Starwood 2006 Annual Report Download - page 24

without stockholder approval, to implement possible takeover defenses that are not currently in place, such as a
classified board. In addition, our charter contains provisions relating to restrictions on transferability of the
Corporation Shares, which provisions may be amended only by the affirmative vote of our shareholders holding
two-thirds of the votes entitled to be cast on the matter. As permitted under the Maryland General Corporation Law,
our Bylaws provide that directors have the exclusive right to amend our Bylaws.
Our Shareholder Rights Plan Would Cause Substantial Dilution to Any Shareholder That Attempts to
Acquire Us on Terms Not Approved by Our Board of Directors. We adopted a shareholder rights plan which
provides, among other things, that when specified events occur, our shareholders will be entitled to purchase from
us a newly created series of junior preferred stock, subject to the ownership limit described above. The preferred
stock purchase rights are triggered by the earlier to occur of (i) ten days after the date of a public announcement that
a person or group acting in concert has acquired, or obtained the right to acquire, beneficial ownership of 15% or
more of our outstanding Corporation Shares or (ii) ten business days after the commencement of or announcement
of an intention to make a tender offer or exchange offer, the consummation of which would result in the acquiring
person becoming the beneficial owner of 15% or more of our outstanding Corporation Shares. The preferred stock
purchase rights would cause substantial dilution to a person or group that attempts to acquire us on terms not
approved by our Board of Directors.
Item 2. Properties.
We are one of the largest hotel and leisure companies in the world, with operations in approximately 100
countries. We consider our hotels and resorts, including vacation ownership resorts (together “Resorts”), generally
to be premier establishments with respect to desirability of location, size, facilities, physical condition, quality and
variety of services offered in the markets in which they are located. Although obsolescence arising from age and
condition of facilities can adversely affect our Resorts, Starwood and third-party owners of managed and franchised
Resorts expend substantial funds to renovate and maintain their facilities in order to remain competitive. For further
information see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Oper-
ations — Liquidity and Capital Resources in this Annual Report.
Our hotel business included 871 owned, managed or franchised hotels with approximately 266,000 rooms and
our vacation ownership business included 25 vacation ownership resorts and residential properties at December 31,
2006, predominantly under seven brands. All brands (other than the Four Points by Sheraton and the newly
announced aloft and Element brands) represent full-service properties that range in amenities from luxury hotels
and resorts to more moderately priced hotels. We also lease three stand-alone Bliss Spas, two in New York, New
York and one in London, England and have opened five Bliss Spas in W Hotels. In addition, we have opened three
Remède Spas in St. Regis hotels.
The following table reflects our hotel and vacation ownership properties, by brand as of December 31, 2006:
Properties Rooms Properties Rooms
Hotels VOI and Residential
St. Regis and Luxury Collection .......................... 60 9,500 3 100
W ................................................ 21 6,000 — —
Westin ............................................. 131 54,200 11 2,100
Le Méridien......................................... 123 32,800 — —
Sheraton ........................................... 396 135,900 7 4,400
Four Points ......................................... 126 21,900 — —
Independent / Other ................................... 14 5,300 4 300
Total .............................................. 871 265,600 25 6,900
Hotel Business
Owned, Leased and Consolidated Joint Venture Hotels. Historically, we have derived the majority of our
revenues and operating income from our owned, leased and consolidated joint venture hotels and a significant
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