Starwood Reports Second Quarter 2010 Results

Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported second quarter 2010 financial results.

Second Quarter 2010 Highlights

• Excluding special items, EPS from continuing operations was $0.35. Including special items, EPS from continuing operations was $0.42.
• Adjusted EBITDA was $226 million.
• Excluding special items, income from continuing operations was $67 million. Including special items, income from continuing operations was $79 million.
• Worldwide System-wide REVPAR for Same-Store Hotels increased 13.1% (11.9% in constant dollars) compared to the second quarter of 2009. System-wide REVPAR for Same-Store Hotels in North America increased 12.0% (10.6% in constant dollars).
• Management and franchise revenues increased 14.0% compared to 2009.
• Worldwide Same-Store company-operated gross operating profit margins increased approximately 150 basis points.
• Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 18.4% (16.4% in constant dollars) compared to the second quarter of 2009. REVPAR for Starwood branded Same-Store Owned Hotels in North America increased 21.1% (17.6% in constant dollars).
• Margins at Starwood branded Same-Store Owned Hotels Worldwide increased 400 basis points.
• Operating income from vacation ownership and residential increased $6 million compared to 2009.
• During the quarter, the Company signed 25 hotel management and franchise contracts representing approximately 6,400 rooms and opened 18 hotels and resorts with approximately 4,100 rooms.

Second Quarter 2010 Earnings Summary

Starwood Hotels & Resorts Worldwide, Inc. ("Starwood” or the "Company”) today reported EPS from continuing operations for the second quarter of 2010 of $0.42 per share compared to $0.78 in the second quarter of 2009. Excluding special items, EPS from continuing operations was $0.35 for the second quarter of 2010 compared to $0.22 in the second quarter of 2009. Excluding special items, the effective income tax rate in the second quarter of 2010 was 16.1% compared to 23.5% in the same period of 2009.

Income from continuing operations was $79 million in the second quarter of 2010 compared to $140 million in 2009. Excluding special items, income from continuing operations was $67 million in the second quarter of 2010 compared to $40 million in 2009.

Net income, which includes a $36 million after-tax gain in discontinued operations from the sale of two hotels, was $114 million and EPS was $0.61 in the second quarter of 2010 compared to net income of $134 million and EPS of $0.74 in the second quarter of 2009. Net income in 2009 includes a $120 million income tax benefit associated with an Italian tax incentive program.

Frits van Paasschen, CEO said, "Starwood’s global footprint and strong brands drove the Company’s second quarter revenues and earnings above expectations. Average daily rates are back into positive territory as occupancy levels continue their steady ascent towards pre-crisis levels. The relaunch of Sheraton is enjoying a terrific response with strong increases in North American market share during the first six months of 2010.”

"While global lodging demand is solid, the economic outlook around the world remains unpredictable. We will continue to plan for a range of potential scenarios, but each entails a focus on driving top-line growth with strong discipline in our cost base. We remain cautiously confident in our near-term outlook and are bullish over the long-term given our growth prospects.”

Second Quarter 2010 Operating Results

Management and Franchise Revenues

Worldwide System-wide REVPAR for Same-Store Hotels increased 13.1% (11.9% in constant dollars) compared to the second quarter of 2009. International System-wide REVPAR for Same-Store Hotels increased 14.6% (13.8% in constant dollars).

Increases in REVPAR for Worldwide System-wide Same-Store hotels by region:

											REVPAR
Region											Reported						Constant dollars
North America											12.0%						10.6%
Europe											6.3%						10.0%
Asia Pacific											31.7%						24.2%
Africa and the Middle East											0.1%						0.2%
Latin America											29.7%						29.7%

Increases in REVPAR for Worldwide System-wide Same-Store hotels by brand:

										REVPAR
Brand										Reported					Constant dollars
St. Regis/Luxury Collection										10.7%					11.5%
W Hotels										33.1%					32.2%
Westin										11.4%					9.9%
Sheraton										13.5%					11.9%
Le Méridien										8.8%					9.2%
Four Points by Sheraton										12.6%					9.9%

Worldwide Same-Store company-operated gross operating profit margins increased approximately 150 basis points in the second quarter driven by REVPAR increases. International gross operating profit margins for Same-Store company-operated properties increased approximately 180 basis points, and North American Same-Store company-operated gross operating profit margins increased approximately 140 basis points.

Management fees, franchise fees and other income were $177 million, up $11 million, or 6.6%, from the second quarter of 2009. Management fees increased 16.3% to $100 million and franchise fees increased 20.6% to $41 million.

During the second quarter of 2010, the Company signed 25 hotel management and franchise contracts, representing approximately 6,400 rooms, of which 18 are new builds and seven are conversions from other brands. At June 30, 2010, the Company had approximately 350 hotels in the active pipeline representing approximately 85,000 rooms.

During the second quarter of 2010, 18 new hotels and resorts (representing approximately 4,100 rooms) entered the system, including the Le Méridien Philadelphia (Pennsylvania, 192 rooms), Sheraton Brooklyn New York Hotel (New York, 321 rooms), Sheraton Hsinchu (Taiwan, 359 rooms), and The Romanos, a Luxury Collection Resort, Costa Navarino (Greece, 321 rooms). Six properties (representing approximately 1,600 rooms) were removed from the system during the quarter.

Owned, Leased and Consolidated Joint Venture Hotels

Worldwide REVPAR for Starwood branded Same-Store Owned Hotels increased 18.4% (16.4% in constant dollars). REVPAR at Starwood branded Same-Store Owned Hotels in North America increased 21.1% (17.6% in constant dollars). Internationally, Starwood branded Same-Store Owned Hotel REVPAR increased 14.3% (14.7% in constant dollars).

Revenues at Starwood branded Same-Store Owned Hotels in North America increased 15.9% (12.6% in constant dollars) while costs and expenses increased 10.6% when compared to 2009. Margins at these hotels increased 390 basis points.

Revenues at Starwood branded Same-Store Owned Hotels Worldwide increased 16.0% (14.0% in constant dollars) while costs and expenses increased 10.3% when compared to 2009. Margins at these hotels increased 400 basis points.

Revenues at owned, leased and consolidated joint venture hotels were $437 million, compared to $386 million in 2009.

Vacation Ownership

Total vacation ownership revenues increased 5.6% to $131 million when compared to $124 million in 2009. Originated contract sales of vacation ownership intervals decreased 1.3% primarily due to the closure of fractional sales centers in 2009. The average price per vacation ownership unit sold decreased 7.5% to approximately $15,000, driven by price reductions and inventory mix. The number of contracts signed increased 5.9% when compared to 2009 due to higher closing efficiency partly offset by lower tour flow.

Selling, General, Administrative and Other

Selling, general, administrative and other expenses increased 17.9% to $92 million compared to the second quarter of 2009, due to the timing of accruals for incentive based compensation this year when compared to last year. SG&A head count was flat and cost controls remained strong in the quarter.

Capital

Gross capital spending during the quarter included approximately $25 million of maintenance capital and $49 million of development capital. Investment spending on net vacation ownership interest ("VOI”) and residential inventory was $28 million, primarily related to the St. Regis Bal Harbour project.

Asset Sales

On April 15, 2010, the Company completed the sale of the former W Court and Tuscany in New York for gross proceeds of $78 million. These hotels were sold unencumbered by management contracts and are no longer part of the Starwood system.

Balance Sheet

At June 30, 2010, the Company had gross debt of $2.979 billion, excluding $375 million of debt associated with securitized vacation ownership notes receivable that are required to be consolidated under ASU 2009-17. Additionally, the Company had cash and cash equivalents of $162 million (including $72 million of restricted cash), or net debt of $2.817 billion, compared to net debt of $2.883 billion as of March 31, 2010. Net debt at June 30, 2010 including debt associated with securitized vacation ownership notes receivables was $3.192 billion.

At June 30, 2010, debt was approximately 78% fixed rate and 22% floating rate and its weighted average maturity was 4.6 years with a weighted average interest rate of 6.93% excluding the securitized debt. The Company had cash (including current restricted cash) and availability under the domestic and international revolving credit facility of approximately $1.381 billion.

On April 20, 2010, the Company executed a new $1.5 billion Senior Credit Facility ("New Facility”). The New Facility matures on November 15, 2013 and replaces the former $1.875 billion Revolving Credit Agreement, which would have matured on February 11, 2011. The New Facility enhances the Company’s financial flexibility and is expected to be used for general corporate purposes.

IRS Tax Settlement

In January 2009, the Company and the IRS reached an agreement in principle to settle the litigation pertaining to the tax treatment of the Company’s 1998 disposition of World Directories, Inc. Under the proposed settlement, the Company expects to receive a refund in 2010 of over $200 million as a result of tax payments previously made.

Outlook

For the Full Year 2010, based on our second quarter results and our expectations for the third quarter:

• Adjusted EBITDA is expected to be approximately $815 million to $845 million assuming:

									• REVPAR increases at Same-Store Company Operated Hotels Worldwide of 7% to 9% in constant dollars (approximately 100 basis points lower in dollars at current exchange rates).
									• REVPAR increases at Branded Same-Store Owned Hotels Worldwide of 7% to 9% in constant dollars and in dollars at current exchange rates.
									• Management and franchise revenues is expected to be up approximately 7% to 9%.
									• Operating income from our vacation ownership and residential business is expected to be approximately $115 million to $125 million.
									• Selling, General and Administrative expenses is expected to increase 6% to 8%.

• Depreciation and amortization is expected to be approximately $332 million.
• Interest expense is expected to be approximately $262 million and cash taxes are expected to be approximately $75 million.
• Full year effective tax rate is expected to be approximately 20%.
• EPS before special items is expected to be approximately $0.93 to $1.05.
• Full year capital expenditures (excluding vacation ownership and residential inventory) is expected to be approximately $150 million for maintenance, renovation and technology. In addition, in-flight investment projects and prior commitments for joint ventures and other investments is expected to total approximately $150 million. Vacation ownership is expected to generate approximately $200 million in positive cash flow, including proceeds from a planned securitization in late 2010. Bal Harbour capital is expected to be approximately $140 million.

For the three months ended September 30, 2010:

• Adjusted EBITDA is expected to be approximately $185 million to $195 million assuming:

									• REVPAR increases at Same-Store Company Operated Hotels Worldwide of 8% to 10% in constant dollars (5% to 7% in dollars at current exchange rates).
									• REVPAR increases at Branded Same-Store Owned Hotels Worldwide of 8% to 10% in constant dollars (5% to 7% in dollars at current exchange rates).
									• Management and franchise revenues is expected to be up approximately 7% to 9%.
									• Operating income from our vacation ownership and residential business is expected to be flat to up $5 million.

• Depreciation and amortization is expected to be $82 million.
• Interest expense is expected to be $67 million.
• Income from continuing operations, before special items, is expected to be approximately $28 million to $36 million, reflecting an effective tax rate of approximately 22%.
• EPS before special items is expected to be approximately $0.15 to $0.19.

Special Items

The Company’s special items netted to a benefit of $21 million ($12 million after-tax benefit) in the second quarter of 2010 compared to a $26 million charge ($100 million after-tax benefit) in the same period of 2009.

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 June 30,													Six Months Ended June 30,
2010					2009								2010					2009
$	67				$	40				Income from continuing operations before special items			$	91				$	67
$	0.35				$	0.22				EPS before special items			$	0.48				$	0.37
										Special Items
	1					(5	)			Restructuring, goodwill impairment and other special charges, net (a)				1					(22	)
	20					(21	)			Gain (loss) on asset dispositions and impairments, net (b)				21					(26	)
	21					(26	)			Total special items – pre-tax				22					(48	)
	(9	)				6				Income tax (expense) benefit for special items (c)				(4	)				10
	—					120				Italian income tax incentive (d)				—					120
	12					100				Total special items – after-tax				18					82
$	79				$	140				Income from continuing operations			$	109				$	149
$	0.42				$	0.78				EPS including special items			$	0.58				$	0.82

(a)		During the three and six months ended June 30, 2010, the Company recorded restructuring credits associated with the reversal of previous restructuring reserves no longer deemed necessary.
		During the three and six months ended June 30, 2009, the Company recorded restructuring charges associated with its initiative to streamline operations and eliminate costs, including severance, lease termination fees and the write-off of leasehold improvements.
(b)		During the three and six months ended June 30, 2010, the net gain primarily relates to a gain of $14 million from property insurance proceeds related to an owned hotel damaged by a tornado and a $5 million gain that resulted from the step acquisition of a controlling interest in a previously unconsolidated joint venture.
		During the three and six months ended June 30, 2009, the charge primarily reflects a loss on the sale of one owned hotel and the impairment of the Company’s retained interest in securitized receivables and certain fixed assets.
(c)		During the three months ended June 30, 2010, the expense primarily relates to tax expense at the statutory rate for restructuring credits and gains. During the six months ended June 30, 2010, the expense primarily relates to tax expense at the statutory rate for restructuring credits and gains, partially offset by the adjustment of deferred tax assets associated with prior year impairment charges due to a change in a foreign tax rate.
		During the three and six months ended June 30, 2009, the benefit primarily relates to tax benefits at the statutory rate for restructuring and impairment charges, partially offset by permanent tax charges associated with the loss on asset dispositions.
(d)		During the three and six months ended June 30, 2009, benefit relates to an Italian tax incentive program through which the tax basis of Italian owned hotels were stepped up in exchange for paying a relatively minor current tax. As a result, the Company recognized a net deferred tax benefit of $120 million under the program.

The Company has included the above supplemental information concerning special items to assist investors in analyzing Starwood’s financial position and results of operations. The Company has chosen to provide this information to investors to enable them to perform meaningful comparisons of past, present and future operating results and as a means to emphasize the results of core on-going operations.

Starwood will be conducting a conference call to discuss the second quarter financial results at 10:30 a.m. (EDT) today at (706) 758-8744. The conference call will be available through a simultaneous web cast in the Investor Relations/Press Releases section of the Company’s website at http://www.starwoodhotels.com. A replay of the conference call will also be available from 1:30 p.m. (EDT) today through July 29, 2010 at 12:00 midnight (EDT) on both the Company’s website and via telephone replay at (706) 645-9291 (pass code #57055870).

Definitions

All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations attributable to Starwood’s common shareholders. All references to continuing operations, discontinued operations and net income reflect amounts attributable to Starwood’s common shareholders (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 total Company as well as for individual properties or groups of properties because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items, such as 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 on-going operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by GAAP and such metrics should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by GAAP. The Company’s calculation of EBITDA and Adjusted EBITDA may be different from the calculations used by other companies and, therefore, comparability may be limited.

All references to Same-Store Owned Hotels reflect the Company’s owned, leased and consolidated joint venture hotels, excluding 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 and managed hotels. References to System-Wide 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 contract sales or originated sales reflect vacation ownership sales before revenue adjustments for percentage of completion accounting methodology.

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 offset by payments by Starwood under performance and other guarantees.

Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with 1,011 properties in 100 countries and 145,000 employees at its owned and managed properties. Starwood Hotels is a fully integrated owner, operator and franchisor of hotels and resorts with the following internationally renowned brands: St. Regis^®, The Luxury Collection^®, W^®, Westin^®, Le Méridien^®, Sheraton^®, Four Points^® by Sheraton, aloft(SM), and element(SM). Starwood Hotels also owns Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwoodhotels.com.

** Please contact Starwood’s new, toll-free media hotline at (866) 4-STAR-PR

(866-478-2777) for photography or additional information.**

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, business and financing conditions, 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 June 30,																	Six Months Ended June 30,
	2010					2009				% Variance								2010					2009				% Variance
														Revenues
$	437				$	386				13.2				Owned, leased and consolidated joint venture hotels			$	818				$	766				6.8
	137					126				8.7				Vacation ownership and residential sales and services				270					261				3.4
	177					166				6.6				Management fees, franchise fees and other income				330					310				6.5
	538					489				10.0				Other revenues from managed and franchised    properties (a)				1,058					957				10.6
	1,289					1,167				10.5								2,476					2,294				7.9
														Costs and Expenses
	347					322				(7.8	)			Owned, leased and consolidated joint venture hotels				676					649				(4.2	)
	103					98				(5.1	)			Vacation ownership and residential				204					204				—
	92					78				(17.9	)			Selling, general, administrative and other				168					151				(11.3	)
	(1	)				5				n/m				Restructuring, goodwill impairment and other special    charges, net				(1	)				22				n/m
	66					69				4.3				Depreciation				132					137				3.6
	7					7				—				Amortization				17					14				(21.4	)
	538					489				(10.0	)			Other expenses from managed and franchised    properties (a)				1,058					957				(10.6	)
	1,152					1,068				(7.9	)							2,254					2,134				(5.6	)
	137					99				38.4				Operating income				222					160				38.8
	3					3				—				Equity earnings and gains and (losses) from    unconsolidated ventures, net				6					(2	)			n/m
	(59	)				(53	)			(11.3	)			Interest expense, net of interest income of $0, $2, $1    and $2				(121	)				(96	)			(26.0	)
	20					(21	)			n/m				Gain (loss) on asset dispositions and impairments, net				21					(26	)			n/m
	101					28				n/m				Income from continuing operations before taxes				128					36				n/m
	(22	)				112				n/m				Income tax (expense) benefit				(21	)				111				n/m
	79					140				(43.6	)			Income from continuing operations				107					147				(27.2	)
														Discontinued Operations:
	(1	)				1				n/m				Net (loss) income from operations, net of tax				(1	)				(1	)			—
	36					(7	)			n/m				Net gain (loss) on dispositions, net of tax				(36	)				(8	)			n/m
	114					134				(14.9	)			Net income				142					138				2.9
	—					—				—				Net loss attributable to noncontrolling interests				2					2				—
$	114				$	134				(14.9	)			Net income attributable to Starwood			$	144				$	140				2.9
														Earnings (Loss) Per Share – Basic
$	0.44				$	0.79				(44.3	)			Continuing operations			$	0.60				$	0.83				(27.7	)
	0.19					(0.04	)			n/m				Discontinued operations				0.19					(0.05	)			n/m
$	0.63				$	0.75				(16.0	)			Net income			$	0.79				$	0.78				1.3
														Earnings (Loss) Per Share – Diluted
$	0.42				$	0.78				(46.2	)			Continuing operations			$	0.58				$	0.82				(29.3	)
	0.19					(0.04	)			n/m				Discontinued operations				0.19					(0.05	)			n/m
$	0.61				$	0.74				(17.6	)			Net income			$	0.77				$	0.77				—
														Amounts attributable to Starwood’s Common    Shareholders
$	79				$	140				(43.6	)			Continuing operations			$	109				$	149				(26.8	)
	35					(6	)			n/m				Discontinued operations				35					(9	)			n/m
$	114				$	134				(14.9	)			Net income			$	144				$	140				2.9
	182					180								Weighted average number of shares				182					179
	189					183								Weighted average number of shares assuming dilution				188					182

(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, 2010						December 31, 2009
				(unaudited)
Assets
Current assets:
Cash and cash equivalents				$	90					$	87
Restricted cash					64						47
Accounts receivable, net of allowance for doubtful accounts of $50 and $54					521						447
Securitized vacation ownership notes receivable, net of allowance for doubtful    accounts of $9 and $0					49						—
Inventories					749						783
Prepaid expenses and other					146						127
Total current assets					1,619						1,491
Investments					308						344
Plant, property and equipment, net					3,312						3,350
Assets held for sale					—						71
Goodwill and intangible assets, net					2,064						2,063
Deferred tax assets					971						982
Other assets (a)					493						460
Securitized vacation ownership notes receivable					346						—
				$	9,113					$	8,761
Liabilities and Stockholders’ Equity
Current liabilities:
Short-term borrowings and current maturities of long-term debt (b)				$	7					$	5
Current maturities of long-term securitized vacation ownership debt					108						—
Accounts payable					142						139
Accrued expenses					1,118						1,212
Accrued salaries, wages and benefits					326						303
Accrued taxes and other					317						368
Total current liabilities					2,018						2,027
Long-term debt (b)					2,972						2,955
Long-term securitized vacation ownership debt					267						—
Deferred income taxes					30						31
Other liabilities					1,875						1,903
					7,162						6,916
Commitments and contingencies
Stockholders’ equity:
Corporation common stock; $0.01 par value; authorized 1,000,000,000 shares; outstanding 190,215,688 and 186,785,068 shares at June 30, 2010 and December 31, 2009, respectively					2						2
Additional paid-in capital					647						552
Accumulated other comprehensive loss					(385	)					(283	)
Retained earnings					1,671						1,553
Total Starwood stockholders’ equity					1,935						1,824
Noncontrolling interest					16						21
Total equity					1,951						1,845
				$	9,113					$	8,761

(a)		Includes restricted cash of $8 million and $7 million at June 30, 2010 and December 31, 2009, respectively.
(b)		Excludes Starwood’s share of unconsolidated joint venture debt aggregating approximately $439 million and $581 million at June 30, 2010 and December 31, 2009, respectively.

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Historical Data
(In millions)
Three Months Ended June 30,																	Six Months Ended June 30,
	2010					2009				% Variance								2010					2009				% Variance
														Reconciliation of Net Income to EBITDA and    Adjusted EBITDA
$	114				$	134				(14.9	)			Net income			$	144				$	140				2.9
	64					58				10.3				Interest expense(a)				130					109				19.3
	(12	)				(118	)			(89.8	)			Income tax (benefit) expense (b)				(13	)				(116	)			(88.8	)
	75					80				(6.3	)			Depreciation(c)				149					158				(5.7	)
	8					7				14.3				Amortization (d)				19					15				26.7
	249					161				54.7				EBITDA				429					306				40.2
	(20	)				21				n/m				(Gain) loss on asset dispositions and impairments, net				(21	)				26				n/m
	(2	)				13				n/m				Discontinued operations pre-tax net (gain) loss on    dispositions				(2	)				13				n/m
	(1	)				5				n/m				Restructuring, goodwill impairment and other special    charges, net				(1	)				22				n/m
$	226				$	200				13.0				Adjusted EBITDA			$	405				$	367				10.4

(a)		Includes $5 million and $3 million of interest expense related to unconsolidated joint ventures for the three months ended June 30, 2010 and 2009, respectively, and $8 million and $11 million for the six months ended June 30, 2010 and 2009, respectively.
(b)		Includes $(34) million and $(6) million of tax (benefit) expense recorded in discontinued operations net (gain) loss on dispositions for the three months ended June 30, 2010 and 2009, respectively, and $(34) million and $(5) million for the six months ended June 30, 2010 and 2009, respectively.
(c)		Includes $9 million and $8 million of Starwood’s share of depreciation expense of unconsolidated joint ventures for the three months ended June 30, 2010 and 2009, respectively, and $17 million and $16 million for the six months ended June 30, 2010 and 2009, respectively. Includes $0 million and $3 million of depreciation expense in discontinued operations for the three months ended June 30, 2010 and 2009, respectively, and $0 million and $5 million for the six months ended June 30, 2010 and 2009, respectively.
(d)		Includes $1 million and $0 million of Starwood’s share of amortization expense of unconsolidated joint ventures for the three months ended June 30, 2010 and 2009, respectively, and $2 million and $1 million for the six months ended June 30, 2010 and 2009, respectively.

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Future Performance
(In millions, except per share data)
Low Case
Three Months Ended September 30, 2010									Year Ended December 31, 2010
$	28				Net income				$	230
	67				Interest expense					262
	8				Income tax expense (a)					15
	82				Depreciation and amortization					332
	185				EBITDA					839
	—				Gain on asset disposition and impairments, net					(21	)
	—				Discontinued operations pre-tax net gain on dispositions					(2	)
	—				Restructuring, goodwill impairment and other special charges, net					(1	)
$	185				Adjusted EBITDA				$	815

Three Months Ended September 30, 2010									Year Ended December 31, 2010
$	28				Income from continuing operations before special items				$	177
$	0.15				EPS before special items				$	0.93
					Special Items
	—				Restructuring, goodwill impairment and other special charges, net					1
	—				Gain on asset dispositions and impairments, net					21
	—				Total special items – pre-tax					22
	—				Income tax expense on special items					(4	)
	—				Total special items – after-tax					18
$	28				Income from continuing operations				$	195
$	0.15				EPS including special items				$	1.03

					High Case
Three Months Ended September 30, 2010									Year Ended December 31, 2010
$	36				Net income				$	253
	67				Interest expense					262
	10				Income tax expense (a)					22
	82				Depreciation and amortization					332
	195				EBITDA					869
	—				Gain on asset disposition and impairments, net					(21	)
	—				Discontinued operations pre-tax net gain on dispositions					(2	)
	—				Restructuring, goodwill impairment and other special charges, net					(1	)
$	195				Adjusted EBITDA				$	845

Three Months Ended September 30, 2010									Year Ended December 31, 2010
$	36				Income from continuing operations before special items				$	200
$	0.19				EPS before special items				$	1.05
					Special Items
	—				Restructuring, goodwill impairment and other special charges, net					1
	—				Gain on asset dispositions and impairments, net					21
	—				Total special items – pre-tax					22
	—				Income tax expense on special items					(4	)
	—				Total special items – after-tax					18
$	36				Income from continuing operations				$	218
$	0.19				EPS including special items				$	1.15

(a)		The full year amounts reflect a $34 million tax benefit recorded in discontinued operations.

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Non-GAAP to GAAP Reconciliations – Same Store Owned Hotel Revenue and Expenses
(In millions)
Three Months Ended June 30,															Six Months Ended June 30,
2010				2009				% Variance				Same-Store Owned Hotels Worldwide			2010				2009				% Variance
												Revenue
$	391			$	340			15.0				Same-Store Owned Hotels			$	721			$	655			10.1
	—				21			(100.0	)			Hotels Sold or Closed in 2010 and 2009 (a)				—				49			(100.0	)
	44				25			76.0				Hotels Without Comparable Results				95				62			53.2
	2				—			n/m				Other ancillary hotel operations				2				—			n/m
$	437			$	386			13.2				Total Owned, Leased and Consolidated Joint Venture Hotels    Revenue			$	818			$	766			6.8
												Costs and Expenses
$	308			$	281			(9.6	)			Same-Store Owned Hotels			$	592			$	551			(7.4	)
	—				19			100.0				Hotels Sold or Closed in 2010 and 2009 (a)				—				44			100.0
	37				22			(68.2	)			Hotels Without Comparable Results				82				54			(51.9	)
	2				—			n/m				Other ancillary hotel operations				2				—			n/m
$	347			$	322			(7.8	)			Total Owned, Leased and Consolidated Joint Venture Hotels    Costs and Expenses			$	676			$	649			(4.2	)
Three Months Ended June 30,															Six Months Ended June 30,
2010				2009				% Variance				Same-Store Owned Hotels North America			2010				2009				% Variance
												Revenue
$	247			$	216			14.4				Same-Store Owned Hotels			$	458			$	420			9.0
	—				14			(100.0	)			Hotels Sold or Closed in 2010 and 2009 (a)				—				29			(100.0	)
	28				25			12.0				Hotels Without Comparable Results				68				61			11.5
	2				—			n/m				Other ancillary hotel operations				2				—			n/m
$	277			$	255			8.6				Total Owned, Leased and Consolidated Joint Venture Hotels    Revenue			$	528			$	510			3.5
												Costs and Expenses
$	203			$	185			(9.7	)			Same-Store Owned Hotels			$	389			$	364			(6.9	)
	—				12			100.0				Hotels Sold or Closed in 2010 and 2009 (a)				—				24			100.0
	22				21			(4.8	)			Hotels Without Comparable Results				55				52			(5.8	)
	2				—			n/m				Other ancillary hotel operations				2				—			n/m
$	227			$	218			(4.1	)			Total Owned, Leased and Consolidated Joint Venture Hotels    Costs and Expenses			$	446			$	440			(1.4	)
Three Months Ended June 30,															Six Months Ended June 30,
2010				2009				% Variance				Same-Store Owned Hotels International			2010				2009				% Variance
												Revenue
$	144			$	124			16.1				Same-Store Owned Hotels			$	263			$	235			11.9
	—				7			(100.0	)			Hotels Sold or Closed in 2010 and 2009 (a)				—				20			(100.0	)
	16				—			n/m				Hotels Without Comparable Results				27				1			n/m
	—				—			—				Other ancillary hotel operations				—				—			—
$	160			$	131			22.1				Total Owned, Leased and Consolidated Joint Venture Hotels    Revenue			$	290			$	256			13.3
												Costs and Expenses
$	105			$	96			(9.4	)			Same-Store Owned Hotels			$	203			$	187			(8.6	)
	—				7			100.0				Hotels Sold or Closed in 2010 and 2009 (a)				—				20			100.0
	15				1			n/m				Hotels Without Comparable Results				27				2			n/m
	—				—			—				Other ancillary hotel operations				—				—			—
$	120			$	104			(15.4	)			Total Owned, Leased and Consolidated Joint Venture Hotels    Costs and Expenses			$	230			$	209			(10.0	)

(a)		Same-Store Owned Hotel Results exclude six and eight hotels sold or closed in 2010 and 2009 for three and six months, respectively, and five hotels without comparable results for the three and six months.
n/m= not meaningful

Starwood Hotels & Resorts Worldwide, Inc.
Systemwide(1) Statistics - Same Store
For the Three Months Ended June 30,
UNAUDITED
					Systemwide - Worldwide									Systemwide - North America									Systemwide - International
					2010			2009			Var.			2010			2009			Var.			2010			2009			Var.
TOTAL HOTELS
REVPAR ($)					109.07			96.42			13.1%			105.76			94.46			12.0%			113.65			99.13			14.6%
ADR ($)					158.54			156.08			1.6%			148.41			146.28			1.5%			173.82			171.19			1.5%
Occupancy (%)					68.8%			61.8%			7.0			71.3%			64.6%			6.7			65.4%			57.9%			7.5
SHERATON
REVPAR ($)					95.67			84.32			13.5%			93.76			83.98			11.6%			98.14			84.75			15.8%
ADR ($)					140.86			138.53			1.7%			132.51			131.15			1.0%			152.79			149.28			2.4%
Occupancy (%)					67.9%			60.9%			7.0			70.8%			64.0%			6.8			64.2%			56.8%			7.4
WESTIN
REVPAR ($)					122.23			109.72			11.4%			116.93			107.98			8.3%			137.94			114.89			20.1%
ADR ($)					171.03			168.68			1.4%			161.78			162.22			-0.3%			199.78			189.73			5.3%
Occupancy (%)					71.5%			65.0%			6.5			72.3%			66.6%			5.7			69.0%			60.6%			8.4
ST. REGIS/LUXURY COLLECTION
REVPAR ($)					182.97			165.31			10.7%			175.27			152.23			15.1%			187.38			172.72			8.5%
ADR ($)					287.60			293.02			-1.8%			266.43			258.83			2.9%			300.37			313.68			-4.2%
Occupancy (%)					63.6%			56.4%			7.2			65.8%			58.8%			7.0			62.4%			55.1%			7.3
LE MERIDIEN
REVPAR ($)					122.24			112.34			8.8%			210.00			166.86			25.9%			114.62			107.58			6.5%
ADR ($)					180.92			179.45			0.8%			246.09			207.57			18.6%			173.61			176.22			-1.5%
Occupancy (%)					67.6%			62.6%			5.0			85.3%			80.4%			4.9			66.0%			61.1%			4.9
W
REVPAR ($)					174.63			131.20			33.1%			169.99			135.35			25.6%			194.89			113.01			72.5%
ADR ($)					231.42			217.45			6.4%			223.52			211.02			5.9%			267.44			258.88			3.3%
Occupancy (%)					75.5%			60.3%			15.2			76.1%			64.1%			12.0			72.9%			43.7%			29.2
FOUR POINTS
REVPAR ($)					71.54			63.53			12.6%			68.76			63.14			8.9%			77.12			64.32			19.9%
ADR ($)					105.53			102.63			2.8%			99.91			98.79			1.1%			117.32			111.22			5.5%
Occupancy (%)					67.8%			61.9%			5.9			68.8%			63.9%			4.9			65.7%			57.8%			7.9
(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,
UNAUDITED
															Systemwide (1)									Company Operated (2)
															2010			2009			Var.			2010			2009			Var.
TOTAL WORLDWIDE
REVPAR ($)															109.07			96.42			13.1%			122.15			107.64			13.5%
ADR ($)															158.54			156.08			1.6%			176.04			173.56			1.4%
Occupancy (%)															68.8%			61.8%			7.0			69.4%			62.0%			7.4
NORTH AMERICA
REVPAR ($)															105.76			94.46			12.0%			128.23			113.17			13.3%
ADR ($)															148.41			146.28			1.5%			174.10			170.58			2.1%
Occupancy (%)															71.3%			64.6%			6.7			73.7%			66.3%			7.4
EUROPE
REVPAR ($)															143.37			134.84			6.3%			157.93			150.89			4.7%
ADR ($)															208.65			215.07			-3.0%			222.18			230.63			-3.7%
Occupancy (%)															68.7%			62.7%			6.0			71.1%			65.4%			5.7
AFRICA & MIDDLE EAST
REVPAR ($)															117.71			117.59			0.1%			118.95			119.97			-0.9%
ADR ($)															168.57			175.13			-3.7%			168.79			176.75			-4.5%
Occupancy (%)															69.8%			67.1%			2.7			70.5%			67.9%			2.6
ASIA PACIFIC
REVPAR ($)															99.31			75.43			31.7%			97.73			72.56			34.7%
ADR ($)															156.92			141.03			11.3%			156.64			139.12			12.6%
Occupancy (%)															63.3%			53.5%			9.8			62.4%			52.2%			10.2
LATIN AMERICA
REVPAR ($)															78.04			60.15			29.7%			78.96			60.76			30.0%
ADR ($)															137.91			130.02			6.1%			145.28			139.24			4.3%
Occupancy (%)															56.6%			46.3%			10.3			54.3%			43.6%			10.7
(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 Hotel Results - Same Store (1)
For the Three Months Ended June 30,
UNAUDITED
									WORLDWIDE									NORTH AMERICA									INTERNATIONAL
									2010			2009			Var.			2010			2009			Var.			2010			2009			Var.
TOTAL HOTELS									58 Hotels									31 Hotels									27 Hotels
REVPAR ($)									143.09			121.43			17.8%			149.40			124.57			19.9%			133.06			116.44			14.3%
ADR ($)									201.77			195.67			3.1%			198.30			184.82			7.3%			208.26			217.41			-4.2%
Occupancy (%)									70.9%			62.1%			8.8			75.3%			67.4%			7.9			63.9%			53.6%			10.3
Total Revenue									390,791			339,632			15.1%			247,122			215,807			14.5%			143,669			123,825			16.0%
Total Expenses									307,883			280,607			9.7%			202,793			184,845			9.7%			105,090			95,762			9.7%
BRANDED HOTELS									52 Hotels									25 Hotels									27 Hotels
REVPAR ($)									146.90			124.12			18.4%			157.36			129.92			21.1%			133.06			116.44			14.3%
ADR ($)									206.17			199.58			3.3%			204.85			189.09			8.3%			208.26			217.41			-4.2%
Occupancy (%)									71.3%			62.2%			9.1			76.8%			68.7%			8.1			63.9%			53.6%			10.3
Total Revenue									359,463			309,948			16.0%			215,794			186,123			15.9%			143,669			123,825			16.0%
Total Expenses									280,726			254,612			10.3%			175,636			158,850			10.6%			105,090			95,762			9.7%
(1) Hotel Results exclude 6 hotels sold or closed and 5 hotels without comparable results during 2010 & 2009

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Three Months Ended June 30,
UNAUDITED ($ millions)
										Worldwide
										2010		2009		$ Variance		% Variance
Management Fees:
Base Fees										69		60		9		15.0%
Incentive Fees										31		26		5		19.2%
Total Management Fees										100		86		14		16.3%
Franchise Fees										41		34		7		20.6%
Total Management & Franchise Fees										141		120		21		17.5%
Other Management & Franchise Revenues (1)										30		30		0		0.0%
Total Management & Franchise Revenues										171		150		21		14.0%
Other										6		16		-10		-62.5%
Management Fees, Franchise Fees & Other Income										177		166		11		6.6%
(1) Other Management & Franchise Revenues includes the amortization of deferred gains of approximately $20 million in 2010 and 2009 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)
								2010					2009					% Variance
Originated Sales Revenues (1) -- Vacation Ownership Sales								74					75					(1.3%)
Other Sales and Services Revenues (2)								62					49					26.5%
Deferred Revenues -- Percentage of Completion								0					13					(100.0%)
Deferred Revenues -- Other (3)								(5)					(13)					(61.5%)
Vacation Ownership Sales and Services Revenues								131					124					5.6%
Residential Sales and Services Revenues								6					2					n/m
Total Vacation Ownership & Residential Sales and Services Revenues								137					126					8.7%
Originated Sales Expenses (4) -- Vacation Ownership Sales								48					47					(2.1%)
Other Expenses (5)								50					41					(22.0%)
Deferred Expenses -- Percentage of Completion								0					6					100.0%
Deferred Expenses -- Other								5					3					(66.7%)
Vacation Ownership Expenses								103					97					(6.2%)
Residential Expenses								0					1					100.0%
Total Vacation Ownership & Residential Expenses								103					98					(5.1%)

(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, gain on sale of notes receivable, and miscellaneous other revenues
(3)	Includes deferral of revenue for contracts still in rescission period, contracts that do not yet meet the requirements of ASC 978-605-25
	and provision for loan loss
(4)	Timeshare cost of sales and sales & marketing expenses before deferrals of sales expenses for U.S. GAAP reporting purposes
(5)	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.
Systemwide(1) Statistics - Same Store
For the Six Months Ended June 30,
UNAUDITED
									Systemwide - Worldwide									Systemwide - North America									Systemwide - International
									2010			2009			Var.			2010			2009			Var.			2010			2009			Var.
TOTAL HOTELS
REVPAR ($)									103.61			94.58			9.5%			98.41			91.80			7.2%			110.73			98.37			12.6%
ADR ($)									158.47			159.28			-0.5%			147.67			150.34			-1.8%			173.93			172.33			0.9%
Occupancy (%)									65.4%			59.4%			6.0			66.6%			61.1%			5.5			63.7%			57.1%			6.6
SHERATON
REVPAR ($)									91.29			83.52			9.3%			85.81			80.63			6.4%			98.38			87.26			12.7%
ADR ($)									141.58			142.36			-0.5%			130.73			133.33			-2.0%			156.24			154.88			0.9%
Occupancy (%)									64.5%			58.7%			5.8			65.6%			60.5%			5.1			63.0%			56.3%			6.7
WESTIN
REVPAR ($)									116.93			108.16			8.1%			112.58			107.16			5.1%			129.38			111.03			16.5%
ADR ($)									172.09			173.94			-1.1%			164.07			169.70			-3.3%			195.97			186.84			4.9%
Occupancy (%)									67.9%			62.2%			5.7			68.6%			63.1%			5.5			66.0%			59.4%			6.6
ST. REGIS/LUXURY COLLECTION
REVPAR ($)									171.40			156.38			9.6%			176.81			163.98			7.8%			168.22			151.94			10.7%
ADR ($)									279.30			291.25			-4.1%			270.41			287.03			-5.8%			285.08			293.98			-3.0%
Occupancy (%)									61.4%			53.7%			7.7			65.4%			57.1%			8.3			59.0%			51.7%			7.3
LE MERIDIEN
REVPAR ($)									119.40			109.96			8.6%			181.66			150.19			21.0%			113.90			106.40			7.0%
ADR ($)									180.78			181.06			-0.2%			229.24			207.36			10.6%			175.56			178.24			-1.5%
Occupancy (%)									66.0%			60.7%			5.3			79.2%			72.4%			6.8			64.9%			59.7%			5.2
W
REVPAR ($)									163.86			131.54			24.6%			155.34			128.30			21.1%			209.78			149.06			40.7%
ADR ($)									226.74			224.53			1.0%			214.45			215.12			-0.3%			293.98			281.85			4.3%
Occupancy (%)									72.3%			58.6%			13.7			72.4%			59.6%			12.8			71.4%			52.9%			18.5
FOUR POINTS
REVPAR ($)									67.52			61.90			9.1%			63.07			60.27			4.6%			76.69			65.28			17.5%
ADR ($)									105.97			103.98			1.9%			99.36			99.14			0.2%			119.47			114.69			4.2%
Occupancy (%)									63.7%			59.5%			4.2			63.5%			60.8%			2.7			64.2%			56.9%			7.3
(1) Includes same store owned, leased, managed, and franchised hotels

Starwood Hotels & Resorts Worldwide, Inc.
Worldwide Hotel Results - Same Store
For the Six Months Ended June 30,
UNAUDITED
									Systemwide (1)									Company Operated (2)
									2010			2009			Var.			2010			2009			Var.
TOTAL WORLDWIDE
REVPAR ($)									103.61			94.58			9.5%			116.04			105.67			9.8%
ADR ($)									158.47			159.28			-0.5%			175.18			176.93			-1.0%
Occupancy (%)									65.4%			59.4%			6.0			66.2%			59.7%			6.5
NORTH AMERICA
REVPAR ($)									98.41			91.80			7.2%			118.95			110.53			7.6%
ADR ($)									147.67			150.34			-1.8%			171.81			175.77			-2.3%
Occupancy (%)									66.6%			61.1%			5.5			69.2%			62.9%			6.3
EUROPE
REVPAR ($)									126.17			116.65			8.2%			137.42			128.60			6.9%
ADR ($)									201.61			202.48			-0.4%			214.61			216.27			-0.8%
Occupancy (%)									62.6%			57.6%			5.0			64.0%			59.5%			4.5
AFRICA & MIDDLE EAST
REVPAR ($)									126.14			128.18			-1.6%			127.18			130.64			-2.6%
ADR ($)									179.71			190.66			-5.7%			180.27			193.14			-6.7%
Occupancy (%)									70.2%			67.2%			3.0			70.5%			67.6%			2.9
ASIA PACIFIC
REVPAR ($)									100.74			79.92			26.1%			98.54			76.04			29.6%
ADR ($)									159.08			147.92			7.5%			158.65			146.29			8.4%
Occupancy (%)									63.3%			54.0%			9.3			62.1%			52.0%			10.1
LATIN AMERICA
REVPAR ($)									80.61			71.65			12.5%			82.44			74.87			10.1%
ADR ($)									140.56			139.34			0.9%			149.05			149.50			-0.3%
Occupancy (%)									57.4%			51.4%			6.0			55.3%			50.1%			5.2
(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 Hotel Results - Same Store (1)
For the Six Months Ended June 30,
UNAUDITED
									WORLDWIDE									NORTH AMERICA									INTERNATIONAL
									2010			2009			Var.			2010			2009			Var.			2010			2009			Var.
TOTAL HOTELS									57 Hotels									30 Hotels									27 Hotels
REVPAR ($)									133.19			119.37			11.6%			140.09			125.37			11.7%			122.55			110.12			11.3%
ADR ($)									198.42			196.36			1.0%			196.55			193.04			1.8%			201.81			202.47			-0.3%
Occupancy (%)									67.1%			60.8%			6.3			71.3%			64.9%			6.4			60.7%			54.4%			6.3
Total Revenue									720,244			655,581			9.9%			457,668			420,020			9.0%			262,576			235,561			11.5%
Total Expenses									592,232			550,454			7.6%			388,991			363,346			7.1%			203,241			187,108			8.6%
BRANDED HOTELS									51 Hotels									24 Hotels									27 Hotels
REVPAR ($)									138.31			123.28			12.2%			150.68			133.59			12.8%			122.55			110.12			11.3%
ADR ($)									202.62			200.71			1.0%			203.15			199.59			1.8%			201.81			202.47			-0.3%
Occupancy (%)									68.3%			61.4%			6.9			74.2%			66.9%			7.3			60.7%			54.4%			6.3
Total Revenue									666,799			601,981			10.8%			404,223			366,420			10.3%			262,576			235,561			11.5%
Total Expenses									539,722			499,077			8.1%			336,481			311,969			7.9%			203,241			187,108			8.6%
(1) Hotel Results exclude 8 hotels sold or closed and 5 hotels without comparable results during 2010 & 2009

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Management Fees, Franchise Fees and Other Income
For the Six Months Ended June 30,
UNAUDITED ($ millions)
						Worldwide
						2010			2009			$ Variance			% Variance
Management Fees:
Base Fees						129			114			15			13.2%
Incentive Fees						58			51			7			13.7%
Total Management Fees						187			165			22			13.3%
Franchise Fees						76			66			10			15.2%
Total Management & Franchise Fees						263			231			32			13.9%
Other Management & Franchise Revenues (1)						59			62			-3			-4.8%
Total Management & Franchise Revenues						322			293			29			9.9%
Other						8			17			-9			-52.9%
Management Fees, Franchise Fees & Other Income						330			310			20			6.5%
(1) Other Management & Franchise Revenues includes the amortization of deferred gains of approximately $40 million in 2010 and 2009 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 Six Months Ended June 30,
UNAUDITED ($ millions)
						2010				2009				% Variance
Originated Sales Revenues (1) -- Vacation Ownership Sales						151				156				(3.2%)
Other Sales and Services Revenues (2)						124				101				22.8%
Deferred Revenues -- Percentage of Completion						0				17				(100.0%)
Deferred Revenues -- Other (3)						(13	)			(16	)			(18.8%)
Vacation Ownership Sales and Services Revenues						262				258				1.6%
Residential Sales and Services Revenues						8				3				n/m
Total Vacation Ownership & Residential Sales and Services Revenues						270				261				3.4%
Originated Sales Expenses (4) -- Vacation Ownership Sales						97				104				6.7%
Other Expenses (5)						95				81				(17.3%)
Deferred Expenses -- Percentage of Completion						0				9				100.0%
Deferred Expenses -- Other						11				8				(37.5%)
Vacation Ownership Expenses						203				202				(0.5%)
Residential Expenses						1				2				50.0%
Total Vacation Ownership & Residential Expenses						204				204				0.0%

(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, gain on sale of notes receivable, and miscellaneous other revenues
(3)	Includes deferral of revenue for contracts still in rescission period, contracts that do not yet meet the requirements of ASC 978-605-25
	and provision for loan loss
(4)	Timeshare cost of sales and sales & marketing expenses before deferrals of sales expenses for U.S. GAAP reporting purposes
(5)	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 June 30, 2010
UNAUDITED ($ millions)
Properties without comparable results in 2010:										Revenues and Expenses Associated with Assets Sold or Closed in 2010 and 2009: (1)
Property					Location
Sheraton Steamboat Resort & Conference Center					Steamboat Springs, CO							Q1			Q2			Q3			Q4			Full Year
Westin Peachtree					Atlanta, GA					Hotels Sold or Closed in 2009:
W Chicago - City Center					Chicago, IL					2009
W Barcelona					Barcelona, Spain					Revenues		$	28		$	21		$	14		$	11		$	74
The Manhattan at Time Square Hotel					New York, NY					Expenses (excluding depreciation)		$	25		$	19		$	12		$	9		$	65
Properties sold or closed in 2010 and 2009:										Hotels Sold or Closed in 2010:
										2010
Property					Location					Revenues		$	-		$	-		$	-		$	-		$	-
Sheraton Brussels Hotel & Towers					Brussels, Belgium					Expenses (excluding depreciation)		$	-		$	-		$	-		$	-		$	-
Sheraton Mencey Hotel					Santa Cruz de Tenerife, Spain
Sheraton Newton					Newton, MA					2009
Minneapolis Gateway Hotel					Minneapolis, MN					Revenues		$	-		$	-		$	-		$	-		$	-
Park Ridge Hotel & Conference Center at Valley Forge					King of Prussia, PA					Expenses (excluding depreciation)		$	-		$	-		$	-		$	-		$	-
W San Francisco					San Francisco, CA
Four Points by Sheraton Sydney Hotel					Sydney, Australia					(1) Results consist of 0 hotels sold or closed in 2010 and 7 hotels sold or closed in 2009. These amounts are
W New York - The Court & Tuscany					New York, NY					included in the revenues and expenses from owned, leased and consolidated joint venture hotels in 2010 and 2009.
										These amounts do not include revenues and expenses from the W New York - Court & Tuscany which were
										reclassified to discontinued operations.

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Capital Expenditures
For the Three & Six Months Ended June 30, 2010
UNAUDITED ($ millions)
		Q2		YTD
Maintenance Capital Expenditures: (1)
Owned, Leased and Consolidated Joint Venture Hotels		21		34
Corporate/IT		4		7
Subtotal		25		41
Vacation Ownership Capital Expenditures: (2)
Net capital expenditures for inventory (excluding St.Regis Bal Harbour)		(8)		(17)
Net capital expenditures for inventory - St.Regis Bal Harbour		36		75
Subtotal		28		58
Development Capital: (3)		49		62
Total Capital Expenditures		102		161
(1) Maintenance capital expenditures include improvements, repairs and maintenance.
(2) Represents gross inventory capital expenditures of $41 and $86 in the three and six months ended June 30, 2010, respectively, less cost of sales of $13 and $28 in the three and six months ended June 30, 2010, respectively.
(3) Development capital primarily relates to improvements expected to generate positive returns.

Starwood Hotels & Resorts Worldwide, Inc.
2010 Divisional Hotel Inventory Summary by Ownership by Brand*
June 30, 2010
		NAD				EAME				LAD				ASIA				Total
		Hotels		Rooms		Hotels		Rooms		Hotels		Rooms		Hotels		Rooms		Hotels		Rooms
Owned
Sheraton		6		3,527		4		705		5		2,713		2		821		17		7,766
Westin		5		2,849		3		650		3		902		1		273		12		4,674
Four Points		2		327		-		-		-		-		-		-		2		327
W		7		2,440		1		473		-		-		-		-		8		2,913
Luxury Collection		1		643		7		828		1		180		-		-		9		1,651
St. Regis		3		668		1		161		-		-		-		-		4		829
Aloft		2		272		-		-		-		-		-		-		2		272
Element		1		123		-		-		-		-		-		-		1		123
Other		7		2,600		-		-		-		-		-		-		7		2,600
Total Owned		34		13,449		16		2,817		9		3,795		3		1,094		62		21,155
Managed & UJV
Sheraton		40		27,318		67		20,217		15		2,934		55		20,285		177		70,754
Westin		53		28,158		11		3,124		-		-		21		7,428		85		38,710
Four Points		1		171		9		1,641		4		517		12		4,257		26		6,586
W		20		6,042		2		581		2		433		3		722		27		7,778
Luxury Collection		4		1,648		14		2,744		7		250		1		186		26		4,828
St. Regis		7		1,485		1		95		2		309		4		1,009		14		2,898
Le Meridien		4		607		60		15,073		-		-		25		6,982		89		22,662
Aloft		-		-		1		408		-		-		1		186		2		594
Other		-		-		1		-		-		-		-		-		1		-
Total Managed & UJV		129		65,429		166		43,883		30		4,443		122		41,055		447		154,810
Franchised
Sheraton		149		44,118		28		6,639		8		2,040		15		6,010		200		58,807
Westin		58		18,600		6		2,655		2		396		7		1,939		73		23,590
Four Points		101		15,993		12		1,671		8		1,264		4		374		125		19,302
Luxury Collection		6		1,256		15		2,010		2		248		8		2,262		31		5,776
St. Regis		-		-		1		133		-		-		-		-		1		133
Le Meridien		7		1,997		4		1,340		2		324		2		554		15		4,215
Aloft		37		5,390		-		-		-		-		-		-		37		5,390
Element		6		762		-		-		-		-		-		-		6		762
Total Franchised		364		88,116		66		14,448		22		4,272		36		11,139		488		117,975
Systemwide
Sheraton		195		74,963		99		27,561		28		7,687		72		27,116		394		137,327
Westin		116		49,607		20		6,429		5		1,298		29		9,640		170		66,974
Four Points		104		16,491		21		3,312		12		1,781		16		4,631		153		26,215
W		27		8,482		3		1,054		2		433		3		722		35		10,691
Luxury Collection		11		3,547		36		5,582		10		678		9		2,448		66		12,255
St. Regis		10		2,153		3		389		2		309		4		1,009		19		3,860
Le Meridien		11		2,604		64		16,413		2		324		27		7,536		104		26,877
Aloft		39		5,662		1		408		-		-		1		186		41		6,256
Element		7		885		-		-		-		-		-		-		7		885
Other		7		2,600		1		-		-		-		-		-		8		2,600
Vacation Ownership		13		6,618		-		-		1		382		-		-		14		7,000
Total Systemwide		540		173,612		248		61,148		62		12,892		161		53,288		1,011		300,940
*Includes Vacation Ownership properties

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
Vacation Ownership Inventory Pipeline
As of June 30, 2010
UNAUDITED
		# Resorts						# of Units (1)
				In		In Active				Pre-sales/		Future		Total at
Brand		Total (2)		Operations		Sales		Completed (3)		Development (4)		Capacity (5),(6)		Buildout
Sheraton		7		7		6		2,988		91		712		3,791
Westin		9		9		9		1,463		99		21		1,583
St. Regis		2		2		-		63		-		-		63
The Luxury Collection		1		1		-		6		-		-		6
Unbranded		3		3		1		124		-		1		125
Total SVO, Inc.		22		22		16		4,644		190		734		5,568
Unconsolidated Joint Ventures (UJV's)		1		1		1		198		-		-		198
Total including UJV's		23		23		17		4,842		190		734		5,766
Total Intervals Including UJV's (7)								251,784		9,880		38,168		299,832
(1) Lockoff units are considered as one unit for this analysis.
(2) Includes resorts in operation, active sales or future development.
(3) Completed units include those units that have a certificate of occupancy.
(4) Units in Pre-sales/Development are in various stages of development (including the permitting stage), most of which are currently being offered for sale to customers.
(5) Based on owned land and average density in existing marketplaces
(6) Future units indicated above include planned timeshare units on land owned by the Company or applicable UJV that have received all major governmental land use approvals for the development of timeshare. There can 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.
(7) Assumes 52 intervals per unit.