Starwood Reports Lower Fourth-Quarter Profit

Starwood Hotels & Resorts Worldwide, Inc. reported EPS from continuing operations for the fourth quarter of 2007 of $0.74 compared to $0.94 in the fourth quarter of 2006. Excluding special items, EPS from continuing operations was $0.79 for the fourth quarter of 2007 compared to $0.92 in the fourth quarter of 2006.

Strong hotel results in the fourth quarter of 2007 were offset by declines in the company’s vacation ownership and residential business, loss of earnings from hotels sold during the past year, and a higher tax rate.

Excluding special items, the effective income tax rate in the fourth quarter of 2007 was 28.5 percent, compared to 21.4 percent in the same period of 2006 primarily related to the recognition in 2006 of certain tax credits generated in 2005.

Income from continuing operations was $146 million in the fourth quarter of 2007 compared to $203 million in 2006. Excluding special items, which net to an $11 million charge in 2007, income from continuing operations was $157 million for the fourth quarter of 2007 compared to $199 million in 2006.

Net income was $146 million and EPS was $0.74 in the fourth quarter of 2007 compared to net income of $203 million and EPS of $0.93 in the fourth quarter of 2006. Worldwide system-wide (owned, managed and franchised) REVPAR for same-store hotels increased 13.3 percent compared to the fourth quarter of 2006, including 24.5 percent in Europe, 20 percent in Africa and the Middle East, 17.5 percent in Asia Pacific, 11 percent in Latin America and 7.8 percent in North America.