Starwood 2005 Annual Report Download - page 25

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Vacation Ownership and Residential Business
We develop, own and operate vacation ownership resorts, market and sell the VOIs in the resorts and, in
many cases, provide Ñnancing to customers who purchase such ownership interests. Owners of VOIs can trade
their interval for intervals at other Starwood vacation ownership resorts, for intervals at certain vacation
ownership resorts not otherwise sponsored by Starwood through an exchange company, or for hotel stays at
Starwood properties. From time to time, we securitize or sell the receivables generated from our sale of VOIs.
We have also entered into arrangements with several owners for mixed use hotel projects that will include
a residential component. We entered into licensing agreements for the use of our W, Westin and St. Regis
brands to allow the owners to oÅer branded condominiums to prospective purchasers. In consideration, we will
receive a licensing fee equal to a percentage of the gross sales revenue of the units sold. The licensing
arrangement terminates upon the earlier of sell-out of the units or a speciÑed length of time.
At December 31, 2005, we had 19 residential and vacation ownership resorts and sites in our portfolio
with 12 actively selling VOIs and residences, three expected to start construction in 2006 and four that have
sold all existing inventory. During 2005 and 2004, we invested approximately $231 million and $162 million,
respectively, for capital expenditures, including VOI construction at Westin Ka'anapali Ocean Resort and
Villas in Maui, Hawaii, Sheraton Vistana Villages in Orlando, Florida and Westin Kierland Villas in
Scottsdale, Arizona.
In December 2004, we completed the conversion of 98 guest rooms at the St. Regis in Aspen, Colorado
into 25 fractional units which are being sold in four week intervals, and 20 new hotel rooms. Also in late 2004,
we began selling condominiums at the St. Regis Museum Tower in San Francisco, California which opened in
November 2005. For the years ended December 31, 2005 and 2004, the Company invested approximately
$96 million and $75 million, respectively, for construction of the hotel and residences at the St. Regis Museum
Tower. We recognized revenues of approximately $183 million and $15 million in 2005 and 2004, respectively,
related to the sale of the condominiums.
Item 3. Legal Proceedings.
Incorporated by reference to the description of legal proceedings in Note 22. Commitments and
Contingencies, in the notes to Ñnancial statements set forth in Part II, Item 8. Financial Statements and
Supplementary Data.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive OÇcers of the Registrants
See Part III, Item 10. of this Joint Annual Report for information regarding the executive oÇcers of the
Registrants, which information is incorporated herein by reference.
PART II
Item 5. Market for Registrants' Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
Market Information
The Shares are traded on the New York Stock Exchange (the ""NYSE'') under the symbol ""HOT.'' The
Class A Shares are all directly or indirectly held by the Corporation and have never been traded.
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