e10vk

SCHEDULE III

STARWOOD HOTELS & RESORTS

REAL ESTATE AND ACCUMULATED DEPRECIATION

December 31, 2005

(In millions)


												Gross Amount Book Value
			Initial Cost to				Costs Subsequent to					at December 31, 2005
			Company				Acquisition
														(a)(b)		Accumulated
					Building and					Building and		(a)		Building and		Depreciation &		Year of	Date
Description	City	State	Land		Improvements		Land			Improvements		Land		Improvements		Amortization		Construction	Acquired	Life

The St. Regis, New York	New York	NY	$	65	$	150	$	—		$	17	$	65	$	167	$	30	1904	6/98	40
Hotel properties, each less than 5% of total	Various	Various		330		2,741		(25	)		296		305		3,040		710	Various	Various	Various

			$	395	$	2,891	$	(25	)	$	313	$	370	$	3,207	$	740

Land															370		—
Furniture, fixtures and equipment															490		387
Construction in progress															19		—

														$	4,086	$	1,127


(a)	As of December 31, 2005, land, building and improvements, furniture, fixtures and equipment and construction in progress have a cost basis of $312 million, $1,754 million, $72 million and $20 million, respectively, for federal income tax purposes.
(b)	Building and improvements include amounts allocated for leasehold interest in land.

S-2

SCHEDULE III — (Continued)

STARWOOD HOTELS & RESORTS

REAL ESTATE AND ACCUMULATED DEPRECIATION

(In millions)

A reconciliation of the Trust’s investment in real estate, furniture and fixtures and related accumulated depreciation is as follows:


		Year Ended December 31,

		2005			2004			2003

Real Estate and Furniture and Fixtures
Balance at beginning of period		$	4,298		$	4,229		$	4,108
Additions during period:
	Improvements		76			153			62
	Transfer from assets held for sale		—			—			80
Deductions during period:
	Sale of properties		(217	)		(84	)		(21	)
	Write down of impaired assets		(71	)		—			—

Balance at end of period		$	4,086		$	4,298		$	4,229

Accumulated Depreciation
Balance at beginning of period		$	(1,044	)	$	(905	)	$	(746	)
Additions during period:
	Depreciation expense		(148	)		(156	)		(155	)
	Transfer from assets held for sale		—			—			(16	)
Deductions during period:
	Sale of properties		45			17			12
	Write down of impaired assets		20			—			—

Balance at end of period		$	(1,127	)	$	(1,044	)	$	(905	)

S-3

SCHEDULE IV

STARWOOD HOTELS & RESORTS

MORTGAGE LOANS ON REAL ESTATE

December 31, 2005

(In millions)


												Interest Earned
						Amount of						During the
						Principal						Twelve Months
				Carrying		Unpaid at		Amount		Interest Due at		Ended
		Prior		Amount of		December 31,		Being		December 31,		December 31,
Description		Liens		Mortgages(a)		2005		Foreclosed		2005		2005

Intercompany Mortgage Loans
First Mortgages:
	Westin Maui — Hawaii		No	$	209	$	200	$	—	$	9	$	12
	Other, all(5) less than 3% of total carrying value		No		131		112		—		19		10
	Sheraton Holding Corporation Mortgage Note		No		344		210		—		134		18
	Sheraton Holding Corporation Mortgage Note		No		2,256		1,289		—		967		129
	Starwood Hotels & Resorts Worldwide, Inc.		No		239		150		—		89		13

				$	3,179	$	1,961	$	—	$	1,218	$	182


(a)	Per the mortgage loan agreements, several of the loans do not require monthly interest payments if cash flows are insufficient. Thus, the Trust has accrued interest on such loans.


		Year Ended December 31,

		2005			2004			2003

Balance at beginning of period		$	2,974		$	2,836		$	2,661
Additions:
	New mortgage loans		200			—			—
	Accrued interest(a)		114			178			175
Deductions:
	Principal repayments		(109	)		(40	)		—

Balance at end of period		$	3,179		$	2,974		$	2,836


(a)	Per the mortgage loan agreements, several of the loans do not require monthly interest payments if cash flows are insufficient. Thus, the Trust has accrued interest on such loans.

S-4

EXHIBIT INDEX


Exhibit
Number			Description of Exhibit

	2	.1	Formation Agreement, dated as of November 11, 1994, among the Trust, the Corporation, Starwood Capital and the Starwood Partners (incorporated by reference to Exhibit 2 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K dated November 16, 1994). (The SEC file numbers of all filings made by the Corporation and the Trust pursuant to the Securities Exchange Act of 1934, as amended, and referenced herein are: 1-7959 (the Corporation) and 1-6828 (the Trust)).
	2	.2	Form of Amendment No. 1 to Formation Agreement, dated as of July 1995, among the Trust, the Corporation and the Starwood Partners (incorporated by reference to Exhibit 10.23 to the Trust’s and the Corporation’s Joint Registration Statement on Form S-2 filed with the SEC on June 29, 1995 (Registration Nos. 33-59155 and 33-59155-01)).
	2	.3	Transaction Agreement, dated as of September 8, 1997, by and among the Trust, the Corporation, Realty Partnership, Operating Partnership, WHWE L.L.C., Woodstar Investor Partnership (“Woodstar”), Nomura Asset Capital Corporation, Juergen Bartels, Westin Hotels & Resorts Worldwide, Inc., W&S Lauderdale Corp., W&S Seattle Corp., Westin St. John Hotel Company, Inc., W&S Denver Corp., W&S Atlanta Corp. and W&S Hotel L.L.C. (incorporated by reference to Exhibit 2 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed with the SEC on September 25, 1997, as amended by the Form 8-K/A filed with the SEC on December 18, 1997).
	2	.4	Master Agreement and Plan of Merger, dated as of November 14, 2005, among Host Marriott Corporation, Host Marriott, L.P., Horizon Supernova Merger Sub, L.L.C., Horizon SLT Merger Sub, L.P., Starwood Hotels & Resorts Worldwide, Inc., Starwood Hotels & Resorts, Sheraton Holding Corporation and SLT Realty Limited Partnership (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Current Report on From 8-K filed November 14, 2005).
	3	.1	Amended and Restated Declaration of Trust of the Trust, amended and restated through April 16, 1999 (incorporated by reference to Exhibit 3.1 of the Trust’s and the Corporation’s Joint Quarterly Report on Form 10-Q for the quarterly period ended March 31, 1999 (the “1999 Form 10-Q1”).
	3	.2	Articles of Amendment to the Amended and Restated Declaration of Trust of the Trust, dated as of November 15, 2004 (incorporated by reference to Exhibit 3.2 of the Trust’s and the Corporation’s Joint Annual Report on Form 10-K for the fiscal year ended December 31, 2004 (the “2004 Form 10-K”)).
	3	.3	Articles of Restatement of the Corporation, as of May 7, 2004 (incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2004 (the “2004 Form 10-Q2”)).
	3	.4	Bylaws of the Trust, as amended and restated through November 8, 2004 (incorporated by reference to Exhibit 3.4 of the 2004 Form 10-K).
	3	.5	Amended and Restated Bylaws of the Corporation, as amended and restated through May 7, 2004 (incorporated by reference to Exhibit 10.2 to the 2004 Form 10-Q2).
	4	.1	Amended and Restated Intercompany Agreement, dated as of January 6, 1999, between the Corporation and the Trust (incorporated by reference to Exhibit 3 to the Trust Form 8-A, except that on January 6, 1999, the Intercompany Agreement was executed and dated as of January 6, 1999).
	4	.2	Rights Agreement, dated as of March 15, 1999, between the Corporation and Chase Mellon Shareholder Services, L.L.C., as Rights Agent (incorporated by reference to Exhibit 4 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed with the SEC on March 15, 1999).
	4	.3	First Amendment to Rights Agreement, dated as of October 2, 2003 (incorporated by reference to Exhibit 4 of Form 8-A/A filed on October 7, 2003).


Exhibit
Number			Description of Exhibit

	4	.4	Second Amendment to Rights Agreement, dated as of October 24, 2003 (incorporated by reference to Exhibit 4 of Form 8-A/A filed on October 30, 2003).
	4	.5	Amended and Restated Indenture, dated as of November 15, 1995, as Amended and Restated as of December 15, 1995 between ITT Corporation (formerly known as ITT Destinations, Inc.) and the First National Bank of Chicago, as trustee (incorporated by reference to Exhibit 4.A.IV to the First Amendment to ITT Corporation’s Registration Statement on Form S-3 filed November 13, 1996).
	4	.6	First Indenture Supplement, dated as of December 31, 1998, among ITT Corporation, the Corporation and The Bank of New York (incorporated by reference to Exhibit 4.1 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed January 8, 1999).
	4	.7	Indenture, dated as of May 25, 2001, by and among the Corporation, as Issuer, the guarantors named therein and Firstar Bank, N.A., as Trustee (incorporated by reference to Exhibit 10.2 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 (the “2001 Form 10-Q2”)).
	4	.8	Indenture, dated as of April 19, 2002, among the Corporation, the guarantor parties named therein and U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Corporation’s and Sheraton Holding Corporation’s Joint Registration Statement on Form S-4 filed on November 19, 2002 (the “2002 Forms S-4”)).
	4	.9	Indenture dated May 16, 2003 between the Corporation, the Trust, the Guarantor and U.S. Bank National Association as trustee (incorporated by reference to Exhibit 4.9 to the July 8, 2003 Form S-3) (Registration Nos. 333-106888, 333-106888-01, 333-106888-02) (the “Form S-3”).
	4	.10	First Indenture Supplement, dated as of January 11, 2006, between the Corporation, the Trust, the Guarantor and U.S. Bank National Association as trustee (incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed January 17, 2006).
			The Registrants hereby agree to file with the Commission a copy of any instrument, including indentures, defining the rights of long-term debt holders of the Registrants and their consolidated subsidiaries upon the request of the Commission.
	10	.1	Third Amended and Restated Limited Partnership Agreement for Realty Partnership, dated January 6, 1999, among the Trust and the limited partners of Realty Partnership (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Annual Report on Form 10-K for the fiscal year ended December 31, 1998 (the “1998 Form 10-K”)).
	10	.2	Third Amended and Restated Limited Partnership Agreement for Operating Partnership, dated January 6, 1999, among the Corporation and the limited partners of Operating Partnership (incorporated by reference to Exhibit 10.2 to the 1998 Form 10-K).
	10	.3	Form of Lease Agreement, entered into as of February 14, 1997, between the Trust (or a subsidiary) as Lessor and the Corporation (or a subsidiary) as Lessee (incorporated by reference to Exhibit 10.3 to the 2004 Form 10-K).
	10	.4	Form of Amendment of Lease, dated as of June 1, 2002, between the Trust (or a subsidiary) as Lessor and the Corporation (or a subsidiary) as Lessee (incorporated by reference to Exhibit 10.4 to the 2004 Form 10-K).
	10	.5	Form of Trademark License Agreement, dated as of December 10, 1997, between Starwood Capital and the Trust (incorporated by reference to Exhibit 10.22 to the Trust’s and the Corporation’s Joint Annual Report on Form 10-K for the fiscal year ended December 31, 1997 (the “1997 Form 10-K”)).


Exhibit
Number			Description of Exhibit

	10	.6	Credit Agreement, dated October 9, 2002, among the Corporation, certain additional alternative currency revolving loan borrowers and various lenders, Deutsche Bank, AG, New York Branch, as Administrative Agent, JP Morgan Chase Bank, as Syndication Agent, Bank of America, N.A., Fleet National Bank and Societe Generale, as Co-Documentation Agents, and Deutsche Bank Securities Inc. and JP Morgan Securities Inc. as Co-Lead Arrangers and joint Book Running Managers (incorporated by reference to Exhibit 10.1 of Form 8-K filed on October 11, 2002).
	10	.7	First Amendment to Credit Agreement (incorporated by reference to Exhibit 10.5 to the to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2003 (the “2003 10-Q1”)).
	10	.8	Second Amendment to Credit Agreement (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended June 30, 2003 (the “2003 10-Q2”)).
	10	.9	Third Amendment to Credit Agreement (incorporated by reference to Exhibit 10.1 to Form 10-Q for the quarter ended September 30, 2004 (the “2004 10-Q3”)).
	10	.10	Form of Fourth Amendment to the Credit Agreement (incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed November 9, 2005).
	10	.11	Incremental Term Loan Commitment to Credit Agreement (incorporated by reference to Exhibit 10.2 to the 2004 10-Q3).
	10	.12	Pledge and Security Agreement, dated as of February 23, 1998, executed and delivered by the Trust, the Corporation and the other Pledgors party thereto, in favor of Bankers Trust Company as Collateral Agent (incorporated by reference to Exhibit 10.63 to the 1997 Form 10-K).
	10	.13	Credit Agreement, dated as of February 10, 2006, among Starwood Hotels & Resorts Worldwide, Inc., Starwood Hotels & Resorts, certain additional Dollar Revolving Loan Borrowers, certain additional Alternate Currency Revolving Loan Borrowers, various Lenders, Deutsche Bank AG New York Branch, as Administrative Agent, JPMorgan Chase Bank, N.A. and Societe Generale, as Syndication Agents, Bank of America, N.A. and Calyon New York Branch, as Co-Documentation Agents, Deutsche Bank Securities Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Lead Arrangers and Book Running Managers, The Bank of Nova Scotia, Citicorp North America, Inc., and the Royal Bank of Scotland PLC, as Senior Managing Agents and Nizvho Corporate Bank, Ltd. as Managing Agent (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Current Report on Form 8-K filed February 15, 2006).
	10	.14	Loan Agreement, dated as of February 23, 1998, between the Trust and the Corporation, together with Promissory Note executed in connection therewith, by the Corporation to the order of the Trust, in the principal amount of $3,282,000,000 (incorporated by reference to Exhibit 10.65 to the 1997 Form 10-K).
	10	.15	First Modification, dated as of January 27, 1999, to Loan Agreement, dated as of February 23, 1998, among ITT Corporation, Realty Partnership, Sheraton Phoenician Corporation, and Starwood Phoenician CMBS I LLC (incorporated by reference to Exhibit 10.13 to the 2004 Form 10-K).
	10	.16	Second Modification, dated as of December 30, 1999, to Loan Agreement, dated as of February 23, 1998, among ITT Corporation, Realty Partnership, the Trust and Starwood Hotels and Resorts Holdings, Inc (incorporated by reference to Exhibit 10.14 to the 2004 Form 10-K).
	10	.17	Third Modification, dated as of June 30, 2000, to Loan Agreement, dated as of February 23, 1998, among ITT Corporation, the Corporation, Realty Partnership, the Trust and Starwood Hotels and Resorts Holdings, Inc. (incorporated by reference to Exhibit 10.15 to the 2004 Form 10-K).
	10	.18	Loan Agreement, dated as of February 23, 1998, between the Trust and the Corporation, together with Promissory Note executed in connection therewith, by the Corporation to the order of the Trust, in the principal amount of $100,000,000 (incorporated by reference to Exhibit 10.66 to the 1997 Form 10-K).


Exhibit
Number			Description of Exhibit

	10	.19	First Modification, dated as of January 27, 1999, to Loan Agreement, dated as of February 23, 1998, among the Corporation, Harbor-Cal S.D., Starwood Sheraton San Diego CMBS I LLC and Realty Partnership (incorporated by reference to Exhibit 10.17 to the 2004 Form 10-K).
	10	.20	Loan Agreement, dated as of February 23, 1998, between the Trust and the Corporation, together with Promissory Note executed in connection therewith, by the Corporation to the order of the Trust, in the principal amount of $50,000,000 (incorporated by reference to Exhibit 10.67 to the 1997 Form 10-K).
	10	.21	First Modification, dated as of January 27, 1999, to Loan Agreement, dated as of February 23, 1998, among the Corporation, Harbor-Cal S.D., Starwood Sheraton San Diego CMBS I LLC and Realty Partnership (incorporated by reference to Exhibit 10.19 to the 2004 Form 10-K).
	10	.22	Loan Agreement, dated as of January 27, 1999, among the Borrowers named therein, as Borrowers, Starwood Operator I LLC, as Operator, and Lehman Brothers Holding Inc., d/b/a Lehman Capital, a division of Lehman Brothers Holdings Inc. (incorporated by reference to Exhibit 10.58 to the 1998 Form 10-K).
	10	.23	Starwood Hotels & Resorts 1995 Long-Term Incentive Plan (the “Trust 1995 LTIP”) (Amended and Restated as of December 3, 1998) (incorporated by reference to Annex D to the Trust’s and the Corporation’s Joint Proxy Statement dated December 3, 1998 (the “1998 Proxy Statement”))⁽¹⁾
	10	.24	Second Amendment to the Trust 1995 LTIP (incorporated by reference to Exhibit 10.4 to the 2003 10-Q1)⁽¹⁾
	10	.25	Form of Non-Qualified Stock Option Agreement pursuant to the Trust 1995 LTIP ((incorporated by reference to Exhibit 10.23 to the 2004 Form 10-K).⁽¹⁾
	10	.26	Starwood Hotels & Resorts Worldwide, Inc. 1995 Long-Term Incentive Plan (the “Corporation 1995 LTIP”) (Amended and Restated as of December 3, 1998) (incorporated by reference to Annex E to the 1998 Proxy Statement).⁽¹⁾
	10	.27	Second Amendment to the Corporation 1995 LTIP (incorporated by reference to Exhibit 10.3 to the 2003 10-Q1).⁽¹⁾
	10	.28	Form of Non-Qualified Stock Option Agreement pursuant to the Corporation 1995 LTIP (incorporated by reference to Exhibit 10.26 to the 2004 Form 10-K).⁽¹⁾
	10	.29	Starwood Hotels & Resorts Worldwide, Inc. 1999 Long-Term Incentive Compensation Plan (the “1999 LTIP”) (incorporated by reference to Exhibit 10.4 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1999 (the “1999 Form 10-Q2”)).⁽¹⁾
	10	.30	First Amendment to the 1999 LTIP, dated as of August 1, 2001 (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2001).⁽¹⁾
	10	.31	Second Amendment to the 1999 LTIP (incorporated by reference to Exhibit 10.2 to the 2003 10-Q1).⁽¹⁾
	10	.32	Form of Non-Qualified Stock Option Agreement pursuant to the 1999 LTIP (incorporated by reference to Exhibit 10.30 to the 2004 Form 10-K).⁽¹⁾
	10	.33	Form of Restricted Stock Agreement pursuant to the 1999 LTIP (incorporated by reference to Exhibit 10.31 to the 2004 Form 10-K).⁽¹⁾
	10	.34	Starwood Hotels & Resorts Worldwide, Inc. 2002 Long-Term Incentive Compensation Plan (the “2002 LTIP”) (incorporated by reference to Annex B of the Corporation’s 2002 Proxy Statement).⁽¹⁾
	10	.35	First Amendment to the 2002 LTIP (incorporated by reference to Exhibit 10.1 to the 2003 10-Q1).⁽¹⁾


Exhibit
Number			Description of Exhibit

	10	.36	Form of Non-Qualified Stock Option Agreement pursuant to the 2002 LTIP (incorporated by reference to Exhibit 10.49 to the 2002 Form 10-K filed on February 28, 2003 (the “2002 10-K”)).⁽¹⁾
	10	.37	Form of Restricted Stock Agreement pursuant to the 2002 LTIP (incorporated by reference to Exhibit 10.35 to the 2004 Form 10-K).⁽¹⁾
	10	.38	2004 Long-Term Incentive Compensation Plan (“2004 LTIP”) (incorporated by reference to the Corporation’s 2004 Notice of Annual Meeting of Stockholders and Proxy Statement, pages A-1 through A-20).⁽¹⁾
	10	.39	Form of Non-Qualified Stock Option Agreement pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.4 to the 2004 10-Q2).⁽¹⁾
	10	.40	Form of Restricted Stock Agreement pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.38 to the 2004 Form 10-K).⁽¹⁾
	10	.41	Form of Non-Qualified Stock Option Agreement pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.2 to the Corporation’s and the Trust’s Joint Current Report on Form 8-K filed February 13, 2006 (the “February 2006 Form 8-K”)).⁽¹⁾
	10	.42	Form of Restricted Stock Agreement pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.1 to the February 2006 Form 8-K).⁽¹⁾
	10	.43	Starwood Hotels & Resorts Worldwide, Inc. 2005 Annual Incentive Plan for Certain Executives (incorporated by reference to Appendix A to the Corporation’s 2005 Proxy Statement).⁽¹⁾
	10	.44	Starwood Hotels & Resorts Worldwide, Inc. Annual Incentive Plan, dated as of November 3, 2005 (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005 (the “2005 Form 10-Q3”)).⁽¹⁾
	10	.45	Starwood Hotels & Resorts Worldwide, Inc. Deferred Compensation Plan, effective as of January 1, 2001 (incorporated by reference to Exhibit 10.1 to the 2001 Form 10-Q2).⁽¹⁾
	10	.46	Amendment, dated as of November 3, 2005, to the Deferred Compensation Plan (incorporated by reference to Exhibit 10.2 to the 2005 Form 10-Q3).⁽¹⁾
	10	.47	Form of Indemnification Agreement between the Corporation, the Trust and each of its Directors/Trustees and executive officers (incorporated by reference to Exhibit 10.10 to the 2003 Form 10-K).⁽¹⁾
	10	.48	Registration Rights Agreement, dated May 16, 2003, among the Corporation, the Guarantor and the Initial Purchasers (incorporated by reference to Exhibit 4.10 to the Form S-3).
	10	.49	Exchange Rights Agreement, dated as of January 1, 1995, among the Trust, the Corporation, Realty Partnership, Operating Partnership and the Starwood Partners (incorporated by reference to Exhibit 2B to the Trust’s and the Corporation’s Joint Current Report on Form 8-K dated January 31, 1995 (the “Formation Form 8-K”)).
	10	.50	Registration Rights Agreement, dated as of January 1, 1995, among the Trust, the Corporation and Starwood Capital (incorporated by reference to Exhibit 2C to the Formation Form 8-K).
	10	.51	Exchange Rights Agreement, dated as of June 3, 1996, among the Trust, the Corporation, Realty Partnership, Operating Partnership, Philadelphia HIR Limited Partnership and Philadelphia HSR Limited Partnership (incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1996 (the “1996 Form 10-Q2”)).
	10	.52	Registration Rights Agreement, dated as of June 3, 1996, among the Trust, the Corporation and Philadelphia HSR Limited Partnership (incorporated by reference to Exhibit 10.2 to the 1996 Form 10-Q2).


Exhibit
Number			Description of Exhibit

	10	.53	Units Exchange Rights Agreement, dated as of February 14, 1997, by and among, inter alia, the Trust, the Corporation, Realty Partnership, Operating Partnership and the Starwood Partners (incorporated by reference to Exhibit 10.34 to the 1997 Form 10-K).
	10	.54	Class A Exchange Rights Agreement, dated as of February 14, 1997, by and among, inter alia, the Trust, the Corporation, Operating Partnership and the Starwood Partners (incorporated by reference to Exhibit 10.35 to the 1997 Form 10-K).
	10	.55	Exchange Rights Agreement, dated as of January 2, 1998, among, inter alia, the Trust, Realty Partnership and Woodstar (incorporated by reference to Exhibit 10.50 to the 1997 Form 10-K).
	10	.56	Amendment to Exchange Rights Agreement (Class A Realty Partnership Units), dated as of October 10, 2002, among the Trust, Realty Partnership and certain limited partners of the Realty Partnership (incorporated by reference to Exhibit 10.53 to the 2002 Form 10-K).
	10	.57	Amendment to Exchange Rights Agreement, dated as of December 17, 2003 for the Class A Realty Partnership Units (incorporated by reference to Exhibit 10.67 to the 2003 Form 10-K).
	10	.58	Exchange Rights Agreement, dated as of January 2, 1998, among, inter alia, the Corporation, Operating Partnership and Woodstar (incorporated by reference to Exhibit 10.51 to the 1997 Form 10-K).
	10	.59	Amendment to Exchange Rights Agreement (Class B Operating Partnership Units), dated as of October 10, 2002, among the Corporation, Operating Partnership and certain limited partners of the Operating Partnership (incorporated by reference to Exhibit 10.54 to the 2002 form 10-K).
	10	.60	Employment Agreement, dated March 25, 1998, between Theodore Darnall and the Corporation (incorporated by reference to Exhibit 10.61 to the 2002 Form 10-K).⁽¹⁾
	10	.61	Severance Agreement, dated December 1999, between the Corporation and Theodore Darnall (incorporated by reference to Exhibit 10.55 to the 2002 Form 10-K).⁽¹⁾
	10	.62	Employment Agreement, dated as of November 13, 2003, between the Corporation and Vasant Prabhu (incorporated by reference to Exhibit 10.68 to the 2003 10-K).⁽¹⁾
	10	.63	Employment Agreement, dated as of September 20, 2004, between the Corporation and Steven J. Heyer (incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Current Report on Form 8-K filed with the SEC on September 24, 2004).⁽¹⁾
	10	.64	Amendment, dated as of May 4, 2005, to Employment Agreement between the Corporation and Steve J. Heyer (incorporated by reference to Exhibit 10.1 to the Corporation’s and Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005).⁽¹⁾
	10	.65	Form of Non-Qualified Stock Option Agreement between the Corporation and Steven J. Heyer pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.70 to the 2004 Form 10-K).⁽¹⁾
	10	.66	Form of Restricted Stock Unit Agreement between the Corporation and Steven J. Heyer pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.71 to the 2004 Form 10-K).⁽¹⁾
	10	.67	Employment Agreement, dated as of November 13, 2003, between the Corporation and Kenneth Siegel (incorporated by reference to Exhibit 10.57 to the Corporation’s and Trust’s Joint Annual Report on Form 10-K for the fiscal year ended December 31, 2000 (the “2000 Form 10-K”)).⁽¹⁾
	10	.68	Form of Severance Agreement, dated as of September 26, 2000, between the Corporation and Kenneth S. Siegel (incorporated by reference to Exhibit 10.58 to the 2000 Form 10-K).⁽¹⁾
	10	.69	Letter Agreement, dated July 22, 2004 between the Corporation and Kenneth Siegel (incorporated by reference to Exhibit 10.73 to the 2004 Form 10-K).⁽¹⁾
	10	.70	Employment Agreement, dated December 27, 1996, between Starwood Vacation Ownership and Raymond Gellein (incorporated by reference to Exhibit 10.1 to Vistana Inc.’s Registration Statement on Form S-1 filed with the SEC on February 27, 1997).⁽¹⁾


Exhibit
Number			Description of Exhibit

	10	.71	Amendment Number 1 and Amendment Number 2 to the Employment Agreement between Starwood Vacation Ownership and Raymond Gellein (incorporated by reference to Exhibits 10.1(a) and 10.1(b) to Vistana Inc.’s Annual Report on Form 10-K for the fiscal year ended December 31, 1998).⁽¹⁾
	10	.72	Severance Agreement, dated October 1, 2003, between the Corporation and Raymond Gellein.⁽¹⁾⁽²⁾
	12	.1	Calculation of Ratio of Earnings to Total Fixed Charges. ⁽²⁾
	21	.1	Subsidiaries of the Registrants.⁽²⁾
	23	.1	Consent of Ernst & Young LLP.⁽²⁾
	31	.1	Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Executive Officer — Corporation.⁽²⁾
	31	.2	Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Financial Officer — Corporation.⁽²⁾
	31	.3	Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Executive Officer — Trust. ⁽²⁾
	31	.4	Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Financial and Accounting Officer — Trust.⁽²⁾
	32	.1	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief Executive Officer — Corporation.⁽²⁾
	32	.2	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief Financial Officer — Corporation.⁽²⁾
	32	.3	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief Executive Officer — Trust.⁽²⁾
	32	.4	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief Financial and Accounting Officer — Trust.⁽²⁾


(1)	Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to Item 14(c) of Form 10-K.

(2)	Filed herewith.

EX-10.72 2 p71921exv10w72.txt EX-10.72 Exhibit 10.72 SEVERANCE AGREEMENT THIS AGREEMENT, dated October 1, 2003 (the "Effective Date"), is made by and between Starwood Hotels and Resorts Worldwide, Inc., a Maryland corporation (the "Company"), and Rip Gellein (the "Executive"). WHEREAS, the Executive is employed by the Company as Chairman and CEO, Starwood Vacation Ownership; and WHEREAS, the Company considers it essential to the best interests of its stockholders to foster the continued employment of key management personnel; and WHEREAS, the Board recognizes that, as is the case with many publicly held corporations, the possibility of a Change in Control exists and that such possibility, and the uncertainty and questions which it may raise among management, may result in the departure or distraction of senior management personnel to the detriment of the Company and its stockholders; and WHEREAS, the Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the Company's senior management, including the Executive, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from the possibility of a Change in Control. NOW, THEREFORE, the Company and the Executive hereby agree as follows: 1. Defined Terms. The definitions of capitalized terms used in this Agreement are provided in the last Section hereof. 2. Term of Agreement. The Term of this Agreement shall commence on the Effective Date and shall continue in effect through the third anniversary of the Effective Date; provided, however, that on each anniversary of the Effective Date during the Term of this Agreement, the Term shall automatically be extended for one additional year unless, not later than 90 days prior to any such anniversary, the Company or the Executive shall have given notice not to extend the Term; and further provided, however, that if a Change in Control or a Potential Change in Control shall have occurred during the Term, the Term shall expire no earlier than twenty-four (24) months beyond the month in which such Change in Control or a Potential Change in Control occurred. 3. Company's Covenants Summarized. In order to induce the Executive to remain in the employ of the Company and in consideration of the Executive's covenants set forth in Section 4 hereof, the Company agrees, under the conditions described herein, to pay the Executive the Severance Payments and the other payments and benefits described herein. Except as provided in Section 10 hereof, no Severance Payments shall be payable under this Agreement unless during the Term there shall have been (or, under the terms of the second sentence of Section 6 hereof, there shall be deemed to have been) a termination of the Executive's employment with the Company following a Change in Control. This Agreement shall not be construed as creating an express or implied contract of employment and, except as otherwise agreed in writing between the Executive and the Company, the Executive shall not have any right to be retained in the employ of the Company. 4. The Executive's Covenants. The Executive agrees that, subject to the terms and conditions of this Agreement, in the event a Potential Change in Control occurs during the Term, the Executive will remain in the employ of the Company until the earliest of (i) a date which is six (6) months from the date of such Potential Change of Control, (ii) the date of a Change in Control, (iii) the date of termination by the Executive of the Executive's employment for Good Reason or by reason of death, Disability or Retirement, or (iv) the termination by the Company of the Executive's employment for any reason. 5. Compensation Other Than Severance Payments. a. Payment of Salary During Disability. Following a Change in Control and during the Term, during any period that the Executive is unable to perform the Executive's full-time duties with the Company as a result of incapacity due to physical or mental illness, the Company shall pay to the Executive the full salary to which the Executive is entitled at the rate in effect at the commencement of any such period, together with all compensation and benefits payable to the Executive under the terms of any compensation or benefit plan, program or arrangement maintained by the Company during such period, until the Executive's employment is terminated by the Company for Disability. b. Accrued salary. If the Executive's employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay to the Executive such Executive's full salary through the Date of Termination at the rate in effect immediately prior to the Date of Termination or, if higher, the rate in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, together with all compensation and benefits payable to the Executive through the Date of Termination under the terms of the Company's compensation and benefit plans, programs or arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, 2 as in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason. c. Post-Termination Benefits. If the Executive's employment shall be terminated for any reason following a Change in Control and during the Term, the Company shall pay to the Executive the Executive's normal post-termination compensation and benefits as such payments become due. Such post-termination compensation and benefits shall be determined under, and paid in accordance with, the Company's retirement, insurance and other compensation or benefit plans, programs and arrangements as in effect immediately prior to the Date of Termination or, if more favorable to the Executive, as in effect immediately prior to the occurrence of the first event or circumstance constituting Good Reason. 6. Severance Payments. a. If the Executive's employment is terminated following a Change in Control and during the Term, other than (A) by the Company for Cause, (B) by reason of death or Disability, or (C) by the Executive without Good Reason, then, in any such case, the Company shall pay the Executive the amounts, and provide the Executive the benefits, described in this Section 6 ("Severance Payments") and Section 7, in addition to any payments and benefits to which the Executive is entitled under Section 5 hereof. For purposes of this Agreement, the Executive's employment shall be deemed to have been terminated following a Change in Control by the Company without Cause or by the Executive with Good Reason, if (i) the Executive's employment is terminated by the Company without Cause prior to a Change in Control (whether or not a Change in Control ever occurs) and such termination was at the request or direction of a Person who has entered into an agreement with the Company the consummation of which would constitute a Change in Control (an "Acquiring Person"), (ii) the Executive terminates his employment for Good Reason prior to a Change in Control (whether or not a Change in Control ever occurs) and the circumstance or event which constitutes Good Reason occurs at the request or direction of an Acquiring Person, or (iii) the Executive's employment is terminated by the Company without Cause or by the Executive for Good Reason and such termination or the circumstance or event which constitutes Good Reason is otherwise in connection with or in anticipation of a Change in Control (whether or not a Change in Control ever occurs). For purposes of any determination regarding the applicability of the immediately preceding sentence, any position taken by the Executive shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that such position is not correct. 3 (1) Lump Sum Payment. In lieu of any further salary payments to the Executive for periods subsequent to the Date of Termination and in lieu of any severance benefit otherwise payable to the Executive, the Company shall pay to the Executive a lump sum severance payment, in cash, equal to two times the sum of (i) the Executive's base salary as in effect immediately prior to the Date of Termination or, if higher, in effect immediately prior to the first occurrence of an event or circumstance constituting Good Reason, and (ii) the average annual bonuses earned by the Executive in the three fiscal years ending immediately prior to the fiscal year in which occurs the Date of Termination or, if higher, immediately prior to the fiscal year in which occurs the first event or circumstance constituting Good Reason. For purposes of the preceding sentence, in determining any bonus amount for any fiscal year, bonuses paid with respect to any year in which employment of the Executive commenced shall be annualized based on the number of days employed by the Company during such year. (2) Continuation of Welfare Benefits. For the twelve (12) month period immediately following the Date of Termination, the Company shall arrange to provide the Executive and his dependents life, disability, accident and health insurance benefits and other benefits and perquisites (including employee stay rates) substantially similar to those provided to the Executive and his dependents immediately prior to the Date of Termination or, if more favorable to the Executive, those provided to the Executive and his dependents immediately prior to the first occurrence of an event or circumstance constituting Good Reason, at no greater cost to the Executive than the cost to the Executive immediately prior to such date or occurrence. Benefits otherwise receivable by the Executive pursuant to this Section 6(a)(2) shall be reduced to the extent benefits of the same type are received by the Executive from another employer during the twelve (12) month period following the Executive's termination of employment; provided, however, that the Company shall reimburse the Executive for the excess, if any, of the cost of such benefits to the Executive over such cost immediately prior to the Date of Termination or, if more favorable to the Executive, the first occurrence of an event or circumstance constituting Good Reason. (3) Incentive Compensation. Notwithstanding any provision of any annual or long-term incentive plan to the contrary, the Company shall pay to the Executive a lump sum amount, in cash, equal to the sum of (i) any unpaid incentive compensation which has been allocated or awarded to the Executive for a completed fiscal year or other measuring period preceding the Date of Termination under any such plan and which, as 4 of the Date of Termination, is contingent only upon the continued employment of the Executive to a subsequent date, and (ii) the aggregate value of all contingent incentive compensation awards allocated or awarded to the Executive for all then uncompleted periods under any such plan that the Executive would have earned on the last day of the performance award period, assuming the achievement, at the target level, of the individual and corporate performance goals established with respect to such award. Awards for uncompleted periods shall be prorated based upon the number of days the Executive is employed by the Company during such year. (4) Accelerated Vesting of Stock Options. All stock options and restricted stock held by the Executive under any stock option or incentive plan maintained by the Company (including the Company's 1995 and 1999 Long-Term Incentive Plans) shall immediately vest and become exercisable as of the Date of Termination, to be exercised in accordance with the terms of the applicable plan. (5) Outplacement Services. The Company shall provide the Executive with outplacement services suitable to the Executive's position for a period of two (2) years or, if earlier, until the first acceptance by the Executive of an offer of employment. The cost of such outplacement services shall not exceed twenty percent (20%) of the Executive's base salary. (6) Deferred Compensation. The Company shall pay the Executive a lump sum payment of any of the Executive's deferred compensation. (7) 401(k) Contributions. All unvested 40l(k) contributions in the Executive's 401(k) account shall immediately vest or the Company shall pay the Executive an amount equal to any such unvested amounts that are forfeited by reason of the Executive's termination of employment. (8) Loans. The Company shall forgive in full any home, relocation and other loans from the Company to the Executive, identified on Schedule A hereto, that are outstanding as of the Date of Termination and execute and record any investments and documents necessary or desirable to evidence the satisfaction in full of such loans and the release of any lien securing such loan. In addition, the Company shall pay to Executive an amount required, in the good faith estimate of Executive's tax advisor, to permit Executive to pay any income tax incurred by Executive as a result of 5 such loan forgiveness and the payment of such additional amounts by the Company, 7. 280G Cap. a. Notwithstanding any other provisions of this Agreement, in the event that any payment or benefit received or to be received by the Executive in connection with a Change in Control or the termination of the Executive's employment (whether pursuant to the terms of this Agreement or any other plan, arrangement or agreement with the Company, any Person whose actions result in a Change in Control or any Person affiliated with the Company or such Person) (all such payments and benefits, including the Severance Payments, being hereinafter called "Total Payments") would not be deductible (in whole or part), by the Company, an affiliate or Person making such payment or providing such benefit as a result of section 280G of the Code, then, to the extent necessary to make such portion of the Total Payments deductible (and after taking into account any reduction in the Total Payments provided by reason of section 280G of the Code in such other plan, arrangement or agreement), the cash Severance Payments shall first be reduced (if necessary, to zero), and all other Severance Payments shall thereafter be reduced (if necessary, to zero); provided, however, that the Executive may elect to have the noncash Severance Payments reduced (or eliminated) prior to any reduction of the cash Severance Payments. b. For purposes of this limitation, (i) no portion of the Total Payments the receipt or enjoyment of which the Executive shall have waived at such time and in such manner as not to constitute a "payment" within the meaning of section 280G(b) of the Code shall be taken into account, (ii) no portion of the Total Payments shall be taken into account which, in the opinion of tax counsel ("Tax Counsel") reasonably acceptable to the Executive and selected by the accounting firm which was, immediately prior to the Change in Control, the Company's independent auditor (the "Auditor"), does not constitute a "parachute payment" within the meaning of section 280G(b)(2) of the Code, including by reason of section 280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be reduced only to the extent necessary so that the Total Payments (other than those referred to in clauses (i) or (ii)) in their entirety constitute reasonable compensation for services actually rendered within the meaning of section 280G(b)(4)(B) of the Code or are otherwise not subject to disallowance as deductions by reason of section 280G of the Code, in the opinion of Tax Counsel, and (iv) the value of any noncash benefit or any deferred payment or benefit included in the Total Payments shall be determined by the Auditor in accordance with the principles of sections 280G(d)(3) and (4) of the Code. 6 c. If it is established pursuant to a final determination of a court or an Internal Revenue Service proceeding that, notwithstanding the good faith of the Executive and the Company in applying the terms of this Section 7(c), the Total Payments paid to or for the Executive's benefit are in an amount that would result in any portion of such Total Payments being subject to the Excise Tax, then, if such repayment would result in (i) no portion of the remaining Total Payments being subject to the Excise Tax and (ii) a dollar-for-dollar reduction in the Executive's taxable income and wages for purposes of federal, state and local income and employment taxes, the Executive shall have an obligation to pay the Company upon demand an amount equal to the sum of (i) the excess of the Total Payments paid to or for the Executive's benefit over the Total Payments that could have been paid to or for the Executive's benefit without any portion of such Total Payments being subject to the Excise Tax; and (ii) interest on the amount set forth in clause (i) of this sentence at the rate provided in section 1274(b)(2)(B) of the Code from the date of the Executive's receipt of such excess until the date of such payment. 8. Termination Procedures and Compensation During Dispute. a. Notice of Termination. After a Change in Control and during the Term, any purported termination of the Executive's employment (other than by reason of death) shall be communicated by written Notice of Termination from one party hereto to the other party hereto in accordance with Section 12 hereof. For purposes of this Agreement, a "Notice of Termination" shall mean a notice which shall indicate the specific termination provision in this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive's employment under the provision so indicated. Further, a Notice of Termination for Cause is required to include a copy of a resolution duly adopted by the affirmative vote of not less than three-quarters (3/4) of the entire membership of the Board at a meeting of the Board which was called and held for the purpose of considering such termination (after reasonable notice to the Executive and an opportunity for the Executive, together with the Executive's counsel, to be heard before the Board) finding that, in the good faith opinion of the Board, the Executive was guilty of conduct set forth in clause (i) or (ii) of the definition of Cause herein, and specifying the particulars thereof in detail. b. Date of Termination. "Date of Termination," with respect to any purported termination of the Executive's employment after a Change in Control and during the Term, shall mean (i) if the Executive's employment is terminated for Disability, thirty (30) days after Notice of Termination is given (provided that the Executive shall not have returned to the full-time performance of the Executive's duties during such thirty (30) day period), and (ii) if the Executive's employment is 7 terminated for any other reason, the date specified in the Notice of Termination (which, in the case of a termination by the Company, shall not be less than thirty (30) days (except in the case of a termination for Cause) and, in the case of a termination by the Executive, shall not be less than fifteen (15) days nor more than sixty (60) days, respectively, from the date such Notice of Termination is given). c. Dispute Concerning Termination. If within fifteen (15) days after any Notice of Termination is given, or, if later, prior to the Date of Termination (as determined without regard to this Section 8 (c)), the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be extended until the earlier of (i) the date on which the Term ends or (ii) the date on which the dispute is finally resolved, either by mutual written agreement of the parties or by a final judgment, order or decree of an arbitrator or a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); provided, however, that the Date of Termination shall be extended by a notice of dispute given by the Executive only if such notice is given in good faith and the Executive pursues the resolution of such dispute with reasonable diligence. d. Compensation During Dispute. If a purported termination occurs following a Change in Control and during the Term and the Date of Termination is extended in accordance with Section 8(c) hereof, the Company shall continue to pay the Executive the full compensation in effect when the notice giving rise to the dispute was given (including, but not limited to, salary) and continue the Executive as a participant in all compensation, benefit and insurance plans in which the Executive was participating when the notice giving rise to the dispute was given, until the Date of Termination, as determined in accordance with Section 8(c) hereof. Amounts paid under this Section 8(d) are in addition to all other amounts due under this Agreement (other than those due under Section 5(b) hereof) and shall not be offset against or reduce any other amounts due under this Agreement. 9. No Mitigation. The Company agrees that, if the Executive's employment with the Company terminates during the Term, the Executive is not required to seek other employment or to attempt in any way to reduce any amounts payable to the Executive by the Company pursuant to Section 6 hereof or Section 8(d) hereof. Further, the amount of any payment or benefit provided for in this Agreement (other than Section 6(a)(2) hereof) shall not be reduced by any compensation earned by the Executive as the result of employment by another employer, by retirement benefits, by offset against any amount claimed to be owed by the Executive to the Company, or otherwise. 8 10. Successors: Binding Agreement. a. In addition to any obligations imposed by law upon any successor to the Company, the Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle the Executive to compensation from the Company in the same amount and on the same terms as the Executive would be entitled to hereunder if the Executive were to terminate the Executive's employment for Good Reason after a Change in Control, except that, for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. b. This Agreement shall inure to the benefit of and be enforceable by the Executive's personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If the Executive shall die while any amount would still be payable to the Executive hereunder (other than amounts which, by their terms, terminate upon the death of the Executive) if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to the executors, personal representatives or administrators of the Executive's estate. 11. Indemnification. The Company shall indemnify and hold Executive harmless for acts and omissions in his capacity as an officer, director or employee of the Company to the maximum extent permitted under applicable law. The Company shall maintain a Director's and Officer's Liability Insurance Policy, which shall provide liability coverage for Executive's benefit, and the Executive shall remain covered under such policy for a period of at least six (6) years following the earlier of termination of employment or the occurrence of a Change in Control. 12. Notices. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed, if to the Executive, to the address inserted below the Executive's signature on the final page hereof and, if to the Company, to the address set forth below, or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon actual receipt: 9 To the Company: Starwood Hotels and Resorts Worldwide, Inc. 1111 Westchester Avenue White Plains, NY 10604 Attention: General Counsel 13. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing and signed by the Executive and such officer as may be specifically designated by the Board. No waiver by either party hereto at any time of any breach by the other party hereto of, or of any lack of compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. This Agreement supersedes any other agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof which have been made by either party; provided, however, that this Agreement shall supersede any agreement setting forth the terms and conditions of the Executive's employment with the Company only in the event that the Executive's employment with the Company is terminated on or following a Change in Control, by the Company other than for Cause or by the Executive other than for Good Reason. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the State of New York. All references to sections of the Exchange Act or the Code shall be deemed also to refer to any successor provisions to such sections. Any payments provided for hereunder shall be paid net of any applicable withholding required under federal, state or local law and any additional withholding to which the Executive has agreed. The obligations of the Company and the Executive under this Agreement which by their nature may require either partial or total performance after the expiration of the Term (including, without limitation, those under Sections 6, 7, 8, and 9 hereof) shall survive such expiration. 14. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument. 15. Settlement of Disputes; Arbitration. a. All claims by the Executive for benefits under this Agreement shall be directed to and determined by the Board and shall be in writing. Any denial by the Board of a claim for benefits under this Agreement shall be delivered to the 10 Executive in writing and shall set forth the specific reasons for the denial and the specific provisions of this Agreement relied upon. The Board shall afford a reasonable opportunity to the Executive for a review of the decision denying a claim and shall further allow the Executive to appeal to the Board a decision of the Board within sixty (60) days after notification by the Board that the Executive's claim has been denied. b. Any further dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in New York, in accordance with the rules of the American Arbitration Association then in effect; provided, however, that the evidentiary standards set forth in this Agreement shall apply. Judgment may be entered on the arbitrator's award in any court having jurisdiction. Notwithstanding any provision of this Agreement to the contrary, the Executive shall be entitled to seek specific performance of the Executive's right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. 16. Definitions. For purposes of this Agreement, the following terms shall have the meanings indicated below: a. "Affiliate" shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act. b. "Auditor" shall have the meaning set forth in Section 7 hereof. c. "Base Amount" shall have the meaning set forth in section 280G(b)(3) of the Code. d. "Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the Exchange Act. e. "Board" shall mean the Board of Directors of the Company. f. "Cause" for termination by the Company of the Executive's employment shall mean (i) the willful and continued failure by the Executive to substantially perform the Executive's duties with the Company after a written demand for substantial performance is delivered to the Executive by the Board, which demand specifically identifies the manner in which the Board believes that the Executive has not substantially performed the Executive's duties, and Executive has not cured any such failure that is capable of being cured in all material respects within ten (10) days of receiving such written demand, or (ii) the willful engaging by the Executive in conduct which is demonstrably and materially injurious to the 11 Company or its subsidiaries, monetarily or otherwise. For purposes of clauses (i) and (ii) of this definition, (x) no act, or failure to act, on the Executive's part shall be deemed "willful" unless done, or omitted to be done, by the Executive not in good faith and without reasonable belief that the Executive's act, or failure to act, was in the best interest of the Company and (y) in the event of a dispute concerning the application of this provision, no claim by the Company that Cause exists shall be given effect unless the Company establishes to the Board by clear and convincing evidence that Cause exists. g. A "Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (1) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates) representing 25% or more of the combined voting power of the Company's then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (i) of paragraph (3) below; or (2) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the date hereof, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Company's stockholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the date hereof or whose appointment, election or nomination for election was previously so approved or recommended; or (3) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof), in combination with the ownership of any trustee or other fiduciary holding securities under an employee benefit plan of the Company or any subsidiary of the Company, at least 70% of the 12 combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation and in proportion to their relative voting power immediately prior to such merger or consolidation, or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 25% or more of the combined voting power of the Company's then outstanding securities; or (4) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company's assets, other than a sale or disposition by the Company of all or substantially all of the Company's assets to an entity, at least 70% of the combined voting power of the voting securities of which are owned by stockholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale. Notwithstanding the foregoing, a "Change in Control" shall not be deemed to have occurred by virtue of the consummation of any transaction or series of integrated transactions immediately following which the record holders of the common stock of the Company immediately prior to such transaction or series of transactions continue to have substantially the same proportionate ownership in an entity which owns all or substantially all of the assets of the Company immediately following such transaction or series of transactions. h. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time. i. "Company" shall mean Starwood Hotels and Resorts Worldwide, Inc., and, except in determining under Section 17(g) hereof whether or not any Change in Control of the Company has occurred, shall include any successor to its business and/or assets which assumes and agrees to perform this Agreement by operation of law, or otherwise. j. "Date of Termination" shall have the meaning set forth in Section 8 hereof. k. "Disability" shall be deemed the reason for the termination by the Company of the Executive's employment, if, as a result of the Executive's incapacity due to physical or mental illness, the Executive shall have been absent from the full-time performance of the Executive's duties with the Company for a period of six (6) consecutive months, the Company shall have given the Executive a 13 Notice of Termination for Disability, and, within thirty (30) days after such Notice of Termination is given, the Executive shall not have returned to the full-time performance of the Executive's duties. l. "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from time to time. m. "Excise Tax" shall mean any excise tax imposed under section 4999 of the Code. n. "Executive" shall mean the individual named in the first paragraph of this Agreement. o. "Good Reason" for termination by the Executive of the Executive's employment shall mean the occurrence (without the Executive's express written consent) after any Change in Control, or prior to a Change in Control under the circumstances described in clauses (ii) and (iii) of the second sentence of Section 6(a) hereof (treating all references in paragraphs (1) through (7) below to a "Change in Control" as references to a "Potential Change in Control"), of any one of the following acts by the Company, or failures by the Company to act, unless, in the case of any act or failure to act described in paragraph (1), (5), (6) or (7) below, such act or failure to act is corrected prior to the Date of Termination specified in the Notice of Termination given in respect thereof: (1) the assignment to the Executive of any duties inconsistent with the Executive's status as a senior executive officer of the Company or a substantial adverse alteration in the nature or status of the Executive's responsibilities from those in effect immediately prior to the Change in Control; (2) a reduction by the Company in the Executive's annual base salary as in effect on the date hereof or as the same may be increased from time to time; (3) the relocation of the Executive's principal place of employment to a location more than 35 miles from the Executive's principal place of employment immediately prior to the Change in Control or the Company's requiring the Executive to be based anywhere other than such principal place of employment (or permitted relocation thereof) except for required travel on the Company's business to an extent substantially consistent with the Executive's present business travel obligations; 14 (4) the failure by the Company to pay to the Executive any portion of the Executive's current compensation, or to pay to the Executive any portion of an installment of deferred compensation under any deferred compensation program of the Company, within seven (7) days of the date such compensation is due; (5) the failure by the Company to continue in effect any compensation plan in which the Executive participates immediately prior to the Change in Control which is material to the Executive's total compensation, including but not limited to the Company's stock option, bonus and other plans or any substitute plans adopted prior to the Change in Control, unless an equitable arrangement (embodied in an ongoing substitute or alternative plan) has been made with respect to such plan, or the failure by the Company to continue the Executive's participation therein (or in such substitute or alternative plan) on a basis not materially less favorable, both in terms of the amount or timing of payment of benefits provided and the level of the Executive's participation relative to other participants, as existed immediately prior to the Change in Control; (6) the failure by the Company to continue to provide the Executive with benefits substantially similar to those enjoyed by the Executive under any of the Company's pension, savings, life insurance, medical, health and accident, or disability plans in which the Executive was participating immediately prior to the Change in Control, the taking of any other action by the Company which would directly or indirectly materially reduce any of such benefits or deprive the Executive of any material fringe benefit enjoyed by the Executive at the time of the Change in Control, or the failure by the Company to provide the Executive with the number of paid vacation days to which the Executive is entitled on the basis of years of service with the Company in accordance with the Company's normal vacation policy or any employment agreement in effect at the time of the Change in Control; or (7) any purported termination of the Executive's employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 8(a) hereof; for purposes of this Agreement, no such purported termination shall be effective. The Executive's right to terminate the Executive's employment for Good Reason shall not be affected by the Executive's incapacity due to physical or mental illness. The Executive's continued employment shall not constitute consent 15 to, or a waiver of rights with respect to, any act or failure to act constituting Good Reason hereunder. For purposes of any determination regarding the existence of Good Reason, any claim by the Executive that Good Reason exists shall be presumed to be correct unless the Company establishes to the Board by clear and convincing evidence that Good Reason does not exist. p. "Notice of Termination" shall have the meaning set forth in Section 8 hereof. q. "Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company. r. "Potential Change in Control" shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred: (1) the Company enters into an agreement, the consummation of which would result in the occurrence of a Change in Control; (2) the Company or any Person publicly announces an intention to take or to consider taking actions which, if consummated, would constitute a Change in Control; (3) any Person becomes the Beneficial Owner, directly or indirectly, of securities of the Company representing 15% or more of either the then outstanding shares of common stock of the Company or the combined voting power of the Company's then outstanding securities (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its affiliates); or (4) the Board adopts a resolution to the effect that, for purposes of this Agreement, a Potential Change in Control has occurred. 16 s. "Retirement" shall be deemed the reason for the termination by the Executive of the Executive's employment if such employment is terminated in accordance with the Company's retirement policy, including early retirement, generally applicable to its salaried employees. t. "Severance Payments" shall have the meaning set forth in Section 6 hereof. 17 u. "Tax Counsel" shall have the meaning set forth in Section 7 hereof. v. "Term" shall mean the period of time described in Section 2 hereof (including any extension, continuation or termination described therein). w. "Total Payments" shall mean those payments so described in Section 7 hereof. STARWOOD HOTELS AND RESORTS WORLDWIDE, INC. By: /s/ D. Norton ------------------------------------ Name: D. Norton Title: EVP, Human Resources Dated: October 1, 2003 EXECUTIVE /s/ Rip Gellein ---------------------------------------- Rip Gellein Dated: 10/1, 2003 Address: ---------------------------------------- ---------------------------------------- ---------------------------------------- (Please print carefully) 18 EX-12.1 3 p71921exv12w1.htm EX-12.1 exv12w1

EXHIBIT 12.1
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CALCULATION OF RATIO OF EARNINGS TO TOTAL FIXED CHARGES
(Dollars in Millions)


	Year Ended December 31,
	2005		2004			2003			2002		2001

Earnings:
Income (loss) from continuing operations		423		369			105			251		147
Add:
Adjustment for distributions in excess of equity earnings and losses (a)		19		(9	)		37			3		(13	)
Provision for income taxes		219		43			(113	)		2		42
Minority equity in net income (loss)		—		—			(3	)		2		3
Amortization of interest capitalized		1		1			1			1		1

		662		404			27			259		180


Fixed Charges:
Interest and other financial charges		283		275			305			356		403
Interest factor attributable to rentals (b)		30		28			26			26		25

		313		303			331			382		428



Earnings, as adjusted, from continuing operations		975		707			358			641		608


Fixed Charges:
Fixed charges above		313		303			331			382		428
Interest capitalized		25		18			14			10		11

Total fixed charges		338		321			345			392		439


Ratio:
Earnings, as adjusted, from continuing operations to fixed charges		2.88		2.20			1.04			1.64		1.38

Notes:

(a) The adjustment represents distributions in excess of undistributed earnings and losses of companies in which at least 20% but less than 50% equity is owned.

(b) The interest factor attributable to rentals consists of one-third of rental charges, which is deemed by Starwood to be representative of the interest factor inherent in rents.

EX-21.1 4 p71921exv21w1.htm EX-21.1 exv21w1

EXHIBIT 21.1

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
AND STARWOOD HOTELS & RESORTS

SUBSIDIARIES OF THE REGISTRANTS


				Wholly Owned Direct or Indirect
				Subsidiaries Carrying on the Same Line
				of Business as Named Subsidiary
				Operating	Operating
	Jurisdiction of			in the	in Foreign
Name	Organization	Parent	Line of Business	United States	Countries
Starwood Hotels & Resorts Worldwide, Inc. (“SH&RW”)	Maryland	—	Lodging	185	81
SLC Operating Limited Partnership	Delaware	SH&RW	Lodging	0	0
Starwood Hotels & Resorts Holdings, Inc. (“SH&RH”)	Arizona	SH&RW	Lodging	1	0
Starwood Hotels & Resorts (“SH&R”)	Maryland	SH&RH	Lodging	12	1
SLT Realty Limited Partnership	Delaware	SH&R	Lodging	40	1
Sheraton Holding Corporation (“SHC”)	Nevada	SH&RW	—	9	1
The Sheraton Corporation (“SC”)	Delaware	SHC	Lodging	45	4
Sheraton International, Inc. (“SII”)	Delaware	SC	Lodging	7	68
Sheraton Overseas Management Corporation	Delaware	SII	—	0	0
CIGA S.p.A.	Italy	SII	Lodging	0	15


NOTE:		The names of some consolidated wholly owned subsidiaries of the Corporation carrying on the same lines of business as other
subsidiaries named above have been omitted, the number of such omitted subsidiaries operating in the United States and in foreign countries being shown. Also omitted from the list are the names of other subsidiaries that, if considered in the aggregate as a single subsidiary, would not constitute a significant subsidiary.

EXHIBIT 21.1 (Continued)

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
AND STARWOOD HOTELS & RESORTS

ASSUMED NAMES REPORT


Arizona
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Four Points by Sheraton Tucson University Plaza
Starwood Hotels & Resorts Worldwide, Inc.		The Phoenician
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Tucson Hotel & Suites


California
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		The Westin San Francisco Airport
Starwood Hotels & Resorts Worldwide, Inc.		Clarion Hotel — San Francisco Airport
Starwood Hotels & Resorts Worldwide, Inc.		Westin Horton Plaza
Starwood Hotels & Resorts Worldwide, Inc.		W San Francisco
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Long Beach
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Los Angeles Airport
Starwood Hotels & Resorts Worldwide, Inc.		The Westin South Coast Plaza
Starwood Hotels & Resorts Worldwide, Inc.		W Los Angeles — Westwood
Starwood Hotels & Resorts Worldwide, Inc.		Westin Mission Hills Resort
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton San Diego Hotel & Marina
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Universal Hotel
Starwood Hotels & Resorts Worldwide, Inc.		St. Regis San Francisco


Colorado
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Four Points by Sheraton Denver Cherry Creek
Starwood Hotels & Resorts Worldwide, Inc.		St. Regis, Aspen
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Tabor Center


Connecticut
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Stamford Hotel


Florida
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Suites Tampa Airport
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Fort Lauderdale
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Key West All Suites Hotel
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Bal Harbour Beach Resort


Georgia
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Lenox Inn
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Midtown Atlanta Hotel @ Colony Square
Starwood Hotels & Resorts Worldwide, Inc.		Westin Atlanta North at Perimeter
Starwood Hotels & Resorts Worldwide, Inc.		Westin Peachtree Plaza
Starwood Hotels & Resorts Worldwide, Inc.		W Atlanta


Hawaii
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Maui


Illinois
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		The Tremont Chicago
Starwood Hotels & Resorts Worldwide, Inc.		W Chicago City Center
Starwood Hotels & Resorts Worldwide, Inc.		W Chicago Lakeshore


Indiana
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Indianapolis Hotel & Suites
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Indianapolis


Louisiana
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		W New Orleans
Starwood Hotels & Resorts Worldwide, Inc.		W New Orleans-French Quarter


Maine
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton South Portland Hotel


Massachusetts
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Colonial Hotel & Golf Club Boston North
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Boston
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Braintree Hotel
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Framingham Hotel
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Hyannis Hotel
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Inn Lexington
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Newton Hotel
Starwood Hotels & Resorts Worldwide, Inc.		Boston Park Plaza
Starwood Hotels & Resorts Worldwide, Inc.		Westin Waltham
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Needham


Minnesota
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Four Points by Sheraton Minneapolis


Nebraska
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Omaha Hotel


New Hampshire
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Nashua Hotel


New Jersey
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Edison Hotel Raritan Center
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Parsippany Hotel


New York
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		W New York — The Tuscany
Starwood Hotels & Resorts Worldwide, Inc.		W New York — The Court
Starwood Hotels & Resorts Worldwide, Inc.		W New York
Starwood Hotels & Resorts Worldwide, Inc.		W Times Square
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton New York Hotel & Towers
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Manhattan
Starwood Hotels & Resorts Worldwide, Inc.		The St. Regis


Ohio
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Westin Cincinnati


Oregon
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Days Inn City Center
Starwood Hotels & Resorts Worldwide, Inc.		Four Points by Sheraton Portland Downtown


Pennsylvania
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Caesars Cove Haven
Starwood Hotels & Resorts Worldwide, Inc.		Caesars Paradise Stream
Starwood Hotels & Resorts Worldwide, Inc.		Caesars Pocono Palace
Starwood Hotels & Resorts Worldwide, Inc.		Caesars Brookdale on the Lake
Starwood Hotels & Resorts Worldwide, Inc.		Four Points by Sheraton Philadelphia Airport
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Park Ridge Hotel & Conference Center
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Suites Philadelphia Airport


Rhode Island
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Providence Airport Hotel


Texas
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		The St Regis, Houston
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Galleria Houston
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Oaks


Washington
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Days Inn Town Center
Starwood Hotels & Resorts Worldwide, Inc.		Sixth Avenue Inn
Starwood Hotels & Resorts Worldwide, Inc.		W Seattle
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Seattle


Washington D.C.
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Capitol Hill Suites
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Grand
Starwood Hotels & Resorts Worldwide, Inc.		The Westin Embassy Row


Wisconsin
Entity Name		Assumed Name
Starwood Hotels & Resorts Worldwide, Inc.		Sheraton Milwaukee Brookfield Hotel

EX-23.1 5 p71921exv23w1.htm EX-23.1 exv23w1

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the Registration Statement (Form S-4 Nos. 333-101310 and 333-106887-01; Form S-3 Nos. 333-96715, 333-96715-01, 333-89310, 333-89130-76, 333-106888 and 333-106888-01; and Form S-8 Nos. 333-115926, 333-115926-01, 333-97469, 333-97469-01, 333-111384 and 333-111384-01) of Starwood Hotels & Resorts Worldwide, Inc. and Starwood Hotels & Resorts (the “Company”) and in the related Prospectuses of our reports dated March 2, 2006, with respect to the consolidated financial statements and schedules of the Company, Starwood Hotels & Resorts Worldwide, Inc. and Starwood Hotels & Resorts management’s assessment of the effectiveness of internal control over financial reporting, and the effectiveness of internal control over financial reporting of the Company, included in this Joint Annual Report (Form 10-K) for the year ended December 31, 2005.


	ERNST & YOUNG LLP

New York, New York
March 14, 2006

EX-31.1 6 p71921exv31w1.htm EX-31.1 exv31w1

Exhibit 31.1

CERTIFICATION PURSUANT TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Steven J. Heyer, certify that:

	1)		I have reviewed this annual report on Form 10-K of Starwood Hotels & Resorts Worldwide, Inc.;

	2)		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3)		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4)		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2006


/s/ Steven J. Heyer

Steven J. Heyer
Chief Executive Officer

EX-31.2 7 p71921exv31w2.htm EX-31.2 exv31w2

Exhibit 31.2

CERTIFICATION PURSUANT TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Vasant Prabhu, certify that:

	1)		I have reviewed this annual report on Form 10-K of Starwood Hotels & Resorts Worldwide, Inc.;

	2)		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3)		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4)		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2006


/s/ Vasant Prabhu
Vasant Prabhu Chief Financial Officer

EX-31.3 8 p71921exv31w3.htm EX-31.3 exv31w3

Exhibit 31.3

CERTIFICATION PURSUANT TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Steven J. Heyer, certify that:

	1)		I have reviewed this annual report on Form 10-K of Starwood Hotels & Resorts;

	2)		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3)		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4)		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 2, 2006


/s/ Steven J. Heyer
Steven J. Heyer Chief Executive Officer

EX-31.4 9 p71921exv31w4.htm EX-31.4 exv31w4

Exhibit 31.4

CERTIFICATION PURSUANT TO RULE 13a-14 UNDER THE SECURITIES EXCHANGE ACT OF 1934

I, Vasant Prabhu, certify that:

	1)		I have reviewed this annual report on Form 10-K of Starwood Hotels & Resorts;

	2)		Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

	3)		Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

	4)		The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

	(a)		Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

	(b)		Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

	(c)		Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)

	(a)		All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

	(b)		Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: March 3, 2006


/s/ Vasant Prabhu
Vasant Prabhu Chief Financial Officer

EX-32.1 10 p71921exv32w1.htm EX-32.1 exv32w1

Exhibit 32.1

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code

I, Steven J. Heyer, the Chief Executive Officer of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), certify that (i) the Form 10-K for the fiscal year ended December 31, 2005 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Starwood.



	/s/ Steven J. Heyer
	Steven J. Heyer
	Chief Executive Officer Starwood Hotels & Resorts Worldwide, Inc. March 2, 2006

EX-32.2 11 p71921exv32w2.htm EX-32.2 exv32w2

Exhibit 32.2

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code

I, Vasant Prabhu, the Chief Financial Officer of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), certify that (i) the Form 10-K for the fiscal year ended December 31, 2005 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Starwood.



	/s/ Vasant Prabhu
	Vasant Prabhu
	Chief Financial Officer Starwood Hotels & Resorts Worldwide, Inc. March 3, 2006

EX-32.3 12 p71921exv32w3.htm EX-32.3 exv32w3

Exhibit 32.3

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code

I, Steven J. Heyer, the Chief Executive Officer of Starwood Hotels & Resorts (“Starwood”), certify that (i) the Form 10-K for the fiscal year ended December 31, 2005 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Starwood.



	/s/ Steven J. Heyer
	Steven J. Heyer
	Chief Executive Officer Starwood Hotels & Resorts March 2, 2006

EX-32.4 13 p71921exv32w4.htm EX-32.4 exv32w4

Exhibit 32.4

Certification Pursuant to Section 1350 of Chapter 63
of Title 18 of the United States Code

I, Vasant Prabhu, the Chief Financial Officer of Starwood Hotels & Resorts (“Starwood”), certify that (i) the Form 10-K for the fiscal year ended December 31, 2005 (the “Form 10-K”) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and (ii) the information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of Starwood.



	/s/ Vasant Prabhu
	Vasant Prabhu
	Chief Financial Officer Starwood Hotels & Resorts March 3, 2006

-----END PRIVACY-ENHANCED MESSAGE-----


Commission File Number: 1-7959 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. (Exact name of Registrant as specified in its charter)		Commission File Number: 1-6828 STARWOOD HOTELS & RESORTS (Exact name of Registrant as specified in its charter)

Maryland (State or other jurisdiction of incorporation or organization) 52-1193298 (I.R.S. employer identification no.) 1111 Westchester Avenue White Plains, NY 10604 (Address of principal executive offices, including zip code) (914) 640-8100 (Registrant’s telephone number, including area code)		Maryland (State or other jurisdiction of incorporation or organization) 52-0901263 (I.R.S. employer identification no.) 1111 Westchester Avenue White Plains, NY 10604 (Address of principal executive offices, including zip code) (914) 640-8100 (Registrant’s telephone number, including area code)


Title of Each Class		Name of Each Exchange on Which Registered

Common Stock, par value $0.01 per share (“Corporation Share”), of Starwood Hotels & Resorts Worldwide, Inc. (the “Corporation”), Class B shares of beneficial interest, par value $0.01 per share (“Class B Shares”), of Starwood Hotels & Resorts (the “Trust”), and Preferred Stock Purchase Rights of the Corporation, all of which are attached and trade together as a Share		New York Stock Exchange


Document		Where Incorporated

Proxy Statement		Part III (Items 11 and 12)


		Page

PART I
	Forward-Looking Statements		1
Item 1.	Business		1
Item 1A.	Risk Factors		10
Item 2.	Properties		18
Item 3.	Legal Proceedings		21
Item 4.	Submission of Matters to a Vote of Security Holders		21
	Executive Officers of the Registrants		21

PART II
Item 5.	Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		21
Item 6.	Selected Financial Data		24
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		24
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		39
Item 8.	Financial Statements and Supplementary Data		40
Item 9.	Changes In and Disagreements with Accountants on Accounting and Financial Disclosure		40
Item 9A.	Controls and Procedures		40

PART III
Item 10.	Directors, Trustees and Executive Officers of the Registrants		43
Item 11.	Executive Compensation		46
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		47
Item 13.	Certain Relationships and Related Transactions		47
Item 14.	Principal Accountant Fees and Services		48

PART IV
Item 15.	Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K		48
EX-10.72
EX-12.1
EX-21.1
EX-23.1
EX-31.1
EX-31.2
EX-31.3
EX-31.4
EX-32.1
EX-32.2
EX-32.3
EX-32.4


	Number of
	Properties		Rooms

Owned hotels^(a)		130		47,000
Managed and unconsolidated joint venture hotels		378		121,000
Franchised hotels		337		90,000
Vacation ownership resorts and residential properties		19		6,000

Total properties		864		264,000


	þ	Joint Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	o	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Large accelerated filer þ Accelerated filer o Non-accelerated filer o


	•	Continuing to build our brands to appeal to upscale business travelers and other customers seeking full-service hotels in major markets by establishing emotional connections to our brands by offering signature experiences at our properties such as by placing Bliss^® Spas, Remede^sm Spas and their branded amenities and upscale restaurants in certain of our branded hotels and by continuing our tradition of innovation started with the Heavenly Bed^® and Heavenly Bath^®, the Sheraton Sweet Sleeper^sm Bed, the Sheraton Service Promise^sm and the Four Points by Sheraton Four Comfort Bed^sm and with such ideas as Westin being the first major brand to go “smoke-free” in North America;

	•	Renovating, upgrading and expanding our branded hotels to further our strategy of strengthening brand identity;

	•	Continuing to expand our role as a third-party manager of hotels and resorts. This allows us to expand the presence of our lodging brands and gain additional cash flow generally with modest capital commitment;

	•	Franchising the Sheraton, Westin, Four Points by Sheraton, Luxury Collection, Le Méridien and aloft brands to selected third-party operators and licensing the Sheraton, Westin, W and St. Regis brand names to selected third parties in connection with luxury residential condominiums, thereby expanding our market presence, enhancing the exposure of our hotel brands and providing additional income through franchise and license fees;

	•	Expanding our internet presence and sales capabilities to increase revenue and improve customer service;

	•	Continuing to grow our frequent guest program, thereby increasing occupancy rates while providing our customers with benefits based upon loyalty to our hotels and vacation ownership resorts;

	•	Enhancing our marketing efforts by integrating our proprietary customer databases, so as to sell additional products and services to existing customers, improve occupancy rates and create additional marketing opportunities;

	•	Optimizing use of our real estate assets to improve ancillary revenue, such as residential sales and restaurant, beverage and parking revenue from our hotels and resorts;

	•	Establishing relationships with third parties to enable us to provide attractive restaurants and other amenities at our branded properties;

	•	Developing additional vacation ownership resorts and leveraging our hotel real estate assets where possible through VOI construction and residential sales;

	•	Leveraging the Bliss and Remede product lines and distribution channels; and

	•	Increasing operating efficiencies through increased use of technology.


	•	Luxury and upscale hotels and resorts in major metropolitan areas and business centers;

	•	Development of an “extended stay” product by Westin;

	•	Hotels or brands which would enable us to provide a wider range of amenities and services to customers or provide attractive geographic distribution;

	•	Major tourist hotels, destination resorts or conference centers that have favorable demographic trends and are located in markets with significant barriers to entry or with major room demand generators such as office or retail complexes, airports, tourist attractions or universities;


	•	Undervalued hotels whose performance can be increased by re-branding to one of our hotel brands, the introduction of better and more efficient management techniques and practices and/or the injection of capital for renovating, expanding or repositioning the property; and

	•	Portfolios of hotels or hotel companies that exhibit some or all of the criteria listed above, where the purchase of several hotels in one transaction enables us to obtain favorable pricing or obtain attractive assets that would otherwise not be available or realize cost reductions on operating the hotels by incorporating them into the Starwood system.


	•	changes in general economic conditions, including the prospects for improved performance in other parts of the world;

	•	impact of war and terrorist activity (including threatened terrorist activity) and heightened travel security measures instituted in response thereto;

	•	domestic and international political and geopolitical conditions;

	•	travelers’ fears of exposures to contagious diseases;

	•	decreases in the demand for transient rooms and related lodging services, including a reduction in business travel as a result of general economic conditions;

	•	the impact of internet intermediaries on pricing and our increasing reliance on technology;

	•	cyclical over-building in the hotel and vacation ownership industries;

	•	restrictive changes in zoning and similar land use laws and regulations or in health, safety and environmental laws, rules and regulations and other governmental and regulatory action;

	•	changes in travel patterns;

	•	changes in operating costs including, but not limited to, energy, labor costs (including the impact of unionization), food costs, workers’ compensation and health-care related costs, insurance and unanticipated costs such as acts of nature and their consequences;

	•	disputes with owners of properties, franchisees and homeowner associations which may result in litigation;

	•	the availability of capital to allow us and potential hotel owners and franchisees to fund construction, renovations and investments;

	•	foreign exchange fluctuations;

	•	the financial condition of third-party property owners, project developers and franchisees, which may impact our ability to recover indemnity payments that may be owed to us and their ability to fund amounts required under development, management and franchise agreements and in most cases our recourse is limited to the equity value said party has in the property; and

	•	the financial condition of the airline industry and the impact on air travel.


	•	construction delays or cost overruns that may increase project costs;

	•	receipt of zoning, occupancy and other required governmental permits and authorizations;

	•	development costs incurred for projects that are not pursued to completion;

	•	so-called acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project;

	•	defects in design or construction that may result in additional costs to remedy or require all or a portion of a property to be closed during the period required to rectify the situation;

	•	ability to raise capital; and

	•	governmental restrictions on the nature or size of a project or timing of completion.


	Hotels				VOI and Residential

	Properties		Rooms		Properties		Rooms

St. Regis and Luxury Collection		53		8,000		2		—
Sheraton		389		134,000		6		4,000
Westin		121		51,000		7		2,000
W		20		6,000		—		—
Four Points		127		22,000		—		—
Le Méridien		122		32,000		—		—
Independent/Other		13		5,000		4		—

Total		845		258,000		19		6,000


	Year Ended
	December 31,

	2005			2004			Variance

Worldwide (119 hotels with approximately 44,000 rooms)
REVPAR	$	123.14		$	111.01			10.9	%
ADR	$	174.70		$	162.50			7.5	%
Occupancy		70.5	%		68.3	%		2.2
North America (78 hotels with approximately 32,000 rooms)
REVPAR	$	123.02		$	110.13			11.7	%
ADR	$	170.93		$	156.62			9.1	%
Occupancy		72.0	%		70.3	%		1.7
International (41 hotels with approximately 12,000 rooms)
REVPAR	$	123.48		$	113.48			8.8	%
ADR	$	186.30		$	181.21			2.8	%
Occupancy		66.3	%		62.6	%		3.7


	For the Transition Period from to


Item 1.	*Business.*


Item 2.	*Properties.*


Item 3.	*Legal Proceedings.*


(1)	REVPAR is calculated by dividing room revenue, which is derived from rooms and suites rented or leased, by total room nights available for a given period. REVPAR may not be comparable to similarly titled measures such as revenues.


Item 5.	*Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.*


	High		Low

2005
Fourth quarter	$	65.22	$	54.93
Third quarter	$	64.36	$	54.23
Second quarter	$	61.04	$	51.50
First quarter	$	61.45	$	55.00
2004
Fourth quarter	$	59.50	$	46.20
Third quarter	$	46.65	$	40.06
Second quarter	$	45.04	$	38.15
First quarter	$	40.93	$	34.81


	Distributions
	Made

2005
Annual distribution	$	0.84	^(a)
2004
Annual distribution	$	0.84	^(a)


(a)	The Trust declared distributions in the fourth quarter of 2005 and 2004 to shareholders of record on December 31, 2005 and 2004, respectively. The distributions were paid in January 2006 and 2005, respectively.


							Maximum Number (or
							Approximate Dollar
	Total		Average		Total Number of Shares		Value) of Shares that
	Number of		Price		Purchased as Part		May Yet Be Purchased
	Shares		Paid for		of Publicly Announced		Under the Plans or
Period	Purchased		Share		Plans or Programs		Programs (in millions)

October		—	$	—		—	$	1,296
November		1,100,000	$	59.33		1,100,000	$	1,231
December		2,938,100	$	63.80		2,938,100	$	1,043

Total		4,038,100				4,038,100


(a)	This balance reflects the payment made in January 2002 for the dividends declared for the fourth quarter of 2001. The Trust declared an annual dividend in 2002, which was paid in January 2003 and reflected in the 2003 column.


	At December 31,

	2005		2004		2003		2002		2001

	(In millions)
Balance Sheet Data
Total assets	$	12,454	$	12,298	$	11,857	$	12,190	$	12,416
Long-term debt, net of current maturities and including exchangeable units and Class B preferred shares	$	2,926	$	3,823	$	4,424	$	4,500	$	5,301


	•	Owned, Leased and Consolidated Joint Ventures — Represents revenue primarily derived from hotel operations, including the rental of rooms and food and beverage sales from owned, leased or consolidated joint venture hotels and resorts. Revenue is recognized when rooms are occupied and services have been rendered. These revenues are impacted by global economic conditions affecting the travel and hospitality industry as well as relative market share of the local competitive set of hotels. REVPAR is a leading indicator of revenue trends at owned, leased and consolidated joint venture hotels as it measures the period-over-period growth in rooms revenue for comparable properties.

	•	Management and Franchise Fees — Represents fees earned on hotels managed worldwide, usually under long-term contracts, franchise fees received in connection with the franchise of the our Sheraton, Westin, Four Points by Sheraton, Le Méridien, St. Regis, W and Luxury Collection brand names and termination fees, offset by payments by us under performance and other guarantees. Management fees are comprised of a base fee, which is generally based on a percentage of gross revenues, and an incentive fee, which is generally based on the property’s profitability. For any time during the year, when the provisions of our management contracts allow receipt of incentive fees upon termination, incentive fees are recognized for the fees due and earned as if the contract was terminated at that date, exclusive of any termination fees due or payable. Therefore, during periods prior to year-end, the incentive fees recorded may not be indicative of the eventual incentive fees that will be recognized at year-end as conditions and incentive hurdle calculations may not be final. Franchise fees are generally based on a percentage of hotel room revenues. As with hotel revenues discussed above, these revenue sources are affected by conditions impacting the travel and hospitality industry as well as competition from other hotel management and franchise companies.

	•	Vacation Ownership and Residential — We recognize revenue from VOI sales and financings and the sales of residential units which are typically a component of mixed use projects that include a hotel. Such revenues are impacted by the state of the global economies and, in particular, the U.S. economy, as well as interest rate and other economic conditions affecting the lending market. We determine the portion of revenues to recognize for sales accounted for under the percentage of completion method based on judgments and estimates including total project costs to complete. Additionally, we record reserves against these revenues based on expected default levels. Changes in costs could lead to adjustments to the percentage of completion status of a project, which may result in differences in the timing and amount of revenues recognized from the projects. We anticipate developing future high end VOI projects adjacent to or as part of our luxury resorts, resulting in cross-selling opportunities and an audience of higher-end purchasers, yielding both higher revenues and reduced risks associated with financing these VOI sales. We have also entered into licensing agreements with third-party developers to offer consumers branded condominiums or residences. Our fees from these agreements are generally based on the gross sales revenue of units sold.

	•	Revenues from Managed and Franchised Properties — These revenues represent reimbursements of costs incurred on behalf of managed hotel properties and franchisees. These costs relate primarily to payroll costs at managed properties where we are the employer. Since the reimbursements are made based upon the costs incurred with no added margin, these revenues and corresponding expenses have no effect on our operating income and our net income.


Top Ten Metropolitan Areas as a % of Owned North America Revenues for
the Year Ended December 31, 2005 with Comparable Data for 2004

	2005			2004
Metropolitan Area	Revenues			Revenues

New York, NY		20.0	%		19.2	%
Boston, MA		9.1	%		9.4	%
San Diego, CA		5.3	%		5.2	%
Los Angeles-Long Beach, CA		5.1	%		4.8	%
Phoenix, AZ		4.8	%		5.0	%
Atlanta, GA		4.6	%		4.4	%
Seattle, WA		3.9	%		3.8	%
Toronto, Canada		3.9	%		3.9	%
Maui, HI		3.7	%		3.5	%
Houston, TX		3.0	%		2.8	%
All Other		36.6	%		38.0	%

Total		100	%		100	%


			Due in Less		Due in		Due in		Due After
	Total		Than 1 Year		1-3 Years		3-5 Years		5 Years

Long-term debt	$	4,143	$	1,219	$	851	$	481	$	1,592
Capital lease obligations⁽¹⁾		2		—		—		—		2
Operating lease obligations		1,142		78		140		125		799
Unconditional purchase obligations⁽²⁾		135		45		57		25		8
Other long-term obligations		—		—		—		—		—

Total contractual obligations	$	5,422	$	1,342	$	1,048	$	631	$	2,401


(1)	Excludes sublease income of $2 million.

(2)	Included in these balances are commitments that may be satisfied by our managed and franchised properties.


			Amount of Commitment Expiration Per Period

			Less Than						After
	Total		1 Year		1-3 Years		3-5 Years		5 Years

Standby letters of credit	$	129	$	129	$	—	$	—	$	—
Hotel loan guarantees⁽¹⁾		47		4		43		—		—
Other commercial commitments		—		—		—		—		—

Total commercial commitments	$	176	$	133	$	43	$	—	$	—


(1)	Excludes fair value of guarantees which are reflected in our consolidated balance sheet.


		Amount				Interest Rate at
		Outstanding at				December 31,			Average
		December 31, 2005^(a)			Interest Terms	2005			Maturity

		(Dollars in millions)							(In years)
Floating Rate Debt
Senior Credit Facility:
	Term Loan	$	450		LIBOR^(b)+1.25%		5.64	%		0.7
	Revolving Credit Facility		11		CBA + 1.25%		4.57	%		0.8
Mortgages and Other			481		Various		4.05	%		1.4
Interest Rate Swaps			300				8.77	%		—

Total/ Average		$	1,242				5.77	%		1.0

Fixed Rate Debt
Sheraton Holding Public Debt		$	148				7.75	%		19.9
Senior Notes			1,494	^(c)			6.70	%		3.9
Convertible Debt			360				3.50	%		0.4
Mortgages and Other			649				7.07	%		4.6
Interest Rate Swaps			(300	)			7.88	%		—

Total/ Average		$	2,351				6.23	%		4.5

Floating Rate Debt Classified as Held for Sale		$	25				4.30	%		4.0
Fixed Rate Debt Classified as Held for Sale		$	527				7.59	%		10.1
Total Debt

Total Debt and Average Terms		$	4,145				6.27	%		4.4


(a)		Excludes approximately $469 million of our share of unconsolidated joint venture debt, all of which was non-recourse.

(b)		At December 31, 2005, one-month LIBOR was 4.39%

(c)		Includes approximately $(3) million at December 31, 2005 of fair value adjustments related to existing and terminated fixed-to-floating interest rate swaps.


	•	S & P affirmed our BB+ rating and revised their outlook to positive from stable. At the same time, S & P placed the BB+ ratings of Sheraton Holding Corporation on CreditWatch with negative implications, reflecting the possibility that these obligations will be assumed by Host Marriott, a lower rated entity.


	•	Moody’s affirmed our Ba1 rating and placed it on review for a potential upgrade, and simultaneously placed the Ba1 ratings of Sheraton Holding Corporation on review for possible downgrade for the same reasons cited above.


Item 7A.	*Quantitative and Qualitative Disclosures about Market Risk.*


		Expected Maturity or
		Transaction Date															Total Fair
		At December 31,												Total at			Value at
														December 31,			December 31,
		2006		2007		2008		2009		2010		Thereafter		2005			2005

Liabilities
Fixed rate (in millions)		$	380	$	740	$	22	$	435	$	7	$	1,594	$	3,178		$	3,466
Average interest rate															6.61	%
Floating rate (in millions)		$	839	$	85	$	4	$	36	$	3	$	—	$	967		$	967
Average interest rate															4.81	%
Interest Rate Swaps
Fixed to variable (in millions)		$	—	$	—	$	—	$	—	$	—	$	300	$	300
	Average pay rate														8.77	%
	Average receive rate														7.88	%