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  • In 2006 began repurchasing stock due to saving cash in 2005
  • Issued long-term debt to repurchase stock
  • More debt, less equity Levering up balance sheet

Reducing reliance on debt

Starwood

Financing Activities

  • Low Net Income in 2009 due to economic downturn
  • Decreasing depreciation reflects Starwood's move from owning to franchising hotels
  • Inventories comprised primarily of Vacation Ownership Interests, Residential and Hotel inventory
  • 30% increase in vacation ownership revenues led to decrease in VOI inventory in 2011

Cash From

Operating Activities

Starwood Investing Activities

  • PP&E consists primarily of properties
  • Net Purchases are declining, which supports Starwood's transition to a franchising strategy

STARWOOD'S STORY

Starwood's Cash Flows reflect transition to franchising

Reduced debt ratio

Reduced net purchases

Decreasing depreciation/inventory

CASH FLOW SUMMARY

  • Low operating in 2011 due to negative accrued income taxes
  • Positive investing in 2009 due to purchasing less PP&E and selling more PP&E
  • Volatile financing due to accumulation of cash for large debt repayments
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