Hotel Online  Special Report

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Starwood Reports Net Income for the 4th Qtr of 2005 Increased 59% to $159 million; 
For the Full Year 2005, Starwood's Earnings Up 7% to $422 million
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Hotel Operating Statistics
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WHITE PLAINS, N.Y. - Feb. 2, 2006 - Fourth Quarter 2005 Highlights
  • EPS from continuing operations for the fourth quarter of 2005 increased 37% to $0.70, compared to $0.51 in the fourth quarter of 2004. Excluding special items, EPS from continuing operations increased 25% to $0.71 for the fourth quarter of 2005 compared to $0.57 for the fourth quarter of 2004.
  • REVPAR at Same-Store Owned Hotels in North America and worldwide increased 12.2% and 9.4%, respectively, when compared to the fourth quarter of 2004. ADR increased 9.5% and 7.0% in North America and worldwide, respectively.
  • Margins at Starwood branded Same-Store Owned Hotels in North America improved approximately 140 basis points when compared to the fourth quarter of 2004, despite the negative impact of a significant 30% increase in energy costs in North America.
  • Globally, REVPAR for Same-Store Owned Hotels grew for W Hotels (18.9%), followed by Westin (8.4%), Sheraton (8.2%), and St. Regis/Luxury Collection (5.2%), with each of these brands experiencing both ADR and occupancy gains.
  • Third-party management and franchise fees, including fees from the Le Meridien hotels from the acquisition date of November 24, 2005, increased 30.2% in the quarter when compared to 2004.
  • Excluding the fractional sales at the St. Regis Aspen and residential sales at the St. Regis in San Francisco, contract sales at vacation ownership properties were up 17.8% when compared to 2004. However, reported revenues from vacation ownership and residential sales decreased $5 million in the quarter when compared to 2004 primarily due to percentage of completion accounting for pre-sales at new timeshare projects.
  • Net income for the fourth quarter of 2005 increased 59% to $159 million, compared to net income of $100 million in the fourth quarter of 2004. Excluding special items, income from continuing operations increased 32% to $162 million in the fourth quarter of 2005 compared to $123 million in the same period of 2004.
  • Total Company Adjusted EBITDA increased 19.6% to $391 million when compared to $327 million in 2004.
  • For the thirteenth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as for system-wide hotels. According to Smith Travel Research, system-wide market share in North America increased approximately 100 basis points for the full year 2005 when compared to 2004. 
Starwood Hotels & Resorts Worldwide, Inc. ("Starwood" or the "Company") today reported EPS from continuing operations for the fourth quarter of 2005 of $0.70 compared to $0.51 in the fourth quarter of 2004. Excluding special items which net to a negative $3 million and primarily relate to severance related costs associated with the corporate restructuring in the quarter, net gains realized on the sale of several hotels partially offset by a hotel impairment charge and additional tax expense arising from the deposit with the IRS of funds for taxes claimed as a result of the 1998 disposition of ITT World Directories, EPS from continuing operations was $0.71 for the fourth quarter of 2005 compared to $0.57 in the fourth quarter of 2004. Income from continuing operations was $159 million in the fourth quarter of 2005 compared to $111 million in 2004. Excluding special items, income from continuing operations was $162 million for the fourth quarter of 2005 compared to $123 million in 2004. In connection with the announced sale of 38 hotels to Host Marriott Corporation, the Company's EPS in the fourth quarter was positively impacted by approximately $17 million or $0.05 per share associated with the cessation of depreciation of these assets held for sale. The Company's results continued to be negatively impacted by lost business in New Orleans, Cancun and Miami as a result of damage at its owned hotels from Hurricanes Katrina and Wilma. Although the Company has recorded expenses for its insurance deductibles associated with these storms, in accordance with accounting rules, it has not recorded any of its expected recoveries under its existing business interruption insurance policies. Net income (after discontinued operations) was $159 million and EPS was $0.70 in the fourth quarter of 2005 compared to $100 million and EPS of $0.46 in the fourth quarter of 2004. The effective tax rate for the fourth quarter of 2005 was 21.4%.

Steven J. Heyer, CEO, said "I am very pleased with our results this quarter. We beat our top and bottom line expectations and for thirteen quarters in a row our market share has increased. We are moving full speed ahead with all of our strategic initiatives and with the brand building initiatives rolling out across our system, we expect our momentum to continue.

During the quarter we made significant progress toward reducing our investment in owned real estate, while maintaining long-term, attractive management agreements with an outstanding partner. I couldn't be more pleased with the results of this transaction and the future opportunities it creates for us. And, as we said when we announced the deal, it re-opened our window for share repurchases. Since our window opened, we have repurchased $373 million in stock, and we plan to be buyers of our stock throughout 2006.

We closed on the purchase of the Le Meridien brand, adding another upper upscale brand and 122 hotels to our system. The brand is very strong, and we are pleased with the quality of the hotel management teams in place. After these two transactions, our earnings become more balanced between hotel ownership and fee income. We expect to aggressively drive both businesses.

Entering into 2006, we have significant opportunities ahead of us. We will continue to work on unlocking the value in our owned real estate. Our core lodging business remains strong and supply continues to be constrained. Our pipeline continues to grow, outpacing our fair share, and we've added resources to aggressively pursue the opportunity. We are focused on our key initiatives and expect 2006 to be another great year at Starwood with our core business, on a comparable basis, growing approximately 15%."

Operating Results

Fourth Quarter Ended December 31, 2005

Cash flow used for operations was $54 million compared to cash flow from operations of $201 million in 2004. The decrease in cash flows from operations was primarily due to the payment, in October 2005, of the deposit with the IRS associated with the 1998 disposition of ITT World Directories. Total Company Adjusted EBITDA was $391 million compared to $327 million in 2004.

Owned, Leased and Consolidated Joint Venture Hotels

REVPAR for Same-Store Owned Hotels in North America and worldwide increased 12.2% and 9.4%, respectively, when compared to 2004. REVPAR at Same-Store Owned Hotels in North America increased 18.9% at W, 11.7% at Sheraton, 10.5% at Westin, and 10.3% at St. Regis/Luxury Collection. REVPAR growth was particularly strong at the Company's owned hotels in New York, Atlanta, Houston, Chicago, and the Hawaiian Islands. Revenue from transient travel was up 16.6% in North America when compared to 2004. Internationally, Same-Store Owned Hotel REVPAR increased 10% after adjusting for the impact of foreign exchange. As reported, in US dollars, Same-Store Owned Hotel REVPAR increased 1.5%, with Latin America up 9.2% (REVPAR in owned hotels in Argentina, Brazil, Peru and resort areas in Mexico was particularly strong, excluding two hotels in Cancun which were closed due to damage from Hurricane Wilma), Europe up 1.6%, and Asia Pacific down 8.5% due to the fact that one of the four owned hotels in this region was under significant renovation during the quarter.

Total revenues at Same-Store Owned Hotels worldwide increased 6.6% to $843 million when compared to $791 million in 2004 while costs and expenses at the hotels increased 5.7% to $620 million in 2005 compared to $587 million in 2004. Total revenues at Same-Store Owned Hotels in North America increased 9.2% to $626 million in 2005 when compared to $573 million in 2004 while costs and expenses at these hotels increased 7.3% to $453 million when compared to $422 million in 2004. The increase in costs and expenses is primarily due to an increase in occupancy and a significant 30% increase in energy costs in North America.

System-wide REVPAR; Management/Franchise Fees

System-wide (owned, managed and franchised) REVPAR for Same-Store Hotels in North America, excluding Le Meridien hotels, increased 10.8%; W Hotels 17.9%, Sheraton 11.3%, Westin 9.8%, Four Points by Sheraton 9.3%, and St. Regis/Luxury Collection 6.9%. For the thirteenth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as for system-wide hotels. According to Smith Travel Research, system-wide market share in North America increased approximately 100 basis points for the full year 2005 when compared to 2004. Total third-party management and franchise fees, including fees from the Le Meridien hotels from the acquisition date of November 24, 2005, were $104 million in the quarter, up $24 million, or 30.2%, from last year.

Vacation Ownership and Residential

Vacation ownership and residential revenue, which excludes gains on sales of notes receivable, decreased $5 million, or 2.5% to $192 million when compared to 2004. This decrease was primarily due to a larger portion of vacation ownership sales coming from pre-sales at new phases under construction at the Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii and the Westin Kierland Villas in Scottsdale, Arizona which are recognized based on percentage of completion in accordance with US GAAP. Contract sales, excluding fractional sales at the St. Regis Aspen and residential sales at the St. Regis in San Francisco, were up 17.8% when compared to 2004. The average price per timeshare unit sold increased approximately 11.8% to $22,868, and the number of contracts signed increased approximately 5.3% when compared to 2004.

Residential sales continued in the fourth quarter at the St. Regis Museum Tower in San Francisco. The Company recognized revenues of approximately $42 million, an increase of $27 million compared to 2004. The St. Regis Museum Tower hotel and condominiums opened in November 2005.

In addition to its robust pipeline of existing vacation ownership inventory, the Company continues to evaluate its existing owned real estate for potential conversion to vacation ownership, fractional, or residential projects. For example, the Company is converting four floors of the St. Regis hotel in New York into fractional units and residences and has partially demolished the Sheraton in Cancun, Mexico, where it will build a timeshare development that is expected to have up to 73 units upon completion of the first phase. The Company is also working with its business partners to develop similar conversion opportunities at managed hotels.

Currently, the Company is working on new phases at the Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii, the Westin Kierland Villas in Scottsdale, Arizona, the Sheraton Broadway Plantation in Myrtle Beach, South Carolina, and the Sheraton Vistana Villages in Orlando, Florida.

In addition to the expansion at the existing properties above, Starwood Vacation Ownership is in the predevelopment phase of several new vacation ownership resorts including one in Princeville on the island of Kauai, Hawaii. The Company is also working on a third St. Regis-branded fractional resort in Punta Mita, Mexico.

During the fourth quarter of 2005, the Company sold approximately $221 million of vacation ownership notes receivable and recognized gains of $25 million as compared to gains of $3 million in the same period of 2004.

Results for the Twelve Months Ended December 31, 2005

EPS from continuing operations increased 9% to $1.88 compared to $1.72 in 2004. Excluding special items, EPS from continuing operations increased 44% to $2.34 compared to $1.62 in 2004. Income from continuing operations was $423 million compared to $369 million in 2004. Excluding special items, income from continuing operations increased 51% to $526 million compared to $348 million in 2004. Net income (after discontinued operations) was $422 million and EPS was $1.88 compared to $395 million and $1.84, respectively, in 2004.

Cash flow from operations was $764 million compared to $578 million in 2004. Total Company Adjusted EBITDA was $1.417 billion compared to $1.150 billion in 2004.

Brand Development/Unit Growth

During the fourth quarter, the Company signed 42 hotel management and franchise contracts (representing approximately 15,000 rooms) including the W Las Vegas (Las Vegas, Nevada, 4,000 rooms), Westin Orlando Convention Center (Orlando, Florida, 603 rooms), and W Pudong (Shanghai, China, 400 rooms). In addition to the 122 Le Meridien hotels (representing approximately 31,700 rooms) that are currently in the system following the Company's acquisition of the brand in November 2005, nine new hotels and resorts (representing approximately 2,200 rooms) entered the system, including the Westin Paris (Paris, France, 438 rooms) and the Sheraton Haikou (Haikou, China, 341 rooms). Thirteen properties (representing approximately 3,500 rooms) were removed from the system during the quarter (4 Sheratons, 4 Four Points, 3 Westins and 2 unbranded). The Company expects to open more than 50 hotels (representing approximately 14,000 rooms) in 2006. The Company had approximately 220 hotels and approximately 65,000 rooms in its active global development pipeline at December 31, 2005, with roughly half of that number in international locations.

In November 2005, the Company opened its third Remede Spa in the St. Regis hotel in San Francisco. The Company also had six Bliss spas at the end of 2005. In 2006, the Company plans to open 2 new Bliss spas in W hotels in Dallas and Los Angeles, with several other Bliss and Remede Spas in various planning stages.

Distribution

Starwood's central distribution systems gross bookings during the fourth quarter of 2005 increased approximately 10.1% when compared to 2004. Gross online bookings through proprietary branded websites increased 31.2% as compared to 2004, with gross dollar bookings from the proprietary branded sites increasing 38.3%. Gross online dollar bookings represented approximately 12.2% of the overall gross dollar bookings, with 78.6% of that coming from our proprietary branded websites, as compared to 10.4% of overall gross dollar bookings, with 74.6% of that from proprietary branded websites in 2004.

The above distribution figures do not include the Le Meridien hotels. The Company expects to integrate these hotels into the starwoodhotels.com and related websites by the end of the first quarter of 2006.

Capital

Gross capital spending during the quarter included approximately $99 million in renovations of hotel assets including construction capital at the Sheraton Hotel & Towers in New York, New York, the Sheraton Hotel & Marina in San Diego, California, and the Sheraton Royal Denarau Resort in Nadi, Fiji. Investment spending on gross VOI inventory was $36 million, which was offset by cost of sales of $35 million tied to VOI sales during the quarter. The inventory spend included VOI construction at the Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii, the Sheraton Vistana Villages in Orlando, Florida, and the Westin Kierland Villas in Scottsdale, Arizona. Additionally during the quarter, further investment spending of $241 million included the purchase of the Le Meridien brand and the related management and franchise business, which was substantially offset by the return of the Company's previous investment in the outstanding senior debt of Le Meridien, as well as the development of the St. Regis Museum Tower in San Francisco which consists of 260 hotel rooms and 102 condominium units and which as discussed earlier, opened in November 2005. Construction of this project is substantially complete, and through December 31, 2005, the Company has invested $318 million in the project. The Company expects to realize gross proceeds of approximately $245 million from the sale of the project's condominiums and has recognized approximately $198 million in revenues through the end of 2005.

Share Repurchase

For the quarter ended December 31, 2005, the Company repurchased approximately 4 million shares at a total cost of approximately $253 million. At December 31, 2005, approximately $1.043 billion remained available under the Company's Board authorized share repurchase program. At December 31, 2005, Starwood had approximately 219 million shares outstanding (including partnership units and exchangeable preferred shares).

From January 1, 2006 through February 1, 2006, the Company repurchased an additional 1.9 million shares at a total cost of approximately $120 million.

Dividend

Starwood Hotels & Resorts (the "Trust") declared its annual dividend for 2005 of $0.84 per share, which was paid on January 20, 2006 to shareholders of record on December 31, 2005.

The Trust expects to declare a dividend for the first quarter of 2006 of approximately $0.21 per Share to shareholders of record as of a date in the latter part of February 2006 to be paid in early March 2006. The dividend declaration and the amount are subject to approval of the Trust's Board of Trustees.

Balance Sheet

At December 31, 2005, the Company had total debt (including debt classified as held for sale) of $4.145 billion and cash and cash equivalents (including $307 million of restricted cash) of $1.204 billion, or net debt of $2.941 billion, compared to net debt of $3.136 billion at the end of the third quarter of 2005.

At December 31, 2005, debt was approximately 69% fixed rate and 31% floating rate and its weighted average maturity was 4.4 years with a weighted average interest rate of 6.27%. The Company had cash (including total restricted cash) and availability under domestic and international revolving credit facilities of approximately $2.147 billion.

Asset Sales

In 2005, in addition to the sale of three hotels in joint ventures that we hold minority interest in, the Company sold ten wholly-owned hotels for cash proceeds of approximately $510 million. Additionally, in January 2006 the Company completed the sale of four hotels for proceeds of $234 million in cash. As previously announced, the Company entered into a definitive agreement with Host Marriott Corporation to sell 38 hotels for cash, assumption of debt and stock. As part of the agreement, the Company will manage the hotels for up to 40 years.

Outlook

All comments in the following paragraphs and certain comments in this release above are deemed to be forward-looking statements. These statements reflect expectations of the Company's performance given its current base of assets and its current understanding of external economic and geo-political environments. Actual results may differ materially.

The Company's guidance for 2006 assumes:

    --  The close of the previously announced transaction with Host
        Marriott Corporation at the end of the first quarter.

    --  Stock option expense of approximately $45 million or $0.13 per
        share.

    --  Since we last provided forward looking estimates, four
        additional asset sales which have closed in 2006 and three
        hotels expected to be sold in the first quarter of 2006 which
        contributed approximately $122 million in revenues and $87
        million in expenses in 2005.

For the full year 2006, assuming REVPAR at Same-Store Owned Hotels in North America increases approximately 8% - 10% versus 2005:

    --  Full year Adjusted EBITDA would be expected to be
        approximately $1.210 billion assuming:

        --  Worldwide Same-Store Owned Hotel EBITDA growth of 15% to
            17%.

        --  Worldwide Same-Store Owned Hotel margin improvement of
            approximately 150 - 200 basis points.

        --  Growth from management and franchise fees of approximately
            18% to 20%.

        --  Growth from our timeshare and residential business of
            approximately 20% to 25% (excluding gains on sales of
            receivables).

    --  Full year income from continuing operations, excluding special
        items, would be expected to be approximately $475 million at
        an effective tax rate of approximately 33%. This assumes a 20%
        tax rate in the first quarter and a 35% tax rate for the
        remainder of the year.

    --  Full year EPS would be expected to be approximately $2.14.

    --  Full year capital expenditures (excluding timeshare inventory)
        would be approximately $475 million, including $175 million
        for maintenance, renovation and technology and $300 million
        for other growth initiatives. Additionally, net capital
        expenditures for timeshare inventory would be approximately
        $175 million.

    --  For the full year the Company expects cash interest expense of
        approximately $175 million and cash taxes of approximately
        $150 million.

For the three months ended March 31, 2006, if REVPAR at Same-Store Owned Hotels in North America increases approximately 10% - 12% versus the same period in 2005:

    --  Adjusted EBITDA would be expected to be approximately $238
        million assuming:

        --  Worldwide Same-Store Owned Hotel EBITDA growth of 15% to
            17%.

        --  Worldwide Same-Store Owned Hotel margin improvement of
            approximately 150 - 200 basis points.

        --  Growth from management and franchise fees of approximately
            18% to 20%.

        --  A decline in operating income from our timeshare and
            residential business of $40 million to $45 million due to
            percentage of completion accounting for pre-sales at new
            timeshare projects.

    --  Income from continuing operations, excluding special items,
        would be expected to be approximately $74 million at an
        effective tax rate of approximately 20%.

    --  EPS would be expected to be approximately $0.33.

The Company's guidance excludes:

    --  The impact of the adoption of SFAS No. 152, "Accounting for
        Real Estate Time-Sharing Transactions," which is expected to
        result in a one time pre-tax charge of approximately $100
        million to $120 million in the first quarter of 2006.

    --  Transition costs associated with the Le Meridien transaction
        which closed in 2005 of approximately $15 million in the first
        quarter and $30 million in the full year.

    --  A one time income tax benefit and certain one-time financing
        costs which will be recorded when the transaction with Host
        Marriott Corporation closes.

Special Items

The Company recorded net charges of $3 million (after-tax) for special items in the fourth quarter of 2005 compared to $12 million of net charges (after-tax) in the same period of 2004.

Special items in the fourth quarter of 2005 primarily relate to severance related costs associated with the corporate restructuring in the fourth quarter of 2005, net gains realized on the sale of several hotels partially offset by a hotel impairment charge and additional tax expense arising from the deposit with the IRS of funds for taxes claimed as a result of the 1998 disposition of ITT World Directories.

The following represents a reconciliation of income from continuing operations before special items to income from continuing operations after special items (in millions, except per share data):

  Three Months
      Ended                                              Year Ended
  December 31,                                          December 31,
-----------------                                      ---------------
 2005    2004                                           2005    2004
------- -------                                        ------- -------

                 Income from continuing operations
  $162    $123    before special items                   $526    $348
------- -------                                        ------- -------
 $0.71   $0.57   EPS before special items               $2.34   $1.62
------- -------                                        ------- -------

                 Special Items
                 Restructuring and other special
   (13)     --    (charges) credits, net (a)              (13)     37
                 Adjustment to costs associated with
    --       -    construction remediation (b)             --       4
                 Gain (loss) on asset dispositions and
     2     (25)   impairments, net (c)                    (30)    (33)
------- -------                                        ------- -------
   (11)    (25)  Total special items - pre-tax            (43)      8
                 Income tax benefit (expense) for
     5      10    special items (d)                        16      (2)
                 Tax expense on repatriation of
    --       -    foreign earnings (e)                    (47)      -
                 Reserves and credits associated with
     3       3    tax matters (f)                         (29)     15
------- -------                                        ------- -------
    (3)    (12)  Total special items - after-tax         (103)     21
------- -------                                        ------- -------

  $159    $111   Income from continuing operations       $423    $369
------- -------                                        ------- -------
 $0.70   $0.51   EPS including special items            $1.88   $1.72
======= =======                                        ======= =======
 

(a) During 2005, the Company recorded $13 million in restructuring and
    other special (charges) credits, net primarily related to
    severance costs in connection with the Company's restructuring as
    a result of its planned disposition of significant real estate
    assets and transition costs associated with the Le Meridien
    transaction. During the year ended December 31, 2004, the Company
    reversed a $37 million reserve previously recorded through
    restructuring and other special credits due to a favorable
    judgment in a litigation matter.

(b) Represents adjustments to the Company's share of costs for
    construction remediation efforts at a property owned by a vacation
    ownership unconsolidated joint venture that were previously
    recorded in 2002.

(c) For the three months ended December 31, 2005, primarily reflects
    the gains recorded on the sale of three hotels offset by the
    impairment of a hotel. For the year ended December 31, 2005, the
    balance also includes the losses recorded on the sale of two
    hotels and impairment charges associated with the Sheraton hotel
    in Cancun, Mexico that is being partially demolished in order to
    build vacation ownership units. Loss of $25 million and $33
    million for the three and twelve months ended December 31, 2004,
    respectively, reflects the loss on the sale or impairment of
    hotels and investments offset, in part, by the gain on the sale of
    one hotel.

(d) Represents taxes on special items at the Company's incremental tax
    rate.

(e) Represents tax expense associated with the adoption of a plan to
    repatriate foreign earnings in accordance with the American Jobs
    Creation Act of 2004.

(f) During the three months and year ended December 31, 2005, the
    Company recorded a tax charge of approximately $12 million and $52
    million, respectively, to increase its tax reserves relating to
    the Company's 1998 disposition of World Directories as a result of
    a United States Tax Court decision against another taxpayer and
    the deposit of these funds with the IRS. The three and twelve
    months ended December 31, 2005 also include a net tax credit of
    approximately $15 million related to the deferred gain on the sale
    of the Hotel Danieli in Venice, Italy. The year ended December 31,
    2005 also includes tax refunds of $8 million related to tax years
    prior to the 1995 split-up of ITT Corporation. Tax benefits in the
    three and twelve months ended December 31, 2004 reflect the
    favorable results of certain changes to the Federal tax rules, the
    resolution of various tax matters that were successfully settled
    during these periods, and the reversal of tax reserves no longer
    deemed necessary.

The Company has included the above supplemental information concerning special items to assist investors in analyzing Starwood's financial position and results of operations. The Company has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.
 
 
 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
 (In millions, except per Share data)

   Three Months Ended                               Year Ended
      December 31,                                 December 31,
------------------------                     -------------------------
                   %                                             %
 2005    2004   Variance                      2005    2004    Variance
------- ------- --------                     ------- ------- ---------
                         Revenues
                         Owned, leased and
                          consolidated joint
  $894    $878      1.8   venture hotels     $3,517  $3,326       5.7
                         Vacation ownership
                          and residential
   192     197     (2.5)  sales and services    889     640      38.9
                         Management fees,
                          franchise fees and
   152     120     26.7   other income          501     419      19.6
                         Other revenues from
                          managed and
                          franchised
   278     247     12.6   properties (a)      1,070     983       8.9
------- ------- --------                     ------- ------- ---------
 1,516   1,442      5.1                       5,977   5,368      11.3
                         Costs and Expenses
                         Owned, leased and
                          consolidated joint
   672     655     (2.6)  venture hotels      2,634   2,519      (4.6)
                         Vacation ownership
   158     154     (2.6)  and residential       661     488     (35.5)
                         Selling, general,
                          administrative and
    96      87    (10.3)  other                 370     331     (11.8)
                         Restructuring and
                          other special
                          charges (credits),
    13      --      n/m   net                    13     (37)      n/m
    82     107     23.4  Depreciation           387     413       6.3
     7       5    (40.0) Amortization            20      18     (11.1)
                         Other expenses from
                          managed and
                          franchised
   278     247    (12.6)  properties (a)      1,070     983      (8.9)
------- ------- --------                     ------- ------- ---------
 1,306   1,255     (4.1)                      5,155   4,715      (9.3)
   210     187     12.3  Operating income       822     653      25.9
                         Gain on sale of VOI
    25       3      n/m   notes receivable       25      14      78.6
                         Equity earnings
                          from
                          unconsolidated
    24      10      n/m   ventures, net          64      32     100.0
                         Interest expense,
                          net of interest
                          income of $8, $1,
   (58)    (61)     4.9   $19 and $3           (239)   (254)      5.9
                         Gain (loss) on
                          asset dispositions
                          and impairments,
     2     (25)     n/m   net                   (30)    (33)      9.1
------- ------- --------                     ------- ------- ---------
                         Income from
                          continuing
                          operations before
                          taxes and minority
   203     114     78.1   equity                642     412      55.8
   (44)     (2)     n/m  Income tax expense    (172)    (43)      n/m
                         Tax expense on
                          repatriation of
    --       -       --   foreign earnings      (47)      -       n/m
                         Minority equity in
    --      (1)   100.0   net (income) loss      --      --        --
------- ------- --------                     ------- ------- ---------
                         Income from
                          continuing
   159     111     43.2   operations            423     369      14.6
                         Discontinued
                          operations:
                         Loss from
    --       -       --   operations (b)         (1)      -       n/m
                         Gain (loss) on
    --     (11)   100.0   disposition (c)        --      26    (100.0)
------- ------- --------                     ------- ------- ---------
  $159    $100     59.0  Net income            $422    $395       6.8
======= ======= ========                     ======= ======= =========
                         Earnings Per Share
                          - Basic
                         Continuing
 $0.72   $0.53     35.8   operations          $1.95   $1.78       9.6
                         Discontinued
    --   (0.05)   100.0   operations             --    0.13    (100.0)
------- ------- --------                     ------- ------- ---------
 $0.72   $0.48     50.0  Net income           $1.95   $1.91       2.1
======= ======= ========                     ======= ======= =========
                         Earnings Per Share
                          - Diluted
                         Continuing
 $0.70   $0.51     37.3   operations          $1.88   $1.72       9.3
                         Discontinued
    --   (0.05)   100.0   operations             --    0.12    (100.0)
------- ------- --------                     ------- ------- ---------
 $0.70   $0.46     52.2  Net income           $1.88   $1.84       2.2
======= ======= ========                     ======= ======= =========

                         Weighted average
   219     208            number of Shares      217     207
======= =======                              ======= =======
                         Weighted average
                          number of Shares
   228     217            assuming dilution     225     215
======= =======                              ======= =======
 

    (a) The Company includes in revenues the reimbursement of costs
        incurred on behalf of managed hotel property owners and
        franchisees with no added margin and includes in costs and
        expenses these reimbursed costs. These costs relate primarily
        to payroll costs at managed properties where the Company is
        the employer.

    (b) 2005 activity primarily represents a sales and use tax
        assessment related to the Company's gaming business disposed
        of in 1999 for periods prior to its disposition.

    (c) 2004 activity represents the reversal of reserves that are no
        longer required as the related contingencies have been
        resolved and the favorable resolution of certain tax matters
        related to the 1999 divestiture of the Company's gaming
        business.

    n/m = not meaningful
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                      CONSOLIDATED BALANCE SHEETS
                   (in millions, except share data)

                                            December 31,  December 31,
                                                2005          2004
                                            ------------  ------------
Assets
Current assets:
 Cash and cash equivalents                         $897          $326
 Restricted cash                                    295           347
 Accounts receivable, net of allowance for
  doubtful accounts of $50 and $58                  642           482
 Inventories                                        280           371
 Prepaid expenses and other                         169           157
                                            ------------  ------------
 Total current assets                             2,283         1,683
Investments                                         403           453
Plant, property and equipment, net                3,956         4,341
Assets held for sale  (a)                         2,614         2,656
Goodwill and intangible assets, net               2,796         2,544
Other assets (b)                                    402           621
                                            ------------  ------------
                                                $12,454       $12,298
                                            ============  ============
Liabilities and Stockholders' Equity
Current liabilities:
 Short-term borrowings and current
  maturities of long-term debt (c)               $1,219          $617
 Accounts payable                                   156           200
 Accrued expenses                                 1,049           867
 Accrued salaries, wages and benefits               297           299
 Accrued taxes and other                            140           143
                                            ------------  ------------
   Total current liabilities                      2,861         2,126
Long-term debt (c)                                2,226         2,661
Long-term debt held for sale  (d)                   700         1,164
Deferred income taxes                               563           880
Other liabilities                                   851           652
                                            ------------  ------------
                                                  7,201         7,483
Minority interest                                    25            27
Commitments and contingencies
Stockholders' equity:
   Class A exchangeable preferred shares of
    the Trust; $0.01 par value; authorized
    30,000,000 shares; outstanding 562,222
    and 597,825 shares at December 31, 2005
    and December 31, 2004, respectively              --             -
   Corporation common stock; $0.01 par
    value; authorized 1,050,000,000 shares;
    outstanding 217,218,781 and 208,730,800
    shares at December 31, 2005 and December
    31, 2004, respectively                            2             2
   Trust Class B shares of beneficial
    interest; $0.01 par value; authorized
    1,000,000,000 shares; outstanding
    217,218,781 and 208,730,800 shares at
    December 31, 2005 and December 31, 2004,
    respectively                                      2             2
Additional paid-in capital                        5,429         5,121
Deferred compensation                               (53)          (14)
Accumulated other comprehensive loss               (322)         (255)
Retained earnings (accumulated deficit)             170           (68)
                                            ------------  ------------
   Total stockholders' equity                     5,228         4,788
                                            ------------  ------------
                                                $12,454       $12,298
                                            ============  ============
 

    (a) Includes 38 hotels expected to be sold in connection with the
        definitive agreement signed on November 14, 2005 with Host
        Marriott Corporation as well as three additional hotels which
        had signed definitive agreements at December 31, 2005 and
        which were later sold in January 2006.

    (b) Includes restricted cash of $12 million and $10 million at
        December 31, 2005 and 2004, respectively.

    (c) Excludes Starwood's share of unconsolidated joint venture debt
        aggregating approximately $469 million and $438 million at
        December 31, 2005 and 2004, respectively.

    (d) Represents the debt that is expected to be assumed by Host
        Marriott Corporation in connection with the definitive
        agreement signed on November 14, 2005.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
          Non-GAAP to GAAP Reconciliations - Historical Data
                             (in millions)

   Three Months Ended                               Year Ended
      December 31,                                 December 31,
-------------------------                    -------------------------
                   %                                             %
 2005    2004   Variance                      2005    2004    Variance
------- ------- ---------                    ------- ------- ---------

                          Reconciliation of
                           Net Income to
                           EBITDA and
                           Adjusted EBITDA
  $159    $100      59.0  Net income           $422    $395       6.8
                          Interest
    76      66      15.2   expense(a)           283     275       2.9
                          Income tax
    44      26      69.2   expense(b)           218      34       n/m
    93     115     (19.1) Depreciation(c)       423     445      (4.9)
     8       8        --  Amortization (d)       26      26        --
------- ------- ---------                    ------- ------- ---------
   380     315      20.6  EBITDA              1,372   1,175      16.8
                          Adjustment to
                           costs associated
                           with construction
    --       -        --   remediation           --      (4)    100.0
                          (Gain) loss on
                           asset
                           dispositions and
    (2)     25       n/m   impairments, net      30      33       9.1
                          Restructuring and
                           other special
                           charges
    13      --       n/m   (credits), net        13     (37)      n/m
                          Discontinued
    --     (13)    100.0   operations(e)          2     (17)      n/m
------- ------- ---------                    ------- ------- ---------
  $391    $327      19.6  Adjusted EBITDA    $1,417  $1,150      23.2
======= ======= =========                    ======= ======= =========

(a) Includes $10 million and $4 million of interest expense related to
    unconsolidated joint ventures for the three months ended December
    31, 2005 and 2004, respectively, and $25 million and $18 million
    for the year ended December 31, 2005 and 2004, respectively.

(b) Includes $0 million and $24 million of tax expense (benefit)
    recorded in discontinued operations for the three months ended
    December 31, 2005 and 2004, respectively, and $(1) million and
    $(9) million for the year ended December 31, 2005 and 2004,
    respectively. Also includes $47 million of tax expense on the
    repatriation of foreign earnings for the year ended December 31,
    2005.

(c) Includes $11 million and $8 million of Starwood's share of
    depreciation expense of unconsolidated joint ventures for the
    three months ended December 31, 2005 and 2004, respectively, and
    $36 million and $32 million for the year ended December 31, 2005
    and 2004, respectively.

(d) Includes $1 million and $3 million of Starwood's share of
    amortization expense of unconsolidated joint ventures for the
    three months ended December 31, 2005 and 2004, respectively, and
    $6 million and $8 million for the year ended December 31, 2005 and
    2004, respectively.

(e) Excludes the taxes already added back as noted in (b) above.
 

 Three Months
     Ended                                               Year Ended
 December 31,                                           December 31,
---------------                                        ---------------
 2005    2004                                           2005    2004
------- -------                                        ------- -------
                Cash Flow Data
  $159    $100  Net income                               $422    $395
                Discontinued operations:
    --      11   Gain on dispositions                      --     (26)
                 Other adjustments relating to
    10      --    discontinued operations                  11       1
   (47)    (60) (Increase) decrease in restricted cash     50    (257)
                Adjustments to income from continuing
                 operations, changes in working
  (176)    150   capital, and other                       281     465
------- -------                                        ------- -------
                Cash from (used for) operating
  $(54)   $201   activities                              $764    $578
======= =======                                        ======= =======
                Cash from (used for) investing
  $339    $(91)  activities                               $85   $(415)
======= =======                                        ======= =======
 $(287)   $(22) Cash used for financing activities      $(253)  $(273)
======= =======                                        ======= =======
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
         Non-GAAP to GAAP Reconciliations - Future Performance
                             (In millions)

Three Months Ended                                      Year Ended
  March 31, 2006                                     December 31, 2006
------------------                                   -----------------

                  Income from continuing
             $64   operations(a)                                 $455
              66  Interest expense                                178
              14  Income tax expense                              224
              79  Depreciation and amortization                   323
 ----------------                                     ----------------
             223  EBITDA                                        1,180
              15  Le Meridien transition costs                     30
 ----------------                                     ----------------
            $238  Adjusted EBITDA                              $1,210
 ================                                     ================
 

Three Months Ended                                      Year Ended
  March 31, 2006                                    December 31, 2006
------------------                                  ------------------

                  Income from continuing
             $64   operations(a)                                 $455
 ----------------                                    -----------------
           $0.29  EPS                                           $2.05
 ----------------                                    -----------------

                  Special Items
              15  Le Meridien transition costs                     30
 ----------------                                    -----------------
              15  Total special items - pre-tax                    30
                  Income tax (benefit) expense on
              (5)  special items                                  (10)
 ----------------                                    -----------------
              10  Total special items - after-tax                  20
 ----------------                                    -----------------

                  Income from continuing operations
             $74   excluding special  items                      $475
 ----------------                                    -----------------
           $0.33  EPS excluding special items                   $2.14
 ================                                    =================

(a) The Company expects to realize significant income tax benefits and
    certain one-time financing costs in connection with the pending
    transaction with Host Marriott Corporation which will be recorded
    at the time that the transaction is approved by Host Marriott
    Corporation's shareholders and/or the transaction is consummated.
    At this time, these benefits and costs cannot be quantified and
    are therefore not included in the above estimates of future
    performance.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
   Non-GAAP to GAAP Reconciliations - Future Performance (continued)
                             (In millions)

      Reconciliation from Previous Guidance to Current Guidance

Previous 2006 EBITDA guidance                                  $1,250
Plus: Expected first quarter results from hotels being sold
 to Host Marriott
  Revenues                                                        292
  Expenses                                                       (222)
  Fees and other income                                           (26)
Less: Expected results from additional asset sales
  Revenues                                                       (153)
  Expenses                                                        106
  Fees and other income                                             3
Less: Stock option expense                                        (45)
                                                             ---------
Adjusted previous 2006 EBITDA guidance                         $1,205
                                                             ---------
Current 2006 EBITDA guidance                                   $1,210
                                                             =========
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                  Non-GAAP to GAAP Reconciliations -
              Same Store Owned Hotel Revenue and Expenses
                             (In millions)

   Three Months Ended                                Year Ended
      December 31,                                  December 31,
------------------------                      ------------------------
                          Same-Store Owned                        
                   %          Hotels (1)                         %    
 2005    2004   Variance      Worldwide        2005    2004   Variance
------- ------- --------                      ------- ------- --------

                         Revenue
                           Same-Store Owned
  $843    $791      6.6     Hotels            $3,183  $2,943      8.2
                           Hotels Sold or
                            Closed in 2005
                            and 2004 (12
    18      43    (58.1)    hotels)              123     168    (26.8)
                           Hotels Without
                            Comparable
                            Results (11
    33      44    (25.0)    hotels)              205     209     (1.9)
                           Other ancillary
    --      --       --     hotel operations       6       6       --
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
  $894    $878      1.8   Hotels Revenue      $3,517  $3,326      5.7
======= ======= ========                      ======= ======= ========

                         Costs and Expenses
                           Same-Store Owned
  $620    $587     (5.6)    Hotels            $2,374  $2,231     (6.4)
                           Hotels Sold or
                            Closed in 2005
                            and 2004 (12
    15      33     54.5     hotels)               91     129     29.5
                           Hotels Without
                            Comparable
                            Results
    37      35     (5.7)    (11 hotels)          165     155     (6.5)
                           Other ancillary
    --      --       --     hotel operations       4       4       --
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
                          Hotels Costs and
  $672    $655     (2.6)  Expenses            $2,634  $2,519     (4.6)
======= ======= ========                      ======= ======= ========
 

   Three Months Ended                                Year Ended
      December 31,                                  December 31,
------------------------                      ------------------------
                          Same-Store Owned
                   %            Hotels                           %
 2005    2004   Variance    North America      2005    2004   Variance
------- ------- --------                      ------- ------- --------

                         Revenue
                             Same-Store Owned
  $626    $573      9.2       Hotels          $2,306  $2,128      8.4
                             Hotels Sold or
                              Closed in 2005
                              and 2004 (10
    11      32    (65.6)      hotels)             86     118    (27.1)
                             Hotels Without
                              Comparable
                              Results (9
    32      37    (13.5)      hotels)            178     177      0.6
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
  $669    $642      4.2   Hotels Revenue      $2,570  $2,423      6.1
======= ======= ========                      ======= ======= ========

                         Costs and Expenses
                             Same-Store Owned
  $453    $423     (7.1)      Hotels          $1,709  $1,612     (6.0)
                             Hotels Sold or
                              Closed in 2005
                              and 2004 (10
    10      25     60.0       hotels)             68      95     28.4
                             Hotels Without
                              Comparable
                              Results (9
    33      28    (17.9)      hotels)            145     130    (11.5)
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
                          Hotels Costs and
  $496    $476     (4.2)  Expenses            $1,922  $1,837     (4.6)
======= ======= ========                      ======= ======= ========

   Three Months Ended                                Year Ended
      December 31,                                  December 31,
------------------------                      ------------------------
                          Same-Store Owned
                   %            Hotels                           %
 2005    2004   Variance    International      2005    2004   Variance
------- ------- --------                      ------- ------- --------

                         Revenue
                             Same-Store Owned
  $217    $218     (0.5)      Hotels            $877    $815      7.6
                             Hotels Sold or
                              Closed in 2005
                              and 2004 (2
     7      11    (36.4)      hotels)             37      50    (26.0)
                             Hotels Without
                              Comparable
                              Results (2
     1       7    (85.7)      hotels)             27      32    (15.6)
                             Other ancillary
                              hotel
    --      --       --       operations           6       6       --
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
  $225    $236     (4.7)  Hotels Revenue        $947    $903      4.9
======= ======= ========                      ======= ======= ========

                         Costs and Expenses
                             Same-Store Owned
  $167    $164     (1.8)      Hotels            $665    $619     (7.4)
                             Hotels Sold or
                              Closed in 2005
                              and 2004 (2
     5       8     37.5       hotels)             23      34     32.4
                             Hotels Without
                              Comparable
                              Results (2
     4       7     42.9       hotels)             20      25     20.0
                             Other ancillary
                              hotel
    --      --       --       operations           4       4       --
------- ------- --------                      ------- ------- --------
                         Total Owned, Leased
                          and Consolidated
                          Joint Venture
                          Hotels Costs and
  $176    $179      1.7   Expenses              $712    $682     (4.4)
======= ======= ========                      ======= ======= ========

(1) Same-Store Owned Hotel Results exclude 12 hotels sold or closed in
    2005 and 2004 and 11 hotels without comparable results.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
                      For the Three Months Ended
                           December 31, 2005
                               UNAUDITED

                                 WORLDWIDE           NORTH AMERICA
                           --------------------- ---------------------
                            2005    2004   Var.   2005    2004   Var.
                           ------- ------- ----- ------- ------- -----

                                 120 Hotels            79 Hotels
                           --------------------- ---------------------
SAME STORE OWNED HOTELS
      REVPAR ($)           125.47  114.71   9.4% 127.76  113.88  12.2%
      ADR ($)              182.91  170.96   7.0% 184.65  168.64   9.5%
      OCCUPANCY (%)          68.6%   67.1%  1.5    69.2%   67.5%  1.7

                                    53                    31
                           --------------------- ---------------------
SHERATON
      REVPAR ($)           104.79   96.84   8.2% 112.40  100.64  11.7%
      ADR ($)              156.65  146.25   7.1% 166.57  151.15  10.2%
      OCCUPANCY (%)          66.9%   66.2%  0.7    67.5%   66.6%  0.9

                                    32                    19
                           --------------------- ---------------------
WESTIN
      REVPAR ($)           127.00  117.15   8.4% 113.60  102.84  10.5%
      ADR ($)              178.58  170.22   4.9% 158.09  146.48   7.9%
      OCCUPANCY (%)          71.1%   68.8%  2.3    71.9%   70.2%  1.7

                                    8                     3
                           --------------------- ---------------------
ST. REGIS/LUXURY COLLECTION
      REVPAR ($)           281.35  267.32   5.2% 302.16  274.02  10.3%
      ADR ($)              423.33  407.20   4.0% 431.18  393.67   9.5%
      OCCUPANCY (%)          66.5%   65.6%  0.9    70.1%   69.6%  0.5

                                    10                    10
                           --------------------- ---------------------
W
      REVPAR ($)           216.92  182.51  18.9% 216.92  182.51  18.9%
      ADR ($)              288.09  252.92  13.9% 288.09  252.92  13.9%
      OCCUPANCY (%)          75.3%   72.2%  3.1    75.3%   72.2%  3.1

                                    17                    16
                           --------------------- ---------------------
OTHER
      REVPAR ($)            85.76   77.22  11.1%  80.45   71.79  12.1%
      ADR ($)              131.56  122.95   7.0% 128.47  121.93   5.4%
      OCCUPANCY (%)          65.2%   62.8%  2.4    62.6%   58.9%  3.7
 

                                                 INTERNATIONAL(2)
                                            --------------------------
                                              2005      2004     Var.
                                            --------- --------- ------

                                                     41 Hotels
                                            --------------------------
SAME STORE OWNED HOTELS
      REVPAR ($)                              118.84    117.11    1.5%
      ADR ($)                                 177.68    177.82  (0.1%)
      OCCUPANCY (%)                             66.9%     65.9%   1.0

                                                       22
                                            --------------------------
SHERATON
      REVPAR ($)                               89.50     89.30    0.2%
      ADR ($)                                 136.18    136.33  (0.1%)
      OCCUPANCY (%)                             65.7%     65.5%   0.2

                                                       13
                                            --------------------------
WESTIN
      REVPAR ($)                              173.21    165.78    4.5%
      ADR ($)                                 252.65    258.61  (2.3%)
      OCCUPANCY (%)                             68.6%     64.1%   4.5

                                                        5
                                            --------------------------
ST. REGIS/LUXURY COLLECTION
      REVPAR ($)                              239.54    253.10  (5.4%)
      ADR ($)                                 404.66    442.10  (8.5%)
      OCCUPANCY (%)                             59.2%     57.2%   2.0
 

W
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)

                                                        1
                                            --------------------------
OTHER
      REVPAR ($)                              116.50    108.71    7.2%
      ADR ($)                                 145.55    127.01   14.6%
      OCCUPANCY (%)                             80.0%     85.6%  (5.6)
 
 

(1) Hotel Results exclude 12 hotels sold or closed and 10 hotels
    without comparable results during 2004 & 2005

(2) See next page for breakdown by division
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
                      For the Three Months Ended
                           December 31, 2005
                               UNAUDITED

                                  EUROPE             LATIN AMERICA
                          ---------------------- ---------------------
                           2005    2004    Var.   2005    2004   Var.
                          ------- ------- ------ ------- ------- -----

                                 27 Hotels             10 Hotels
                          ---------------------- ---------------------
SAME STORE OWNED HOTELS
      REVPAR ($)          152.06  149.67    1.6%  75.78   69.40   9.2%
      ADR ($)             223.29  235.59  (5.2%) 116.66  108.05   8.0%
      OCCUPANCY (%)         68.1%   63.5%   4.6    65.0%   64.2%  0.8

                                   11                     8
                          ---------------------- ---------------------
SHERATON
      REVPAR ($)          111.81  108.82    2.7%  67.20   62.80   7.0%
      ADR ($)             159.23  165.06  (3.5%) 105.40  100.00   5.4%
      OCCUPANCY (%)         70.2%   65.9%   4.3    63.8%   62.8%  1.0

                                   11                     2
                          ---------------------- ---------------------
WESTIN
      REVPAR ($)          182.88  178.02    2.7% 131.89  112.67  17.1%
      ADR ($)             270.70  287.51  (5.8%) 181.12  153.09  18.3%
      OCCUPANCY (%)         67.6%   61.9%   5.7    72.8%   73.6% (0.8)

                                    5
                          ----------------------
ST. REGIS/LUXURY
 COLLECTION
      REVPAR ($)          239.54  253.10  (5.4%)
      ADR ($)             404.66  442.10  (8.5%)
      OCCUPANCY (%)         59.2%   57.2%   2.0
 

OTHER
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)
 

                                                    ASIA PACIFIC
                                              ------------------------
                                               2005     2004    Var.
                                              -------- ------- -------

                                                      4 Hotels
                                              ------------------------
SAME STORE OWNED HOTELS
      REVPAR ($)                               106.13  116.00   (8.5%)
      ADR ($)                                  157.81  148.81     6.0%
      OCCUPANCY (%)                              67.3%   77.9%  (10.6)

                                                         3
                                              ------------------------
SHERATON
      REVPAR ($)                                99.78  120.46  (17.2%)
      ADR ($)                                  167.94  164.42     2.1%
      OCCUPANCY (%)                              59.4%   73.3%  (13.9)
 

WESTIN
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)
 

ST. REGIS/LUXURY COLLECTION
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)

                                                    1
                                              ------------------------
OTHER
      REVPAR ($)                               116.50  108.71     7.2%
      ADR ($)                                  145.55  127.01    14.6%
      OCCUPANCY (%)                              80.0%   85.6%   (5.6)
 
 

(1) Hotel Results exclude 12 hotels sold or closed and 10 hotels
    without comparable results during 2004 & 2005
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
                      For the Three Months Ended
                           December 31, 2005
               UNAUDITED ($ thousands except variances)

                           WORLDWIDE(3)           NORTH AMERICA(3)
                     ------------------------ ------------------------
                      2005     2004     Var.   2005     2004     Var.
                     -------- -------- ------ -------- -------- ------

                            120 Hotels                79 Hotels
                     ------------------------ ------------------------
SAME STORE OWNED
 HOTELS
      Total REVENUE  843,362  790,804    6.6% 626,213  573,282    9.2%
      Total EXPENSE  619,892  586,557  (5.7%) 453,094  422,443  (7.3%)
 

                               53                       31
                     ------------------------ ------------------------
SHERATON
      REVENUE        343,286  325,359    5.5% 235,059  216,099    8.8%
      EXPENSE        245,877  234,829  (4.7%) 166,790  157,006  (6.2%)
 

                               32                       19
                     ------------------------ ------------------------
WESTIN
      REVENUE        250,486  233,374    7.3% 171,737  156,058   10.0%
      EXPENSE        188,406  176,458  (6.8%) 126,031  115,699  (8.9%)
 

                                8                        3
                     ------------------------ ------------------------
ST. REGIS/LUXURY
 COLLECTION
      REVENUE         90,317   89,507    0.9%  69,561   67,464    3.1%
      EXPENSE         67,009   65,729  (1.9%)  50,088   48,575  (3.1%)
 

                               10                       10
                     ------------------------ ------------------------
W(3)
      REVENUE        106,427   94,149   13.0% 106,427   94,149   13.0%
      EXPENSE         75,083   68,847  (9.1%)  75,083   68,847  (9.1%)
 

                               17                       16
                     ------------------------ ------------------------
OTHER
        REVENUE       52,846   48,415    9.2%  43,429   39,512    9.9%
        EXPENSE       43,517   40,694  (6.9%)  35,102   32,315  (8.6%)
 

                                                  INTERNATIONAL(2)
                                              ------------------------
                                               2005     2004     Var.
                                              -------- -------- ------

                                                      41 Hotels
                                              ------------------------
SAME STORE OWNED HOTELS
        Total REVENUE                         217,149  217,522  (0.2%)
        Total EXPENSE                         166,798  164,115  (1.6%)
 

                                                        22
                                              ------------------------
SHERATON
        REVENUE                               108,227  109,260  (0.9%)
        EXPENSE                                79,087   77,823  (1.6%)
 

                                                        13
                                              ------------------------
WESTIN
        REVENUE                                78,749   77,316    1.9%
        EXPENSE                                62,375   60,759  (2.7%)
 

                                                         5
                                              ------------------------
ST. REGIS/LUXURY COLLECTION
        REVENUE                                20,756   22,043  (5.8%)
        EXPENSE                                16,921   17,154    1.4%
 
 

W(3)
        REVENUE
        EXPENSE
 

                                                         1
                                              ------------------------
OTHER
        REVENUE                                 9,417    8,903    5.8%
        EXPENSE                                 8,415    8,379  (0.4%)
 

(1) Hotel Results exclude 12 hotels sold or closed and 10 hotels
    without comparable results during 2004 & 2005

(2) See next page for breakdown by division

(3)Includes lease expense of $4,288 in 2005 and 2004 related to the
    lease of the W Times Square in New York
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
                      For the Three Months Ended
                           December 31, 2005
               UNAUDITED ($ thousands except variances)

                              EUROPE               LATIN AMERICA
                     ------------------------ ------------------------
                      2005     2004     Var.   2005     2004    Var.
                     -------- -------- ------ -------- ------- -------

                             27 Hotels                10 Hotels
                     ------------------------ ------------------------
SAME STORE OWNED
 HOTELS
      Total REVENUE  139,185  142,980  (2.7%)  50,249  44,982    11.7%
      Total EXPENSE  112,340  113,978    1.4%  33,143  28,105  (17.9%)
 

                               11                        8
                     ------------------------ ------------------------
SHERATON
      REVENUE         52,783   54,465  (3.1%)  37,146  34,138     8.8%
      EXPENSE         42,124   43,569    3.3%  24,063  20,601  (16.8%)
 

                               11                        2
                     ------------------------ ------------------------
WESTIN
      REVENUE         65,646   66,472  (1.2%)  13,103  10,844    20.8%
      EXPENSE         53,295   53,255  (0.1%)   9,080   7,504  (21.0%)
 

                                5
                     ------------------------
ST. REGIS/LUXURY
 COLLECTION
      REVENUE         20,756   22,043  (5.8%)
      EXPENSE         16,921   17,154    1.4%
 
 

OTHER
      REVENUE
      EXPENSE
 

                                                    ASIA PACIFIC
                                              ------------------------
                                                 2005    2004   Var.
                                              -------- ------- -------

                                                      4 Hotels
                                              ------------------------
SAME STORE OWNED
 HOTELS
        Total REVENUE                          27,715  29,560   (6.2%)
        Total EXPENSE                          21,315  22,032     3.3%
 

                                                         3
                                              ------------------------
SHERATON
        REVENUE                                18,298  20,657  (11.4%)
        EXPENSE                                12,900  13,653     5.5%
 
 

WESTIN
        REVENUE
        EXPENSE
 
 

ST. REGIS/LUXURY
 COLLECTION
        REVENUE
        EXPENSE
 

                                                         1
                                              ------------------------
OTHER
        REVENUE                                 9,417   8,903     5.8%
        EXPENSE                                 8,415   8,379   (0.4%)
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
             For the Twelve Months Ended December 31, 2005
                               UNAUDITED

                                 WORLDWIDE           NORTH AMERICA
                           --------------------- ---------------------
                            2005    2004   Var.   2005    2004   Var.
                           ------- ------- ----- ------- ------- -----

                                 119 Hotels            78 Hotels
                           --------------------- ---------------------
SAME STORE OWNED HOTELS
      REVPAR ($)           123.14  111.01  10.9% 123.02  110.13  11.7%
      ADR ($)              174.70  162.50   7.5% 170.93  156.62   9.1%
      OCCUPANCY (%)          70.5%   68.3%  2.2    72.0%   70.3%  1.7

                                    52                    30
                           --------------------- ---------------------
SHERATON
      REVPAR ($)            99.98   91.51   9.3% 105.28   96.10   9.6%
      ADR ($)              146.63  136.87   7.1% 150.58  137.48   9.5%
      OCCUPANCY (%)          68.2%   66.9%  1.3    69.9%   69.9%  0.0

                                    32                    19
                           --------------------- ---------------------
WESTIN
      REVPAR ($)           134.54  121.61  10.6% 118.64  107.21  10.7%
      ADR ($)              182.34  170.88   6.7% 157.55  146.14   7.8%
      OCCUPANCY (%)          73.8%   71.2%  2.6    75.3%   73.4%  1.9

                                    8                     3
                           --------------------- ---------------------
ST. REGIS/LUXURY
 COLLECTION
      REVPAR ($)           263.37  238.86  10.3% 265.64  232.63  14.2%
      ADR ($)              397.36  386.67   2.8% 379.41  357.38   6.2%
      OCCUPANCY (%)          66.3%   61.8%  4.5    70.0%   65.1%  4.9

                                    10                    10
                           --------------------- ---------------------
W
      REVPAR ($)           195.65  164.23  19.1% 195.65  164.23  19.1%
      ADR ($)              255.01  225.57  13.1% 255.01  225.57  13.1%
      OCCUPANCY (%)          76.7%   72.8%  3.9    76.7%   72.8%  3.9

                                    17                    16
                           --------------------- ---------------------
OTHER
      REVPAR ($)            88.71   79.80  11.2%  84.76   76.09  11.4%
      ADR ($)              128.71  120.54   6.8% 126.27  120.42   4.9%
      OCCUPANCY (%)          68.9%   66.2%  2.7    67.1%   63.2%  3.9
 

                                                  INTERNATIONAL(2)
                                               -----------------------
                                                2005     2004    Var.
                                               -------- ------- ------

                                                      41 Hotels
                                               -----------------------
SAME STORE OWNED HOTELS
      REVPAR ($)                                123.48  113.48    8.8%
      ADR ($)                                   186.30  181.21    2.8%
      OCCUPANCY (%)                               66.3%   62.6%   3.7

                                                         22
                                               -----------------------
SHERATON
      REVPAR ($)                                 89.72   82.65    8.6%
      ADR ($)                                   138.36  135.52    2.1%
      OCCUPANCY (%)                               64.8%   61.0%   3.8

                                                         13
                                               -----------------------
WESTIN
      REVPAR ($)                                188.20  169.67   10.9%
      ADR ($)                                   274.08  265.81    3.1%
      OCCUPANCY (%)                               68.7%   63.8%   4.9

                                                         5
                                               -----------------------
ST. REGIS/LUXURY COLLECTION
      REVPAR ($)                                258.80  252.06    2.7%
      ADR ($)                                   440.48  460.58  (4.4%)
      OCCUPANCY (%)                               58.8%   54.7%   4.1
 

W
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)

                                                         1
                                               -----------------------
OTHER
      REVPAR ($)                                111.55  101.36   10.1%
      ADR ($)                                   140.63  121.06   16.2%
      OCCUPANCY (%)                               79.3%   83.7%  (4.4)
 

(1) Hotel Results exclude 12 hotels sold or closed and 11 hotels
    without comparable results during 2004 & 2005

(2) See next page for breakdown by division
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
             For the Twelve Months Ended December 31, 2005
                               UNAUDITED

                                 EUROPE             LATIN AMERICA
                         ---------------------- ---------------------
                          2005    2004    Var.   2005    2004   Var.
                         ------- ------- ------ ------- ------- -----

                                27 Hotels             10 Hotels
                         ---------------------- ---------------------
SAME STORE OWNED HOTELS
      REVPAR ($)         162.98  151.12    7.8%  68.90   59.54  15.7%
      ADR ($)            242.29  240.26    0.8% 110.65  105.00   5.4%
      OCCUPANCY (%)        67.3%   62.9%   4.4    62.3%   56.7%  5.6

                                  11                     8
                         ---------------------- ---------------------
SHERATON
      REVPAR ($)         115.27  107.09    7.6%  59.64   52.30  14.0%
      ADR ($)            166.56  164.48    1.3%  99.27   96.17   3.2%
      OCCUPANCY (%)        69.2%   65.1%   4.1    60.1%   54.4%  5.7

                                  11                     2
                         ---------------------- ---------------------
WESTIN
      REVPAR ($)         201.58  183.80    9.7% 129.57  107.00  21.1%
      ADR ($)            301.54  296.40    1.7% 169.09  148.80  13.6%
      OCCUPANCY (%)        66.8%   62.0%   4.8    76.6%   71.9%  4.7

                                   5
                         ----------------------
ST. REGIS/LUXURY
 COLLECTION
      REVPAR ($)         258.80  252.06    2.7%
      ADR ($)            440.48  460.58  (4.4%)
      OCCUPANCY (%)        58.8%   54.7%   4.1
 

OTHER
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)
 

                                                     ASIA PACIFIC
                                                ----------------------
                                                 2005     2004   Var.
                                                -------- ------- -----

                                                       4 Hotels
                                                ----------------------
SAME STORE OWNED HOTELS
      REVPAR ($)                                 113.99  107.92   5.6%
      ADR ($)                                    157.64  142.48  10.6%
      OCCUPANCY (%)                                72.3%   75.7% (3.4)

                                                          3
                                                ----------------------
SHERATON
      REVPAR ($)                                 115.49  111.95   3.2%
      ADR ($)                                    169.79  158.00   7.5%
      OCCUPANCY (%)                                68.0%   70.9% (2.9)
 

WESTIN
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)
 

ST. REGIS/LUXURY COLLECTION
      REVPAR ($)
      ADR ($)
      OCCUPANCY (%)

                                                          1
                                                ----------------------
OTHER
      REVPAR ($)                                 111.55  101.36  10.1%
      ADR ($)                                    140.63  121.06  16.2%
      OCCUPANCY (%)                                79.3%   83.7% (4.4)
 

(1) Hotel Results exclude 12 hotels sold or closed and 11 hotels
    without comparable results during 2004 & 2005
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
             For the Twelve Months Ended December 31, 2005
               UNAUDITED ($ thousands except variances)

                     WORLDWIDE(3)               NORTH AMERICA(3)
             ---------------------------- ----------------------------
               2005       2004      Var.    2005       2004      Var.
             ---------- ---------- ------ ---------- ---------- ------

                      119 Hotels                    78 Hotels
             ---------------------------- ----------------------------
SAME STORE
 OWNED HOTELS
  Total
   REVENUE   3,183,144  2,942,769    8.2% 2,306,326  2,128,197    8.4%
  Total
   EXPENSE   2,374,355  2,231,127  (6.4%) 1,709,386  1,611,571  (6.1%)
 

                         52                           30
             ---------------------------- ----------------------------
SHERATON
  REVENUE    1,244,041  1,172,115    6.1%   822,021    780,581    5.3%
  EXPENSE      924,576    874,609  (5.7%)   608,518    584,921  (4.0%)
 

                         32                           19
             ---------------------------- ----------------------------
WESTIN
  REVENUE    1,015,265    926,911    9.5%   682,069    620,840    9.9%
  EXPENSE      739,932    689,214  (7.4%)   490,782    456,523  (7.5%)
 

                          8                            3
             ---------------------------- ----------------------------
ST. REGIS/
 LUXURY
 COLLECTION
  REVENUE      326,581    311,603    4.8%   240,588    227,472    5.8%
  EXPENSE     250,166    240,950  (3.8%)   182,914    174,349  (4.9%)
 

                         10                           10
             ---------------------------- ----------------------------
W(3)
  REVENUE     384,758    336,232   14.4%   384,758    336,232   14.4%
  EXPENSE     286,329    264,972  (8.1%)   286,329    264,972  (8.1%)
 

                         17                           16
             ---------------------------- ----------------------------
OTHER
  REVENUE     212,499    195,908    8.5%   176,890    163,072    8.5%
  EXPENSE     173,352    161,382  (7.4%)   140,844    130,806  (7.7%)
 

                                                  INTERNATIONAL(2)
                                              ------------------------
                                               2005     2004     Var.
                                              -------- -------- ------

                                                      41 Hotels
                                              ------------------------
SAME STORE OWNED HOTELS
        Total REVENUE                         876,818  814,572    7.6%
        Total EXPENSE                         664,968  619,556  (7.3%)
 

                                                        22
                                              ------------------------
SHERATON
        REVENUE                               422,020  391,534    7.8%
        EXPENSE                               316,058  289,688  (9.1%)
 

                                                        13
                                              ------------------------
WESTIN
        REVENUE                               333,196  306,071    8.9%
        EXPENSE                               249,150  232,691  (7.1%)
 

                                                         5
                                              ------------------------
ST. REGIS/LUXURY COLLECTION
        REVENUE                                85,993   84,131    2.2%
        EXPENSE                                67,252   66,601  (1.0%)
 
 

W(3)
        REVENUE
        EXPENSE
 

                                                         1
                                              ------------------------
OTHER
        REVENUE                                35,609   32,836    8.4%
        EXPENSE                                32,508   30,576  (6.3%)
 

(1) Hotel Results exclude 12 hotels sold or closed and 11 hotels
    without comparable results during 2004 & 2005

(2) See next page for breakdown by division

(3) Includes lease expense of $17,150 in 2005 and 2004 related to the
    lease of the W Times Square in New York
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
             For the Twelve Months Ended December 31, 2005
               UNAUDITED ($ thousands except variances)

                             EUROPE                LATIN AMERICA
                    ------------------------ -------------------------
                     2005     2004     Var.   2005     2004     Var.
                    -------- -------- ------ -------- -------- -------

                            27 Hotels                10 Hotels
                    ------------------------ -------------------------
SAME STORE OWNED
 HOTELS
      Total REVENUE 584,233  553,812    5.5% 178,015  152,504    16.7%
      Total EXPENSE 460,449  437,671  (5.2%) 117,359  100,222  (17.1%)
 

                              11                        8
                    ------------------------ -------------------------
SHERATON
      REVENUE       215,429  204,032    5.6% 127,630  112,082    13.9%
      EXPENSE       174,660  164,877  (5.9%)  86,746   73,724  (17.7%)
 

                              11                        2
                    ------------------------ -------------------------
WESTIN
      REVENUE       282,811  265,649    6.5%  50,385   40,422    24.6%
      EXPENSE       218,537  206,193  (6.0%)  30,613   26,498  (15.5%)
 

                               5
                    ------------------------
ST. REGIS/LUXURY
 COLLECTION
      REVENUE        85,993   84,131    2.2%
      EXPENSE        67,252   66,601  (1.0%)
 
 

OTHER
      REVENUE
      EXPENSE
 

                                                    ASIA PACIFIC
                                              ------------------------
                                               2005     2004     Var.
                                              -------- -------- ------

                                                      4 Hotels
                                              ------------------------
SAME STORE OWNED HOTELS
        Total REVENUE                         114,570  108,256    5.8%
        Total EXPENSE                          87,160   81,663  (6.7%)
 

                                                         3
                                              ------------------------
SHERATON
        REVENUE                                78,961   75,420    4.7%
        EXPENSE                                54,652   51,087  (7.0%)
 
 

WESTIN
        REVENUE
        EXPENSE
 
 

ST. REGIS/LUXURY COLLECTION
        REVENUE
        EXPENSE
 

                                                         1
                                              ------------------------
OTHER
        REVENUE                                35,609   32,836    8.4%
        EXPENSE                                32,508   30,576  (6.3%)
 

(1) Hotel Results exclude 12 hotels sold or closed and 11 hotels
    without comparable results during 2004 & 2005
 
 

              STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                        Debt Portfolio Summary
                       As of December 31, 2005
                              UNAUDITED

                                                               Avg
                  Interest    Balance      % of    Interest  Maturity
      Debt         Terms   (in millions) Portfolio   Rate   (in years)
----------------- -------- ------------- --------- -------- ----------

Floating Rate
 Debt:

Senior credit
 facility
  Revolving
   credit         Various
   facility        + 125            $11         0%    4.57%       0.8
  Term loan        LIBOR
                   + 125            450        11%    5.64%       0.7
                           ------------- --------- -------- ----------
                                    461        11%    5.61%       0.7

Mortgages and
 other            Various           481        12%    4.05%       1.4

Interest rate      LIBOR
 swaps             + 423            300         7%    8.77%
                           ------------- --------- --------

  Total Floating                  1,242        30%    5.77%       1.0

Fixed Rate Debt:

Senior notes (1)                  1,494        36%    6.70%       3.9

Convertible debt                    360         9%    3.50%       4.0

Mortgages and
 other                              649        15%    7.07%       4.6

Interest rate
 swaps                             (300)      (7%)    7.88%
                           ------------- --------- --------

  Total Fixed                     2,203        53%    6.14%       3.6
                           ------------- --------- --------

    Total                        $3,445        83%    6.01%       2.9
                           ============= ========= ========

Floating rate
 debt classified
 as held for sale                    25         1%    4.30%       4.0

Fixed rate debt
 classified as
 held for sale                      675        16%    7.63%      12.3
                           ------------- --------- --------

Total debt
 classified as
 held for sale                     $700        17%    7.50%      12.0
                           ============= ========= ========

  Total Debt                     $4,145       100%    6.27%       4.4
                           ============= ========= ========
 

                                                Maturities
                                        ------------------------------
                                            less than 1 year   $1,219
                                                   1-3 years      851
                                                   4-5 years      481
                                        greater than 5 years    1,594
                                                               -------
                                                               $4,145
                                                               =======
                                        ------------------------------
 

(1) Balance consists of outstanding public debt of $1.497 billion and
    a $19 million fair value adjustment related to the unamortized
    gain on fixed to floating interest rate swaps terminated in
    September 2002 and March 2004 and a ($22) million fair value
    adjustment related to current fixed to floating interest rate
    swaps.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
       Hotels without Comparable Results & Other Selected Items
                        As of December 31, 2005
                        UNAUDITED ($ millions)

Properties without comparable results in 2005:

Property                                          Location
--------                                          --------           
St. Regis Aspen                                   Aspen, CO
Sheraton Kauai                                    Koloa, HI
Sheraton Cancun                                   Cancun, Mexico
W New Orleans - French Quarter                    New Orleans, LA
Westin Regina Resort - Cancun                     Cancun, Mexico
W New Orleans                                     New Orleans, LA
Westin Fort Lauderdale                            Fort Lauderdale, FL
Sheraton Bal Harbour Beach Resort                 Bal Harbour, FL
Sheraton Suites Key West                          Key West, FL
Paradise Streams Caesars                          Mt. Pocono, PA
St. Regis Hotel, San Francisco                    San Francisco, CA
 

Properties sold or closed in 2005 and 2004:

Property                                          Location
--------                                          --------           
Rancho Bernardo - Four Points                     Rancho Bernardo, CA
Sheraton Denver Tech Center                       Englewood, CO
Sheraton Lisboa Hotel & Towers                    Lisbon, Portugal
Deerfield Beach Hilton                            Ft. Lauderdale, FL
Raphael Hotel                                     Chicago, IL
Sheraton Chapel Hill Hotel                        Chapel Hill, NC
St. Regis Washington, DC                          Washington, DC
Sheraton Russell Hotel                            New York, NY
Westin Philadelphia                               Philadelphia, PA
Westin Princeton at Forrestal Village             Princeton, NJ
Hotel Danieli                                     Venice, Italy
Sheraton Ft. Lauderdale Airport Hotel             Dania, FL
 
 

Selected Balance Sheet and Cash Flow Items:

Cash and cash equivalents
(including restricted cash of $307 million)                    $1,204
Debt
(including debt classified as held for sale)                   $4,145
 
 

Revenues and Expenses Associated with Assets Sold in 2005 or Expected
to be Sold in the First Quarter of 2006 (1):

                                 Q1     Q2     Q3      Q4    Full Year
                                --------------------------------------
Hotels Sold in 2005:
2005
 Revenues                        $33    $39    $25     $15       $112
Expenses                         $27    $25    $17     $12        $81

2004
 Revenues                        $34    $42    $38     $39       $153
Expenses                         $28    $30    $28     $30       $116

Hotels Classified as Held for Sale at December 31, 2005:
2005
 Revenues                       $282   $358   $329    $351     $1,320
Expenses                        $225   $243   $232    $247       $947

2004
 Revenues                       $279   $333   $299    $331     $1,242
Expenses                        $218   $231   $218    $236       $903
 

(1) Results consist of 10 hotels sold in 2005 and 41 hotels which are
    classified as held for sale at December 31, 2005. These amounts
    are included in the revenues and expenses from owned, leased and
    consolidated joint venture hotels in 2005 and 2004.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                         Capital Expenditures
        For the Three and Twelve Months Ended December 31, 2005
                        UNAUDITED ($ millions)

                                                         Q4      YTD
                                                       ------  -------
 Capital Expenditures:
   Owned, Leased and Consolidated Joint Venture Hotels    99      282
   Corporate/IT                                           22       51
                                                       ------  -------
 Subtotal                                                121      333

 Vacation Ownership Capital Expenditures:
   Capital expenditures (includes land acquisitions)       7       95
   Net capital expenditures for inventory (1)              1      (35)
                                                       ------  -------
 Subtotal                                                  8       60

 Development Capital                                     241      424
                                                       ------  -------

 Total Capital Expenditures                              370      817
                                                       ======  =======

(1) Represents gross inventory capital expenditures of $36 and $136 in
    the three and twelve months ended December 31, 2005, respectively,
    less cost of sales of $35 and $171 in the three and twelve months
    ended December 31, 2005, respectively.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Summary of Portfolio by Properties & Rooms
                        As of December 31, 2005
                               UNAUDITED

                             NAD             EAME            LAD
                      ---------------- --------------- ---------------
Owned                  Hotels   Rooms   Hotels  Rooms   Hotels  Rooms
                      ------- -------- ------- ------- ------- -------
Sheraton                  33   15,653      11   3,074       7   3,235
Westin                    20    9,784      11   2,372       3     901
Four Points                6    1,153       -       -       -       -
W                         12    4,294       -       -       -       -
Luxury Collection          1      654       4     405       2     320
St. Regis                  4      919       1     161       -       -
Other                     11    2,611       -       -       -       -
                      ------- -------- ------- ------- ------- -------
Total Owned               87   35,068      27   6,012      12   4,456
Managed & UJV
Sheraton                  41   20,565      72  21,254      12   2,230
Westin                    36   19,950       8   2,302       -       -
Four Points                1      475       7   1,019       2     263
W                          5      904       -       -       1     237
Luxury Collection          6    1,422       8   1,405       8     188
St. Regis                  3      596       1      95       -       -
Le Meridien                6    1,188      71  16,910       3     839
Other                      2    2,705       -       -       -       -
                      ------- -------- ------- ------- ------- -------
Total Managed & UJV      100   47,805     167  42,985      26   3,757
Franchised
Sheraton                 114   35,924      28   6,943       4   1,294
Westin                    21    7,994       3   1,142       3     598
Four Points               87   15,247      11   1,482       9   1,350
Luxury Collection          1      249      12   1,354       -       -
Le Meridien                3      982      11   3,820       -       -
                      ------- -------- ------- ------- ------- -------
Total Franchised         226   60,396      65  14,741      16   3,242
----------------------------------------------------------------------
Systemwide
Sheraton                 188   72,142     111  31,271      23   6,759
Westin                    77   37,728      22   5,816       6   1,499
Four Points               94   16,875      18   2,501      11   1,613
W                         17    5,198       -       -       1     237
Luxury Collection          8    2,325      24   3,164      10     508
St. Regis                  7    1,515       2     256       -       -
Le Meridien                9    2,170      82  20,730       3     839
Other                     13    5,316       -       -       -       -
                      ------- -------- ------- ------- ------- -------
Total Systemwide         413  143,269     259  63,738      54  11,455
                      ======= ======== ======= ======= ======= =======
----------------------------------------------------------------------
 

                                            ASIA            Total
                                      --------------- ----------------
Owned                                  Hotels  Rooms   Hotels   Rooms
                                      ------- ------- ------- --------
Sheraton                                   3   1,028      54   22,990
Westin                                     -       -      34   13,057
Four Points                                1     630       7    1,783
W                                          -       -      12    4,294
Luxury Collection                          -       -       7    1,379
St. Regis                                  -       -       5    1,080
Other                                      -       -      11    2,611
                                      ------- ------- ------- --------
Total Owned                                4   1,658     130   47,194
Managed & UJV
Sheraton                                  45  15,721     170   59,770
Westin                                    11   4,290      55   26,542
Four Points                                2     387      12    2,144
W                                          2     353       8    1,494
Luxury Collection                          -       -      22    3,015
St. Regis                                  2     591       6    1,282
Le Meridien                               23   5,215     103   24,152
Other                                      -       -       2    2,705
                                      ------- ------- ------- --------
Total Managed & UJV                       85  26,557     378  121,104
Franchised
Sheraton                                  19   7,086     165   51,247
Westin                                     5   1,226      32   10,960
Four Points                                1     126     108   18,205
Luxury Collection                          -       -      13    1,603
Le Meridien                                5   2,774      19    7,576
                                      ------- ------- ------- --------
Total Franchised                          30  11,212     337   89,591
----------------------------------------------------------------------
Systemwide
Sheraton                                  67  23,835     389  134,007
Westin                                    16   5,516     121   50,559
Four Points                                4   1,143     127   22,132
W                                          2     353      20    5,788
Luxury Collection                          -       -      42    5,997
St. Regis                                  2     591      11    2,362
Le Meridien                               28   7,989     122   31,728
Other                                      -       -      13    5,316
                                      ------- ------- ------- --------
Total Systemwide                         119  39,427     845  257,889
                                      ======= ======= ======= ========
----------------------------------------------------------------------
 
 
 

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 850 properties in more than 95 countries and 145,000 employees at its owned and managed properties. Starwood® Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis®, The Luxury Collection®, Sheraton®, Westin®, Four Points® by Sheraton, W®, Le Meridien® and the recently announced aloft(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.

This press release contains forward-looking statements within the meaning of federal securities regulations. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. 

.
Contact:

Starwood Hotels & Resorts Worldwide, Inc.
Alisa Rosenberg, 914-640-5214

Also See: Starwood Reports 2003 Full Year Net Income Down 13% to $309 million from $355 million in 2002; Worldwide 4th Qtr RevPAR Up 6.6% and 4.7% in North America / Hotel Operating Statistics / February 2004
Starwood Hotels Reports 4th Quarter RevPAR Rose 9.4% World-wide, ADR Increased 4.1% and Occupancy Rose to 61.8% from 58.7% / Hotel Operating Statistics / Jan 2003

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