STARWOOD REPORTS FOURTH QUARTER 2014 RESULTS AND DECLARES FIRST QUARTER DIVIDEND OF $0.375 PER SHARE

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1 Investor Contact Stephen Pettibone Media Contact KC Kavanagh One StarPoint Stamford, CT United States STARWOOD REPORTS FOURTH QUARTER 2014 RESULTS AND DECLARES FIRST QUARTER DIVIDEND OF $0.375 PER SHARE STAMFORD, Conn. (February 10, 2015) Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) today reported fourth quarter 2014 financial results. Fourth Quarter 2014 Highlights Excluding special items, EPS from continuing operations was $0.97. Including special items, EPS from continuing operations was $1.40. Adjusted EBITDA was $335 million. Excluding special items, income from continuing operations was $171 million. Including special items, income from continuing operations was $245 million. Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant dollars (2.3% in actual dollars) compared to Systemwide REVPAR for Same-Store Hotels in North America increased 5.8% in constant dollars (5.1% in actual dollars). Management fees, franchise fees and other income increased 10.9% compared to Core fees (total management and franchise fees) increased 3.7% compared to Earnings from Starwood s vacation ownership and residential business remained flat compared to 2013, including a $12 million decrease in earnings from the St. Regis Bal Harbour residential project ( Bal Harbour ), which is sold out. During the quarter, the Company signed 63 hotel management and franchise contracts, representing approximately 12,900 rooms, and opened 27 hotels and resorts with approximately 5,800 rooms. During the quarter, the Company paid a regular quarterly dividend of $0.35 per share and a special dividend of $0.65 per share, and repurchased 7.8 million shares at a total cost of $609 million and a weighted average price of $78.12 per share. During the quarter, the Company completed the sale of six wholly-owned hotels and one unconsolidated joint venture hotel for gross cash proceeds of approximately $585 million. On February 10, 2015, the Company announced its plans to spin-off its vacation ownership business to shareholders as a separate publicly traded company.

2 Full Year 2014 Highlights Excluding special items, EPS from continuing operations was $3.02. Including special items, EPS from continuing operations was $3.46. Adjusted EBITDA was $1.238 billion. Excluding special items, income from continuing operations was $561 million. Including special items, income from continuing operations was $643 million. Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.8% in constant dollars (4.9% in actual dollars) compared to Systemwide REVPAR for Same-Store Hotels in North America increased 7.0% in constant dollars (6.3% in actual dollars). Management fees, franchise fees and other income increased 9.5% compared to Core fees increased 6.8% compared to Earnings from Starwood s vacation ownership and residential business decreased approximately $115 million compared to 2013, including a $108 million decrease in earnings from Bal Harbour. During the year, the Company signed 175 hotel management and franchise contracts, representing approximately 34,700 rooms, and opened 74 hotels and resorts with approximately 15,000 rooms. During the year, the Company returned approximately $2.4 billion to shareholders through dividends and share repurchases. During the year, the Company completed the sale of eight wholly-owned hotels and one unconsolidated joint venture hotel for gross cash proceeds of approximately $817 million. 2

3 Fourth Quarter 2014 Earnings Summary Starwood Hotels & Resorts Worldwide, Inc. ( Starwood or the Company ) today reported EPS from continuing operations for the fourth quarter of 2014 of $1.40 compared to $0.67 in the fourth quarter of Excluding special items, EPS from continuing operations was $0.97 for the fourth quarter of 2014 compared to $0.73 in the fourth quarter of Special items in the fourth quarter of 2014, which totaled an after-tax benefit of $74 million, primarily related to net gains on the sales of hotels. Special items in the fourth quarter of 2013 totaled an after-tax charge of $13 million. Excluding special items, the effective income tax rate in the fourth quarter of 2014 was 24.5% compared to 33.0% in the fourth quarter of The decrease is primarily related to the geographical mix of operational results. Income from continuing operations was $245 million in the fourth quarter of 2014, compared to $128 million in the fourth quarter of Excluding special items, income from continuing operations was $171 million in the fourth quarter of 2014, compared to $141 million in the fourth quarter of Net income was $234 million and $1.33 per share in the fourth quarter of 2014, compared to $128 million and $0.67 per share in the fourth quarter of Frits van Paasschen, CEO, said, We delivered another solid year of performance. Worldwide REVPAR was up nearly 6% in constant dollars, and both Adjusted EBITDA and EPS were ahead of our expectations. We posted another year of rising REVPAR index, a sign of the global strength of our brands and platform. We signed 175 deals for new hotels, our second best signing year in Starwood s history. Around the world, we opened nearly 15,000 rooms, including our 200th Westin. In 2014, we returned $2.4 billion to shareholders through our dividends and stock repurchases. We were able to deliver this amount by reaching our long-term target leverage, with cash flow from operations, and asset sales. During the year, we sold eight hotels for gross proceeds of over $800 million. As a further step in our asset-light strategy, we announced today our plans to spin-off our vacation ownership business in This transaction will create a new pure-play vacation ownership company with a seasoned management team, strong balance sheet, and great prospects for growth. Looking ahead to 2015, we expect more strong growth in global lodging. The U.S. economy looks set to continue its growth, and in the U.S. hotel business, limited new supply points to rising rates for some time to come. In Europe, we are optimistic that hotel performance will improve modestly. In other markets around the world, conditions are mixed. However, the underlying secular growth in demand for high-end hotels continues, and we are bullish on the prospects for our business and industry over the long-term. 3

4 Year Ended December 31, 2014 Earnings Summary Income from continuing operations was $643 million for the year ended December 31, 2014 compared to $565 million in Excluding special items, income from continuing operations was $561 million for the year ended December 31, 2014 compared to $579 million in Excluding special items, the effective income tax rate for the year ended December 31, 2014 was 30.9% compared to 32.4% in the same period in Net income was $633 million and $3.40 per share for the year ended December 31, 2014 compared to $635 million and $3.28 per share for the year ended December 31, Adjusted EBITDA was $1.238 billion for the year ended December 31, 2014 compared to $1.263 billion in the same period in Fourth Quarter 2014 Operating Results Management and Franchise Revenues Worldwide Systemwide REVPAR for Same-Store Hotels increased 4.4% in constant dollars (2.3% in actual dollars) compared to the fourth quarter of International Systemwide REVPAR for Same-Store Hotels increased 2.7% in constant dollars (decreased 0.8% in actual dollars). Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by region: REVPAR Constant Region Dollars Actual Dollars Americas: North America 5.8% 5.1% Latin America 2.8% 2.8% Asia Pacific: Greater China 4.1% 3.4% Rest of Asia 1.2% (3.4)% Europe, Africa & Middle East: Europe 4.0% (3.3)% Africa & Middle East (0.3)% (1.8)% Changes in REVPAR for Worldwide Systemwide Same-Store Hotels by brand: REVPAR Brand Constant Dollars Actual Dollars St. Regis/Luxury Collection 5.2% 3.0% W Hotels 3.7% 2.5% Westin 5.8% 3.6% Sheraton 3.7% 1.7% Le Méridien 0.6% (2.5)% Four Points by Sheraton 4.1% 2.1% Aloft 8.7% 8.1% 4

5 Worldwide Same-Store Company-Operated gross operating profit margins increased 32 basis points compared to the fourth quarter of International gross operating profit margins for Same-Store Company-Operated properties increased 63 basis points. North American Same-Store Company-Operated gross operating profit margins decreased 8 basis points. Management fees, franchise fees and other income were $294 million, up $29 million, or 10.9% compared to the fourth quarter of Core fees increased 3.7% to $225 million. Other management and franchise revenues increased 53.7% or $22 million, primarily due to fees associated with the termination of certain management and franchise contracts. For the full year 2014, Worldwide Systemwide REVPAR for Same-Store Hotels increased 5.8% in constant dollars (4.9% in actual dollars) compared to the full year Worldwide Same-Store Company-Operated gross operating profit margins increased 96 basis points. Management fees, franchise fees and other income were $1.057 billion, up $92 million or 9.5% compared to the full year Core fees increased 6.8% to $827 million. Other management and franchise revenues increased 23.4%, or $39 million, primarily due to fees associated with the termination of certain management and franchise contracts. Development During the fourth quarter of 2014, the Company signed 63 hotel management and franchise contracts, representing approximately 12,900 rooms, of which 52 are new builds and 11 are conversions from other brands. At December 31, 2014, the Company had approximately 480 hotels in the active pipeline representing approximately 108,000 rooms. During the fourth quarter of 2014, 27 new hotels and resorts (representing approximately 5,800 rooms) entered the system, including Sheraton Wuhan Hankou Hotel (China, 509 rooms), Excelsior Hotel Gallia, a Luxury Collection Hotel, Milan (Italy, 188 rooms), Le Méridien Suvarnabhumi, Bangkok Golf Resort & Spa (Thailand, 223 rooms), W Bogota (Colombia, 168 rooms), Le Méridien Indianapolis (Indiana, 99 rooms) and Aloft Denver Downtown (Colorado, 140 rooms). During the quarter, 12 properties (representing approximately 3,400 rooms) were removed from the system. For the full year 2014, the Company signed 175 hotel management and franchise contracts (representing approximately 34,700 rooms). For the full year 2014, 74 new hotels and resorts (representing approximately 15,000 rooms) entered the system and 28 properties (representing approximately 7,000 rooms) left the system. Owned, Leased and Consolidated Joint Venture Hotels Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 4.7% in constant dollars (1.2% in actual dollars) when compared to the fourth quarter of REVPAR at Starwood Same-Store Owned Hotels in North America increased 4.2% in constant dollars (1.9% in actual dollars). Internationally, Starwood Same-Store Owned Hotel REVPAR increased 5.4% in constant dollars (0.3% in actual dollars). Revenues at Starwood Same-Store Owned Hotels Worldwide increased 3.6% in constant dollars (remained flat in actual dollars) while costs and expenses increased 3.6% in constant dollars (decreased 0.2% in actual dollars) when compared to the fourth quarter of Margins at these hotels increased 20 basis points. Revenues at Starwood Same-Store Owned Hotels in North America increased 2.7% in constant dollars (0.4% in actual dollars) while costs and expenses increased 4.8% in constant dollars (2.6% in actual dollars) when compared to the fourth quarter of Margins at these hotels decreased 170 basis points. Internationally, revenues at Starwood Same-Store Owned Hotels increased 4.8% in constant dollars (decreased 0.5% in actual dollars) while costs and expenses increased 2.0% in constant dollars (decreased 3.6% in actual dollars) when compared to the fourth quarter of Margins at these hotels increased 250 basis points. 5

6 Revenues at owned, leased and consolidated joint venture hotels were $370 million, compared to $416 million in the fourth quarter of Expenses at owned, leased and consolidated joint venture hotels were $288 million compared to $326 million in the fourth quarter of Fourth quarter results were impacted by asset sales since the fourth quarter of For the full year 2014, Worldwide REVPAR at Starwood Same-Store Owned Hotels increased 6.1% in constant dollars (5.0% in actual dollars) when compared to the full year Margins at these hotels increased 150 basis points. Vacation Ownership Total vacation ownership revenues increased 15.2% to $167 million in the fourth quarter of 2014 when compared to 2013, primarily due to the timing and recognition of deferred revenues. Originated contract sales of vacation ownership intervals decreased 2.4% during the fourth quarter of 2014, compared to the corresponding period in 2013, as the average price per vacation ownership unit sold decreased 3.0% to approximately $14,000, partially offset by a 0.9% increase in the number of contracts signed. For the full year 2014, total vacation ownership revenues increased 0.8% to $643 million when compared to the full year 2013 as originated contract sales of vacation ownership intervals, number of contracts signed, and the average price per vacation ownership unit sold remained substantially consistent. On February 10, 2015, the Company announced plans to spin-off its vacation ownership business to shareholders as a separate publicly traded company. The transaction is subject to the receipt of normal and customary regulatory approvals and will not require a shareholder vote. The transaction, which is expected to be tax-free to shareholders, will be effected through a pro rata distribution of the new entity s stock to existing Starwood shareholders. The Company expects to complete the transaction in the fourth quarter of 2015 but there can be no assurance regarding the ultimate timing of the spin-off or that the spin-off will ultimately occur. Residential During the fourth quarter of 2014, the Company s residential revenues were $3 million compared to $31 million in The Company realized residential revenues from Bal Harbour of $23 million and earnings of $12 million in the fourth quarter of 2013 compared to no revenue or earnings in the fourth quarter of 2014, as Bal Harbour sold out in early Selling, General, Administrative and Other During the fourth quarter of 2014, selling, general, administrative and other expenses increased 2.8% to $109 million, compared to $106 million in the fourth quarter of For the full year 2014, selling, general, administrative and other expenses increased 4.7% to $402 million compared to $384 million in the full year Capital Gross capital spending during the quarter included approximately $74 million of maintenance capital and $58 million of development capital. For the full year 2014, capital spending included $207 million of maintenance capital and $183 million of development capital. Asset Sales During the fourth quarter of 2014, the Company completed the sales of six wholly-owned hotels and one unconsolidated joint venture hotel for gross cash proceeds of approximately $585 million. These hotels were sold subject to long-term management or franchise contracts. 6

7 Dividend In the fourth quarter of 2014, the Company declared a regular quarterly dividend of $0.35 per share, which was paid on December 29, In accordance with the Company s intention to return to shareholders approximately $500 million in cash realized from the completion of the Bal Harbour residential project and sale of the hotel earlier this year, the Company also paid the last of four special dividends of $0.65 per share on December 29, The total dividends paid in the fourth quarter of 2014 were approximately $173 million. For the full year 2014, the Company paid regular dividends of $1.40 per share and special dividends of $2.60 per share for a total of $4.00 per share, or approximately $733 million in dividends to its shareholders. On February 9, 2015, the Company s Board of Directors declared a first quarter cash dividend of $0.375 per share representing an increase of 7.1% over the prior quarterly dividend. The cash dividend will be paid on March 26, 2015 to shareholders of record on March 5, Share Repurchase In the fourth quarter of 2014, the Company repurchased 7.8 million shares at a total cost of approximately $609 million and a weighted average price of $78.12 per share. For the full year 2014, the Company repurchased 20.3 million shares at a total cost of approximately $1.636 billion and a weighted average price of $80.45 per share. As of December 31, 2014, approximately $79 million remained available under the Company s share repurchase authorization. On February 9, 2015, the Company s Board of Directors approved an increase to its share repurchase authorization of $750 million. Following this increase, the Company s total share repurchase authorization is $754 million. Balance Sheet At December 31, 2014, the Company had gross debt of $2.7 billion, cash and cash equivalents of $1.0 billion (including $76 million of restricted cash) and net debt of $1.7 billion, compared to net debt of $1.7 billion as of September 30, 2014, in each case, excluding debt and restricted cash associated with securitized vacation ownership notes receivable. Net debt at December 31, 2014, including $249 million of debt and $11 million of restricted cash associated with securitized vacation ownership notes receivables, was $1.9 billion. At December 31, 2014, debt was approximately 64% fixed rate and 36% floating rate and its weighted average maturity was 7.2 years with a weighted average interest rate of 3.90%, excluding the securitized debt and capital leases. The Company had cash (including current restricted cash) and availability under the revolving credit facilities of approximately $2.12 billion. Subsequent to the end of the year, the Company repaid approximately $400 million of its commercial paper borrowings using cash on hand at December 31,

8 Outlook The following outlook assumes the planned spin-off of the vacation ownership business occurs on December 31, Transaction costs related to the planned spin-off are not included in full year selling, general and administrative expense guidance. For the full year 2015: Adjusted EBITDA is expected to be approximately $1.175 billion to $1.200 billion (based on the assumptions below). REVPAR increases at Same-Store Systemwide Hotels Worldwide of 5% to 7% in constant dollars (approximately 300 basis points lower in actual dollars at current exchange rates). 1 REVPAR increases at Same-Store Owned Hotels Worldwide of 2% to 4% in constant dollars (approximately 550 basis points lower in actual dollars at current exchange rates). Margins at Same-Store Owned Hotels Worldwide increase 25 to 75 basis points. Core management and franchise fees increase approximately 5% to 7%. Management fees, franchise fees and other income increase approximately 2% to 4%. Earnings from the Company s vacation ownership and residential business of approximately $140 million to $150 million. Selling, general and administrative expenses increase approximately 2% to 4%. Full year owned earnings are negatively impacted by approximately $42 million due to asset sales completed in Shifts in exchange rates since 2014 will negatively impact full year earnings by approximately $35 million if exchange rates stay at current levels. Significant non-recurring items in 2014 Adjusted EBITDA include $35 million related to five large onetime termination fees received by the Company and $11 million from the Bal Harbour residential project, which is sold out. Depreciation and amortization is expected to be approximately $315 million. Interest expense is expected to be approximately $135 million. Full year effective tax rate is expected to be approximately 32%, and cash taxes from operating earnings are expected to be approximately $110 million. EPS before special items is expected to be approximately $2.87 to $2.97 (based on the assumptions above). Cash flow from operations is expected to be approximately $700 million to $800 million (based on the assumptions above). Cash flow from operations includes vacation ownership investment in inventory expected to be approximately $160 million which includes approximately $80 million related to the development of the third phase of the Westin Ka anapali Ocean Resort Villas. Full year capital expenditures (excluding vacation ownership inventory) are expected to be approximately $200 million for maintenance, renovation and technology. In addition, in-flight investment projects and prior commitments for joint ventures and other investments are expected to total approximately $200 million. 1 Previously, the Company provided an outlook for REVPAR increases at Same-Store Company-Operated Hotels Worldwide. The current outlook for REVPAR increases at Same-Store Systemwide Hotels Worldwide includes Company-Operated and franchised hotels. 8

9 For the three months ended March 31, 2015: Adjusted EBITDA is expected to be approximately $250 million to $260 million (based on the assumptions below). REVPAR increases at Same-Store Systemwide Hotels Worldwide of 4% to 6% in constant dollars (approximately 300 basis points lower in actual dollars at current exchange rates). REVPAR increases at Same-Store Company Owned Hotels Worldwide of 3% to 5% in constant dollars (approximately 525 basis points lower in actual dollars at current exchange rates). Core management and franchise fees increase approximately 3% to 5%. Management fees, franchise fees and other income are expected to be approximately flat due to a large termination fee received in the first quarter of Earnings from the Company s vacation ownership and residential business of approximately $35 million to $40 million. EPS is expected to be approximately $0.53 to $0.57 (based on the assumptions above). 9

10 Special Items The Company s special items netted to a pre-tax benefit of $23 million ($74 million after-tax) in the fourth quarter of 2014 compared to a pre-tax charge of $42 million ($13 million after-tax) in the same period of 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 December 31, Year Ended December 31, $ 171 $ 141 Income from continuing operations before special items $ 561 $ 579 $ 0.97 $ 0.73 EPS before special items $ 3.02 $ 2.99 Special Items 1 (24) Restructuring and other special (charges) credits, net (a) 4 (1) 22 (18) Gain (loss) on asset dispositions and impairments, net (b) (33) (23) Impairment of unconsolidated joint venture hotel (c) (4) Loss on early extinguishment of debt, net (d) (1) 23 (42) Total special items pre-tax (30) (28) Income tax benefit (expense) for special items (e) Income tax benefit (expense) other non-recurring items (f) (13) Total special items after-tax 82 (14) $ 245 $ 128 Income from continuing operations $ 643 $ 565 $ 1.40 $ 0.67 EPS including special items $ 3.46 $ 2.92 (a) During the year ended December 31, 2014, the net credit primarily relates to the reversal of a reserve associated with a note receivable from a previous disposition. During the three months ended December 2013, the Company decided to absorb certain technology related costs and expenses that it previously intended to collect from its managed and franchised properties. As a result, the Company recorded a $19 million charge, representing the costs and expenses incurred through the end of 2013 that are no longer intended to be recovered. The three months ended December 31, 2013 also include approximately $5 million in severance costs related to a hotel the Company exited in The year ended December 31, 2013 includes a favorable adjustment to a legal reserve of approximately $22 million. (b) During the three months ended December 31, 2014, the net gain relates to a $31 million gain on the acceleration of deferred gains primarily related to hotels that were converted from management to franchise contracts, and a $10 million gain on the sale of our interest in an unconsolidated joint venture hotel, partially offset by a loss of $17 million from the sale of four wholly-owned hotels. The year ended December 31, 2014 also includes a net loss of $39 million from the impairment of three hotels, two of which were sold subject to long-term franchise contracts and the other of which represents a leased hotel that was converted to a managed hotel, an impairment charge of $7 million associated with a foreign unconsolidated joint venture, and a $9 million charge related to the termination of a leasehold interest in a hotel which is now franchised. During the three months ended December 31, 2013, the net loss primarily related to a $17 million impairment charge associated with a wholly-owned hotel, asset disposals at certain owned hotels partially offset by the gain on the sales of two hotels and insurance proceeds relating to an owned hotel that suffered damages as a result of a cyclone. The year ended December 31, 2013 includes losses related to the sale of three wholly-owned hotels. (c) During the year ended December 31, 2013, the net loss related to an impairment charge associated with a hotel in which the Company owns a non-controlling interest. (d) During the year ended December 31, 2014, the net charge relates to the write-off of certain deferred financing costs associated with amending the Company s Revolving Credit Facility. (e) During the three months ended December 31, 2014, the benefit primarily relates to the recognition of tax benefits that were realized in connection with the dispositions of wholly-owned hotels. The year ended December 31, 2014 also includes tax benefits on hotels sold in prior quarters. During the three months ended December 31, 2013, the benefit primarily related to tax benefits on the special items at the statutory tax rate. The year ended December 31, 2013 also includes tax benefits primarily relating to the sale of three hotels with high tax bases. (f) During the three months ended December 31, 2014, the benefit primarily relates to the tax, net of foreign tax credits, on a portion of foreign earnings no longer considered permanently invested. The year ended December 31, 2014 also includes the recognition of a $49 million benefit for the settlement of a foreign tax audit. During the three months and year ended December 31, 2013, the net benefit primarily represents tax benefits associated with the tax law change in Mexico in late 2013 and the reversal of tax reserves associated with tax assets which are now deemed realizable. 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. 10

11 Starwood will be conducting a conference call to discuss the fourth quarter financial results at 10:30 a.m. Eastern Standard Time today, available via webcast on the Company s website at A webcast replay will be available on the corporate website a few hours after the live event on Tuesday, February 10 and will run for one year. Alternatively, participants may dial into the live call at (866) with conference ID Outside the U.S., participants may dial into the live call at (706) Please dial in fifteen minutes early to ensure a timely start. A call replay will be available a few hours after the live event on Tuesday, February 10 and will run for one week; the call replay can be accessed by dialing (855) with conference ID Outside the U.S., the call replay can be accessed at (404) 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 non-controlling interests). All references to net capital expenditures mean gross capital expenditures for timeshare and fractional inventory net of cost of sales. EBITDA represents net income before interest expense, taxes, depreciation and amortization. The Company believes that EBITDA is a useful measure of the Company s operating performance due to the significance of the Company s long-lived assets and level of indebtedness. EBITDA is a commonly used measure of performance in its industry which, when considered with GAAP measures, the Company believes gives a more complete understanding of the Company s operating performance. It also facilitates comparisons between the Company and its competitors. The Company s management has historically adjusted EBITDA (i.e., Adjusted EBITDA ) when evaluating operating performance for the Company, as well as for individual properties or groups of properties, because the Company believes that the inclusion or exclusion of certain recurring and non-recurring items, such as restructuring, goodwill impairment and other special charges and gains and losses on asset dispositions and impairments, is necessary to provide the most accurate measure of core operating results and as a means to evaluate comparative results. The Company s management also uses Adjusted EBITDA as a measure in determining the value of acquisitions and dispositions and it is used in the annual budget process. The Company has historically reported this measure to its investors and believes that the continued inclusion of Adjusted EBITDA provides consistency in its financial reporting and enables investors to perform more meaningful comparisons of past, present and future operating results and provides a means to evaluate the results of its core ongoing operations. EBITDA and Adjusted EBITDA are not intended to represent cash flow from operations as defined by GAAP and such metrics should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by GAAP. The Company s calculation of EBITDA and Adjusted EBITDA may be different from the calculations used by other companies and, therefore, comparability may be limited. All references to Same-Store Owned Hotels reflect the Company s owned, leased and consolidated joint venture hotels, excluding condo hotels, hotels sold to date and hotels undergoing significant repositionings or for which comparable results are not available (i.e., hotels not owned during the entire periods presented or closed due to seasonality or natural disasters). References to Company-Operated Hotel metrics (e.g., REVPAR) reflect metrics for the Company s owned, leased and managed hotels. References to Systemwide metrics (e.g., REVPAR) reflect metrics for the Company s Owned, managed and franchised hotels. REVPAR is defined as revenue per available room. ADR is defined as average daily rate. All references to revenues in constant dollars represent revenues, excluding the impact of the movement of foreign exchange rates. The Company calculates revenues in constant dollars by calculating revenues for the current year using the prior year s exchange rates. The Company uses this revenue measure to better understand the underlying results and trends of the business, excluding the impact of movements in foreign exchange rates. 11

12 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 services represent the mathematical difference between revenues and expenses from vacation ownership and residential as shown on the Company s statement of operations. 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 more than 1,200 properties in 100 countries and 180,400 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 or contact Investor Relations at (203) 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. There can be no assurance as to the development of future hotels in the Company s pipeline or additional vacation ownership units. 12

13 Three Months Ended December 31, STARWOOD HOTELS & RESORTS WORLDWIDE, INC. Unaudited Consolidated Statements of Income (In millions, except per share data) Year Ended December 31, % Variance % Variance Revenues $ 370 $ 416 (11.1) Owned, leased and consolidated joint venture hotels $ 1,541 $ 1,612 (4.4) (3.4) Vacation ownership and residential sales and services (27.1) Management fees, franchise fees and other income 1, Other revenues from managed and franchised properties (a) 2,711 2, ,493 1,506 (0.9) 5,983 6,115 (2.2) Costs and Expenses Owned, leased and consolidated joint venture hotels 1,211 1, Vacation ownership and residential (2.8) Selling, general, administrative and other (4.7) (1) 24 n/m Restructuring and other special charges (credits), net (4) 1 n/m (1.5) Depreciation (6.3) 7 7 Amortization (3.6) (1.5) Other expenses from managed and franchised properties (a) 2,711 2,614 (3.7) 1,251 1, ,100 5, Operating income (4.5) Equity (losses) earnings and gains and (losses) from unconsolidated ventures, net (33.3) (21) (23) 8.7 Interest expense, net of interest income of $1, $1, $3 and $3 (94) (100) 6.0 Loss on early extinguishment of debt (1) n/m 22 (18) n/m Gain (loss) on asset dispositions and impairments, net (33) (23) (43.5) Income from continuing operations before taxes and noncontrolling interests (5.6) (4) (40) 90.0 Income tax benefit (expense) (139) (263) Income (loss) from continuing operations Discontinued Operations: (1) Loss from operations, net of tax (1) (100.0) (11) 1 n/m Gain (loss) on dispositions, net of tax (10) 71 n/m $ 234 $ Net income (loss) attributable to Starwood $ 633 $ 635 (0.3) Earnings (Losses) Per Share Basic $ 1.41 $ 0.68 n/m Continuing operations $ 3.49 $ (0.07) n/m Discontinued operations (0.06) 0.37 n/m $ 1.34 $ Net income (loss) $ 3.43 $ Earnings (Losses) Per Share Diluted $ 1.40 $ 0.67 n/m Continuing operations $ 3.46 $ (0.07) n/m Discontinued operations (0.06) 0.36 n/m $ 1.33 $ Net income (loss) $ 3.40 $ Weighted average number of shares Weighted average number of shares 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 13

14 Consolidated Balance Sheets (In millions, except share data) December 31, 2014 December 31, 2013 Assets Current assets: Cash and cash equivalents $ 935 $ 616 Restricted cash Accounts receivable, net of allowance for doubtful accounts of $63 and $ Inventories Securitized vacation ownership notes receivable, net of allowance for doubtful accounts of $4 and $ Deferred income tax Prepaid expenses and other Total current assets 2,321 1,996 Investments Plant, property and equipment, net 2,634 3,034 Goodwill and intangible assets, net 1,956 2,032 Deferred tax assets Other assets (a) Securitized vacation ownership notes receivable Total assets $ 8,659 $ 8,762 Liabilities and Stockholders Equity Current liabilities: Short-term borrowings and current maturities of long-term debt (b) $ 297 $ 2 Accounts payable Current maturities of long-term securitized vacation ownership debt Accrued expenses 1,307 1,092 Accrued salaries, wages and benefits Accrued taxes and other Total current liabilities 2,450 1,924 Long-term debt (b) 2,398 1,265 Long-term securitized vacation ownership debt Deferred income taxes Other liabilities 2,069 1,904 Total liabilities 7,131 5,399 Commitments and contingencies Stockholders equity: Common stock; $0.01 par value; authorized 1,000,000,000 shares; outstanding 172,694,299 and 191,897,809 shares at December 31, 2014 and December 31, 2013, respectively 2 2 Additional paid-in capital Accumulated other comprehensive loss (508) (335) Retained earnings 1,984 3,032 Total Starwood stockholders equity 1,525 3,360 Noncontrolling interest 3 3 Total stockholders equity 1,528 3,363 Total liabilities and stockholders equity $ 8,659 $ 8,762 (a) Includes restricted cash of $3 million and $3 million at December 31, 2014 and December 31, 2013, respectively. (b) Excludes Starwood s share of unconsolidated joint venture debt aggregating approximately $200 million and $218 million at December 31, 2014 and December 31, 2013, respectively. 14

15 Three Months Ended December 31, STARWOOD HOTELS & RESORTS WORLDWIDE, INC. Non-GAAP to GAAP Reconciliations Historical Data (In millions) Year Ended December 31, % Variance % Variance Reconciliation of Net Income to EBITDA and Adjusted EBITDA $ 234 $ Net income $ 633 $ 635 (0.3) Interest expense (a) (0.9) Loss on early extinguishment of debt, net 1 n/m 41 (100.0) Income tax (benefit) expense (b) (30.9) Depreciation (c) Amortization (d) EBITDA 1,194 1,237 (3.5) (Gain) loss on asset dispositions and impairments, (22) 18 n/m net Restructuring and other special charges (credits), net (4) 1 n/m (1) 24 n/m Impairment of unconsolidated joint venture hotel (e) 4 (100.0) 15 (2) n/m Discontinued operations (gain) loss on dispositions (f) 15 (2) n/m $ 335 $ Adjusted EBITDA $ 1,238 $ 1,263 (2.0) (a) Includes $6 million and $3 million of Starwood s share of interest expense of unconsolidated joint ventures for the three months ended December 31, 2014 and 2013, respectively, and $17 million and $12 million for the year ended December 31, 2014 and 2013, respectively. (b) Includes $(4) million and $1 million of tax expense (benefit) recorded in discontinued operations for the three months ended December 31, 2014 and 2013, respectively, and $(5) million and $(69) million for the year ended December 31, 2014 and 2013, respectively. (c) Includes $7 million and $6 million of Starwood s share of depreciation expense of unconsolidated joint ventures for the three months ended December 31, 2014 and 2013, respectively, and $26 million and $23 million for the year ended December 31, 2014 and 2013, respectively. (d) (e) (f) Includes $1 million and $0 million of Starwood s share of amortization expense of unconsolidated joint ventures for the three months ended December 31, 2014 and 2013, respectively, and $3 million and $3 million for the year ended December 31, 2014 and 2013, respectively. The impairment charge is included in the equity earnings and gain/(loss) from unconsolidated ventures, net line item in the statement of income. Excludes the amount of income tax expense (benefit) included within (b) above. 15

16 Non-GAAP to GAAP Reconciliations Same-Store Owned/Leased Hotels Worldwide (In millions) Three Months Ended December 31, 2014 $ Change % Variance Revenue Revenue increase/(decrease) (GAAP) $ Impact of changes in foreign exchange rates % Revenue increase/(decrease) in constant dollars $ % Expense Expense increase/(decrease) (GAAP) $ (1) (0.2)% Impact of changes in foreign exchange rates 9 3.8% Expense increase/(decrease) in constant dollars $ 8 3.6% Non-GAAP to GAAP Reconciliations Same-Store Owned/Leased Hotels North America (In millions) Three Months Ended December 31, 2014 $ Change % Variance Revenue Revenue increase/(decrease) (GAAP) $ 1 0.4% Impact of changes in foreign exchange rates 4 2.3% Revenue increase/(decrease) in constant dollars $ 5 2.7% Expense Expense increase/(decrease) (GAAP) $ 3 2.6% Impact of changes in foreign exchange rates 3 2.2% Expense increase/(decrease) in constant dollars $ 6 4.8% Non-GAAP to GAAP Reconciliations Same-Store Owned/Leased Hotels International (In millions) Three Months Ended December 31, 2014 $ Change % Variance Revenue Revenue increase/(decrease) (GAAP) $ (1) (0.5)% Impact of changes in foreign exchange rates 7 5.3% Revenue increase/(decrease) in constant dollars $ 6 4.8% Expense Expense increase/(decrease) (GAAP) $ (4) (3.6)% Impact of changes in foreign exchange rates 6 5.6% Expense increase/(decrease) in constant dollars $ 2 2.0% 16

17 Non-GAAP to GAAP Reconciliations Future Performance (In millions, except per share data) Low Case Three Months Ended March 31, 2015 Year Ended December 31, 2015 $ 92 Net income $ Interest expense Income tax expense Depreciation and amortization EBITDA 1,175 (Gain) loss on asset dispositions and impairments, net Discontinued operations (gain) loss on dispositions $ 250 Adjusted EBITDA $ 1,175 Three Months Ended March 31, 2015 Year Ended December 31, 2015 $ 92 Income from continuing operations before special items $ 493 $ 0.53 EPS before special items $ 2.87 Special Items Gain (loss) on asset dispositions and impairments, net Total special items pre-tax Income tax benefit associated with special items Total special items after-tax $ 92 Income from continuing operations $ 493 $ 0.53 EPS including special items $ 2.87 High Case Three Months Ended March 31, 2015 Year Ended December 31, 2015 $ 99 Net income $ Interest expense Income tax expense Depreciation and amortization EBITDA 1,200 (Gain) loss on asset dispositions and impairments, net Discontinued operations (gain) loss on dispositions $ 260 Adjusted EBITDA $ 1,200 Three Months Ended March 31, 2015 Year Ended December 31, 2015 $ 99 Income from continuing operations before special items $ 510 $ 0.57 EPS before special items $ 2.97 Special Items Gain (loss) on asset dispositions and impairments, net Total special items pre-tax Income tax benefit associated with special items Total special items after-tax $ 99 Income from continuing operations $ 510 $ 0.57 EPS including special items $

18 Non-GAAP to GAAP Reconciliations Same Store Owned Hotel Revenue and Expenses (In millions) Three Months Ended December 31, % Variance Year Ended December 31, Same-Store Owned Hotels Worldwide % Variance Revenue $ 298 $ 298 Same-Store Owned Hotels (a) $ 1,044 $ 1, (73.0) Hotels Sold in 2014 and (50.5) Hotels Without Comparable Results Other ancillary hotel operations (3.7) $ 370 $ 416 (11.1) Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 1,541 $ 1,612 (4.4) Costs and Expenses $ 236 $ Same-Store Owned Hotels (a) $ 830 $ 816 (1.7) Hotels Sold in 2014 and (10.0) Hotels Without Comparable Results (9.7) 7 6 (16.7) Other ancillary hotel operations (4.2) Total Owned, Leased and Consolidated Joint Venture Hotels $ 288 $ Costs and Expenses $ 1,211 $ 1, Three Months Ended December 31, % Variance Year Ended December 31, Same-Store Owned Hotels North America % Variance Revenue $ 168 $ Same-Store Owned Hotels (a) $ 531 $ (85.2) Hotels Sold in 2014 and (79.3) Hotels Without Comparable Results Other ancillary hotel operations $ 198 $ 212 (6.6) Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 776 $ 829 (6.4) Costs and Expenses $ 134 $ 131 (2.6) Same-Store Owned Hotels (a) $ 429 $ 422 (1.6) Hotels Sold in 2014 and (16.7) Hotels Without Comparable Results (10.6) (1) Other ancillary hotel operations $ 158 $ Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 630 $ Three Months Ended December 31, % Variance Year Ended December 31, Same-Store Owned Hotels International % Variance Revenue $ 130 $ 131 (0.5) Same-Store Owned Hotels (a) $ 513 $ (66.0) Hotels Sold in 2014 and (27.6) Hotels Without Comparable Results Other ancillary hotel operations (3.7) $ 172 $ 204 (15.7) Total Owned, Leased and Consolidated Joint Venture Hotels Revenue $ 765 $ 783 (2.3) Costs and Expenses $ 102 $ Same-Store Owned Hotels (a) $ 401 $ 394 (1.7) Hotels Sold or 2014 and Hotels Without Comparable Results (7.7) 7 7 Other ancillary hotel operations (4.2) $ 130 $ Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses $ 581 $ (a) Same-Store Owned Hotel results exclude 11 hotels sold or closed, two leased hotels converted to managed or franchised hotels and six hotels without comparable results for the three months ended December 31, 2014 and 15 hotels sold, two leased hotels converted to managed or franchised hotels, and eight hotels without comparable results for the year ended December 31, n/m = not meaningful 18

19 Systemwide (1) Statistics - Same Store For the Three Months Ended December 31, UNAUDITED Systemwide - Worldwide Systemwide - North America Systemwide - International Var. USD Var. USD Var. USD TOTAL HOTELS REVPAR ($) % % % ADR ($) % % % Occupancy (%) 68.1% 66.4% % 68.3% % 64.3% 1.8 SHERATON REVPAR ($) % % % ADR ($) % % % Occupancy (%) 66.7% 65.2% % 66.3% % 64.0% 1.5 WESTIN REVPAR ($) % % % ADR ($) % % % Occupancy (%) 70.9% 69.2% % 69.1% % 69.3% 2.0 ST. REGIS/LUXURY COLLECTION REVPAR ($) % % % ADR ($) % % % Occupancy (%) 66.5% 64.1% % 70.8% % 61.4% 3.2 LE MERIDIEN REVPAR ($) % % % ADR ($) % % % Occupancy (%) 66.4% 66.3% % 80.3% % 63.8% 0.0 W REVPAR ($) % % % ADR ($) % % % Occupancy (%) 77.8% 76.4% % 77.0% % 75.2% 3.7 FOUR POINTS REVPAR ($) % % % ADR ($) % % % Occupancy (%) 65.0% 62.9% % 65.0% % 60.3% 2.0 ALOFT REVPAR ($) % % % ADR ($) % % % Occupancy (%) 68.9% 65.9% % 70.6% % 56.8% 4.8 (1) Includes same-store Owned, managed and franchised hotels 19