Fourth Quarter 2009 Earnings Summary
Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today reported
a loss from continuing operations for the fourth quarter of 2009 of $1.03 per share
compared to $0.25 in the fourth quarter of 2008. Excluding special items, which net to a
charge of $281 million in 2009 and $133 million in 2008, EPS from continuing operations
was $0.51 for the fourth quarter of 2009 compared to $0.49 in the fourth quarter of 2008.
Excluding special items, the effective income tax rate in the fourth quarter of 2009 was
4.1% compared to 27.5% in the same period of 2008 primarily due to a lower overall
effective tax rate on foreign earnings.
Special items in the fourth quarter of 2009 totaled a pretax charge of $431 million ($281
million after tax or $1.54 per share) and were related to the following primarily non-cash
charges:
$362 million of impairment charges related to the Company’s decision to no longer
pursue development of certain vacation ownership projects, charges related to price
reductions at certain vacation ownership projects and impairment of goodwill
associated with the vacation ownership business.
$42 million of impairment charges primarily related to five owned hotels.
$17 million charge associated with tender premiums and other costs related to the
prepayment of approximately $600 million of the Company’s long-term debt.
$10 million of severance and other costs associated with the Company’s ongoing
initiative of rationalizing its cost structure.
The loss from continuing operations was $186 million in the fourth quarter of 2009
compared to $45 million in 2008. Excluding special items, income from continuing
operations was $95 million in the fourth quarter of 2009 compared to $88 million in 2008.
The net loss was $107 million and $0.59 per share in the fourth quarter of 2009 compared
to net income of $79 million and EPS of $0.44 in the fourth quarter of 2008.
Frits van Paasschen, CEO said, “We ended 2009 with the best REVPAR results we have
seen since the third quarter of 2008, and our continued focus on costs allowed us to beat
expectations again in the quarter. Lodging demand continued to improve in the fourth
quarter, with group and business transient posting positive bookings. After being buffeted
by headwinds throughout 2009, our portfolio is set to begin a rebound in 2010 from a deep
drop-off.”
“We believe that our competitive position in the global marketplace as an operator of
lifestyle hospitality brands continues to build. Importantly, the forces of globalization,
capital flows, emerging middle class and demand for hotel infrastructure are alive and well,
and we intend to capture more than our fair share of this growth.”
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