Starwood Investment Proposition and 3-Year Outlook

©2013 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. | Proprietary & Confidential

THE STARWOOD INVESTMENT PROPOSITION

VASANT PRABHU // VICE CHAIRMAN AND CHIEF FINANCIAL OFFICER

142

FORWARD-LOOKING STATEMENTS These presentations contain forward-looking statements within the meaning of federal securities regulations. These forward-looking statements generally can be identified by phrases such as Starwood or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, statements in this release that describe the Company’s business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. Forward-looking statements are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially from those anticipated at the time the forward-looking statements are made. Future results, performance and achievements may be affected by general economic conditions including the severity and duration of any downturn in the US or global economy, the impact of war and terrorist activity, business and financing conditions, including the availability of mortgage financing, foreign exchange fluctuations, cyclicality of the real estate, including the sale of residential units, and the hotel and vacation ownership businesses, operating risks associated with the sale of residential units, hotel and vacation ownership businesses, relationships with associates, customers and property owners, the impact of the internet reservation channels, our reliance on technology, domestic and international political and geopolitical conditions, competition, governmental and regulatory actions (including the impact of changes in U.S. and foreign tax laws and their interpretation), travelers’ fears of exposure to contagious diseases, risk associated with the level of our indebtedness, risk associated with potential acquisitions and dispositions, and other circumstances and uncertainties. There can also be no assurance that agreements will be entered into for the hotels in the Company’s pipeline and, if entered into, the timing of any agreement and the opening of the related hotel. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. Please note that these presentations include non-GAAP financial measures. For definitions of certain terms used herein and a presentation of the most directly comparable financial measure calculated and presented in accordance with GAAP and a reconciliation of the differences between the non-GAAP financial measure disclosed and the most comparable financial measure calculated and presented in accordance with GAAP, please refer to the Company’s web site at www.starwoodhotels.com.corporate/investor_relations.html.

The Starwood Transformation

17%

Owning Hotels Owning Relationships

STARWOOD 2000

Fees

62% 80% Fees Fees

Owned/ SVO/Other

TRANSFORMING EVENTS » Sold 122 Owned hotels since 2000 for $8.3 billion » Transforming transaction: Sale of 33 hotels (16k rooms) to Host in 2006 for $4.1 billion; distribution of $2.8 billion

to shareholders

STARWOOD 2012 2016 TARGET

Note: Percentages represent Earnings before selling, general and administrative expenses and exclude earnings from Bal Harbour Fee earnings represents Management fees, Franchise fee and Other Income

Owned/ SVO/Other

Owned/ SVO/Other

143


37% 63%

U.S Centric Global Enterprise

STARWOOD 2000

Non U.S. 56% 44% 80%

20%

TRANSFORMING EVENTS » Added 492 net Managed and Franchised hotels (139k rooms) since 2000, 63% (88k rooms) outside the U.S. » Transforming transaction: Acquisition of Le Méridien, 122 hotels (32k rooms), 95% non-U.S., ~$50M fees for $250M

STARWOOD 2012 TARGET

Note: Percentages represent hotel fee business; pro forma for implied fee on owned hotel gross operating revenue

U.S. Non U.S. U.S. Non U.S.

U.S.

144

The Starwood Transformation Price Point Segmentation Lifestyle Segmentation

» Uncompromising » Address » Bespoke

» Flirty » Insider » Escape

» Culture » Indigenous » Experience

» Warm » Comforting » Connections

» Personal » Instinctive » Renewal

» Chic » Cultured » Discovery

» Honest » Uncomplicated » Comfort

» Sassy » Refreshing » Oasis

» Smart » Renewing » Haven

Starwood Preferred Guest Transformation

2012

Launch of W 1998

Westin “Heavenly” Launch 1999

Sheraton Revitalization 2007

Launch of Aloft and Element 2008

Global Expansion of W 2009

Crossover Rewards 2013

TRACK RECORD OF INNOVATION

145

Results


»Higher Growth Trajectory »Lower Cyclicality »Higher Margins »Higher Capital Efficiency »Significant Cash Generation

Superior Shareholder Value Creation

146


S&P 98%

MAR 164%

HOT 256%

10-Year Total Shareholder Return

Superior Shareholder Value Creation

Source: Bloomberg. Represents 10-year total shareholder returns from 31-Dec-02 through 31-Dec-12 with monthly returns and reinvestment in security 147

The Starwood Investment Proposition » Leading Global Hotel Company in High Growth Markets

» Best Global High End Lodging Brands

» High Quality Global Pipeline

» High Value Global Owned Hotel Portfolio

» Unmatched Global Platform

» Extraordinary Cash Generation Potential

LE ROYAL MERIDIEN ABU DHABI

SHERATON ABU DHABI HOTEL & RESORT

148

The Most Global Hotel Company

As of 31-Dec-12

1,134 Properties and 335,415 Rooms in Nearly 100 Countries

LEADING HOTEL COMPANY IN HIGH GROWTH MARKETS

U.S. 47%

Starwood

U.S. 78%

Hilton

U.S. 69%

Hyatt

U.S. 78%

Marriott

(Rooms)

Greater China Asia Europe Africa / Middle East Latin America / Canada 149

Upper-Upscale,

75%

Geographical ly Wel l Balanced High End Hotel Platform

As of 31-Dec-12

U.S. 44%

Fees by Brand Fees by Region


Upper Upscale: Westin, Sheraton, Le Méridien

Luxury: W Hotels, St. Regis, Luxury Collection

Select Serve: Aloft, Element, Four Points

Greater China Asia Europe

Africa / Middle East Latin America / Canada

150

Leadership in High Growth Markets

36 20 9 9

HOT MAR HLT H31 18 18 15

HOT MAR HLT H

GREATER CHINA

21 11 16 5

HOT MAR HLT H

MIDDLE EAST / AFRICA ASIA (EX GREATER CHINA)

13 9 6 3

HOT MAR HLT H

LATIN AMERICA

Room

s (00

0s)

Sources: Smith Travel Research as of December 2012, company data

41

102

104

155

H

MAR

HLT

HOT

Non-U.S. Operating Luxury / Upper Upscale Rooms (in 000s)


151

The World is Changing in our Favor

2011–2030 CAGR

5%

3%

5%

3% Europe

Asia Pacific

Americas

Africa Middle East

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1990 1995 2000 2005 2010 2015 2020 2025 2030

Num

ber o

f To

urist

Arri

vals

(in

milli

ons)

TOURIST ARRIVALS BY ORIGIN » Our global footprint positions

us to take advantage of changing global travel patterns

» 3 billion people entering the global economy

» Regional travel patterns are evolving

» Enormous outbound travel opportunity from Growth Markets

» Rise of the “Mega Traveler”

Source: World Tourism Organization UNWTO Tourism Highlights 2012 Edition; UNWTO “Tourism towards 2030”


152

Americas Division

» Joined Starwood through Vistana Resorts in 1989

» Co-President of Americas

Sergio Rivera Osvaldo Librizzi

» Joined Starwood in 1975 at the Sheraton Buenos Aires

» Co-President of Americas


Current Pipeline implies growth of +10%

St. Regis Luxury Collection W Le Méridien Westin Sheraton Four Points

by Sheraton Aloft Element Other Total Operating

United States Hotels 10 13 26 8 102 186 87 45 10 3 490 Rooms 2,294 3,912 8,245 2,113 44,538 69,113 13,814 6,607 1,641 561 152,838 Latin America & Canada Hotels 4 10 4 5 29 51 37 4 - - 144 Rooms 558 719 742 628 10,087 17,621 5,682 559 - - 36,596

As of 31-Dec-12 153

Asia Pacific Division

Stephen Ho

» Joined Starwood at Sheraton Brunei in 1981

» President of Asia Pacific



Qian Jin



China Hotels 5 4 1 7 15 55 17 5 - - 109 Rooms 1,380 811 392 2,535 5,341 22,715 5,293 1,023 - - 39,490 Asia Hotels 4 17 7 22 25 42 12 5 - - 134 Rooms 812 4,270 1,520 5,487 7,788 14,634 2,958 860 - - 38,329

» Joined Starwood at Sheraton Shanghai in 1986

» President of Greater China

As of 31-Dec-12 154

Europe, Africa and the Middle East (EAME)

» Joined Starwood at Sheraton Brussels in 1982

» President of EAME since

Guido de Wilde Hassan Ahdab

» Joined Le Méridien in 1977

» Vice-President, Regional Director of Operations, Africa & Indian Ocean

» Joined Sheraton in 1983 in Belgium and relocated to Bahrain in 1984

» SVP, Regional Director – Middle East



Roeland Vos



Europe Hotels 4 36 5 26 18 61 11 2 - 1 164 Rooms 484 5,270 1,029 7,630 5,923 16,913 1,848 402 - 165 39,664 Africa & Middle East Hotels 3 5 1 28 3 32 7 1 - - 80 Rooms 885 1,384 441 6,954 949 8,788 1,329 408 - - 21,138

As of 31-Dec-12 155

AL MAHA DESERT RESORT & SPA, DUBAI

ALOFT ABU DHABI







156

Best Global High End Lodging Brands

Source: Smith Travel Research, Company reports. Third party logos displayed are the trademarks of their respective third party owners. Such logos are referenced for informational purposes only and not intended to indicate any affiliation, association, or endorsement.

BEST GLOBAL LODGING BRANDS

35K 59%

Luxu

ry

Starwood

Uppe

r Ups

cale

% Rooms Outside

U.S.

251K 54%

Marriott

50K 52%

Hilton

18K 51%

Hyatt

29K 64%

249K 31%

245K 39%

74K 30%

% Rooms Outside

U.S.

157

http://www.marriott.com/marriott-hotels-resorts/travel.mi

http://www.marriott.com/renaissance-hotel/travel.mi

http://www.marriott.com/autograph-collection-hotel/travel.mi

http://www.marriott.com/hotels/travel/dalgt-gaylord-texan-resort-and-convention-center/

Fastest Growing Luxury Brand Portfol io BEST GLOBAL LODGING BRANDS

Starwood Luxury Brands » Added 17k net luxury rooms globally since 2007 » W, the most successful new brand launch in the hotel industry, now at 44 hotels globally » St. Regis has grown from 1 iconic New York hotel to 30 hotels since 1999 » Luxury Collection offers unique experiences in over 80 locations across 30 countries

-

10

20

30

40

50

60

2007 2012 -

10

20

30

40

50

60

2007 2012

HOT Luxury Brands

Room

s (00

0s)

-

10

20

30

40

50

60

2007 2012

Room

s (00

0s)

Room

s (00

0s)

Four Seasons MAR Luxury Brands

Source: Smith Travel Research, Luxury Hotel Rooms. 2007 MAR pro forma for JW Marriott

+ 92%

+ 18%

+ 32%

158

Largest Global Portfol io of Upper-Upscale Brands


Starwood Upper-Upscale Brands » 250K Upper-Upscale Rooms globally in

89 countries » Sheraton: Leading Global five-star brand,

with more rooms outside the U.S. and Europe than any other competitor

» Westin: Top North American Upper-Upscale brand expanding rapidly outside the U.S.

» Le Méridien: With deep roots in Europe, Africa and the Middle East, re-energized into a unique and compelling global brand since 2007

240

245

250

HOT UpperUpscale

Hilton UpperUpscale

MAR UpperUpscale

2012

Room

s (00

0s)

Source: Smith Travel Research, Upper Upscale Hotel Rooms 159

Different iated Select Serve Brands Growing Global ly

05

101520253035404550

2007 2012

Four Points Aloft

Room

s (00

0s)

Starwood Select Serve Brands » Rooms have almost doubled globally

since 2007

» Four Points by Sheraton has experienced dramatic non-U.S. growth and already has 55% of rooms outside the U.S.

» Aloft, a highly differentiated select serve brand, has grown to 62 hotels since its launch in 2007 with 33% of rooms outside the U.S.


As of 31-Dec-12 160

LE MÉRIDIEN MINA SEYAHI BEACH RESORT & MARINA

GROSVENOR HOUSE







161

High Quality 100K room (400 hotel) global pipeline

Sources: Smith Travel Research Pipeline reports: Total Pipeline, company data

HIGH QUALITY GLOBAL PIPELINE AND GROWTH OPPORTUNITY

87%

76%

60%

47%

Starwood

Hyatt

Hilton

Marriott

Outside of U.S. (% of Pipeline)

67%

66%

37%

36%

Starwood

Hyatt

Marriott

Hilton

Upper Upscale / Lux (% of Pipeline)

162

Well Posi t ioned to take advantage of Global Growth

Sources: IMF 5-Year Nominal GDP Growth, Starwood pipeline data (mix by rooms)

25%

44%

20% 16%

19%

13%

19%

7% 10%

6% 7%

14%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

I I I I I I I I I I I I

Greater China Asia (excludingGreater China)

U.S. Europe Latin America &Canada

Africa / Middle East


% of 5-year Global GDP Growth % of Starwood Room Pipeline

163

Global Growth fueled by all Nine Brands HIGH QUALITY GLOBAL PIPELINE AND GROWTH OPPORTUNITY

05

101520253035

Sheraton Four Points bySheraton

Westin Aloft W Le Meridien St. Regis Luxury Collection Element

Pipeline by Brand

U.S. Greater China Asia ex China Europe Africa/ Middle East Latin America/ Canada

Room

s (00

0s)

As of 31-Dec-12 164

10-year track record of 5% Net Rooms Growth

100

200

300

400

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013E

5% Net Rooms Growth Operating

Rooms


165

FOUR POINTS BY SHERATON SHEIKH ZAYED ROAD, DUBAI

FOUR POINTS BY SHERATON DOWNTOWN DUBAI







166

High Value Global Owned Hotel Portfol io HIGH VALUE GLOBAL OWNED PORTFOLIO

25 TOP OWNED/LEASED HOTELS (~90% OWNED/LEASED EARNINGS)

U.S. / Canada

Asia Europe Latin America

• Sheraton On The Park, Sydney

• Sheraton Fiji Resort

• Westin Denarau , Fiji

• Sheraton Rio

• Sheraton Maria Isabel, Mexico

• Sheraton Buenos Aires

• Sheraton Lima

• St. Regis Grand, Rome

• Gritti Palace, Venice

• Hotel Alfonso XIII, Seville

• W Barcelona

• W London

• Westin Excelsior, Rome

• Sheraton Park Lane, London

• St. Regis New York

• St. Regis San Francisco

• St. Regis Bal Harbour

• The Phoenician, Arizona

• W New Orleans

• W NY – Times Square

• Westin Maui

• Westin SFO

• Sheraton Centre Toronto

• Sheraton Gateway Toronto

• Le Centre Sheraton Montreal

Based on Projected 2013 Earnings 167

Well Diversified Globally

ST. REGIS BAL HARBOUR

WESTIN EXCELSIOR, ROME BY DIVISION

HIGH VALUE GLOBAL OWNED PORTFOLIO

Europe

Asia U.S.

Based on 2012 owned earnings assuming Owned hotel set as of January 31st, 2013

Latin America / Canada

168

ST. REGIS NEW YORK

HOTEL GRITTI PALACE, VENICE

BY PROPERTY TYPE

HIGH VALUE GLOBAL OWNED PORTFOLIO

Based on 2012 owned earnings assuming Owned hotel set as of January 31st, 2013

Convention

Resort Urban

Airport

In High Barrier to Entry Urban and Resort Markets

169

Unlocking Value from Asset Sales STARWOOD 3-YEAR OUTLOOK

$275k/room = $4.8B

$300k/room = $5.2B

$325k/room = $5.6B

$/Room

14x = $4.4B

15x = $4.7B

16x = $5.0B

Adj. Earnings Multiple

To estimate cash proceeds, valuations will need to be adjusted for leases (20% of rooms), capital needs for certain hotels and any cash taxes on gains. Actual proceeds may vary depending on market conditions.

HIGH LEVEL VALUATION SCENARIOS

Owned Rooms ~14,800 Leased Rooms ~2,500

Note: Adjusted earnings represents Owned/Leased hotel operating revenue less operating expenses, pro forma for management fee on gross revenue. Value based on average EBITDA 2013-2015. 170

Unlock ing Value f rom UJVs and Non-EBITDA Producing Assets

KEY UNCONSOLIDATED JOINT VENTURES (>85% UJV EBITDA)

Asia Pacific North America

Latin America Non-EBITDA Producing Assets

UJV Rooms ~8,485 UJV EBITDA (HOT share) ~$70M

Hotel Rooms Ownership St. Regis Beijing, China 258 32% W Maldives 78 50% Sheraton Hong Kong 782 25% Sheraton Royal Orchid, Bangkok 726 44% Sheraton Imperial Kuala Lumpur 385 49% Sheraton Maldives 156 45%

Hotel Rooms Ownership

St. Regis Punta Mita 120 40% W Mexico City 237 50%

Hotel Rooms Ownership

Sheraton New Orleans Hotel 1,110 47% Sheraton Seattle Hotel 1,258 22% Westin Savannah 403 49% Westin Bellevue 337 17%

Land Holdings

Sardinia Atlanta Buckhead

Maui, HI Avon, CO

Orlando, FL Aruba, NA

STARWOOD 3-YEAR OUTLOOK

171

LE MERIDIEN DUBAI

LE ROYAL MERIDIEN ABU DHABI







172

Global Infrastructure – the Power of Starwood

INDIVIDUAL SPIRIT, COLLECTIVE STRENGTH

OPERATIONS REVENUE

MANAGEMENT SALES

Central Marketing Delivery

SPG & PARTNERSHIPS

BRAND / FIELD MARKETING

& PR

UNMATCHED GLOBAL PLATFORM

173

SPG & PARTNERSHIPS

BRAND / FIELD MARKETING

& PR

CENTRAL MARKETING DELIVERY

Global Infrastructure - Capabil i t ies


» Starwood centrally influences 71% of Room Nights

» Digital Channels ~25%

» Starwood influenced property direct ~23%

» Customer Contact Centers ~13%

» Global Distribution Services (GDS) ~10%

» 54% growth in SPG members globally since 2007

» 47% of SPG members come from outside the U.S.

» SPG share of occupancy is > 50% at a 25% ADR premium globally

» Key partnership across industries – Travel (Delta), Finance (Amex), F&B (Coca-Cola), Entertainment (Live Nation), Sports (U.S. Open), and Retail (Pottery Barn)

» Starwood’s internal marketing agency, Field Marketing, provides localized support to individual hotel business needs

» Currently 94% of Starwood hotels in North America opt into program

» Delivers on average $25 for every $1 spent on investment for participating hotels

174

Global Infrastructure - Capabil i t ies

SALES

REVENUE MANAGEMENT

OPERATIONS


» Starwood B2B Sales drives ~70% of Revenue

» >5,000 sellers deployed against customers’ teams and buying patterns

» Adding resources in key markets, including BRIC, Eastern Europe, and South Africa

» Multi-million dollar investment in cutting-edge revenue management technology

» Implementation of effective pricing and inventory strategies

» Corporate, divisional, regional and area-based RM experts work with hotels

» Best-in-class hotel operations teams

» 3,500 restaurants and bars Systemwide

» Sustainability strategy which targets 30% energy reduction and 20% water reduction by 2020

175

Best Global Team

Mexico City

Buenos Aires

Toronto

Honolulu

Sydney

London

Madrid Milan

Tokyo

Bangkok Singapore

New Delhi

Vienna

Brussels

Dubai

Seattle Chicago

Atlanta Shanghai

Kuala Lumpur

Miami

New York

3 Divisions 6 Regions Cross-functional teams at Divisions/Regions

Global Structure

% Born outside U.S: 39% % Working outside home country: 37% Avg. Starwood Tenure:16 years

Leadership 100 Demographics


Orlando

Scottsdale

176

THE WESTIN ABU DHABI GOLF RESORT & SPA

SHERATON DUBAI CREEK HOTEL & TOWERS







177

Cash From Hotel Operations EXTRAORDINARY CASH GENERATION POTENTIAL

Note: Excludes cash from Timeshare and Bal Harbour

$815

$531 $596

$694 $738

2008 2009 2010 2011 2012

$3.4B of Cash from Hotel Operations since 2008 Invested Capital of $1.8B in Hotel Business since 2008

$428

$236 $265

$462 $417

2008 2009 2010 2011 2012

Hotel Earnings – Includes Owned, Fees and Other Earnings less SG&A and Gain Amortization

Capital – Includes Maintenance and Development Capital

178

Cash from Timeshare Operations & Bal Harbour EXTRAORDINARY CASH GENERATION POTENTIAL

($150)

$275 $182 $150 $177

2008 2009 2010 2011 2012

($133) ($68)

($127) ($29)

$461

2008 2009 2010 2011 2012

Timeshare – Net Cash Bal Harbour – Net Cash

Net Cash Flow – Includes all timeshare cash receipts and expenses, securitization proceeds, capital and SPG point cost

Net Cash Flow – Includes cash from closings, construction capital (both residential and hotel), S&M expenses and developer liability costs

179

Cash from Asset Sales

$238M $148M

$312M

$548M

$1.25B

2009 2010 2011 2012 Total 2009-12 # of Transactions Price / Room AEBITDA Multiple Multiple w/ CAPEX

7 $162K

14x 24x

2 $298K

28x 28x

3 $177K

13x 14x

5 $317K*

17x 19x

17 $228K

16x 19x

»$1.25B of Cash Proceeds (gross) generated since 2009 (Avg. Multiple over 16X) »Buyers have invested heavily in hotels (St. Regis Aspen, Westin Gaslamp, W Lakeshore, Le Méridien Perimeter)

EXTRAORDINARY CASH GENERATION POTENTIAL

* Excludes Poconos 180

$913

$771

Extraordinary Cash Generation

Net Debt Reduction of $2.4B since 2008 Returned $1.7B to Shareholders since 2008

Share Buybacks

Dividends

EXTRAORDINARY CASH GENERATION POTENTIAL

$3,248 $3,523

$2,826

$2,051

$1,511

$811

1/12008

1/12009

1/12010

1/12011

1/12012

1/12013

Note: Net debt consists of Long-term debt and short term debt, net of cash equivalents and restricted cash 181

LE MÉRIDIEN MINA SEYAHI BEACH RESORT & MARINA

THE WESTIN DUBAI MINA SEYAHI BEACH RESORT & MARINA







182

STARWOOD 3 YEAR OUTLOOK

GROSVENOR HOUSE, DUBAI

183

Source: International Monetary Fund, UNWTO World Tourism Organization

Secular Demand Gains in Growth Markets


GLOBAL GDP 2012 2020

GLOBAL TRAVEL 2000 2012 2020

2000 Growth Markets

Mature Markets

Growth Markets

Mature Markets

Growth Markets

Mature Markets

Growth Markets

Mature Markets

Growth Markets

Mature Markets

Growth Markets

Mature Markets

184

Best Growth Markets Platform in Lodging STARWOOD 3-YEAR OUTLOOK

FEES PIPELINE ROOMS

Mature

Growth (32%)

Mature

Growth (35%)

Mature

Growth (80%)

Greater China India / Emerging Asia Emerging Europe / AME Latin America

As of 31-Dec-12 185

Secular Growth with Cycles in Mature Markets

Sources: US data; PWC (lodging 1967-1986); STR (lodging 1987-2012; U.S. Bureau of Labor Statistics U.S. Price Inflation (CPI-U, Annual Average)

8 Years 8 Years 10 Years 10 Years

$0$10$20$30$40$50$60$70

'71

'72

'73

'74

'75

'76

'77

'78

'79 80 '81

'82

'83

'84

'85

'86

'87

'88

'89

'90

'91

'92

'93

'94

'95

'96

'97

'98

'99

'00

'01

'02

'03

'04

'05

'06

'07

'08

'09

'10

'11 12

Nominal RevPAR

Real RevPAR (2012 dollars)


186

2.7% 3.2%

2.0%

0.6% 0.5%

2008 2009 2010 2011 2012 2013 E

U.S. SUPPLY GROWTH (%) BY YEAR

Low Supply Growth Supports Recovery

Source: Smith Travel Research, PWC

Europe Supply Growth over next 3 Years = <1%


21% 25%

21%

13%

1970s 1980s 1990s 2000s

U.S. SUPPLY GROWTH (%) BY DECADE

<1%

187

65% 67% 67% 67%

64%

58%

62%

64% 66%

2004 2005 2006 2007 2008 2009 2010 2011 2012

$133

$141

$152

$162 $165

$147 $147

$154

$159

2004 2005 2006 2007 2008 2009 2010 2011 2012

$176 (11%) 2008 Peak ADR in “Real” terms

Rates wil l dr ive Next Leg of RevPAR Growth


Source: STR. U.S. Luxury, Upper-Upscale and Upper Tier Independents

Occupancy % ADR ($)

U.S. Luxury / Upper Upscale

188

Growth

Well Balanced Mature Markets Business

FEES INCENTIVE FEES OWNED/LEASED EARNINGS

BASE FEES

Franchise

Incentive

Base Mgmt

Growth

Mature (75%)

Growth

Mature (85%)

Note: Earnings represents Owned/Leased hotel operating revenue less operating expenses


U.S. 37%

Asia Europe Canada

2012

($M’s) % of Hotels Paying Fees

$50M 31%

$128M 81%

Mature

Growth

MATURE

Mature

189

5-7% Growth Achievable wi th Cont inuing Recovery Cycle

U.S. REVPAR

’75-’79 CAGR 15% n/a

’93-’97 CAGR

7% 8%

’03-’07 CAGR

7% 9%

’10-’15 CAGR ~6% Total U.S.

U.S. Luxury/UU

Source: PWC (lodging 1967-2015E)


$0

$10

$20

$30

$40

$50

$60

$70

$80

$90

'68

'69

'70 '71

'72

'73

'74'75

'76'77

'78

'79

'80'81

'82

'83

'84

'85

'86

'87

'88

'89

'90 '91

'92

'93

'94

'95

'96

'97

'98

'99

'00'01

'02

'03

'04

'05

'06

'07

'08

'09'10 '11

'12'13 14 15

190

Indicative Management Contract Structures

U.S. Non-U.S.

Base Fee (% GOR) ~3-4% ~2-3%

Incentive Fee ~10-12% of “Incentive Income,” Often NOI after an Owner priority return that is typically 8-10% of

invested capital

~8-10% of (typically) GOP after Base Fee; No Owner priority return

Term ~20-40 years

Limited Owner rights to terminate (e.g. on sale of property) or convert

to franchise

~20-40 years Early Owner termination right is

rare

Expanding Margins Driving Incentive Fee Growth STARWOOD 3-YEAR OUTLOOK

» GOP Margins have expanded 270 bps since 2009 with incentive fee growth of 46%

» ~60% of same store managed properties worldwide pay incentive fees

» ~76% of same store managed properties in international markets pay incentive fees

191

$280

$540

2012 2017 Target

19%

26%

2012 2017 Target

EARNINGS ($M)

» RevPAR CAGR 6% » ADR CAGR 5% » Margin gains of ~130 bps / year

» Global Revenue Management » Lean Operations » Food and Beverage

Key Assumptions

CAGR: +14%

MARGIN

+7 pts

RevPAR

$0 $10 $20 $30 $40 $50 $60 $70 $80

Note: Earnings represents Owned/Leased hotel operating revenue less operating expenses for Owned hotel set as of January 31st, 2013.. Excludes $27M in sold and other earnings.

“Path to Peak” at Owned / Leased Hotels STARWOOD 3-YEAR OUTLOOK

Key Initiatives

Current Owned / Leased Hotel Set

192

$340

$350

$360

$370

$380

$390

$400

$410

$420

2007 2012

Worldwide SG&A*

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

2007 2012

Systemwide Rooms

-11%

* 2007 SG&A excludes expenses associated with Bliss spa subsidiary, sold in 2009.

Holding the Line on SG&A STARWOOD 3-YEAR OUTLOOK

» In the last 5 years, SG&A per room is down over 25%

» We are adding costs strategically to support the growth of our business in key markets

» Controlling the growth of corporate costs

+21%

193

Key Assumptions

Global Outlook

» Normal cyclical recovery in Mature Markets

» Continued rapid growth in Growth Markets

» Modest increase in interest rates

» Constant foreign exchange rates at current levels

Macro » No additional hotel sales

included (adjustments in the future if/when hotels sold)

» No share repurchases assumed

» Bal Harbour included in cash flow (excluded from EBITDA)

» Focus on share gain and cost control in the hotel business

» Manage Timeshare business for cash generation

» Sell-out Bal Harbour by the end of 2013

» Continue tight SG&A control

Operational Financial


194

What Could Disrupt a Normal Cyclical Recovery?

Starwood Outlook

MACRO-ECONOMIC RISKS » Political backlash to austerity in Southern Europe » Deceleration in China due to global slowdown in demand » Low / no growth in North America due to deficit/debt issues

GEO-POLITICAL RISKS » Syria / Egypt / Iran » Afghanistan / Pakistan » North Korea


195

Starwood 3-Year Outlook CAGRs 2012 - 2015

Starwood 3-Year Outlook

RevPAR Growth = 5 to 7% EBITDA Growth = 10 to 12% EPS Growth = 16 to 20%


196

Owned / Leased Hotels 3-Year Outlook CAGRs 2012 - 2015


RevPAR Growth = 4 to 7% Margin Improvement = +200 to +400 bps Earnings Growth = 10 to 14%

+/-1% RevPAR CAGR = +/-$20-25M Owned/Leased Earnings through 2015

Note: Earnings represents Owned/Leased operating revenue less operating expenses.


197

Managed and Franchised Hotels 3-Year Outlook CAGRs 2012 - 2015


+/-1% RevPAR CAGR = +/- $20-25M Management & Franchise Fees through 2015

RevPAR Growth = 5 to 7% Net Rooms Growth = 4 to 5% Incentive Fee Growth = 15 to 20% Managed & Franchise Fee Growth= 9 to 12%

Note: All growth rates same store except Net Rooms Growth and Total Fee Growth


198

Vacation Ownership / Residential 3-Year Outlook (CAGRs 2012 – 2015, unless otherwise noted)


Note: Earnings represents VOI operating revenue less VOI operating expenses.

Originated Sales Growth = Flat Operating Income Growth = Flat Timeshare Capital Spend = $150 to $200M (Cumulative’13-15)

Timeshare Cash Flow = $450 to $500M (Cumulative ’13-’15)

Bal Harbour Net Cash Flow = $100M (2013 Cash Flow per 2/7/2013 Outlook) (sell out in 2013)


199

3-Year Outlook: Sources of Growth


Note: EBITDA and EPS before special items

2012 2015

PRO-FORMA EPS

2012 OWNED M&F SVO / NET 2015

PRO-FORMA HOTELS FEES RESIDENTIAL SG&A EBITDA

Tax Rate: ~31%

$1,043

$1,370 -

$1,450 +10%

- +14%

+9% -

+12% flat

-3% -

-5%

EBITDA GROWTH (2012 – 2015, $M)

EPS GROWTH (2012 – 2015, $M)

$2.08

$3.25 -

$3.60

CAGR: 16% - 20%


200

Significant Cash Generation Potential (all figures cumulative, $ in millions)


~$2B

- = +

Asset Sales

Cash available to:

» Fund growth

» Return to shareholders

3 Yea

r Cas

h Fl

ows f

rom

2012 Ending “Excess” Cash ~$300M

Owned Hotels $1,050M

To $1,150M

Fee Business $3,100M

to $3,200M

SVO / Bal Harbour

$550M to

$600M

=

3 Yea

r Cas

h Fl

ows

SG&A Expense ($1,200M)

To ($1,250M)

Owned Hotel and IT Capital

($1,150M) to

($1,200M)

Tax and Interest Expense

($700M) to

($750M)

Sources Uses 3 Year Cash Flow

Balance Sheet capacity in 2015 (at target 2.5x Gross Debt/AEBITDA) + $1.0B to $1.3B

“Capacity” for Growth Investments & Return to Shareholders = $3.0B to $3.3B


201

Achiev ing 80/20 Asset L ight goal by 2016 = ~$3B in Cash

North America » Improving industry operating fundamentals » Low Supply increases » Foreign and PE equity capital re-emerging » REITs with access to capital Europe » Significant interest for gateway markets » Interest from Middle East and Asia Latin America » Mexican GDP accelerating » Global investor interest in Brazil Asia » Australia: hub for cross-border capital » Emergence of REITs in certain markets

Transaction Outlook Disposition Alternatives


Individual Asset Sales Portfolio Sale » Small (< 3 assets) » Large ($750M+)

Joint Venture » Private Equity » REIT » Institutional Investor / SWF REIT Spin-Off » HOT sponsored spin-off (public or non-traded REIT) » Contribute all / a portion of assets in exchange for share

and cash (public)

202

Use of “Capacity” – $3.0B to $3.3B + Cash from Asset Sales


» Support Pipeline Growth – Joint Ventures – Financing – Opportunistic Hotel Acquisitions

» Strategic Brand Acquisitions – Expand current footprint – Acquire additional regional or global

scale

Fund Growth

» Pay Dividends – 2012 Dividend: +150%; 2% yield – Increase payout as EPS grows

» Buy Back Stock – Offset Share Dilution – EPS Accretion – Below intrinsic value

Return Cash to Shareholders


203

IN SUMMARY

FOUR POINTS BY SHERATON SHEIKH ZAYED ROAD, DUBAI

204


Summary

Owning Hotels Owning Relationships

U.S.-Centric Global Enterprise

Price Point Segmentation Lifestyle Segmentation

» Higher growth trajectory

» Lower cyclicality

» Higher margin

» Higher capital efficiency

» Significant cash generation

» Superior shareholder value creation

IN SUMMARY

205

The Starwood Investment Proposition

Summary

»Leading Global Hotel Company in High Growth Markets

»Best Global High End Lodging Brands

»High Quality Global Pipeline

»High Value Global Owned Hotel Portfolio

»Unmatched Global Platform

»Extraordinary Cash Generation Potential

IN SUMMARY

206

Starwood Outlook

Summary

»Secular demand gains in Growth Markets

»Below-trend supply growth in Mature Markets

»Sharp rebound in owned hotel profits

»Significant cash generation from hotel operations, asset sales and timeshare

IN SUMMARY

207


Summary

»5-7% annual RevPAR growth achievable 2012-2015 with continued cyclical recovery

»10-12% annual EBITDA growth & 16-20% annual EPS Growth

»$3.0B to $3.3B of operating cash flow and balance sheet capacity

»80/20 Asset Light goal by 2016 could generate ~$3B in cash

»Significant capacity to fund growth investments and return cash to shareholders over next three years

IN SUMMARY

208

Same Store Owned, Leased and Consolidated Joint Venture Hotels Worldwide 2009 2012

RevenueSame store Owned, Leased and Consolidated Joint Venture Hotels 1,386$ 1,252$ Hotels sold, closed or without comparable results 198 446

Total Owned, Leased and Consolidated Joint Venture Hotels Revenue 1,584$ 1,698$

Costs and ExpensesSame store Owned, Leased and Consolidated Joint Venture Hotels 1,136$ 993$ Hotels sold, closed or without comparable results 179 398

Total Owned, Leased and Consolidated Joint Venture Hotels Costs and Expenses 1,315$ 1,391$

December 31,Twelve Months Ended

STARWOOD HOTELS AND RESORTS WORLDWIDE, INC.Non-GAAP to GAAP Reconciliations - Same Store Owned, Leased and Consolidated Joint Venture Hotel Revenue and Expenses

(In millions)

$ 562 $ (153) $ 409 182 - 182 128 (128) - 234 (55) 179 256 (11) 245 28 - 28 1,390 (347) 1,043 21 (21) - (179) 179 - (12) 12 - $ 1,220 $ (177) $ 1,043

(a)

(b)(c)

(d)(e)

STARWOOD HOTELS AND RESORTS WORLDWIDE, INC.Non-GAAP to GAAP Reconciliations - Pro Forma Data

(In millions)

Year EndedDecember 31, 2012

Income tax (benefit) expense(c)

As ReportedPro Forma

As Adjusted

Reconciliation of Net Income (Loss) to EBITDA and Adjusted EBITDA

Net income (loss)(a)

Interest expenseLoss on early extinguishment of debt, net(b)

Pro Forma Adjustments

Unusual and one-time items not expected to occur in a normalized year.

Depreciation(d)

AmortizationEBITDA(Gain) loss on asset dispositions and impairments, net(e)

Discontinued operations (gain) loss on dispositions(e)

Restructuring and other special charges (credits), net(e)

Adjusted EBITDA

The reduction in net income reflects the adjustments noted below to normalize the 2012 year. This includes eliminating $157 million of earnings from Bal Harbour, the reduction of $20 million for the asset sales that occurred in 2012 and the effect of the adjustments below.

Represents a decrease in costs as the early extinguishment is an unusual item in 2012.Includes a benefit of $52 million due to reduced EBITDA from the St. Regis Bal Harbour and a $3 million tax benefit from lower operating income from hotels sold during 2012.Includes an $11 million benefit from reduced depreciation associated with hotels sold during 2012.

Twelve Months Ended Unconsolidated Joint Ventures December 31, 2012

Equity Earnings from Unconsolidated Joint Ventures 25$ Depreciation and amortization from Unconsolidated Joint Ventures 32 Interest Expense from Unconsolidated Joint Ventures 10 EBITDA of Unconsolidated Joint Ventures 67$

STARWOOD HOTELS AND RESORTS WORLDWIDE, INC.Non-GAAP to GAAP Reconciliations

(In millions)

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.

Non-GAAP to GAAP Reconciliations – Future Performance (In millions, except per share data)

Low Case

Year Ended

December 31, 2015 Net income $ 640 Interest expense 120 Income tax expense 288 Depreciation and amortization 322 EBITDA 1,370 (Gain) loss on asset dispositions and impairments, net - Discontinued operations (gain) loss on dispositions - Adjusted EBITDA $ 1,370

Year Ended

December 31, 2015 Income from continuing operations before special items $ 640 EPS before special items $ 3.25 Special Items Gain (loss) on asset dispositions and impairments, net - Total special items – pre-tax - Income tax benefit associated with special items - Total special items – after-tax - Income from continuing operations $ 640 EPS including special items $ 3.25

High Case

Year Ended

December 31, 2015 Net income $ 709 Interest expense 110 Income tax expense 319 Depreciation and amortization 312 EBITDA 1,450 (Gain) loss on asset dispositions and impairments, net - Discontinued operations (gain) loss on dispositions - Adjusted EBITDA $ 1,450

Year Ended

December 31, 2015 Income from continuing operations before special items $ 709 EPS before special items $ 3.60 Special Items Gain (loss) on asset dispositions and impairments, net - Total special items – pre-tax - Income tax benefit associated with special items - Total special items – after-tax - Income from continuing operations $ 709 EPS including special items $ 3.60

Starwood Investment Proposition and 3-Year Outlook

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