Starwood Reports First Quarter 2013 Results

  Starwood Reports First Quarter 2013 Results

Business Wire

STAMFORD, Conn. -- April 30, 2013

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported first
quarter 2013 financial results.

First Quarter 2013 Highlights

  *Excluding special items, EPS from continuing operations was $0.76.
    Including special items, EPS from continuing operations was $0.73.
  *Adjusted EBITDA was $315 million, which included $58 million of EBITDA
    from the St. Regis Bal Harbour residential project.
  *Excluding special items, income from continuing operations was $148
    million. Including special items, income from continuing operations was
    $143 million.
  *Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.0% in
    constant dollars (4.6% in actual dollars) compared to 2012. Systemwide
    REVPAR for Same-Store Hotels in North America increased 6.2% in constant
    dollars (6.2% in actual dollars).
  *Management fees, franchise fees and other income increased 8.0% compared
    to 2012.
  *Worldwide Same-Store Company-Operated gross operating profit margins
    increased approximately 52 basis points compared to 2012.
  *Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 3.4% in
    constant dollars (3.1% in actual dollars) compared to 2012.
  *Margins at Starwood Same-Store Owned Hotels Worldwide remained flat
    compared to 2012.
  *Earnings from Starwood’s vacation ownership and residential business
    decreased approximately $11 million compared to 2012, due to lower
    revenues at the St. Regis Bal Harbour residential project that is nearing
    completion.
  *During the quarter, the Company signed 26 hotel management and franchise
    contracts, representing approximately 6,200 rooms, and opened 18 hotels
    and resorts with approximately 4,000 rooms.

First Quarter 2013 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today
reported EPS from continuing operations for the first quarter of 2013 of $0.73
compared to $0.65 in the first quarter of 2012. Excluding special items, EPS
from continuing operations was $0.76 for the first quarter of 2013 compared to
$0.63 in the first quarter of 2012. Special items in the first quarter of
2013, which totaled a charge of $5 million (after-tax), included a loss of $8
million (pre-tax), primarily related to the sale of three wholly-owned hotels.
Special items in the first quarter of 2012, which totaled a benefit of $5
million (after-tax), included an $11 million (pre-tax) reduction of a legal
reserve, partially offset by a $7 million (pre-tax) loss on the sale of one
wholly-owned hotel. Excluding special items, the effective income tax rate in
the first quarter of 2013 was 31.3% compared to 29.8% in the first quarter of
2012.

Income from continuing operations was $143 million in the first quarter of
2013, compared to $129 million in the first quarter of 2012. Excluding special
items, income from continuing operations was $148 million in the first quarter
of 2013 compared to $124 million in the first quarter of 2012.

Net income was $213 million and $1.09 per share in the first quarter of 2013,
compared to $128 million and $0.65 per share in the first quarter of 2012. The
net income in the first quarter of 2013 included a tax benefit of $70 million,
in discontinued operations, as a result of the reversal of a reserve
associated with an uncertain tax position related to a previous disposition.
The applicable statute of limitation for this tax position lapsed during the
first quarter of 2013.

Frits van Paasschen, CEO, said, “We had a solid first quarter across all lines
of our business. Our management and franchise fees grew strongly, and despite
our sale of 11 hotels, earnings at our owned portfolio exceeded last year’s
levels, driven by great performance at our North American properties. We grew
REVPAR Index as we captured more than our fair share of global growth. And at
Bal Harbour, we’ve now sold and closed on approximately 86% of the residences.
Overall, the global lodging recovery continues along the trend lines we’ve
been seeing. Tight supply is driving higher room rates in North America, and
our footprint continues to expand in the growing economies. We are seeing more
interest among real estate buyers for both vacation ownership and our owned
hotels.”

“We spent a month in Dubai as part of a temporary office relocation to work
closely with our teams in that region. Dubai is a perfect example of how
growth in lodging demand is being fueled by the rising wealth around the
world, the creation of new cities in fast growing economies, and the expanding
reach of global businesses.”

First Quarter 2013 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.0% in constant
dollars (4.6% in actual dollars) compared to the first quarter of 2012.
International Systemwide REVPAR for Same-Store Hotels increased 3.4% in
constant dollars (increased 2.6% in actual dollars).

Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by region:


                                          REVPAR
                                              Constant        Actual
Region                                                    
                                              Dollars         Dollars
Americas:
North America                                 6.2%            6.2%
Latin America                                 0.3%            0.3%
Asia Pacific:
Greater China                                 5.4%            6.4%
Rest of Asia                                  5.5%            1.7%
Europe, Africa & Middle East:
Europe                                        (1.3)%          (0.4)%
Africa & Middle East                          7.3%            6.0%

Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by brand:

                                              REVPAR
                                              Constant        Actual
Brand
                                              Dollars         Dollars
St. Regis/Luxury Collection                   11.1%           10.4%
W Hotels                                      7.9%            7.9%
Westin                                        3.6%            3.1%
Sheraton                                      3.8%            3.2%
Le Méridien                                   2.0%            2.3%
Four Points by Sheraton                       6.9%            6.7%
Aloft                                         7.7%            7.7%


Worldwide Same-Store Company-Operated gross operating profit margins increased
approximately 52 basis points compared to 2012. International gross operating
profit margins for Same-Store Company-Operated properties increased 12 basis
points. North American Same-Store Company-Operated gross operating profit
margins increased approximately 110 basis points, driven by REVPAR increases
and cost controls.

Management fees, franchise fees and other income were $217 million, up $16
million, or 8.0% compared to the first quarter of 2012. Management fees
increased 7.8% to $124 million and franchise fees increased 6.7% to $48
million.

Development

During the first quarter of 2013, the Company signed 26 hotel management and
franchise contracts, representing approximately 6,200 rooms, of which 20 are
new builds and 6 are conversions from other brands. At March 31, 2013, the
Company had approximately 400 hotels in the active pipeline representing
approximately 100,000 rooms.

During the first quarter of 2013, 18 new hotels and resorts (representing
approximately 4,000 rooms) entered the system, including Le Méridien Dallas,
The Stoneleigh (Dallas, 170 rooms), The Westin Birmingham (Birmingham, 294
rooms), The Westin Panama (Panama City, 218 rooms), Sheraton Dubai Mall of
Emirates Hotel (Dubai, 481 rooms), Aloft Kuala Lumpur Sentral (Kuala Lumpur,
482 rooms), and W Guangzhou (Guangdong, 317 rooms). During the quarter, five
properties (representing approximately 900 rooms) were removed from the
system.

Owned, Leased and Consolidated Joint Venture Hotels

Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 3.4% in
constant dollars (3.1% in actual dollars) when compared to 2012. Excluding
owned hotels in Argentina, REVPAR at Worldwide Owned Hotels increased 5.3% in
constant dollars (4.9% in actual dollars). REVPAR at Starwood Same-Store Owned
Hotels in North America increased 6.3% in constant dollars (6.1% actual
dollars). Internationally, Starwood Same-Store Owned Hotel REVPAR increased
0.9% in constant dollars (0.4% in actual dollars). Excluding owned hotels in
Argentina, internationally, REVPAR at owned hotels increased 4.2% in constant
dollars (3.7% in actual dollars). REVPAR at owned hotels in Argentina
decreased approximately 27% in constant dollars driven by economic instability
in the country.

Revenues at Starwood Same-Store Owned Hotels Worldwide increased 2.0% in
constant dollars (increased 1.6% in actual dollars) while costs and expenses
increased 1.9% in constant dollars (1.5% in actual dollars) when compared to
2012. Margins at these hotels remained flat compared to 2012. Excluding owned
hotels in Argentina, margins increased by approximately 100 basis points.

Revenues at Starwood Same-Store Owned Hotels in North America increased 4.5%
in constant dollars (4.3% in actual dollars) while costs and expenses
increased 2.8% in constant dollars (2.7% in actual dollars) when compared to
2012. Margins at these hotels increased approximately 130 basis points.

Internationally, revenues at Starwood Same-Store Owned Hotels decreased 0.3%
in constant dollars (decreased 0.9% in actual dollars) while costs and
expenses increased 1.1% in constant dollars (0.5% in actual dollars) when
compared to 2012. Margins at these hotels decreased approximately 120 basis
points. Excluding owned hotels in Argentina, margins increased by
approximately 70 basis points.

Revenues at owned, leased and consolidated joint venture hotels were $379
million, compared to $402 million in 2012. Expenses at owned, leased and
consolidated joint venture hotels were $320 million compared to $349 million
in 2012. First quarter results were negatively impacted by asset sales since
the first quarter of 2012.

Vacation Ownership

Total vacation ownership revenues increased 16.4% to $177 million in the first
quarter of 2013 when compared to 2012 primarily due to increased revenues from
resort operations, the transfer of the Westin St. John from owned hotel
revenues to vacation ownership revenues, and a favorable adjustment to loan
loss reserves. Originated contract sales of vacation ownership intervals and
the number of contracts signed were flat compared to 2012. The average price
per vacation ownership unit sold increased 0.5% to approximately $16,200,
driven by inventory mix.

Residential

During the first quarter of 2013, the Company’s residential revenues were $132
million compared to $362 million in 2012. The Company realized residential
revenues from Bal Harbour of $129 million and generated EBITDA of $58 million,
compared to revenues of $356 million and EBITDA of $78 million in the same
period of 2012. During the first quarter of 2013, the Company closed sales of
38 units at Bal Harbour and realized incremental cash proceeds of $127 million
associated with these units. From project inception through March 31, 2013,
the Company has closed contracts on approximately 86% of the total residential
units available at Bal Harbour and realized residential revenue of $939
million and EBITDA of $219 million.

Selling, General, Administrative and Other

During the first quarter of 2013, selling, general, administrative and other
expenses decreased 6.3% to $90 million compared to $96 million in 2012
primarily due to organizational changes in the second half of 2012 and
non-recurring professional expenses recorded in the prior year. The Company
continues to target a 3-5% increase for the full year.

During the first quarter of 2013, the Company completed certain changes to its
organizational structures in the Americas division. The Company recorded an
expense for severance costs of approximately $4 million associated with these
changes.

Capital

Gross capital spending during the quarter included approximately $17 million
of maintenance capital and $81 million of development capital.

Asset Sales

During the first quarter of 2013, the Company completed the sales of three
hotels; the Aloft and Element hotels in Lexington, Massachusetts and the W New
Orleans - French Quarter for cash proceeds of approximately $61 million. These
hotels were sold subject to either long-term management or franchise
contracts. The Company recorded a loss of $8 million associated with these
sales. In addition, following the end of the first quarter the Company
completed the sale of the W New Orleans for cash proceeds of approximately $65
million.

Share Repurchase

In the first quarter of 2013 and through April 5, 2013, the Company
repurchased nearly 1 million shares at a total cost of approximately $56
million and a weighted average price of $59.35 per share. As of April 5, 2013,
approximately $624 million remained available under the Company’s share
repurchase authorization.

Balance Sheet

At March 31, 2013, the Company had gross debt of $1.275 billion, cash and cash
equivalents of $529 million (including $142 million of restricted cash) and
net debt of $746 million, compared to net debt of $847 million as of December
31, 2012, in each case excluding debt and restricted cash associated with
securitized vacation ownership notes receivable. Net debt at March 31, 2013,
including $472 million of debt and $20 million of restricted cash associated
with securitized vacation ownership notes receivable, was $1.198 billion.

Outlook

For the Full Year 2013:

Including Bal Harbour, which is expected to contribute approximately $90
million of EBITDA, adjusted EBITDA is expected to be approximately $1.210
billion to $1.235 billion (based on the assumptions below).

  *Excluding Bal Harbour, adjusted EBITDA is expected to be approximately
    $1.120 billion to $1.145 billion, assuming:

       *REVPAR increases at Same-Store Company-Operated Hotels Worldwide of
         5% to 7% in constant and actual dollars.
       *REVPAR increases at Same-Store Owned Hotels Worldwide of 4% to 6% in
         constant and actual dollars.
       *Margins at Same-Store Owned Hotels Worldwide increase 75 to 125 basis
         points.
       *Management fees, franchise fees and other income increase
         approximately 9% to 11%.
       *Earnings from the Company’s vacation ownership and residential
         business of approximately $160 million to $165 million.
       *Selling, general and administrative expenses increase approximately
         3% to 5%.

  *Full year owned earnings are negatively impacted by approximately $8
    million due to assets sold year to date in 2013.
  *Depreciation and amortization is expected to be approximately $300
    million.
  *Interest expense is expected to be approximately $125 million.
  *Full year effective tax rate is expected to be approximately 32%, and cash
    taxes are expected to be approximately $115 million.
  *Including Bal Harbour, EPS before special items is expected to be
    approximately $2.75 to $2.83 (based on the assumptions above).
  *Full year capital expenditures (excluding vacation ownership and
    residential inventory) are expected to be approximately $200 million for
    maintenance, renovation and technology. In addition, in-flight investment
    projects and prior commitments for joint ventures and other investments
    are expected to total approximately $350 million.
  *Vacation ownership (excluding Bal Harbour) is expected to generate
    approximately $175 million in positive cash flow. Bal Harbour is expected
    to generate at least $150 million in net cash flow.

For the three months ended June 30, 2013:

  *Including Bal Harbour, which is expected to contribute approximately $20
    million of EBITDA, adjusted EBITDA is expected to be approximately $305
    million to $315 million (based on the assumptions below).
  *Excluding Bal Harbour, adjusted EBITDA is expected to be approximately
    $285 million to $295million, assuming:

       *REVPAR increases at Same-Store Company-Operated Hotels Worldwide of
         5% to 7% in constant dollars (approximately 50 basis points lower in
         actual dollars at current exchange rates).
       *REVPAR increases at Same-Store Company-Owned Hotels Worldwide of 4%
         to 6% in constant dollars (approximately 50 basis points lower in
         actual dollars at current exchange rates).
       *Management fees, franchise fees and other income increase
         approximately 8% to 10%.
       *Earnings from the Company’s vacation ownership and residential
         business are flat to up approximately $5 million year over year.

  *Depreciation and amortization is expected to be approximately $75 million.
  *Interest expense is expected to be approximately $30 million.
  *Including Bal Harbour, income from continuing operations is expected to be
    approximately $136 million to $143 million, reflecting an effective tax
    rate of approximately 32% (based on the assumptions above).
  *Including Bal Harbour, EPS is expected to be approximately $0.70 to $0.73
    (based on the assumptions above).

Special Items

The Company’s special items  netted to a charge of $8 million ($5 million
after-tax) in the first quarter of 2013 compared to a benefit of $4 million (a
$5 million benefit after-tax) in the same period of 2012.

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


                                                       Three Months Ended
                                                  
                                                       March 31,
                                                       2013        2012
                                                                      
Income from continuing operations before               $ 148         $ 124  
special items
EPS before special items                               $ 0.76        $ 0.63 
Special Items
Restructuring and other special (charges)                1              11
credits, net ^(a)
Gain (loss) on asset dispositions and                   (9   )        (7   )
impairments, net ^(b)
Total special items – pre-tax                            (8   )         4
Income tax benefit (expense) for special items          3            1    
^(c)
Total special items – after-tax                         (5   )        5    
                                                                      
Income from continuing operations                      $ 143         $ 129  
EPS including special items                            $ 0.73        $ 0.65 


     During the three months ended March 31, 2012, the Company recorded a
a)  favorable adjustment of $11 million to reverse a portion of a litigation
     reserve established in 2011.
     
     During the three months ended March 31, 2013, the net loss primarily
b)   relates to the sale of three wholly-owned hotels. During the three months
     ended March 31, 2012, the net loss primarily relates to the sale of one
     wholly-owned hotel.
     
     During the three months ended March 31, 2013, the benefit primarily
c)   relates to a tax benefit on the special items at the statutory tax rate.
     The three months ended March 31, 2012 includes the recognition of a
     deferred tax adjustment associated with a previous transaction.
     

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
ongoing operations.

Starwood will be conducting a conference call to discuss the first quarter
financial results at 10:30 a.m. Eastern Time today, available via webcast on
the Company’s website at
http://www.starwoodhotels.com/corporate/about/investor/earnings.html. A
webcast replay will be available at 1:30 p.m. Eastern Time on Tuesday, April
30 and will run for one year. Alternatively, participants may call into (866)
921-0636 with conference ID 27331153; please dial in fifteen minutes early to
ensure a timely start. A call replay will be available from 1:30 p.m. Eastern
Time on Tuesday,April 30 through Tuesday, May 7, 2013 and can be accessed by
dialing (855) 859-2056 with conference ID 27331153.

Definitions

All references to EPS, unless otherwise noted, reflect earnings per diluted
share from continuing operations attributable to Starwood’s common
stockholders. All references to continuing operations, discontinued operations
and net income reflect amounts attributable to Starwood’s common stockholders
(i.e., excluding amounts attributable to noncontrolling interests). All
references to “net capital expenditures” mean 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 operating performance. It also
facilitates comparisons between the Company and its competitors. The Company’s
management has historically adjusted EBITDA (i.e., “Adjusted EBITDA”) when
evaluating operating performance for the 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
restructuring, goodwill impairment and other special charges, and gains and
losses on asset dispositions and impairments, 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 uses Adjusted EBITDA as a
measure in determining the value of acquisitions and dispositions and it is
used in the annual budget process. 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 ongoing
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 condo hotels, hotels sold to
date and hotels undergoing significant repositionings or for which comparable
results are not available (i.e., hotels not owned during the entire periods
presented or closed due to seasonality or natural disasters). References to
Company-Operated Hotel metrics (e.g., REVPAR) reflect metrics for the
Company’s owned, leased and managed hotels. References to Systemwide metrics
(e.g., REVPAR) reflect metrics for the Company’s owned, managed and franchised
hotels. REVPAR is defined as revenue per available room. ADR is defined as
average daily rate.

All references to revenues in constant dollars represent revenues, excluding
the impact of the movement of foreign exchange rates. The Company calculates
revenues in constant dollars by calculating revenues for the current year
using the prior year’s exchange rates. The Company uses this revenue measure
to better understand the underlying results and trends of the business,
excluding the impact of movements in foreign exchange rates.

All references to contract sales or originated sales reflect vacation
ownership sales before revenue adjustments for percentage of completion
accounting methodology. All references to earnings from vacation ownership and
residential represents operating income before depreciation expense. All
references to management and franchise revenues represent base and incentive
fees, franchise fees, amortization of deferred gains resulting from the sales
of hotels subject to long-term management contracts and termination fees.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and
leisure companies in the world with 1,146 properties in nearly 100 countries
and 171,000 employees at its owned and managed properties. Starwood is a fully
integrated owner, operator and franchisor of hotels, resorts and residences
with the following internationally renowned brands: St. Regis^®, The Luxury
Collection^®, W^®, Westin^®, Le Méridien^®, Sheraton^®, Four Points^® by
Sheraton, Aloft^®, and Element^®. The Company boasts one of the industry’s
leading loyalty programs, Starwood Preferred Guest (SPG), allowing members to
earn and redeem points for room stays, room upgrades and flights, with no
blackout dates. Starwood also owns Starwood Vacation Ownership, Inc., a
premier provider of world-class vacation experiences through villa-style
resorts and privileged access to Starwood brands. For more information,
including reconciliations of non-GAAP financial measures to GAAP financial
measures, please visit www.starwoodhotels.com or contact Investor Relations at
(203) 351-3500.

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 impact of war and terrorist activity, natural
disasters, business and financing conditions (including the condition of
credit markets in the U.S. and internationally), foreign exchange
fluctuations, cyclicality of the real estate (including residential) and the
hotel and vacation ownership businesses, operating risks associated with the
hotel, vacation ownership and residential businesses, relationships with
associates and labor unions, 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 the introduction of new brand
concepts and other risks and uncertainties. These risks and uncertainties are
presented in detail in our filings with the Securities and Exchange
Commission. Future vacation ownership units indicated in this press release
include planned units on land owned by the Company or by joint ventures in
which the Company has an interest that have received all major governmental
land use approvals for the development of vacation ownership resorts. There
can also be no assurance that such units will in fact be developed and, if
developed, the time period of such development (which may be more than several
years in the future). Some of the projects may require additional third-party
approvals or permits for development and build out and may also be subject to
legal challenges as well as a commitment of capital by the Company. The actual
number of units to be constructed may be significantly lower than the number
of future units indicated. There can also be no assurance that agreements will
be entered into for the hotels in the Company’s pipeline and, if entered into,
the timing of any agreement and the opening of the related hotel. Although we
believe the expectations reflected in 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
                                     
                                          March 31,
                                                                      %
                                          2013        2012       
                                                                      Variance
Revenues
Owned, leased and consolidated            $ 379         $ 402         (5.7   )
joint venture hotels
Vacation ownership and                      309           514         (39.9  )
residential sales and services
Management fees, franchise fees             217           201         8.0
and other income
Other revenues from managed and            634         598        6.0    
franchised properties ^(a)
                                            1,539         1,715       (10.3  )
Costs and Expenses
Owned, leased and consolidated              320           349         8.3
joint venture hotels
Vacation ownership and                      199           393         49.4
residential
Selling, general, administrative            90            96          6.3
and other
Restructuring and other special             (1    )       (11   )     90.9
charges (credits), net
Depreciation                                58            57          (1.8   )
Amortization                                7             6           (16.7  )
                                                                             
Other expenses from managed and            634         598        (6.0   )
franchised properties ^(a)
                                            1,307         1,488       12.2
Operating income                            232           227         2.2
Equity (losses) earnings and
gains (losses) from
unconsolidated                              9             10          (10.0  )

ventures, net
Interest expense, net of interest           (26   )       (49   )     46.9
income of $1 and $0
Gain  (loss) on asset                      (9    )      (7    )     (28.6  )
dispositions and impairments, net
Income from continuing operations
before taxes and                            206           181         13.8

noncontrolling interests
Income tax benefit (expense)               (64   )      (52   )     (23.1  )
Income from continuing operations           142           129         10.1
Discontinued Operations:
Gain (loss) on dispositions, net           70          (1    )     n/m    
of tax
Net income                                  212           128         65.6
Net loss (income) attributable to          1           —          n/m    
noncontrolling interests
Net income attributable to                $ 213        $ 128        66.4   
Starwood
Earnings (Losses) Per Share –
Basic
Continuing operations                     $ 0.74        $ 0.67        10.4
Discontinued operations                    0.37        —          n/m    
Net income (loss)                         $ 1.11       $ 0.67       65.7   
Earnings (Losses) Per Share –
Diluted
Continuing operations                     $ 0.73        $ 0.65        12.3
Discontinued operations                    0.36        —          n/m    
Net income (loss)                         $ 1.09       $ 0.65       67.7   
Amounts attributable to
Starwood’s Common Stockholders
Continuing operations                     $ 143         $ 129         10.9
Discontinued operations                    70          (1    )     n/m    
Net income (loss)                         $ 213        $ 128        66.4   
                                                                      
Weighted average number of shares          191         192   
Weighted average number of shares          194         197   
assuming dilution


(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.

n/m= not meaningful



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Consolidated Balance Sheets

(In millions, except share data)

                                                March 31,       December 31,
                                                          
                                                2013              2012
                                                (unaudited)
Assets
Current assets:
Cash and cash equivalents                       $  387            $  305
Restricted cash                                    158               158
Accounts receivable, net of allowance              600               586
for doubtful accounts of $54 and $59
Inventories                                        299               361
Securitized vacation ownership notes
receivable, net of allowance for
doubtful                                           63                65

accounts of $8 and $9
Deferred income taxes                              277               320
Prepaid expenses and other                        163             124    
Total current assets                               1,947             1,919
Investments                                        266               260
Plant, property and equipment, net                 3,133             3,162
Assets held for sale, net                          —                 36
Goodwill and intangible assets, net                2,025             2,025
Deferred income taxes                              624               636
Other assets ^(a)                                  425               385
Securitized vacation ownership notes              410             438    
receivable
Total assets                                    $  8,830         $  8,861  
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current               $  2              $  2
maturities of long-term debt ^(b)
Accounts payable                                   100               121
Current maturities of long-term                    119               150
securitized vacation ownership debt
Accrued expenses                                   1,150             1,074
Accrued salaries, wages and benefits               297               395
Accrued taxes and other                           195             287    
Total current liabilities                          1,863             2,029
Long-term debt ^(b)                                1,273             1,273
Long-term securitized vacation                     353               383
ownership debt
Deferred income taxes                              75                78
Other liabilities                                 1,921           1,956  
Total liabilities                                 5,485           5,719  
Commitments and contingencies
Stockholders’ equity:
Common stock; $0.01 par value;
authorized 1,000,000,000 shares;
outstanding
                                                   2                 2
194,555,997 and 193,121,094 shares at
March 31, 2013 and December 31,

2012, respectively
Additional paid-in capital                         820               816
Accumulated other comprehensive loss               (350   )          (338   )
Retained earnings                                 2,870           2,657  
Total Starwood stockholders’ equity                3,342             3,137
Noncontrolling interest                           3               5      
Total stockholders’ equity                        3,345           3,142  
Total liabilities and stockholders’             $  8,830         $  8,861  
equity


(a)  Includes restricted cash of $4 million and $6 million at March 31, 2013
      and December 31, 2012, respectively.
      Excludes Starwood’s share of unconsolidated joint venture debt
(b)   aggregating approximately $362 million and $389 million at March 31,
      2013 and December 31, 2012, respectively.



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Historical Data

(In millions)

                                    Three Months Ended
                              
                                    March 31,
                                                                      %
                                    2013    2012   
                                                                      Variance
                                                                      
Reconciliation of Net
Income (Loss) to EBITDA
and Adjusted EBITDA
Net income                          $  213           $  128           66.4  %
Interest expense ^(a)                  28               49            (42.9 )%
Income tax (benefit)                   (6   )           53            n/m
expense ^(b)
Depreciation ^(c)                      64               64            —
Amortization ^(d)                     8              7            14.3  %
EBITDA                                 307              301           2.0   %
(Gain) loss on asset
dispositions and                       9                7             28.6  %
impairments, net
Restructuring and other
special charges                       (1   )          (11  )        (90.9 )%
(credits), net
Adjusted EBITDA                     $  315          $  297          6.1   %


      Includes $1 million and $0 million of Starwood’s share of interest
(a)  expense of unconsolidated joint ventures for the three months ended
      March 31, 2013 and 2012, respectively.
      Includes $(70 million) and $1 million of tax expense (benefit) recorded
(b)   in discontinued operations for the three months ended March 31, 2013 and
      2012, respectively.
      Includes $6 million and $7 million of Starwood’s share of depreciation
(c)   expense of unconsolidated joint ventures for the three months ended
      March 31, 2013 and 2012, respectively.
      Includes $1 million and $1 million of Starwood’s share of amortization
(d)   expense of unconsolidated joint ventures for the three months ended
      March 31, 2013 and 2012, respectively.



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels Worldwide

(In millions)

                                                 Three Months Ended
                                            
                                                 March 31, 2013
                                                 $Change    % Variance
Revenue
Revenue increase/(decrease) (GAAP)               $   4.4            1.6    %
Impact of changes in foreign exchange               1.1           0.4    %
rates
Revenue increase/(decrease) in constant          $   5.5           2.0    %
dollars
                                                                    
Expense
Expense increase/(decrease) (GAAP)               $   3.6            1.5    %
Impact of changes in foreign exchange               0.8           0.4    %
rates
Expense increase/(decrease) in constant          $   4.4           1.9    %
dollars

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels North
America

(In millions)
                                                 Three Months Ended

                                                 March 31, 2013
                                                 $Change           % Variance
Revenue
Revenue increase/(decrease) (GAAP)               $   5.7            4.3    %
Impact of changes in foreign exchange               0.3           0.2    %
rates
Revenue increase/(decrease) in constant          $   6.0           4.5    %
dollars
                                                                    
Expense
Expense increase/(decrease) (GAAP)               $   3.0            2.7    %
Impact of changes in foreign exchange               0.1           0.1    %
rates
Expense increase/(decrease) in constant          $   3.1           2.8    %
dollars

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels
International

(In millions)
                                                 Three Months Ended

                                                 March 31, 2013
                                                 $Change           % Variance
Revenue
Revenue increase/(decrease) (GAAP)               $   (1.3  )        (0.9   )%
Impact of changes in foreign exchange               0.9           0.6    %
rates
Revenue increase/(decrease) in constant          $   (0.4  )        (0.3   )%
dollars
                                                                    
Expense
Expense increase/(decrease) (GAAP)               $   0.6            0.5    %
Impact of changes in foreign exchange               0.7           0.6    %
rates
Expense increase/(decrease) in constant          $   1.3           1.1    %
dollars



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels Worldwide

(In millions)

                             Three Months Ended
                        
                             March 31, 2013
                             2013    2012    % Variance
                                                                   ^(a)
Revenue
Total revenue from
same-store owned             $   285            $   280            1.6     %
hotels
less: revenue from
same-store owned                (10   )           (14   )        (26.4   )%
hotels in Argentina
Total revenue
excluding revenue
from same-store              $   275           $   266           3.1     %
owned hotels in
Argentina
                                                                   
Expense
Total expense from
same-store owned             $   234            $   230            1.5     %
hotels
less: expense from
same-store owned                (10   )           (10   )        (5.7    )%
hotels in Argentina
Total expense
excluding expense
from same-store              $   224           $   220           1.9     %
owned hotels in
Argentina

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels
International

(In millions)
                             Three Months Ended

                             March 31, 2013
                             2013               2012               % Variance
                                                                   ^(a)
Revenue
Total revenue from
same-store owned             $   146            $   147            (0.9    )%
hotels
less: revenue from
same-store owned                (10   )           (14   )        (26.4   )%
hotels in Argentina
Total revenue
excluding revenue
from same-store              $   136           $   133           1.9     %
owned hotels in
Argentina
                                                                   
Expense
Total expense from
same-store owned             $   122            $   122            0.5     %
hotels
less: expense from
same-store owned                (10   )           (10   )        (5.7    )%
hotels in Argentina
Total expense
excluding expense
from same-store              $   112           $   112           1.1     %
owned hotels in
Argentina

(a) % Variance calculated based on numbers in thousands.

Non-GAAP to GAAP Reconciliation – Earnings from Vacation Ownership and
Residential

Business

(In millions)
                             Three Months Ended

                             March 31, 2013
                             2013               2012               $ Variance
Earnings from
vacation ownership           $   110            $   121            (11     )
and residential
Depreciation expense            (5    )           (5    )        —       
Operating income
from vacation                $   105           $   116           (11     )
ownership and
residential

Non-GAAP to GAAP Reconciliation – Earnings from Bal Harbour

(In millions)
                             Three Months Ended

                             March 31, 2013
                             2013               2012               $ Variance
Earnings from Bal            $   58             $   78             (20     )
Harbour
Depreciation expense            —                —             —       
Operating income             $   58            $   78            (20     )
from Bal Harbour



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Future Performance

(In millions, except per share data)

Low Case

Three Months                                                 Year Ended
Ended                                             
                                                             December 31, 2013
June 30, 2013
$     136              Net income ^(a)                      $      599
      30                Interest expense                             125
      64                Income tax expense ^(a)                      178
     75               Depreciation and                           300    
                        amortization
      305               EBITDA                                       1,202
                        (Gain) loss on asset
      —                 dispositions and                             9
                        impairments, net
     —                Restructuring and other                    (1     )
                        special charges (credits)
$     305              Adjusted EBITDA                      $      1,210  
                
Three Months                                                 Year Ended
Ended
                                                             December 31, 2013
June 30, 2013
                        Income from continuing
$     136              operations before special            $      534    
                        items
$     0.70             EPS before special items             $      2.75   
                        Special Items
                        Gain (loss) on asset
      —                 dispositions and                             (9     )
                        impairments, net
     —                Restructuring and other                    1      
                        special (charges) credits
      —                 Total special items –                        (8     )
                        pre-tax
                        Income tax benefit
     —                associated with special                    3      
                        items
     —                Total special items –                      (5     )
                        after-tax
$     136              Income from continuing               $      529    
                        operations
$     0.70             EPS including special                $      2.72   
                        items

High Case

Three Months                                                 Year Ended
Ended                  
                                                             December 31, 2013
June 30, 2013
$     143               Net income ^(a)                      $       616
      30                Interest expense                             125
      67                Income tax expense ^(a)                      186
     75               Depreciation and                           300    
                        amortization
      315               EBITDA                                       1,227
                        (Gain) loss on asset
      —                 dispositions and                             9
                        impairments, net
     —                Restructuring and other                    (1     )
                        special charges (credits)
$     315              Adjusted EBITDA                      $      1,235  
                                                                            
Three Months                                                 Year Ended
Ended         
                                                             December 31, 2013
June 30, 2013
                        Income from continuing
$     143              operations before special            $      551    
                        items
$     0.73             EPS before special items             $      2.83   
                        Special Items
                        Gain (loss) on asset
      —                 dispositions and                             (9     )
                        impairments, net
     —                Restructuring and other                    1      
                        special (charges) credits
      —                 Total special items –                      (8     )
                        pre-tax
                        Income tax benefit
     —                associated with special                    3      
                        items
     —                Total special items –                      (5     )
                        after-tax
$     143              Income from continuing               $      546    
                        operations
$     0.73             EPS including special                $      2.81   
                        items


(a) Includes a tax benefit of $70 million recorded in discontinued operations
during the three months ended March 31, 2013.


STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations –

Future Earnings from Vacation Ownership and Residential Business

Excluding Bal Harbour

(In millions)

Low Case

                                       Three Months Ended
                                 
                                       June 30,
                                                                      $
                                       2013    2012  
                                                                      Variance
                                                                      
Earnings from vacation                 $   40          $   40         $  —
ownership and residential
Depreciation expense                      (5  )          (4  )        (1  )
Operating income from
vacation ownership and                 $   35         $   36        $  (1  )
residential

                                                       Year Ended

                                                       December 31, 2013
                                                       
Earnings from vacation ownership and residential       $ 160
Depreciation expense                                   (22                   )
Operating income from vacation ownership and           $ 138                 
residential


High Case

                                       Three Months Ended
                                 
                                       June 30,
                                                                      $
                                       2013    2012  
                                                                      Variance
                                                                      
Earnings from vacation                 $   45          $   40         $  5
ownership and residential
Depreciation expense                      (5  )          (4  )        (1  )
Operating income from
vacation ownership and                 $   40         $   36        $  4   
residential

                                                       Year Ended

                                                       December 31, 2013
                                                       
Earnings from vacation ownership and residential       $ 165
Depreciation expense                                   (22                   )
Operating income from vacation ownership and           $ 143                 
residential



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations –

Future Earnings from Bal Harbour

(In millions)

                                              Three Months Ended
                                                           
                                              June 30, 2013
                                                                 
Earnings from Bal Harbour                     $        20
Depreciation expense                                  —         
Operating income from Bal Harbour             $        20        
                                                                 
                                                                 
                                              Year Ended
                                                                 
                                              December 31, 2013
                                                                 
Earnings from Bal Harbour                     $        90
Depreciation expense                                  —         
Operating income from Bal Harbour             $        90        
                                                                 


STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses

(In millions)

                                        Three Months Ended
                                   
                                        March 31,
Same-Store Owned Hotels                                               %
                                        2013   2012  
Worldwide                                                             Variance
                                                                      
Revenue
Same-Store Owned Hotels ^(a)            $    285       $    280       1.8
Hotels Sold or Closed in 2013                3              38        (92.1  )
and 2012
Hotels Without Comparable                    85             77        10.4
Results
Other ancillary hotel                       6             7         (14.3  )
operations
Total Owned, Leased and
Consolidated Joint Venture              $    379       $    402       (5.7   )
Hotels Revenue
                                                                      
Costs and Expenses
Same-Store Owned Hotels ^(a)            $    234       $    230       (1.7   )
Hotels Sold or Closed in 2013                3              35        91.4
and 2012
Hotels Without Comparable                    77             78        1.3
Results
Other ancillary hotel                       6             6         —      
operations
Total Owned, Leased and
Consolidated Joint Venture              $    320       $    349       8.3    
Hotels Costs and Expenses
                                                                      
                                        Three Months Ended

                                        March 31,
Same-Store Owned Hotels                                               %
                                        2013           2012
North America                                                         Variance
                                                                      
Revenue
Same-Store Owned Hotels ^(a)            $    139       $    133       4.5
Hotels Sold or Closed in 2013                3              38        (92.1  )
and 2012
Hotels Without Comparable                   76            72        5.6    
Results
Total Owned, Leased and
Consolidated Joint Venture              $    218       $    243       (10.3  )
Hotels Revenue
                                                                      
Costs and Expenses
Same-Store Owned Hotels ^(a)            $    112       $    108       (3.7   )
Hotels Sold or Closed in 2013                3              35        91.4
and 2012
Hotels Without Comparable                   65            69        5.8    
Results
Total Owned, Leased and
Consolidated Joint Venture              $    180       $    212       15.1   
Hotels Costs and Expenses
                                                                      
                                        Three Months Ended

                                        March 31,
Same-Store Owned Hotels                                               %
                                        2013           2012
International                                                         Variance
                                                                      
Revenue
Same-Store Owned Hotels ^(a)            $    146       $    147       (0.7   )
Hotels Without Comparable                    9              5         80.0
Results
Other ancillary hotel                       6             7         (14.3  )
operations
Total Owned, Leased and
Consolidated Joint Venture              $    161       $    159       1.3    
Hotels Revenue
                                                                      
Costs and Expenses
Same-Store Owned Hotels ^(a)            $    122       $    122       —
Hotels Without Comparable                    12             9         (33.3  )
Results
Other ancillary hotel                       6             6         —      
operations
Total Owned, Leased and
Consolidated Joint Venture              $    140       $    137       (2.2   )
Hotels Costs and Expenses


      Same-Store Owned Hotel results exclude 11 hotels sold and 12 hotels
(a)  without comparable results for the three months

      ended March 31, 2013.



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Systemwide^(1) Statistics - Same Store
For the Three Months Ended March 31, 2013
UNAUDITED

                   Systemwide - Worldwide                         Systemwide - North America                     Systemwide - International                 
                        2013     2012     Variance       2013     2012     Variance       2013     2012     Variance 
                                                                                                                                               
                                                                                                                                                                          
TOTAL HOTELS
REVPAR ($)               112.50           107.60           4.6%             112.44           105.89           6.2%             112.56           109.66           2.6%
ADR ($)                  172.35           168.77           2.1%             163.96           157.33           4.2%             183.56           184.28           -0.4%
Occupancy                65.3%            63.8%            1.5              68.6%            67.3%            1.3              61.3%            59.5%            1.8
(%)
                                                                                                                                                                          
                                                                                                                                                                          
SHERATON
REVPAR ($)               94.86            91.90            3.2%             94.26            88.90            6.0%             95.56            95.43            0.1%
ADR ($)                  150.14           148.70           1.0%             141.45           136.04           4.0%             161.72           165.61           -2.3%
Occupancy                63.2%            61.8%            1.4              66.6%            65.3%            1.3              59.1%            57.6%            1.5
(%)
                                                                                                                                                                          
                                                                                                                                                                          
WESTIN
REVPAR ($)               127.41           123.60           3.1%             126.00           121.32           3.9%             130.45           128.58           1.5%
ADR ($)                  184.10           179.72           2.4%             178.12           172.17           3.5%             197.91           197.58           0.2%
Occupancy                69.2%            68.8%            0.4              70.7%            70.5%            0.2              65.9%            65.1%            0.8
(%)
                                                                                                                                                                          
                                                                                                                                                                          
ST.
REGIS/LUXURY
COLLECTION
REVPAR ($)               191.04           173.11           10.4%            252.51           223.41           13.0%            163.42           150.50           8.6%
ADR ($)                  300.38           291.13           3.2%             344.44           320.26           7.6%             275.89           274.47           0.5%
Occupancy                63.6%            59.5%            4.1              73.3%            69.8%            3.5              59.2%            54.8%            4.4
(%)
                                                                                                                                                                          
                                                                                                                                                                          
LE MERIDIEN
REVPAR ($)               121.90           119.13           2.3%             180.97           165.50           9.3%             114.87           113.61           1.1%
ADR ($)                  188.61           185.72           1.6%             235.60           220.91           6.6%             181.81           180.74           0.6%
Occupancy                64.6%            64.1%            0.5              76.8%            74.9%            1.9              63.2%            62.9%            0.3
(%)
                                                                                                                                                                          
                                                                                                                                                                          
W
REVPAR ($)               212.11           196.51           7.9%             196.43           185.25           6.0%             248.32           222.35           11.7%
ADR ($)                  286.65           274.40           4.5%             264.17           251.98           4.8%             339.39           330.61           2.7%
Occupancy                74.0%            71.6%            2.4              74.4%            73.5%            0.9              73.2%            67.3%            5.9
(%)
                                                                                                                                                                          
                                                                                                                                                                          
FOUR POINTS
REVPAR ($)               74.38            69.69            6.7%             70.55            65.07            8.4%             80.14            76.69            4.5%
ADR ($)                  116.55           113.94           2.3%             107.79           103.98           3.7%             130.58           129.91           0.5%
Occupancy                63.8%            61.2%            2.6              65.5%            62.6%            2.9              61.4%            59.0%            2.4
(%)
                                                                                                                                                                          
                                                                                                                                                                          
ALOFT
REVPAR ($)               70.67            65.61            7.7%             75.76            71.56            5.9%
ADR ($)                  108.99           106.51           2.3%             112.53           108.05           4.1%
Occupancy                64.8%            61.6%            3.2              67.3%            66.2%            1.1
(%)


(1)Includes same store owned, leased, managed, and franchised hotels



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Worldwide Hotel Results - Same Store
For the Three Months Ended March 31, 2013
UNAUDITED

                Systemwide ^(1)                             Company Operated ^(2)                   
                     2013     2012     Var.        2013     2012     Var.  
                                                        USD                                             USD
                                                                                            
                                                                                                              
TOTAL
WORLDWIDE
REVPAR                112.50           107.60           4.6%          127.70           121.99           4.7%
($)
ADR ($)               172.35           168.77           2.1%          194.67           191.07           1.9%
Occupancy             65.3%            63.8%            1.5           65.6%            63.8%            1.8
(%)
                                                                                                              
                                                                                                              
AMERICAS
REVPAR                111.89           105.85           5.7%          140.23           133.26           5.2%
($)
ADR ($)               164.46           158.38           3.8%          199.37           191.26           4.2%
Occupancy             68.0%            66.8%            1.2           70.3%            69.7%            0.6
(%)
                                                                                                              
                                                                                                              
North
America
REVPAR                112.44           105.89           6.2%          143.32           135.43           5.8%
($)
ADR ($)               163.96           157.33           4.2%          201.12           192.35           4.6%
Occupancy             68.6%            67.3%            1.3           71.3%            70.4%            0.9
(%)
                                                                                                              
                                                                                                              
Latin
America
REVPAR                105.69           105.37           0.3%          118.38           117.90           0.4%
($)
ADR ($)               170.73           171.55           -0.5%         185.52           182.82           1.5%
Occupancy             61.9%            61.4%            0.5           63.8%            64.5%            -0.7
(%)
                                                                                                              
                                                                                                              
ASIA
PACIFIC
REVPAR                108.22           104.42           3.6%          110.17           104.03           5.9%
($)
ADR ($)               172.69           175.88           -1.8%         176.28           178.26           -1.1%
Occupancy             62.7%            59.4%            3.3           62.5%            58.4%            4.1
(%)
                                                                                                              
                                                                                                              
Greater
China
REVPAR                89.73            84.30            6.4%          89.14            83.86            6.3%
($)
ADR ($)               166.31           167.08           -0.5%         165.44           167.93           -1.5%
Occupancy             54.0%            50.5%            3.5           53.9%            49.9%            4.0
(%)
                                                                                                              
                                                                                                              
Rest of
Asia
REVPAR                127.31           125.17           1.7%          140.16           132.78           5.6%
($)
ADR ($)               177.65           182.55           -2.7%         187.43           188.71           -0.7%
Occupancy             71.7%            68.6%            3.1           74.8%            70.4%            4.4
(%)
                                                                                                              
                                                                                                              
EAME
REVPAR                119.73           117.22           2.1%          127.28           124.12           2.5%
($)
ADR ($)               201.20           198.10           1.6%          207.70           205.24           1.2%
Occupancy             59.5%            59.2%            0.3           61.3%            60.5%            0.8
(%)
                                                                                                              
                                                                                                              
Europe
REVPAR                109.45           109.94           -0.4%         119.06           119.17           -0.1%
($)
ADR ($)               195.07           193.39           0.9%          204.23           203.48           0.4%
Occupancy             56.1%            56.8%            -0.7          58.3%            58.6%            -0.3
(%)
                                                                                                              
                                                                                                              
Africa &
Middle
East
REVPAR                138.26           130.40           6.0%          138.83           131.09           5.9%
($)
ADR ($)               210.65           205.75           2.4%          212.05           207.53           2.2%
Occupancy             65.6%            63.4%            2.2           65.5%            63.2%            2.3
(%)


(1)Includes same store owned, leased, managed, and franchised hotels
(2)Includes same store owned, leased, and managed hotels



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Owned/Leased Hotel Results - Same Store
For the Three Months Ended March 31, 2013
UNAUDITED


               WORLDWIDE                                NORTH AMERICA                            INTERNATIONAL
                2013        2012        Variance        2013        2012        Variance        2013        2012        Variance

TOTAL                         38 Hotels                                   14 Hotels                                   24 Hotels      
HOTELS
REVPAR            150.19       145.71       3.1%          156.98       147.95       6.1%          144.35       143.77       0.4%
($)
ADR ($)             212.90         207.92         2.4%            207.64         198.41         4.7%            218.08         217.15         0.4%
Occupancy           70.5%          70.1%          0.4             75.6%          74.6%          0.1             66.2%          66.2%          0.0
(%)
                                                                                                                                                    
Total               284,785        280,362        1.6%            139,121        133,424        4.3%            145,663        146,938        -0.9%
Revenue*
Total               233,541        229,989        -1.5%           111,366        108,453        -2.7%           122,175        121,536        -0.5%
Expenses*
                                                                                                                                                    
*Revenues & Expenses above are represented in '000's



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended March 31, 2013
UNAUDITED ($ millions)


                Worldwide
                    2013    2012    $            %
                                                      Variance        Variance
                                                                      
Management
Fees:
Base Fees           80               76               4               5.3%
Incentive           44               39               5               12.8%
Fees
Total
Management          124              115              9               7.8%
Fees
                                                                      
Franchise           48               45               3               6.7%
Fees
                                                                      
Total
Management          172              160              12              7.5%
& Franchise
Fees
                                                                      
Other
Management
& Franchise         39               36               3               8.3%
Revenues
^(1)
                                                                      
Total
Management          211              196              15              7.7%
& Franchise
Revenues
                                                                      
Other               6                5                1               20.0%
                                                                      
Management
Fees,
Franchise           217              201              16              8.0%
Fees &
Other
Income


(1) Other Management & Franchise Revenues includes the amortization of
deferred gains of approximately $23

million in 2013 and $21 million in 2012, resulting from the sales of hotels
subject to long-term management

contracts and termination fees.


STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership & Residential Revenues and Expenses
For the Three Months Ended March 31, 2013
UNAUDITED ($ millions)

                 2013    2012    $           %
                                                       Variance       Variance
                                                                      
Originated
Sales
Revenues ^
(1) --               83               83               0              0.0%
Vacation
Ownership
Sales
Other Sales
and Services         88               70               18             25.7%
Revenues
^(2)
Deferred
Revenues --
Percentage           (2)              1                (3)            n/m
of
Completion
Deferred
Revenues --          8                (2)              10             n/m
Other ^(3)
Vacation
Ownership
Sales and            177              152              25             16.4%
Services
Revenues
Residential
Sales and
Services             132              362              (230)          (63.5%)
Revenues
^(4)
Total
Vacation
Ownership &
Residential          309              514              (205)          (39.9%)
Sales and
Services
Revenues
                                                                      
Originated
Sales
Expenses ^
(5) --               63               59               (4)            (6.8%)
Vacation
Ownership
Sales
Other
Expenses             64               53               (11)           (20.8%)
^(6)
Deferred
Expenses --
Percentage           (1)              0                1              n/m
of
Completion
Deferred
Expenses --          2                3                1              33.3%
Other
Vacation
Ownership            128              115              (13)           (11.3%)
Expenses
Residential
Expenses             71               278              207            (74.5%)
^(4)
Total
Vacation
Ownership &          199              393              194            49.4%
Residential
Expenses


(1)  Timeshare sales revenue originated at each sales location before
      deferrals of revenue for U.S. GAAP reporting purposes
(2)   Includes resort income, interest income, and miscellaneous other
      revenues
      Includes deferral of revenue for contracts still in rescission period,
(3)   contracts that do not yet meet the requirements of ASC 978-605-25

      and provision for loan loss
      For 2013, includes $129 million of revenues and $71 million expenses
      associated with the St. Regis Bal Harbour residential project. For 2012,
(4)
      includes $356 million of revenues and $278 million expenses associated
      wit the St. Regis Bal Harbour residential project.
(5)   Timeshare cost of sales and sales & marketing expenses before deferrals
      of sales expenses for U.S. GAAP reporting purposes
(6)   Includes resort, general and administrative, and other miscellaneous
      expenses

Note: Deferred revenue is calculated based on the Percentage of Completion
("POC") of the project. Deferred expenses, also based on POC, include

product costs and direct sales and marketing costs only. Indirect sales and
marketing costs are not deferred per ASC 978-720-25 and ASC 978-340-25.

n/m = not meaningful



STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Hotels without Comparable Results & Other Selected Items
As of March 31, 2013
UNAUDITED ($ millions)




Properties without comparable     Revenues and Expenses Associated with Assets Sold or Closed in 2013 and 2012:
results in 2013 and 2012:             ^(1)
                                                                                                       
Property       Location
The Westin
Peachtree          Atlanta,                           Q1           Q2           Q3           Q4          Full
Plaza,             GA                                                                                            Year
Atlanta
The St.            Bal                Hotels Sold
Regis Bal          Harbour,           or Closed in
Harbour            FL                 2012:
Resort
The St.            New York,
Regis New          NY                 2012
York
The Westin
Maui
Resort &           Maui, HI           Revenues        $    35     $    43     $    36     $    -     $ 114
Spa,
Ka'anapali
The Westin
Denarau                               Expenses
Island             Nadi, Fiji         (excluding      $       32     $       32     $       28     $       1     $ 93
Resort &                              depreciation)
Spa, Fiji
Aloft San          Millbrae,
Francisco          CA
Airport
Sheraton                              Hotels Sold
Santa              Madrid,            or Closed in
Maria de           Spain              2013: ^(3)
El Paular
Hotel
Maria              San
Cristina,          Sebastian,         2013
San                Spain
Sebastian
Hotel
Alfonso            Seville,           Revenues        $       3      $       -      $       -      $       -     $ 3
XIII,              Spain
Seville
Four
Points by                             Expenses
Sheraton           Tucson, AZ         (excluding      $       3      $       -      $       -      $       -     $ 3
Tucson                                depreciation)
University
^(2)
The Gritti         Venice,
Palace,            Ital*Story
Venice             too large*

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