-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, BXhA7jdLKy3g5NoWaHIZAFb6sDWV0SSb8JRUzsyKamUSpxiUFuMwjN5AucN9STlB 2om1/IBlVoKpF34QlcAyAQ== 0000950153-96-000859.txt : 19961115 0000950153-96-000859.hdr.sgml : 19961115 ACCESSION NUMBER: 0000950153-96-000859 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: AMEX SROS: BSE SROS: CSX SROS: PSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING TRUST CENTRAL INDEX KEY: 0000048595 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE INVESTMENT TRUSTS [6798] IRS NUMBER: 520901263 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-06828 FILM NUMBER: 96661086 BUSINESS ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 3105753900 MAIL ADDRESS: STREET 1: 11835 W OLYMPIC BLVD STREET 2: SUITE 550 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST /MD/ DATE OF NAME CHANGE: 19930506 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS TRUST DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS DATE OF NAME CHANGE: 19800720 FILER: COMPANY DATA: COMPANY CONFORMED NAME: STARWOOD LODGING CORP CENTRAL INDEX KEY: 0000316206 STANDARD INDUSTRIAL CLASSIFICATION: REAL ESTATE [6500] IRS NUMBER: 521193298 STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-07959 FILM NUMBER: 96661087 BUSINESS ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 BUSINESS PHONE: 6028523900 MAIL ADDRESS: STREET 1: 11845 W OLYMPIC BLVD STREET 2: SUITE 560 CITY: LOS ANGELES STATE: CA ZIP: 90064 FORMER COMPANY: FORMER CONFORMED NAME: HOTEL INVESTORS CORP DATE OF NAME CHANGE: 19920703 10-Q 1 STARWOOD LODGING & CORP. 10-Q FOR 09/30/96 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [x] Quarterly report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the quarterly period ended September 30, 1996 OR [ ] Transition report pursuant to Section 13 or 15(d) of the Securities and Exchange Act of 1934 For the transition period from _________ to _________ Commission File Number: 1-6828 STARWOOD LODGING TRUST (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction of incorporation or organization) 52-0901263 (I.R.S. employer identification no.) 2231 East Camelback Road, Suite 410 Phoenix, AZ 85016 (Address of principal executive offices, including zip code) (602) 852-3900 (Registrant's telephone number, including area code) Commission File Number: 1-7959 STARWOOD LODGING CORPORATION (Exact name of registrant as specified in its charter) Maryland (State or other jurisdiction of incorporation or organization) 52-1193298 (I.R.S. employer identification no.) 2231 East Camelback Road, Suite 400 Phoenix, AZ 85016 (Address of principal executive offices, including zip code) (602) 852-3900 (Registrant's telephone number, including area code) Indicate by check mark whether the Registrants (1) have filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months or for such shorter period that the Registrants were required to file such reports), and (2) have been subject to such filing requirements for the past 90 days. Yes X No . --- --- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 26,682,514 Shares of Beneficial Interest, par value $0.01 per share, of Starwood Lodging Trust paired with 26,682,514 Shares of Common Stock, par value $0.01 per share, of Starwood Lodging Corporation, outstanding as of November 7, 1996. 2 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION PART I - FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS The following financial statements of Starwood Lodging Trust and Starwood Lodging Corporation are provided pursuant to the requirements of this item. INDEX TO FINANCIAL STATEMENTS Starwood Lodging Trust and Starwood Lodging Corporation: Combined Balance Sheets - As of September 30, 1996 and December 31, 1995 Combined Statements of Operations - For the three and nine months ended September 30, 1996 and 1995 Combined Statements of Cash Flows - For the nine months ended September 30, 1996 and 1995 Starwood Lodging Trust: Balance Sheets - As of September 30, 1996 and December 31, 1995 Statements of Operations - For the three and nine months ended September 30, 1996 and 1995 Statements of Cash Flows - For the nine months ended September 30, 1996 and 1995 Starwood Lodging Corporation: Balance Sheets - As of September 30, 1996 and December 31, 1995 Statements of Operations - For the three and nine months ended September 30, 1996 and 1995 Statements of Cash Flows - For the nine months ended September 30, 1996 and 1995 Notes to Financial Statements Starwood Lodging Trust and Starwood Lodging Corporation: Combined Statement of Operations for the three and nine months ended September 30, 1996 Combined Pro Forma Statement of Operations - For the three and nine months ended September 30, 1995 Notes to Unaudited Combined Pro Forma Statements of Operations for the three and nine months ended September 30, 1996 2 3 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION COMBINED BALANCE SHEETS
September 30, December 31, 1996 1995 (Unaudited) --------------- ------------- ASSETS Hotel assets held for sale, net ............................... $ 32,921,000 $ 21,063,000 Hotel assets, net ............................................. 968,781,000 315,895,000 --------------- ------------- 1,001,702,000 336,958,000 Mortgage notes receivable, net ................................ 72,446,000 79,261,000 Investments ................................................... 48,934,000 2,858,000 --------------- ------------- Total real estate investments .............................. 1,123,082,000 419,077,000 Cash and cash equivalents ..................................... 31,298,000 9,332,000 Accounts and interest receivable .............................. 40,724,000 9,595,000 Notes receivable, net ......................................... 2,916,000 1,796,000 Inventories, prepaid expenses and other assets ................ 16,292,000 20,194,000 --------------- ------------- $ 1,214,312,000 $ 459,994,000 =============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Collateralized notes payable and revolving lines of credit .... $ 423,709,000 $ 119,100,000 Mortgage and other notes payable .............................. 1,582,000 4,385,000 Accounts payable and other liabilities ........................ 43,223,000 19,022,000 Dividends/distributions payable ............................... 15,990,000 9,284,000 --------------- ------------- 484,504,000 151,791,000 --------------- ------------- Commitments and contingencies MINORITY INTEREST ............................................. 134,022,000 92,735,000 --------------- ------------- SHAREHOLDERS' EQUITY Trust shares of beneficial interest, $.01 par value; authorized 100,000,000 shares; outstanding 26,636,000 shares and 13,799,000 at September 30, 1996 and December 31, 1995, respectively .......................................... 266,000 138,000 Corporation common stock at, $.01 par value; authorized 100,000,000 shares; outstanding 26,636,000 shares and 13,799,000 at September 30, 1996 and December 31, 1995, respectively ................................................ 266,000 138,000 Additional paid-in capital .................................... 863,487,000 434,107,000 Distributions in excess of earnings ........................... (268,233,000) (218,915,000) --------------- ------------- 595,786,000 215,468,000 --------------- ------------- $ 1,214,312,000 $ 459,994,000 =============== =============
See accompanying notes to financial statements. 3 4 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended September 30, -------------------------------- 1996 1995 ------------- ------------ REVENUE Hotel .......................................................... $ 99,574,000 $ 32,366,000 Gaming ......................................................... 5,593,000 6,559,000 Interest from mortgage and other notes ......................... 2,843,000 2,868,000 Income from joint ventures and rents from leased hotel properties .......................... 872,000 221,000 Other .......................................................... 509,000 377,000 Loss on sale of real estate assets ............................. (1,037,000) (12,000) ------------- ------------ 108,354,000 42,379,000 ------------- ------------ EXPENSES Hotel operations ............................................... 69,934,000 21,875,000 Gaming operations .............................................. 5,624,000 6,018,000 Interest ....................................................... 6,062,000 461,000 Depreciation and amortization .................................. 13,921,000 3,997,000 Administrative and operating ................................... 4,644,000 1,386,000 ------------- ------------ 100,185,000 33,737,000 ------------- ------------ Income before extraordinary item and minority interest ......... 8,169,000 8,642,000 Minority interest .............................................. 2,070,000 2,655,000 ------------- ------------ Income before extraordinary item ............................... 6,099,000 5,987,000 Extraordinary item (net of $1,084,000 minority interest in 1995) -- (2,518,000) ------------- ------------ NET INCOME $ 6,099,000 $ 3,469,000 ============= ============ EARNINGS PER PAIRED SHARE Income before extraordinary item ............................... $ 0.28 $ 0.43 Extraordinary item ............................................. -- (0.18) ------------- ------------ NET INCOME PER PAIRED SHARE $ 0.28 $ 0.25 ============= ============ Weighted average number of paired shares 21,933,000 13,810,000 ============= ============
See accompanying notes to financial statements. 4 5 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION COMBINED STATEMENTS OF OPERATIONS (UNAUDITED)
Nine months ended September 30, ------------------------------- 1996 1995 ------------- ------------- REVENUE Hotel ............................................................ $ 203,079,000 $ 81,951,000 Gaming ........................................................... 19,336,000 20,375,000 Interest from mortgage and other notes ........................... 7,604,000 8,004,000 Income from joint ventures and rents from leased hotel properties ............................ 3,545,000 608,000 Other ............................................................ 2,561,000 1,334,000 Loss on sale of hotel assets ..................................... (1,384,000) (125,000) ------------- ------------- 234,741,000 112,147,000 ------------- ------------- EXPENSES Hotel operations ................................................. 139,587,000 56,232,000 Gaming operations ................................................ 17,816,000 18,351,000 Interest ......................................................... 13,688,000 11,198,000 Depreciation and amortization .................................... 27,373,000 10,182,000 Administrative and operating ..................................... 10,009,000 3,836,000 ------------- ------------- 208,473,000 99,799,000 ------------- ------------- Income before extraordinary item and minority interest ........... 26,268,000 12,348,000 Minority interest ................................................ 7,558,000 5,398,000 ------------- ------------- Income before extraordinary item ................................. 18,710,000 6,950,000 Extraordinary item (net of $413,000 and $163,000 minority interest in 1996 and 1995, respectively ................................ 1,077,000 (2,155,000) ------------- ------------- NET INCOME $ 19,787,000 $ 4,795,000 ============= ============= EARNINGS PER PAIRED SHARE Income before extraordinary item ................................. $ 1.08 $ 1.17 Extraordinary item ............................................... 0.06 (0.36) ------------- ------------- NET INCOME PER PAIRED SHARE $ 1.14 $ 0.81 ============= ============= Weighted average number of paired shares 17,333,000 5,951,000 ============= =============
See accompanying notes to financial statements. 5 6 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION COMBINED STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended September 30, ------------------------------- 1996 1995 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income .................................................. $ 19,787,000 $ 4,795,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Minority interest ......................................... 7,558,000 5,398,000 Extraordinary item ........................................ (1,077,000) 2,155,000 Depreciation and amortization ............................. 27,373,000 10,182,000 Accretion of discount ..................................... (2,344,000) (2,286,000) Deferred interest ......................................... -- 649,000 Loss on sale of real estate assets ........................ 1,384,000 125,000 Changes in operating assets and liabilities: Accounts receivable, inventories, prepaid expenses and other assets .............................................. (24,945,000) (9,374,000) Accounts payable and other liabilities .................... 20,573,000 5,681,000 ------------- ------------- Net cash provided by operating activities ............. 48,309,000 17,325,000 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to hotel assets ................................... (664,020,000) (113,075,000) Purchase of investments ..................................... (45,878,000) -- Net proceeds from sale of hotel assets ...................... 11,284,000 -- Increase in mortgage notes receivable ....................... (34,289,000) (19,515,000) Principal received on mortgage and other notes receivable ... 3,331,000 6,332,,000 Reorganization costs ........................................ -- (2,786,000) Changes in investments ..................................... (2,069,000) -- ------------- ------------- Net cash used in investing activities ................. (731,641,000) (129,044,000) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on mortgage and other notes payable ...... (3,376,000) (106,130,000) Borrowings (payments) under collateralized notes payable, net 117,235,000 (38,299,000) Borrowings under mortgage and other notes payable ........... 190,886,000 9,977,000 Capital contributions, net .................................. 1,264,000 14,860,000 Proceeds from equity offerings .............................. 429,495,000 245,681,000 Dividends/distributions paid ................................ (30,206,000) -- Purchase of warrants ........................................ -- (1,300,000) ------------- ------------- Net cash provided by financing activities ............. 705,298,000 124,789,000 ------------- ------------- INCREASE IN CASH AND CASH EQUIVALENTS ....................... 21,966,000 13,070,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .................................... 9,332,000 5,065,000 ------------- ------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD .......................................... $ 31,298,000 $ 18,135,000 ============= =============
See accompanying notes to financial statements. 6 7 STARWOOD LODGING TRUST BALANCE SHEETS
September 30, December 31, 1996 1995 (Unaudited) --------------- ------------- ASSETS Hotel assets held for sale, net ................................. $ 29,381,000 $ 20,547,000 Hotel assets, net ............................................... 858,088,000 221,063,000 --------------- ------------- 887,469,000 241,610,000 Mortgage notes receivable, net .................................. 72,446,000 79,261,000 Mortgage notes receivable, Corporation .......................... 87,884,000 68,486,000 Investments ..................................................... 47,482,000 2,841,000 --------------- ------------- Total real estate investments ............................. 1,095,281,000 392,198,000 Cash and cash equivalents ....................................... 12,852,000 710,000 Rent and interest receivable .................................... 9,203,000 1,841,000 Notes receivable, net ........................................... 2,239,000 1,232,000 Notes receivable, Corporation ................................... 11,162,000 17,978,000 Prepaid expenses and other assets ............................... 9,117,000 11,778,000 --------------- ------------- $ 1,139,854,000 $ 425,737,000 =============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Collateralized notes payable and revolving line of credit ....... $ 423,709,000 $ 119,100,000 Mortgage and other notes payable ................................ -- 100,000 Accounts payable and other liabilities .......................... 7,125,000 4,412,000 Dividends/Distributions payable ................................. 15,990,000 9,284,000 --------------- ------------- 446,824,000 132,896,000 --------------- ------------- Commitments and contingencies MINORITY INTEREST ............................................... 127,268,000 88,113,000 --------------- ------------- SHAREHOLDERS' EQUITY Trust shares of beneficial interest, $.01 par value; authorized 100,000,000 shares; outstanding 26,636,000 shares and 13,799,000 at September 30, 1996 and December 31, 1995, respectively .................................................. 266,000 138,000 Additional paid-in capital ...................................... 762,610,000 354,619,000 Distributions in excess of earnings ............................. (197,114,000) (150,029,000) --------------- ------------- 565,762,000 204,728,000 --------------- ------------- $ 1,139,854,000 $ 425,737,000 =============== =============
See accompanying notes to financial statements. 7 8 STARWOOD LODGING TRUST STATEMENTS OF OPERATIONS (UNAUDITED)
Three Months Ended September 30, ----------------------------- 1996 1995 ------------ ------------ REVENUE Rents from Corporation .......................................... $ 23,767,000 $ 7,319,000 Interest from Corporation ....................................... 1,855,000 1,060,000 Interest from mortgage and other notes .......................... 2,952,000 2,802,000 Income (loss) from joint venture and rents from other leased hotel properties ..................... (53,000) 221,000 Other income .................................................... 305,000 361,000 Loss on sale of real estate assets .............................. (1,037,000) (12,000) ------------ ------------ 27,789,000 11,751,000 ------------ ------------ EXPENSES Interest ........................................................ 6,021,000 426,000 Depreciation and amortization ................................... 11,744,000 2,342,000 Administrative and operating .................................... 156,000 405,000 ------------ ------------ 17,921,000 3,173,000 ------------ ------------ Income before extraordinary item and minority interest .......... 9,868,000 8,578,000 Minority interest ............................................... 2,260,000 2,581,000 ------------ ------------ Income before extraordinary item ................................ 7,608,000 5,997,000 Extraordinary item (net of $1,084,000 minority interest in 1995) -- (2,518,.000) ------------ ------------ NET INCOME $ 7,608,000 $ 3,479,000 ============ ============ EARNINGS PER PAIRED SHARE Income before extraordinary item ................................ $ 0.35 $ 0.43 Extraordinary item............................................... (0.18) ------------ ------------ NET INCOME PER SHARE $ 0.35 $ 0.25 ============ ============
See accompanying notes to financial statements. 8 9 STARWOOD LODGING TRUST STATEMENTS OF OPERATIONS (UNAUDITED)
Nine Months Ended September 30, ----------------------------- 1996 1995 ------------ ------------ REVENUE Rents from Corporation ....................................... $ 47,021,000 $ 18,287,000 Interest from Corporation .................................... 5,958,000 2,629,000 Interest from mortgage and other notes ....................... 7,648,000 7,915,000 Income from joint venture and rents from other leased hotel properties .................. 2,177,000 608,000 Other income ................................................. 1,378,000 461,000 Loss on sale of real estate assets ........................... (1,384,000) (125,000) ------------ ------------ 62,798,000 29,775,000 ------------ ------------ EXPENSES Interest ..................................................... 13,460,000 10,534,000 Depreciation and amortization ................................ 18,622,000 6,260,000 Administrative and operating ................................. 2,886,000 1,178,000 ------------ ------------ 34,968,000 17,972,000 ------------ ------------ Income before extraordinary item and minority interest ....... 27,830,000 11,803,000 Minority interest ............................................ 7,480,000 4,957,000 ------------ ------------ Income before extraordinary item ............................. 20,350,000 6,846,000 Extraordinary item (net of $921,000 minority interest in 1995) -- (2,155,000) ------------ ------------ NET INCOME $ 20,350,000 $ 4,691,000 ============ ============ EARNINGS PER PAIRED SHARE Income before extraordinary item ............................. $ 1.17 $ 1.15 Extraordinary item ........................................... (0.36) ------------ ------------ NET INCOME PER SHARE $ 1.17 $ 0.79 ============ ============
See accompanying notes to financial statements. 9 10 STARWOOD LODGING TRUST STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended September 30, ------------------------------- 1996 1995 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES Net income .............................................. $ 20,350,000 $ 4,691,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Minority interest ..................................... 7,480,000 4,957,000 Extraordinary item .................................... -- 2,155,000 Depreciation and amortization ......................... 18,622,000 6,260,000 Accretion of discount ................................. (2,344,000) (2,286,000) Deferred interest ..................................... -- 649,000 Deferred interest - Corporation ....................... (2,076,000) (1,111,000) Loss on sale of real estate assets .................... 1,384,000 125,000 Changes in operating assets and liabilities: Accounts receivable, prepaid expenses and other assets (2,707,000) (4,460,000) Accounts payable and other liabilities ................ (153,000) 190,000 ------------- ------------- Net cash provided by operating activities ......... 40,556,000 11,170,000 ------------- ------------- CASH FLOWS FROM INVESTING ACTIVITIES Additions to hotel assets ............................... (653,372,000) (59,014,000) Purchase of investments ................................. (45,369,000) -- Net proceeds from sale of hotel assets .................. 11,284,000 -- Increase in mortgage notes receivable ................... (51,143,000) (17,729,000) Principal received on mortgage and other notes receivable 23,411,000 4,503,000 Reorganization costs .................................... -- (1,393,000) Net changes in notes receivable, Corporation ............ 969,000 (49,562,000) Changes in investments .................................. (634,000) -- ------------- ------------- Net cash used in investing activities ............. (714,854,000) (123,195,000) ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES Principal payments on mortgage and other notes payable .. (1,723,000) (38,299,000) Borrowings (payments) under collateralized notes payable 118,822,000 (96,589,000) Borrowings under mortgage and other notes payable ....... 190,276,000 9,977,000 Capital contributions, net .............................. 1,252,000 11,968,000 Proceeds from equity offerings .......................... 408,019,000 233,398,000 Dividends/distributions paid ............................ (30,206,000) -- Purchase of warrants .................................... -- (1,235,000) ------------- ------------- Net cash provided by financing activities ......... 686,440,000 119,220,000 ------------- ------------- INCREASE IN CASH AND CASH EQUIVALENTS CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ................................ 12,142,000 7,195,000 CASH AND CASH EQUIVALENTS AT END OF PERIOD ...................................... 710,000 255,000 ------------- ------------- $ 12,852,000 $ 7,450,000 ============= =============
See accompanying notes to financial statements. 10 11 STARWOOD LODGING CORPORATION BALANCE SHEETS
September 30, December 31, 1996 1995 (Unaudited) ------------- ------------- ASSETS Hotel assets held for sale, net ................................ $ 3,540,000 $ 516,000 Hotel assets, net .............................................. 110,693,000 94,832,000 ------------- ------------- 114,233,000 95,348,000 Investments .................................................... 1,452,000 17,000 ------------- ------------- Total real estate investments ............................ 115,685,000 95,365,000 Cash and cash equivalents ...................................... 18,446,000 8,622,000 Accounts receivable ............................................ 31,521,000 7,754,000 Notes receivable ............................................... 677,000 564,000 Inventories, prepaid expenses and other assets ................. 7,175,000 8,416,000 ------------- ------------- $ 173,504,000 $ 120,721,000 ============= ============= LIABILITIES AND SHAREHOLDERS' EQUITY LIABILITIES Mortgage and other notes payable ............................... $ 1,582,000 $ 4,285,000 Mortgage notes payable, Trust .................................. 87,884,000 68,486,000 Notes payable, Trust ........................................... 11,162,000 17,978,000 Accounts payable and other liabilities ......................... 36,098,000 14,610,000 ------------- ------------- 136,726,000 105,359,000 ------------- ------------- Commitments and contingencies MINORITY INTEREST .............................................. 6,754,000 4,622,000 ------------- ------------- SHAREHOLDERS' EQUITY Corporation common stock, $.01 par value; authorized 100,000,000 shares; outstanding 26,636,000 shares and 13,799,000 at September 30, 1996 and December 31, 1995, respectively ................................................. 266,000 138,000 Additional paid-in capital ..................................... 100,877,000 79,488,000 Accumulated deficit ............................................ (71,119,000) (68,886,000) ------------- ------------- 30,024,000 10,740,000 ------------- ------------- $ 173,504,000 $ 120,721,000 ============= =============
See accompanying notes to financial statements. 11 12 STARWOOD LODGING CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
Three months ended September 30, ------------------------------ 1996 1995 ------------- ------------ REVENUE Hotel ................................ $ 99,574,000 $ 32,366,000 Gaming ............................... 5,593,000 6,559,000 Income from joint venture ............ 925,000 -- Interest from notes receivable ....... -- 66,000 Management fees and other income ..... 95,000 16,000 ------------- ------------ 106,187,000 39,007,000 ------------- ------------ EXPENSES Hotel operations ..................... 69,934,000 21,875,000 Gaming operations .................... 5,624,000 6,018,000 Rent, Trust .......................... 23,767,000 7,319,000 Interest, Trust ...................... 1,855,000 1,060,000 Interest, other ...................... 41,000 35,000 Depreciation and amortization ........ 2,177,000 1,655,000 Administrative and operating ......... 4,488,000 981,000 ------------- ------------ 107,886,000 38,943,000 ------------- ------------ Income (loss) before minority interest (1,699,000) 64,000 Minority interest .................... (190,000) (74,000) ------------- ------------ NET LOSS $ (1,509,000) $ 10,000 ============= ============ NET LOSS PER SHARE $ (0.07) $ 0.00 ============= ============
See accompanying notes to financial statements. 12 13 STARWOOD LODGING CORPORATION STATEMENTS OF OPERATIONS (UNAUDITED)
Nine months ended September 30, ------------------------------ 1996 1995 ------------- ------------ REVENUE Hotel ................................................ $ 203,079,000 $ 81,951,000 Gaming ............................................... 19,336,000 20,375,000 Income from joint venture ............................ 1,368,000 -- Interest from notes receivable ....................... 57,000 89,000 Management fees and other income ..................... 1,082,000 873,000 ------------- ------------ 224,922,000 103,288,000 ------------- ------------ EXPENSES Hotel operations ..................................... 139,587,000 56,232,000 Gaming operations .................................... 17,816,000 18,351,000 Rent, Trust .......................................... 47,021,000 18,287,000 Interest, Trust ...................................... 5,958,000 2,629,000 Interest, other ...................................... 228,000 664,000 Depreciation and amortization ........................ 8,751,000 3,922,000 Administrative and operating ......................... 7,123,000 2,658,000 ------------- ------------ 226,484,000 102,743,000 ------------- ------------ Income (loss) before minority interest ............... (1,562,000) 545,000 Minority interest .................................... 78,000 441,000 ------------- ------------ Income (loss) before extraordinary item .............. (1,640,000) 104,000 Extraordinary item (net of $413,000 minority interest) 1,077,000 -- ------------- ------------ NET INCOME (LOSS) $ (563,000) $ 104,000 ============= ============ EARNINGS PER SHARE Income (loss) before extraordinary item............... $ (0.09) $ 0.02 Extraordinary item.................................... 0.06 -- ------------- ------------ NET INCOME (LOSS ) PER SHARE $ (0.03) $ 0.02 ============= ============
See accompanying notes to financial statements. 13 14 STARWOOD LODGING CORPORATION STATEMENTS OF CASH FLOWS (UNAUDITED)
Nine months ended September 30, ------------------------------- 1996 1995 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES Net income (loss) ......................................... $ (563,000) $ 104,000 Adjustments to reconcile net income to net cash provided by (used in) operating activities .......................... Minority interest ....................................... 78,000 441,000 Extraordinary item ...................................... (1,077,000) Depreciation and amortization ........................... 8,751,000 3,922,000 Deferred interest - Trust ............................... 2,076,000 1,111,000 Changes in operating assets and liabilities: Accounts receivable, inventories, prepaid expenses and other assets .......................................... (22,238,000) (4,914,000) Accounts payable and other liabilities .................. 20,726,000 5,491,000 ------------ ------------ Net cash provided by operating activities ........... 7,753,000 6,155,000 ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES Additions to hotel assets ................................. (30,761,000) (54,061,000) Purchase of investments ................................... (509,000) -- Increase in investments ................................... (1,435,000) -- Principal received on notes receivable .................... 33,000 43,000 Reorganization costs ...................................... -- (1,393,000) Increase in mortgage note receivable ...................... (146,000) -- ------------ ------------ Net cash used in investing activities ............... (32,818,000) (55,411,000) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES Net change in notes payable - Trust ....................... (969,000) 49,562,000 Increase in mortgage notes payable - Trust ................ 17,610,000 -- Principal payments on mortgage and other notes payable .... (3,240,000) (9,541,000) Capital contributions, net ................................ 12,000 2,892,000 Proceeds from equity offerings ............................ 21,476,000 12,283,000 Purchase of warrants ...................................... -- (65,000) ------------ ------------ Net cash provided by financing activities ........... 34,889,000 55,131,000 ------------ ------------ INCREASE IN CASH AND CASH EQUIVALENTS ..................... 9,824,000 5,875,000 CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD .................................. 8,622,000 4,810,000 ------------ ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD ........................................ $ 18,446,000 $ 10,685,000 ============ ============
See accompanying notes to financial statements. 14 15 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION NOTES TO FINANCIAL STATEMENTS NOTE 1. INTERIM FINANCIAL STATEMENTS The accompanying unaudited financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q which mandate adherence to Rule 10-01 of Regulation S-X. Accordingly, these statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management of the Trust and the Corporation, all adjustments necessary for a fair presentation, consisting only of normal recurring accruals, have been included. The financial statements presented herein have been prepared in accordance with the accounting policies described in the Registrants' Joint Annual Report on Form 10-K/A for the year ended December 31, 1995 and should be read in conjunction therewith. NOTE 2. BASIS OF PRESENTATION The Trust and the Corporation (together, the "Company") have unilateral control of SLT Realty Limited Partnership ("Realty") and SLC Operating Limited Partnership ("Operating"), respectively, and therefore, the historical financial statements of Realty and Operating are consolidated with those of the Trust and the Corporation, respectively. Unless the context otherwise requires, all references herein to the "Company" refer to the Trust and the Corporation, and all references to the "Trust" and to the "Corporation" include the Trust and the Corporation and those entities respectively owned or controlled by the Trust or the Corporation, including Realty and Operating. Paired share information has been adjusted to reflect a one-for-six reverse stock split effective June 19, 1995. NOTE 3. HOTEL ASSETS On January 4, 1996, the Company completed the purchase of the equity in the Grand Hotel, a 263-room luxury hotel, located in Washington, D.C., for an additional $13.5 million. The Company had purchased a mortgage interest in the hotel in September 1995 for $19.5 million. On March 22, 1996, the Company acquired the 257-room Midland Hotel, located in Chicago, Illinois, for $21 million in cash. On April 24, 1996, the Company completed the acquisition of the 442-room Clarion hotel, located at the San Francisco Airport, in Millbrae, California for approximately $30.5 million in cash. On April 26, 1996, the Company completed the acquisition of three Doubletree Guest Suite hotels, containing 822 suites, located in Irving, Texas; Ft. Lauderdale, Florida; and Tampa, Florida for approximately $75 million in cash. 15 16 The Company, in June 1996, acquired the 251-suite Doubletree Guest Suites hotel and the 177-room Days Inn, both located at the Philadelphia Airport in Philadelphia, Pennsylvania. The aggregate purchase price for both properties inclusive of $2 million in cash reserves was approximately $22.5 million, including $1.8 million in Limited Partnership units in Realty and Operating convertible into paired shares. On August 12, 1996, the Company completed the acquisition of a portfolio of eight upscale and luxury full-service hotels including: the 290-room Ritz Carlton in Philadelphia, Pennsylvania; the 373-room Ritz Carlton in Kansas City, Missouri; the 347-room Westin Hotel in Waltham, Massachusetts; the 370-room Doubletree Hotel at Concourse in Atlanta, Georgia; the 739-room Doubletree Hotel LAX in Los Angeles, California; the 450-room Doubletree Hotel at Horton Plaza in San Diego, California; the 321-room Doubletree Grand Hotel at Mall of America, Bloomington, Minnesota; and the 251-room Sheraton Ft. Lauderdale Airport Hotel in Dania, Florida (collectively, the "Teachers Portfolio"), from Teachers Insurance and Annuity Association for an aggregate purchase price of approximately $309 million in cash. On August 16, 1996, the Company completed the acquisition of eight properties and on September 11, 1996 purchased the ninth and final property of a portfolio of nine up-scale, full-service hotels from Hotels of Distinction Ventures, Inc. for an aggregate purchase price of approximately $135 million in cash. The portfolio consists of the 257-room Marque in Atlanta, Georgia; the 247-room Sheraton in Needham, Massachusetts; the 198-room Embassy Suites in Palm Desert, California; the 297-room Embassy Suites in St. Louis, Missouri; the 215-room Hotel Park in Tucson, Arizona; the 254-room Sheraton Metrodome in Minneapolis, Minnesota; the 422-room Arlington Park Hilton in Arlington Heights, Illinois; the 224-room Hilton Hotel in Allentown, Pennsylvania; and the 293-room Radisson Marque in Winston-Salem, North Carolina (collectively, the "HOD Portfolio"). On August 29, 1996, the Company completed the acquisition of the 294-room Marriott Forrestal Village Hotel in Princeton, New Jersey for approximately $19.6 million in cash. On September 20, 1996, the Company completed a joint venture with an affiliate of Doral Hotels and Resorts to recapitalize the 121-room Doral Tuscany and the 199-room Doral Court both located in New York, New York. The transaction, valued at $35 million, included the assumption of approximately $27 million of first mortgage debt provided by Sumitomo Trust and Banking Company. NOTE 4. MORTGAGE NOTES RECEIVABLE On August 22, 1996, the Company completed the purchase for $17.4 million of approximately $24.8 million (principal and accrued interest) of debt of which $17.65 million is secured by the 305 - room Holiday Inn in Milpitas, CA. 16 17 NOTE 5. OFFERINGS On April 12, 1996, the Company completed a public offering of 2,000,000 paired shares (the "April 1996 Offering"). Net proceeds from the April 1996 Offering of approximately $62.4 million were used, in part, to fund the acquisitions of the 442-room Clarion Hotel located at the San Francisco Airport (acquired on April 24, 1996) and the Doubletree Guest Suite hotels located in Irving, Texas; Ft. Lauderdale, Florida; and Tampa, Florida (all three properties were acquired on April 26, 1996). On August 12, 1996, the Company completed a public offering of 10,000,000 paired shares and on August 23,1996 the underwriter exercised its over-allotment option to purchase 799,575 paired shares (together, the "August 1996 Offering"). Net proceeds from the August 1996 Offering of approximately $365.0 million were used to fund the acquisition of the Teachers Portfolio and partially fund the acquisition of the HOD Portfolio. NOTE 6. INVESTMENTS On January 24, 1996, the Company completed the acquisition of an interest in the 960-room Boston Park Plaza Hotel Complex in Boston, Massachusetts. The Company formed two limited liability companies in partnership with Donald Saunders Family L.L.C. ("Saunders"). The Trust contributed approximately $41.6 million in exchange for a 58.2% interest in each of the limited liability companies, while Saunders contributed its existing interest in the asset for the remaining 41.8% interest in each of the limited liability companies. The Company has accounted for this transaction under the equity method of accounting. NOTE 7. HOTEL ASSETS HELD FOR SALE At September 30, 1996, the Company's portfolio included five hotel properties which were held for sale. The five properties include the 300-room King 8 Hotel & Gambling Hall in Las Vegas, Nevada, the 151-room Bay Valley resort in Bay City, Michigan, the 166-room Best Western in Las Cruces, New Mexico, the 175-room Best Western Airport in El Paso, Texas and the 142-room Best Western in Savannah, Georgia. During the nine months ended September 30, 1996 the Company sold the Best Western Columbus North in Columbus, Ohio for approximately $3.1 million and the Bourbon Street Hotel and Casino in Las Vegas, Nevada for approximately $7.7 million. NOTE 8. INTEREST RATE HEDGING AGREEMENTS On January 17, 1996, the Trust entered into two interest rate hedging agreements known as Treasury locks, which had the effect of fixing the base rate of interest at 5.7% for debt the Company intended to issue in October, 1996 with an aggregate notional principal amount of $100 million and a term to maturity of seven years. On October 4, 1996, the Trust extended the settlement date to February, 1997 and the base rate increased to 5.8%. The actual interest rate will be determined by reference to this base rate. 17 18 At settlement, the Trust will pay or receive an amount which will be capitalized and amortized over the term of the related debt of seven years. Such amount is not anticipated to have a material effect on the Trust's liquidity or operating results. If the Trust did not issue any such debt, such amount would still be payable or receivable and would be treated as a loss or gain, accordingly. Such a gain or loss could have a material effect on the Trust's results from operations; however due to Management's current intention to issue $100 million of debt in February of 1997, with a term to maturity of seven years, no such gain or loss is anticipated. On August 14, 1996, the Trust entered into another Treasury Lock, which has the effect of fixing the base rate of interest at 6.67% for debt the Company intends to issue in March, 1997 with an aggregate notional principal amount of $150 million and a term to maturity of ten years. The actual interest rate will be determined by reference to this base rate. At settlement, the Trust will pay or receive an amount which will be capitalized and amortized over the term of the related debt of ten years. Such amount is not anticipated to have a material effect on the Trust's liquidity or operating results. If the Trust did not issue any such debt, such amount would still be payable or receivable and would be treated as a loss or gain, accordingly. Such a gain or loss could have a material effect on the Trust's results from operations; however due to Management's current intention to issue $150 million of debt in March of 1997, with a term to maturity of ten years, no such gain or loss is anticipated. NOTE 9. SHAREHOLDERS' EQUITY At December 31, 1995, there were outstanding warrants to purchase 276,662 paired shares at an exercise price of $101.70 per paired share (as adjusted for the one for six reverse stock split in June 1995) through September 15, 1996. Such warrants could also be converted into paired shares on a 600:1 basis. On September 16, 1996 the warrants expired and each 600 warrants were automatically converted into one paired share. In lieu of fractional shares, holders were paid cash in an amount equal to the same fraction of the market value of a single paired share on that date of $40.625 per paired share. NOTE 10. SUBSEQUENT EVENTS In October, 1996 the Company acquired for $10.25 million first mortgage and other notes secured by the 480-room Sheraton Hotel in Stamford, Connecticut. The notes have a principal balance of approximately $116 million, and a balance of approximately $34 million of accrued interest as of September 30, 1996. On November 7, 1996 the Company completed the sale of the King 8 Hotel and Casino in Las Vegas, Nevada for $21.8 million. The $21.8 million purchase price is comprised of $18.8 million for the real property (including approximately $11.6 million in cash and $7.2 million in a 3 1/2 year note secured by a first mortgage) and $3 million for personal property and casino equipment. The sale of the real property was completed however the personal property and casino equipment will be sold in a separate transaction expected to close in the next 18 months following receipt by the purchaser of required gaming approvals. A subsidiary of the Corporation, Hotel Investors Corporation of Nevada, will lease the real property from the purchaser and will continue to operate the hotel and casino while the purchaser completes it application for the gaming licenses. 18 19 NOTE 11. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS In March and October 1995, the Financial Accounting Standards Board issued Statements of Financial Accounting Standards No. 121 "Accounting for the Impairment of Long Lived Assets and for Long Lived Assets to be Disposed Of" and No. 123 "Accounting for Stock-Based Compensation", respectively. These statements shall be effective for financial statements for fiscal years beginning after December 15, 1995. Management believes that adoption of Standard No. 121 will not have a material effect on its financial position or results of operations. Management intends to adopt the disclosure method of Standard No. 123 and, accordingly, there will be no impact on the Company's financial position or results of operations. 19 20 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION UNAUDITED COMBINED STATEMENTS OF OPERATIONS
Three months ended September 30, -------------------------------- Pro Forma 1996 1995 ------------- ------------ REVENUE Hotel ......................................... $ 99,574,000 $ 33,227,000 Gaming ........................................ 5,593,000 6,559,000 Interest from mortgage and other notes ........ 2,843,000 2,868,000 Income from joint ventures and rents from leased hotel properties ........ 872,000 221,000 Other ......................................... 509,000 377,000 Loss on sale of hotel assets .................. (1,037,000) (12,000) ------------- ------------ 108,354,000 43,240,000 ------------- ------------ EXPENSES Hotel operations .............................. 69,934,000 22,406,000 Gaming operations ............................. 5,624,000 6,018,000 Interest ...................................... 6,062,000 460,000 Depreciation and amortization ................. 13,921,000 4,557,000 Administrative and operating .................. 4,644,000 1,387,000 ------------- ------------ 100,185,000 34,828,000 ------------- ------------ Income from operations before minority interest 8,169,000 8,412,000 Minority interest in Partnerships ............. 2,070,000 2,531,000 ------------- ------------ Income from operations ........................ $ 6,099,000 $ 5,881,000 ============= ============ Income from operations per paired share ....... $ 0.28 $ 0.43 ============= ============
See accompanying notes to the pro forma statements of operations. 20 21 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION UNAUDITED COMBINED STATEMENTS OF OPERATIONS
Nine months ended September 30, ------------------------------- Pro Forma 1996 1995 ------------- ------------- REVENUE Hotel ......................................... $ 203,079,000 $ 96,805,000 Gaming ........................................ 19,336,000 20,375,000 Interest from mortgage and other notes ........ 7,604,000 8,004,000 Income from joint ventures and rents from leased hotel properties ........ 3,545,000 608,000 Other ......................................... 2,561,000 1,334,000 Loss on sale of hotel assets .................. (1,384,000) (125,000) ------------- ------------- 234,741,000 127,001,000 ------------- ------------- EXPENSES Hotel operations .............................. 139,587,000 65,702,000 Gaming operations ............................. 17,816,000 18,351,000 Interest ...................................... 13,688,000 999,000 Depreciation and amortization ................. 27,373,000 13,647,000 Administrative and operating .................. 10,009,000 3,847,000 ------------- ------------- 208,473,000 102,546,000 ------------- ------------- Income from operations before minority interest 26,268,000 24,455,000 Minority interest in Partnerships ............. 7,558,000 7,358,000 ------------- ------------- Income from operations ........................ $ 18,710,000 $ 17,097,000 ============= ============= Income from operations per paired share ....... $ 1.08 $ 1.24 ============= =============
See accompanying notes to the pro forma statements of operations. 21 22 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION NOTES TO THE UNAUDITED COMBINED PRO FORMA STATEMENTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 NOTE 1. BASIS OF PRESENTATION Starwood Lodging Trust (the "Trust") and Starwood Lodging Corporation (the "Corporation") (together, the "Company") have unilateral control of SLT Realty Limited Partnership ("Realty") and SLC Operating Limited Partnership ("Operating" and, together with Realty the "Partnerships"), respectively, and, therefore, the historical financial statements of Realty and Operating are consolidated with those of the Trust and the Corporation. Unless the context otherwise requires, all references herein to the "Company" refer to the Trust and the Corporation, and all references to the "Trust" and to the "Corporation" include the Trust and the Corporation and those entities respectively owned or controlled by the Trust or the Corporation, including Realty and Operating. Due to the impact of certain events which occurred in 1995, the historical results of operations and earnings per share for the three and nine months ended September 30, 1995 are not indicative of subsequent and future results of operations and earnings per share. The Unaudited Combined Pro Forma Statements of Operations included as part of the financial statements for the three and nine months ended September 30, 1995 give effect, as of the beginning of the period presented, to the following: the public offering on July 6, 1995 (the "1995 Offering") by the Trust and the Corporation of 11,787,500 paired shares raising net proceeds of approximately $245.7 million; the acquisition of the 462-room Sheraton Colony Square in Atlanta, Georgia; the acquisition of the 224-room Embassy Suites in Tempe, Arizona; the acquisition of the 168-room Omni hotel in Chapel Hill, North Carolina. The pro forma information is based upon historical information and does not purport to present what actual results would have been had such transactions, in fact, occurred at the beginning of the period presented, or to project results for any future period. NOTE 2. NET INCOME PER PAIRED SHARE Net income per paired share has been computed using the pro forma weighted average number of paired shares and equivalent paired shares outstanding for each period presented. Paired share information has been adjusted to reflect a one-for-six reverse stock split effective June 19, 1995. 22 23 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following Management's Discussion and Analysis should be read in conjunction with the Management's Discussion and Analysis included in the Company's Joint Annual Report on Form 10-K/A for the year ended December 31, 1995. HISTORICAL RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995 The following discussion and analysis of the historical results of operations for the three and nine months ended September 30,1996 and 1995 give effect to transactions on the actual date they were consummated. THE TRUST: Rents from the Corporation, which are based largely on hotel revenues, increased $16.4 million and $28.7 million for the three and nine months ended September 30, 1996, respectively as compared to the corresponding periods of 1995. The increase was primarily the result of rents earned by Trust on 30 hotels containing approximately 8,900 rooms (the "Acquired Hotels") acquired during the twelve months ended September 30, 1996. The investment in 30 hotels (the 364-room Terrace Garden Inn, and 180-room Lenox Inn acquired in October 1995; the 206-room Holiday Inn Calverton acquired in November 1995; the 263-room Westin, Washington DC acquired in January 1996; the 442-room Clarion Hotel, and the three Doubletree Guest Suites hotels (822 suites) acquired in April, 1996; the 251-suite Doubletree Guest Suites hotel acquired in June, 1996; the 177-room Days Inn acquired in July, 1996; the Teachers Portfolio, the HOD portfolio and the 294-room Princeton Marriott acquired in August 1996; and the 121-room Doral Tuscany and 199-room Doral Court acquired in September, 1996) accounted for increased rents of $15.5 million and $22.0 million for the three and nine months ended September 30, 1996, respectively, as compared to the corresponding periods in 1995. In addition, rents earned by the Trust from continuously owned properties leased by the Corporation increased by $900,000 and $6.7 million for the three and nine months ended September 30, 1996, respectively, as compared to the corresponding periods in 1995. Interest from the Corporation increased by $795,000 and $3.3 million for the three and nine months ended September 30, 1996, respectively, as compared to the corresponding periods of 1995. The increase in interest income was primarily a result of interest on the first mortgage of the Milwaukee Marriott Hotel which was purchased by Trust in July 1995. Interest from mortgage and other notes amounted to $3.4 million and $8.1 million for the three and nine months ended September 30, 1996, respectively, as compared to $2.8 million and $7.9 million, respectively for the corresponding periods in 1995. The increase resulted from the purchase during the quarter, of debt, a portion of which is secured by the 305-room Holiday Inn in Milpitas, California, offset in part by principal amortization. Income from joint ventures and rents from other leased hotel properties increased by $1.6 million to $2.2 million for the nine months ended September 30, 1996, as compared to the corresponding period in 1995. The increase primarily resulted from the Trust's 58.2% investment in the 960-room Boston Park Plaza. 23 24 Other income for the nine months ended September 30, 1996 includes a $290,000 gain (net of related expenses) realized in connection with the sale of securities which were purchased in contemplation of acquiring a portfolio of hotel properties. Also included in other income is $314,500 recorded as a result of the Ross Litigation settlement (see Item 3 of Part I of the Company's Form 10-K/A for the year ended December 31, 1995). Interest expense increased by $5.6 and $2.9 million for the three and nine months ended September 30, 1996, respectively as compared to the corresponding periods of 1995. The increase was due to borrowings under lines of credit used to acquire the above mentioned properties offset by the repayment of approximately $206.5 million of existing indebtedness in connection with the 1995 Offering. Depreciation and amortization expense increased by $9.4 million and $12.4 million during the three and nine months ended September 30, 1996, respectively as compared to the corresponding periods of 1995, principally due to the acquisition of the Acquired Hotels and to the amortization of financing costs. Administrative and operating expenses for the nine months ended September 30, 1996 increased by $1.7 million to $2.9 million as compared to $1,178,000, for the corresponding period of 1995. The increase resulted from costs incurred relating to the investigation of hotels which ultimately were not acquired. Administrative and operating expenses includes payments of approximately $270,000 to Jeffrey C. Lapin, the former President and COO of the Trust pursuant to his separation agreement. Minority interest represents primarily the interest of Starwood Capital Group, L.P. ("Starwood Capital") and certain affiliates of Starwood Capital in Realty for the three and nine months ended September 30, 1996. THE CORPORATION: Hotel revenues increased by $67.2 million and $121.1 million for the three and nine months ended September 30, 1996, respectively as compared to the corresponding periods of 1995. The addition of the Acquired Hotels and the addition of the 257-room Midland Hotel in Chicago, Illinois resulted in increases in hotel revenues of $59.6 million and $85.7 million for the three and nine months ended September 30, 1996, respectively. The remaining increase of $7.6 million and $35.4 million for the three and nine months ended September 30, 1996, respectively is attributable to other continuously owned properties and properties acquired prior to the end of the third quarter of 1995. Hotel gross margin for the third quarter of 1996 was $29.6 million, or 29.8% of hotel revenues, as compared to $10.5 million, or 32.4% of hotel revenues, for the third quarter of 1995. Hotel gross margin for the nine months ended September 30, 1996 was $63.5 million, or 31.4% of hotel revenues, as compared to $25.7 million, or 31.4% of hotel revenues, for the corresponding period in 1995. The decrease in gross margin in the third quarter was primarily due to the increase in the food and beverage revenue component of total hotel revenue resulting from the Company's continued investment in full-service hotels offset, in part, by increases in REVPAR and the termination of third-party management agreements. 24 25 Gaming revenues for the third quarter of 1996 as compared to the corresponding period of 1995 decreased by $966,000. Gaming revenues for the nine months ended September 30, 1996 as compared to the corresponding period of 1995 decreased by $1.0 million to $19.3 million. Gaming gross margin for the third quarter of 1996 was ($31,000) or (1%) of gaming revenues, as compared to $541,000 or 8.3% of gaming revenues, for the third quarter of 1995. Gaming gross margin for the nine months ended September 30, 1996 was $1.5 million or 7.9% of gaming revenues, as compared to $2.0 million or 9.9% of gaming revenues, for the corresponding period in 1995. The decrease in gaming revenues and the decline in gaming gross margin predominately resulted from operations at the Bourbon Street Hotel and Casino which was sold on September 13, 1996. Management fees and other income for the nine months ended September 30, 1996 includes $314,500 of income recorded as a result of the Ross Litigation settlement (see Item 3 of Part I of the Company's Form 10-K/A for the year ended December 31, 1995) and $678,000 of management fee income from the joint venture that owns the Boston Park Plaza hotel. Income from joint venture represents income, after rents to the Trust, from the Corporation's 58.2% investment in the 960-room Boston Park Plaza. Administrative and operating expenses for the three and nine months ended September 30, 1996, increased by $3.5 million to $4.5 million or 4.2% of revenues and by $4.5 million to $7.1 million or 3.2% of revenues, respectively, as compared to $981,000 or 2.5% of revenues and $2.7 million or 2.6% of revenues, respectively, for the corresponding periods of 1995. The increases were primarily a result of increases in payroll costs commensurate with the Company's growth, as well as the assumption of management of hotels previously provided by third-party operators. Administrative and operating expenses for the three and nine months ended September 30, 1996 included a $1.5 million charge relating to costs relating to the relocation of the corporate office from Los Angeles, California to Phoenix, Arizona. Depreciation and amortization expense increased by $522,000 and $4.8 million for the three and nine months ended September 30, 1996, respectively, as compared to the corresponding periods of 1995. The increases were primarily a result of depreciation relating to the Acquired Hotels. Minority interest represents primarily the interest of Starwood Capital and certain affiliates of Starwood Capital in Operating for the three and nine months ended September 30, 1996. 25 26 Net income for the nine months ended September 30, 1996 includes an extraordinary gain of $1.5 million before minority interest resulting from early extinguishment of debt. The extraordinary gain resulted from the early payoff at a discount of a note secured by the Milwaukee Marriott. In addition, the Corporation purchased the remaining equity interest for $240,000 and became the 100% owner of the hotel. Net income for the third quarter and nine months ended September 30, 1996 also includes a $1.5 million charge resulting from the relocation of the Company's corporate offices to Phoenix, Arizona from Los Angeles, California in July. For information with respect to rent and interest to the Trust during the three and nine months ended September 30, 1996 and 1995, see "Trust" immediately above. 26 27 COMBINED HISTORICAL RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 AND COMBINED PRO FORMA RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1995 INCOME FROM OPERATIONS Combined income from operations for the third quarter of 1996 was $6.1 million, or $0.28 per paired share, on combined revenues of $108.4 million, compared to combined pro forma income from operations of $5.9 million, or $0.43 per paired share, on combined revenues of $43.2 million for the corresponding period in 1995. Combined income from operations for the nine months ended September 30, 1996 was $19.8 million, or $1.14 per paired share, on combined revenues of $234.7 million, compared to combined pro forma net income of $17.1 million, or $1.24 per paired share, on combined revenues of $127.0 million for the corresponding period in 1995. EXTERNAL GROWTH During the quarter ended September 30, 1996 the Company acquired equity and debt interests in 21 hotels containing 6,485 rooms at a combined cost of approximately $520 million. During the nine months ended September 30, 1996, the Company acquired equity interests in 29 hotels as follows: the 263-room Grand Hotel (renamed The Westin Hotel) in Washington, DC (January 1996); a 58.2% interest in the 960-room Boston Park Plaza Hotel Complex in Boston, Massachusetts (January 1996); the 257-room Midland Hotel in Chicago, Illinois (March 1996); the 442-room Clarion Hotel located at the San Francisco Airport in Millbrae, California (April 1996), the 260-room Doubletree Guest Suites hotel in Tampa, Florida, the 254-room Doubletree Guest Suites hotel in Cypress Creek, Florida, and the 308-room Doubletree Guest Suites hotel in Irving, Texas (April 1996), the 251-room Doubletree Guest Suites hotel and the 177-room Days Inn, both located at the Philadelphia Airport in Philadelphia, Pennsylvania (June 1996); the Teachers Portfolio (August 1996); the HOD Portfolio (August 1996); the 294-room Marriott in Princeton, New Jersey (August 1996); and the 199-room Doral Court and 121-room Doral Tuscany in New York, New York (September 1996). INTERNAL GROWTH On a same-store-sales basis, including all hotels acquired prior to September 30, 1996, revenue per available room (REVPAR) for the third quarter of 1996 increased 11.4% (10.7% if the Dallas Park Central, which is undergoing a substantial renovation and had occupancy of 11.3% for the quarter, is included), from $62.90 to $70.04 over the same period in 1995. The increase in REVPAR resulted from an increase in average daily rate (ADR) of 14.6%, from $82.01 to $94.02, while the occupancy rate decreased by 2.2 percentage points. On a same-store-sales basis, including all hotels acquired prior to September 30, 1996, REVPAR for the nine months ended September 30, 1996 increased 10.7%, from $59.60 to $65.96 over the same period in 1995. The increase in REVPAR resulted from an increase in ADR of 11.9%, from $80.33 to $89.87 offset by a slight decrease in the occupancy rate from 74.2% to 73.4%. 27 28 The overall increase in REVPAR for the third quarter and nine months ended September 30, 1996 was largely attributable to the strong increase in REVPAR at the Company's upscale hotels. These hotels experienced an increase in REVPAR of 12.7% and 12.3% for the third quarter and nine months ended September 30, 1996, respectively, as compared to the corresponding periods of 1995. ADR for the Company's upscale hotels increased 14.8%, for the third quarter and 11.5% for the nine months ended September 30, 1996, as compared to the corresponding periods of 1995. 28 29 The following tables summarize average occupancy, ADR and REVPAR on a year-over-year basis for the Company's owned and operated (including third party managed hotels), nongaming hotels for the three and nine months ended September 30, 1996 and 1995:
Three Months Ended September 30, ---------------------- All Nongaming Hotels (excluding 1996 1995 - -------------------------------- ----- ----- Dallas Park Central): - -------------------- Occupancy rate ......................... 74.5% 76.7% ADR .................................... $94.02 $82.01 REVPAR ................................. $70.04 $62.90 REVPAR % change ........................ 11.4%
Nine Months Ended September 30, ---------------------- All Nongaming Hotels (excluding 1996 1995 - -------------------------------- ----- ----- Dallas Park Central): - -------------------- Occupancy rate ......................... 73.4% 74.2% ADR .................................... $89.87 $80.33 REVPAR ................................. $65.96 $59.60 REVPAR % change ........................ 10.7%
Three Months Ended September 30, ---------------------- Upscale Hotels: 1996 1995 - -------------- ----- ----- Occupancy rate ......................... 74.9% 76.3% ADR .................................... $99.39 $86.57 REVPAR ................................. $74.44 $66.04 REVPAR % change ........................ 12.7%
Nine Months Ended September 30, ---------------------- Upscale Hotels: 1996 1995 - -------------- ----- ----- Occupancy rate ......................... 74.0% 73.5% ADR .................................... $97.83 $87.77 REVPAR ................................. $72.41 $64.50 REVPAR % change ........................ 12.3%
Three Months Ended September 30, ---------------------- Midscale/Economy Hotels 1996 1995 - ------------------------ ----- ----- (excluding Dallas Park Central): - -------------------------------- Occupancy rate ......................... 72.9% 78.1% ADR .................................... $72.70 $64.91 REVPAR ................................. $52.97 $50.69 REVPAR % change ........................ 4.5%
Nine Months Ended September 30, ---------------------- Midscale/Economy Hotels 1996 1995 - ------------------------ ----- ----- (excluding Dallas Park Central): - -------------------------------- Occupancy rate ......................... 71.6% 76.3% ADR .................................... $66.42 $60.05 REVPAR ................................. $47.57 $45.83 REVPAR % change ........................ 3.8%
29 30 Management believes that increases in REVPAR resulted primarily from increases in demand due to continued favorable economic conditions which have created increased business and leisure travel throughout the United States, while the supply of hotel rooms has not increased as rapidly, particularly in major urban locations. Revenue increases for the quarter were greatest at the recently acquired city center properties in Atlanta, New York, and Washington. REVPAR declined significantly at the Dallas Park Central which was virtually closed for renovation. REVPAR at the Harvey Hotel in Wichita, which is managed by a third party, declined 29%. Management believes that there are several important factors that have contributed to the improved profitability of hotel properties, including increased ADR and effective cost management. Because a substantial portion of the hotels' operating costs and expenses are generally fixed, the Company derives substantial operating leverage from increases in revenue. However, the Company's continued investment in full-service properties has led to a larger component of food and beverage revenue when compared to the same period last year. Consequently, gross margins for the third quarter of 1996 declined to 30% from 32% in the corresponding quarter in 1995. Gross margins for the nine months ended September 30, 1996 remained constant at 31% when compared to the same period in 1995. SELF MANAGEMENT In the nine months ended September 30, 1996, consistent with its business objective to capture the economic benefits otherwise retained by a third-party operator, the Company assumed management of a total of 19 hotels including 18 acquired during the period and one property continuously owned by Realty. In addition, from October 1 through November 8, 1996 the Company assumed management of eight additional hotels acquired in the twelve months ending September 30, 1996. Management believes that the assumption of direct control over the operations of these hotels will allow the Company to effectively use the experience of management to improve operations. RENOVATIONS During the quarter the Company completed a $1.9 million renovation of the Riverside Inn in Portland, Oregon and a $1.6 million renovation of the Terrace Garden Inn in Atlanta, Georgia. The $12 million renovation of the Dallas Park Central is well advanced with completion expected in the first quarter of 1997. Other significant renovations in progress at the end of the quarter include the Sheraton Colony Square in Atlanta, Georgia ($6.5 million total renovation), the Westin Hotel in Washington, D.C. ($6.0 million total renovation), the Meany Tower Hotel in Seattle, Washington ($5.0 million total renovation), the Clarion Hotel located at the San Francisco Airport ($5.0 million total renovation) and the Radisson Hotel in Gainesville, Florida ($3.0 million total renovation). The Company expects to complete these renovation projects in 1997. SEASONALITY AND DIVERSIFICATION Demand is affected by normally recurring seasonal patterns. Generally, the Company's portfolio of hotels as a whole has performed better in the second and third quarters due to decreased travel in the winter months. Future acquisitions may further affect the seasonality of the Company's current portfolio. 30 31 The Company has continued to implement a business strategy of franchise and geographic diversification. OTHER INCOME AND ADMINISTRATIVE AND OPERATING EXPENSES Other income for the nine months ended September 30, 1996 includes $678,000 of management fee income from the Boston Park Plaza and a $290,000 gain (net of related expenses) realized in connection with the sale of securities, which were purchased in contemplation of acquiring a portfolio of hotel properties. Also included in other income is $629,000 recorded in connection with the Ross Litigation settlement (see Item 3 of Part I of the Company's Form 10-K/A for the year ended December 31, 1995). Administrative and operating expenses for the three and nine months ended September 30, 1996 increased by $3.2 million to $4.6 million or 4% of revenue and by $6.2 million to $10.0 million or 4% of revenues, respectively, as compared to $1.4 million or 3.2% of revenues and $3.8 million or 3.0% of revenues, respectively, for the corresponding periods of 1995. The increase was primarily a result of an increase in payroll costs due to additions to the corporate staffs commensurate with the Company's growth, as well as the assumption of management of hotels from third-party operators. Administrative and operating expenses for the quarter and nine months ended September 30, 1996 includes a $1.5 million charge resulting from the relocation of the Company's corporate offices to Phoenix, Arizona from Los Angeles, California. Administrative and operating expenses also includes payments of approximately $270,000 to Jeffrey C. Lapin, the former President and Chief Operating Officer of the Trust pursuant to his separation agreement. The increase in administrative and operating expenses also resulted from costs relating to the potential acquisition of hotels which ultimately were not acquired. 31 32 COMBINED LIQUIDITY AND CAPITAL RESOURCES Cash Flow Provided by Operating Activities. The principal source of cash to be used to fund the Company's operating expenses, interest expense, recurring capital expenditures and distribution payments by the Trust will be cash flow provided by operating activities. The Company anticipates that cash flow provided by operating activities will provide the necessary funds on a short and long term basis to meet operating cash requirements including all distributions to shareholders by the Trust. During the first quarter, the Trust paid a distribution of $0.47 per share for the fourth quarter of 1995. During the second quarter, the Trust paid the distribution of $0.47 per share for the quarter ending March 31, 1996. During the third quarter, the Trust paid the distribution of $0.49 per share for the quarter ended June 30, 1996 and declared a distribution of $0.49 per share for the quarter ended September 30, 1996. Cash Flows from Investing and Financing Activities. Additionally, the Company intends to finance the acquisition of additional hotel properties, hotel renovations and capital improvements and provide for general corporate purposes through three loan facilities with affiliates of Lehman Brothers Inc. (one of which is now managed by Bank of Boston) and one loan facility with an affiliate of Goldman Sachs and, when market conditions warrant, to issue additional equity or debt securities. In March 1996, Realty entered into a loan facility (the "Term Loan") with an affiliate of Lehman Brothers Inc. The 12-month Term Loan was put in place to fund the acquisition in March 1996, of the 257-room Midland Hotel in Chicago and, in April 1996, the facility was increased to $94 million. The Term Loan is secured by certain properties of the Company on a cross-collateralized basis. As of September 30, 1996, Realty had borrowed $74 million under the Term Loan, which accrues interest at a rate equal to the one-two-or three-month LIBOR, at the Company's option, plus (a) 1.95 % for the first $20 million and (b) 1.75 % for the balance of the Term Loan. The Term Loan may be retired from the proceeds of public or private issuances of equity or debt securities by the Company. In July 1996, the maturity date of the Mortgage Loan Funding Facility (the "Repo Facility") which the Company had entered into in July 1995 with an affiliate of Lehman Brothers, Inc. was extended from January 25, 1997 to July 25, 1997. As of September 30, 1996, Realty had borrowed $71 million under the Repo Facility. In August 1996, the Company entered into a loan facility (the "Goldman Loan") with an affiliate of Goldman Sachs for a one-year (extendible to 18 months) loan of up to $300 million to fund a portion of the acquisition cost of the HOD Portfolio and for general corporate purposes. The Goldman Loan bears interest at one-month LIBOR plus 1.75% and is secured by interests in the Teachers Portfolio and the HOD Portfolio. At September 30, 1996, the Company had borrowed $140 million under the Goldman Loan. On April 12, 1996, the Company completed a public offering of 2,000,000 paired shares at a net price to the Company of $31.50 per paired share. The net proceeds of approximately $62.4 million were used, in part, to fund the acquisition of the 442-room Clarion Hotel at the San Francisco Airport and the three Doubletree Guest Suite hotels located in Irving, Texas; Ft. Lauderdale, Florida; and Tampa, Florida. 32 33 On August 12, 1996, the Company completed a public offering of 10,000,000 paired shares and on August 23, 1996 the underwriter exercised its over-allotment option to purchase 799,575 paired shares. Net proceeds from the offering of approximately $365.0 million were used to fund the acquisition of the Teachers Portfolio and the balance was used to fund a portion of the acquisition of the HOD Portfolio. The remaining portion of the HOD Portfolio was funded through the Goldman Loan discussed above. As previously discussed, during the quarter, the Company completed a $1.9 million renovation of the Portland Riverside Inn, in Portland, Oregon and a $1.6 million renovation of the Terrace Garden Inn in Atlanta, Georgia. The $12 million renovation of the Dallas Park Central is well advanced with completion expected in the first quarter of 1997. Other significant renovations in progress at the end of the third quarter include the Sheraton Colony Square in Atlanta, Georgia; the Westin Hotel in Washington, D.C.; the Meany Tower Hotel in Seattle, Washington; the Clarion Hotel at the San Francisco Airport and the Radisson Hotel in Gainesville, Florida. The Company expects to complete these renovations in 1997 for approximately $25.5 million. Major and minor renovations of other hotels are also being contemplated. Sources of capital for major building renovations and expansions are expected to be: (i) excess funds from operations, (ii) additional debt financing, and (iii) additional equity raised in the public and private markets. As of the date of the filing of this report, since January 1, 1995, the Company has invested over $726 million in hotel assets (approximately $743 million including capital expenditures for the nine months ended September 30, 1996). As part of its investment strategy, the Company plans to acquire additional hotels. Future acquisitions are expected to be funded through further draws under a three-year, $135 million secured revolving credit facility with affiliates of Lehman Brothers Inc. and managed by Bank of Boston (the "Acquisition Facility"), and the Goldman Loan and the issuance of additional equity or debt securities. The Company intends to incur additional indebtedness in a manner consistent with its policy of maintaining a Ratio of Debt-to-Total Market Capitalization of not more than 50%. Management of each of the Trust and of the Corporation believes that it will have access to capital resources sufficient to satisfy the cash requirements of each of the Trust and the Corporation and to expand and develop their business in accordance with their strategy for future growth. 33 34 FUNDS FROM OPERATIONS Management believes that funds from operations ("FFO") is one measure of financial performance of an equity REIT such as the Trust. Combined FFO (as defined by the National Association of Real Estate Investment Trusts)(1) for the quarter ended September 30, 1996 almost doubled to $25.3 million, compared to combined historical FFO of $12.7 million for the corresponding period in 1995 and grew by 95% compared to pro forma FFO of $13.0 million for the corresponding period in 1995. The following table shows the calculation of historical and pro forma combined FFO for the quarter ended September 30, 1996:
Three Months Ended September 30, ----------------------------------------- Pro Forma Historical 1996 1995 1995 ----------- ----------- ----------- Income before extraordinary item and minority interest ........................................... $ 8,169,000 $ 8,412,000 $ 8,642,000 Real estate related depreciation and amortization, net of amortization of financing costs ................. 13,169,000 4,557,000 3,997,000 Real estate related depreciation-Boston Park Plaza ... 1,424,000 -- -- Loss on sales of hotel assets ........................ 1,037,000 12,000 12,000 Corporate relocation costs ........................... 1,500,000 -- -- ----------- ----------- ----------- FFO $25,299,000 $12,981,000 $12,651,000 =========== =========== ===========
For the nine months ended September 30, 1996 combined FFO grew by 150% to $56.6 million, compared to combined historical FFO of $22.7 million for the corresponding period in 1995 and grew by 50% compared to pro forma FFO of $37.8 million for the corresponding period in 1995. The following table shows the calculation of historical and pro forma combined FFO for the nine months ended September 30, 1996:
Nine Months Ended September 30, ----------------------------------------- Pro Forma Historical 1996 1995 1995 ----------- ----------- ----------- Income before extraordinary item and minority interest .................................. $26,268,000 $24,445,000 $12,348,000 Real estate related depreciation and amortization, net of amortization of financing costs ................. 25,860,000 13,233,000 10,182,000 Real estate related depreciation-Boston Park Plaza ... 1,621,000 -- -- Loss on sales of hotel assets ........................ 1,384,000 125,000 125,000 Corporate relocation costs ........................... 1,500,000 -- -- ----------- ----------- ----------- FFO $56,633,000 $37,813,000 $22,655,000 =========== =========== ===========
34 35 FFO includes $201,000 and $430,000 of interest income recognized in excess of the actual cash received on mortgage notes receivable (as a result of the notes having been purchased at a discount) for the quarter ended September 30, 1996 and 1995, respectively, and $719,000 and $975,000 for the nine months ended September 30, 1996 and 1995, respectively. (1) With respect to the presentation of FFO, management elected early adoption of the "new definition" as recommended in the March 1995 NAREIT White Paper on FFO beginning January 1, 1995. Management and industry analysts generally consider funds from operations to be one measure of the financial performance of an equity REIT that provides a relevant basis for comparison among REITs and it is presented to assist investors in analyzing the performance of the Company. FFO is defined as income before minority interest (computed in accordance with generally accepted accounting principles), excluding gains (losses) from debt restructuring and sales of property, and real estate related depreciation and amortization (excluding amortization of financing costs). FFO does not represent cash generated from operating activities in accordance with generally accepted accounting principles and is not necessarily indicative of cash available to fund cash needs. FFO should not be considered an alternative to net income as an indication of the Company's financial performance or as an alternative to cash flows from operating activities as a measure of liquidity. 35 36 PART II. - OTHER INFORMATION Item 1. Legal proceedings None. Item 2. Changes in Securities None. Item 3. Defaults Upon Senior Securities None. Item 4. Submission of Matters to a Vote of Security Holders None. Item 5. Other Information None. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Exhibit 11 - Combined statement regarding computation of per share earnings. (b) Reports on Form 8-K. On August 12, 1996, the Trust and and the Corporation filed a Joint Current Report on Form 8-K to report the acquisition of the Teachers Portfolio and the HOD Portfolio. 36 37 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, each Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. STARWOOD LODGING TRUST STARWOOD LODGING CORPORATION Registrant Registrant /s/ RONALD C. BROWN /s/ ALAN M. SCHNAID - ----------------------------------- ----------------------------------------- Ronald C. Brown Alan M. Schnaid Senior Vice President and Vice President and Corporate Controller Chief Financial Officer (Principal Accounting Officer) (Principal Financial Officer) Date: November _____, 1996. 37 EX-11 2 COMPUTATION OF PER SHARE EARNINGS 1 STARWOOD LODGING TRUST AND STARWOOD LODGING CORPORATION COMBINED STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 1996 Exhibit 11
Three Months Ended Nine Months Ended September 30, 1996 September 30, 1996 ------------------ ------------------ Net income $ 6,099,000 $19,787,000 Weighted average paired shares assuming no dilution 21,700,000 17,193,000 Common equivalent shares Additional shares applicable to stock options based on the weighted average market price 233,000 140,000 Weighted average paired shares applicable to net income per common ----------- ----------- and common equivalent paired shares 21,933,000 17,333,000 ----------- ----------- Additional shares applicable to stock options based on the market close price at the end of the period 92,000 102,000 Weighted average paired shares ----------- ----------- assuming full dilution 22,025,000 17,435,000 ----------- ----------- Net income per common and common equivalent paired shares $ 0.28 $ 1.14 =========== =========== Net income per common paired shares assuming full dilution $ 0.28 $ 1.13 =========== ===========
EX-27.1 3 F.D.S. FOR STARWOOD LODGING CORPORATION
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RELATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ON THE JOINT ANNUAL REPORT ON FORM 10K. 0000316206 STARWOOD LODGING CORPORATION 1 U.S. DOLLARS 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 1 18,446,000 0 32,198,000 0 0 7,175,000 115,685,000 0 173,504,000 36,098,000 0 0 0 266,000 29,758,000 173,504,000 105,167,000 106,187,000 0 75,558,000 30,432,000 0 1,896,000 (1,509,000) (1,509,000) (1,509,000) 0 0 0 (1,509,000) (0.07) 0
EX-27.2 4 F.D.S. FOR STARWOOD LODGING TRUST
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RELATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH ON THE JOINT ANNUAL REPORT ON FORM 10K. 0000048595 STARWOOD LODGING TRUST 1 U.S. DOLLARS 3-MOS DEC-31-1996 JUL-01-1996 SEP-30-1996 1 12,852,000 0 22,604,000 0 0 9,117,000 1,095,281,000 0 1,139,854,000 23,115,000 0 0 0 266,000 565,496,000 1,139,854,000 0 27,789,000 0 0 11,900,000 0 6,021,000 7,608,000 7,608,000 7,608,000 0 0 0 7,608,000 0.35 0
-----END PRIVACY-ENHANCED MESSAGE-----