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Starwood Reports Fourth Quarter 2012 Results

Year Ended December 31, 2012 Earnings Summary

Income from continuing operations was $470 million for the year ended December 31, 2012 compared to $502 million in the same period in 2011. Excluding special items, income from continuing operations was $513 million for the year ended December 31, 2012, compared to $378 million in the same period in 2011. In addition to the fourth quarter special items discussed above, the results for the year ended December 31, 2012 included a favorable adjustment of $11 million to reverse a portion of a litigation reserve established in 2011, a $7 million loss primarily related to the sale of one wholly-owned hotel, and $15 million net charges associated with the early redemption of approximately $495 million of senior notes. Excluding special items, the effective income tax rate for the year ended December 31, 2012 was 32.1%, when compared to 26.1% in the same period in 2011.

Net income was $562 million and $2.86 per share for the year ended December 31, 2012 compared to $489 million and $2.51 per share in the same period in 2011.

Adjusted EBITDA was $1.220 billion for the year ended December 31, 2012, compared to $1.032 billion in the same period in 2011. Adjusted EBITDA in 2012 includes $157 million of EBITDA from the St. Regis Bal Harbour Resort residential project (“Bal Harbour”), compared to $27 million in 2011.

Fourth Quarter 2012 Operating Results

Management and Franchise Revenues

Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.1% in constant dollars (3.6% in actual dollars) compared to the fourth quarter of 2011. International Systemwide REVPAR for Same-Store Hotels increased 2.7% in constant dollars (increased 1.5% in actual dollars).

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

Dollars
      Actual

Dollars
North America 5.2%       5.4%
Europe 1.0% (2.4%)
Asia Pacific 3.9% 3.9%
Africa and the Middle East 1.2% 0.0%
Latin America 5.8% 5.8%
 

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

Constant

Dollars
      Actual

Dollars
St. Regis/Luxury Collection 3.2%       1.7%
W Hotels 4.2% 4.2%
Westin 4.2% 3.8%
Sheraton 3.8% 3.7%
Le Méridien 3.0% 1.3%
Four Points by Sheraton 5.6% 5.9%
Aloft 9.3% 9.0%
 

Worldwide Same-Store Company-Operated gross operating profit margins increased approximately 45 basis points compared to 2011. International gross operating profit margins for Same-Store Company-Operated properties increased 55 basis points. North American Same-Store Company-Operated gross operating profit margins increased approximately 35 basis points, driven by REVPAR increases and cost controls.

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