• Second quarter diluted EPS from continuing operations increased 30% to $0.56 when compared to pro forma comparable diluted EPS for the same period of 1999.
• Total revenues increased 19% to $1.15 billion.  
• Operating income increased 24% to $289 million.
• REVPAR for Same-Store Owned Hotels in North America increased 12.8%.
• Occupancy rates at Same-Store Owned Hotels in North America increased 370 basis points including a 550 basis point improvement at Sheraton Same-Store Owned Hotels.
• Total Company EBITDA increased 18%.  
• EBITDA margins at Comparable Owned Hotels worldwide increased 170 basis points to 35.5%.  

Six Months Ended June 30, 2000
For the six months ended June 30, 2000, total revenues increased 18% to $2.16 billion when compared to the same period in 1999.  Income from continuing operations increased 28% to $0.82 per diluted share for the six months ended June 30, 2000 compared to pro forma comparable income from continuing operations of $0.64 per diluted share for the corresponding period in 1999.  Income from continuing operations was approximately $167 million for the six months ended June 30, 2000 compared to pro forma comparable income from continuing operations of $125 million for the same period of 1999. 

Operating Results
Revenues for the second quarter of 2000 at the Company�s owned, leased and consolidated joint venture hotels, excluding six hotels sold since June 30, 1999 and four hotels without comparable prior year results (�Comparable Owned Hotels�), increased 9% to $941 million from $861 million in 1999 and EBITDA increased 15% to $334 million from $291 million in 1999.  EBITDA at the Company�s Comparable Owned Hotels in North America increased 21% to $243 million in the second quarter of 2000 when compared to the same period in 1999.  

International results were unfavorably impacted by continued weakness in the Euro, economic conditions in Latin America and the political unrest in Fiji.
For the second quarter of 2000, revenue per available room (�REVPAR�) at owned hotels worldwide, excluding hotels under significant renovation or for which comparable results are not available (�Same-Store Owned Hotels�), increased 8.6% when compared to the same period in 1999 as a result of increases in both average daily rate (�ADR�) and occupancy rate.  ADR and occupancy rate increases in the second quarter of 2000 were strongest at the Same-Store Owned Hotels in North America where ADR increased 7.3% to $154.08 and occupancy increased 370 basis points to 76.8%, resulting in a 12.8% increase in REVPAR when compared to the same period in 1999.

The Sheraton Same-Store Owned Hotels in North America experienced particularly strong occupancy gains, up 550 basis points, resulting in a 13.5% REVPAR increase.  These results exclude the recently renovated Sheraton Boston hotel which had a REVPAR increase of approximately 180%.  REVPAR at the Westin Same-Store Owned Hotels in North America increased 8.3%; REVPAR at the St.  Regis/Luxury Collection Same-Store Owned Hotels in North America increased 15.2%; REVPAR at W Same-Store Owned Hotels in North America increased 43.4%, while the Same-Store owned portfolio in North America, operating under independent and other brands, increased 6.6%.  The increase in North America for the Company�s proprietary brands was a result of previous and current investment spending for asset renovations and repositionings, the Starwood Preferred Guest Program and sales force realignment, as well as the bi-coastal concentration of the owned portfolio, particularly Boston, New York and San Francisco.  In Europe, Same-Store Owned Hotel REVPAR increased more than 12% excluding the unfavorable effect of foreign currency translation.  In Latin America, REVPAR increased 1.3% excluding the unfavorable foreign currency translation despite difficult economic conditions.  The Company�s three Same-Store Owned Hotels in Asia, two of which are in Fiji where recent political unrest has forced the closing of one of the hotels, had a decrease in REVPAR of 18.5%.

EBITDA margins at Comparable Owned Hotels worldwide increased 170 basis points (bps) to 35.5% (Sheraton +250 bps to 36.6%, Westin +40 bps to 34.9%, St. Regis/ Luxury Collection +270 bps to 34.9% and W Hotels +370 bps to 32.1%).  In North America, EBITDA margins at Comparable Owned Hotels increased 230 basis points to 35.0%.  Internationally, despite negative REVPAR due to the unfavorable impact of foreign currency translation, EBITDA margins increased 30 bps to 37.0%.

Development highlights included the addition of 14 managed Barcelo hotels in North America which were all converted to Four Points and Sheraton brands on April 27, 2000.  Additionally, 30 management and franchise contracts with approximately 7,100 rooms were signed during the second quarter of 2000.

The Company is currently selling vacation ownership interest (�VOI�) inventory in ten locations including Orlando, Florida; Myrtle Beach, South Carolina; Scottsdale, Arizona; Avon, Colorado; St. John, U.S. Virgin Islands; Paradise Island, The Bahamas; St. Augustine, Florida; and Port St. Lucie, Florida.  New build projects are currently underway at the Harborside Resort at Atlantis on Paradise Island in The Bahamas; Sheraton�s Mountain Vista in Avon, Colorado; and Sheraton�s Vistana Villages in Orlando, Florida.  Additional VOI projects capitalizing on current Starwood locations are targeted in markets such as Palm Springs and Phoenix and are expected to begin construction by the end of 2000.  In July 2000, the Company�s vacation ownership subsidiary was renamed Starwood Vacation Ownership, Inc.

Dispositions
On June 23, 2000, the Company completed the sale of the Desert Inn Resort & Casino (the �Desert Inn�) for approximately $270 million.  This transaction completes the Company�s exit from the gaming business and brings total asset sales in the two years since the acquisition of ITT to more than $7.0 billion.  In addition, the Company continues its efforts to sell non-strategic hotel assets around the world, closing approximately $34 million of such sales so far in 2000.

Renovations
During the second quarter of 2000, the Company invested approximately $160 million in capital improvements on owned hotel assets and new construction of timeshare inventory.  Approximately 7,000 or 13% of the Company�s owned hotel rooms, were either under renovation or completed during the quarter, including the completion of the almost year-long renovation at the 1,068 room Westin Peachtree Plaza in Atlanta, Georgia.

Additionally, during the quarter, the Company continued its aggressive renovation program on its largest brand, Sheraton, completing the renovation of six owned Sheratons during this period.  During 1999 and through the end of the second quarter of 2000, the Company has renovated more than 55% of its owned Sheraton rooms and is on target to reach its goal of having more than 60% of its owned Sheraton rooms renovated by the end of 2000. Approximately 4,500 managed and franchised rooms have also been renovated.

�I�m pleased that for the second quarter in a row, we were able to exceed expectations and achieve industry leading results in REVPAR, total revenue, operating income and EPS growth.  I am particularly encouraged by the rapid improvements in our largest and most significant global brand, Sheraton,� said Barry S. Sternlicht, Chairman and CEO of Starwood.  �After the completion of our exit from gaming our balance sheet restructuring is substantially complete, providing significant financial flexibility, positioning the Company for growth.  This quarter highlights the progress we�ve made in strengthening our management team, driving process improvements, building stronger relationships with our customers, driving margin improvements, implementing innovative marketing programs and executing our e-commerce strategies (such as our e-purchasing partnership with Zoho) while also fulfilling our corporate commitment to community service.�

Completion of Tender Offer to Purchase Minority Shares of CIGA, S.p.A.
In June 2000, the Company completed the acquisition of the minority-owned
shares of CIGA, S.p.A. (�CIGA�).  The aggregate purchase price of the incremental shares was approximately $312 million.  The Company is currently evaluating alternatives for maximizing the value of this unique portfolio of assets.

Financing
On June 30, 2000, the Company had total debt of approximately $5.6 billion and cash of approximately $283 million.  During the quarter ended June 30, 2000, the Company paid down $484 million of its revolving credit facility with proceeds from the sale of the Desert Inn and using cash balances repatriated from overseas operations.  As of June 30, 2000, the Company had availability under its revolving credit facility of $700 million.  Due to the Company�s continuous improvement of its credit profile, the interest rate on the Company�s Senior Credit Facility decreased 25 basis points in the second quarter.  Other than $700 million of outstanding ITT Bonds maturing in November 2000, Starwood has no significant debt maturing until 2003, and the weighted average maturity of the Company�s debt portfolio exceeds five years.  At the end of the second quarter of 2000, the Company�s debt was approximately 70% fixed and 30% floating.  On July 25, 2000, the Company entered into a one-year, Euro 270 million loan (approximately $252 million) at an initial average interest rate of Euribor + 112.5 basis points.  The proceeds from this loan were used to further pay down the Company�s revolving credit facility, bringing current availability to more than $1.0 billion.

During the second quarter of 2000, the Company declared a dividend of $0.1725 per share ($0.69 per share on an annual basis for 2000), representing a 15% increase over the prior year, consistent with the Company�s January 6, 1999 reorganization.  At June 30, 2000, Starwood had approximately 203 million shares outstanding (including partnership units and exchangeable preferred shares).

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) is one of the leading hotel and leisure companies in the world with more than 725 upscale and luxury properties in 80 countries and 120,000 employees at its owned and managed properties.  With internationally renowned brands, Starwood is a fully integrated owner, operator and franchiser of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points and W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership.  

This release contains certain statements that may be deemed �forward-looking statements� within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934.