FORWARD-LOOKING STATEMENTS

Transcription

1 WELCOME TO DUBAI 1

2 FORWARD-LOOKING STATEMENTS These presentations contain forward-looking statements within the meaning of federal securities regulations. These forwardlooking statements generally can be identified by phrases such as Starwood or its management believes, expects, anticipates, foresees, forecasts, estimates or other words or phrases of similar import. Similarly, statements in this release that describe the Company s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. Future results, performance and achievements may be affected by general economic conditions including the severity and duration of any downturn in the US or global economy, the impact of war and terrorist activity, business and financing conditions, including the availability of mortgage financing, foreign exchange fluctuations, cyclicality of the real estate, including the sale of residential units, and the hotel and vacation ownership businesses, operating risks associated with the sale of residential units, hotel and vacation ownership businesses, relationships with associates, customers and property owners, the impact of the internet reservation channels, our reliance on technology, domestic and international political and geopolitical conditions, competition, governmental and regulatory actions (including the impact of changes in U.S. and foreign tax laws and their interpretation), travelers fears of exposure to contagious diseases, risk associated with the level of our indebtedness, risk associated with potential acquisitions and dispositions, and other circumstances and uncertainties. There can also be no assurance that agreements will be entered into for the hotels in the Company s pipeline and, if entered into, the timing of any agreement and the opening of the related hotel. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Please note that these presentations include non-gaap financial measures. For definitions of certain terms used herein and a presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of the differences between the non-gaap financial measure disclosed and the most comparable financial measure calculated and presented in accordance with GAAP, please refer to the Company s web site at 2

3 FRITS VAN PAASSCHEN // CHIEF EXECUTIVE OFFICER 2013 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. Proprietary & Confidential 3

4 Our Agenda Today Shareholder Value Creation Strategy and Outlook Frits van Paasschen 8:30-9:00 Middle East Review Guido de Wilde 9:00-9:40 South Asia Review Dilip Puri 9:40-10:00 Starwood Strategy : Individual Spirit and Collective Strength Break Frits van Paasschen 10:15-11:15 Starwood Investment Proposition Vasant Prabhu 11:15-12:15 Break 3-Year Outlook Vasant Prabhu 12:30-1:00 Q&A All 1:00-1:30 Lunch 4

5 THE WESTIN DUBAI MINA SEYAHI BEACH RESORT & MARINA SHAREHOLDER VALUE CREATION AT STARWOOD 5

6 SHAREHOLDER VALUE CREATION AT STARWOOD Shareholder Value Creation at Starwood 10-Year Total Shareholder Return»Sustaining Innovation»Delivering Operational Excellence»Growing the System»Executing Asset Light Strategy»Generating Significant Cash S&P 98% MAR 164% HOT 256% 6 Source: Bloomberg. Represents 10-year total shareholder returns from 31-Dec-02 through 31-Dec-12 with monthly returns and reinvestment in security 6

7 SHAREHOLDER VALUE CREATION AT STARWOOD Sustaining Innovation» W Hotels (1998)» Westin Heavenly (1999)» Aloft and Element (2008)» Le Méridien Reinvention (2009)» Link at Sheraton (2009)» SPG Transformation (2012)» Mobile Platform (2012)» Crossover Rewards (2013) 7 7

8 SHAREHOLDER VALUE CREATION AT STARWOOD Delivering Operational Excellence » RPI Gains of nearly 200bps» SPG share of occupancy from 42% to over 50%» Company Operated Hotel GOP Margins +270bps» Owned Hotel Margins +260bps» SG&A per room down over 25% since pre-crisis levels THE CHATWAL, A LUXURY COLLECTION HOTEL AL MAHA DESERT RESORT AND SPA, DUBAI 8 Note: Samsestore 2012 margins vs. Samestore 2007 Margins for Company Operated and Owned/Leased Hotels 8

9 SHAREHOLDER VALUE CREATION AT STARWOOD Growing the System» 5% net rooms growth since 2004» 100k room, 400 hotel pipeline (30% future growth)» Fastest growing luxury hotel portfolio» Largest global upper-upscale (5 star) hotel company Operating Rooms % Net Rooms Growth

10 SHAREHOLDER VALUE CREATION AT STARWOOD Executing Asset-Light Strategy» Sold 14 hotels since 2009» Proceeds of over $1.25B» Average EBITDA multiple over 16x» Sold and Closed over 73% of Bal Harbour units» Sell-Out in 2013 likely» Targeting total sales over $1B» Starwood Vacation Ownership cash generation of almost $800 million since 2009 ALOFT LEXINGTON, MA THE ST. REGIS BAL HARBOUR RESORT 10 10

11 SHAREHOLDER VALUE CREATION AT STARWOOD Extraordinary Cash Generation» Reduced net debt from over $3.5B in 2008 to just over $800M by 2013» Returned $1.7B to shareholders in since 2008» Increased Dividend by 150% in 2012; 2% yield» Repurchased over 6M shares in 2012» While investing in our core business to drive growth and build capability Net Debt Reduction of $2.4B since 2008 $3,523 $3,248 $2,826 $2,051 $1,511 $811 1/ / / / / / Note: Net debt consists of Long-term debt and short term debt, net of cash equivalents and restricted cash 11

12 THE WESTIN DUBAI MINA SEYAHI BEACH RESORT & MARINA STARWOOD STRATEGY AND OUTLOOK 12 1

13 STARWOOD STRATEGY AND OUTLOOK Dramatic Growth in the Global Middle Class» It took 100 years of economic growth for the Middle Class to reach 1 billion» 20 years to reach 2 billion» In next 20 years, the number of people considered Middle Class will reach 5 billion 1 BILLION 2 BILLION 5 BILLION Source: OECD 13

14 STARWOOD STRATEGY AND OUTLOOK Rapid Urbanization» With the Rise in the Middle Class and wealth, more people will live in cities» Global Urbanization 1950: 30% 2010: 50% 2050: 70% 3 Source: UN World Urbanization Prospects 14

15 STARWOOD STRATEGY AND OUTLOOK Massive Infrastructure Development» More infrastructure will be built in the next 40 years than in all of human history» Hotels = Infrastructure 4 Source: National Intelligence Council 15

16 STARWOOD STRATEGY AND OUTLOOK REVOLUTION IN GLOBAL TRAVEL» 3 billion people entering the global economy» Regional travel patterns are evolving» Enormous outbound travel opportunity from Fast Growing Markets» Rise of the Mega Traveler Number of Tourist Arrivals (in millions) 1,800 1,600 1,400 1,200 1, TOURIST ARRIVALS BY ORIGIN Africa Middle East Americas Asia Pacific Europe CAGR 5% 3% 5% 3% Source: OECD 16

17 STARWOOD STRATEGY AND OUTLOOK Starwood: the Best Positioned Hotel Company to Capitalize on Secular Growth Trends in Travel» Leading Global Hotel Company in High Growth Markets» Best Global High-End Lodging Brands» High Quality Global Pipeline SHERATON ADDIS» High Value Global Owned Hotel Portfolio» Unmatched Global Platform» Extraordinary Cash Generation Potential SHERATON DUBAI MALL OF THE EMIRATES HOTEL 6 17

18 STARWOOD STRATEGY AND OUTLOOK STARWOOD STRATEGY: INDIVIDUAL SPIRIT, COLLECTIVE STRENGTH» Starwood s brands lie at the heart of our competitive advantage» Distinguished by a combination of Lifestyle Concepts, Design Leadership and Innovation» Collective strength of SPG and Starwood centralized services (Sales, Revenue Management, Web) unify our brands and drive performance 7 18

19 STARWOOD STRATEGY AND OUTLOOK Starwood Outlook» Secular demand gains in Growth Markets» Below-trend supply growth in Mature Markets» Sharp rebound in owned hotel profits» Significant cash generation from hotel operations, asset sales and timeshare WESTIN DUBAI MINA SEYAHI BEACH RESORT & MARINA

20 STARWOOD STRATEGY AND OUTLOOK Starwood 3-Year Outlook» 5-7% annual RevPAR growth achievable with continued cyclical recovery» 10-12% annual EBITDA growth & 16-20% annual EPS Growth» $3.0B to $3.3B of operating cash flow and balance sheet capacity» 80/20 Asset Light goal by 2016 could generate ~$3B in cash» Significant capacity to fund growth investments and return cash to shareholders over next three years 20 9

21 STARWOOD HOTELS AND RESORTS WORLDWIDE, INC. Non-GAAP to GAAP Reconciliations - Same Store Owned, Leased and Consolidated Joint Venture Hotel Revenue and Expenses (In millions) Twelve Months Ended December 31, Same Store Owned, Leased and Consolidated Joint Venture Hotels Worldwide Revenue Same store Owned, Leased and Consolidated Joint Venture Hotels $ 1,386 $ 1,252 Hotels sold, closed or without comparable results Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 1,584 $ 1,698 Costs and Expenses Same store Owned, Leased and Consolidated Joint Venture Hotels $ 1,136 $ 993 Hotels sold, closed or without comparable results Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 1,315 $ 1,391

22 STARWOOD HOTELS AND RESORTS WORLDWIDE, INC. Non-GAAP to GAAP Reconciliations - Pro Forma Data (In millions) As Reported Year Ended December 31, 2012 Pro Forma Adjustments Pro Forma As Adjusted Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA Net income (loss) (a) Interest expense Loss on early extinguishment of debt, net (b) Income tax (benefit) expense (c) Depreciation (d) Amortization EBITDA (Gain) loss on asset dispositions and impairments, net (e) Discontinued operations (gain) loss on dispositions (e) Restructuring and other special charges (credits), net (e) Adjusted EBITDA $ 562 $ (153) $ (128) (55) (11) ,390 (347) 1, (21) - (179) (12) 12 - $ 1,220 $ (177) $ 1,043 (a) (b) (c) (d) (e) The reduction in net income reflects the adjustments noted below to normalize the 2012 year. This includes eliminating $157 million of earnings from Bal Harbour, the reduction of $20 million for the asset sales that occurred in 2012 and the effect of the adjustments below. Represents a decrease in costs as the early extinguishment is an unusual item in Includes a benefit of $52 million due to reduced EBITDA from the St. Regis Bal Harbour and a $3 million tax benefit from lower operating income from hotels sold during Includes an $11 million benefit from reduced depreciation associated with hotels sold during Unusual and one-time items not expected to occur in a normalized year.

23 STARWOOD HOTELS AND RESORTS WORLDWIDE, INC. Non-GAAP to GAAP Reconciliations (In millions) Twelve Months Ended Unconsolidated Joint Ventures December 31, 2012 Equity Earnings from Unconsolidated Joint Ventures $ 25 Depreciation and amortization from Unconsolidated Joint Ventures 32 Interest Expense from Unconsolidated Joint Ventures 10 EBITDA of Unconsolidated Joint Ventures $ 67

24 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. Non-GAAP to GAAP Reconciliations Future Performance (In millions, except per share data) Low Case Year Ended December 31, 2015 Net income $ 640 Interest expense 120 Income tax expense 288 Depreciation and amortization 322 EBITDA 1,370 (Gain) loss on asset dispositions and impairments, net - Discontinued operations (gain) loss on dispositions - Adjusted EBITDA $ 1,370 Year Ended December 31, 2015 Income from continuing operations before special items $ 640 EPS before special items $ 3.25 Special Items Gain (loss) on asset dispositions and impairments, net - Total special items pre-tax - Income tax benefit associated with special items - Total special items after-tax - Income from continuing operations $ 640 EPS including special items $ 3.25 High Case Year Ended December 31, 2015 Net income $ 709 Interest expense 110 Income tax expense 319 Depreciation and amortization 312 EBITDA 1,450 (Gain) loss on asset dispositions and impairments, net - Discontinued operations (gain) loss on dispositions - Adjusted EBITDA $ 1,450 Year Ended December 31, 2015 Income from continuing operations before special items $ 709 EPS before special items $ 3.60 Special Items Gain (loss) on asset dispositions and impairments, net - Total special items pre-tax - Income tax benefit associated with special items - Total special items after-tax - Income from continuing operations $ 709 EPS including special items $ 3.60