STARWOOD REPORTS THIRD QUARTER 2002 RESULTS

CONTACT: David Matheson (914) 640-5204 FOR IMMEDIATE RELEASE October 24, 2002 STARWOOD REPORTS THIRD QUARTER 2002 RESULTS WHITE PLAINS, NY, October 24, 2002 Starwood Hotels & Resorts Worldwide, Inc. (NYSE: HOT) ( Starwood or the Company ) today reported results for the third quarter of 2002. Third Quarter Financial Results EPS was $0.26 excluding special items, an increase of 62.5% compared to $0.16 in 2001. EPS including special items was also $0.26, an increase of 85.7% compared to $0.14 in 2001. Total revenues of $970 million, excluding other revenues from managed and franchised properties, increased slightly when compared to 2001 levels. REVPAR for Same-Store Owned Hotels decreased 2.7% in North America and 2.4% worldwide when compared to 2001. Total Company EBITDA was $276 million, a decrease of 4.2% compared to $288 million in 2001. EBITDA at Comparable Owned Hotels worldwide decreased 6.2% to $211 million. EBITDA at Comparable Owned Hotels in North America decreased 7.4% to $132 million. Total Company EBITDA margin was approximately 28.5% in the third quarter of 2002 compared to 29.8% in 2001. Third Quarter Ended September 30, 2002 EPS was $0.26, excluding special items of approximately $2 million (after-tax), an increase of 62.5% compared to EPS of $0.16 in 2001, which excluded $3 million (after-tax) of special items. EPS, including these special items, was also $0.26 in 2002, an increase of 85.7% compared to $0.14 in 2001. Total revenues increased $5 million to $970 million when compared to the same period of 2001. Operating income was $130 million compared to $135 million in the same period of 2001 and income from continuing operations was $52 million as compared to $30 million in the same period of 2001. Results continued to be adversely impacted by the weakened worldwide economic environment. Results benefited 1

from a reduced tax rate and from a $16 million after-tax reduction in goodwill amortization as a result of a new accounting rule pertaining to goodwill and intangible assets that became effective on January 1, 2002, offset by an increase in depreciation expense of $15 million pretax or 13.8% when compared to the third quarter of 2001 due to prior year s renovation programs, the repositioning and acquisition of certain hotels and investments in technology. Nine Months Ended September 30, 2002 For the nine months ended September 30, 2002, total revenues were $2.9 billion when compared to $3.1 billion in the same period in 2001. EPS excluding net benefits for special items of $4 million (after-tax) in 2002 and net charges of $8 million (after-tax) in 2001 was $0.76, compared to EPS of $1.00 in the corresponding period in 2001. EPS including these special items was $0.78 compared to $0.96 in 2001 and EPS including discontinued operations was $1.29 compared to $0.96 in 2001. Income from continuing operations decreased to $160 million compared to $199 million in the same period of 2001. Comments from the CEO Barry S. Sternlicht, Chairman and CEO said, The global economic environment is challenging as business and trans-oceanic travel remain depressed. In the third quarter, the absence of these sectors hit our urban portfolio particularly hard. Given the uncertainty, we are more focused than ever on the risks and rewards of our capital and investment spend, and managing our cost structure as we enter 2003. As booking patterns remain short and transient demand is buffeted by news events, we expect to drive earnings and cash flow through additional cost containment and strategic spend while we continue to strengthen our brands. Though we are not pleased with every brand s performance in the quarter, our overall company market share actually increased slightly since December of 2001. To that end, in mid-september we introduced the Sheraton Service Promise where we guarantee customer satisfaction to wide customer acclaim. Though it s too early to draw firm conclusions, in the first three weeks of October, Sheraton s REVPAR index has improved 200 basis points. Concluding, Mr. Sternlicht said, With our recent internal reorganization into essentially a real estate and an operating company, we are more committed than ever to unlocking the considerable value in our asset base through increased divestitures and careful investment spending. A significant bright spot for our company is our rapid expansion of our distribution base across Asia where this year alone we have signed 10 full service hotel agreements in addition to our sector leading 85 operating hotels. We expect to increase that pace of growth across all our brands going into 2003 with minimal capital investment. Operating Results At the Company s Comparable Owned Hotels worldwide, revenues for the third quarter of 2002 decreased approximately $15 million to $775 million from $790 million in 2001 and EBITDA for the period decreased 6.2% to $211 million from $225 million in 2001. EBITDA at the Company s Comparable Owned Hotels in North America decreased 7.4% to $132 2

million in the third quarter of 2002 when compared to the same period of 2001. EBITDA at the Company s Comparable Owned Hotels internationally decreased 4.1% to approximately $80 million in the third quarter of 2002 when compared to the same period of 2001. The positive effects of foreign exchange in Europe and Asia Pacific were offset by the devaluation of currencies in South America. Excluding the effects of foreign exchange, EBITDA at the Company s Comparable Owned Hotels internationally decreased 7.2% in the third quarter of 2002 when compared to the same period in 2001. The decline in operating results at Comparable Owned Hotels when compared to 2001 reflects the impact of lower REVPAR primarily attributable to the weakened global economies. REVPAR at Same-Store Owned Hotels worldwide decreased 2.4% in the third quarter of 2002 when compared to the same period of 2001 as a result of a decline in occupancy rates of 40 basis points to 65.5% and a decline in ADR of 1.7% from the prior year. REVPAR at Same-Store Owned Hotels in North America decreased 2.7% to $91.42 when compared to the same period of 2001 as a result of a decrease in ADR of 4.0% to $134.90, offset by increases in occupancy rates to 67.8% from 66.9% in the prior year. REVPAR at system-wide hotels (Same-Store Owned, managed and franchised) in North America decreased 1.7% when compared to the same period of 2001 as a result of a decrease in ADR of 4.2% offset by increases in occupancy rates to 66.2% from 64.5%. Internationally, Same-Store Owned Hotel REVPAR decreased 1.4%, with Europe up 3.7% and Asia Pacific up 7.4% offset by declines in Latin America of 24.2% when compared to 2001. EBITDA margins at Comparable Owned Hotels worldwide were 27.3% in the third quarter of 2002 when compared to 28.5% in the same period of 2001. In North America, EBITDA margins at Comparable Owned Hotels were 24.3% when compared to 25.7% in the same period of 2001. Internationally, EBITDA margins at Comparable Owned Hotels were 34.1% when compared to 35.0% in the same period of 2001. During the third quarter of 2002, the Company signed seven management and franchise contracts representing more than 2,500 rooms. New hotel openings in the fourth quarter of 2002 include: the Sheraton Wild Horse Pass (approximately 500 rooms) in Phoenix, Arizona; the Westin Kierland Resort & Spa in Scottsdale, Arizona (approximately 750 rooms); the Westin Times Square (approximately 863 rooms) in New York; the W San Diego (approximately 260 rooms) in California; the Sheraton Overland Park Hotel (approximately 412 rooms) in Overland Park, Kansas; the Westin Detroit Airport Hotel (approximately 404 rooms) in Detroit, Michigan; the Hotel Bora Bora Nui (approximately 120 rooms),a Luxury Collection Hotel, in French Polynesia; the Westin Shanghai (approximately 450 rooms) in Shanghai, China and the Sheraton Krabi Beach resort (approximately 246 rooms) in Krabi, Thailand. Including these properties, through the end of 2003, the Company expects 50 new full service hotels and resorts around the world, with approximately 115,000 rooms to commence operations. Starwood Vacation Ownership, Inc. ( SVO ) is currently selling VOI inventory at ten resorts and engaged in pre-opening sales at two others currently under construction (Westin Mission Hills Resort Villas in Rancho Mirage, California and Westin Ka anapali Ocean Resort Villas in Maui, Hawaii). Contract sales in the third quarter increased approximately 22.4% when compared to the same period in 2001 and sales were particularly strong at the Maui and Mission Hills resorts. SVO will begin construction of its fourth Westin-branded interval ownership resort later this year featuring 158 villas located adjacent to the Westin Kierland Resort & Spa in Scottsdale, Arizona. SVO sold, on a non-recourse basis, 3

approximately $24 million of notes receivable originated by the vacation ownership operations in the third quarter of 2002, recognizing a pretax gain of $3 million in operating income compared to a gain of $3 million in the third quarter of 2001. Dispositions The Company continues to review its portfolio for disposition candidates, placing additional emphasis on its domestic portfolio. In July 2002, the Company signed a letter of intent to sell its assets in Sardinia, Italy, part of the CIGA portfolio of luxury hotels and resorts, to a consortium of Italian investors. The Company is continuing such negotiations and has commenced discussions with other potential purchasers for these and other CIGA assets. Capital During the third quarter of 2002, the Company invested approximately $112 million in hotel and VOI capital assets, including VOI construction at Westin Mission Hills Resort Villas in Rancho Mirage, California and Westin Ka anapali Ocean Resort Villas in Maui, Hawaii, the acquisition of 18.5 acres of zoned land for a new Westin timeshare development in Princeville, Hawaii, as well as the ongoing development of the St. Regis Museum Tower in San Francisco (269 rooms and 102 condominiums). Progress also continues on the flexible new build Sheraton and Westin prototypes, details of which were recently unveiled. Other major projects included the renovation of approximately 370 rooms at the Sheraton New York, the Westin Excelsior in Rome, Italy, the Westin Galleria and Oaks in Houston, Texas the Phoenician in Scottsdale, Arizona and the roll out of the Sheraton Sweet Sleeper bed. Additionally, the Company spent approximately $25 million to acquire an interest in the Westin Savannah Harbor Resort and Spa in Savannah, Georgia. Financing On September 30, 2002, the Company had total debt of $5.347 billion and cash and cash equivalents of $229 million, or net debt of $5.118 billion, compared to net debt of $5.301 billion at the end of the second quarter of 2002. Following the end of the third quarter, the Company refinanced its senior credit facility, which consisted of a $1.1 billion revolving credit facility and a $174 million term loan and was scheduled to mature in February 2003. The new credit facility is a four-year facility (with a one-year extension option) comprised of a $1.0 billion revolving credit facility and a $300 million term loan, each bearing an initial interest rate of LIBOR +1.625%. Giving effect to the refinancing, at the end of the third quarter of 2002, the Company s debt was approximately 56% fixed rate and 44% floating rate and its weighted average maturity was 6.4 years. As of September 30, 2002, the Company had cash and availability under its domestic and international revolving credit facilities of approximately $843 million and the Company s debt had a weighted average interest rate of 5.86% (assuming the refinancing had occurred as of September 30, 2002). The Company expects to record approximately $2 million in early debt extinguishment costs in the fourth quarter of 2002 related to this refinancing. In September 2002, the Company terminated its existing fixed-to-floating interest rate swaps and immediately entered into new fixed-to-floating interest rate swaps on the same 4

underlying debt. This resulted in a $78 million cash payment to the Company, which was used to pay down debt outstanding under the Company s revolving credit facility. At September 30, 2002, Starwood had approximately 203 million shares outstanding (including partnership units and exchangeable preferred shares). Dividend In 2002, the Company has shifted from a quarterly dividend to an annual dividend. The final determination of the amount of the dividend will be subject to economic and financial considerations and Board approval in the fourth quarter of 2002. At this time, the Company expects the annual dividend to be $0.84 per share. Special Items The Company recorded charges of $8 million (pretax) offset by credits of $8 million (pretax) for special items in the third quarter of 2002 when compared to net charges of $5 million (pretax) in the same period of 2001. The net charges in the third quarter of 2002 primarily represent $5 million of estimated costs (before any recovery from insurance and other claims) associated with construction remediation at an unconsolidated joint venture and $3 million (pretax) foreign exchange loss in Argentina, offset by a net $6 million (pretax) gain from the sale of investments primarily related to a gain on the sale of Starwood s investment in Interval International, a timeshare exchange company. The following represents a reconciliation of income from continuing operations before special items to income from continuing operations after special items (in millions, except per share data): Three Months Ended September 30, Nine Months Ended September 30, 2002 2001 2002 2001 $ 54 $ 33 Income from continuing operations excluding special items... $ 156 $ 207 $ 0.26 $ 0.16 EPS excluding special items... $ 0.76 $ 1.00 Special Items: 2 (a) (4) (b) Restructuring and other special credits (charges), net... 5 (a) (3) (b) 6 (c) (1) Gain (loss) on asset dispositions... 2 (c) - (3) - Foreign exchange gain (loss) from Argentina (d)... 30 - - - Debt extinguishment costs (e)... (29) (9) (5) - Estimated costs associated with construction remediation (f)... (5) - - - State tax refund... 6 - - (5) Total special items pretax... 9 (12) (2) 2 Income tax benefit (expense) (g)... (5) 4 (2) (3) Total special items after-tax... 4 (8) 52 30 Income from continuing operations... 160 199 $ 0.26 $ 0.14 EPS including special items... $ 0.78 $ 0.96 5

(a) During the first and third quarters of 2002, the Company sold its investments in certain e-business ventures previously deemed impaired; throughout the first nine months of 2002, the Company collected receivables, which were previously deemed uncollectible. Accordingly, the previously recorded impairment reserves associated with these assets were reversed. (b) During the first quarter of 2001, the Company wrote-down its investments in various e-business ventures by approximately $19 million based on the market conditions for the technology sector at the time and management s assessment that these investments were permanently impaired; this charge was offset by the reversal of a $20 million bad debt restructuring charge taken in 1998 relating to a note receivable which is now fully performing. During the third quarter of 2001, the Company recorded $4 million of charges primarily related to severance and other costs incurred as a result of the Company s immediate cost containment efforts after the September 11 th attacks. (c) Represents a gain on sale recorded in the third quarter of 2002 in connection with the sale of the Company s investment in Interval International. On a year-to-date basis, this gain is offset, in part, by an impairment charge recorded in the first quarter of 2002 to reduce the carrying value of a hotel to its fair market value, which was sold in the second quarter of 2002. (d) Amount is reflected in selling, general, administrative and other expenses and represents foreign exchange losses and gains resulting from the initial devaluation of the Argentine Peso and subsequent rate volatility. (e) Balance is reflected in interest expense and represents costs related to the early extinguishment of debt in 2001 and 2002 and the unwinding of associated interest-rate swap for 2002. (f) Amount is reflected as a reduction to other hotel and leisure revenues and represents the Company s estimated share of costs for construction remediation efforts at a property owned by an unconsolidated joint venture. (g) All special items are taxed at a 35% incremental tax rate with the exception of the construction remediation charge which is not tax-effected because the joint venture is in a tax-exempt jurisdiction. Future Performance All comments in the following paragraphs and certain comments in this release above are deemed to be forward-looking statements. These statements reflect expectations of the Company s performance given its current base of assets and its current understanding of external economic and political environments. Actual results may differ materially. The weakness in North American and European economies, combined with the current political environment in South America, the Middle East and other parts of the world and their consequent impact on travel in their respective regions and on the rest of the world, make it difficult to predict future results with any degree of precision. The Company currently expects full year 2002 REVPAR to decline 5-6% from 2001 levels, full-year EBITDA of approximately $1.090 to $1.110 billion and EPS of approximately $0.95 to $1.00 with an effective tax rate of approximately 15%, which is predicated on a dividend in 2002 of $0.84 per share. Based on these assumptions and assuming no further asset sales for modeling purposes, approximate quarterly EPS for 2002 is expected to be as follows: 6

2002 First quarter (actual)... $ 0.08 Second quarter (actual)... $ 0.41 Third quarter (actual)... $ 0.26 Fourth quarter (estimate)... $0.20-0.25 Full year (estimate)... $0.95-1.00 REVPAR at Same-Store Owned Hotels in North America for the fourth quarter of 2002 is now expected to be up 7 to 9% when compared to the fourth quarter of 2001. The Company currently expects total capital expenditures in 2002 to be less than $400 million. Free cash flow for 2002 for dividends and other Corporate uses (after cash interest expense of no more than $350 million, cash taxes of no more than $100 million, approximately $220 million of hotel and corporate capital expenditures, approximately $75 million of timeshare inventory and other timeshare capital investments and approximately $100 million of acquisitions and investments) is expected to exceed $250 million. For full year 2003, the Company currently expects REVPAR to be up 2% to 5% when compared to 2002, EBITDA of $1.150 billion to $1.200 billion and EPS of $1.15 to $1.30. Starwood will be conducting a conference call to discuss the third quarter financial results at 10:30 a.m. (ET) today. The conference call will be available through simultaneous webcast in the Investor Relations/Press Releases section of the Company s website at www.starwood.com. A replay of the conference call will also be available from 1:30 p.m. (ET) today through 8:00 p.m. (ET) Thursday, October 31, on both the Company s website and via telephone replay at 719-457-0820 (access code: 212820). All references to EPS, unless otherwise noted, reflect earnings per diluted share from continuing operations excluding special items. All references to total revenues exclude other revenues from managed and franchised properties. All references to total Company EBITDA and EBITDA margins exclude other revenues and expenses from managed and franchised properties. All references to Comparable Owned Hotels reflect the Company s owned, leased and consolidated joint venture hotels, excluding hotels sold during 2001 and 2002 and hotels without comparable prior year results. All references to Same-Store Owned Hotels reflect the Company s owned, leased and consolidated joint venture hotels, excluding hotels under significant renovation or for which comparable results are not available. REVPAR is defined as revenue per available room. ADR is defined as average daily rate. Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including: St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by 7

Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. For more information, please visit www.starwood.com. (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. General economic conditions including the duration and severity of the current global economic downturn, the hospitality industry s pace of recovery from the terrorist attacks in New York, Washington, D.C. and Pennsylvania and their aftermath, business and financing conditions, cyclicality of the real estate and the hotel and leisure business, operating risks associated with the hotel and leisure business, relationships with customers and property owners, domestic and international political and geopolitical conditions, competition, governmental and regulatory actions, risk associated with the level of our indebtedness, and other circumstances and uncertainties may affect future results, performance and achievements. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such 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.) 8

UNAUDITED CONSOLIDATED STATEMENTS OF INCOME (In millions, except per Share data) Three Months Ended September 30, 2002 2001 Nine Months Ended September 30, % Variance 2002 2001 % Variance Revenues $ 806 $ 802 0.5 Owned, leased and consolidated joint venture hotels... $ 2,418 $ 2,597 (6.9) 164 163 0.6 Other hotel and leisure (a)... 478 492 (2.8) 970 965 0.5 2,896 3,089 (6.2) 187 182 2.7 Other revenues from managed and franchised properties (b) 589 574 2.6 1,157 1,147 0.9 3,485 3,663 (4.9) Costs and Expenses 589 576 (2.3) Owned, leased and consolidated joint venture hotels... 1,759 1,790 1.7 123 116 (6.0) Selling, general, administrative and other (c)... 318 323 1.5 (2) 4 150.0 Restructuring and other special charges (credits), net... (5) 3 266.7 124 109 (13.8) Depreciation... 352 321 (9.7) 6 25 76.0 Amortization... 16 70 77.1 840 830 (1.2) 2,440 2,507 2.7 187 182 (2.7) Other expenses from managed and franchised properties (b) 589 574 (2.6) 1,027 1,012 (1.5) 3,029 3,081 1.7 130 135 (3.7) Operating income... 456 582 (21.6) (81) (89) 9.0 Interest expense, net of interest income (d)... (271) (290) 6.6 6 (1) 700.0 Gain (loss) on asset dispositions, net... 2 - - 55 45 22.2 187 292 (36.0) (3) (14) 78.6 Income tax expense... (27) (90) 70.0 - (1) - Minority equity in net income... - (3) - 52 30 73.3 Income from continuing operations... 160 199 (19.6) - - - Discontinued operations... 104 - - $ 52 $ 30 73.3 Net income... $ 264 $ 199 32.7 Earnings Per Share Basic $ 0.26 $ 0.15 73.3 Continuing operations... $ 0.80 $ 0.99 (19.2) - - - Discontinued operations... 0.51 - - $ 0.26 $ 0.15 73.3 Net income... $ 1.31 $ 0.99 32.3 Earnings Per Share Diluted $ 0.26 $ 0.14 85.7 Continuing operations... $ 0.78 $ 0.96 (18.8) - - - Discontinued operations... 0.51 - - $ 0.26 $ 0.14 85.7 Net income... $ 1.29 $ 0.96 34.4 201 200 Weighted average number of Shares... 201 201 204 206 Weighted average number of Shares assuming dilution.. 205 207 Reconciliation of Operating Income to EBITDA (e) $ 130 $ 135 (3.7) Operating income... $ 456 $ 582 (21.6) 130 116 12.1 Depreciation (f)... 369 341 8.2 6 25 (76.0) Amortization (f)... 16 70 (77.1) 4 6 (33.3) Interest expense of unconsolidated joint ventures... 12 19 (36.8) - 2 - Interest income... 1 9 (88.9) (2) 4 (150.0) Restructuring and other special charges (credits), net... (5) 3 (266.7) 3 - - Foreign exchange loss (gain) from Argentina... (30) - - 5 - - Estimated construction remediation... 5 - - $ 276 $ 288 (4.2) EBITDA... $ 824 $ 1,024 (19.5) 9

(a) Other hotel and leisure revenues include management and franchise fees earned from third party hotel owners, the Company s interest in unconsolidated joint ventures and the sale and financing of VOIs. (b) In accordance with a Financial Accounting Standards Board staff announcement, the Company has included in revenues the reimbursement of costs incurred on behalf of managed hotel property owners and franchisees and included in costs and expenses these reimbursed costs. These costs relate primarily to payroll costs at managed properties where the Company is the employer. Since the reimbursements made are based upon costs incurred with no added margin, the adoption of this guidance has no effect on operating income, total or per Share net income, cash flows or the financial position of the Company. (c) Selling, general, administrative and other expenses includes the cost of sales of VOIs and other costs of vacation ownership operations. (d) Interest expense includes early debt extinguishment costs of $29 million and $9 million, respectively, in the nine months ended September 30, 2002 and 2001, as a result of the Company s early adoption of Statement of Financial Accounting Standards No. 145. (e) EBITDA is defined as income before interest expense, income tax expense and depreciation and amortization. Special items and gains and losses from asset dispositions are also excluded from EBITDA as these items do not impact operating results on a recurring basis. Management considers EBITDA to be one measure of the cash flows from operations of the Company before debt service that provides a relevant basis for comparison, and EBITDA is presented to assist investors in analyzing the performance of the Company. This information should not be considered as an alternative to any measure of performance as promulgated under accounting principles generally accepted in the United States, nor should it be considered as an indicator of the overall financial performance of the Company. The Company s calculation of EBITDA may be different from the calculation used by other companies and, therefore, comparability may be limited. (f) Includes Starwood s share of depreciation and amortization expense of unconsolidated joint ventures. STARWOOD HOTELS & RESORTS WORLDWIDE, INC. UNAUDITED BALANCE SHEET INFORMATION (In millions) September 30, 2002 Total assets... $ 12,232 Cash and cash equivalents... $ 229 Total debt (a)... $ 5,347 Shares outstanding (b)... 203 (a) Excludes Starwood s share of unconsolidated joint venture debt aggregating approximately $342 million. (b) Shares outstanding include partnership units and exchangeable preferred shares. 10

Hotel Results - Same Store (1) For the Quarter Ended September 30, 2002 UNAUDITED WORLDWIDE NORTH AMERICA INTERNATIONAL (2) 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 160 Hotels 111 Hotels 49 Hotels OWNED HOTELS REVPAR ($) 97.08 99.42-2.4% 91.42 94.00-2.7% 114.29 115.89-1.4% ADR ($) 148.24 150.81-1.7% 134.90 140.57-4.0% 195.15 183.80 6.2% OCCUPANCY (%) 65.5% 65.9% -0.4 67.8% 66.9% 0.9 58.6% 63.1% -4.5 SHERATON WESTIN 69 45 24 REVPAR ($) 77.89 84.80-8.1% 81.68 88.27-7.5% 69.24 76.87-9.9% ADR ($) 123.48 130.38-5.3% 122.26 130.74-6.5% 126.91 129.44-2.0% OCCUPANCY (%) 63.1% 65.0% -1.9 66.8% 67.5% -0.7 54.6% 59.4% -4.8 36 23 13 REVPAR ($) 105.59 103.57 2.0% 94.79 92.39 2.6% 145.35 144.73 0.4% ADR ($) 151.15 152.32-0.8% 133.34 136.17-2.1% 222.56 211.16 5.4% OCCUPANCY (%) 69.9% 68.0% 1.9 71.1% 67.8% 3.3 65.3% 68.5% -3.2 16 5 11 LUXURY COLLECTION REVPAR ($) 223.58 220.90 1.2% 148.10 164.54-10.0% 294.42 273.87 7.5% ADR ($) 406.41 352.03 15.4% 296.11 287.65 2.9% 493.12 402.94 22.4% OCCUPANCY (%) 55.0% 62.8% -7.8 50.0% 57.2% -7.2 59.7% 68.0% -8.3 W OTHER 10 10 0 REVPAR ($) 123.56 124.12-0.5% 123.56 124.12-0.5% 0.00 0.00 n/a ADR ($) 187.00 187.19-0.1% 187.00 187.19-0.1% 0.00 0.00 n/a OCCUPANCY (%) 66.1% 66.3% -0.2 66.1% 66.3% -0.2 0.0% 0.0% n/a 29 28 1 REVPAR ($) 80.84 77.76 4.0% 83.29 80.27 3.8% 55.71 51.95 7.2% ADR ($) 114.18 116.76-2.2% 118.43 121.39-2.4% 73.63 72.78 1.2% OCCUPANCY (%) 70.8% 66.6% 4.2 70.3% 66.1% 4.2 75.7% 71.4% 4.3 (1) Hotel Results exclude 1 hotel under significant renovation or without comparable results, 3 hotels without prior year results and 2 hotels sold during 2001 and 2002. (2) See next page for breakdown by division. Page 1

Hotel Results - Same Store (1) For the Quarter Ended September 30, 2002 UNAUDITED EUROPE LATIN AMERICA ASIA PACIFIC 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 33 Hotels 13 Hotels 3 Hotels OWNED HOTELS REVPAR ($) 171.60 165.51 3.7% 45.92 60.60-24.2% 65.42 60.94 7.4% ADR ($) 269.78 240.66 12.1% 95.27 112.88-15.6% 95.12 91.30 4.2% OCCUPANCY (%) 63.6% 68.8% -5.2 48.2% 53.7% -5.5 68.8% 66.7% 2.1 SHERATON WESTIN 12 10 2 REVPAR ($) 101.04 101.67-0.6% 43.40 59.13-26.6% 72.87 67.84 7.4% ADR ($) 159.50 148.61 7.3% 94.73 114.83-17.5% 114.76 107.40 6.9% OCCUPANCY (%) 63.3% 68.4% -5.1 45.8% 51.5% -5.7 63.5% 63.2% 0.3 10 3 0 REVPAR ($) 178.33 173.95 2.5% 58.71 68.02-13.7% 0.00 0.00 n/a ADR ($) 265.33 248.58 6.7% 97.34 105.02-7.3% 0.00 0.00 n/a OCCUPANCY (%) 67.2% 70.0% -2.8 60.3% 64.8% -4.5 0.0% 0.0% n/a 11 0 0 LUXURY COLLECTION REVPAR ($) 294.42 273.87 7.5% 0.00 0.00 n/a 0.00 0.00 n/a ADR ($) 493.12 402.94 22.4% 0.00 0.00 n/a 0.00 0.00 n/a OCCUPANCY (%) 59.7% 68.0% -8.3 0.0% 0.0% n/a 0.0% 0.0% n/a OTHER 0 0 1 REVPAR ($) 0.00 0.00 n/a 0.00 0.00 n/a 55.71 51.95 7.2% ADR ($) 0.00 0.00 n/a 0.00 0.00 n/a 73.63 72.78 1.2% OCCUPANCY (%) 0.0% 0.0% n/a 0.0% 0.0% n/a 75.7% 71.4% 4.3 (1) Hotel Results exclude 1 hotel under significant renovation or without comparable results, 3 hotels without prior year results and 2 hotels sold during 2001 and 2002. Page 2

Hotel Results - Comparable (1) For the Quarter Ended September 30, 2002 UNAUDITED ($thousands) WORLDWIDE NORTH AMERICA INTERNATIONAL (2) 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 161 Hotels 111 Hotels 50 Hotels OWNED HOTELS Total REVENUE 774,853 789,839-1.9% 540,757 551,884-2.0% 234,096 237,955-1.6% Total EBITDA 211,485 225,417-6.2% 131,597 142,074-7.4% 79,888 83,343-4.1% MARGIN % 27.3% 28.5% -1.2 24.3% 25.7% -1.4 34.1% 35.0% -0.9 SHERATON WESTIN 70 45 25 REVENUE 305,469 328,297-7.0% 213,856 226,891-5.7% 91,613 101,406-9.7% EBITDA 82,075 99,365-17.4% 55,645 67,447-17.5% 26,430 31,918-17.2% MARGIN % 26.9% 30.3% -3.4 26.0% 29.7% -3.7 28.8% 31.5% -2.7 36 23 13 REVENUE 213,481 209,274 2.0% 148,090 144,355 2.6% 65,391 64,919 0.7% EBITDA 58,986 54,222 8.8% 38,370 32,705 17.3% 20,616 21,517-4.2% MARGIN % 27.6% 25.9% 1.7 25.9% 22.7% 3.2 31.5% 33.1% -1.6 16 5 11 LUXURY COLLECTION REVENUE 119,552 117,431 1.8% 47,242 50,232-6.0% 72,310 67,199 7.6% EBITDA 36,878 36,345 1.5% 3,842 6,273-38.8% 33,036 30,072 9.9% MARGIN % 30.8% 31.0% -0.2 8.1% 12.5% -4.4 45.7% 44.8% 0.9 W OTHER 10 10 0 REVENUE 54,532 55,371-1.5% 54,532 55,371-1.5% 0 0 n/a EBITDA 10,308 12,179-15.4% 10,308 12,179-15.4% 0 0 n/a MARGIN % 18.9% 22.0% -3.1 18.9% 22.0% -3.1 n/a n/a n/a 29 28 1 REVENUE 81,819 79,466 3.0% 77,037 75,035 2.7% 4,782 4,431 7.9% EBITDA 23,238 23,306-0.3% 23,432 23,470-0.2% (194) (164) -18.3% MARGIN % 28.4% 29.3% -0.9 30.4% 31.3% -0.9-4.1% -3.7% -0.4 (1) Hotel Results exclude 3 hotels without prior year results and 2 hotels sold during 2001 and 2002. (2) See next page for breakdown by division. Page 3

Hotel Results - Comparable (1) For the Quarter Ended September 30, 2002 UNAUDITED ($thousands) EUROPE LATIN AMERICA ASIA PACIFIC 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 33 Hotels 13 Hotels 4 Hotels OWNED HOTELS Total REVENUE 179,786 172,392 4.3% 36,767 49,846-26.2% 17,543 15,717 11.6% Total EBITDA 64,907 63,166 2.8% 11,604 17,382-33.2% 3,377 2,795 20.8% MARGIN % 36.1% 36.6% -0.5 31.6% 34.9% -3.3 19.2% 17.8% 1.4 SHERATON WESTIN 12 10 3 REVENUE 50,917 50,582 0.7% 27,935 39,538-29.3% 12,761 11,286 13.1% EBITDA 13,349 14,332-6.9% 9,510 14,627-35.0% 3,571 2,959 20.7% MARGIN % 26.2% 28.3% -2.1 34.0% 37.0% -3.0 28.0% 26.2% 1.8 10 3 0 REVENUE 56,559 54,611 3.6% 8,832 10,308-14.3% 0 0 n/a EBITDA 18,522 18,762-1.3% 2,094 2,755-24.0% 0 0 n/a MARGIN % 32.7% 34.4% -1.7 23.7% 26.7% -3.0 n/a n/a n/a 11 0 0 LUXURY COLLECTION REVENUE 72,310 67,199 7.6% 0 0 n/a 0 0 n/a EBITDA 33,036 30,072 9.9% 0 0 n/a 0 0 n/a MARGIN % 45.7% 44.8% 0.9 n/a n/a n/a n/a n/a n/a OTHER 0 0 1 REVENUE 0 0 n/a 0 0 n/a 4,782 4,431 7.9% EBITDA 0 0 n/a 0 0 n/a (194) (164) -18.3% MARGIN % n/a n/a n/a n/a n/a n/a -4.1% -3.7% -0.4 (1) Hotel Results exclude 3 hotels without prior year results and 2 hotels sold during 2001 and 2002. Page 4

Hotel Results - Same Store (1) For the Nine Months Ended September 30, 2002 UNAUDITED WORLDWIDE NORTH AMERICA INTERNATIONAL (2) 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 156 Hotels 110 Hotels 46 Hotels OWNED HOTELS REVPAR ($) 96.53 107.09-9.9% 94.97 105.23-9.8% 101.28 112.77-10.2% ADR ($) 150.39 158.99-5.4% 144.50 154.55-6.5% 170.20 173.08-1.7% OCCUPANCY (%) 64.2% 67.4% -3.2 65.7% 68.1% -2.4 59.5% 65.2% -5.7 SHERATON WESTIN 68 44 24 REVPAR ($) 78.28 90.78-13.8% 82.37 94.54-12.9% 69.53 82.78-16.0% ADR ($) 127.90 138.31-7.5% 129.60 140.62-7.8% 123.80 133.00-6.9% OCCUPANCY (%) 61.2% 65.6% -4.4 63.6% 67.2% -3.6 56.2% 62.2% -6.0 35 23 12 REVPAR ($) 107.38 116.21-7.6% 98.89 107.06-7.6% 140.24 151.47-7.4% ADR ($) 154.63 161.14-4.0% 140.60 147.85-4.9% 212.58 213.45-0.4% OCCUPANCY (%) 69.4% 72.1% -2.7 70.3% 72.4% -2.1 66.0% 71.0% -5.0 14 5 9 LUXURY COLLECTION REVPAR ($) 216.31 237.61-9.0% 208.88 241.00-13.3% 224.69 233.77-3.9% ADR ($) 362.18 349.90 3.5% 349.15 357.35-2.3% 376.94 341.59 10.3% OCCUPANCY (%) 59.7% 67.9% -8.2 59.8% 67.4% -7.6 59.6% 68.4% -8.8 W OTHER 10 10 0 REVPAR ($) 129.91 139.89-7.1% 129.91 139.89-7.1% 0.00 0.00 n/a ADR ($) 197.10 209.47-5.9% 197.10 209.47-5.9% 0.00 0.00 n/a OCCUPANCY (%) 65.9% 66.8% -0.9 65.9% 66.8% -0.9 0.0% 0.0% n/a 29 28 1 REVPAR ($) 73.67 76.66-3.9% 75.59 79.19-4.5% 54.21 50.63 7.1% ADR ($) 111.70 118.83-6.0% 115.90 123.64-6.3% 73.80 73.08 1.0% OCCUPANCY (%) 66.0% 64.5% 1.5 65.2% 64.0% 1.2 73.5% 69.3% 4.2 (1) Hotel Results exclude 1 hotel under significant renovation or without comparable results, 7 hotels without prior year results and 4 hotels sold during 2001 and 2002. (2) See next page for breakdown by division. Page 5

Hotel Results - Same Store (1) For the Nine Months Ended September 30, 2002 UNAUDITED EUROPE LATIN AMERICA ASIA PACIFIC 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 30 Hotels 13 Hotels 3 Hotels OWNED HOTELS REVPAR ($) 142.79 150.36-5.0% 56.67 76.97-26.4% 63.30 62.92 0.6% ADR ($) 226.31 218.50 3.6% 108.16 129.65-16.6% 94.37 92.55 2.0% OCCUPANCY (%) 63.1% 68.8% -5.7 52.4% 59.4% -7.0 67.1% 68.0% -0.9 SHERATON WESTIN 12 10 2 REVPAR ($) 93.81 100.65-6.8% 50.52 70.96-28.8% 70.28 72.37-2.9% ADR ($) 147.26 146.55 0.5% 102.91 126.12-18.4% 113.05 108.03 4.6% OCCUPANCY (%) 63.7% 68.7% -5.0 49.1% 56.3% -7.2 62.2% 67.0% -4.8 9 3 0 REVPAR ($) 161.63 169.61-4.7% 87.86 107.24-18.1% 0.00 0.00 n/a ADR ($) 249.92 244.73 2.1% 127.05 142.97-11.1% 0.00 0.00 n/a OCCUPANCY (%) 64.7% 69.3% -4.6 69.2% 75.0% -5.8 0.0% 0.0% n/a 9 0 0 LUXURY COLLECTION REVPAR ($) 224.69 233.77-3.9% 0.00 0.00 n/a 0.00 0.00 n/a ADR ($) 376.94 341.59 10.3% 0.00 0.00 n/a 0.00 0.00 n/a OCCUPANCY (%) 59.6% 68.4% -8.8 0.0% 0.0% n/a 0.0% 0.0% n/a OTHER 0 0 1 REVPAR ($) 0.00 0.00 n/a 0.00 0.00 n/a 54.21 50.63 7.1% ADR ($) 0.00 0.00 n/a 0.00 0.00 n/a 73.80 73.08 1.0% OCCUPANCY (%) 0.0% 0.0% n/a 0.0% 0.0% n/a 73.5% 69.3% 4.2 (1) Hotel Results exclude 1 hotel under significant renovation or without comparable results, 7 hotels without prior year results and 4 hotels sold during 2001 and 2002. Page 6

Hotel Results - Comparable (1) For the Nine Months Ended September 30, 2002 UNAUDITED ($thousands) WORLDWIDE NORTH AMERICA INTERNATIONAL (2) 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 157 Hotels 110 Hotels 47 Hotels OWNED HOTELS Total REVENUE 2,273,901 2,514,043-9.6% 1,675,378 1,853,899-9.6% 598,523 660,144-9.3% Total EBITDA 638,992 792,289-19.3% 449,922 567,810-20.8% 189,070 224,479-15.8% MARGIN % 28.1% 31.5% -3.4 26.9% 30.6% -3.7 31.6% 34.0% -2.4 SHERATON WESTIN 69 44 25 REVENUE 881,662 1,004,727-12.2% 611,587 690,129-11.4% 270,075 314,598-14.2% EBITDA 245,660 314,765-22.0% 166,588 215,065-22.5% 79,072 99,700-20.7% MARGIN % 27.9% 31.3% -3.4 27.2% 31.2% -4.0 29.3% 31.7% -2.4 35 23 12 REVENUE 660,118 716,835-7.9% 480,420 523,277-8.2% 179,698 193,558-7.2% EBITDA 193,905 229,857-15.6% 135,379 159,594-15.2% 58,526 70,263-16.7% MARGIN % 29.4% 32.1% -2.7 28.2% 30.5% -2.3 32.6% 36.3% -3.7 14 5 9 LUXURY COLLECTION REVENUE 330,688 364,505-9.3% 195,558 225,139-13.1% 135,130 139,366-3.0% EBITDA 99,692 124,570-20.0% 47,507 69,662-31.8% 52,185 54,908-5.0% MARGIN % 30.1% 34.2% -4.1 24.3% 30.9% -6.6 38.6% 39.4% -0.8 W OTHER 10 10 0 REVENUE 173,076 188,396-8.1% 173,076 188,396-8.1% 0 0 n/a EBITDA 41,765 55,504-24.8% 41,765 55,504-24.8% 0 0 n/a MARGIN % 24.1% 29.5% -5.4 24.1% 29.5% -5.4 n/a n/a n/a 29 28 1 REVENUE 228,357 239,580-4.7% 214,737 226,958-5.4% 13,620 12,622 7.9% EBITDA 57,970 67,593-14.2% 58,683 67,985-13.7% (713) (392) -81.9% MARGIN % 25.4% 28.2% -2.8 27.3% 30.0% -2.7-5.2% -3.1% -2.1 (1) Hotel Results exclude 7 hotels without prior year results and 4 hotels sold during 2001 and 2002. (2) See next page for breakdown by division. Page 7

Hotel Results - Comparable (1) For the Nine Months Ended September 30, 2002 UNAUDITED ($thousands) EUROPE LATIN AMERICA ASIA PACIFIC 2002 2001 Var. 2002 2001 Var. 2002 2001 Var. 30 Hotels 13 Hotels 4 Hotels OWNED HOTELS Total REVENUE 416,317 436,822-4.7% 133,286 178,795-25.5% 48,920 44,527 9.9% Total EBITDA 131,678 145,514-9.5% 48,936 71,399-31.5% 8,456 7,566 11.8% MARGIN % 31.6% 33.3% -1.7 36.7% 39.9% -3.2 17.3% 17.0% 0.3 SHERATON WESTIN 12 10 3 REVENUE 139,565 149,081-6.4% 95,210 133,612-28.7% 35,300 31,905 10.6% EBITDA 35,405 40,129-11.8% 34,498 51,613-33.2% 9,169 7,958 15.2% MARGIN % 25.4% 26.9% -1.5 36.2% 38.6% -2.4 26.0% 24.9% 1.1 9 3 0 REVENUE 141,622 148,375-4.6% 38,076 45,183-15.7% 0 0 n/a EBITDA 44,088 50,477-12.7% 14,438 19,786-27.0% 0 0 n/a MARGIN % 31.1% 34.0% -2.9 37.9% 43.8% -5.9 n/a n/a n/a 9 0 0 LUXURY COLLECTION REVENUE 135,130 139,366-3.0% 0 0 n/a 0 0 n/a EBITDA 52,185 54,908-5.0% 0 0 n/a 0 0 n/a MARGIN % 38.6% 39.4% -0.8 n/a n/a n/a n/a n/a n/a OTHER 0 0 1 REVENUE 0 0 n/a 0 0 n/a 13,620 12,622 7.9% EBITDA 0 0 n/a 0 0 n/a (713) (392) -81.9% MARGIN % n/a n/a n/a n/a n/a n/a -5.2% -3.1% -2.1 (1) Hotel Results exclude 7 hotels without prior year results and 4 hotels sold during 2001 and 2002. Page 8

Debt Portfolio Summary As of September 30, 2002 UNAUDITED (in millions) Interest Balance Interest Avg Maturity Debt Terms (in millions) % of Portfolio Rate (in years) Floating Rate Debt: Senior credit facility Revolving credit facility VARIOUS + 160 $ 506 9% 4.10% 0.4 (1) Term loan LIBOR + 160 174 3% 3.48% 0.4 (1) 680 12% 3.95% 0.4 450M Euro facility EURIBOR + 195 444 8% 5.24% 0.7 Mortgages and other Various 251 5% 5.59% 2.6 Interest rate swaps Various 1,001 19% 5.77% Total Floating 2,376 44% 5.13% 0.9 Fixed Rate Debt: Sheraton Holding public debt 1,324 25% 6.52% 8.5 (3) Senior notes 1,542 29% 7.05% 7.3 (4) Convertible debt 313 6% 3.25% 1.7 (5) Mortgages and other 793 15% 7.38% 9.5 Interest rate swaps (1,001) -19% 7.26% Total Fixed 2,971 56% 6.43% 7.7 Total Debt 5,347 100% 5.85% 5.9 Maturities (1) (2) <1 year $ 1,270 $ 589 2-3 years 645 770 4-5 years 1,334 1,890 >5 years 2,098 2,098 $ 5,347 $ 5,347 (1) Reflects original maturities, before the effects of the $1.3 billion refinancing of the senior credit facility completed in October 2002. The new facility matures October 9, 2006. After giving effect to the refinancing, the Company's debt at September 30, 2002 remains at 44% floating rate and 56% fixed rate with a weighted average maturity of 6.4 years at 5.86%. (2) Reflects maturities after giving effect to the refinancing completed in October 2002 discussed in (1) above. (3) Balance consists of outstanding public debt of $1.297 billion and a $27 million fair value adjustment primarily related to fixed to floating interest rate swaps terminated in September 2002. (4) Balance consists of outstanding public debt of $1.494 billion and a $48 million fair market value adjustment primarily related to fixed to floating interest rate swaps terminated in September 2002. (5) Maturity date reflects the first put date of the convertible debt. Page 9

Hotels under Renovation and/or without Comparable Results & Other Selected Items For the Three Months Ended September 30, 2002 UNAUDITED Properties under Significant Renovation or without Comparable Results during the 3rd Quarter 2002 Selected Balance Sheet and Cash Flow Items: Property Location Cash and cash equivalents $ 229 Capital expenditures $ 112 W Chicago - Lake Shore Chicago, IL Debt level $ 5,347 Sheraton Royal Denarau Resort Nadi, Fiji Shares Repurchased - Westin Dublin Hotel Dublin, Ireland W New York - Times Square New York, NY Page 10

Summary of Portfolio by Properties & Rooms As of September 30, 2002 UNAUDITED PROPERTIES Sheraton Westin Lux. Col./ St. Regis Four Points W Other Total Owned, leased & consolidated JVs 68 38 18 7 12 21 164 Unconsolidated joint ventures 29 9 2 2-1 43 Equity interest properties 97 47 20 9 12 22 207 Managed (third-party owned) 141 39 18 22 4 4 228 Franchised, represented & referral 158 26 12 114 - - 310 Total 396 112 50 145 16 26 745 ROOMS Sheraton Westin Lux. Col./ St. Regis Four Points W Other Total Owned, leased & consolidated JVs 26,989 14,398 3,731 1,782 4,391 5,103 56,394 Unconsolidated joint ventures 11,510 3,763 441 328-132 16,174 Equity interest properties 38,499 18,161 4,172 2,110 4,391 5,235 72,568 Managed (third-party owned) 47,423 19,257 3,474 4,101 595 624 75,474 Franchised, represented & referral 46,682 8,493 1,473 20,692 - - 77,340 Total 132,604 45,911 9,119 26,903 4,986 5,859 225,382 Page 11