Starwood 2012 Annual Report Download - page 100

This Annual Report is filed by Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the
“Corporation”). Unless the context otherwise requires, all references to “we”, “us”, “our”, “Starwood”, or the
“Company” refer to the Corporation and include those entities owned or controlled by the Corporation.
PART I
Forward-Looking Statements
This Annual Report contains statements that constitute forward-looking statements within the meaning of
the Private Securities Litigation Reform Act of 1995. Forward-looking statements are any statements other than
statements of historical fact, including statements regarding the intent, belief or current expectations of Starwood,
its directors or its officers with respect to the matters discussed in this Annual Report. In some cases, forward-
looking statements can be identified by the use of words such as “may,” “will,” “expects,” “should,” “believes,”
“plans,” “anticipates,” “estimates,” “predicts,” “potential,” “continue,” or other words of similar meaning. Such
forward-looking statements appear in several places in this Annual Report, including, without limitation, Item 1.
Business and Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
All forward-looking statements involve risks and uncertainties that could cause actual results to differ materially
from those discussed in, or implied by, the forward-looking statements including, without limitation, the risks
and uncertainties disclosed under Item 1A. Risk Factors. We caution readers that any such statements are based
on currently available operational, financial and competitive information, and they should not place undue
reliance on these forward-looking statements, which reflect management’s opinion only as of the date on which
they were made. Except as required by law, Starwood undertakes no obligation to publicly update or revise any
forward-looking statements to reflect current or future events or circumstances.
Item 1. Business
General
We are one of the largest hotel and leisure companies in the world, with 1,134 properties in nearly
100 countries and 171,000 employees at our owned and managed properties. We conduct our hotel and leisure
business both directly and through our subsidiaries. We boast one of the industry’s leading loyalty programs,
Starwood Preferred Guest (“SPG”), allowing members to earn and redeem points for room stays, room upgrades
and flights, with no blackout dates. We also own Starwood Vacation Ownership, Inc., a premier provider of
world-class vacation experiences through villa-style resorts and privileged access to Starwood brands.
Our revenue and earnings are derived primarily from hotel operations, which include management and other
fees earned from hotels we manage pursuant to management contracts, the receipt of franchise and other fees and
the operation of our owned hotels. We consider our hotels and resorts, including vacation ownership resorts
(together “Hotels”), 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 attributable to age, condition of facilities, and style can adversely affect our Hotels, we and the
third-party owners of managed and franchised Hotels expend substantial funds to renovate and maintain our
facilities in order to remain competitive. For further information see Item 7, Management’s Discussion and
Analysis of Financial Condition and Results of Operations – Liquidity and Capital Resources in this Annual
Report.
Our hotel business emphasizes the global operation of hotels and resorts primarily in the luxury and upscale
segments of the lodging industry. We seek to acquire management or franchise rights with respect to, or interests
in, properties in these segments. At December 31, 2012, our hotel business included 1,121 owned, managed or
franchised hotels with approximately 328,000 rooms, comprising 53 hotels that we own or lease or in which we
have a majority equity interest, 547 hotels managed by us on behalf of third-party owners (including entities in
which we have a minority equity interest) and 521 hotels for which we receive franchise fees. Additionally, our
vacation ownership and residential business included 13 stand-alone vacation ownership resorts and residential
properties at December 31, 2012. All brands (other than the Four Points by Sheraton and the Aloft
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