Starwood 2007 Annual Report Download - page 86

During the years ended December 31, 2007 and 2006, we invested approximately $211 million and
$245 million, respectively, for capital improvements at owned hotels. These capital expenditures include the
renovations of the Westin Maui Resort in Maui, Hawaii, the Phoenician in Scottsdale, Arizona, the W Los Angeles
in Los Angeles, California and the W San Francisco in San Francisco, California. Additionally, in 2007 we acquired
the Sheraton Steamboat in Steamboat Springs, Colorado, for $58 million.
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 financing 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 have entered into licensing agreements for the use of certain of our brands to allow the
owners to offer branded condominiums to prospective purchasers. In consideration, we typically receive a licensing
fee equal to a percentage of the gross sales revenue of the units sold. The licensing arrangement generally terminates
upon the earlier of sell-out of the units or a specified length of time.
At December 31, 2007, we had 28 residential and vacation ownership resorts and sites in our portfolio with 16
actively selling VOIs and residences, 8 sites being held for possible future development and 4 that have sold all
existing inventory. During 2007 and 2006, we invested approximately $448 million and $411 million, respectively,
for vacation ownership capital expenditures, including VOI construction at Westin Ka’anapali Ocean Resort Villas
North in Maui, Hawaii, and the Westin Princeville Resort in Kauai, Hawaii and the purchase of a leasehold interest
in land in Aruba.
In late 2004, we began selling residential units at the St. Regis Museum Tower in San Francisco, California
which opened in November 2005. We recognized revenues of approximately $53 million in 2006 related to the sale
of these residential units which were sold out in the first half of 2006. In 2006 we began selling residential units at
the St. Regis Hotel in New York, New York and recognized revenues of approximately $3 million and $41 million in
2007 and 2006, respectively. During 2007 and 2006, we invested approximately $19 million and $23 million,
respectively, for residential inventory.
Item 3. Legal Proceedings.
Incorporated by reference to the description of legal proceedings in Note 22. Commitments and Contingencies,
in the notes to financial 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 Officers of the Registrants
See Part III, Item 10. of this Annual Report for information regarding the executive officers of the Registrants,
which information is incorporated herein by reference.
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