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  Starwood Hotels & Resorts Reports 2nd Qtr Net Income Dropped to $154 million from $290 million in 2nd Qtr
of 2003, RevPAR Up 17.1% Worldwide
Hotel Operating Statistics

.

WHITE PLAINS, NY - July 22, 2004--Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT): Second Quarter 2004 Highlights:
  • REVPAR at Same-Store Owned Hotels worldwide and in North America increased 17.1% and 16.0%, respectively, when compared to the second quarter of 2003. ADR increased 7.5% and 6.9% worldwide and in North America, respectively.
  • Globally, for Same-Store Owned Hotels, Sheraton REVPAR grew (+21.9%), followed by St. Regis/Luxury Collection (+16.0%), W Hotels (+15.6%), and Westin (+11.0%), with each of these brands experiencing both ADR and occupancy gains.
  • Year over year REVPAR growth at North America Same-Store Owned Hotels was +19.0% in April, +16.5% in May and +12.8% in June of 2004.
  • Management and franchise fees increased approximately 31.6% when compared to 2003.
  • EPS from continuing operations for the second quarter of 2004 was $0.56 compared to $0.42 in the second quarter of 2003. Excluding special items, EPS from continuing operations was $0.50 for the second quarter of 2004 compared to $0.28 in the second quarter of 2003.
  • Total Company Adjusted EBITDA increased 25.5% to $310 million when compared to $247 million in 2003 and, excluding 20 hotels sold in 2003, total Company Adjusted EBITDA increased 34.2%.
  • Margins at Starwood branded Same-Store Owned Hotels in North America improved 240 basis points when compared to the second quarter of 2003.
  • Total Company market share increased during the quarter. At proprietary branded owned hotels in North America, according to Smith Travel Research, market share increased 150 basis points when compared to 2003.
  • Starwood Vacation Ownership revenues, which exclude gains on sales of notes receivable, increased 32.1% as contract sales, excluding the fractional sales at the St. Regis Aspen, were up 49.5% when compared to 2003.
Starwood Hotels & Resorts Worldwide, Inc. ("Starwood" or the "Company") today reported EPS from continuing operations for the second quarter of 2004 of $0.56 compared to $0.42 in the second quarter of 2003. Excluding special items, EPS from continuing operations was $0.50 for the second quarter of 2004 compared to $0.28 in the second quarter of 2003. Income from continuing operations was $120 million in the second quarter of 2004 compared to $87 million in 2003. Excluding special items, income from continuing operations was $107 million for the second quarter of 2004 compared to $57 million in 2003. Net income (including discontinued operations) was $154 million and EPS was $0.72 in the second quarter of 2004 compared to $290 million and EPS of $1.41 in the second quarter of 2003, which included a $193 million gain on the sale of the Hotel Principe di Savoia in Milan, Italy in June 2003. Selling, general, administrative and other in the second quarter of 2004 includes cost of sales from our new Bliss spa and beauty products business (the revenue from this business is included in management fees, franchise fees and other income) and an accrual, not payment, for Mr. Sternlicht's contractual separation payment. The normalized tax rate for the second quarter of 2004 and 2003 was 14.5% and 0%, respectively, excluding a $12 million net benefit in 2004 related to the reversal of a reserve as a result of a change in a Federal tax rule and a $24 million net benefit in 2003 resulting from the favorable settlement of certain tax matters.

Barry S. Sternlicht, Chairman and CEO, said "We are very pleased with our results this quarter and are increasingly excited by the significant momentum our company is building as the economic recovery strengthens and spreads globally. For the third quarter in a row we are delighted to be able to raise EPS and EBITDA guidance despite the industry leading revenue estimates we have provided each quarter going back nearly a year. Our new guidance suggests our EBITDA will increase nearly $200 million on a year-over-year basis, clearly the strongest EBITDA growth not only among lodging companies but among most any real estate company."

"While we expect REVPAR growth to slow as we pass the anniversary of the war, we remain confident in producing superior results well into 2006. We do so on the strength of many engines of growth. 

First, our brands continue to gain meaningful market share. 

Second, supply growth in our core markets remains very modest. 

Third, our development pipeline is the best in the company's history and is global. Our recent selection as the operator of the new 1,200 room Sheraton Phoenix convention center hotel, the new Ws in the Maldives, Scottsdale, Hoboken, and Europe's first W in Barcelona, along with the announcement of our 25th hotel in China, are the latest in the growing stream of important new external growth victories. 

Fourth, despite our success, we have maintained our focus on our cost structure and have made major progress in workers compensation and will launch a critical set of productivity initiatives that we are confident will lead to further expansion in margins beginning in the third quarter. 

Fifth, we have absorbed many unusual charges to our earnings this year that are not expected to be repeated in 2005. 

Sixth, we are secure in the growth and rapid expansion of our vacation ownership group. 

Seventh, we are looking forward to the further recovery of the lagging European and Latin American markets where we own significant assets. 

Eighth, our accelerated expansion of our retail and spa businesses, led by Bliss, will add to our growth profile as they roll out around the world. 

Ninth, we are announcing today that we intend to sell an additional $500 million of assets over the next twelve months as we move aggressively in this climate to rationalize our portfolio. This is the next stage in our efforts to unlock the very significant real estate values in our asset base. 

Tenth, our strong balance sheet gives us enormous flexibility. With net debt of approximately $4.0 billion and expected proceeds from the sale of the St. Regis San Francisco condominiums in 2005 and the restructuring/resolution of the Le Meridien investment, all else being equal, our debt balance will fall significantly further. This flexibility affords us the opportunity to pursue high return investments and/or to continue the share repurchases we began to pursue more aggressively last quarter. 

Eleventh, we are making significant progress redeveloping our unique asset base. Finally, the commitment and passion of our management team and each and every associate will continue to drive the innovative Starwood culture."

Concluding, Mr. Sternlicht said, "With all this momentum, I am growing ever more confident that the EBITDA and earnings growth we're experiencing in 2004 can be repeated in 2005."

Operating Results:

Second Quarter Ended June 30, 2004
Cash flow from operations was $119 million compared to $81 million in 2003. Total Company Adjusted EBITDA was $310 million compared to $247 million in 2003. Excluding assets sold in 2003, total Company Adjusted EBITDA increased 34.2% when compared to 2003.

Owned, Leased and Consolidated Joint Venture Hotels
REVPAR for Same-Store Owned Hotels worldwide and in North America increased 17.1% and 16.0%, respectively, when compared to 2003. Revenue from transient travel was up 17.0% in North America when compared to 2003. REVPAR at Same-Store Owned Hotels in North America increased 22.9% at Sheraton, 15.6% at W, 11.1% at St. Regis/Luxury Collection, and 8.7% at Westin. REVPAR growth was particularly strong at the Company's owned hotels in New York, Boston, Los Angeles, Toronto, Atlanta, New Orleans, San Francisco, Washington D.C., Maui and Philadelphia. REVPAR was weaker at owned hotels in Phoenix, Seattle and Chicago. Internationally, Same-Store Owned Hotel REVPAR increased 20.0%, with Europe up 18.6%, Asia Pacific up 49.0%, and Latin America up 12.6%. Excluding the favorable effects of foreign exchange, REVPAR increased 12.0% internationally.

Total revenues at Same-Store Owned Hotels worldwide increased 13.9% to $857.7 million when compared to $753.1 million in 2003 while costs and expenses at these hotels increased 11.3% to $628.6 million in 2004 compared to $564.9 million in 2003. Total revenues at Same-Store Hotels in North America increased 12.3% to $617.3 million in 2004 when compared to $549.6 million in 2003 while costs and expenses at these hotels increased 9.4% to $454.7 million when compared to $415.5 million in 2003, resulting in significantly increased margins despite rising food and beverage costs, workers compensation costs and other healthcare related costs.

System-wide REVPAR; Management/Franchise Fees
System-wide (owned, managed and franchised) branded REVPAR for Same-Store Hotels in North America increased 13.6%: W Hotels +16.1%, Westin +14.6%, Sheraton +14.1%, St. Regis/Luxury Collection +10.1%, and Four Points by Sheraton +6.5%. Total management and franchise fees were $75 million, up $18 million, or 31.6%, from last year. Base management fees increased approximately 14% due to the strong top line growth while incentive fees grew 76%.

Starwood Vacation Ownership
Vacation ownership revenue, which excludes gains on sales of notes receivable, was up $34 million, or 32.1% to $140 million in the second quarter of 2004 when compared to 2003 as contract sales, excluding fractional sales at the St. Regis Aspen, were up 49.5% reflecting strong demand at our resorts in Maui, Scottsdale and Orlando. The average price per timeshare unit sold increased approximately 11.4% to $20,064, and the number of contracts sold increased approximately 34.2% in the second quarter of 2004 when compared to 2003. In May 2004, the Company began selling fractional units at the St. Regis in Aspen, Colorado. The Company is in the process of converting 98 guest rooms at this hotel into 24 fractional units, which will be sold in four week intervals, one residential unit and 20 new hotel rooms. The fractional project is expected to be completed towards the end of 2004. During the second quarter of 2004, the Company completed a sale of $63 million of vacation ownership notes receivable, recognizing a gain on sale of $7 million. During the second quarter of 2003, the Company recognized $4 million in gains on sale of notes receivable. New development planning continues for the Sheraton Kauai, Princeville, Sheraton Cancun, other Mexico properties, and a second Palm Springs phase. At the end of the second quarter of 2004, there were 535 units under construction across the SVO portfolio.

Brand Development/Unit Growth
For the seventh quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as system-wide hotels. During the second quarter, the Company signed 15 hotel management and franchise contracts (representing approximately 4,100 rooms), including the Westin Boston Convention Center Waterfront (790 rooms), the Westin Beijing (500 rooms), the Sheraton Sapporo (500 rooms), the W Scottsdale Hotel & Residences (225 rooms and approximately 25 condominium units), the W Barcelona (475 rooms), and opened five new hotels and resorts, including the Sheraton Krakow Hotel (Krakow, Poland, 232 rooms), and the Blue Palace Resort & Spa (Crete, Greece, 204 rooms). Including these hotels, the Company expects to open 25 new full service hotels and resorts (approximately 6,000 rooms) around the world in 2004. The Company had approximately 60 full service hotels and approximately 17,000 rooms in its active global development pipeline at June 30, 2004, with roughly one half of that number in international locations. Additionally, plans are underway to develop nine new Bliss spas in W hotels, with the first new Bliss spa coming to the W New York (20,000 square feet) in November 2004.

Results for the Six Months Ended June 30, 2004:
EPS from continuing operations for the six months ended June 30, 2004 was $0.72 compared to a loss of $0.15 in the same period of 2003. Excluding special items, EPS from continuing operations was $0.66 in 2004 compared to $0.20 in 2003. Income from continuing operations was $153 million in 2004 compared to a loss from continuing operations of $30 million in 2003. Excluding special items, income from the continuing operations was $140 million in 2004 compared to $40 million in 2003. Net income (including discontinued operations) was $188 million and EPS was $0.88 in 2004 compared to $174 million and $0.85 in 2003.

Cash flow from operations for the six months ended June 30, 2004 was $182 million compared to $222 million in the same period of 2003. Total Company Adjusted EBITDA for the six months ended 2004 was $532 million compared to $434 million in the same period in 2003.

Capital:
Gross capital spending during the quarter included approximately $50 million in renovations of hotel assets including $5 million for the renovation of the Company's flagship Sheraton Hotel and Towers in New York and $4 million for construction at the Boston Park Plaza. Capital spending on VOI capital assets (primarily inventory build) was $26 million, including VOI construction at Westin Ka'anapali Ocean Resort Villas in Maui, Hawaii and at Westin Mission Hills Resort in Rancho Mirage, California and construction of fractional units at The St. Regis in Aspen, Colorado. Additionally during the quarter, development capital of $24 million included the ongoing development of the St. Regis Museum Tower in San Francisco (269 rooms and 102 condominium units). To date, the Company has invested $170 million in the St. Regis Museum Tower Project, a mixed-use project, which is expected to open in mid-2005. The Company expects to realize gross proceeds of approximately $200 million from the sale of the project's condominiums. The Company expects to begin taking reservations for these condominiums this quarter.

Share Repurchase:
For the quarter ended June 30, 2004, the Company repurchased 2,152,800 shares at a total cost of approximately $85.7 million (an average cost of $39.77 per share). At June 30, 2004, approximately $519 million remained available under the Company's Board authorized share repurchase program. At June 30, 2004, Starwood had approximately 210 million shares outstanding (including partnership units and exchangeable preferred shares).

Balance Sheet:
At June 30, 2004, the Company had total debt of $4.434 billion and cash and cash equivalents (including restricted cash) of $383 million, or net debt of $4.051 billion, compared to net debt of $4.200 billion at the end of the first quarter of 2004. In addition, the Company has an approximate $200 million investment in the senior debt of Le Meridien hotels.

At June 30, 2004, debt was approximately 77% fixed rate and 23% floating rate and its weighted average maturity was 5.5 years with a weighted average interest rate of 5.66%. The Company had cash (including restricted cash) and availability under domestic and international revolving credit facilities of approximately $1.1 billion.

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.

For the third quarter of 2004, if REVPAR at Same-Store Owned Hotels in North America is up 10% - 12% versus the same period a year ago:

  • Adjusted EBITDA would be expected to be approximately $285 million.
  • Net income would be expected to be approximately $78 million.
  • EPS would be expected to be approximately $0.36.
For the full year 2004, if REVPAR at Same-Store Owned Hotels in North America increases approximately 10% - 11% versus the full year 2003:
  • Full year revenues, including other revenues from managed and franchised properties, would be expected to be approximately $5.300 billion.
  • Full year Adjusted EBITDA would be expected to increase approximately 21% to approximately $1.110 billion, when compared to 2003 Adjusted EBITDA of $917 million, after adjusting for the sale of 20 hotels in 2003.
  • Full year income from continuing operations before special items would be expected to be approximately $301 million. Full year EPS from continuing operations before special items would be expected to be approximately $1.40 at a 15% effective tax rate, which assumes an annual dividend of $0.84 per Share (payable in January 2005).
  • Full year capital expenditures (excluding timeshare inventory) would be approximately $450 million, including approximately $100 million for the St. Regis San Francisco multi-use project under construction, $150 million for other growth initiatives and $200 million for maintenance capital. Additionally, net capital expenditures for timeshare inventory would be approximately $50 million focusing on projects in Aspen, Maui, Scottsdale and Orlando.
  • For the full year the Company expects cash interest expense of approximately $285 million and cash taxes of approximately $50 million.
Special Items:
The Company recorded net credits of $13 million (after-tax) for special items in the second quarter of 2004 compared to $30 million of net credits (after-tax) in the same period of 2003.

Special items in the second quarter of 2004 primarily relate to the reversal of a reserve as a result of a change in a Federal tax rule.

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

Three Months Ended                                    Six Months Ended
     June 30,                                             June 30,
-------------------                                   ----------------
    2004      2003                                       2004    2003
--------- ---------                                   -------- -------
                      Income from continuing
                      operations before special
    $107       $57    items                              $140     $40
--------- ---------                                   -------- -------
   $0.50     $0.28    EPS before special items          $0.66   $0.20
--------- ---------                                   -------- -------
 

                      Special Items:
                      Adjustment to costs associated
       3         -     with construction remediation (a)    4       -
                      Loss on asset dispositions and
      (3)       (6)    impairments, net (b)                (4)   (176)
--------- ---------                                   -------- -------
       -        (6)   Total special items - pre-tax         -    (176)
                      Income tax benefit for special
       1        12     items (c)                            1      78
                      Favorable settlement of tax
      12        24     matters (d)                         12      28
--------- ---------                                   -------- -------
      13        30    Total special items - after-tax      13     (70)
--------- ---------                                   -------- -------

                      Income (loss) from continuing
    $120       $87     operations                        $153    $(30)
--------- ---------                                   -------- -------

   $0.56     $0.42    EPS including special items       $0.72  $(0.15)
========= =========                                   ======== =======

(a) Represents an adjustment to the Company's previously recorded share of costs for construction remediation efforts at a property owned by a vacation ownership unconsolidated joint venture. (b) Loss of $3 million and $4 million for the three and six months ended June 30, 2004, respectively, reflects impairment charges primarily associated with the renovation of a portion of the W New York for the Bliss spa. Loss for the three and six months ended June 30, 2003 primarily represents the initial and subsequent impairment charges recorded due to the classification of a portfolio of 18 domestic non-core hotels as held for sale, 16 of which were subsequently sold in 2003. (c) Represents taxes on special items at the Company's incremental tax rate. (d) Tax benefit of $12 million in the three and six months ended June 30, 2004, respectively, reflects the favorable results of certain changes to the Federal tax rules. Tax benefits of $24 million and $28 million for the three and six months ended June 30, 2003, respectively, relate to various tax matters that were successfully settled during 2003.

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
                                                      June 30,
                                                                %
                                                2004   2003   Variance
                                               ------ ------ ---------
Revenues
Owned, leased and consolidated joint 
 venture hotels                                 $868   $821       5.7
Vacation ownership sales and services            140    106      32.1
Management fees, franchise fees and
 other income                                    104     64      62.5
Other revenues from managed and franchised
 properties(a)                                   251    220      14.1
                                               ------ ------ ---------
                                               1,363  1,211      12.6
Costs and Expenses
Owned, leased and consolidated joint
 venture hotels                                  640    618      (3.6)
Vacation ownership                               105     83     (26.5)
Selling, general, administrative and other        88     64     (37.5)
Depreciation                                     101     98      (3.1)
Amortization                                       5      6      16.7
Other expenses from managed and franchised
 properties(a)                                   251    220     (14.1)
                                               ------ ------ ---------
                                               1,190  1,089      (9.3)
Operating income                                 173    122      41.8
Gain on sale of VOI notes receivable               8      4       n/m
Equity earnings from unconsolidated 
 ventures                                         12      4       n/m
Interest expense, net of interest income of
 $1, $1, $1 and $1 (b)                           (65)   (73)     11.0
Loss on asset dispositions and 
 impairments, net                                 (3)    (6)     50.0
                                               ------ ------ ---------
Income (loss) from continuing operations 
 before taxes and minority equity                125     51       n/m
Income tax benefit (expense)                      (5)    36       n/m
Minority equity in net loss                        -      -         -
                                               ------ ------ ---------
Income (loss) from continuing operations         120     87      37.9
Discontinued operations:
     Loss from operations, net of taxes
      of $0, $1, $0 and $1 (c)                     -      -         -
     Gain on disposition (d)                      34    203     (83.3)
                                               ------ ------ ---------
Net income                                      $154   $290     (46.9)
                                               ====== ====== =========

Earnings (Loss) Per Share -- Basic
Continuing operations                          $0.57  $0.43      32.6
Discontinued operations                         0.17   1.00     (83.0)
                                               ------ ------ ---------
Net income                                     $0.74  $1.43     (48.3)
                                               ====== ====== =========

Earnings (Loss) Per Share -- Diluted
Continuing operations                          $0.56  $0.42      33.3
Discontinued operations                         0.16   0.99     (83.8)
                                               ------ ------ ---------
Net income                                     $0.72  $1.41     (48.9)
                                               ====== ====== =========

Weighted average number of Shares                208    202
                                               ====== ======
Weighted average number of Shares 
 assuming dilution                               215    205
                                               ====== ======
 

                                                  Six Months Ended    
                                                       June 30,       
                                              ----------------------- 
                                                               %      
                                               2004   2003   Variance 
                                              ------ ------ --------- 
                                                                     
Revenues                                     
Owned, leased and consolidated joint                    
 venture hotels                              $1,637  $1,553       5.4 
Vacation ownership sales and services           268     198      35.4 
Management fees, franchise fees and          
 other income                                   194     116      67.2 
Other revenues from managed and franchised  
 properties(a)                                  491     430      14.2 
                                             ------- ------- ---------
                                              2,590   2,297      12.8 
Costs and Expenses                           
Owned, leased and consolidated joint         
 venture hotels                               1,247   1,204      (3.6)
Vacation ownership                              202     154     (31.2)
Selling, general, administrative and other      170     114     (49.1)
Depreciation                                    203     209       2.9 
Amortization                                      9      10      10.0 
Other expenses from managed and franchised   
 properties(a)                                  491     430     (14.2)
                                             ------- ------- ---------
                                              2,322   2,121      (9.5)
                                             
Operating income                                268     176      52.3 
Gain on sale of VOI notes receivable              8       5      60.0 
Equity earnings from unconsolidated              
 ventures                                        16       8       n/m
Interest expense, net of interest income of   
 $1, $1, $1 and $1 (b)                         (129)   (150)     14.0 
Loss on asset dispositions and               ------- ------- ---------
 impairments, net                                (4)   (176)     97.7
                                             
Income (loss) from continuing operations        159    (137)      n/m
 before taxes and minority equity          
Income tax benefit (expense)                     (7)    106       n/m 
                                             ------- ------- ---------
Minority equity in net loss                       1       1         -
                                                                      
Income (loss) from continuing operations        153     (30)      n/m
Discontinued operations:                                              
     Loss from operations, net of taxes           
      of $0, $1, $0 and $1 (c)                    -      (1)      n/m 
     Gain on disposition (d)                     35     205     (82.9)
                                             ------- ------- ---------
Net income                                     $188    $174       8.0 
                                             ======= ======= =========
                                                                      
Earnings (Loss) Per Share -- Basic           
Continuing operations                         $0.74  $(0.15)      n/m
Discontinued operations                        0.17    1.01     (83.2)
                                             ------- ------- ---------
Net income                                    $0.91   $0.86       5.8 
                                             ======= ======= =========
                                                                      
                                                                      
Earnings (Loss) Per Share -- Diluted          
Continuing operations                         $0.72  $(0.15)      n/m
Discontinued operations                        0.16    1.00     (84.0)
                                             ------- ------- ---------
Net income                                    $0.88   $0.85       3.5 
                                             ======= ======= =========
                                                                      
                                                206     202           
Weighted average number of Shares            ======= =======          
                                                                      
Weighted average number of Shares                                     
 assuming dilution                              213     204           
                                             ======= =======          
                                                          
(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) Interest expense is net of $0 million of discontinued operations
    allocations for the three and six month periods ended June 30,
    2004 and $3 and $7 million for the three and six month periods
    ended June 30, 2003, respectively.

(c) For 2003, the Hotel Principe di Savoia in Milan, Italy
    ("Principe") is reported as a discontinued operation as a result
    of the sale of this hotel in June 2003 with no continuing
    involvement.

(d) 2004 and 2003 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.
    Also includes a $193 million (pre-tax) gain in the three and six
    months ended June 30, 2003 recorded in connection with the sale of
    the Principe in June 2003.
 

n/m = not meaningful
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                      CONSOLIDATED BALANCE SHEETS
                   (In millions, except share data)
                                                 June 30, December 31,
                                                    2004     2003
                                                 ----------- --------
                                                (unaudited)
Assets
Current assets:
    Cash and cash equivalents                           $167     $427
    Restricted cash                                      216       81
    Accounts receivable, net of allowance for
     doubtful accounts of $52 and $53                    451      418
    Inventories                                          292      232
    Prepaid expenses and other                           193      104
                                                  ----------- --------
       Total current assets                            1,319    1,262
  Investments                                            441      415
  Plant, property and equipment, net                   6,956    7,106
  Goodwill and intangible assets, net                  2,508    2,488
  Other assets                                           635      623
                                                  ----------- --------
                                                     $11,859  $11,894
                                                  =========== ========

Liabilities and Stockholders' Equity
Current liabilities:
  Short-term borrowings and current maturities of
   long-term debt     (a)                               $260     $233
  Accounts payable                                       141      171
  Accrued expenses                                       695      836
  Accrued salaries, wages and benefits                   251      228
  Accrued taxes and other                                167      176
                                                  ----------- --------
    Total current liabilities                          1,514    1,644
Long-term debt   (a)                                   4,174    4,393
Deferred income taxes                                    827      898
Other liabilities                                        647      574
                                                  ----------- --------
                                                       7,162    7,509
                                                  ----------- --------
Minority interest                                         27       28
                                                  ----------- --------
Exchangeable units and Class B preferred shares,
 at redemption value of $38.50                             -       31
                                                  ----------- --------
Commitments and contingencies
Stockholders' equity:
     Class A exchangeable preferred shares of the
      Trust; $0.01 par value; authorized
      30,000,000 shares; outstanding 597,983 and
      480,880 shares at June 30, 2004 and December
      31, 2003, respectively                               -        -
     Corporation common stock; $0.01 par value;
      authorized 1,050,000,000 shares; outstanding
      208,239,105 and 201,812,126 shares at June
      30, 2004 and December 31, 2003, respectively         2        2
     Trust Class B shares of beneficial interest;
      $0.01 par value; authorized 1,000,000,000
      shares; outstanding 208,239,105 and
      201,812,126 shares at June 30, 2004 and
      December 31, 2003, respectively                      2        2
                        Additional paid-in capital     5,148    4,952
                             Deferred compensation       (24)      (9)
              Accumulated other comprehensive loss      (359)(   (334)
                               Accumulated deficit       (99)    (287)
                                                  ----------- --------
                        Total stockholders' equity     4,670    4,326
                                                  ----------- --------
                                                     $11,859  $11,894
                                                  =========== ========

(a) Excludes Starwood's share of unconsolidated joint venture debt
    aggregating approximately $412 million and $410 million at June
    30, 2004 and December 31, 2003, respectively.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
          Non-GAAP to GAAP Reconciliations - Historical Data
                             (In millions)
    Three Months Ended                            Six Months Ended
         June 30,                                     June 30,
--------------------------                     -----------------------
                   %                                             %
 2004     2003  Variance                        2004   2003   Variance
------ -------- ----------                     ------ ------ ---------

                           Reconciliation of
                            Net Income to
                            EBITDA and
                            Adjusted EBITDA
 $154     $290      (46.9) Net income           $188   $174       8.0
   70       81      (13.6) Interest expense(a)   141    166     (15.1)
                           Income tax (benefit)
  (29)       4        n/m   expense (b)          (27)   (65)    (58.5)
  109      105        3.8  Depreciation (c)      219    223      (1.8)
    6        7      (14.3) Amortization (d)       12     13      (7.7)
------ -------- ----------                     ------ ------ ---------
  310      487      (36.3) EBITDA                533    511       4.3
                           Adjustment to costs
                            associated with
                            construction
   (3)       -        n/m   remediation           (4)     -       n/m
                           Loss on asset
                            dispositions and
    3        6      (50.0)  impairments, net       4    176     (97.7)
                           Discontinued
    -     (246)       n/m   operations(e)         (1)  (253)    (99.6)
------ -------- ----------                     ------ ------ ---------
  310      247       25.5  Adjusted EBITDA       532    434      22.6
                           Hotels Sold in 2003
                            (20 hotels) (f)
    -      (61)       n/m    Revenues              -   (103)      n/m
                             Costs and
    -       45        n/m     expenses             -     83       n/m
------ -------- ----------                     ------ ------ ---------
                           Adjusted EBITDA
                            excluding assets
 $310     $231       34.2   sold in 2003        $532   $414      28.5
====== ======== ==========                     ====== ====== =========
 

(a) Includes $4, $4, $11 and $8 million of interest expense related to
    unconsolidated joint ventures for the three months ended June 30,
    2004 and 2003 and the six months ended June 30, 2004 and 2003,
    respectively. Also includes $3 and $7 million of interest expense
    allocated to discontinued operations for the three and six months
    ended June 30, 2003, respectively. No interest expense was
    allocated to discontinued operations in 2004.

(b) Includes $(34), $40, $(34) and $41 million of tax (benefit)
    expense recorded in discontinued operations for the three months
    ended June 30, 2004 and 2003 and for the six months ended June 30,
    2004 and 2003, respectively.
(c) Includes $8, $7, $16 and $13 million of Starwood's share of
    depreciation expense of unconsolidated joint ventures for the
    three months ended June 30, 2004 and 2003 and the six months ended
    June 30, 2004 and 2003, respectively. Also includes $1 million of
    depreciation expense included in discontinued operations for the
    six months ended June 30, 2003. No depreciation expense was
    allocated to discontinued operations in the second quarter of 2003
    or in 2004.

(d) Includes $1, $1, $3 and $3 million of Starwood's share of
    amortization expense of unconsolidated joint ventures for the
    three months ended June 30, 2004 and 2003 and the six months ended
    June 30, 2004 and 2003, respectively.
(e) Excludes the interest expense, taxes, and depreciation balances
    already added back as noted in (a), (b) and (c) above.
(f) Represents 20 hotels (excluding the Principe which is reported in
    discontinued operations) that were sold in 2003. These amounts are
    included in the revenues and expenses from owned, leased and
    consolidated joint venture hotels in 2003.

 Three Months                                             Six Months
     Ended                                                   Ended
   June 30,                                                June 30,
---------------                                          -------------

  2004    2003                                            2004   2003
------- -------                                          ------ ------
                  Cash Flow Data
  $154    $290    Net income                              $188   $174
                  Exclude:
   (34)   (203)        Discontinued operations, net        (35)  (204)
------- -------                                          ------ ------
                  Income (loss) from continuing
   120      87     operations                              153    (30)
   (51)    (15)   Increase in restricted cash             (135)   (53)
                  Adjustment to income (loss) from
                   continuing operations and changes
    50       6     in working capital                      163    295
------- -------                                          ------ ------
   119      78         Cash from continuing operations     181    212
                       Cash from discontinued
     -       3          operations                           1     10
------- -------                                          ------ ------
  $119     $81    Cash from operating activities          $182   $222
======= =======                                          ====== ======
                  Cash from (used for) investing
  $(64)   $595     activities                            $(244)  $529
======= =======                                          ====== ======
 $(128)  $(518)   Cash used for financing activities     $(201) $(546)
======= =======                                          ====== ======
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
         Non-GAAP to GAAP Reconciliations - Future Performance
                             (In millions)
 
                                                         Twelve Months
                                                             Ended
                                                          December 31,
                                                             2004

Income from continuing operations before special items     $   301
Special items (see page 7)                                      13
Income from continuing operations                          $   314
 

EPS from continuing operations before special items        $  1.40
Special items (see page 7)                                    0.06
EPS from continuing operations                             $  1.46

                                           Three Months  Twelve Months
                                              Ended          Ended
                                          September 30,   December 31,
                                              2004           2004
                                          -------------  -------------

Net income                                  $   78         $   350
Interest expense                                72             285
Income tax expense                              16               6
Depreciation and amortization                  119             470
                                          -------------  -------------
EBITDA                                         285           1,111
Loss on asset dispositions, net                  -               4
Discontinued operations                          -              (1)
Costs associated with construction 
 remediation                                     -              (4)
                                          -------------  -------------
Adjusted EBITDA                               $285          $1,110
                                          =============  =============
 

                                                         Twelve Months
                                                              Ended   
                                                          December 31,
                                                              2003    
                                                                  

Net income                                                 $   309
 Interest expense                                              312
 Income tax benefit                                            (73)
 Depreciation                                                  438
Amortization                                                    26
EBITDA                                                       1,012
Loss on asset dispositions and impairments, net                183
 Discontinued operations                                      (252)
Restructuring and other special credits, net                    (9)
Costs associated with construction remediation                   4
Adjusted EBITDA                                                938
Hotels sold in 2003
     Revenues                                                 (110)
     Costs and expenses                                         89
Adjusted EBITDA excluding hotels sold in 2003              $   917
 

                                            Three Months Ended
                                                   June 30,
   Same Store Owned Hotels (1)         -------------------------------
          Worldwide                                               %
                                            2004      2003    Variance

Revenue
      Same Store Owned Hotels           $    858  $    753       13.9
      Hotels Sold or Closed in 2003 
       (23 hotels)                            -         60      n/m
      Hotels without Comparable Results
        (2 hotels)                            9          5       80.0
      Other reconciling items                 1          3      (66.7)
                                       --------------------- ---------
                                       --------------------- ---------
Total Owned, Leased and Consolidated
  Joint Venture Hotels
   Revenue                              $    868  $    821        5.7
                                       ===================== =========
                                       ===================== =========

Costs and Expenses
      Same Store Owned Hotels               629        565      (11.3)
      Hotels Sold or Closed in 2003 
       (23 hotels)                            -         46        n/m
      Hotels without Comparable Results
        (2 hotels)                            9          5      (80.0)
      Other reconciling items                 2          2        -
                                       --------------------- ---------
                                       --------------------- ---------
Total Owned, Leased and Consolidated 
Joint Venture Hotels Costs and Expenses $   640   $    618       (3.6)
                                       ===================== =========
                                       ===================== =========
 
 

                                              Three Months Ended      
                                                   June 30,           
     Same Store Owned Hotels           -------------------------------
         North America                                            %   
                                            2004      2003    Variance

Revenue
      Same Store Owned Hotels          $     617  $    550       12.2
      Hotels Sold or Closed in 2003
       (17 hotels)                             -        50        n/m
      Hotels without Comparable
       Results (2 hotels)                      9         5       80.0
                                       --------------------- ---------
                                       --------------------- ---------
Total Owned, Leased and Consolidated
  Joint Venture Hotels Revenue         $     626  $    605        3.5
                                       ===================== =========

Costs and Expenses
      Same Store Owned Hotels                455       415       (9.6)
      Hotels Sold or Closed in 2003
       (17 hotels)                             -        37        n/m
      Hotels without Comparable Results
       (2 hotels)                              9         5      (80.0)
                                       --------------------- ---------
                                       --------------------- ---------
Total Owned, Leased and Consolidated
 Joint Venture Hotels Costs and
 Expenses                              $     464  $    457       (1.5)
                                       ===================== =========
 
 
 

                                              Three Months Ended      
                                                   June 30,           
  Same Store Owned Hotels              -------------------------------
      International                    -------------------------------
                                                                  %   
                                            2004      2003    Variance
                                      
                                      
Revenue
      Same Store Owned Hotels          $    241   $    203       18.7
      Hotels Sold or Closed in 2003 
       (6 hotels)                             -         10        n/m
      Other reconciling items                 1          3      (66.7)
                                      --------------------- ----------
                                      --------------------- ----------
Total Owned, Leased and Consolidated
 Joint Venture Hotels Revenue          $    242   $    216       12.0
                                      ===================== ==========

Costs and Expenses
      Same Store Owned Hotels               174        150      (16.0)
      Hotels Sold or Closed in 2003
       (6 hotels)                             -          9        n/m
      Other reconciling items                 2          2        -
                                      --------------------- ----------
                                      --------------------- ----------
Total Owned, Leased and Consolidated
 Joint Venture Hotels Costs and 
 Expenses                              $    176   $    161       (9.3)
                                      ===================== ==========
 

                                                Six Months Ended
                                                    June 30,
   Same Store Owned Hotels (1)         -------------------------------
          Worldwide                                               %
                                            2004      2003    Variance

                                      
Revenue
      Same Store Owned Hotels          $   1,611  $  1,431       12.6
      Hotels Sold or Closed in 2003 
       (23 hotels)                             -       103        n/m
      Hotels without Comparable
       Results (2 hotels)                     25        16       56.3
      Other reconciling items                  1         3      (66.7)
                                      --------------------- ----------
                                      --------------------- ----------
Total Owned, Leased and Consolidated 
 Joint Venture Hotels Revenue          $   1,637  $  1,553        5.4
                                      
                                      ===================== ==========
                                      ===================== ==========

Costs and Expenses
      Same Store Owned Hotels              1,226     1,104      (11.1)
      Hotels Sold or Closed in 2003
       (23 hotels)                             -        86       n/m
      Hotels without Comparable 
       Results (2 hotels)                     18        11      (63.6)
      Other reconciling items                  3         3        -
                                      --------------------- ----------
                                      --------------------- ----------
Total Owned, Leased and Consolidated 
 Joint Venture Hotels Costs and
 Expenses                            $   1,247    $  1,204       (3.6)
                                      ===================== ==========
                                      ===================== ==========

                                                         
                                                Six Months Ended      
                                                    June 30,          
      Same Store Owned Hotels          -------------------------------
           North America                                          %   
                                            2004      2003    Variance
Revenue                                                               
      Same Store Owned Hotels          $ 1,175    $  1,063       10.5
      Hotels Sold or Closed in 2003
       (17 hotels)                           -          91        n/m
      Hotels without Comparable 
        Results (2 hotels)                  25          16       56.3
                                       ---------- ---------- ---------
                                       ---------- ---------- ---------
Total Owned, Leased and Consolidated
  Joint Venture Hotels Revenue         $ 1,200    $  1,170        2.6
                                       ========== ========== =========

Costs and Expenses
      Same Store Owned Hotels              895         822       (8.9)
      Hotels Sold or Closed in 2003 
       (17 hotels)                           -          70        n/m
      Hotels without Comparable
       Results (2 hotels)                   18          11      (63.6)
                                       ---------- ---------- ---------
                                       ---------- ---------- ---------
Total Owned, Leased and Consolidated
  Joint Venture Hotels Costs and 
  Expenses                             $   913    $    903       (1.1)
                                       ========== ========== =========
                                       ========== ========== =========

                                               
                                                  
                                                Six Months Ended      
                                                    June 30,          
      Same Store Owned Hotels          -------------------------------
         International                 -------------------------------
                                                                  %   
                                            2004      2003    Variance
Revenue                                 
      Same Store Owned Hotels          $    436   $    368       18.5
      Hotels Sold or Closed in 
       2003 (6 hotels)                        -         12        n/m
      Other reconciling items                 1          3      (66.7)
                                       ---------- ---------- ---------
                                       ---------- ---------- ---------
Total Owned, Leased and Consolidated 
 Joint Venture Hotels Revenue          $    437   $    383       14.1
                                       ========== ========== =========

Costs and Expenses
      Same Store Owned Hotels               331        282      (17.4)
      Hotels Sold or Closed in 2003
       (6 hotels)                             -         16        n/m
      Other reconciling items                 3          3        -
                                       ---------- ---------- ---------
                                       ---------- ---------- ---------
Total Owned, Leased and Consolidated 
 Joint Venture Hotels Costs and 
 Expenses                              $    334   $    301      (11.0)
                                       ========== ========== =========
                                       ========== ========== =========
 

               STARWOOD HOTELS & RESORTS WORLDWIDE INC.
             Hotel Results - Same Store Owned Hotels (1)
               For the Three Months Ended June 30, 2004
                              UNAUDITED

                                                    WORLDWIDE         
                                          2004        2003        Var.
                                                   139 Hotels         
SAME STORE OWNED HOTELS
               REVPAR ($)                116.03       99.07      17.1%
               ADR ($)                   164.25      152.73       7.5%
               OCCUPANCY (%)              70.6%       64.9%        5.7

                                                       60             
SHERATON
               REVPAR ($)                 95.80       78.60      21.9%
               ADR ($)                   138.38      126.83       9.1%
               OCCUPANCY (%)              69.2%       62.0%        7.2

                                                       36             
WESTIN
               REVPAR ($)                126.13      113.61      11.0%
               ADR ($)                   172.21      162.30       6.1%
               OCCUPANCY (%)              73.2%       70.0%        3.2

                                                       10             
ST. REGIS/LUXURY COLLECTION
               REVPAR ($)                258.86      223.17      16.0%
               ADR ($)                   390.77      370.32       5.5%
               OCCUPANCY (%)              66.2%       60.3%        5.9

                                                       12             
W
               REVPAR ($)                167.46      144.83      15.6%
               ADR ($)                   218.23      200.59       8.8%
               OCCUPANCY (%)              76.7%       72.2%        4.5

                                                       21             
OTHER
               REVPAR ($)                 80.36       66.66      20.6%
               ADR ($)                   119.72      109.62       9.2%
               OCCUPANCY (%)              67.1%       60.8%        6.3
 

                                                  NORTH AMERICA
                                           2004       2003        Var.
                                                    94 Hotels         
SAME STORE OWNED HOTELS                                               
               REVPAR ($)                114.11       98.33      16.0%
               ADR ($)                   156.03      145.94       6.9%
               OCCUPANCY (%)              73.1%       67.4%        5.7

                                                       36             
SHERATON                                                              
               REVPAR ($)                102.52       83.40      22.9%
               ADR ($)                   139.08      127.45       9.1%
               OCCUPANCY (%)              73.7%       65.4%        8.3

                                                       22             
WESTIN                                                                
               REVPAR ($)                108.79      100.05       8.7%
               ADR ($)                   146.06      139.80       4.5%
               OCCUPANCY (%)              74.5%       71.6%        2.9

                                                        4             
ST. REGIS/LUXURY COLLECTION                                           
               REVPAR ($)                233.32      210.02      11.1%
               ADR ($)                   338.31      323.21       4.7%
               OCCUPANCY (%)              69.0%       65.0%        4.0

                                                       12             
W                                                                     
               REVPAR ($)                167.46      144.83      15.6%
               ADR ($)                   218.23      200.59       8.8%
               OCCUPANCY (%)              76.7%       72.2%        4.5

                                                       20             
OTHER                                                                 
               REVPAR ($)                 78.48       68.55      14.5%
               ADR ($)                   119.58      112.66       6.1%
               OCCUPANCY (%)              65.6%       60.8%        4.8
 

                                                INTERNATIONAL(2)      
                                          2004        2003        Var.
                                                   45 Hotels          
SAME STORE OWNED HOTELS                                             
               REVPAR ($)                121.38      101.16      20.0%
               ADR ($)                   190.57      175.01       8.9%
               OCCUPANCY (%)              63.7%       57.8%        5.9

                                                       24             
SHERATON                                                            
               REVPAR ($)                 82.94       69.41      19.5%
               ADR ($)                   136.75      125.45       9.0%
               OCCUPANCY (%)              60.7%       55.3%        5.4

                                                       14             
WESTIN                                                              
               REVPAR ($)                180.80      156.59      15.5%
               ADR ($)                   260.77      240.82       8.3%
               OCCUPANCY (%)              69.3%       65.0%        4.3

                                                        6             
ST. REGIS/LUXURY COLLECTION                                         
               REVPAR ($)                303.43      246.12      23.3%
               ADR ($)                   493.43      472.95       4.3%
               OCCUPANCY (%)              61.5%       52.0%        9.5
W                                                                   
               REVPAR ($)                  0.00        0.00       0.0%
               ADR ($)                     0.00        0.00       0.0%
               OCCUPANCY (%)               0.0%        0.0%        n/a
  
                                                        1             
OTHER                                                               
               REVPAR ($)                 93.54       52.86      77.0%
               ADR ($)                   120.53       87.26      38.1%
               OCCUPANCY (%)              77.6%       60.6%       17.0

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results
(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 June 30, 2004
                               UNAUDITED

                                                        EUROPE
                                                 2004    2003   Var.
                                                      29 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                              174.26  146.96  18.6%
        ADR ($)                                 262.08  241.41   8.6%
        OCCUPANCY (%)                            66.5%   60.9%    5.6

                                                          12
SHERATON
        REVPAR ($)                              115.14   97.65  17.9%
        ADR ($)                                 174.51  158.67  10.0%
        OCCUPANCY (%)                            66.0%   61.5%    4.5

                                                          11
WESTIN
        REVPAR ($)                              217.37  185.48  17.2%
        ADR ($)                                 315.41  295.06   6.9%
        OCCUPANCY (%)                            68.9%   62.9%    6.0

                                                           6
ST. REGIS/LUXURY COLLECTION
        REVPAR ($)                              303.43  246.12  23.3%
        ADR ($)                                 493.43  472.95   4.3%
        OCCUPANCY (%)                            61.5%   52.0%    9.5

                                                           0
OTHER                                          -----------------------
        REVPAR ($)                                0.00    0.00   0.0%
        ADR ($)                                   0.00    0.00   0.0%
        OCCUPANCY (%)                             0.0%    0.0%    n/a
 

                                                    LATIN AMERICA
                                                 2004     2003   Var.
                                                       12 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                               55.61   49.40  12.6%
        ADR ($)                                  97.31   94.34   3.1%
        OCCUPANCY (%)                             57.1%   52.4%  4.7

                                                           9
SHERATON
        REVPAR ($)                               49.01   42.81  14.5%
        ADR ($)                                  90.64   88.87   2.0%
        OCCUPANCY (%)                            54.1%   48.2%    5.9

                                                           3
WESTIN
        REVPAR ($)                               84.13   78.48   7.2%
        ADR ($)                                 119.44  110.76   7.8%
        OCCUPANCY (%)                            70.4%   70.9%  (0.5)

                                                           0
ST. REGIS/LUXURY COLLECTION                    -----------------------
        REVPAR ($)                                0.00    0.00   0.0%
        ADR ($)                                   0.00    0.00   0.0%
        OCCUPANCY (%)                             0.0%    0.0%    n/a

                                                           0
OTHER                                          -----------------------
        REVPAR ($)                                0.00    0.00   0.0%
        ADR ($)                                   0.00    0.00   0.0%
        OCCUPANCY (%)                             0.0%    0.0%    n/a
 

                                                     ASIA PACIFIC
                                                 2004    2003    Var.
                                                     4  Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                               99.01   66.45  49.0%
        ADR ($)                                 138.70  108.74  27.6%
        OCCUPANCY (%)                            71.4%   61.1%   10.3

                                                          3
SHERATON
        REVPAR ($)                              102.36   74.79  36.9%
        ADR ($)                                 151.49  121.74  24.4%
        OCCUPANCY (%)                            67.6%   61.4%    6.2

                                                          0
WESTIN                                         -----------------------
        REVPAR ($)                                0.00    0.00   0.0%
        ADR ($)                                   0.00    0.00   0.0%
        OCCUPANCY (%)                             0.0%    0.0%    n/a

                                                          0
ST. REGIS/LUXURY COLLECTION                    -----------------------
        REVPAR ($)                                0.00    0.00   0.0%
        ADR ($)                                   0.00    0.00   0.0%
        OCCUPANCY (%)                             0.0%    0.0%    n/a

                                                          1
OTHER
        REVPAR ($)                               93.54   52.86  77.0%
        ADR ($)                                 120.53   87.26  38.1%
        OCCUPANCY (%)                            77.6%   60.6%   17.0
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results
               STARWOOD HOTELS & RESORTS WORLDWIDE INC.
              Hotel Results - Same Store Owned Hotels (1)
               For the Three Months Ended June 30, 2004
                         UNAUDITED ($thousand)
 

                                                     WORLDWIDE
                                              2004     2003      Var.
                                                     139 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                        857,666  753,138   13.9%
        Total EXPENSE(3)                     628,551  564,953  -11.3%

                                                         60
SHERATON
        REVENUE                              342,572  287,271   19.3%
        EXPENSE                              248,472  217,623  -14.2%

                                                         36
WESTIN
        REVENUE                              265,614  240,993   10.2%
        EXPENSE                              191,443  173,942  -10.1%

                                                         10
ST. REGIS/LUXURY COLLECTION
        REVENUE                               98,186   88,434   11.0%
        EXPENSE                               70,360   66,380   -6.0%

                                                         12
W
        REVENUE                               93,742   85,014   10.3%
        EXPENSE (3)                           71,460   66,423   -7.6%

                                                         21
OTHER
        REVENUE                               57,552   51,426   11.9%
        EXPENSE                               46,816   40,585  -15.4%

                                                   NORTH AMERICA
                                              2004     2003      Var.
                                                     94 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                        617,303  549,569   12.3%
        Total EXPENSE(3)                     454,691  415,453   -9.4%

                                                         36
SHERATON
        REVENUE                              234,544  194,417   20.6%
        EXPENSE                              169,080  147,998  -14.2%

                                                         22
WESTIN
        REVENUE                              173,829  161,926    7.4%
        EXPENSE                              126,413  117,941   -7.2%

                                                         4
ST. REGIS/LUXURY COLLECTION
        REVENUE                               65,080   61,136    6.5%
        EXPENSE                               48,160   47,221   -2.0%

                                                         12
W
        REVENUE                               93,742   85,014   10.3%
        EXPENSE (3)                           71,460   66,423   -7.6%

                                                         20
OTHER
        REVENUE                               50,108   47,076    6.4%
        EXPENSE                               39,578   35,870  -10.3%

                                                  INTERNATIONAL(2)
                                              2004      2003     Var.
                                                    45 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                        240,363  203,569   18.1%
        Total EXPENSE(3)                     173,860  149,500  -16.3%

                                                         24
SHERATON
        REVENUE                              108,028   92,854   16.3%
        EXPENSE                               79,392   69,625  -14.0%

                                                         14
WESTIN
        REVENUE                               91,785   79,067   16.1%
        EXPENSE                               65,030   56,001  -16.1%

                                                         6
ST. REGIS/LUXURY COLLECTION
        REVENUE                                33,106   27,298   21.3%
        EXPENSE                                22,200   19,159  -15.9%

                                                         0
W                                            -------------------------
        REVENUE                                    0        0    0.0%
        EXPENSE (3)                                0        0    0.0%

                                                         1
OTHER
        REVENUE                                7,444    4,350   71.1%
        EXPENSE                                7,238    4,715  -53.5%
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results
(2)See next page for breakdown by division 
(3)Includes rent expense of $4,288 in 2004 and 2003 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 June 30, 2004
                         UNAUDITED ($thousand)

                                                       EUROPE
                                              2004      2003     Var.
                                                     29 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                        173,081  147,367   17.4%
        Total EXPENSE                        125,816  107,042  -17.5%

                                                         12
SHERATON
        REVENUE                               61,370   53,379   15.0%
        EXPENSE                               47,533   40,254  -18.1%

                                                         11
WESTIN
        REVENUE                               78,605   66,690   17.9%
        EXPENSE                               56,083   47,629  -17.7%

                                                         6
ST. REGIS/LUXURY COLLECTION
        REVENUE                               33,106   27,298   21.3%
        EXPENSE                               22,200   19,159  -15.9%
   
                                                         0
OTHER                                        -------------------------
        REVENUE                                    0        0    0.0%
        EXPENSE                                    0        0    0.0%
 

                                                   LATIN AMERICA
                                               2004    2003     Var.
                                                    12 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                         42,207   38,184   10.5%
        Total EXPENSE                         28,380   27,115   -4.7%

                                                         9
SHERATON
        REVENUE                               29,027   25,807   12.5%
        EXPENSE                               19,433   18,743   -3.7%

                                                         3
WESTIN
        REVENUE                               13,180   12,377    6.5%
        EXPENSE                                8,947    8,372   -6.9%

                                                         0
ST. REGIS/LUXURY COLLECTION                  -------------------------
        REVENUE                                    0        0     n/a
        EXPENSE                                    0        0     n/a

                                                         0
OTHER                                        -------------------------
        REVENUE                                    0        0    0.0%
        EXPENSE                                    0        0    0.0%
 

                                                   ASIA PACIFIC
                                                2004    2003   Var.

                                                     4 Hotels
SAME STORE OWNED HOTELS
        Total REVENUE                         25,075   18,018   39.2%
        Total EXPENSE                         19,664   15,343  -28.2%

                                                         3
SHERATON
        REVENUE                               17,631   13,668   29.0%
        EXPENSE                               12,426   10,628  -16.9%

                                                         0 
WESTIN                                       -------------------------
        REVENUE                                    0        0    0.0%
        EXPENSE                                    0        0    0.0%

                                                         0
ST. REGIS/LUXURY COLLECTION                  -------------------------
        REVENUE                                    0         0    n/a
        EXPENSE                                    0         0    n/a

                                                         1
OTHER
        REVENUE                                7,444    4,350   71.1%
        EXPENSE                                7,238    4,715  -53.5%
 
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results

               STARWOOD HOTELS & RESORTS WORLDWIDE INC.
              Hotel Results - Same Store Owned Hotels (1)
                For the Six Months Ended June 30, 2004
                               UNAUDITED

                                                     WORLDWIDE
                                               2004     2003     Var.
                                                    139 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                            108.76    95.05   14.4%
        ADR ($)                               160.91   151.63    6.1%
        OCCUPANCY (%)                          67.6%    62.7%     4.9

                                                         60
SHERATON
        REVPAR ($)                             90.14    76.47   17.9%
        ADR ($)                               135.89   127.09    6.9%
        OCCUPANCY (%)                          66.3%    60.2%     6.1

                                                         36
WESTIN
        REVPAR ($)                            120.42   110.57    8.9%
        ADR ($)                               168.58   160.63    4.9%
        OCCUPANCY (%)                          71.4%    68.8%     2.6

                                                         10
ST. REGIS/LUXURY COLLECTION
        REVPAR ($)                            238.78   207.18   15.3%
        ADR ($)                               384.29   364.23    5.5%
        OCCUPANCY (%)                          62.1%    56.9%     5.2

                                                         12
W
        REVPAR ($)                            152.22   133.73   13.8%
        ADR ($)                               212.32   200.20    6.1%
        OCCUPANCY (%)                          71.7%    66.8%     4.9

                                                         21
OTHER
        REVPAR ($)                             73.27    62.20   17.8%
        ADR ($)                               117.87   108.10    9.0%
        OCCUPANCY (%)                          62.2%    57.5%     4.7
 

                                                   NORTH AMERICA
                                               2004     2003    Var.
                                                    94 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                            107.94    95.76   12.7%
        ADR ($)                               155.06   148.14    4.7%
        OCCUPANCY (%)                          69.6%    64.6%     5.0

                                                         36
SHERATON
        REVPAR ($)                             94.64    81.02   16.8%
        ADR ($)                               136.27   129.12    5.5%
        OCCUPANCY (%)                          69.4%    62.7%     6.7

                                                         22
WESTIN
        REVPAR ($)                            108.82   101.47    7.2%
        ADR ($)                               147.78   143.01    3.3%
        OCCUPANCY (%)                          73.6%    71.0%     2.6

                                                         4
ST. REGIS/LUXURY COLLECTION
        REVPAR ($)                            238.17   214.40   11.1%
        ADR ($)                               351.05   340.70    3.0%
        OCCUPANCY (%)                          67.8%    62.9%     4.9

                                                         12
W
        REVPAR ($)                            152.22   133.73   13.8%
        ADR ($)                               212.32   200.20    6.1%
        OCCUPANCY (%)                          71.7%    66.8%     4.9

                                                         20
OTHER
        REVPAR ($)                             69.45    62.44   11.2%
        ADR ($)                               117.16   112.40    4.2%
        OCCUPANCY (%)                          59.3%    55.5%     3.8
 

                                                   INTERNATIONAL(2)
                                               2004     2003   Var.
                                                     45 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                            111.09    93.02   19.4%
        ADR ($)                               179.54   162.88   10.2%
        OCCUPANCY (%)                          61.9%    57.1%     4.8

                                                         24
SHERATON
        REVPAR ($)                             81.43    67.64   20.4%
        ADR ($)                               135.04   122.62   10.1%
        OCCUPANCY (%)                          60.3%    55.2%     5.1

                                                         14
WESTIN
        REVPAR ($)                            157.87   140.30   12.5%
        ADR ($)                               245.44   226.52    8.4%
        OCCUPANCY (%)                          64.3%    61.9%     2.4

                                                         6
ST. REGIS/LUXURY COLLECTION
        REVPAR ($)                            239.85   194.58   23.3%
        ADR ($)                               459.71   419.98    9.5%
        OCCUPANCY (%)                          52.2%    46.3%     5.9

                                                         0
W                                            -------------------------
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%     0.0%     n/a

                                                         1
OTHER
        REVPAR ($)                            100.04    60.52   65.3%
        ADR ($)                               121.41    84.08   44.4%
        OCCUPANCY (%)                          82.4%    72.0%    10.4
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2 hotel
    without comparable results
(2)See next page for breakdown by division

               STARWOOD HOTELS & RESORTS WORLDWIDE INC.
              Hotel Results - Same Store Owned Hotels (1)
                For the Six Months Ended June 30, 2004
                               UNAUDITED
 
                                                       EUROPE
                                               2004     2003    Var.

                                                     29 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                            148.40   127.33   16.5%
        ADR ($)                               245.50   222.35   10.4%
        OCCUPANCY (%)                          60.4%    57.3%     3.1

                                                         12
SHERATON
        REVPAR ($)                            105.11    90.37   16.3%
        ADR ($)                               169.61   153.24   10.7%
        OCCUPANCY (%)                          62.0%    59.0%     3.0

                                                         11
WESTIN
        REVPAR ($)                            180.03   158.07   13.9%
        ADR ($)                               294.73   269.94    9.2%
        OCCUPANCY (%)                          61.1%    58.6%     2.5

                                                         6
ST. REGIS/LUXURY COLLECTION
        REVPAR ($)                            239.85   194.58   23.3%
        ADR ($)                               459.71   419.98    9.5%
        OCCUPANCY (%)                          52.2%    46.3%     5.9

                                                         0
OTHER                                        -------------------------
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%     0.0%     n/a
 

                                                   LATIN AMERICA
                                               2004     2003    Var.
                                                     12 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                             63.36    54.89   15.4%
        ADR ($)                               105.92   101.84    4.0%
        OCCUPANCY (%)                          59.8%    53.9%     5.9

                                                         9
SHERATON
        REVPAR
         ($)                                     54.62   46.28  18.0%
        ADR
         ($)                                     96.06   92.39   4.0%
        OCCUPANCY (%)                             56.9%   50.1%  6.8

                                                     3
WESTIN
        REVPAR ($)                            101.12    93.34    8.3%
        ADR ($)                               139.27   131.72    5.7%
        OCCUPANCY (%)                          72.6%    70.9%     1.7

                                                         0
ST. REGIS/LUXURY COLLECTION                  -------------------------
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%     0.0%     n/a

                                                         0
OTHER
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%     0.0%     n/a
 

                                                    ASIA PACIFIC
                                               2004     2003    Var.

                                                     4 Hotels
SAME STORE OWNED HOTELS
        REVPAR ($)                            103.29    68.86   50.0%
        ADR ($)                               140.72   104.78   34.3%
        OCCUPANCY (%)                          73.4%    65.7%     7.7

                                                         3
SHERATON
        REVPAR ($)                            105.28    74.04   42.2%
        ADR ($)                               155.10   119.71   29.6%
        OCCUPANCY (%)                          67.9%    61.8%     6.1

                                                         0
WESTIN                                       -------------------------
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%     0.0%     n/a

                                                         0
ST. REGIS/LUXURY COLLECTION                  -------------------------
        REVPAR ($)                              0.00     0.00    0.0%
        ADR ($)                                 0.00     0.00    0.0%
        OCCUPANCY (%)                           0.0%    0.0%      n/a

                                                         1
OTHER
        REVPAR ($)                            100.04    60.52   65.3%
        ADR ($)                               121.41    84.08   44.4%
        OCCUPANCY (%)                          82.4%    72.0%    10.4
 
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2 hotel
    without comparable results
               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Hotel Results - Same Store Owned Hotels (1)
                For the Six Months Ended June 30, 2004
                        UNAUDITED ($ thousands)
                                          WORLDWIDE             
                                2004         2003        Var.   
                             ---------     --------    -------

                                          139 Hotels            
SAME STORE OWNED HOTELS
           Total REVENUE     1,611,073    1,430,844     12.6%   
           Total EXPENSE(3)  1,225,588    1,103,589    -11.1%   

                                             60                 
SHERATON
               REVENUE         639,910      548,701     16.6%  
               EXPENSE         482,882      423,948    -13.9%  

                                             36                 

WESTIN
               REVENUE         504,853      463,272      9.0%   
               EXPENSE         372,779      340,447     -9.5%   

                                             10                 

ST. REGIS/LUXURY COLLECTION
               REVENUE         186,114      165,802     12.3%   
               EXPENSE         139,403      128,850     -8.2%   

                                             12                 

W
               REVENUE         173,762      156,601     11.0%   
               EXPENSE (3)     139,616      128,420     -8.7%   

                                             21                 
OTHER
               REVENUE         106,434       96,468     10.3%   
               EXPENSE          90,908       81,924    -11.0%   
 

                           
                                         NORTH AMERICA            
                                2004         2003        Var.    
                             ---------     --------    -------
                                                                  
                                          94 Hotels              
SAME STORE OWNED HOTELS                                           
           Total REVENUE     1,175,140    1,063,173     10.5%    
           Total EXPENSE(3)    894,287      821,400     -8.9%    
                                                                  
                                             36                  
SHERATON                   ---------------------------------------
               REVENUE         433,021      374,875     15.5%   
               EXPENSE         328,884      292,267    -12.5%   
                                                           
                                             22                  

WESTIN                
               REVENUE         346,139      324,324      6.7%         
               EXPENSE         251,935      235,964     -6.8%         
 
                                              4                     
  
ST. REGIS/LUXURY COLLECTION                                         
               REVENUE         131,726      120,789      9.1%       
               EXPENSE          97,704       92,971     -5.1%      
                                                           
                                             12                       
                           ---------------------------------------    
W                                                                  
               REVENUE         173,762      156,601     11.0%         
               EXPENSE (3)     139,616      128,420     -8.7%         
                                                                      
                                             20                       
                           --------------------------------------- 
OTHER                                                                 
               REVENUE          90,492       86,584      4.5%      
               EXPENSE          76,148       71,778     -6.1%     
                                                                   
                                                                   
                           
                                       INTERNATIONAL(2)               
                           ---------------------------------------    
                                2004         2003        Var.         
                             ---------     --------    -------
                                                                      
                                          45 Hotels                   
                           ---------------------------------------    
SAME STORE OWNED HOTELS                                               
           Total REVENUE      435,933      367,671      18.6%         
           Total EXPENSE(3)   331,301      282,189     -17.4%         
                                                                      
                                             24                       
                           ---------------------------------------   
SHERATON                                                              
               REVENUE        206,889      173,826      19.0%         
               EXPENSE        153,998      131,681     -16.9%         
                                                                      
                                             14                       
                           ---------------------------------------   
                                                                      
WESTIN                                                                
               REVENUE        158,714      138,948      14.2%         
               EXPENSE        120,844      104,483     -15.7%         
                                                                      
                                              6                       
                           ---------------------------------------   
                                                                      
ST. REGIS/LUXURY COLLECTION                                           
               REVENUE         54,388       45,013      20.8%         
               EXPENSE         41,699       35,879     -16.2%         
                                                                      
                                              0                       
                           ---------------------------------------   
                                                                      
W                                                                     
               REVENUE           0            0          0.0%         
               EXPENSE (3)       0            0          0.0%         
                                                                      
                                              1                       
                           ---------------------------------------   
OTHER                                                                 
               REVENUE         15,942        9,884      61.3%         
               EXPENSE         14,760       10,146     -45.5%         
                                                                      

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results
(2) See next page for breakdown by division
(3) Includes rent expense of $8,575 in 2004 and 2003 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 Six Months Ended June 30, 2004
                        UNAUDITED ($ thousands)
                                         EUROPE                    
                           --------------------------------------- 
                               2004         2003        Var.       
                            ---------     --------    -------

                                        29 Hotels                  
                           --------------------------------------- 
SAME STORE OWNED HOTELS
           Total REVENUE      292,304      251,142      16.4%      
           Total EXPENSE      232,722      198,874     -17.0%      

                                            12                     
                           --------------------------------------- 
SHERATON
               REVENUE        109,372      94,485       15.8%      
               EXPENSE         88,853      75,056      -18.4%      

                                            11                     
WESTIN
               REVENUE        128,544     111,644       15.1%      
               EXPENSE        102,170      87,939      -16.2%      

                                             6                     

ST. REGIS/LUXURY COLLECTION
               REVENUE         54,388      45,013       20.8%      
               EXPENSE         41,699      35,879      -16.2%      

                                             0                     

OTHER
               REVENUE              0           0        0.0%      
               EXPENSE              0           0        0.0%      
 
 

                                          LATIN AMERICA          
                              2004          2003         Var.      
                            ---------     --------     -------
                                                                 
                                         12 Hotels                  
SAME STORE OWNED HOTELS                                               
           Total REVENUE      92,526       81,133       14.0%      
           Total EXPENSE      59,233       53,380      -11.0%     
                                                                      
                                              9                     
SHERATON                                                              
               REVENUE        62,356       53,829       15.8%      
               EXPENSE        40,559       36,836      -10.1%     
                                                                      
                                              3                     
WESTIN                                                                
               REVENUE        30,170       27,304       10.5%      
               EXPENSE        18,674       16,544      -12.9%     
                                                                      
                                              0                     
                                                                      
ST. REGIS/LUXURY COLLECTION                                           
               REVENUE             0            0        n/a       
               EXPENSE             0            0        n/a       
                                                                      
                                              0                     
                                                                      
OTHER                                                                 
               REVENUE             0            0        0.0%     
               EXPENSE             0            0        0.0%     
                                                                      
                                                                 
                                       ASIA PACIFIC                   
                           ---------------------------------------    
                              2004         2003         Var.          
                            ---------    --------     -------
                                                                      
                                         4 Hotels                     
                           ---------------------------------------    
SAME STORE OWNED HOTELS                                               
           Total REVENUE      51,103       35,396       44.4%         
           Total EXPENSE      39,346       29,935      -31.4%         
                                                                      
                                              3                       
                           ---------------------------------------    
SHERATON                                                              
               REVENUE        35,161       25,512       37.8%         
               EXPENSE        24,586       19,789      -24.2%         
                                                                      
                                              0                       
                           ---------------------------------------    
WESTIN                                                                
               REVENUE             0            0        0.0%         
               EXPENSE             0            0        0.0%         
                                                                      
                                              0                       
                           ---------------------------------------    
                                                                      
ST. REGIS/LUXURY COLLECTION                                           
               REVENUE             0            0        n/a          
               EXPENSE             0            0        n/a          
                                                                      
                                              1                       
                           ---------------------------------------    
                                                                      
OTHER                                                                 
               REVENUE        15,942        9,884       61.3%         
               EXPENSE        14,760       10,146      -45.5%         
                                                                      
 

(1) Hotel Results exclude 23 hotels sold or closed in 2003 and 2
    hotels without comparable results

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                        Debt Portfolio Summary
                          As of June 30, 2004
                               UNAUDITED
                                       Interest        Balance    
             Debt                       Terms       (in millions) 
---------------------------------- ---------------- ------------- 
Floating Rate Debt:               
Senior credit facility
    Revolving credit facility        Various + 150      $ 196     
    Term loan                         LIBOR + 150         300     
                                                    ------------- 
                                                          496     
  Mortgages and other                 Various             229     
  Interest rate swaps                 Various             300     
                                                    -------------
    Total Floating                                      1,025     

Fixed Rate Debt:
  Sheraton Holding public debt (1)                      1,064     
  
  Senior notes (2)                                      1,513     
  
  Convertible debt - Series B                              19     

  Convertible debt - 2003                                 360     

  Mortgages and other                                     753     

  Interest rate swaps                                    (300)    
    Total Fixed                                         3,409     
        Total Debt                                    $ 4,434     

                                                Interest  Avg Maturity
             Debt              % of Portfolio    Rate      (in years) 
------------------------------ --------------- ---------- ------------
Floating Rate Debt:                                                   
Senior credit facility                                                
    Revolving credit facility        4%           2.92%        2.3    
    Term loan                        7%           2.87%        1.5    
                                   -------       -------    --------- 
                                    11%           2.89%        1.8    
                                                                      
  Mortgages and other                5%           5.05%        1.4    
  Interest rate swaps                7%           5.84%               
                                   -------       -------              
    Total Floating                  23%           4.24%        1.7    
                                                                      
Fixed Rate Debt:                                                      
  Sheraton Holding public debt (1)  24%           6.00%        8.5    
                                                                      
  Senior notes (2)                  34%           6.70%        5.5    
                                                                      
  Convertible debt - Series B        1%           3.25%        2.3 (3)
                                                                      
  Convertible debt - 2003            8%           3.50%        1.9    
                                                                      
  Mortgages and other               17%           7.24%        6.6    
                                                                      
  Interest rate swaps               (7%)          7.88%               
                                   -------       -------              
    Total Fixed                     77%           6.09%        6.2    
                                   -------       -------              
        Total Debt                 100%           5.66%        5.5    
                                   =======       =======

                               Maturities
     less than 1 year                            $260
           2-3 years                           2,087
           4-5 years                             476
 greater than 5 years                           1,611
                                              $4,434
(1) Balance consists of outstanding public debt of $1.047 billion and
    a $17 million fair value adjustment related to the unamortized
    gain on fixed to floating interest rate swaps terminated in
    September 2002 and March 2004.

(2) Balance consists of outstanding public debt of $1.495 billion and
    a $40 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 the current fixed and floating interest rate
    swaps.

(3) Average maturity reflects the maturity date of the revolving
    credit facility which would be used to refinance the amount put to
    the Company.
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
       Hotels without Comparable Results & Other Selected Items
                          As of June 30, 2004
                        UNAUDITED ($ millions)

Properties without comparable results in 2004:
Property                            Location
----------------------------------- ---------------------------------
Sheraton Kauai                      Koloa, HI
St. Regis Apen                      Aspen, CO
 

Properties sold or closed in 2003:
Property                            Location
----------------------------------- ---------------------------------
Lenox Inn                           Atlanta, GA
Sheraton Mofarrej                   Sao Paulo, Brazil
Hotel Cala di Volpe                 Costa Smeralda, Italy
Hotel Pitrizza                      Costa Smeralda, Italy
Hotel Romazzino                     Costa Smeralda, Italy
Cervo Hotel & Conference Center     Costa Smeralda, Italy
Hotel Principe di Savoia            Milan, Italy
Hilton Novi                         Novi, MI
Westin Southfield                   Southfield, MI
Residence Inn Tyson's Corner        Vienna, VA
Sheraton Buckhead                   Atlanta, GA
Sheraton College Park               Beltsville, MD
Sheraton Chicago Northwest          Arlington Heights, IL
Sheraton Norfolk                    Norfolk, VA
Hilton Sonoma County                Santa Rosa, CA
Westin Stamford                     Stamford, CT
Wayfarer Inn                        Bedford, NH
Sheraton Ferncroft                  Danvers, MA
Sheraton Danbury                    Danbury, CT
Sheraton Gainesville                Gainesville, FL
Baltimore Marriott                  Baltimore, MD
Arlington Marriott                  Arlington, VA
North Charleston Sheraton           Charleston, SC
 

Selected Balance Sheet and Cash Flow Items:
Cash and cash equivalents (including restricted cash
 of $216 million)                                               $383
Debt level                                                    $4,434

Revenues and Expenses Associated with Assets Sold in 2003(1):
                                   Q1     Q2     Q3     Q4   Full Year
  2003
Revenues                          $42     $61    $7     $-     $110
Expenses                          $38     $45    $6     $-      $89
 

(1) Results consist of 20 hotels (excludes the Hotel Principe di
    Savoia reported in discontinued operations) that were sold in
    2003. These amounts are included in the revenues and expenses from
    owned, leased and consolidated joint venture hotels in 2003.

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                         Capital Expenditures
           For the Three and Six Months Ended June 30, 2004
                        UNAUDITED ($ millions)
                                                    QTD         YTD Capital Expenditures:
 Owned, Leased and Consolidated Joint Venture
  Hotels                                            $50        $100
 Corporate/IT                                        12          16
                                                ---------   ---------
Subtotal                                             62         116

Vacation Ownership Capital Expenditures:
 Capital expenditures (includes land
  acquisition)                                        4           8
 Inventory                                           22          37
                                                ---------   ---------
Subtotal                                             26          45

Development Capital (1)(2)                           24         156
                                                ---------   ---------
Total Capital Expenditures                         $112        $317
                                                =========   =========
 

(1) The QTD balance includes the St. Regis San Francisco additions of $15 million.
(2) The YTD balance includes the acquisitions of Sheraton Kauai for
    $40 million and Bliss World LLC of approximately $25 million,
    investments in Westin Hotels Limited Partnership of $26 million
    and St. Regis Anguilla of $20 million, and St. Regis San Francisco
    additions of $25 million.
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
              Summary of Portfolio by Properties & Rooms
                          As of June 30, 2004
                               UNAUDITED
                                           NAD            EAME
                                         -------        -------
Owned                                     Hotels  Rooms  Hotels Rooms
                                         -----------------------------
Sheraton                                     37  16,483     12  3,468
Westin                                       22  10,352     11  2,385
Four Points                                   7   1,362      -      -
W                                            12   4,369      -      -
Luxury Collection                             1     654      5    638
St. Regis                                     4     997      1    161
Other                                        13   3,061      -      -
Total Owned                                  96  37,278     29  6,652
Managed & UJV
Sheraton                                     41  19,939     75 21,739
Westin                                       38  21,453      6  1,464
Four Points                                  14   2,853      6    903
W                                             4     750      -      -
Luxury Collection                             7   1,632      6    942
St. Regis                                     2     697      1     95
Other                                         -       -      1    405
Total Managed & UJV                         106  47,324     95 25,548
Franchised
Sheraton                                    111  35,774     30  7,267
Westin                                       19   7,502      3  1,127
Four Points                                  88  15,819     10  1,376
Luxury Collection                             2     351     11  1,287
Total Franchised                            220  59,446     54 11,057
Systemwide
Sheraton                                    189  72,196    117 32,474
Westin                                       79  39,307     20  4,976
Four Points                                 109  20,034     16  2,279
W                                            16   5,119      -      -
Luxury Collection                            10   2,637     22  2,867
St. Regis                                     6   1,694      2    256
Other                                        13   3,061      1    405
Total Systemwide                            422 144,048    178 43,257
 
 

                             LAD           ASIA         Total
                           -------       -------       -------
Owned                       Hotels Rooms  Hotels Rooms  Hotels  Rooms
Sheraton                        7  3,573      3  1,028     59  24,552
Westin                          3    901      -      -     36  13,638
Four Points                     -      -      1    630      8   1,992
W                               -      -      -      -     12   4,369
Luxury Collection               2    320      -      -      8   1,612
St. Regis                       -      -      -      -      5   1,158
Other                           -      -      -      -     13   3,061
Total Owned                    12  4,794      4  1,658    141  50,382
Managed & UJV
Sheraton                        9  1,811     48 17,330    173  60,819
Westin                          -      -     13  5,120     57  28,037
Four Points                     1    128      2    207     23   4,091
W                               1    237      1    100      6   1,087
Luxury Collection               6    143      -      -     19   2,717
St. Regis                       -      -      2    591      5   1,383
Other                           -      -      2    315      3     720
Total Managed & UJV            17  2,319     68 23,663    286  98,854
Franchised
Sheraton                        3  1,074     16  5,445    160  49,560
Westin                          3    598      4  1,018     29  10,245
Four Points                     8  1,244      1    126    107  18,565
Luxury Collection               -      -      -      -     13   1,638
Total Franchised               14  2,916     21  6,589    309  80,008
Systemwide
Sheraton                       19  6,458     67 23,803    392 134,931
Westin                          6  1,499     17  6,138    122  51,920
Four Points                     9  1,372      4    963    138  24,648
W                               1    237      1    100     18   5,456
Luxury Collection               8    463      -      -     40   5,967
St. Regis                       -      -      2    591     10   2,541
Other                           -      -      2    315     16   3,781
Total Systemwide               43 10,029     93 31,910    736 229,244
 

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis(R), The Luxury Collection(R), Sheraton(R), Westin(R), Four Points(R) by Sheraton, W(R) brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. 

This press release contains forward-looking statements within the meaning of federal securities regulations. 

 

 
Contact:

Starwood Hotels & Resorts Worldwide, Inc
White Plains, New York
http://www.starwood.com
Also See: Starwood Posts a First Quarter Net Profit of $34 million Compared with a Loss of $116 million in 2003; Anticipating a Full Year Net Income of $265 million, Plans to Convert a Portion of St. Regis New York into Residential Condominiums / Hotel Operating Statistics / April 2004
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

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