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Starwood Reports 15% Increase in 4th Qtr Profit; Net
Income $100 million vs $87 million a Year Earlier, 
REVPAR for Same-Store Owned Hotels
Worldwide Increased 11.1%
Hotel Operating Statistics

.

WHITE PLAINS, N.Y. - Feb. 3, 2005 -- Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT): Fourth Quarter 2004 Highlights:
  • EPS from continuing operations for the fourth quarter of 2004 was $0.51 compared to $0.42 in the fourth quarter of 2003. Excluding special items, EPS from continuing operations was $0.57 for the fourth quarter of 2004 compared to $0.42 in the fourth quarter of 2003.
  • REVPAR at Same-Store Owned Hotels worldwide and in North America increased 11.1% and 11.0%, respectively, when compared to the fourth quarter of 2003. ADR increased 6.9% and 8.0% worldwide and in North America, respectively.
  • Globally, for Same-Store Owned Hotels, Sheraton REVPAR grew (+11.8%), followed by W Hotels (+11.7%), St. Regis/Luxury Collection (+10.7%), and Westin (+9.5%), with each of these brands experiencing both ADR and occupancy gains (excluding the St. Regis/Luxury Collection, which experienced a slight decline in ADR).
  • Third-party management and franchise fees in the quarter increased approximately 9.2% when compared to 2003.
  • Vacation ownership and residential revenues, which exclude gains on sales of notes receivable, increased 75.9%. Excluding the fractional sales at the St. Regis Aspen and residential sales at the St. Regis in San Francisco, contract sales were up 28.4% when compared to 2003.
  • Net income for the fourth quarter of 2004 was $100 million compared to $87 million in the fourth quarter of 2003. Total Company Adjusted EBITDA increased 20.7% to $327 million when compared to $271 million in 2003.
  • Margins at Starwood branded Same-Store Owned Hotels in North America improved approximately 380 basis points when compared to fourth quarter of 2003.
  • According to Smith Travel Research total Company system-wide market share increased 180 basis points when compared to 2003.
Starwood Hotels & Resorts Worldwide, Inc. today reported EPS from continuing operations for the fourth quarter of 2004 of $0.51 compared to $0.42 in the fourth quarter of 2003. Excluding special items, primarily related to a $15 million (after-tax) net loss on the sale of assets and the impairment of a hotel and an investment, EPS from continuing operations was $0.57 for the fourth quarter of 2004 compared to $0.42 in the fourth quarter of 2003. Income from continuing operations was $111 million in the fourth quarter of 2004 compared to $88 million in 2003. Excluding special items, income from continuing operations was $123 million for the fourth quarter of 2004 compared to $87 million in 2003. Net income (after discontinued operations) was $100 million and EPS was $0.46 in the fourth quarter of 2004 compared to $87 million and EPS of $0.42 in the fourth quarter of 2003. Selling, general, administrative and other in the fourth 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). The effective tax rate for the fourth quarter of 2004 was 1.7%. The tax rate and thereby income from continuing operations benefited from the reversal of $13 million of tax reserves as a result of the resolution of certain tax matters during the quarter.
 
Steven J. Heyer, CEO, said: "I'm very pleased with our industry-leading top and bottom line performance. Clearly the top line was helped in part by our well-located urban concentration of owned assets, but it is just as clear that we are enjoying significant share gains versus our competitive set, beyond that explained by location, owing to the resurgence and effectiveness of our brands. The top line gains are broad based, throughout North America and around the world, and ADR increases were more than 70% of our REVPAR increase.
 
Flow-through increased markedly as a result of the strong ADR increases, our productivity initiatives and a turnaround in the workers compensation issues of last year. Workers comp incidents were down more than 30% in 2004 versus 2003.
 
Meanwhile, our brand composition, innovation, identity and positioning efforts continue as we work to increase their value. The strength, value and potential of our brands is something we must capitalize on in the future."
 
Operating Results:
 
Fourth Quarter Ended December 31, 2004
 
Cash flow from operations was $201 million compared to $260 million in 2003. The decrease primarily relates to the increase in restricted cash of $60 million primarily related to cash in escrow from pre-sales of vacation ownership interests. Total Company Adjusted EBITDA was $327 million compared to $271 million in 2003.
 
Owned, Leased and Consolidated Joint Venture Hotels
 
REVPAR for Same-Store Owned Hotels worldwide and in North America increased 11.1% and 11.0%, respectively, when compared to 2003. REVPAR at Same-Store Owned Hotels in North America increased 11.7% at W, 11.4% at Sheraton, 10.8% 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, Chicago, San Francisco, Los Angeles, New Orleans, Miami and Washington D.C. Revenue from transient travel was up 12.3% in North America when compared to 2003. Internationally, Same-Store Owned Hotel REVPAR increased 11.6%, with Latin America up 24.3% (REVPAR in owned hotels in Argentina and Mexico were particularly strong), Europe up 9.1% and Asia Pacific up 4.1%. Excluding the favorable effects of foreign exchange, REVPAR increased 4.9% internationally.
 
Total revenues at Same-Store Owned Hotels worldwide increased 9.7%, to $867 million when compared to $790 million in 2003 while costs and expenses at the hotels increased 6.1% to $643 million in 2004 compared to $606 million in 2003. Total revenues at Same-Store Owned Hotels in North America increased 8.7% to $631 million in 2004 when compared to $580 million in 2003 while costs and expenses at these hotels increased 3.4% to $464 million when compared to $449 million in 2003, resulting in increased margins of approximately 380 basis points.
 
System-wide REVPAR; Management/Franchise Fees
 
System-wide (owned, managed and franchised) branded REVPAR for Same-Store Hotels in North America increased 10.4%; Westin 11.8%, W Hotels 11.0%, Sheraton 9.7%, St. Regis/Luxury Collection 8.2%, and Four Points by Sheraton 8.9%. For the ninth quarter in a row, total Company market share in North America increased for the Company's owned and managed hotels as well as for system-wide hotels. Total third-party management and franchise fees were $80 million, up $7 million, or 9.2%, from last year.
 
Distribution

Starwood's central distribution systems gross bookings increased approximately 10% and 12% for the fourth quarter and full year 2004 when compared to the same periods in 2003. Gross online bookings through proprietary branded websites increased 29% in 2004 as compared to 2003, with gross dollar bookings from the proprietary branded sites increasing 38%. Gross online dollar bookings represented approximately 10% of the overall gross dollar bookings, with 72% of that coming from our proprietary branded websites.
 
Vacation Ownership and Residential
 
Vacation ownership and residential revenue, which excludes gains on sales of notes receivable, was up $85 million, or 75.9% to $197 million in the fourth quarter of 2004 when compared to 2003 primarily due to residential sales at the St. Regis Museum Tower in San Francisco and vacation ownership sales at our resorts in Aspen, Maui, Orlando and Scottsdale. Contract sales, excluding fractional sales at the St. Regis Aspen and residential sales at the St. Regis in San Francisco, were up 28.4%. The average price per timeshare unit sold increased approximately 3.9% to $20,447, and the number of contracts signed increased approximately 23.6% in the fourth quarter of 2004 when compared to 2003.
 
In December 2004, the Company completed the conversion of 98 guest rooms at the St. Regis in Aspen, Colorado into 25 fractional units, which are being sold in four week intervals, and 20 new hotel rooms. Also, in the fourth quarter of 2004, the Company began selling condominiums at the St. Regis Museum Tower which is under construction in San Francisco, and recognized revenues of approximately $15 million.
 
In addition to its robust pipeline of existing vacation ownership inventory, the Company continues to evaluate its existing owned real estate for potential conversion to vacation ownership, fractional, or residential projects. The Company is also working with its business partners to develop similar conversion opportunities at managed hotels. The Company has identified a significant number of projects which could supply the vacation ownership and residential pipeline with sales at or above its current levels for at least ten years.
 
During the fourth quarter of 2004, the Company sold $25 million of notes receivable and recognized gains of $3 million as compared to gains of $9 million in the same period of 2003. New development planning continues for the owned Sheraton Kauai, the owned land at the Princeville resort in Kauai, the owned Sheraton Cancun, as well as other Mexico properties, and a second phase at the Westin Mission Hills Resort.
 
Brand Development/Unit Growth
 
During the fourth quarter, the Company signed 20 full service hotel management and franchise contracts (representing approximately 5,200 rooms) including the Westin Bellevue (Bellevue, Washington, 337 rooms), W LA Sunset (Los Angeles, California , 164 rooms), Sheraton Oran (Oran, Algeria, 321 rooms) and Sheraton Haikou Resort (China, 330 rooms), and opened 9 new hotels and resorts, including Sheraton Keauhou Bay Resort (Kailua-Kona, Hawaii, 521 rooms), Sheraton Read House Chattanooga Hotel (Chattanooga, Tennessee, 249 rooms), and Sheraton Old San Juan (San Juan, Puerto Rico, 240 rooms). Additionally during the fourth quarter 11 properties (representing approximately 2,800 rooms) were removed from the system (6 Four Points and 5 Sheratons.) The Company expects to open approximately 40 new full-service hotels and resorts (approximately 9,000 rooms) around the world in 2005. The Company had approximately 160 full service hotels and approximately 42,000 rooms in its active global development pipeline at December 31, 2004, with roughly half of that number in international locations. Additionally, during the fourth quarter, the Company opened the new Bliss spa at the W New York (20,000 square feet) and our first Remede Spa at the St. Regis in Aspen (15,000 square feet). In 2005, the Company plans to open 3 new Bliss spas in W hotels in San Francisco, Los Angeles and Chicago and 2 new Remede Spas in St. Regis hotels in San Francisco and New York with several others in various planning stages.
 
Results for the Twelve Months Ended December 31, 2004:
 
EPS from continuing operations for the twelve months ended December 31, 2004 was $1.72 compared to $0.51 in the same period of 2003. Excluding special items, EPS from continuing operations was $1.62 in 2004 compared to $0.86 in 2003. Income from continuing operations was $369 million in 2004 compared to $105 million in 2003. Excluding special items, income from the continuing operations was $348 million in 2004 compared to $176 million in 2003. Net income (after discontinued operations) was $395 million and EPS was $1.84 in 2004 compared to $309 million and $1.50, respectively, in 2003.
 
Cash flow from operations for the twelve months ended December 31, 2004 was $578 million compared to $771 million in the same period of 2003. The decrease primarily relates to the increase in restricted cash of $257 million, primarily related to pre-sales of vacation ownership interests. A substantial portion of this restricted cash will be released upon issuance of the certificate of occupancy for Phase 2 of the Westin Ka'anapali project which is expected to be received in the third quarter of 2005. Total Company Adjusted EBITDA for the twelve months ended December 31, 2004 was $1.150 billion, compared to $917 million (excluding sold hotels) in the same period in 2003.
 
Capital:
 
Gross capital spending during the quarter included approximately $81 million in renovations of hotel assets including construction capital at the St. Regis in Aspen, Colorado, the Boston Park Plaza, the Westin St. John, and the Sheraton Hotel and Towers in New York. Investment spending on VOI capital assets (primarily net capital expenditures for inventory) was $18 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, further investment spending of $44 million included the ongoing development of the St. Regis Museum Tower in San Francisco (260 hotel rooms and 102 condominium units). To date, the Company has invested $221 million in the St. Regis Museum Tower project, which is expected to open in the summer of 2005. The Company expects to realize gross proceeds of approximately $200 million from the sale of the project's condominiums.
 
Share Repurchase:
 
For the quarter ended December 31, 2004, the Company repurchased 1,486,600 shares at a total cost of approximately $77.9 million (an average cost of $52.38 per share). In the twelve months ended December 31, 2004, the Company repurchased 7,030,283 shares at a total cost of approximately $310 million (an average cost of $44.06 per share). At December 31, 2004, approximately $296 million remained available under the Company's Board authorized share repurchase program, and Starwood had approximately 211 million shares outstanding (including partnership units and exchangeable preferred shares).
 
Balance Sheet:
 
At December 31, 2004, the Company had total debt of $4.442 billion and cash and cash equivalents (including $357 million of restricted cash) of $683 million, or net debt of $3.759 billion, compared to net debt of $3.973 billion at the end of the third quarter of 2004. In addition, the Company continues to have an approximate $200 million investment in the senior debt of Le Meridien hotels.
 
At December 31, 2004, debt was approximately 76% fixed rate and 24% floating rate and its weighted average maturity was 5.0 years with a weighted average interest rate of 5.81%. The Company had cash (including total restricted cash) and availability under domestic and international revolving credit facilities of approximately $1.6 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 three months ended March 31, 2005, excluding the effects of the Share-Based Payment amendment to FASB Statement No. 123, if REVPAR at Same-Store Owned Hotels in North America increases approximately 6% - 8% versus the same period in 2004 (in January 2005 REVPAR at Same-Store Owned Hotels in North America increased 9.5% when compared to the same period in 2004):

  • Adjusted EBITDA would be expected to be approximately $275 million, an increase of 24% when compared to the same period of 2004.
  • Net income would be expected to be approximately $66 million, an increase of 100% when compared to income from continuing operations before special items in the first quarter of 2004.
  • EPS would be expected to be $0.30, an increase of 88% when compared to EPS from continuing operations before special items in the first quarter of 2004.
First quarter REVPAR is currently expected to increase less than full year 2005 REVPAR due primarily to the timing of the Easter and Passover holidays. In 2005 both holidays are in March, while in 2004 both holidays were in April.

For the full year 2005, excluding the effects of the Share-Based Payment amendment to FASB Statement No. 123, if REVPAR at Same-Store Owned Hotels in North America increases approximately 8% - 10% versus the full year 2004:

  • Full year revenues, including other revenues from managed and franchised properties, would be expected to be approximately $5.9 billion.
  • Full year Adjusted EBITDA would be expected to increase approximately 17.4% to approximately $1.350 billion, when compared to 2004 Adjusted EBITDA of $1.150 billion.
  • Full year net income would be expected to be approximately $440 million at a 24% effective tax rate, which assumes an annual dividend of $0.84 per Share (payable in January 2006), when compared to 2004 income from continuing operations before special items of approximately $348 million at a 13.9% effective tax rate.
  • Full year EPS would be expected to increase approximately 23.4% to $2.00 when compared to 2004 EPS from continuing operations before special items of $1.62.
  • Full year capital expenditures (excluding timeshare inventory) would be approximately $600 million, including $300 million for maintenance, renovation and technology, approximately $100 million for the completion of the St. Regis San Francisco multi-use project under construction, and $200 million for other growth initiatives. Additionally, net capital expenditures for timeshare inventory would be approximately $100 million.
  • 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 charges of $12 million (after-tax) for special items in the fourth quarter of 2004 compared to $1 million of net benefit (after-tax) in the same period of 2003.
 
Special items in the fourth quarter of 2004 primarily relate to the net loss or impairment on hotels and an investment totaling $15 million (after-tax), offset in part by the $3 million reversal of tax reserves no longer deemed necessary.
 
The following represents a reconciliation of income from continuing operations before special items to income from continuing operation after special items (in millions, except per share data):
 
Three Months
     Ended                                                 Year Ended
  December 31                                             December 31
  -----------                                             -----------
  2004   2003                                              2004   2003
 ------ ------                                            ------ ------

               Income from continuing operations before
  $123    $87   special items                              $348   $176
 ------ ------                                            ------ ------
 $0.57  $0.42  EPS before special items                   $1.62  $0.86
 ------ ------                                            ------ ------

               Special Items
               Restructuring and other special credits,
     -      8   net (a)                                      37      9
               Adjustment to costs associated with
     -     (1)  construction remediation (b)                  4     (4)
               Loss on asset dispositions and
   (25)    (4)  impairments, net (c)                        (33)  (183)
 ------ ------                                            ------ ------
   (25)     3  Total special items - pre-tax                  8   (178)
               Income tax benefit (expense) for special
    10     (4)  items (d)                                    (2)    77
     3      2  Favorable settlement of tax matters (e)       15     30
 ------ ------                                            ------ ------
   (12)     1  Total special items - after-tax               21    (71)

  $111    $88  Income from continuing operations           $369   $105
 ------ ------                                            ------ ------
 $0.51  $0.42  EPS including special items                $1.72  $0.51
 ====== ======                                            ====== ======
 

 (a) During the year ended December 31, 2004, the Company reversed a
     $37 million reserve previously recorded through restructuring and
     other special charges due to a favorable judgment in a litigation
     matter. During the three and twelve months ended December 31,
     2003, the Company received $12 million in a favorable settlement
     of a litigation matter. This credit was offset by an increase of
     $13 million in a reserve for legal defense costs associated with a
     separate litigation matter. Additionally, during the three and
     twelve month periods ending December 31, 2003, the Company
     reversed a $9 million liability that was originally established in
     1997 for the ITT Excess Pension Plan and is no longer required as
     the Company finalized the settlement of its remaining obligations
     associated with the plan.
 (b) Represents adjustments to the Company's share of costs for
     construction remediation efforts at a property owned by a vacation
     ownership unconsolidated joint venture that were previously
     recorded in 2002.
 (c) For the three and twelve months ended December 31, 2004,
     respectively, reflects the loss on the sale or impairment of
     hotels and an investment offset, in part, by the gain on sale of
     one of the Company's hotels. For the three and twelve months ended
     December 31, 2003 primarily represents the loss on the sale or
     impairment of 18 hotels.
 (d) Represents taxes on special items at the Company's incremental tax
     rate.
 (e) Tax benefits in the three and twelve months ended December 31,
     2004 and 2003 reflect the favorable results of certain changes to
     the Federal tax rules, the resolution of various tax matters that
     were successfully settled during these periods, or reversal of tax
     reserves no longer deemed necessary.
 
 
 

    The Company has included the above supplemental information
concerning special items to assist investors in analyzing Starwood's
financial position and results of operations. The Company has chosen
to provide this information to investors to enable them to perform
meaningful comparisons of past, present and future operating results
and as a means to emphasize the results of core on-going operations.
    Starwood will be conducting a conference call to discuss the fourth quarter financial results at 10:30 a.m. (EST) today. The conference call will be available through simultaneous webcast in the Investor Relations/Press Releases section of the Company's website at www.starwoodhotels.com. A replay of the conference call will also be available from 1:30 p.m. (EST) today through Thursday, February 10 at 12:00 midnight (EST) on both the Company's website and via telephone replay at (719) 457-0820 (access code 729974).
 

    Definitions:
 

    All references to EPS, unless otherwise noted, reflect earnings
per diluted share from continuing operations. All references to "net
capital expenditures" means gross capital expenditures for timeshare
and fractional inventory net of cost of sales. EBITDA represents net
income before interest expense, taxes, depreciation and amortization.
The Company believes that EBITDA is a useful measure of the Company's
operating performance due to the significance of the Company's
long-lived assets and level of indebtedness. EBITDA is a commonly used
measure of performance in its industry which, when considered with
GAAP measures, the Company believes gives a more complete
understanding of the Company's ability to service debt, fund capital
expenditures, pay income taxes and pay cash distributions. It also
facilitates comparisons between the Company and its competitors. The
Company's management has historically adjusted EBITDA (i.e., "Adjusted
EBITDA" and "Adjusted EBITDA excluding assets sold in 2003") when
evaluating operating performance for the total Company as well as for
individual properties or groups of properties because the Company
believes that the inclusion or exclusion of certain recurring and
non-recurring items, such as the special items described on page 7 of
this release and/or revenues and costs and expenses from hotels sold,
is necessary to provide the most accurate measure of core operating
results and as a means to evaluate comparative results. The Company's
management also used Adjusted EBITDA as a measure in determining the
value of acquisitions and dispositions and it is used in the annual
budget process. Due to recent guidance from the Securities and
Exchange Commission, the Company now does not reflect such items when
calculating EBITDA; however, the Company continues to adjust for these
special items and refers to this measure as Adjusted EBITDA. The
Company has historically reported this measure to its investors and
believes that the continued inclusion of Adjusted EBITDA provides
consistency in its financial reporting and enables investors to
perform more meaningful comparisons of past, present and future
operating results and provides a means to evaluate the results of its
core on-going operations. EBITDA and Adjusted EBITDA are not intended
to represent cash flow from operations as defined by GAAP and such
metrics should not be considered as an alternative to net income, cash
flow from operations or any other performance measure prescribed by
GAAP. The Company's calculation of EBITDA and Adjusted EBITDA may be
different from the calculations used by other companies and,
therefore, comparability may be limited.
    All references to Same-Store Owned Hotels reflect the Company's owned, leased and consolidated joint venture hotels, excluding hotels sold to date, and under significant renovation or for which comparable results are not available. REVPAR is defined as revenue per available room. ADR is defined as average daily rate.
    All references to contract sales reflect vacation ownership sales before revenue adjustments for percentage of completion accounting methodology.
    Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with approximately 750 properties in more than 80 countries and 110,000 employees at is owned and managed properties. For a list of the Company's owned, leased and consolidated joint venture hotels as of December 31, 2004, please visit >http://www.starwoodhotels.com/corporate/investor_relations.html.
    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, and W(R) brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.
 

    (Note: This press release contains forward-looking statements
within the meaning of federal securities regulations. Forward-looking
statements are not guarantees of future performance and involve risks
and uncertainties and other factors that may cause actual results to
differ materially from those anticipated at the time the
forward-looking statements are made. Further results, performance and
achievements may be affected by general economic conditions including
the timing and robustness of a recovery from the current global
economic downturn, the impact of war and terrorist activity, business
and financing conditions, foreign exchange fluctuations, cyclicality
of the real estate and the hotel and vacation ownership businesses,
operating risks associated with the hotel and vacation ownership
businesses, relationships with associates, customers and property
owners, the impact of the internet reservation channels, our reliance
on technology, domestic and international political and geopolitical
conditions, competition, governmental and regulatory actions
(including the impact of changes in U.S. and foreign tax laws and
their interpretation), travelers' fears of exposure to contagious
diseases, risk associated with the level of our indebtedness, risk
associated with potential acquisitions and dispositions, and other
circumstances and uncertainties. These risks and uncertainties are
presented in detail in our filings with the Securities and Exchange
Commission. Although we believe the expectations reflected in such
forward-looking statements are based upon reasonable assumptions, we
can give no assurance that our expectations will be attained or that
results will not materially differ. We undertake no obligation to
publicly update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise.)
 
 
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               UNAUDITED CONSOLIDATED STATEMENTS OF INCOME
                  (In millions, except per Share data)
   Three Months Ended                                Year Ended
      December 31,                                  December 31,
 -----------------------                      -------------------------
                  %                                              %
  2004   2003   Variance                        2004    2003   Variance
 ------ ------ ---------                      ------- ------- ---------
                         Revenues
                         Owned, leased and
                          consolidated joint
  $878   $797      10.2%  venture hotels      $3,326  $3,085       7.8%
                         Vacation ownership
                          and residential
   197    112      75.9   sales and services     640     439      45.8
                         Management fees,
                          franchise fees and
   120     71      69.0   other income           419     255      64.3
                         Other revenues from
                          managed and
                          franchised
   247    217      13.8   properties (a)         983     851      15.5
 ------ ------ ---------                      ------- ------- ---------
 1,442  1,197      20.5                        5,368   4,630      15.9
                         Costs and Expenses
                         Owned, leased and
                          consolidated joint
   655    611      (7.2)  venture hotels       2,519   2,392      (5.3)
                         Vacation ownership
   154     88     (75.0)  and residential        488     340     (43.5)
                         Selling, general,
                          administrative and
    87     41    (112.0)  other                  331     200     (65.5)
                         Restructuring and
                          other special
     -     (8)      n/m   credits, net           (37)     (9)      n/m
   107    101      (5.9) Depreciation            413     410       (.7)
     5      5         -  Amortization             18      19       5.3
                         Other expenses from
                          managed and
                          franchised
   247    217     (13.8)  properties (a)         983     851     (15.5)
 ------ ------ ---------                      ------- ------- ---------
 1,255  1,055     (19.0)                       4,715   4,203     (12.2)
   187    142      31.7  Operating income        653     427      52.9
                         Gain on sale of VOI
     3      9     (66.7)  notes receivable        14      15      (6.7)
                         Equity earnings from
                          unconsolidated
    10      2     400.0   ventures                32      12     166.7
                         Interest expense,
                          net of interest
                          income of $1, $2,
   (61)   (63)      3.2   $3 and $5 (b)         (254)   (282)      9.9
                         Loss on asset
                          dispositions and
   (25)    (4)      n/m   impairments, net       (33)   (183)      n/m
 ------ ------ ---------                      ------- ------- ---------
                         Income (loss) from
                          continuing
                          operations before
                          taxes and minority
   114     86      32.6   equity                 412     (11)      n/m
                         Income tax benefit
    (2)     -       n/m   (expense)              (43)    113       n/m
                         Minority equity in
    (1)     2     150.0   net loss (income)        -       3       n/m
 ------ ------ ---------                      ------- ------- ---------
                         Income from
                          continuing
   111     88      26.1   operations             369     105     251.4
                         Discontinued
                          operations:
                           Loss from
                            operations, net
                            of taxes $0, $1
     -     (1)      n/m     $0 and $0 (c)          -      (2)      n/m
                           Gain (loss) on
   (11)     -       n/m     disposition (d)       26     206       n/m
 ------ ------ ---------                      ------- ------- ---------
   100     87      14.9  Net income              395     309      27.8
 ====== ====== =========                      ======= ======= =========
                         Earnings Per Share -
                          Basic
                         Continuing
 $0.53  $0.43      23.3   operations           $1.78   $0.52     242.3
                         Discontinued
 (0.05)     -       n/m   operations            0.13    1.01       n/m
 ------ ------ ---------                      ------- ------- ---------
 $0.48  $0.43      11.6  Net income            $1.91   $1.53      24.8
 ====== ====== =========                      ======= ======= =========
                         Earnings Per Share -
                          Diluted
                         Continuing
 $0.51  $0.42      21.4   operations           $1.72   $0.51     237.3
                         Discontinued
 (0.05)     -       n/m   operations            0.12    0.99       n/m
 ------ ------ ---------                      ------- ------- ---------
 $0.46  $0.42       9.5  Net income            $1.84   $1.50      22.7
 ====== ====== =========                      ======= ======= =========

                         Weighted average
   208    202             number of Shares       207     203
 ====== ======                                ======= =======
                         Weighted average
                          number of Shares
   217    209             assuming dilution      215     207
 ====== ======                                ======= =======
 

     (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 and $7 million of discontinued
         operations allocations for the three and twelve months ended
         December 31, 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) Activity in the three and twelve months ended December 31,
         2004 primarily represents the adjustments to the tax liability
         associated with the successful resolution of certain
         contingencies and the reversal of reserves that are no longer
         required as the related contingencies have been resolved, both
         of which are related to the 1999 divestiture of the Company's
         gaming business. Activity in the year ended December 31, 2003
         primarily relates to a $194 million (pre-tax) gain 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)

                                              December 31, December 31,
                                                  2004         2003
                                              ------------ ------------
 Assets
 Current assets:
  Cash and cash equivalents                          $326         $427
  Restricted cash                                     347           81
  Accounts receivable, net of allowance for
   doubtful accounts of $58 and $53                   482          381
  Inventories                                         371          232
  Prepaid expenses and other                          157          104
                                              ------------ ------------
    Total current assets                            1,683        1,225
  Investments                                         453          415
  Plant, property and equipment, net                6,997        7,106
  Goodwill and intangible assets, net               2,544        2,488
  Other assets (a)                                    621          623
                                              ------------ ------------
                                                  $12,298      $11,857
                                              ============ ============

 Liabilities and Stockholders' Equity
 Current liabilities:
  Short-term borrowings and current maturities
   of long-term debt (b)                             $619         $233
  Accounts payable                                    200          171
  Accrued expenses                                    872          799
  Accrued salaries, wages and benefits                299          228
  Accrued taxes and other                             138          176
                                              ------------ ------------
    Total current liabilities                       2,128        1,607
 Long-term debt (b)                                 3,823        4,393
 Deferred income taxes                                880          898
 Other liabilities                                    652          574
                                              ------------ ------------
                                                    7,483        7,472
 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 597,825
     and 480,880 shares at December 31, 2004
     and December 31, 2003, respectively                -            -
    Corporation common stock; $0.01 par value;
     authorized 1,050,000,000 shares;
     outstanding 208,730,800 and 201,812,126
     shares at December 31, 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
     208,730,800 and 201,812,126 shares at
     December 31,2004 and December 31, 2003,
     respectively                                       2            2
 Additional paid-in capital                         5,121        4,952
 Deferred compensation                                (14)          (9)
 Accumulated other comprehensive loss                (255)        (334)
 Retained earnings (accumulated deficit)              (68)        (287)
                                              ------------ ------------
    Total stockholders' equity                      4,788        4,326
                                              ------------ ------------
                                                  $12,298      $11,857
                                              ============ ============
 

     (a) Includes restricted cash of $10 million and $19 million at
         December 31, 2004 and December 31, 2003, respectively.
     (b) Excludes Starwood's share of unconsolidated joint venture debt
         aggregating approximately $438 million and $410 million at
         December 31, 2004 and December 31, 2003, respectively.
 

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

    Three Months Ended                                Year Ended
       December 31,                                  December 31,
 -------------------------                     ------------------------
                    %                                            %
   2004    2003   Variance                       2004   2003   Variance
 ------- ------- ---------                     ------- ------ ---------
                           Reconciliations of
                            Net Income to
                            EBITDA and
                            Adjusted EBITDA
   $100     $87      14.9  Net income            $395   $309      27.8%
                           Interest expense
     66      70       5.7   (a)                   275    312      11.9
                           Income tax
                            (benefit) expense
     26      (1)      n/m   (b)                    34    (73)      n/m
    115     108      (6.5) Depreciation (c)       445    438      (1.6)
      8       8         -  Amortization (d)        26     26         -
 ------- ------- ---------                     ------- ------ ---------
    315     272      15.8  EBITDA               1,175  1,012      16.1
                           Adjustment to costs
                            associated with
                            construction
      -       1       n/m   remediation            (4)     4       n/m
                           Loss on asset
                            dispositions and
     25       4       n/m   impairments, net       33    183       n/m
                           Discontinued
    (13)      2       n/m   operations (e)        (17)  (252)      n/m
                           Restructuring and
                           other special
      -      (8)      n/m   credits, net          (37)    (9)      n/m
 ------- ------- ---------                     ------- ------ ---------
    327     271      20.7  Adjusted EBITDA      1,150    938      22.6
                           Hotels Sold in 2003
                            (20 hotels) (f)
      -       -       n/m   Revenues                -   (110)      n/m
      -       -       n/m   Costs and expenses      -     89       n/m
 ------- ------- ---------                     ------- ------ ---------
                           Adjusted EBITDA
                            excluding assets
   $327    $271      20.7%  sold in 2003       $1,150   $917      25.4%
 ======= ======= =========                     ======= ====== =========
 

     (a) Includes $4, $5, $18 and $18 million of interest expense
         related to unconsolidated joint ventures for the three months
         ended December 31, 2004 and 2003 and the twelve months ended
         December 31, 2004 and 2003, respectively. Also includes $7
         million of interest expense allocated to discontinued
         operations for the twelve months ended December 31, 2003,
         respectively. No interest expense was allocated to
         discontinued operations in 2004 or in the fourth quarter of
         2003.
     (b) Includes $24, $(1), $(9) and $40 million of tax (benefit)
         expense recorded in discontinued operations for the three
         months ended December 31, 2004 and 2003 and for the twelve
         months ended December 31, 2004 and 2003, respectively.
     (c) Includes $8, $7, $32 and $27 million of Starwood's share of
         depreciation expense of unconsolidated joint ventures for the
         three months ended December 31, 2004 and 2003 and the twelve
         months ended December 31, 2004 and 2003, respectively. Also
         includes $1 million of depreciation expense included in
         discontinued operations for the twelve months ended December
         31, 2003. No depreciation expense was allocated to
         discontinued operations in 2004 or the fourth quarter of 2003.
     (d) Includes $3, $3, $8 and $7 million of Starwood's share of
         amortization expense of unconsolidated joint ventures for the
         three months ended December 31, 2004 and 2003 and the twelve
         months ended December 31, 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 Ended                                      Year Ended
    December 31,                                        December 31,
 ------------------                                  ------------------
  2004      2003                                      2004      2003
 --------  --------                                  --------  --------
                    Cash Flow Data
    $100       $87  Net income                          $395      $309
                    Exclude:
      11         1     Discontinued operations, net      (26)     (204)
 --------  --------                                  --------  --------
                    Income from continuing
     111        88   operations                          369       105
                    (Increase) decrease in
     (60)        4   restricted cash                    (257)       17
                    Adjustments to income from
                     continuing operations, changes
     150       167   in working capital, and other       465       638
 --------  --------                                  --------  --------
                       Cash from continuing
     201       259      operations                       577       760
                       Cash from discontinued
       -         1      operations                         1        11
 --------  --------                                  --------  --------
    $201      $260  Cash from operating activities      $578      $771
 ========  ========                                  ========  ========
                    Cash from (used for) investing
    $(91)    $(327)  activities                        $(415)     $510
 ========  ========                                  ========  ========
                    Cash used for financing
    $(22)    $(301)  activities                        $(273)    $(979)
 ========  ========                                  ========  ========
 
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
          Non-GAAP to GAAP Reconciliations - Future Performance
                              (In millions)
 Three Months Ended                                      Year Ended
   March 31, 2005                                     December 31, 2005
 ------------------                                   -----------------
               $66   Net Income                                   $440
                71   Interest expense                              285
                21   Income tax expense                            140
               117   Depreciation and amortization                 485
 ------------------                                   -----------------
              $275   EBITDA                                     $1,350
 ==================                                   =================
 
 

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

   Three Months Ended                                Year Ended
   December 31, 2004                              December 31, 2004
 ----------------------                       -------------------------
                          Same-Store Owned
                 %            Hotels (1)                         %
 2004  2003    Variance       Worldwide         2004    2003   Variance
 ----- ----- ----------                       ------- ------- ---------
                        Revenue
                           Same-Store Owned
 $867  $790        9.7      Hotels            $3,266  $2,933      11.4
                           Hotels Sold or
                            Closed in 2004
                            and 2003 (24
    -     2        n/m      hotels)                4     115       n/m
                           Hotels without
                            Comparable
                            Results (2
   11     5      120.0      hotels)               50      29      72.4
                           Other ancillary
    -     -          -      hotel operations       6       8     (25.0)
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotels
 $878  $797       10.2   Revenue              $3,326  $3,085       7.8
 ===== ===== ==========                       ======= ======= =========

                        Costs and Expenses
                           Same Store Owned
 $643  $606      $(6.1)     Hotels            $2,470  $2,271      (8.8)
                           Hotels Sold or
                            Closed in 2004
                            and 2003 (24
    1     1        n/m      hotels)                3      95       n/m
                           Hotels without
                            Comparable
                            Results (2
   11     4     (175.0)     hotels)               41      21     (95.2)
                           Other ancillary
    -     -          -      hotel operations       5       5         -
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotel
 $655   611       (7.2)  Costs and Expenses   $2,519  $2,392      (5.3)
 ===== ===== ==========                       ======= ======= =========

   Three Months Ended                                Year Ended
   December 31, 2004                              December 31, 2004
 ----------------------                       -------------------------
                          Same-Store Owned
                 %              Hotels                           %
 2004  2003    Variance     North America       2004    2003   Variance
 ----- ----- ----------                       ------- ------- ---------
                        Revenue
                           Same-Store Owned
 $631  $580        8.8      Hotels            $2,369  $2,153      10.0
                           Hotels Sold or
                            Closed in 2004
                            and 2003 (18
    -     2        n/m      hotels)                4     103       n/m
                           Hotels without
                            Comparable
                            Results (2
   11     5      120.0      hotels)               50      29      72.4
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotels
 $642  $587        9.4   Revenue              $2,423  $2,285       6.0
 ===== ===== ==========                       ======= ======= =========

                        Costs and Expenses
                           Same Store Owned
 $464  $449      $(3.3)     Hotels            $1,793  $1,679      (6.8)
                          Hotels Sold or
                           Closed in 2004 and
    1     1          -     2003 (18 hotels)        3      79       n/m
                           Hotels without
                            Comparable
                            Results (2
   11     4     (175.0)     hotels)               41      21     (95.2)
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotel
 $476  $454       (4.8)  Costs and Expenses   $1,837  $1,779      (3.3)
 ===== ===== ==========                       ======= ======= =========

   Three Months Ended                                Year Ended
   December 31, 2004                              December 31, 2004
 ----------------------                       -------------------------
                          Same-Store Owned
                 %              Hotels                           %
 2004  2003    Variance     International       2004    2003   Variance
 ----- ----- ----------                       ------- ------- ---------
                        Revenue
                           Same-Store Owned
 $236  $210      (12.4)     Hotels              $897    $780      15.0
                           Hotels Sold or
                            Closed in 2004
                            and 2003 (6
    -     -        n/m      hotels)                -      12       n/m
                           Other ancillary
    -     -        n/m      hotel operations       6       8     (25.0)
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotels
 $236  $210      (12.4)  Revenue                $903    $800      12.9
 ===== ===== ==========                       ======= ======= =========

                        Costs and Expenses
                           Same Store Owned
 $179  $157      (14.0)     Hotels              $677    $592     (14.4)
                          Hotels Sold or
                           Closed in 2004 and
    -     -          -     2003 (6 hotels)         -      16       n/m
                           Other ancillary
    -     -          -      hotel operations       5       5         -
 ----- ----- ----------                       ------- ------- ---------
                        Total Owned, Leased
                         and Consolidated
                         Joint Venture Hotel
 $179  $157      (14.0)  Costs and Expenses     $682    $613     (11.3)
 ===== ===== ==========                       ======= ======= =========
 

 (1) Same-Store Owned Hotel Results exclude 24 hotels sold or closed in
     2004 and 2003 and 2 hotels without comparable results.
 

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Three Months Ended December 31, 2004
                                UNAUDITED
                            WORLDWIDE               NORTH AMERICA
                     ------------------------  ------------------------
                      2004     2003     Var.    2004     2003     Var.
                     -------- -------- ------  -------- -------- ------

                            138 Hotels                 93 Hotels
                     ------------------------  ------------------------
 SAME-STORE OWNED HOTELS
    REVPAR ($)        113.88   102.49   11.1%   113.63   102.41   11.0%
    ADR ($)           169.52   158.56    6.9%   167.85   155.35    8.0%
    OCCUPANCY (%)       67.2%    64.6%   2.6      67.7%    65.9%   1.8

                               60                        36
                     ------------------------  ------------------------
 SHERATON
    REVPAR ($)         96.42    86.23   11.8%   101.15    90.83   11.4%
    ADR ($)           145.39   135.18    7.6%   151.57   138.46    9.5%
    OCCUPANCY (%)       66.3%    63.8%   2.5      66.7%    65.6%   1.1

                               36                        22
                     ------------------------  ------------------------
 WESTIN
    REVPAR ($)        115.04   105.04    9.5%   103.18    94.95    8.7%
    ADR ($)           166.52   157.03    6.0%   146.44   137.64    6.4%
    OCCUPANCY (%)       69.1%    66.9%   2.2      70.5%    69.0%   1.5

                               10                         4
                     ------------------------  ------------------------
 ST. REGIS/
  LUXURY COLLECTION
    REVPAR ($)        256.43   231.66   10.7%   261.43   235.88   10.8%
    ADR ($)           397.39   401.06   (0.9)   378.23   386.34   (2.1)
    OCCUPANCY (%)       64.5%    57.8%   6.7      69.1%    61.1%   8.0

                               12                        12
                     ------------------------  ------------------------
 W
    REVPAR ($)        175.81   157.38   11.7%   175.81   157.38   11.7%
    ADR ($)           243.52   219.51   10.9%   243.52   219.51   10.9%
    OCCUPANCY (%)       72.2%    71.7%   0.5      72.2%    71.7%   0.5

                               20                        19
                     ------------------------  ------------------------
 OTHER
    REVPAR ($)         78.25    70.28   11.3%    73.67    65.34   12.7%
    ADR ($)           124.48   118.07    5.4%   123.94   117.35    5.6%
    OCCUPANCY (%)       62.9%    59.5%   3.4      59.4%    55.7%   3.7
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 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 December 31, 2004
                                UNAUDITED
                                               INTERNATIONAL(2)
                                          2004       2003        Var.
                                        ---------  ---------  ---------

                                                   45 Hotels
 SAME-STORE OWNED HOTELS
    REVPAR ($)                            114.59     102.71       11.6%
    ADR ($)                               174.38     168.45        3.5%
    OCCUPANCY (%)                           65.7%      61.0%       4.7

                                                      24
 SHERATON
    REVPAR ($)                             87.27      77.27       12.9%
    ADR ($)                               133.20     128.22        3.9%
    OCCUPANCY (%)                           65.5%      60.3%       5.2

                                                      14
 WESTIN
    REVPAR ($)                            153.81     138.15       11.3%
    ADR ($)                               238.14     230.13        3.5%
    OCCUPANCY (%)                           64.6%      60.0%       4.6

                                                      6
 ST. REGIS/LUXURY COLLECTION
    REVPAR ($)                            247.70     224.30       10.4%
    ADR ($)                               438.28     431.21       (1.6)
    OCCUPANCY (%)                           56.5%      52.0%       4.5
 

 W
    REVPAR ($)
    ADR ($)
    OCCUPANCY (%)
                                                      1
 OTHER
    REVPAR ($)                            108.71     104.75        3.8%
    ADR ($)                               127.01     121.27        4.7%
    OCCUPANCY (%)                           85.6%      86.4%      (0.8)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 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 December 31, 2004
                                UNAUDITED
                               EUROPE               LATIN AMERICA
                      -----------------------  -----------------------
                        2004     2003    Var.    2004    2003    Var.
                      -------- -------- -----  -------- ------- ------

                             29 Hotels                12 Hotels
                      -----------------------  -----------------------
 SAME-STORE OWNED HOTELS
    REVPAR ($)         148.10   135.79   9.1%    69.04   55.54   24.3%
    ADR ($)            236.87   227.05   4.3%   104.99   99.05    6.0%
    OCCUPANCY (%)        62.5%    59.8%  2.7      65.8%   56.1%   9.7

                                12                       9
                      -----------------------  -----------------------
 SHERATON
    REVPAR ($)         104.53    95.28   9.7%    63.51   51.69   22.9%
    ADR ($)            162.43   155.78   4.3%    98.50   93.20    5.7%
    OCCUPANCY (%)        64.4%    61.2%  3.2      64.5%   55.5%   9.0

                                11                       3
                      -----------------------  -----------------------
 WESTIN
    REVPAR ($)         178.02   164.51   8.2%    92.94   72.18   28.8%
    ADR ($)            287.51   271.68   5.8%   130.35  122.91    6.1%
    OCCUPANCY (%)        61.9%    60.6%  1.3      71.3%   58.7%  12.6

                                6
 ST. REGIS/
  LUXURY COLLECTION
    REVPAR ($)         247.70   224.30  10.4%
    ADR ($)            438.28   431.21   1.6%
    OCCUPANCY (%)        56.5%    52.0%  4.5
 

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

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Three Months Ended December 31, 2004
                                UNAUDITED
                                                  ASIA PACIFIC
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                     4 Hotels
 SAME-STORE OWNED HOTELS
    REVPAR ($)                              116.00    111.45       4.1%
    ADR ($)                                 148.81    139.92       6.4%
    OCCUPANCY (%)                             77.9%     79.7%     (1.8)

                                                       3
 SHERATON
    REVPAR ($)                              120.46    115.56       4.2%
    ADR ($)                                 164.42    153.01       7.5%
    OCCUPANCY (%)                             73.3%     75.5%     -2.2
 

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

 ST. REGIS/LUXURY COLLECTION
    REVPAR ($)
    ADR ($)
    OCCUPANCY (%)
                                                       1
 OTHER
    REVPAR ($)                              108.71    104.75       3.8%
    ADR ($)                                 127.01    121.27       4.7%
    OCCUPANCY (%)                             85.6%     86.4%     (0.8)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Three Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                             WORLDWIDE              NORTH AMERICA
                      -----------------------  -----------------------
                       2004     2003    Var.    2004     2003    Var.
                      -------- -------- -----  -------- -------- -----

                             138 Hotels               93 Hotels
                      -----------------------  -----------------------
 SAME-STORE OWNED HOTELS
    Total REVENUE     867,070  790,212   9.7%  630,606  580,061   8.7%
    Total EXPENSE(3)  643,297  606,372  (6.1)  464,244  449,081  (3.4)

                                60                       36
                      -----------------------  -----------------------
 SHERATON
    REVENUE           354,006  319,174  10.9%  236,664  215,949   9.6%
    EXPENSE           256,409  242,626  (5.7)  171,767  166,925  (2.9)
 

                                36                       22
                      -----------------------  -----------------------
 WESTIN
    REVENUE           253,266  232,925   8.7%  172,282  161,446   6.7%
    EXPENSE           192,717  178,470  (8.0)  128,080  124,478  (2.9)
 

                                10                       4
                      -----------------------  -----------------------
 ST. REGIS/
  LUXURY COLLECTION
    REVENUE           102,806   93,215  10.3%   73,571   66,269  11.0%
    EXPENSE            74,829   69,171  (8.2)   53,433   49,476  (8.0)
 

                                12                       12
                      -----------------------  -----------------------
 W(3)
    REVENUE           101,920   92,178  10.6%  101,920   92,178  10.6%
    EXPENSE            73,818   71,413  (3.4)   73,818   71,413  (3.4)
 

                                20                       19
                      -----------------------  -----------------------
 OTHER
    REVENUE            55,072   52,720   4.5%   46,169   44,219   4.4%
    EXPENSE            45,525   44,692  (1.9)   37,146   36,789  (1.0)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 (2) See next page for breakdown by division
 (3) Includes lease 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 December 31, 2004
                        UNAUDITED (in thousands)
                                                INTERNATIONAL(2)
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                    45 Hotels
 SAME-STORE OWNED HOTELS
    Total REVENUE                          236,464   210,151      12.5%
    Total EXPENSE(3)                       179,054   157,291     (13.8)
 

                                                       24
 SHERATON
    REVENUE                                117,342   103,225      13.7%
    EXPENSE                                 84,642    75,701     (11.8)
 

                                                       14
 WESTIN
    REVENUE                                 80,984    71,479      13.3%
    EXPENSE                                 64,637    53,992     (19.7)
 

                                                       6
 ST. REGIS/LUXURY COLLECTION
    REVENUE                                 29,235    26,946       8.5%
    EXPENSE                                 21,396    19,695      (8.6)
 
 

 W(3)
    REVENUE
    EXPENSE

                                                       1
 OTHER
    REVENUE                                  8,903     8,501       4.7%
    EXPENSE                                  8,379     7,903      (6.0)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 (2) See next page for breakdown by division
 (3) Includes lease 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 December 31, 2004
                        UNAUDITED (in thousands)
                               EUROPE               LATIN AMERICA
                      ------------------------  ----------------------
                       2004     2003     Var.    2004    2003    Var.
                      -------- -------- ------  ------- ------- ------

                              29 Hotels                12 Hotels
                      ------------------------  ----------------------
 SAME-STORE OWNED HOTELS
    Total REVENUE     154,184  139,292   10.7%  52,720  42,952   22.7%
    Total EXPENSE     121,915  107,989  (12.9)  35,107  28,686  (22.4)
 

                                12                        9
                      ------------------------  ----------------------
 SHERATON
    REVENUE            58,477   52,183   12.1%  38,208  31,636   20.8%
    EXPENSE            47,264   42,432  (11.4)  23,725  20,556  (15.4)
 

                                11                        3
                      ------------------------  ----------------------
 WESTIN
    REVENUE            66,472   60,163   10.5%  14,512  11,316   28.2%
    EXPENSE            53,255   45,862  (16.1)  11,382   8,130  (40.0)
 

                                 6
 ST. REGIS/
  LUXURY COLLECTION
    REVENUE            29,235   26,946    8.5%
    EXPENSE            21,396   19,695   (8.6)
 
 

 OTHER
    REVENUE
    EXPENSE

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Three Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                                                  ASIA PACIFIC
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                     4 Hotels
 SAME-STORE OWNED HOTELS
    Total REVENUE                           29,560    27,907       5.9%
    Total EXPENSE                           22,032    20,616      (6.9)
 

                                                       3
 SHERATON
    REVENUE                                 20,657    19,406       6.4%
    EXPENSE                                 13,653    12,713      (7.4)
 
 

 WESTIN
    REVENUE
    EXPENSE
 

 ST. REGIS/LUXURY COLLECTION
    REVENUE
    EXPENSE

                                                       1
 OTHER
    REVENUE                                  8,903     8,501       4.7%
    EXPENSE                                  8,379     7,903      (6.0)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Twelve Months Ended December 31, 2004
                                UNAUDITED
                             WORLDWIDE              NORTH AMERICA
                      ------------------------ ------------------------
                       2004     2003     Var.   2004     2003     Var.
                      -------- -------- ------ -------- -------- ------

                             138 Hotels                93 Hotels
                      ------------------------ ------------------------
 SAME-STORE OWNED HOTELS
    REVPAR ($)         110.81    98.03   13.0%  110.13    98.21   12.1%
    ADR ($)            161.74   151.49    6.8%  156.65   147.15    6.5%
    OCCUPANCY (%)        68.5%    64.7%   3.8     70.3%    66.7%   3.6

                                60                       36
                      ------------------------ ------------------------
 SHERATON
    REVPAR ($)          92.59    79.97   15.8%   97.90    84.79   15.5%
    ADR ($)            137.50   127.72    7.7%  139.79   129.39    8.0%
    OCCUPANCY (%)        67.3%    62.6%   4.7     70.0%    65.5%   4.5

                                36                       22
                      ------------------------ ------------------------
 WESTIN
    REVPAR ($)         118.98   109.43    8.7%  106.78    99.37    7.5%
    ADR ($)            166.99   157.70    5.9%  145.80   138.84    5.0%
    OCCUPANCY (%)        71.3%    69.4%   1.9     73.2%    71.6%   1.6

                                10                        4
                      ------------------------ ------------------------
 ST. REGIS/
  LUXURY COLLECTION
    REVPAR ($)         236.17   207.65   13.7%  225.65   203.53   10.9%
    ADR ($)            379.50   364.56    4.1%  343.02   335.04    2.4%
    OCCUPANCY (%)        62.2%    57.0%   5.2     65.8%    60.7%   5.1

                                12                       12
                      ------------------------ ------------------------
 W
    REVPAR ($)         158.15   141.90   11.5%  158.15   141.90   11.5%
    ADR ($)            217.81   203.17    7.2%  217.81   203.17    7.2%
    OCCUPANCY (%)        72.6%    69.8%   2.8     72.6%    69.8%   2.8

                                20                       19
                      ------------------------ ------------------------
 OTHER
    REVPAR ($)          80.29    68.89   16.5%   77.14    67.67   14.0%
    ADR ($)            121.83   112.65    8.1%  121.99   115.50    5.6%
    OCCUPANCY (%)        65.9%    61.2%   4.7     63.2%    58.6%   4.6
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 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 Twelve Months Ended December 31, 2004
                                UNAUDITED
                                                INTERNATIONAL(2)
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                    45 Hotels
 SAME-STORE OWNED HOTELS
    REVPAR ($)                              112.72     97.52      15.6%
    ADR ($)                                 177.57    165.37       7.4%
    OCCUPANCY (%)                             63.5%     59.0%      4.5

                                                       24
 SHERATON
    REVPAR ($)                               82.33     70.65      16.5%
    ADR ($)                                 132.52    123.99       6.9%
    OCCUPANCY (%)                             62.1%     57.0%      5.1

                                                       14
 WESTIN
    REVPAR ($)                              158.26    142.03      11.4%
    ADR ($)                                 244.00    227.85       7.1%
    OCCUPANCY (%)                             64.9%     62.3%      2.6

                                                       6
 ST. REGIS/LUXURY COLLECTION
    REVPAR ($)                              254.53    214.83      18.5%
    ADR ($)                                 454.21    426.72       6.4%
    OCCUPANCY (%)                             56.0%     50.3%      5.7
 

 W
    REVPAR ($)
    ADR ($)
    OCCUPANCY (%)
                                                       1
 OTHER
    REVPAR ($)                              101.36     77.36      31.0%
    ADR ($)                                 121.06     97.95      23.6%
    OCCUPANCY (%)                             83.7%     79.0%      4.7
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 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 Twelve Months Ended December 31, 2004
                                UNAUDITED
                               EUROPE               LATIN AMERICA
                      ------------------------ ------------------------
                       2004     2003     Var.   2004     2003     Var.
                      -------- -------- ------ -------- -------- ------

                              29 Hotels                12 Hotels
                      ------------------------ ------------------------
 SAME-STORE OWNED HOTELS
    REVPAR ($)         151.29   133.59   13.2%   62.02    52.51   18.1%
    ADR ($)            242.21   225.01    7.6%  102.32    97.99    4.4%
    OCCUPANCY (%)        62.5%    59.4%   3.1     60.6%    53.6%   7.0

                                12                        9
                      ------------------------ ------------------------
 SHERATON
    REVPAR ($)         104.78    92.49   13.3%   54.94    46.18   19.0%
    ADR ($)            163.01   152.30    7.0%   94.82    91.42    3.7%
    OCCUPANCY (%)        64.3%    60.7%   3.6     57.9%    50.5%   7.4

                                11                        3
                      ------------------------ ------------------------
 WESTIN
    REVPAR ($)         183.80   165.69   10.9%   92.64    80.33   15.3%
    ADR ($)            296.40   273.83    8.2%  128.33   119.73    7.2%
    OCCUPANCY (%)        62.0%    60.5%   1.5     72.2%    67.1%   5.1

                                 6
 ST. REGIS/
  LUXURY COLLECTION
    REVPAR ($)         254.53   214.83   18.5%
    ADR ($)            454.21   426.72    6.4%
    OCCUPANCY (%)        56.0%    50.3%   5.7
 

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

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Twelve Months Ended December 31, 2004
                                UNAUDITED
                                                  ASIA PACIFIC
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                     4 Hotels
 SAME-STORE OWNED HOTELS
    REVPAR ($)                              107.92     86.07      25.4%
    ADR ($)                                 142.48    118.08      20.7%
    OCCUPANCY (%)                             75.7%     72.9%      2.8

                                                       3
 SHERATON
    REVPAR ($)                              111.95     91.43      22.4%
    ADR ($)                                 158.00    132.27      19.5%
    OCCUPANCY (%)                             70.9%     69.1%      1.8
 

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

 ST. REGIS/LUXURY COLLECTION
    REVPAR ($)
    ADR ($)
    OCCUPANCY (%)
                                                       1
 OTHER
    REVPAR ($)                              101.36     77.36      31.0%
    ADR ($)                                 121.06     97.95      23.6%
    OCCUPANCY (%)                             83.7%     79.0%      4.7
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Twelve Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                                                  WORLDWIDE
                                         2004         2003       Var.
                                      -----------  -----------  -------

                                                  138 Hotels
 SAME-STORE OWNED HOTELS
    Total REVENUE                      3,266,463    2,933,119     11.4%
    Total EXPENSE(3)                   2,469,832    2,270,687     (8.8)
 

                                                     60
 SHERATON
    REVENUE                            1,315,074    1,147,227     14.6%
    EXPENSE                              979,724      885,266    (10.7)
 

                                                     36
 WESTIN
    REVENUE                            1,000,409      922,477      8.4%
    EXPENSE                              747,296      691,268     (8.1)
 

                                                     10
 ST. REGIS/LUXURY COLLECTION
    REVENUE                              365,691      327,188     11.8%
    EXPENSE                              277,097      257,747     (7.5)
 

                                                     12
 W(3)
    REVENUE                              363,061      332,931      9.0%
    EXPENSE                              283,803      267,634     (6.0)
 

                                                     20
 OTHER
    REVENUE                              222,228      203,296      9.3%
    EXPENSE                              181,912      168,772     (7.8)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 (2) See next page for breakdown by division
 (3) Includes lease expense of $17,150 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 Twelve Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                        NORTH AMERICA             INTERNATIONAL(2)
                 ---------------------------  -------------------------
                   2004       2003     Var.    2004     2003     Var.
                 ---------- ---------- -----  -------- -------- -------

                          93 Hotels                   45 Hotels
                 ---------------------------  -------------------------
 SAME-STORE OWNED 
  HOTELS
    Total
     REVENUE     2,368,900  2,152,888  10.0%  897,563  780,231    15.0%
    Total
     EXPENSE(3)  1,792,295  1,678,943  (6.8)  677,537  591,744   (14.5)
 

                             36                          24
                 ---------------------------  -------------------------
 SHERATON
    REVENUE        888,284    777,733  14.2%  426,790  369,494    15.5%
    EXPENSE        663,000    608,277  (9.0)  316,724  276,989   (14.3)
 

                             22                          14
                 ---------------------------  -------------------------
 WESTIN
    REVENUE        678,536    636,668   6.6%  321,873  285,809    12.6%
    EXPENSE        501,948    476,758  (5.3)  245,348  214,510   (14.4)
 

                             4                           6
                 ---------------------------  -------------------------
 ST. REGIS/
  LUXURY COLLECTION
    REVENUE        249,627    227,566   9.7%  116,064   99,622    16.5%
    EXPENSE        192,208    182,239  (5.5)   84,889   75,508   (12.4)
 

                             12
 W(3)
    REVENUE        363,061    332,931   9.0%
    EXPENSE        283,803    267,634  (6.0)
 

                             19                          1
                 ---------------------------  -------------------------
 OTHER
    REVENUE        189,392    177,990   6.4%   32,836   25,306    29.8%
    EXPENSE        151,336    144,035  (5.1)   30,576   24,737   (23.6)
 
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 (2) See next page for breakdown by division
 (3) Includes lease expense of $17,150 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 Twelve Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                              EUROPE                LATIN AMERICA
                     ------------------------  ------------------------
                      2004     2003     Var.    2004     2003     Var.
                     -------- -------- ------  -------- -------- ------

                             29 Hotels                 12 Hotels
                     ------------------------  ------------------------
 SAME-STORE OWNED HOTELS
    Total REVENUE    603,952  532,698   13.4%  185,355  159,012   16.6%
    Total EXPENSE    470,958  414,224  (13.7)  124,916  107,819  (15.9)
 

                               12                         9
                     ------------------------  ------------------------
 SHERATON
    REVENUE          222,239  196,022   13.4%  129,131  110,257   17.1%
    EXPENSE          179,876  156,730  (14.8)   85,761   75,295  (13.9)
 

                               11                         3
                     ------------------------  ------------------------
 WESTIN
    REVENUE          265,649  237,054   12.1%   56,224   48,755   15.3%
    EXPENSE          206,193  181,986  (13.3)   39,155   32,524  (20.4)
 

                                6
 ST. REGIS/
  LUXURY COLLECTION
    REVENUE          116,064   99,622   16.5%
    EXPENSE           84,889   75,508  (12.4)
 
 

 OTHER
    REVENUE
    EXPENSE

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Hotel Results - Same Store Owned Hotels(1)
              For the Twelve Months Ended December 31, 2004
                        UNAUDITED (in thousands)
                                                  ASIA PACIFIC
                                            2004      2003      Var.
                                          --------- --------- ---------

                                                     4 Hotels
 SAME-STORE OWNED HOTELS
    Total REVENUE                          108,256    88,521      22.3%
    Total EXPENSE                           81,663    69,701     (17.2)
 

                                                       3
 SHERATON
    REVENUE                                 75,420    63,215      19.3%
    EXPENSE                                 51,087    44,964     (13.6)
 
 

 WESTIN
    REVENUE
    EXPENSE
 

 ST. REGIS/LUXURY COLLECTION
    REVENUE
    EXPENSE

                                                       1
 OTHER
    REVENUE                                 32,836    25,306      29.8%
    EXPENSE                                 30,576    24,737     (23.6)
 

 (1) Hotel Results exclude 24 hotels sold or closed in 2004 and 2003 
      and 2 hotels without comparable results
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                         Debt Portfolio Summary
                        As of December 31, 2004
                               UNAUDITED
                                                                Avg
                                                              Maturity
                  Interest   Balance       % of     Interest    (in
      Debt         Terms   (in millions)  Portfolio   Rate     years)
 ---------------  -------- ------------- ---------- -------- ----------

 Floating Rate
  Debt:
   Senior credit
    facility
     Revolving 
      credit      Various
      facility      + 125            11          0%    3.81%       1.8
     Term loan    LIBOR
                    + 125           550         12%    3.65%       1.5
                           ------------- ---------- -------- ----------
                                    561         12%    3.65%       1.5

   Mortgages      Various
    and other                       207          5%    5.37%       2.1

   Interest rate  LIBOR 
    swaps         + 423             300          7%    6.72%
                           ------------- ---------- --------

      Total Floating              1,068         24%    4.85%       1.7

 Fixed Rate
  Debt:
   Sheraton
    Holding public
    debt (1)                      1,058         24%    6.00%       7.9

   Senior notes (2)               1,514         34%    6.70%       4.9

   Convertible debt                 360          8%    3.50%       1.4

   Mortgages and
    other                           742         17%    7.25%       6.2
   Interest rate
    swaps                          (300)       (7%)    7.88%
                           ------------- ---------- --------

      Total Fixed                 3,374         76%    6.11%       5.7
                           ------------- ---------- --------

       Total Debt                $4,442        100%    5.81%       5.0
                           ============= ========== ========
 

 (1) Balance consists of outstanding public debt of $1.047 billion and 
 an $11 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 $1.496 billion and a $33 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 ($15) million fair value adjustment related to current fixed to floating interest rate swaps. 
                             
                                          ------------------------ 
                                          Maturities (in millions)
                                     less than 1 year           $619 
                                     1-3 years                 1,744 
                                     3-5 years                   468 
                                     greater than 5 years      1,611 
                                                              $4,442 
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
        Hotels without Comparable Results & Other Selected Items
                        As of December 31, 2004
                         UNAUDITED (in millions)
 

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

  Properties sold or closed in 2004 and 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
  Four Points Rancho Bernardo            Rancho Bernardo, CA
 

 Selected Balance Sheet and Cash Flow Items:
 Cash and cash equivalents 
 (including restricted cash of $357 million)                      $683
 Debt level                                                     $4,442
 

 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 have been sold in
     2003. These amounts are included in the revenues and expenses from
     owned, leased and consolidated joint venture hotels in 2003.

 Top Ten Markets as a % of 2004 EBITDA from Owned Hotels in North
  America and Worldwide:
                            % of NAD                     % of Worldwide
                              EBITDA                          EBITDA
  Market:                   --------  Market:            --------------
  New York, NY                 17.0%  New York, NY                12.4%
  Boston, MA                    9.7%  Italy                        8.6%
  San Diego, CA                 7.5%  Boston, MA                   7.0%
  Phoenix, AZ                   5.5%  San Diego, CA                5.4%
  Seattle, WA                   5.1%  Mexico                       5.0%
  Atlanta, GA                   4.8%  Phoenix, AZ                  4.0%
  Maui, Hawaii                  4.3%  Seattle, WA                  3.7%
  Los Angeles-Long Beach, CA    4.1%  Atlanta, GA                  3.5%
  Toronto                       3.9%  Spain                        3.4%
  Miami, FL                     3.2%  Maui, Hawaii                 3.1%
                            --------                     --------------
 Total Top Ten Markets         65.1%  Total Top Ten Markets       56.1%
 
 

               STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
                          Capital Expenditures
         For the Three and Twelve Months Ended December 31, 2004
                         UNAUDITED (in millions)
                                                         QTD      YTD Capital Expenditures:
    Owned, Leased and Consolidated Joint Venture Hotels   $81     $235
    Corporate/IT                                           29       55
                                                      -------- --------
  Subtotal                                                110      290
  Vacation Ownership Capital Expenditures:
    Capital expenditures (includes land acquisitions)      15       34
    Net capital expenditures for Inventory (1)              3      (38)
                                                      -------- --------
  Subtotal                                                 18       (4)

  Development Capital                                      44      255
                                                      -------- --------

  Total Capital Expenditures                             $172     $541
                                                      ======== ========

 (1) Represents gross inventory capital expenditures of $55 and $129 in
     the three and twelve months ended December 31, 2004, respectively,
     less cost of sales of $53 and $166 in the three and twelve months
     ended December 31, 2004, respectively.
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Summary of Portfolio by Properties & Rooms
                         As of December 31, 2004
                                UNAUDITED
                              NAD             EAME            LAD
                       ---------------- --------------- ---------------
 Owned                  Hotels   Rooms   Hotels  Rooms   Hotels  Rooms
                       ------- -------- ------- ------- ------- -------
 Sheraton                  37   16,483      12   3,463       7   3,573
 Westin                    22   10,352      11   2,382       3     901
 Four Points                6    1,153       -       -       -       -
 W                         12    4,344       -       -       -       -
 Luxury Collection          1      654       5     638       2     320
 St. Regis                  4      899       1     161       -       -
 Other                     13    3,035       -       -       -       -
                       ------- -------- ------- ------- ------- -------
 Total Owned               95   36,920      29   6,644      12   4,794
 Managed & UJV
 Sheraton                  42   20,268      73  21,586      10   1,995
 Westin                    38   21,417       6   1,464       -       -
 Four Points               10    2,458       6     903       1     128
 W                          5      902       -       -       1     237
 Luxury Collection          6    1,393       6     942       7     158
 St. Regis                  2      697       1      95       -       -
 Other                      1    2,558       1     405       -       -
                       ------- -------- ------- ------- ------- -------
 Total Managed & UJV      104   49,693      93  25,395      19   2,518
 Franchised
 Sheraton                 112   36,090      29   7,041       3   1,074
 Westin                    17    6,897       3   1,141       3     598
 Four Points               88   15,763      10   1,376       9   1,350
 Luxury Collection          2      351      11   1,292       -       -
                       ------- -------- ------- ------- ------- -------
 Total Franchised         219   59,101      53  10,850      15   3,022
 Systemwide
 Sheraton                 191   72,841     114  32,090      20   6,642
 Westin                    77   38,666      20   4,987       6   1,499
 Four Points              104   19,374      16   2,279      10   1,478
 W                         17    5,246       -       -       1     237
 Luxury Collection          9    2,398      22   2,872       9     478
 St. Regis                  6    1,596       2     256       -       -
 Other                     14    5,593       1     405       -       -
                       ------- -------- ------- ------- ------- -------
 Total Systemwide         418  145,714     175  42,889      46  10,334
                       ======= ======== ======= ======= ======= =======
 
 

                STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
               Summary of Portfolio by Properties & Rooms
                         As of December 31, 2004
                                UNAUDITED
                                          ASIA              Total
                                    ----------------  ----------------
 Owned                               Hotels   Rooms    Hotels   Rooms
                                    ------- --------  ------- --------
 Sheraton                                3    1,028       59   24,547
 Westin                                  -        -       36   13,635
 Four Points                             1      630        7    1,783
 W                                       -        -       12    4,344
 Luxury Collection                       -        -        8    1,612
 St. Regis                               -        -        5    1,060
 Other                                   -        -       13    3,035
                                    ------- --------  ------- --------
 Total Owned                             4    1,658      140   50,016
 Managed & UJV
 Sheraton                               46   16,578      171   60,427
 Westin                                 12    4,905       56   27,786
 Four Points                             3      291       20    3,780
 W                                       2      353        8    1,492
 Luxury Collection                       -        -       19    2,493
 St. Regis                               2      591        5    1,383
 Other                                   2      315        4    3,278
                                    ------- --------  ------- --------
 Total Managed & UJV                    67   23,033      283  100,639
 Franchised
 Sheraton                               17    5,687      161   49,892
 Westin                                  5    1,226       28    9,862
 Four Points                             1      126      108   18,615
 Luxury Collection                       -        -       13    1,643
                                    ------- --------  ------- --------
 Total Franchised                       23    7,039      310   80,012
 Systemwide
 Sheraton                               66   23,293      391  134,866
 Westin                                 17    6,131      120   51,283
 Four Points                             5    1,047      135   24,178
 W                                       2      353       20    5,836
 Luxury Collection                       -        -       40    5,748
 St. Regis                               2      591       10    2,443
 Other                                   2      315       17    6,313
                                    ------- --------  ------- --------
 Total Systemwide                       94   31,730      733  230,667
                                    ======= ========  ======= ========


 
.
Contact:
 Starwood Hotels & Resorts Worldwide, Inc.
Alisa Rosenberg
914-640-5214
Also See: Starwood Reports 2003 Full Year Net Income Down 13% to $309 million from $355 million in 2002; Worldwide 4th Qtr RevPAR Up 6.6% and 4.7% in North America / Hotel Operating Statistics / February 2004
Starwood Hotels Reports 4th Quarter RevPAR Rose 9.4% World-wide, ADR Increased 4.1% and Occupancy Rose to 61.8% from 58.7% / Hotel Operating Statistics / Jan 2003


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