    Reconciliation of Net Income to EBITDA and                                      
                                    Adjusted EBITDA                                      
$ 88       $ 109         (19.3 )           Net income           $ 323       $ 399         (19.0 )  
  34         32         6.3             Interest expense (a)             101         86         17.4    
          1         (100.0 )           Loss on early extinguishment of debt, net                     1         (100.0 )  
  42         54         (22.2 )           Income tax (benefit) expense (b)             138         134         3.0    
  67         72         (6.9 )           Depreciation (c)             203         207         (1.9 )  
  8         8                     Amortization (d)             23         24         (4.2 )  
  239         276         (13.4 )           EBITDA             788         851         (7.4 )  
                                   

Loss on asset dispositions and impairments,

                                     
  46         22         (109.1 )           net             32         55         41.8    
  9               n/m             Restructuring and other special charges (credits), net             63         (3 )     n/m    
                n/m             Gain on sale of a unconsolidated joint venture hotel (e)             (4 )             n/m    
$ 294       $ 298         (1.3 )           Adjusted EBITDA           $ 879       $ 903         (2.7 )  
                                                                           
(a)   Includes $4 million and $5 million of Starwood’s share of interest expense from unconsolidated joint ventures for the three months ended September 30, 2015 and 2014, respectively, and $11 million for the nine months ended September 30, 2015 and 2014.
(b)   Includes $0 million of tax expense (benefit) recorded in discontinued operations for the three months ended September 30, 2015 and 2014, and $0 million and $(1) million for the nine months ended September 30, 2015 and 2014, respectively.
(c)   Includes $5 million and $7 million of Starwood’s share of depreciation expense from unconsolidated joint ventures for the three months ended September 30, 2015 and 2014, respectively, and $14 million and $19 million for the nine months ended September 30, 2015 and 2014, respectively.
(d)   Includes $1 million of Starwood’s share of amortization expense from unconsolidated joint ventures for the three months ended September 30, 2015 and 2014, and $1 million and $2 million for the nine months ended September 30, 2015 and 2014, respectively.
(e)   The gain on sale is included in the equity earnings and gains from unconsolidated ventures, net line item in the statement of income.
 

n/m= not meaningful

 
   
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.  
Non-GAAP to GAAP Reconciliations – Same-Store Owned Hotels Worldwide  
(In millions)  
   
          Three Months Ended  
          September 30, 2015  
         

    $ Change    

    % Variance  
Revenue                        
Revenue increase/(decrease) (GAAP)         $   (8 )     (2.8 )
Impact of changes in foreign exchange rates             23       8.0  
Revenue increase/(decrease) in constant dollars         $   15       5.2  
Expense                        
Expense increase/(decrease) (GAAP)         $   (6 )     (3.1 )
Impact of changes in foreign exchange rates             16       7.3  
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, 2015  
     

    $ Change    

    % Variance  
Revenue                      
Revenue increase/(decrease) (GAAP)    

$

 

 

4       2.9  
Impact of changes in foreign exchange rates           4       2.7  
Revenue increase/(decrease) in constant dollars    

$

 

 

8       5.6  
Expense                      
Expense increase/(decrease) (GAAP)    

$

 

 

2       1.4  
Impact of changes in foreign exchange rates           3       2.4  
Expense increase/(decrease) in constant dollars    

$

 

 

5       3.8  
 
 
Non-GAAP to GAAP Reconciliations – Same-Store Owned Hotels International
(In millions)
 
         

Three Months Ended

 
          September 30, 2015  
         

    $ Change    

    % Variance  
Revenue                        
Revenue increase/(decrease) (GAAP)         $   (12 )     (8.3 )
Impact of changes in foreign exchange rates             19       13.1  
Revenue increase/(decrease) in constant dollars         $   7       4.8  
Expense                        
Expense increase/(decrease) (GAAP)         $   (8 )     (8.0 )
Impact of changes in foreign exchange rates             13       12.6  
Expense increase/(decrease) in constant dollars         $   5       4.6  
                         
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Non-GAAP to GAAP Reconciliations – Future Performance    
(In millions, except per share data)    

 

   
              Low Case                  
Three Months Ended                     Year Ended      

  December 31, 2015  

                   

  December 31, 2015  

     
$ 128           Net income         $ 448      
  34           Interest expense           135      
  60           Income tax expense           201      
  78           Depreciation and amortization           305      
  300           EBITDA           1,089      
            Loss on asset dispositions and impairments, net           32      
            Gain on sale of a unconsolidated joint venture hotel           (4 )    
            Restructuring and other special charges, net           63      
$ 300           Adjusted EBITDA         $ 1,180      
                                 
Three Months Ended                     Year Ended      
December 31, 2015                     December 31, 2015      
$ 128           Income from continuing operations before special items         $ 503      
$ 0.76           EPS before special items         $ 2.96      
              Special Items                  
            Restructuring and other special charges, net           (63 )    
            Loss on asset dispositions and impairments, net           (32 )    
            Gain on sale of a unconsolidated joint venture hotel           4      
            Total special items – pre-tax           (91 )    
            Income tax benefit on special items           28      
            Income tax benefit – other non-recurring items           8      
            Total special items – after-tax           (55 )    
$ 128           Income from continuing operations         $ 448      
$ 0.76           EPS including special items         $ 2.64      
                                 
              High Case                  
Three Months Ended                     Year Ended      
December 31, 2015                     December 31, 2015      
$ 138           Net income         $ 458      
  34           Interest expense           135      
  65           Income tax expense           206      
  78           Depreciation and amortization           305      
  315           EBITDA           1,104      
            Loss on asset dispositions and impairments, net           32      
            Gain on sale of a unconsolidated joint venture hotel           (4 )    
            Restructuring and other special charges, net           63      
$ 315           Adjusted EBITDA         $ 1,195      
                                 
Three Months Ended                     Year Ended      
December 31, 2015                     December 31, 2015      
$ 138           Income from continuing operations before special items         $ 513      
$ 0.82           EPS before special items         $ 3.02      
              Special Items                  
            Restructuring and other special charges, net           (63 )    
            Loss on asset dispositions and impairments, net           (32 )    
            Gain on sale of a unconsolidated joint venture hotel           4      
            Total special items – pre-tax           (91 )    
            Income tax benefit on special items           28      
            Income tax benefit – other non-recurring items           8      
            Total special items – after-tax           (55 )    
$ 138           Income from continuing operations         $ 458      
$ 0.82           EPS including special items         $ 2.70      
                                 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses    
(In millions)    
     
Three Months Ended                         Nine Months Ended      
September 30,                         September 30,      

     2015     

       

     2014     

       

   %

   Variance   

            Same-Store Owned Hotels

Worldwide

         

     2015     

     

 

     2014     

       

   %

   Variance   

     
                                                    Revenue                                                        
$       268         $       276           (2.8 )           Same-Store Owned Hotels (a)           $       745         $       743           0.4      
        8                 72           (88.9 )           Hotels Sold or Closed in 2015 and 2014                   108                 274           (60.6 )    
        31                 39           (20.5 )           Hotels Without Comparable Results                   117                 135           (13.3 )    
        5                 6           (16.7 )           Other ancillary hotel operations                   14                 19           (26.3 )    
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       312         $       393           (20.6 )           Hotels Revenue           $       984         $       1,171           (16.0 )    
                                                    Costs and Expenses                                                        
$       209         $       215           3.1             Same-Store Owned Hotels (a)           $       603         $       608           0.8      
        6                 57           89.5             Hotels Sold or Closed in 2015 and 2014                   70                 197           64.5      
        22                 30           26.7             Hotels Without Comparable Results                   83                 99           16.2      
        4                 6           33.3             Other ancillary hotel operations                   12                 19           36.8      
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       241         $       308           21.8             Hotels Costs and Expenses           $       768         $       923           16.8      
                                                                                                             
Three Months Ended                         Nine Months Ended      
September 30,                         September 30,      
2015         2014        

%

Variance

            Same-Store Owned Hotels

North America

          2015         2014        

%

Variance

     
                                                    Revenue                                                        
$       139         $       135           2.9             Same-Store Owned Hotels (a)           $       411         $       389           5.8      
                        21           (100.0 )           Hotels Sold or Closed in 2015 and 2014                   75                 112           (33.0 )    
        19                 27           (29.6 )           Hotels Without Comparable Results                   65                 77           (15.6 )    
                                              Other ancillary hotel operations                                                  
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       158         $       183           (13.7 )           Hotels Revenue           $       551         $       578           (4.7 )    
                                                    Costs and Expenses                                                        
$       115         $       113           (1.4 )           Same-Store Owned Hotels (a)           $       342         $       331           (3.4 )    
                        22           100.0             Hotels Sold or Closed in 2015 and 2014                   45                 84           46.4      
        16                 20           20.0             Hotels Without Comparable Results                   52                 58           10.3      
                                              Other ancillary hotel operations                                                  
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       131         $       155           15.5             Hotels Costs and Expenses           $       439         $       473           7.2      
                                                                                                             
Three Months Ended                         Nine Months Ended      
September 30,                         September 30,      
2015        

 2014 

       

%

Variance

            Same-Store Owned Hotels

International

          2015         2014        

%

Variance

     
                                                    Revenue                                                        
$       129         $       141           (8.3 )           Same-Store Owned Hotels (a)           $       334         $       354           (5.6 )    
        8                 51           (84.3 )           Hotels Sold or Closed in 2015 and 2014                   33                 162           (79.6 )    
        12                 12                       Hotels Without Comparable Results                   52                 58           (10.3 )    
        5                 6           (16.7 )           Other ancillary hotel operations                   14                 19           (26.3 )    
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       154         $       210           (26.7 )           Hotels Revenue           $       433         $       593           (27.0 )    
                                                    Costs and Expenses                                                        
$       94         $       102           8.0             Same-Store Owned Hotels (a)           $       261         $       277           5.7      
        6                 35           82.9             Hotels Sold or Closed in 2015 and 2014                   25                 113           77.9      
        6                 10           40.0             Hotels Without Comparable Results                   31                 41           24.4      
        4                 6           33.3             Other ancillary hotel operations                   12                 19           36.8      
                                                   

Total Owned, Leased and Consolidated Joint Venture

                                                       
$       110         $       153           28.1             Hotels Costs and Expenses           $       329         $       450           26.9      
                                                                                                             
(a)   Same-Store Owned Hotel results exclude 12 hotels sold or closed, two leased hotels converted to managed or franchised hotels and three hotels without comparable results for the three months ended September 30, 2015 and 13 hotels sold or closed, two leased hotels converted to managed or franchised hotels and four hotels without comparable results for the nine months ended September 30, 2015.
     
   
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    
         

    2015    

       

    2014    

       

Var. USD

       

    2015    

       

    2014    

       

Var. USD

       

     2015    

       

     2014     

       

Var. USD

   
TOTAL HOTELS                                                                                                                
REVPAR ($)           126.32           126.71           -0.3 %         139.58           134.79           3.6 %         112.52           118.31           -4.9 %  
ADR ($)           171.56           176.86           -3.0 %         176.59           173.33           1.9 %         165.46           181.22           -8.7 %  
Occupancy (%)           73.6 %         71.6 %         2.0           79.0 %         77.8 %         1.2           68.0 %         65.3 %         2.7    
                                                                                                                 
SHERATON                                                                                                                
REVPAR ($)           104.44           105.65           -1.1 %         118.37           113.86           4.0 %         90.97           97.71           -6.9 %  
ADR ($)           144.89           150.50           -3.7 %         153.97           150.62           2.2 %         134.88           150.36           -10.3 %  
Occupancy (%)           72.1 %         70.2 %         1.9           76.9 %         75.6 %         1.3           67.4 %         65.0 %         2.4    
                                                                                                                 
WESTIN                                                                                                                
REVPAR ($)           142.06           140.51           1.1 %         148.36           143.05           3.7 %         129.83           135.58           -4.2 %  
ADR ($)           182.78           184.60           -1.0 %         184.87           181.08           2.1 %         178.31           192.25           -7.3 %  
Occupancy (%)           77.7 %         76.1 %         1.6           80.3 %         79.0 %         1.3           72.8 %         70.5 %         2.3    
                                                                                                                 
ST. REGIS/LUXURY COLLECTION                                                                                                                
REVPAR ($)           229.79           232.68           -1.2 %         287.47           282.77           1.7 %         208.23           213.95           -2.7 %  
ADR ($)           333.27           348.14           -4.3 %         374.23           364.37           2.7 %         315.45           340.63           -7.4 %  
Occupancy (%)           69.0 %         66.8 %         2.2           76.8 %         77.6 %         -0.8           66.0 %         62.8 %         3.2    
                                                                                                                 
LE MERIDIEN                                                                                                                
REVPAR ($)           129.43           132.98           -2.7 %         220.08           212.30           3.7 %         113.30           118.88           -4.7 %  
ADR ($)           183.37           193.67           -5.3 %         259.07           255.27           1.5 %         166.54           179.90           -7.4 %  
Occupancy (%)           70.6 %         68.7 %         1.9           85.0 %         83.2 %         1.8           68.0 %         66.1 %         1.9    
                                                                                                                 
W                                                                                                                
REVPAR ($)           234.53           236.94           -1.0 %         238.29           231.78           2.8 %         227.44           246.63           -7.8 %  
ADR ($)           290.27           295.56           -1.8 %         281.64           277.97           1.3 %         308.98           332.75           -7.1 %  
Occupancy (%)           80.8 %         80.2 %         0.6           84.6 %         83.4 %         1.2           73.6 %         74.1 %         -0.5    
                                                                                                                 
FOUR POINTS                                                                                                                
REVPAR ($)           78.73           78.95           -0.3 %         94.43           93.51           1.0 %         60.45           62.30           -3.0 %  
ADR ($)           108.94           112.79           -3.4 %         119.18           119.93           -0.6 %         94.23           102.33           -7.9 %  
Occupancy (%)           72.3 %         70.0 %         2.3           79.2 %         78.0 %         1.2           64.1 %         60.9 %         3.2    
                                                                                                                 
ALOFT                                                                                                                
REVPAR ($)           86.07           79.76           7.9 %         108.38           100.72           7.6 %         48.73           44.22           10.2 %  
ADR ($)           115.41           115.25           0.1 %         134.78           129.03           4.5 %         75.19           81.60           -7.9 %  
Occupancy (%)           74.6 %         69.2 %         5.4           80.4 %         78.1 %         2.3           64.8 %         54.2 %         10.6    
(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)      
           

       2015       

       

       2014       

       

   Var. USD   

       

       2015       

       

       2014       

       

   Var. USD   

     
TOTAL WORLDWIDE                                                                                
REVPAR ($)             126.32           126.71           -0.3 %         139.50           141.57           -1.5 %    
ADR ($)             171.56           176.86           -3.0 %         192.26           200.48           -4.1 %    
Occupancy (%)             73.6 %         71.6 %         2.0           72.6 %         70.6 %         2.0      
                                                                                 
AMERICAS                                                                                
REVPAR ($)             133.75           129.84           3.0 %         170.37           166.36           2.4 %    
ADR ($)             173.65           171.80           1.1 %         219.65           216.20           1.6 %    
Occupancy (%)             77.0 %         75.6 %         1.4           77.6 %         76.9 %         0.7      
                                                                                 
North America                                                                                
REVPAR ($)             139.58           134.79           3.6 %         180.59           175.45           2.9 %    
ADR ($)             176.59           173.33           1.9 %         225.38           220.16           2.4 %    
Occupancy (%)             79.0 %         77.8 %         1.2           80.1 %         79.7 %         0.4      
                                                                                 
Latin America                                                                                
REVPAR ($)             77.28           81.85           -5.6 %         89.74           94.76           -5.3 %    
ADR ($)             134.47           150.57           -10.7 %         156.40           171.24           -8.7 %    
Occupancy (%)             57.5 %         54.4 %         3.1           57.4 %         55.3 %         2.1      
                                                                                 
ASIA PACIFIC                                                                                
REVPAR ($)             95.64           99.19           -3.6 %         97.47           100.56           -3.1 %    
ADR ($)             139.87           150.56           -7.1 %         141.08           151.61           -6.9 %    
Occupancy (%)             68.4 %         65.9 %         2.5           69.1 %         66.3 %         2.8      
                                                                                 
Greater China                                                                                
REVPAR ($)             87.70           91.32           -4.0 %         87.61           90.88           -3.6 %    
ADR ($)             132.75           141.93           -6.5 %         131.65           140.59           -6.4 %    
Occupancy (%)             66.1 %         64.3 %         1.8           66.5 %         64.6 %         1.9      
                                                                                 
Rest of Asia Pacific                                                                                
REVPAR ($)             107.77           111.12           -3.0 %         120.45           123.14           -2.2 %    
ADR ($)             149.85           162.92           -8.0 %         160.58           175.26           -8.4 %    
Occupancy (%)             71.9 %         68.2 %         3.7           75.0 %         70.3 %         4.7      
                                                                                 
EAME                                                                                
REVPAR ($)             147.55           157.02           -6.0 %         153.06           163.20           -6.2 %    
ADR ($)             209.05           232.14           -9.9 %         219.19           243.49           -10.0 %    
Occupancy (%)             70.6 %         67.6 %         3.0           69.8 %         67.0 %         2.8      
                                                                                 
Europe                                                                                
REVPAR ($)             177.03           192.45           -8.0 %         196.69           215.33           -8.7 %    
ADR ($)             228.13           257.61           -11.4 %         249.38           282.60           -11.8 %    
Occupancy (%)             77.6 %         74.7 %         2.9           78.9 %         76.2 %         2.7      
                                                                                 
Africa & Middle East                                                                                
REVPAR ($)             94.47           93.39           1.2 %         94.48           93.38           1.2 %    
ADR ($)             163.05           169.94           -4.1 %         163.79           170.59           -4.0 %    
Occupancy (%)             57.9 %         55.0 %         2.9           57.7 %         54.7 %         3.0      
(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    
     
          Worldwide           North America         International      
         

     2015     

       

     2014     

       

Var. USD

         

     2015     

     

     2014     

       

Var. USD

       

     2015     

       

     2014     

       

Var. USD

     
TOTAL HOTELS         29 Hotels           10 Hotels         19 Hotels      

REVPAR ($)

          198.16           203.53           -2.6 %           210.05         206.27           1.8 %         186.46           200.83           -7.2 %    
ADR ($)           252.42           262.79           -3.9 %           253.86         253.07           0.3 %         250.85           273.40           -8.2 %    
Occupancy (%)           78.5 %         77.5 %         1.0             82.7 %       81.5 %         1.2           74.3 %         73.5 %         0.8      
                                                                                                                   
Total Revenue*           267,781      

 

  275,584           -2.8 %           138,777         134,871           2.9 %         129,005           140,712           -8.3 %    
Total Expenses*           208,844           215,476           3.1 %           114,856         113,276           -1.4 %         93,988           102,200           8.0 %    
*Revenues and Expenses above are represented in '000s
 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Management Fees, Franchise Fees and Other Income    
For the Three Months Ended September 30,    
UNAUDITED ($ millions)    
     
            Worldwide      
           

       2015       

         

       2014       

         

   Variance   

         

   % Variance   

     
Management Fees                                                              
Base Fees             95             97             (2 )           (2.1 )%    
Incentive Fees             47             46             1             2.2 %    
Total Management Fees             142             143             (1 )           (0.7 )%    
                                                               
Franchise Fees             68             63             5             7.9 %    
                                                               
Total Management and Franchise Fees (Core Fees)             210             206             4             1.9 %    
                                                               
Other Management and Franchise Revenues(1)             50             42             8             19.0 %    
                                                               
Total Management and Franchise Revenues             260             248             12             4.8 %    
                                                               
Other             3             7             (4 )           (57.1 )%    
                                                               
Management Fees, Franchise Fees and Other Income             263             255             8             3.1 %    
                                                               
(1)   Other Management and Franchise Revenues includes the amortization of the deferred gains of approximately $23 million in 2015 and $22 million in 2014 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)    
     
         

      2015      

       

      2014      

       

   $ Variance   

       

   % Variance   

     
Originated Sales Revenues (1) — Vacation Ownership Sales           88           80           8           10.0 %    
Other Sales and Services Revenues (2)           89           81           8           9.9 %    
Deferred Revenues — Percentage of Completion           (2 )         3           (5 )       n/m      
Deferred Revenues — Other (3)           (6 )         (7 )         1           14.3 %    
Vacation Ownership Sales and Services Revenues           169           157           12           7.6 %    
Residential Sales and Services Revenues           4           2           2           100.0 %    
Total Vacation Ownership and Residential Sales and Services

Revenues

          173           159           14           8.8 %    
                                                       
Originated Sales Expenses (4) — Vacation Ownership Sales           60           52           (8 )         (15.4 )%    
Other Expenses (5)           66           63           (3 )         (4.8 )%    
Deferred Expenses — Percentage of Completion                     3           3           100.0 %    
Deferred Expenses — Other           1           2           1           50.0 %    
Vacation Ownership Expenses           127           120           (7 )         (5.8 )%    
Residential Expenses                     1           1           100.0 %    
Total Vacation Ownership and Residential Expenses           127           121           (6 )         (5.0 )%    
                                                       
(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)  

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

(5)  

Includes resort, general and administrative, and other miscellaneous expenses.

Note: Deferred revenue is calculated based on the Percentage of Completion ("POC") of the project. Deferred expenses, also based on POC, include product costs and direct sales and marketing costs only. Indirect sales and marketing costs are not deferred per ASC 978-720-25 and ASC 978-340-25.
 
n/m = not meaningful
 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    

Systemwide(1) Statistics - Same Store

   
For the Nine Months Ended September 30,    
UNAUDITED    
     
          Systemwide - Worldwide       Systemwide - North America       Systemwide - International      
         

       2015       

       

       2014       

       

Var. USD

 

 

 

       2015       

       

       2014       

       

Var. USD

     

       2015       

       

       2014       

       

Var. USD

     
TOTAL HOTELS                                                                                                              
REVPAR ($)           122.45           122.41           0.0 %       135.34           129.56           4.5 %       109.21           115.06           -5.1 %    
ADR ($)           172.39           176.67           -2.4 %       177.35           172.76           2.7 %       166.45           181.41           -8.2 %    
Occupancy (%)           71.0 %         69.3 %         1.7         76.3 %         75.0 %         1.3         65.6 %         63.4 %         2.2      
                                                                                                               
SHERATON                                                                                                              
REVPAR ($)           101.54           102.76           -1.2 %       114.44           109.65           4.4 %       89.22           96.17           -7.2 %    
ADR ($)           146.88           151.60           -3.1 %       154.09           149.98           2.7 %       138.93           153.41           -9.4 %    
Occupancy (%)           69.1 %         67.8 %         1.3         74.3 %         73.1 %         1.2         64.2 %         62.7 %         1.5      
                                                                                                               
WESTIN                                                                                                              
REVPAR ($)           139.66           136.85           2.1 %       145.19           138.70           4.7 %       129.05           133.31           -3.2 %    
ADR ($)           184.89           185.49           -0.3 %       186.77           181.73           2.8 %       180.97           193.46           -6.5 %    
Occupancy (%)           75.5 %         73.8 %         1.7         77.7 %         76.3 %         1.4         71.3 %         68.9 %         2.4      
                                                                                                               
ST. REGIS/LUXURY COLLECTION                                                                                                              
REVPAR ($)           214.37           216.80           -1.1 %       294.50           283.39           3.9 %       185.65           192.87           -3.7 %    
ADR ($)           319.76           333.27           -4.1 %       395.42           380.54           3.9 %       288.38           312.76           -7.8 %    
Occupancy (%)           67.0 %         65.1 %         1.9         74.5 %         74.5 %         0.0         64.4 %         61.7 %         2.7      
                                                                                                               
LE MERIDIEN                                                                                                              
REVPAR ($)           126.00           131.65           -4.3 %       205.71           199.37           3.2 %       112.79           120.44           -6.4 %    
ADR ($)           184.63           196.81           -6.2 %       250.86           246.24           1.9 %       170.99           186.55           -8.3 %    
Occupancy (%)           68.2 %         66.9 %         1.3         82.0 %         81.0 %         1.0         66.0 %         64.6 %         1.4      
                                                                                                               
W                                                                                                              
REVPAR ($)           237.26           235.28           0.8 %       242.66           232.80           4.2 %       228.28           239.40           -4.6 %    
ADR ($)           298.42           301.98           -1.2 %       292.89           285.82           2.5 %       308.70           332.35           -7.1 %    
Occupancy (%)           79.5 %         77.9 %         1.6         82.9 %         81.4 %         1.5         73.9 %         72.0 %         1.9      
                                                                                                               
FOUR POINTS                                                                                                              
REVPAR ($)           76.31           75.95           0.5 %       87.94           86.03           2.2 %       62.66           64.25           -2.5 %    
ADR ($)           110.77           114.02           -2.9 %       117.24           117.13           0.1 %       101.55           109.50           -7.3 %    
Occupancy (%)           68.9 %         66.6 %         2.3         75.0 %         73.4 %         1.6         61.7 %         58.7 %         3.0      
                                                                                                               
ALOFT                                                                                                              
REVPAR ($)           84.11           76.77           9.6 %       105.23           96.20           9.4 %       49.24           44.54           10.6 %    
ADR ($)           116.18           113.36           2.5 %       134.62           126.43           6.5 %       78.32           82.73           -5.3 %    
Occupancy (%)           72.4 %         67.7 %         4.7         78.2 %         76.1 %         2.1         62.9 %         53.8 %         9.1      
(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)      
         

       2015       

       

       2014       

       

 Var. USD 

         

       2015       

       

       2014       

       

 Var. USD 

     
TOTAL WORLDWIDE                                                                                
REVPAR ($)           122.45           122.41           0.0 %           136.41           137.77           -1.0 %    
ADR ($)           172.39           176.67           -2.4 %           194.11           201.22           -3.5 %    
Occupancy (%)           71.0 %         69.3 %         1.7             70.3 %         68.5 %         1.8      
                                                                                 
AMERICAS                                                                                
REVPAR ($)           131.34           126.20           4.1 %           169.01           162.86           3.8 %    
ADR ($)           175.60           172.11           2.0 %           222.14           217.54           2.1 %    
Occupancy (%)           74.8 %         73.3 %         1.5             76.1 %         74.9 %         1.2      
                                                                                 
North America                                                                                
REVPAR ($)           135.34           129.56           4.5 %           176.55           169.67           4.1 %    
ADR ($)           177.35           172.76           2.7 %           226.36           220.69           2.6 %    
Occupancy (%)           76.3 %         75.0 %         1.3             78.0 %         76.9 %         1.1      
                                                                                 
Latin America                                                                                
REVPAR ($)           93.52           94.37           -0.9 %           109.83           109.44           0.4 %    
ADR ($)           154.72           164.03           -5.7 %           179.85           185.38           -3.0 %    
Occupancy (%)           60.4 %         57.5 %         2.9             61.1 %         59.0 %         2.1      
                                                                                 
ASIA PACIFIC                                                                                
REVPAR ($)           95.41           97.42           -2.1 %           97.32           98.76           -1.5 %    
ADR ($)           146.08           154.90           -5.7 %           148.49           157.04           -5.4 %    
Occupancy (%)           65.3 %         62.9 %         2.4             65.5 %         62.9 %         2.6      
                                                                                 
Greater China                                                                                
REVPAR ($)           87.06           89.16           -2.4 %           86.56           88.42           -2.1 %    
ADR ($)           140.27           148.51           -5.5 %           138.93           147.01           -5.5 %    
Occupancy (%)           62.1 %         60.0 %         2.1             62.3 %         60.1 %         2.2      
                                                                                 
Rest of Asia Pacific                                                                                
REVPAR ($)           108.14           109.99           -1.7 %           123.03           123.48           -0.4 %    
ADR ($)           153.90           163.59           -5.9 %           167.89           177.83           -5.6 %    
Occupancy (%)           70.3 %         67.2 %         3.1             73.3 %         69.4 %         3.9      
                                                                                 
EAME                                                                                
REVPAR ($)           134.74           147.97           -8.9 %           142.74           156.28           -8.7 %    
ADR ($)           199.22           224.09           -11.1 %           209.89           234.89           -10.6 %    
Occupancy (%)           67.6 %         66.0 %         1.6             68.0 %         66.5 %         1.5      
                                                                                 
Europe                                                                                
REVPAR ($)           143.34           161.19           -11.1 %           159.39           179.20           -11.1 %    
ADR ($)           202.50           235.84           -14.1 %           219.47           255.81           -14.2 %    
Occupancy (%)           70.8 %         68.3 %         2.5             72.6 %         70.1 %         2.5      
                                                                                 
Africa & Middle East                                                                                
REVPAR ($)           118.06           122.42           -3.6 %           118.70           123.30           -3.7 %    
ADR ($)           191.90           198.87           -3.5 %           193.50           200.59           -3.5 %    
Occupancy (%)           61.5 %         61.6 %         -0.1             61.3 %         61.5 %         -0.2      
(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
 
          Worldwide         North America         International    
         

     2015     

       

     2014      

       

Var. USD

       

     2015     

       

     2014      

       

Var. USD

       

     2015     

       

     2014     

       

Var. USD

   
TOTAL HOTELS         28 Hotels         10 Hotels         18 Hotels    
REVPAR ($)           183.87           183.32           0.3     %     203.87           193.39           5.4     %     163.72           173.17           -5.5   %
ADR ($)           241.88           251.40           -3.8     %     255.05           253.17           0.7     %     227.16           249.43           -8.9   %
Occupancy (%)           76.0 %         72.9     %     3.1           79.9 %         76.4 %         3.5           72.1 %         69.4 %         2.7    
                                                                                                                 
Total Revenue*           745,236      

 

  742,570           0.4     %     411,227           388,846           5.8     %     334,009           353,724           -5.6   %
Total Expenses*           603,385           607,955           0.8     %     342,096           330,791           -3.4     %     261,289           277,163           5.7   %
*Revenues and Expenses above are represented in '000s
 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Management Fees, Franchise Fees and Other Income    
For the Nine Months Ended September 30,    
UNAUDITED ($ millions)    
                   
            Worldwide      
           

       2015       

       

       2014       

       

  Variance  

       

  % Variance  

     
Management Fees                                                        
Base Fees             273           281           (8 )         (2.8 )%    
Incentive Fees             141           143           (2 )         (1.4 )%    
Total Management Fees             414           424           (10 )         (2.4 )%    
                                                         
Franchise Fees             193           178           15           8.4 %    
                                                         
Total Management and Franchise Fees (Core Fees)             607           602           5           0.8 %    
                                                         
Other Management and Franchise Revenues (1)             141           143           (2 )         (1.4 )%    
                                                         
Total Management and Franchise Revenues             748           745           3           0.4 %    
                                                         
Other             11           18           (7 )         (38.9 )%    
                                                         
Management Fees, Franchise Fees and Other Income             759           763           (4 )         (0.5 )%    
                                                         
(1)   Other Management and Franchise Revenues includes the amortization of the deferred gains of approximately $67 million in 2015 and $65 million in 2014 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)    
     
           

        2015        

         

        2014        

         

  $ Variance  

         

  % Variance 

     
Originated Sales Revenues (1) – Vacation Ownership Sales             250             243             7             2.9 %    
Other Sales and Services Revenues (2)             280             253             27             10.7 %    
Deferred Revenues – Percentage of Completion             2             (13 )           15           n/m      
Deferred Revenues – Other (3)             (8

)

          (7 )           (1 )           (14.3

)%

   
Vacation Ownership Sales and Services Revenues             524             476             48             10.1 %    
Residential Sales and Services Revenues (4)             6             28             (22 )           (78.6 )%    
Total Vacation Ownership and Residential Sales and Services

Revenues

            530             504             26             5.2 %    
                                                               
Originated Sales Expenses (5) – Vacation Ownership Sales             181             173             (8 )           (4.6 )%    
Other Expenses (6)             201             191             (10 )           (5.2 )%    
Deferred Expenses – Percentage of Completion             2             (7 )           (9 )         n/m      
Deferred Expenses – Other             6             7             1             14.3 %    
Vacation Ownership Expenses             390             364             (26 )           (7.1 )%    
Residential Expenses (4)                         10             10             100.0 %    
Total Vacation Ownership and Residential Expenses             390             374             (16 )           (4.3

)%

   
                                                               
(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 2015 and 2014, includes $0 and $20 million of revenues and $0 and $9 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, 2015    
UNAUDITED ($ millions)    
     
                   

Owned Hotels without comparable results in 2015 and 2014:

                 
                   

Hotel

       

 

 

Location

   
Sheraton Centre Toronto Hotel        

 

 

Toronto, Canada

   
Sheraton Maria Isabel Hotel & Towers        

 

 

Mexico City, Mexico

   
The Westin Excelsior, Florence        

 

 

Florence, Italy

   
The Westin Resort & Spa, Los Cabos        

 

 

Los Cabos, Mexico

   
                 
                 

Owned Hotels sold or closed in 2015 and 2014:

               
                 

Hotel

         

Location

   
Aloft Philadelphia Airport           Philadelphia, PA    
Aloft Tucson University           Tucson, AZ    
Element Denver Park Meadows           Denver, CO    
Four Points by Sheraton Philadelphia Airport           Philadelphia, PA    
Sheraton Ambassador Hotel           Monterrey, Mexico    
Sheraton on the Park           Sydney, Australia    
Sheraton Santa Maria de El Paular           Madrid, Spain    
Sheraton Suites Philadelphia Airport           Philadelphia, PA    
The Gritti Palace, a Luxury Collection Hotel, Venice           Venice, Italy    
The Park Lane Hotel           London, England    
The Phoenician, a Luxury Collection Resort, Scottsdale           Scottsdale, AZ    
The St. Regis Bal Harbour Resort           Miami Beach, FL    
The St. Regis Rome           Rome, Italy    
The Westin Dublin Hotel           Dublin, Ireland    
The Westin Excelsior Rome           Rome, Italy    
   

Revenues and expenses associated with hotels sold or closed in 2015 and 2014: (1)

 
   
           

     Q1      

       

     Q2     

       

     Q3     

       

     Q4     

       

     Full Year     

 
Hotels Sold in 2014:                                                                                            
2014                                                                                            
Revenues           $       50         $       44         $     37         $       20         $       151  
Expenses (excluding depreciation)           $       38         $       31         $     27         $       12         $       108  
                                                                                             
Hotels Sold in 2015:                                                                                            
2015                                                                                            
Revenues           $       55         $       45               8                         $       108  
Expenses (excluding depreciation)           $       36         $       28               6                         $       70  
                                                                                             
2014                                                                                            
Revenues           $       54         $       54         $     35         $       43         $       186  
Expenses (excluding depreciation)           $       36         $       35         $     30         $       32         $       133  
                                                                                             
(1)   Results consist of nine hotels sold or closed in 2014, two leased hotels converted to managed or franchised hotels in 2014, and four hotels sold in 2015. These amounts are included in the revenues and expenses from owned, leased, and consolidated joint venture hotels in the statements of income for 2015 and 2014.
     
       
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.      
Capital Expenditures      
For the Three and Nine Months Ended September 30, 2015      
UNAUDITED ($ millions)      
       
                Q3            

  YTD

     
Maintenance Capital Expenditures: (1)                                                    
Owned, Leased and Consolidated Joint Venture Hotels                       14                     41      
Corporate/IT                       28                     68      
Subtotal                       42                     109      
                                                     
Net capital expenditures for Vacation Ownership inventory (2)                       17                     34      
                                                     
Development Capital                       38                     110      
                                                     
Total Capital Expenditures                       97                     253      
                                                     
(1)   Maintenance capital expenditures include improvements that extend the useful life of the asset.
(2)   Represents gross inventory capital expenditures of $31 million and $86 million in the three and nine months ended September 30, 2015, less cost of sales of $14 million and $52 million in the three and nine months ended September 30, 2015.
     
 
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Divisional Hotel Inventory Summary by Ownership by Brand
As of September 30, 2015
                                                                                     
      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     9     5,792       5     3,328       4     2,464       1     297                 1     297       2     358       2     358                   12     6,447    
Westin     5     2,734       2     1,832       3     902       1     246                 1     246       1     171       1     171                   7     3,151    
Four Points                                                                                                        
W     1     509       1     509                                               2     665       2     665                   3     1,174    
Luxury Collection     1     180                 1     180                                     4     495       4     495                   5     675    
St. Regis     2     498       2     498                 1     160                 1     160       1     99       1     99                   4     757    
Le Meridien                                                                                                        
Aloft                                                                                                        
Element                                                                                                        
Tribute                                                                                                        
Other     1     135       1     135                                                                               1     135    
Total Owned     19     9,848       11     6,302       8     3,546       3     703                 3     703       10     1,788       10     1,788                   32     12,339    
                                                                                                                                                 
Managed & UJV                                                                                                                                                
Sheraton     46     26,645       28     22,716       18     3,929       97     36,634       66     28,175       31     8,459       72     20,880       41     11,671       31     9,209         215     84,159    
Westin     51     26,284       48     25,398       3     886       37     12,450       20     7,047       17     5,403       15     5,106       10     3,767       5     1,339         103     43,840    
Four Points     5     658       1     120       4     538       34     9,478       22     6,625       12     2,853       13     2,568       5     673       8     1,895         52     12,704    
W     28     8,310       24     7,553       4     757       10     2,740       4     1,464       6     1,276       5     941       4     499       1     442         43     11,991    
Luxury Collection     12     2,584       5     2,294       7     290       13     2,636       7     1,464       6     1,172       27     5,038       21     3,403       6     1,635         52     10,258    
St. Regis     12     2,329       9     1,881       3     448       10     2,644       6     1,659       4     985       9     1,973       5     806       4     1,167         31     6,946    
Le Meridien     5     879       4     719       1     160       32     8,272       9     3,130       23     5,142       40     11,976       13     4,476       27     7,500         77     21,127    
Aloft                                   12     3,071       9     2,101       3     970       6     1,292       5     884       1     408         18     4,363    
Element                                   1     188       1     188                                                 1     188    
Tribute                                                                                                        
Other                                                                 1     250                 1     250         1     250    
Total Managed & UJV     159     67,689       119     60,681       40     7,008       246     78,113       144     51,853       102     26,260       188     50,024       104     26,179       84     23,845         593     195,826    
                                                                                                                                                 
Franchised                                                                                                                                                
Sheraton     177     51,611       162     47,924       15     3,687       12     5,841       3     1,836       9     4,005       25     6,187       22     5,609       3     578         214     63,639    
Westin     79     25,633       72     23,348       7     2,285       8     2,531       1     288       7     2,243       7     1,987       7     1,987                   94     30,151    
Four Points     133     20,079       118     17,982       15     2,097       11     1,805       1     126       10     1,679       8     1,267       8     1,267                   152     23,151    
W                                                                                                        
Luxury Collection     15     2,754       11     2,268       4     486       12     3,212                 12     3,212       16     2,408       16     2,408                   43     8,374    
St. Regis                                                                                                        
Le Meridien     17     3,864       16     3,753       1     111       5     1,209       1     160       4     1,049       3     575       3     575                   25     5,648    
Aloft     75     11,342       70     10,428       5     914       6     1,001                 6     1,001       1     116       1     116                   82     12,459    
Element     17     2,593       17     2,593                                               1     133       1     133                   18     2,726    
Tribute     1     393       1     393                                               1     91       1     91                   2     484    
Other     1     120       1     120                                                                               1     120    
Total Franchised     515     118,389       468     108,809       47     9,580       54     15,599       6     2,410       48     13,189       62     12,764       59     12,186       3     578         631     146,752    
                                                                                                                                                 
Systemwide                                                                                                                                                
Sheraton     232     84,048       195     73,968       37     10,080       110     42,772       69     30,011       41     12,761       99     27,425       65     17,638       34     9,787         441     154,245    
Westin     135     54,651       122     50,578       13     4,073       46     15,227       21     7,335       25     7,892       23     7,264       18     5,925       5     1,339         204     77,142    
Four Points     138     20,737       119     18,102       19     2,635       45     11,283       23     6,751       22     4,532       21     3,835       13     1,940       8     1,895         204     35,855    
W     29     8,819       25     8,062       4     757       10     2,740       4     1,464       6     1,276       7     1,606       6     1,164       1     442         46     13,165    
Luxury Collection     28     5,518       16     4,562       12     956       25     5,848       7     1,464       18     4,384       47     7,941       41     6,306       6     1,635         100     19,307    
St. Regis     14     2,827       11     2,379       3     448       11     2,804       6     1,659       5     1,145       10     2,072       6     905       4     1,167         35     7,703    
Le Meridien     22     4,743       20     4,472       2     271       37     9,481       10     3,290       27     6,191       43     12,551       16     5,051       27     7,500         102     26,775    
Aloft     75     11,342       70     10,428       5     914       18     4,072       9     2,101       9     1,971       7     1,408       6     1,000       1     408         100     16,822    
Element     17     2,593       17     2,593                 1     188       1     188                 1     133       1     133                   19     2,914    
Tribute     1     393       1     393                                               1     91       1     91                   2     484    
Other     2     255       2     255                                               1     250                 1     250         3     505    
Vacation Ownership     15     7,706       14     7,126       1     580                                                                     15     7,706    
Total Systemwide     708     203,632       612     182,918       96     20,714       303     94,415       150     54,263       153     40,152       260     64,576       173     40,153       87     24,423         1,271     362,623    
                                                                                                                                                 
     
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.    
Vacation Ownership Inventory Pipeline    
As of September 30, 2015    
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                     10               9               10         1,698         412         21               2,131    
St. Regis                     2               2                       56                               56    
The Luxury Collection                     1               1                       6                               6    
Unbranded                     2               2               1         99                               99    
Total SVO, Inc.                     22               21               17         4,938         412         733               6,083    
Unconsolidated Joint Ventures

(UJV's)

                    1               1               1         198                               198    
Total including UJV's                     23               22               18         5,136         412         733               6,281    
Total Intervals Including UJV's (7)                                                               267,072         21,424         38,116               326,612    
                                                                                                         
(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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