Starwood Reports Fourth Quarter 2008 Results

WHITE PLAINS, N.Y. — Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported fourth quarter 2008 financial results.

Fourth Quarter 2008 Highlights

  • Excluding special items, EPS from continuing operations was $0.49. Including special items, EPS from continuing operations was a loss of $0.25.
  • Total Company Adjusted EBITDA was $273 million.
  • Excluding special items, income from continuing operations was $88 million. Including special items, the loss from continuing operations was $45 million.
  • Special items totaled $133 million of net charges ($0.74 per share) primarily related to $30 million of severance costs, $79 million of impairment charges from discontinued vacation ownership projects and $86 million of impairment charges primarily at five owned hotels in North America.
  • Worldwide System-wide REVPAR for Same-Store Hotels decreased 12.1% (9.1% in constant dollars) compared to the fourth quarter of 2007. System-wide REVPAR for Same-Store Hotels in North America decreased 13.2% (11.7% in constant dollars).
  • Management and franchise revenues decreased 4.7% compared to 2007.
  • Worldwide REVPAR for Starwood branded Same-Store Owned Hotels decreased 19.6% (15.4% in constant dollars) compared to the fourth quarter of 2007. REVPAR for Starwood branded Same-Store Owned Hotels in North America decreased 18.6% (16.3% in constant dollars).
  • Margins at Starwood branded Same-Store Owned Hotels Worldwide and in North America decreased 479 and 596 basis points, respectively, compared to the fourth quarter of 2007.
  • Revenues from vacation ownership and residential sales decreased 48.7% compared to 2007.
  • The Company signed 31 hotel management and franchise contracts in the quarter representing approximately 6,100 rooms. For the full year, the Company signed 147 hotel contracts representing approximately 35,700 rooms.

Fourth Quarter 2008 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported a loss from continuing operations for the fourth quarter of 2008 of $0.25 per share compared to EPS of $0.74 in the fourth quarter of 2007. Excluding special items, which net to a charge of $133 million in 2008 and $11 million in 2007, EPS from continuing operations was $0.49 for the fourth quarter of 2008 compared to $0.79 in the fourth quarter of 2007. Excluding special items, the effective income tax rate in the fourth quarter of 2008 was 27.5% compared to 28.5% in the same period of 2007.

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