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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