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Starwood Reports Third Quarter 2012 Results And Declares Annual Dividend Of $1.25 Per Share

At September 30, 2012, debt was approximately 88% fixed rate and 12% floating rate and its weighted average maturity was 4.1 years with a weighted average interest rate of 7.03%, excluding the securitized debt. The Company had cash (including current restricted cash) and availability under the domestic and international revolving credit facility of approximately $2.297 billion.

Outlook

For the Full Year 2012:

  • Including Bal Harbour, which is expected to contribute approximately $135 million of EBITDA, adjusted EBITDA is expected to be approximately $1.190 billion to $1.195 billion.
  • Excluding Bal Harbour, adjusted EBITDA is expected to be approximately $1.055 billion to $1.060 billion, assuming:
    • REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 5% to 6% in constant dollars (approximately 200 basis points lower in dollars at current exchange rates).
    • REVPAR increases at Same-Store Owned Hotels Worldwide of 3% to 4% in constant dollars (approximately 250 basis points lower in dollars at current exchange rates).
    • Margins at Same-Store Owned Hotels Worldwide increase 50 to 100 basis points.
    • Management fees, franchise fees and other income increase approximately 9% to 10%.
    • Earnings from the Company’s vacation ownership and residential business of approximately $158 million.
    • Selling, general and administrative expenses increase approximately 3% to 4%.
  • Full year earnings are negatively impacted by approximately $10 million due to recent asset sales.
  • Depreciation and amortization is expected to be approximately $280 million.
  • Interest expense is expected to be approximately $185 million, excluding the $15 million of redemption premiums and other costs associated with the Senior Notes redemption in the second quarter of 2012.
  • Including Bal Harbour, full year effective tax rate is expected to be approximately 31%, and cash taxes are expected to be approximately $100 million.
  • Including Bal Harbour, EPS before special items is expected to be approximately $2.55 to $2.57.
  • Full year capital expenditures (excluding vacation ownership and residential inventory) is expected to be approximately $150 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 $325 million.
  • Vacation ownership (excluding Bal Harbour) is expected to generate approximately $200 million in positive cash flow. Bal Harbour is expected to generate at least $400 million in net cash flow.

For the three months ended December 31, 2012:

  • Including Bal Harbour, which is expected to contribute approximately $10 million of EBITDA, adjusted EBITDA is expected to be approximately $295 million to $300 million.
  • Excluding Bal Harbour, adjusted EBITDA is expected to be approximately $285 million to $290 million, assuming:
    • REVPAR increases at Same-Store Company-Operated Hotels Worldwide of 4% to 6% in constant dollars (approximately 50 basis points lower in dollars at current exchange rates).
    • REVPAR increases at Same-Store Company Owned Hotels Worldwide of 3% to 4% in constant dollars (approximately 50 basis points lower in dollars at current exchange rates).
    • Management fees, franchise fees and other income increase approximately 4% to 5%.
    • Earnings from the Company’s vacation ownership and residential business are down approximately $5 million year over year.
  • Fourth quarter earnings are negatively impacted by approximately $8 million due to recent asset sales.
  • Depreciation and amortization is expected to be approximately $70 million.
  • Interest expense is expected to be approximately $43 million.
  • Including Bal Harbour, income from continuing operations is expected to be approximately $126 million to $129 million, reflecting an effective tax rate of approximately 31%.
  • Including Bal Harbour, EPS is expected to be approximately $0.64 to $0.66.

For the Full Year 2013:

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