Starwood Reports Second Quarter 2013 Results

  Starwood Reports Second Quarter 2013 Results

Business Wire

STAMFORD, Conn. -- July 25, 2013

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

Second Quarter 2013 Highlights

  *Excluding special items, EPS from continuing operations was $0.79.
    Including special items, EPS from continuing operations was $0.71.
  *Adjusted EBITDA was $333 million, which included $30 million of EBITDA
    from the St. Regis Bal Harbour residential project.
  *Excluding special items, income from continuing operations was $153
    million. Including special items, income from continuing operations was
    $137 million.
  *Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in
    constant dollars (3.9% in actual dollars) compared to 2012. Systemwide
    REVPAR for Same-Store Hotels in North America increased 5.2% in constant
    dollars (5.1% in actual dollars).
  *Management fees, franchise fees and other income increased 6.3% compared
    to 2012.
  *Worldwide Same-Store Company-Operated gross operating profit margins
    increased approximately 94 basis points compared to 2012.
  *Worldwide REVPAR for Starwood Same-Store Owned Hotels increased 4.4% in
    constant dollars (3.7% in actual dollars) compared to 2012.
  *Margins at Starwood Same-Store Owned Hotels Worldwide increased
    approximately 160 basis points  compared to 2012.
  *Earnings from Starwood’s vacation ownership and residential business
    increased approximately $1 million compared to 2012.
  *During the quarter, the Company signed 32 hotel management and franchise
    contracts, representing approximately 6,500 rooms, and opened 18 hotels
    and resorts with approximately 3,100 rooms.

Second Quarter 2013 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. (“Starwood” or the “Company”) today
reported EPS from continuing operations for the second quarter of 2013 of
$0.71 compared to $0.66 in the second quarter of 2012. Excluding special
items, EPS from continuing operations was $0.79 for the second quarter of 2013
compared to $0.70 in the second quarter of 2012. Special items in the second
quarter of 2013, which totaled a charge of $16 million (after tax), primarily
related to certain non-recurring income tax charges associated with an asset
disposition, interest on deferred income from sales of vacation ownership
units, and the resolution of certain tax positions. Special items in the
second quarter of 2012, which totaled a charge of $9 million (after-tax),
primarily related to costs associated with the early extinguishment of debt.
Excluding special items, the effective income tax rate in the second quarter
of 2013 increased to 33.8%, compared to 31.5% in the second quarter of 2012,
primarily due to the higher percentage of pretax income in the United States
in 2013.

Income from continuing operations was $137 million in the second quarter of
2013, compared to $129 million in the second quarter of 2012. Excluding
special items, income from continuing operations was $153 million in the
second quarter of 2013 compared to $138 million in the second quarter of 2012.

Net income was $137 million and $0.71 per share in the second quarter of 2013,
compared to $122 million and $0.62 per share in the second quarter of 2012.

Frits van Paasschen, CEO, said, “We exceeded our profit expectations --
despite slower revenue growth and exchange rate headwinds -- thanks to SG&A
cost control and good margin performance at Owned and Managed hotels. The
global recovery continues. Tight supply in North America and Europe is the
order of the day, with virtually no new high-end hotels coming on stream. Our
occupancies in Europe are close to 72%. In North America, they reached 76%,
the highest Starwood has ever reported. In China, our hotels significantly
outperformed the competition, demonstrating the value our brands bring to our
hotel owners, even in soft market conditions.

Our global luxury business performed especially well in the second quarter,
highlighting the strength of our global footprint of over 35,000 luxury rooms
in nearly 40 countries. Rising wealth, global business demand, and interest in
new destinations are set to fuel the growth in luxury travel for some time to
come. With St. Regis, Luxury Collection and W Hotels, our three distinct
approaches to luxury, we are well positioned to capture greater share in this
profitable segment.”

Six Months Ended June 30, 2013 Earnings Summary

Income from continuing operations was $280 million in the six months ended
June 30, 2013 compared to $258 million in the same period in 2012. Excluding
special items, income from continuing operations was $301 million in the six
months ended June 30, 2013 compared to $262 million in the same period in
2012.

Net income was $350 million and $1.80 per share in the six months ended June
30, 2013 compared to $250 million and $1.27 per share in the same period in
2012. Net income in the six months ended June 30, 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.

Adjusted EBITDA was $648 million in the six months ended June 30, 2013
compared to $620 million in the same period in 2012.

Second Quarter 2013 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant
dollars (3.9% in actual dollars) compared to the second quarter of 2012.
International Systemwide REVPAR for Same-Store Hotels increased 3.3% in
constant dollars (2.2% in actual dollars).

Changes in REVPAR for Worldwide
Systemwide Same-Store Hotels by region:
                                          
                                          REVPAR
                                          Constant          
Region                                    Dollars    Actual Dollars
Americas:
North America                             5.2%                  5.1%
Latin America                             0.7%                  0.7%
Asia Pacific:
Greater China                             0.9%                  2.7%
Rest of Asia                              5.3%                  0.3%
Europe, Africa & Middle East:
Europe                                    2.5%                  2.4%
Africa & Middle East                      7.5%                  5.5%
                                                                

Changes in REVPAR for Worldwide
Systemwide Same-Store Hotels by brand:
                                          
                                          REVPAR
                                          Constant          
Brand                                     Dollars    Actual Dollars
St. Regis/Luxury Collection               8.7%                  8.4%
W Hotels                                  4.2%                  4.0%
Westin                                    4.4%                  3.8%
Sheraton                                  3.3%                  2.5%
Le Méridien                               1.8%                  1.9%
Four Points by Sheraton                   5.3%                  5.3%
Aloft                                     8.2%                  8.2%
                                                                

Worldwide Same-Store Company-Operated gross operating profit margins increased
approximately 94 basis points compared to 2012. International gross operating
profit margins for Same-Store Company-Operated properties increased 70 basis
points. North American Same-Store Company-Operated gross operating profit
margins increased approximately 123 basis points, driven by REVPAR increases
and cost controls.

Management fees, franchise fees and other income were $236 million, up $14
million, or 6.3% compared to the second quarter of 2012. Management fees
increased 8.7% to $137 million and franchise fees increased 7.7% to $56
million.

Development

During the second quarter of 2013, the Company signed 32 hotel management and
franchise contracts, representing approximately 6,500 rooms, of which 23 are
new builds and 9 are conversions from other brands. At June 30, 2013, the
Company had approximately 400 hotels in the active pipeline representing
approximately 100,000 rooms.

During the second quarter of 2013, 18 new hotels and resorts (representing
approximately 3,100 rooms) entered the system, including Le Méridien Yixing
(China, 280 rooms), Aloft Ahmedabad, SG Road (India, 178 rooms), King George,
a Luxury Collection Hotel, Athens (Greece, 102 rooms), The Westin Sacramento
(California, 101 rooms), Sheraton Pittsburgh Airport Hotel (Pennsylvania, 200
rooms), and Element Vaughan Southwest (Canada, 152 rooms). During the quarter,
two properties (representing approximately 400 rooms) were removed from the
system.

Owned, Leased and Consolidated Joint Venture Hotels

Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 4.4% in
constant dollars (3.7% in actual dollars) when compared to 2012. REVPAR at
Starwood Same-Store Owned Hotels in North America increased 9.8% in constant
dollars (9.2% in actual dollars). Internationally, Starwood Same-Store Owned
Hotel REVPAR increased 0.7% in constant dollars (decreased 0.1% in actual
dollars).

Revenues at Starwood Same-Store Owned Hotels Worldwide increased 5.5% in
constant dollars (4.8% in actual dollars) while costs and expenses increased
3.6% in constant dollars (2.7% in actual dollars) when compared to 2012.
Margins at these hotels increased approximately 160 basis points compared to
2012.

Revenues at Starwood Same-Store Owned Hotels in North America increased 11.1%
in constant dollars (10.5% in actual dollars) while costs and expenses
increased 6.2% in constant dollars (5.7% in actual dollars) when compared to
2012. Margins at these hotels increased approximately 360 basis points.

Internationally, revenues at Starwood Same-Store Owned Hotels increased 1.5%
in constant dollars (0.7% in actual dollars) while costs and expenses
increased 1.5% in constant dollars (0.2% in actual dollars) when compared to
2012. Margins at these hotels increased approximately 40 basis points.

Revenues at owned, leased and consolidated joint venture hotels were $419
million, compared to $453 million in 2012. Expenses at owned, leased and
consolidated joint venture hotels were $328 million compared to $360 million
in 2012. Second quarter 2013 results were negatively impacted by asset sales
completed since the second quarter of 2012.

Vacation Ownership

Total vacation ownership revenues increased 7.4% to $159 million in the second
quarter of 2013, when compared to 2012, primarily due to increased revenues
from resort operations, which included the transfer of the Westin St. John’s
revenues from owned hotels to vacation ownership. Originated contract sales of
vacation ownership intervals and number of contracts signed increased 3.9% and
1.7%, respectively. The average price per vacation ownership unit sold
increased 2.8% to approximately $14,800, driven by inventory mix and increased
focus on sales through new buyer channels.

Residential

During the second quarter of 2013, the Company’s residential revenues were $80
million compared to $168 million in 2012. The Company realized residential
revenues from Bal Harbour of $74 million and generated EBITDA of $30 million,
compared to revenues of $167 million and EBITDA of $35 million in the same
period of 2012. During the second quarter of 2013, the Company closed sales of
22 units at Bal Harbour and realized incremental cash proceeds of $71 million
associated with these units. From project inception through June 30, 2013, the
Company has closed contracts on approximately 93% of the total residential
units available at Bal Harbour and realized residential revenue of $1.0
billion and EBITDA of $249 million.

Selling, General, Administrative and Other

During the second quarter of 2013, selling, general, administrative and other
expenses increased 2.3% to $88 million for the three months ended June 30,
2013, when compared to the corresponding period of 2012, primarily due to an
increase in reserves for uncollectible receivables and the unfavorable impact
of foreign exchange. These increases were partially offset by approximately $7
million of favorable benefits from certain government incentives received in
connection with the relocation of our corporate headquarters. These incentives
were forecasted for 2013, but were anticipated in the back half of the year.
The Company now forecasts selling, general, administrative, and other expenses
to increase 2% to 3% for the full year.

Capital

Gross capital spending during the quarter included approximately $31 million
of maintenance capital and $48 million of development capital.

Asset Sales

During the second quarter of 2013, the Company completed the sale of the W New
Orleans for cash proceeds of approximately $65 million. This hotel was sold
subject to a long-term management contract and the Company recorded a deferred
gain of approximately $3 million.

Share Repurchase

In the second quarter of 2013 the Company repurchased approximately 140,000
shares at a total cost of approximately $8 million and a weighted average
price of $59.77 per share. As of June 30, 2013, approximately $624 million
remained available under the Company’s share repurchase authorization.

Balance Sheet

At June 30, 2013, the Company had gross debt of $1.266 billion, cash and cash
equivalents of $803 million (including $141 million of restricted cash) and
net debt of approximately $463 million, compared to net debt of approximately
$746 million as of March31, 2013, in each case excluding debt and restricted
cash associated with securitized vacation ownership notes receivable. Net debt
at June 30, 2013, including $435 million of debt and $17 million of restricted
cash associated with securitized vacation ownership notes receivable, was
approximately $881 million.

Outlook

For the Full Year 2013:

Including Bal Harbour, which is expected to contribute approximately $110
million of EBITDA, Adjusted EBITDA is expected to be approximately $1.230
billion to $1.250 billion (based on the assumptions below).

  *Excluding Bal Harbour, Adjusted EBITDA is expected to be approximately
    $1.120 billion to $1.140 billion, assuming:

       *REVPAR increases at Same-Store Company-Operated Hotels Worldwide of
         5% to 6% 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 100 basis points lower in
         actual dollars at current exchange rates).
       *Margins at Same-Store Owned Hotels Worldwide increase 75 to 125 basis
         points.
       *Management fees, franchise fees and other income increase
         approximately 7.5% to 9.5%.
       *Earnings from the Company’s vacation ownership and residential
         business of approximately $165 million to $170 million.
       *Selling, general and administrative expenses increase approximately
         2% to 3%.

  *Full year earnings from owned hotels are negatively impacted by
    approximately $8 million due to assets sold year to date in 2013.
  *Shifts in exchange rates since we first provided our outlookwill
    negatively impact full year earnings by $12 million if exchange rates stay
    at current levels.
  *Depreciation and amortization is expected to be approximately $295
    million.
  *Interest expense is expected to be approximately $120 million.
  *Full year effective tax rate is expected to be approximately 33%, and cash
    taxes are expected to be approximately $125 million.
  *Including Bal Harbour, EPS before special items is expected to be
    approximately $2.81 to $2.88 (based on the assumptions above).
  *Full year capital expenditures (excluding vacation ownership and
    residential inventory) are expected to be approximately $175 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 $300 million.
  *Vacation ownership (excluding Bal Harbour) is expected to generate
    approximately $200 million in positive cash flow. Bal Harbour is expected
    to generate at least $175 million in net cash flow.

For the three months ended September 30, 2013:

  *Including Bal Harbour, which is expected to contribute approximately $15
    million of EBITDA, Adjusted EBITDA is expected to be approximately $280
    million to $290 million (based on the assumptions below).
  *Excluding Bal Harbour, Adjusted EBITDA is expected to be approximately
    $265 million to $275 million, assuming:

       *REVPAR increases at Same-Store Company-Operated Hotels Worldwide of
         5% to 6% 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 100 basis points lower in
         actual dollars at current exchange rates).
       *Management fees, franchise fees and other income increase
         approximately 7.5% to 9.5%.
       *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 $117 million to $124 million, (based on the assumptions
    above).
  *The effective tax rate is expected to be approximately 33%.
  *Including Bal Harbour, EPS is expected to be approximately $0.60 to $0.64
    (based on the assumptions above).

Special Items

The Company’s special items  included a pre-tax benefit of $1 million ($16
million charge after-tax) in the second quarter of 2013 compared to a pre-tax
charge of $16 million ($9 million 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                                  Six Months Ended
        June 30,                                                  June 30,
        2013   2012                                 2013   2012
                                                                                 
                                        Income from
        $  153        $  138          continuing                $  301        $  262   
                                        operations before
                                        special items
        $  0.79       $  0.70         EPS before special        $  1.55       $  1.33  
                                        items
                                        Special Items
                                        Restructuring and
           —              —             other special                1              11
                                        (charges) credits,
                                        net^(a)
                                        Gain (loss) on
           1              (1    )       asset dispositions           (8    )        (8    )
                                        and impairments,
                                        net^(b)
          —            (15   )       Debt                        —            (15   )
                                        Extinguishment^(c)
           1              (16   )       Total special items          (7    )        (12   )
                                        – pre-tax
                                        Income tax benefit
          (17   )       7            (expense) for               (14   )       8     
                                        special items^(d)
          (16   )       (9    )       Total special items         (21   )       (4    )
                                        – after-tax
                                                                                 
                                        Income from
        $  137        $  129          continuing                $  280        $  258   
                                        operations
        $  0.71       $  0.66         EPS including             $  1.44       $  1.31  
                                        special items
                                                                                 

             During the six months ended June 30, 2012, the Company recorded a
    a)  favorable adjustment of $11 million to reverse a portion of a
             litigation reserve established in 2011.
             During the six months ended June 30, 2013, the net loss primarily
             related to the sale of three wholly-owned hotels. During the
        b)   three months ended June 30, 2012, the net loss primarily related
             to various asset dispositions. The six months ended June 30, 2012
             included a net loss primarily related to the sale of one
             wholly-owned hotel.
             During the three and six months ended June 30, 2012, the net
        c)   charges were associated with the redemption of approximately $495
             million of senior notes.
             During the three months ended June 30, 2013, the net charges
             included $4 million related to an asset disposition, $8 million
             to accrue interest on deferred income associated with vacation
             ownership sales, and approximately $5 million for charges
        d)   associated with tax reserves and resolution of certain tax
             positions. The six months ended June 30, 2013, included a tax
             benefit of $3 million related to an asset sale. During the three
             and six months ended June 30, 2012, the benefit primarily
             represented income tax benefits on special items at the statutory
             rate.
             

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 second 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 Thursday, July
25 and will run for one year. Alternatively, participants may call into (866)
921-0636 with conference ID 99326536; please dial in fifteen minutes early to
ensure a timely start. A call replay will be available from 2:00 p.m. Eastern
Time on Thursday, July 25, 2013 through Thursday, August 1, 2013 and can be
accessed by dialing (855) 859-2056 with conference ID 99326536.

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 the
Company’s 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 the 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 1,162 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                                           Six Months Ended
June 30,                                                     June 30,
2013    2012    %                                2013    2012    %
                            Variance                                                     Variance
                                         Revenues
                                         Owned, leased
                                         and
$ 419         $ 453         (7.5   )     consolidated        $ 798         $ 855         (6.7   )
                                         joint venture
                                         hotels
                                         Vacation
                                         ownership and
  239           316         (24.4  )     residential           548           830         (34.0  )
                                         sales and
                                         services
                                         Management
  236           222         6.3          fees, franchise       453           423         7.1
                                         fees and other
                                         income
                                         Other revenues
 668         627        6.5         from managed         1,302       1,225      6.3    
                                         and franchised
                                         properties^(a)
  1,562         1,618       (3.5   )                           3,101         3,333       (7.0   )
                                         Costs and
                                         Expenses
                                         Owned, leased
                                         and
  328           360         8.9          consolidated          648           709         8.6
                                         joint venture
                                         hotels
                                         Vacation
  163           241         32.4         ownership and         362           634         42.9
                                         residential
                                         Selling,
  88            86          (2.3   )     general,              178           182         2.2
                                         administrative
                                         and other
                                         Restructuring
  —             —           —            and other             (1    )       (11   )     90.9
                                         special charges
                                         (credits), net
  57            56          (1.8   )     Depreciation          115           113         (1.8   )
  8             6           (33.3  )     Amortization          15            12          (25.0  )
                                         Other expenses
 668         627        (6.5   )     from managed         1,302       1,225      (6.3   )
                                         and franchised
                                         properties^(a)
  1,312         1,376       4.7                                2,619         2,864       8.6
  250           242         3.3          Operating             482           469         2.8
                                         income
                                         Equity (losses)
                                         earnings and
  8             5           60.0         gains (losses)        17            15          13.3
                                         from
                                         unconsolidated
                                         ventures, net
                                         Interest
                                         expense, net of
  (26   )       (46   )     43.5         interest income       (52   )       (95   )     45.3
                                         of $0, $1, $1
                                         and $1
                                         Loss on early
  —             (15   )     100.0        extinguishment        —             (15   )     100.0
                                         of debt, net
                                         Gain  (loss) on
                                         asset
 1           (1    )     (200.0 )     dispositions         (8    )      (8    )     —      
                                         and
                                         impairments,
                                         net
                                         Income from
                                         continuing
                                         operations
  233           185         25.9         before taxes          439           366         19.9
                                         and
                                         noncontrolling
                                         interests
                                         Income tax
  (95   )       (56   )     69.6         benefit              (159  )      (108  )     47.2   
                                         (expense)
                                         Income from
  138           129         7.0          continuing            280           258         8.5
                                         operations
                                         Discontinued
                                         Operations:
                                         Gain (loss) on
  —             (7    )     100.0        dispositions,        70          (8    )     n/m    
                                         net of tax
  138           122         13.1         Net income            350           250         40.0
                                         Net loss
                                         (income)
 (1    )      —          n/m         attributable to      —           —          —      
                                         noncontrolling
                                         interests
                                         Net income
$ 137        $ 122        12.3        attributable to     $ 350        $ 250        40.0   
                                         Starwood
                                         Earnings
                                         (Losses) Per
                                         Share – Basic
$ 0.72        $ 0.67        7.5          Continuing          $ 1.46        $ 1.34        9.0
                                         operations
  —             (0.04 )     (100.0 )     Discontinued         0.37        (0.04 )     n/m    
                                         operations
$ 0.72       $ 0.63       14.3        Net income          $ 1.83       $ 1.30       40.8   
                                         (loss)
                                         Earnings
                                         (Losses) Per
                                         Share – Diluted
$ 0.71        $ 0.66        7.6          Continuing          $ 1.44        $ 1.31        9.9
                                         operations
  —             (0.04 )     (100.0 )     Discontinued         0.36        (0.04 )     n/m    
                                         operations
$ 0.71       $ 0.62       14.5        Net income          $ 1.80       $ 1.27       41.7   
                                         (loss)
                                         Amounts
                                         attributable to
                                         Starwood’s
                                         Common
                                         Stockholders
$ 137         $ 129         6.2          Continuing          $ 280         $ 258         8.5
                                         operations
 —           (7    )     (100.0 )     Discontinued         70          (8    )     n/m    
                                         operations
$ 137        $ 122        12.3        Net income          $ 350        $ 250        40.0   
                                         (loss)
                                                                                         
                                         Weighted
 192         195                     average number       192         193   
                                         of shares
                                         Weighted
                                         average number
 194         198                     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)
                                                              
                                            June 30,              December 31,
                                            2013                  2012
                                            (unaudited)
Assets
Current assets:
Cash and cash equivalents                   $    662              $  305
Restricted cash                                  153                 158
Accounts receivable, net of allowance for        616                 586
doubtful accounts of $56 and $59
Inventories                                      253                 361
Securitized vacation ownership notes
receivable, net of allowance for doubtful
accounts of $7 and $9                            61                  65
Deferred income taxes                            271                 320
Prepaid expenses and other                      174               124    
Total current assets                             2,190               1,919
Investments                                      266                 260
Plant, property and equipment, net               3,039               3,162
Assets held for sale, net                        8                   36
Goodwill and intangible assets, net              2,031               2,025
Deferred income taxes                            588                 636
Other assets ^(a)                                465                 385
Securitized vacation ownership notes            379               438    
receivable
Total assets                                $    8,966           $  8,861  
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current           $    2                $  2
maturities of long-term debt ^(b)
Accounts payable                                 95                  121
Current maturities of long-term                  113                 150
securitized vacation ownership debt
Accrued expenses                                 1,171               1,074
Accrued salaries, wages and benefits             338                 395
Accrued taxes and other                         205               287    
Total current liabilities                        1,924               2,029
Long-term debt ^(b)                              1,264               1,273
Long-term securitized vacation ownership         322                 383
debt
Deferred income taxes                            76                  78
Other liabilities                               1,899             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
194,935,452 and 193,121,094 shares at
June 30, 2013 and December 31, 2012,
respectively                                     2                   2
Additional paid-in capital                       853                 816
Accumulated other comprehensive loss             (386     )          (338   )
Retained earnings                               3,007             2,657  
Total Starwood stockholders’ equity              3,476               3,137
Noncontrolling interest                         5                 5      
Total stockholders’ equity                      3,481             3,142  
Total liabilities and stockholders’         $    8,966           $  8,861  
equity
                                                                  

   (a)  Includes restricted cash of $5 million and $6 million at June 30,
            2013 and December 31, 2012, respectively.
            Excludes Starwood’s share of unconsolidated joint venture debt
      (b)   aggregating approximately $355 million and $389 million at June
            30, 2013 and December 31, 2012, respectively.
            

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Historical Data
(In millions)
                                                     
Three Months Ended                                        Six Months Ended
June 30,                                                  June 30,
2013   2012   %                               2013   2012   %
                          Variance                                                  Variance
                                                                                    
                                       Reconciliation
                                       of Net Income
                                       (Loss) to
                                       EBITDA and
                                       Adjusted
                                       EBITDA
$  137       $  122       12.3         Net income         $  350       $  250       40.0
   32           52        (38.5  )     Interest              60           101       (40.6  )
                                       expense ^(a)
                                       Loss on early
   —            15        (100.0 )     extinguishment        —            15        (100.0 )
                                       of debt, net
                                       Income tax
   95           54        75.9         (benefit)             89           107       (16.8  )
                                       expense ^(b)
   61           63        (3.2   )     Depreciation          125          127       (1.6   )
                                       ^(c)
  9          7        28.6        Amortization         17         14       21.4   
                                       ^(d)
   334          313       6.7          EBITDA                641          614       4.4
                                       (Gain) loss on
                                       asset
   (1  )        1         (200.0 )     dispositions          8            8         —
                                       and
                                       impairments,
                                       net
                                       Net
   —            9         (100.0 )     (gain)/loss on        —            9         (100.0 )
                                       dispositions
                                       ^(e)
                                       Restructuring
                                       and other
  —          —        —           special              (1  )       (11 )     (90.9  )
                                       charges
                                       (credits), net
$  333      $  323      3.1         Adjusted           $  648      $  620      4.5    
                                       EBITDA
                                                                                    

      Includes $6 million and $5 million of Starwood’s share of interest
(a)  expense of unconsolidated joint ventures for the three months ended June
      30, 2013 and 2012, respectively, and $7 million and $5 million for the
      six months ended June 30, 2013 and 2012, respectively.
      Includes $0 million and $(2) million of tax expense (benefit) recorded
(b)   in discontinued operations for the three months ended June 30, 2013 and
      2012, respectively, and $(70) million and $(1) million for the six
      months ended June 30, 2013 and 2012, respectively.
      Includes $4 million and $7 million of Starwood’s share of depreciation
(c)   expense of unconsolidated joint ventures for the three months ended June
      30, 2013 and 2012, respectively, and $10 million and $14 million for the
      six months ended June 30, 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 June
      30, 2013 and 2012, respectively, and $2 million and $2 million for the
      six months ended June 30, 2013 and 2012, respectively.
(e)   Excludes the taxes included in (b) above.
      

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels Worldwide
(In millions)
                                             
                                                   Three Months Ended
                                                   June 30, 2013
                                                   $ Change   % Variance
Revenue
Revenue increase/(decrease) (GAAP)                 $   16           4.8
Impact of changes in foreign exchange                 2           0.7    
rates
Revenue increase/(decrease) in constant            $   18          5.5    
dollars
                                                                           
Expense
Expense increase/(decrease) (GAAP)                 $   7            2.7
Impact of changes in foreign exchange                 2           0.9    
rates
Expense increase/(decrease) in constant            $   9           3.6    
dollars
                                                                           
Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels North
America
(In millions)
                                                                           
                                                   Three Months Ended
                                                   June 30, 2013
                                                   $ Change     % Variance
Revenue
Revenue increase/(decrease) (GAAP)                 $   14           10.5
Impact of changes in foreign exchange                 1           0.6    
rates
Revenue increase/(decrease) in constant            $   15          11.1   
dollars
                                                                           
Expense
Expense increase/(decrease) (GAAP)                 $   6            5.7
Impact of changes in foreign exchange                 1           0.5    
rates
Expense increase/(decrease) in constant            $   7           6.2    
dollars
                                                                           
Non-GAAP to GAAP Reconciliations – Same-Store Owned/Leased Hotels
International
(In millions)
                                                                           
                                                   Three Months Ended
                                                   June 30, 2013
                                                   $ Change     % Variance
Revenue
Revenue increase/(decrease) (GAAP)                 $   1            0.7
Impact of changes in foreign exchange                 2           0.8    
rates
Revenue increase/(decrease) in constant            $   3           1.5    
dollars
                                                                           
Expense
Expense increase/(decrease) (GAAP)                 $   —            0.2
Impact of changes in foreign exchange                 2           1.3    
rates
Expense increase/(decrease) in constant            $   2           1.5    
dollars
                                                                           

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliation – Earnings from Vacation Ownership and Residential Business
(In millions)

               Three Months Ended                       Six Months Ended
                  June 30,                                   June 30,
                  2013   2012   %            2013   2012   %
                                                Variance                                   Variance
Vacation
ownership
and
residential       $  239         $  316         (24.4  )     $  548         $  830         (34.0  )
sales and
services
revenue
Vacation
ownership
and                 (163  )       (241  )     32.4          (362  )       (634  )     42.9   
residential
expenses
Earnings
from
vacation          $  76         $  75         1.3         $  186        $  196        (5.1   )
ownership
and
residential

Non-GAAP to GAAP Reconciliation – Earnings from Bal Harbour
(In millions)

                  Three Months Ended
                  June 30
                  2013           2012           %
                                                Variance
Total Bal
Harbour           $  74          $  167         (55.7  )                                          
revenues
Total Bal
Harbour             (44   )       (132  )     66.7   
expenses
Earnings
from Bal          $  30         $  35         (14.3  )                                          
Harbour
                                                                                                  

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Future Performance
(In millions, except per share data)
                                                      
Low Case
                                                             
Three Months Ended                                          Year Ended
September 30, 2013                                           December 31, 2013
$     117                Net income ^(a)                     $    595
      30                 Interest expense                         120
      58                 Income tax expense ^(a)                  213
     75                Depreciation and amortization           295      
      280                EBITDA                                   1,223
                         (Gain) loss on asset
      —                  dispositions and impairments,            8
                         net
     —                 Restructuring and other                 (1       )
                         special charges (credits)
$     280               Adjusted EBITDA                     $    1,230    
                                                             
Three Months Ended                                          Year Ended
September 30, 2013                                           December 31, 2013
                         Income from continuing
$     117               operations before special           $    546      
                         items
$     0.60              EPS before special items            $    2.81     
                         Special Items
                         Gain (loss) on asset
      —                  dispositions and impairments,            (8       )
                         net
     —                 Restructuring and other                 1        
                         special (charges) credits
      —                  Total special items – pre-tax            (7       )
     —                 Income tax (expense) benefit            (14      )
                         associated with special items
     —                 Total special items –                   (21      )
                         after-tax
$     117               Income from continuing              $    525      
                         operations
$     0.60              EPS including special items         $    2.70     
                                                             
High Case
                                                             
Three Months Ended                                          Year Ended
September 30, 2013                                           December 31, 2013
$     124                Net income ^(a)                     $    608
      30                 Interest expense                         120
      61                 Income tax expense ^(a)                  220
     75                Depreciation and amortization           295      
      290                EBITDA                                   1,243
                         (Gain) loss on asset
      —                  dispositions and impairments,            8
                         net
     —                 Restructuring and other                 (1       )
                         special charges (credits)
$     290               Adjusted EBITDA                     $    1,250    
                                                             
Three Months Ended                                          Year Ended
September 30, 2013                                           December 31, 2013
                         Income from continuing
$     124               operations before special           $    559      
                         items
$     0.64              EPS before special items            $    2.88     
                         Special Items
                         Gain (loss) on asset
      —                  dispositions and impairments,            (8       )
                         net
     —                 Restructuring and other                 1        
                         special (charges) credits
      —                  Total special items – pre-tax            (7       )
     —                 Income tax (expense) benefit            (14      )
                         associated with special items
     —                 Total special items –                   (21      )
                         after-tax
$     124               Income from continuing              $    538      
                         operations
$     0.64              EPS including special items         $    2.77     
                                                                           

(a) The full year amounts include a tax benefit of $70 million recorded in
discontinued operations.

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

                                      September 30,
                                      2013   2012   $ Variance
                                                                    
Vacation ownership and
residential sales and services        $  205         $  208         $   (3  )
revenues
Less: Bal Harbour revenues              (45  )        (62  )         17  
Vacation ownership and
residential sales and services        $  160        $  146        $   14  
revenue excluding Bal Harbour
                                                                    
Vacation ownership and                $  150         $  156         $   (6  )
residential expenses
Less: Bal Harbour expenses              (30  )        (50  )         20  
Vacation ownership and
residential expenses excluding        $  120        $  106        $   14  
Bal Harbour
                                                                  
Earnings from vacation ownership
and residential excluding Bal         $  40         $  40         $   —   
Harbour
                                                                            

                                               Year Ended
                                                             December 31, 2013
                                                             
Vacation ownership and
residential sales and services                               $    930
revenues
Less: Bal Harbour revenues                                       (275    )
Vacation ownership and
residential sales and services                               $    655     
revenue excluding Bal Harbour
                                                             
Vacation ownership and                                       $    655
residential expenses
Less: Bal Harbour expenses                                       (165    )
Vacation ownership and
residential expenses excluding                               $    490     
Bal Harbour
                                                             
Earnings from vacation ownership
and residential excluding Bal                                $    (165    )
Harbour
                                                                          

High Case
                                   
                                      Three Months Ended

                                      September 30,
                                      2013   2012   $ Variance
                                                                    
Vacation ownership and
residential sales and services        $  215         $  208         $   7
revenues
Less: Bal Harbour revenues              (45  )        (62  )         17  
Vacation ownership and
residential sales and services        $  170        $  146        $   24  
revenue excluding Bal Harbour
                                                                    
Vacation ownership and                $  155         $  156         $   (1  )
residential expenses
Less: Bal Harbour expenses              (30  )        (50  )         20  
Vacation ownership and
residential expenses excluding        $  125        $  106        $   19  
Bal Harbour
                                                                  
Earnings from vacation ownership
and residential excluding Bal         $  45         $  40         $   5   
Harbour
                                                                            

                                               Year Ended
                                                             December 31, 2013
                                                             
Vacation ownership and
residential sales and services                               $    940
revenues
Less: Bal Harbour revenues                                       (275    )
Vacation ownership and
residential sales and services                               $    665     
revenue excluding Bal Harbour
                                                             
Vacation ownership and                                       $    660
residential expenses
Less: Bal Harbour expenses                                       (165    )
Vacation ownership and
residential expenses excluding                               $    495     
Bal Harbour
                                                             
Earnings from vacation ownership
and residential excluding Bal                                $    170     
Harbour
                                                                          

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses
(In millions)
                                                   
Three Months Ended                                     Six Months Ended
June 30,                                               June 30,
                          %            Same-Store                                %
2013   2012   Variance     Owned Hotels    2013   2012   Variance
                                       Worldwide
                                                                                 
                                       Revenue
                                       Same-Store
$  339       $  323       5.0          Owned Hotels    $  629       $  599       5.0
                                       ^(a)
                                       Hotels Sold
   2            54        (96.3  )     or Closed in       12           100       (88.0  )
                                       2013 and 2012
                                       Hotels
   71           69        2.9          Without            143          142       0.7
                                       Comparable
                                       Results
                                       Other
  7          7        —           ancillary         14         14       —      
                                       hotel
                                       operations
                                       Total Owned,
                                       Leased and
$  419      $  453      (7.5   )     Consolidated    $  798      $  855      (6.7   )
                                       Joint Venture
                                       Hotels
                                       Revenue
                                                                                 
                                       Costs and
                                       Expenses
                                       Same-Store
$  257       $  251       (2.4   )     Owned Hotels    $  494       $  481       (2.7   )
                                       ^(a)
                                       Hotels Sold
   2            40        95.0         or Closed in       10           80        87.5
                                       2013 and 2012
                                       Hotels
   62           62        —            Without            131          135       3.0
                                       Comparable
                                       Results
                                       Other
  7          7        —           ancillary         13         13       —      
                                       hotel
                                       operations
                                       Total Owned,
                                       Leased and
$  328      $  360      8.9         Consolidated    $  648      $  709      8.6    
                                       Joint Venture
                                       Hotels Costs
                                       and Expenses
                                                       
Three Months Ended                                     Six Months Ended
June 30,                                               June 30,
                          %            Same-Store                                %
2013         2012         Variance     Owned Hotels    2013         2012         Variance
                                       North America
                                                                                 
                                       Revenue
                                       Same-Store
$  149       $  135       10.4         Owned Hotels    $  300       $  267       12.4
                                       ^(a)
                                       Hotels Sold
   2            54        (96.3  )     or Closed in       12           100       (88.0  )
                                       2013 and 2012
                                       Hotels
   58           68        (14.7  )     Without            115          133       (13.5  )
                                       Comparable
                                       Results
  1          —        n/m                           —          —        —      
                                       Total Owned,
                                       Leased and
$  210      $  257      (18.3  )     Consolidated    $  427      $  500      (14.6  )
                                       Joint Venture
                                       Hotels
                                       Revenue
                                                                                 
                                       Costs and
                                       Expenses
                                       Same-Store
$  118       $  112       (5.4   )     Owned Hotels    $  236       $  225       (4.9   )
                                       ^(a)
                                       Hotels Sold
   2            40        95.0         or Closed in       10           80        87.5
                                       2013 and 2012
                                       Hotels
   54           59        8.5          Without            108          119       9.2
                                       Comparable
                                       Results
                                       Other
  1          —        n/m         ancillary         —          —        —      
                                       hotel
                                       operations
                                       Total Owned,
                                       Leased and
$  175      $  211      17.1        Consolidated    $  354      $  424      16.5   
                                       Joint Venture
                                       Hotels Costs
                                       and Expenses
                                                       
Three Months Ended                                     Six Months Ended
June 30,                                               June 30,
                          %            Same-Store                                %
2013         2012         Variance     Owned Hotels    2013         2012         Variance
                                       International
                                                                                 
                                       Revenue
                                       Same-Store
$  190       $  188       1.1          Owned Hotels    $  329       $  332       (0.9   )
                                       ^(a)
                                       Hotels Sold
   —            —         —            or Closed in       —            —         —
                                       2013 and 2012
                                       Hotels
   13           1         n/m          Without            28           9         n/m
                                       Comparable
                                       Results
                                       Other
  6          7        (14.3  )     ancillary         14         14       —      
                                       hotel
                                       operations
                                       Total Owned,
                                       Leased and
$  209      $  196      6.6         Consolidated    $  371      $  355      4.5    
                                       Joint Venture
                                       Hotels
                                       Revenue
                                                                                 
                                       Costs and
                                       Expenses
                                       Same-Store
$  139       $  139       —            Owned Hotels    $  258       $  256       (0.8   )
                                       ^(a)
                                       Hotels Sold
   —            —         —            or Closed in       —            —         —
                                       2013 and 2012
                                       Hotels
   8            3         n/m          Without            23           16        (43.8  )
                                       Comparable
                                       Results
                                       Other
  6          7        14.3        ancillary         13         13       —      
                                       hotel
                                       operations
                                       Total Owned,
                                       Leased and
$  153      $  149      (2.7   )     Consolidated    $  294      $  285      (3.2   )
                                       Joint Venture
                                       Hotels Costs
                                       and Expenses
                                                                                        

      Same-Store Owned Hotel results exclude one hotel sold and 11 hotels
(a)  without comparable results for the three months ended June 30, 2013 and
      12 hotels sold and 11 hotels without comparable results for the six
      months ended June 30, 2013.
      

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Systemwide^(1) Statistics - Same Store
For the Three Months Ended June 30, 2013
UNAUDITED
                                                                                            
               Systemwide - Worldwide             Systemwide - North America         Systemwide - International
               2013     2012     Var.     2013     2012     Var.     2013     2012     Var.
                                         USD                                USD                                USD
                                                                                                               
                                                                                                               
TOTAL HOTELS
   REVPAR      123.73       119.12       3.9%     128.54       122.29       5.1%     117.82       115.23       2.2%
   ($)
   ADR ($)     174.43       170.33       2.4%     168.83       162.31       4.0%     182.54       182.05       0.3%
   Occupancy   70.9%        69.9%        1.0      76.1%        75.3%        0.8      64.5%        63.3%        1.2
   (%)
                                                                                                               
                                                                                                               
SHERATON
   REVPAR      104.34       101.78       2.5%     110.26       105.28       4.7%     97.16        97.52        -0.4%
   ($)
   ADR ($)     150.67       148.10       1.7%     147.79       141.47       4.5%     154.82       157.80       -1.9%
   Occupancy   69.3%        68.7%        0.6      74.6%        74.4%        0.2      62.8%        61.8%        1.0
   (%)
                                                                                                               
                                                                                                               
WESTIN
   REVPAR      139.75       134.61       3.8%     140.24       133.42       5.1%     138.71       137.18       1.1%
   ($)
   ADR ($)     186.66       182.74       2.1%     180.14       174.49       3.2%     202.63       202.91       -0.1%
   Occupancy   74.9%        73.7%        1.2      77.8%        76.5%        1.3      68.5%        67.6%        0.9
   (%)
                                                                                                               
                                                                                                               
ST.
REGIS/LUXURY
COLLECTION
   REVPAR      200.79       185.27       8.4%     239.40       219.81       8.9%     183.93       170.19       8.1%
   ($)
   ADR ($)     302.79       296.65       2.1%     323.56       304.38       6.3%     292.13       292.46       -0.1%
   Occupancy   66.3%        62.5%        3.8      74.0%        72.2%        1.8      63.0%        58.2%        4.8
   (%)
                                                                                                               
                                                                                                               
LE MERIDIEN
   REVPAR      131.66       129.19       1.9%     223.67       219.06       2.1%     119.65       117.47       1.9%
   ($)
   ADR ($)     191.49       185.73       3.1%     267.69       260.17       2.9%     179.05       173.64       3.1%
   Occupancy   68.8%        69.6%        -0.8     83.6%        84.2%        -0.6     66.8%        67.7%        -0.9
   (%)
                                                                                                               
                                                                                                               
W
   REVPAR      238.45       229.22       4.0%     224.65       217.08       3.5%     273.38       259.79       5.2%
   ($)
   ADR ($)     295.90       287.66       2.9%     274.69       267.66       2.6%     352.54       341.33       3.3%
   Occupancy   80.6%        79.7%        0.9      81.8%        81.1%        0.7      77.5%        76.1%        1.4
   (%)
                                                                                                               
                                                                                                               
FOUR POINTS
   REVPAR      80.43        76.35        5.3%     86.21        81.95        5.2%     71.59        67.87        5.5%
   ($)
   ADR ($)     115.96       113.01       2.6%     116.26       113.34       2.6%     115.40       112.40       2.7%
   Occupancy   69.4%        67.6%        1.8      74.2%        72.3%        1.9      62.0%        60.4%        1.6
   (%)
                                                                                                               
                                                                                                               
ALOFT
   REVPAR      79.38        73.39        8.2%     89.91        84.41        6.5%     54.64        47.41        15.2%
   ($)
   ADR ($)     111.86       106.30       5.2%     118.67       111.57       6.4%     91.56        88.71        3.2%
   Occupancy   71.0%        69.0%        2.0      75.8%        75.7%        0.1      59.7%        53.4%        6.3
   (%)
                                                                                                               
                                                                                                               
(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 June 30, 2013
UNAUDITED
                                                                 
                  Systemwide ^(1)                     Company Operated ^(2)
                  2013     2012     Var.      2013     2012     Var.
                                            USD                                 USD
                                                                                
                                                                                
TOTAL
WORLDWIDE
  REVPAR          123.73       119.12       3.9%      138.46       132.47       4.5%
  ($)
  ADR ($)         174.43       170.33       2.4%      196.90       192.32       2.4%
  Occupancy       70.9%        69.9%        1.0       70.3%        68.9%        1.4
  (%)
                                                                                
                                                                                
AMERICAS
  REVPAR          125.76       119.96       4.8%      153.92       145.97       5.4%
  ($)
  ADR ($)         168.43       161.91       4.0%      202.98       194.26       4.5%
  Occupancy       74.7%        74.1%        0.6       75.8%        75.1%        0.7
  (%)
                                                                                
                                                                                
North
America
  REVPAR          128.54       122.29       5.1%      161.04       151.93       6.0%
  ($)
  ADR ($)         168.83       162.31       4.0%      205.94       196.42       4.8%
  Occupancy       76.1%        75.3%        0.8       78.2%        77.4%        0.8
  (%)
                                                                                
                                                                                
Latin
America
  REVPAR          93.33        92.71        0.7%      99.47        100.30       -0.8%
  ($)
  ADR ($)         162.27       155.94       4.1%      172.34       172.34       0.0%
  Occupancy       57.5%        59.5%        -2.0      57.7%        58.2%        -0.5
  (%)
                                                                                
                                                                                
ASIA
PACIFIC
  REVPAR          99.58        98.18        1.4%      101.11       97.54        3.7%
  ($)
  ADR ($)         159.80       162.52       -1.7%     162.27       162.98       -0.4%
  Occupancy       62.3%        60.4%        1.9       62.3%        59.8%        2.5
  (%)
                                                                                
                                                                                
Greater
China
  REVPAR          90.31        87.97        2.7%      90.24        87.60        3.0%
  ($)
  ADR ($)         155.58       157.89       -1.5%     154.87       157.63       -1.8%
  Occupancy       58.0%        55.7%        2.3       58.3%        55.6%        2.7
  (%)
                                                                                
                                                                                
Rest of
Asia
  REVPAR          110.01       109.65       0.3%      118.35       113.26       4.5%
  ($)
  ADR ($)         163.89       166.92       -1.8%     172.23       170.03       1.3%
  Occupancy       67.1%        65.7%        1.4       68.7%        66.6%        2.1
  (%)
                                                                                
                                                                                
EAME
  REVPAR          146.21       141.63       3.2%      154.46       149.14       3.6%
  ($)
  ADR ($)         211.72       209.00       1.3%      221.29       218.68       1.2%
  Occupancy       69.1%        67.8%        1.3       69.8%        68.2%        1.6
  (%)
                                                                                
                                                                                
Europe
  REVPAR          161.20       157.37       2.4%      179.60       174.88       2.7%
  ($)
  ADR ($)         224.13       224.05       0.0%      242.27       242.91       -0.3%
  Occupancy       71.9%        70.2%        1.7       74.1%        72.0%        2.1
  (%)
                                                                                
                                                                                
Africa &
Middle East
  REVPAR          117.49       111.36       5.5%      117.54       111.22       5.7%
  ($)
  ADR ($)         184.80       176.75       4.6%      185.30       177.63       4.3%
  Occupancy       63.6%        63.0%        0.6       63.4%        62.6%        0.8
  (%)
                                                                                
(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 June 30, 2013
UNAUDITED
                                                                                                           
                  Worldwide                               North America                           International
                  2013     2012     Var.      2013     2012     Var.      2013     2012     Var.
                                                USD                                     USD                                     USD
                                                                                                                                
TOTAL                           40 Hotels                             13 Hotels                             27 Hotels      
HOTELS
  REVPAR          175.28         168.98         3.7%      177.08         162.11         9.2%      173.96         174.05         -0.1%
  ($)
  ADR ($)         234.33         227.49         3.0%      217.95         203.63         7.0%      248.39         247.41         0.4%
  Occupancy       74.8%          74.3%          0.5       81.2%          79.6%          1.6       70.0%          70.3%          -0.3
  (%)
                                                                                                                                
  Total           339,041        323,573        4.8%      149,301        135,079        10.5%     189,741        188,494        0.7%
  Revenue*
  Total           257,425        250,772        -2.7%     118,116        111,696        -5.7%     139,309        139,076        -0.2%
  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 June 30, 2013
UNAUDITED ($ millions)
                                                            
                 Worldwide
                 2013     2012     Variance     %
                                                                     Variance
Management
Fees
Base Fees        92                 85                 7             8.2
Incentive        45                 41                 4             9.8
Fees
Total
Management       137                126                11            8.7
Fees
                                                                     
Franchise        56                 52                 4             7.7
Fees
                                                                     
Total
Management &     193                178                15            8.4
Franchise
Fees
                                                                     
Other
Management &
Franchise        37                 37                 -             -
Revenues ^
(1)
                                                                     
Total
Management &     230                215                15            7.0
Franchise
Revenues
                                                                     
Other            6                  7                  (1)           (14.3)
                                                                     
Management
Fees,
Franchise        236                222                14            6.3
Fees and
Other Income
                                                                     

(1) Other Management & Franchise Revenues primarily includes the amortization
of the deferred gains of approximately $22 million in 2013 and 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 June 30,
UNAUDITED ($ millions)
                                                             
                 2013     2012     $ Variance     %
                                                                      Variance
                                                                      
Originated
Sales
Revenues ^
(1) --           79                 76                 3              3.9
Vacation
Ownership
Sales
Other Sales
and Services     83                 72                 11             15.3
Revenues
^(2)
Deferred
Revenues --
Percentage       -                  2                  (2     )       (100.0 )
of
Completion
Deferred
Revenues --      (3       )         (2       )         (1     )       (50.0  )
Other ^(3)
Vacation
Ownership
Sales and        159                148                11             7.4
Services
Revenues
Residential
Sales and
Services         80                168               (88    )       (52.4  )
Revenues
^(4)
Total
Vacation
Ownership &
Residential      239               316               (77    )       (24.4  )
Sales and
Services
Revenues
                                                                      
Originated
Sales
Expenses ^
(5) --           53                 52                 (1     )       (1.9   )
Vacation
Ownership
Sales
Other
Expenses         63                 52                 (11    )       (21.2  )
^(6)
Deferred
Expenses --
Percentage       -                  2                  2              100.0
of
Completion
Deferred
Expenses --      3                 3                 -             -      
Other
Vacation
Ownership        119                109                (10    )       (9.2   )
Expenses
Residential
Expenses         44                132               88            66.7   
^(4)
Total
Vacation
Ownership &      163               241               78            32.4   
Residential
Expenses
                                                                             

*Story too large*
(1)  Timeshare sales revenue originated at each sales location before
      deferrals of revenue for U.S. GAAP reporting purposes
(2)

[TRUNCATED]