745 Annual Report.v7.5 4/26/02 1:52 PM Page 2

745 Annual Report.v7.
5 4/26/02 1:52 PM Page 2
A N N U A L R E P O R T 2 0 0 1
U N P A R A L L E L E D Q U A L I T Y
745 Annual Report.v7.5 4/26/02 1:52 PM Page 3
one voice one vision
WE SUCCEED ONLY WE HAVE A PASSION
WHEN WE MEET AND EXCEED FOR EXCELLENCE AND
THE EXPECTATIONS OF WILL DELIVER THE
OUR CUSTOMERS, OWNERS HIGHEST STANDARDS OF
AND SHAREHOLDERS. INTEGRITY AND FAIRNESS.
WE HONOR
WE CELEBRATE
THE DIGNITY AND
THE DIVERSITY OF PEOPLE,
VALUE OF INDIVIDUALS
IDEAS AND CULTURES.
WORKING AS A TEAM.
WE IMPROVE WE ENCOURAGE INNOVATION,
THE COMMUNITIES ACCEPT ACCOUNTABILITY
IN WHICH WE WORK. AND EMBRACE CHANGE.
WE SHARE
WE SEEK KNOWLEDGE A SENSE OF URGENCY,
AND GROWTH NIMBLENESS AND
THROUGH LEARNING. ENDEAVOR TO
HAVE FUN TOO.
ONE VOICE ONE VISION IS STARWOOD HOTELS & RESORTS’ VALUE STATEMENT.
PROPERTIES SHOWN: FROM TOP, LEFT TO RIGHT THE WESTIN SYDNEY, SYDNEY, AUSTRALIA, SHERATON ROYAL DENARAU RESORT, DENARAU ISLAND, NADI, FIJI,
THE ST. REGIS, BEIJING, CHINA, THE WESTIN INNISBROOK RESORT, PALM HARBOR, FLORIDA, THE WESTIN TURNBERRY RESORT, AYRSHIRE, SCOTLAND UNITED
KINGDOM, JEDDAH SHERATON HOTEL, JEDDAH, SAUDI ARABIA, W SAN FRANCISCO, SAN FRANCISCO, CALIFORNIA, HOTEL DANIELLI, VENICE, ITALY.
The year 2001 was not an easy one for your in 25 hotels in partnership with Cisco Systems and launched
company. Following the collapse of the technology and redesigned websites. We refined our branded interval ownership
telecom sectors, the world’s economies fell into a synchronized programs and began marketing our two new Westin Vacation
recession. A global profits recession ensued which cut business Ownership resorts in Hawaii and Palm Springs. We signed many
travel dramatically. The rapid rise in energy prices exacerbated large meaningful management agreements significantly enhancing
the problem. The tragic events of September 11 only deepened our worldwide distribution. Here we have focused on quality
the travel industry downturn and made it a global event. and earnings impact rather than quantity. We correctly
anticipated the slowing of the global economy and the much
But, the perfect storm should lead to a lower interest rates that followed saving tens of millions of
better than expected recovery. Global interest dollars in interest expense by managing our balance sheet and
rates were lowered, energy prices have subsided and the U.S. took advantage of an unusually attractive convertible market to
government has provided massive stimulus in terms of lower tax further lower the funding costs of our operations. Further, and
rates and large military spending. For Starwood, our international very importantly, while the business environment in the fourth
operations have not performed as we might have hoped over the quarter probably could not have been worse, we were able to
past several years. The strength of the dollar globally has hurt flex our cost structure to post relatively solid EBITDA margins
tremendously, as have revolutions in Fiji, unrest in the Middle East, for a “cyclical” business in our core brands of 26%. Throughout,
the Balkins and Austria, mad cow and hoof and mouth disease, the we believe we have been prudent with our balance sheet and in
collapse of the Asian economies in 1998, the Mexican crisis and investing your precious shareholder capital with the appropriate
the Argentinian devaluation late last year. But, in every storm risk and reward metrics, balancing EBITDA and free cash flow
there is a bright cloud. Our international platform differentiates against earnings growth needs.
us from the competition - we have global growth opportunities.

Our margins remain strong and when the rebound occurs, our Looking ahead, we are positioned to continue making
profitability should be greatly enhanced. There is little doubt rapid progress on our global industry leadership goal. The
that the Asian and Chinese markets will be major growth continued expansion of W Hotels, the St. Regis brand and
businesses in the future, faster than our domestic operations. Starwood Vacation Ownership, the full implementation of Six
Sigma and the new revenue management system, continuing
Nonetheless, Starwood did make great progress innovations behind the Westin brand and the ongoing Sheraton
in 2001. Specifically, we opened three new W Hotels (our 16 th repositioning, combined with the best supply/demand industry
is the first new hotel in New York City after September 11 - dynamics we’ve witnessed in a decade should produce terrific
The W Times Square, the new flagship for the brand). We results for our shareholders in 2003, 2004 and beyond. We feel
leveraged and enhanced the success of Westin's Heavenly blessed to own an unparalleled portfolio of extraordinary assets
Bed with the launch of the Heavenly Bath and Heavenly Crib. around the world, to have a motivated and committed
Starwood Preferred Guest, the leading hotel loyalty program, workforce of more than 100,000 associates and to participate,
continued to gain market share. Guest satisfaction, employee meaningfully, in an industry, travel, which will surely remain a
satisfaction and company wide brand market share scores global growth industry in the 21st century.
continued to climb. We trained more than one thousand

executives in Six Sigma which connects our far-flung hotels with We thank our leadership management and associates for
a human network of more than 300 Black Belt experts capable all their efforts, our partners for their support, our Board of
of sharing best practices and implementing change processes Directors for its tireless efforts and you, the shareholders,
quickly and efficiently. We installed high-speed internet access for your faith in our future. We hope you'll be there with us.
Barry S. Sternlicht
Chairman and Chief Executive Officer
We encourage
innovation,
accept accountability and
embrace change.
Starwood leads the SIX SIGMA INITIATIVE BEARING FRUIT
hospitality industry with Starwood is the first hospitality company to embrace Six Sigma, the internationally recognized program
that dramatically accelerates and maximizes business performance. Initiated in February 2001, Six
innovative programs that
Sigma is already providing the company with measurable gains. This strategic, multi-year program will sustain and
set the pace for the rest build new momentum, strengthen Starwood’s global brands, enhance the company’s ability to share best practices
of the competition. around the world, improve feedback throughout the organization, enable the enterprise to embrace and implement
new technologies that drive revenue and lower costs, and create a consistently superior guest experience at all
From a corporate initiative
Starwood properties while dramatically improving the bottom line. While Starwood incurred $17 million in training
designed to enhance costs to launch Six Sigma in 2001, the company reaped tangible EBITDA increases of more than $17 million.
business performance, Training costs will be significantly reduced in 2002 and Starwood expects a substantial increase (perhaps double)
in the EBIDTA improvement achieved by Six Sigma-related programs.

to a brand launch that
W HOTELS RUNAWAY SUCCESS CONTINUES
revolutionized business
The hip W Hotels brand launched in 1998 continues its runaway success and exemplifies Starwood’s key
travel, and guest amenities
innovator role in the hospitality industry. Noted for trendsetting style, luxurious comfort, endless amenities
that have been copied and advanced technological capabilities, each W property has its own distinct look and personality. Savvy business
but never duplicated, travelers have responded enthusiastically to the upscale environs and W’s signature service commitment to provide
“whatever you want, whenever you want it.” There are now 16 W properties open and five in the pipeline, including
Starwood’s pioneering
San Diego, Mexico City and Seoul. Starwood opened its flagship property, the W Times Square, in New York in
innovations represent December 2001. Situated in the revitalized Broadway theater district, this dramatic new 57-story property is the
the company’s quest fifth W in New York.
to continually exceed WESTIN: HEAVEN ON THE ROAD
expectations, here are Westin has been a leader in developing and introducing groundbreaking hotel amenities and guest services
that have set new standards in the hospitality industry. Introduced in 1999, Westin’s Heavenly Bed®, is the
four recent examples:
brand’s signature innovation. Unlike any other bed in the hotel industry, this sumptuous, stylish all white Heavenly Bed
features a custom designed pillow-top mattress set, down duvets and pillows and high thread count sheets. In 2001 Westin
launched it’s newest innovation, the Heavenly BathSM which provides guests with a therapeutic shower experience and
sumptuous bath amenities. The showcase of the Heavenly Bath is a custom-designed dual head shower which provides
more power and wider water coverage with adjustable jets and spray options. The Heavenly Bath also has a curved
shower curtain rod which provides extra elbow room, and such luxurious products as oversized Brazilian combed
cotton bath sheets, custom designed velour bathrobes and new spa amenities.
BROADBAND: HIGH SPEED INTERNET ACCESS TAKES OFF
To meet the needs of today's business travelers, the company developed and installed Starwood Turbo
Net – High Speed Internet Access in guest and meeting rooms. Available in selected hotels, Starwood
Turbo Net features a convenient, easy-to-use connection and the fastest Internet access available. In addition, the
product provides extensive Virtual Private Network compatibility, especially important to business travelers. By selecting
Cisco as our strategic partner Starwood provides an industry leading Internet access solution for hotels and the
foundation for future innovation for our brands. Additional properties are slated to be installed in 2002.
Westin delivers Sheraton is the global Four Points by Sheraton W is a unique hotel
unmatched comfort quality brand that makes fully meets the needs brand. It redefines
and outstanding service traveling easier, more of the frequent business the hotel experience
to affluent, younger, relaxing and friendlier traveler, from extensive with attitude and
professional business to the frequent, services like room surprise. Targeted to
and leisure travelers, in an upscale business and service and dry cleaning, the younger business
environment characterized leisure travelers, to fitness centers, traveler, W is warm,
by an elegant, calming and than other hotel brands meeting facilities and witty, welcoming, wow,
subdued sense of style. in its class. business centers, whimsical and wired.
at a sensible price.
THE WESTIN PEACHTREE PLAZA SHERATON BAL HARBOUR FOUR POINTS BY SHERATON W TIMES SQUARE
ATLANTA, GEORGIA BEACH RESORT, FLORIDA SAN FRANCISCO AIRPORT, CALIFORNIA NEW YORK
T H E S T A R W O O D F A M I L Y
O F B R A N D S
The St. Regis is the Starwood’s Luxury Starwood Vacation Free nights anytime,
finest premier luxury Collection mark Ownership provides anywhere. An award
hotel brand catering designates top tier upscale villa resorts in winning collection of more
to the high-end leisure properties including some of the most sought- than 750 hotels in over
and business traveler some of the world’s after vacation destinations. 80 countries, with no
who expects the best. most renowned and Every detail that goes into blackouts and no limits on
It delivers the most legendary hotels that the design and décor of the number of free night
discreet, personalized are destinations and each spacious vacation awards you can redeem.
and anticipatory level of status symbols unto villa reflects a deep
service to each and themselves. commitment to the
every guest. comfort and care of our
owners and guests.
ST. REGIS MONARCH BEACH THE PHOENICIAN THE WESTIN ST. JOHN RESORT & VILLAS SHERATON KAUAI RESORT
RESORT & SPA, CALIFORNIA ARIZONA VIRGIN ISLANDS HAWAII

We improve the
communities
in which we work.
JON ADLER, AN ASSOCIATE
FROM THE ST. REGIS, NEW BARRY S. STERNLICHT
YORK, CELEBRATES AFTER WELCOMES MAYOR
COMPLETING THE FOUR-DAY RUDOLF GIULIANI TO THE
AIDS RIDE FROM NEW YORK GRAND OPENING OF THE
TO BOSTON, TO RAISE FUNDS W NEW YORK TIMES SQUARE
TO SUPPORT AIDS SERVICES
TWO SHERATON STEAMBOAT

BARRY S. STERNLICHT
SPRINGS ASSOCIATES
DISTRIBUTES TOYS
CYCLED FROM COLORADO
WHILE VISITING PATIENTS
TO NYC, TO DELIVER THEIR
AT CHILDREN’S HOSPITAL
FUNDRAISING PROCEEDS
— WESTCHESTER
TO THE NY FIREFIGHTERS
MEDICAL CENTER
IN PERSON
ROBERT F. COTTER
SHERATON SUITES
PRESENTS TOYS ON BEHALF
ALEXANDRIA BECAME THE
OF STARWOOD TO THE
OFFICIAL FOOD COLLECTION
FIREFIGHTER WIDOWS AND
AND PREPARATION SITE
ORPHANS FUND TO BENEFIT
FOR THE SALVATION ARMY
FAMILIES AFFECTED BY THE
FOLLOWING SEPTEMBER 11
SEPTEMBER 11 WTC TRAGEDY
THE SHERATON CASABLANCA
HOTEL & TOWERS INVITED NEW YORK AREA
20 UNDERPRIVILEGED ASSOCIATES JOINED
CHILDREN FROM THE HABITAT FOR HUMANITY
NATIONAL CHARITY IN BUILDING A HOME IN
INSTITUTION WESTCHESTER COUNTY
L’HEURE JOYEUSE
W CHEF MICHEL NISCHAN OF

ASSOCIATES THROUGHOUT
W NEW YORK AT A LOCAL
THE UNITED STATES
BRONX SCHOOL TEACHING
AND CANADA WALKED TO
STUDENTS ABOUT THE
RAISE MONEY FOR THE
IMPORTANCE OF GOOD
JUVENILE DIABETES
NUTRITION IN SUPPORT OF
RESEARCH FOUNDATION
NEW YORK CARES
SHERATON PALACE HOTEL

SHERATON TEL AVIV HOTEL
MOSCOW HOSTED A
DEMONSTRATED ITS
CHRISTMAS PARTY FOR
COMMITMENT TO
150 CHILDREN FROM
THE SOCIETY FOR DEAF
THE ORPHANAGES OF
CHILDREN, TEL AVIV
MOSCOW AND THE
AND CENTRAL REGION
SURROUNDING REGIONS
BOSTON ASSOCIATES
THE WESTIN STAMFORD AND
CLEANED THE LYNN WOODS
THE SHERATON STAMFORD
RESERVATION DURING
ASSOCIATES PARTICIPATED
BOSTON CARES DAY.
IN A READ-A-THON,
STARWOOD ASSOCIATES
BENEFITING KINDERGARTEN
ALSO SUPPORTED
AND FIRST GRADE CLASSES
CITY CARES IN CHICAGO
THE EMPLOYEE ACTIVITIES

SHERATON DOHA
COMMITTEE OF THE
HOTEL & RESORT HELD
SHERATON GATEWAY HOTEL
THE SECOND ANNUAL
LOS ANGELES AIRPORT
SHERATON DOHA GOLF CUP
FOCUSED THEIR ATTENTION
AS A FUNDRAISING EVENT
ON A LOCAL CHARITY,
DEDICATED TO UNICEF
THE LOS ANGELES MISSION
We have a passion
for excellence
and will deliver the highest standards
of integrity and fairness.
Groundbreaking industry TRAVEL PROS AWARD STARWOOD BRANDS WITH TOP HONORS
innovations — such as the Travel professionals reinforced the leadership position of many Starwood brands in the prestigious “Top U.S.
Hotel Chain Survey” conducted annually by Business Travel News. Highest honors and dramatic improvements
launch of the stylish W Hotels
characterize Starwood’s results in this significant survey of over 1,500 professional business travel decision makers.
and the introduction of
W Hotels and Westin Hotels & Resorts captured the #1 and #2 positions respectively in the Upper Upscale
Westin’s Heavenly Bed —
Category. W’s position is all the more impressive since it placed #5 last year and it’s just 3 years old. Rarely has a
designed to enhance the multi-brand hotel company enjoyed the distinction of seeing two brands with top honors in one category. Four Points
guest experience have made by Sheraton, Starwood’s full-service mid-scale brand, was awarded the #1 spot in the Mid-Price with Food &
Beverage category. St. Regis/Luxury Collection took the second spot in the Deluxe category. Sheraton catapulted
a meaningful impact. Travel
to the #3 position in the Upscale category, an impressive leap from its #7 spot last year.
professionals and savvy
STARWOOD BRANDS SET THE GOLD STANDARD AMONG TRAVELERS
travelers continue to award
Condé Nast Traveler’s annual Gold List and Gold List Reserve published in the January 2002 issue includes
Starwood brands the highest
56 Starwood properties, more than any other hotel company. Over 29,000 Condé Nast Traveler subscribers select
accolades in three leading their favorite hotels, resorts and cruise lines for the annual Gold List. The Starwood hotels and resorts included in
this prestigious list include many of the company’s world-class properties from The Luxury Collection, St. Regis
travel surveys.
Hotels & Resorts, Sheraton, Westin Hotels & Resorts and W Hotels & Resorts.
AROUND THE GLOBE, STARWOOD PROPERTIES ARE THE FAVORITES
When Travel + Leisure readers chose their favorite hotels and resorts for the annual 2001 World’s Best Awards,
40 Starwood properties were selected. From Bangkok to the Big Island and from San Francisco to Salzburg,
Starwood’s portfolio of global brands are preferred by the world’s savviest travelers.
OPPOSITE PAGE PROPERTIES SHOWN: FROM TOP, LEFT TO RIGHT W SEATTLE, SEATTLE, WASHINGTON, HOTEL IMPERIAL,
VIENNA, AUSTRIA, GRAND HOTEL, FLORENCE, ITALY, THE WESTIN REGINA, GOLF & BEACH RESORT, LOS CABOS, MEXICO,
SHERATON ROYAL HAWAIIAN HOTEL, OAHU, HAWAII, PRINCE DE GALLES HOTEL, PARIS, FRANCE, HOTEL ALFONSO XIII,
A WESTIN HOTEL, SEVILLE, SPAIN, SHERATON LAGUNA NUSA DUA, BALI, INDONESIA, HOTEL PRINCIPE DI SAVOIA, MILAN,
ITALY, W LOS ANGELES WESTWOOD, LOS ANGELES, CALIFORNIA, SHERATON SUITES LE SOLEIL, VANCOUVER, BRITISH COLUMBIA,
SHERATON MIRAGE RESORT, PORT DOUGLAS, AUSTRALIA, THE WESTIN PALACE, MADRID, SPAIN, HOTEL BRISTOL, A WESTIN
HOTEL, VIENNA, AUSTRIA, THE WESTIN HARBOUR CASTLE, TORONTO, ONTARIO, CANADA, THE ST. REGIS, NEW YORK CITY,
NEW YORK, HOTEL GRITTI PALACE, VENICE, ITALY, HOTEL GOLDENER HIRSCH, SALZBURG, AUSTRIA, THE WESTIN EXCELSIOR,
ROME, ITALY, ST. REGIS GRAND, ROME, ITALY.

We honor the
dignity
and value of individuals
working as a team.
The Chairman’s Award As far as we’ve come as a company in the last few years, we had an opportunity to recognize and reward those
associates who consistently personified the elements outlined in our values statement in their character, commitment,
was established when
courage and contribution to our company. In short they are our “pro-bowl” picks. The Chairman’s Award is the highest
the company launched recognition that Starwood presents.
the Starwood Values

Winners represent all five of our geographic divisions. They were selected, among other important individual attributes, for
Statement in 2000. their consistent efforts to exceed the expectations of internal and external customers, their exceptional leadership abilities,
character and their commitment and service as a valuable team member to enhance the teams they are a part of.
SOME OF THE WINNERS OF THE STARWOOD CHAIRMAN’S AWARD:
DENISE BATESON, Executive Housekeeper, Central London Hotels, Park Tower/Park Lane, Europe Division,
SUPHAT CHABOON, Chief Engineer, Royal Orchid Sheraton Hotel & Towers, Asia Pacific, FERNANDO HORTA,
Chief Engineer, Sheraton Algarve Hotel & Resort, Europe Division, CAROLYN JONES, Area Director of Human
Resources, The Westin St. Francis Hotel, North America Division, DAVID OGILVIE, Vice President, Global Corporate
Travel, Starwood Global Sales, CORINNE VEYESSIERE, Executive Housekeeper, Sheraton Paris Airport, Europe,
REX WARREN, Vice President, Corporate Finance, North America Division, DAVID WERNER, Lead Engineer,
Sheraton Atlantic City Convention Center Hotel, North America Division.
KARRI TRAHIN PEREZ, CARMEN OSORIO LOPEZ,
DIRECTOR OF EXECUTIVE HOUSEKEEPER,
HUMAN RESOURCES, THE WESTIN REGINA
THE WESTIN RESORT GUAM, LOS CABOS,
ASIA PACIFIC LATIN AMERICA DIVISION
BRYAN ASHLOCK, MARY DALY,
DIRECTOR OF EXECUTIVE HOUSEKEEPER,
FOOD & BEVERAGE, SHERATON NEW YORK
SHERATON MAUI, HOTEL & TOWERS,
NORTH AMERICA DIVISION NORTH AMERICA DIVISION

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
≤ Joint Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Fiscal Year Ended December 31, 2001
OR
n Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
For the Transition Period from to
Commission File Number: 1-7959 Commission File Number: 1-6828

STARWOOD HOTELS & STARWOOD HOTELS & RESORTS
(Exact name of Registrant as speciÑed in its charter)
RESORTS WORLDWIDE, INC.
(Exact name of Registrant as speciÑed in its charter)
Maryland Maryland
(State or other jurisdiction (State or other jurisdiction
of incorporation or organization) of incorporation or organization)
52-1193298 52-0901263
(I.R.S. employer identiÑcation no.) (I.R.S. employer identiÑcation no.)
1111 Westchester Avenue 1111 Westchester Avenue

White Plains, NY 10604 White Plains, NY 10604
(Address of principal executive (Address of principal executive
oÇces, including zip code) oÇces, including zip code)
(914) 640-8100 (914) 640-8100

(Registrant's telephone number, (Registrant's telephone number,
including area code) including area code)
Securities Registered Pursuant to Section 12(b) of the Act:

Title of Each Class Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share (""Corporation New York Stock Exchange
Share''), of Starwood Hotels & Resorts Worldwide, Inc.
(the ""Corporation''), the Class B shares of beneÑcial
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
Securities Registered Pursuant to Section 12(g) of the Act:

None
Indicate by check mark whether the Registrants (1) have Ñled all reports required to be Ñled by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrants were required to Ñle
such reports), and (2) have been subject to such Ñling requirements for the past 90 days. Yes ≤ No n
Indicate by check mark if disclosure of delinquent Ñlers pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of each Registrant's knowledge, in deÑnitive proxy or information statements incorporated by reference in
Part III of this Form 10-K or any amendment to this Form 10-K. ≤
As of March 15, 2002, the aggregate market value of the Registrants' voting and non-voting common equity held by non-aÇliates
(for purposes of this Joint Annual Report only, includes all shares other than those held by the Registrants' Directors, Trustees and
executive oÇcers) was $7,072,295,483.
As of March 15, 2002, the Corporation had outstanding 198,481,585 Corporation Shares and the Trust had outstanding
198,481,585 Class B Shares and 100 Class A shares of beneÑcial interest, par value $0.01 per share (""Class A Shares'').
For information concerning ownership of shares, see the Proxy Statement for the Corporation's Annual Meeting of Stockholders
that is currently expected to be held on May 17, 2002 (the ""Proxy Statement''), which is incorporated by reference under various Items
of this Joint Annual Report.
Document Incorporated by Reference:
Document Where Incorporated
Proxy Statement Part III (Items 11 and 12)

TABLE OF CONTENTS
Page
PART I
Forward-Looking Statements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1

Item 1. Business ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7
Item 2. Properties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13
Item 3. Legal Proceedings ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15
Item 4. Submission of Matters to a Vote of Security HoldersÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16
Executive OÇcers of the Registrants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16
PART II
Item 5. Market for Registrants' Common Equity and Related Stockholder Matters ÏÏÏÏÏÏÏÏÏÏÏÏ 16
Item 6. Selected Financial Data ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 17
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations 19
Item 7A Quantitative and Qualitative Disclosures about Market RiskÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 29
Item 8. Financial Statements and Supplementary Data ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30
PART III
Item 10. Directors, Trustees and Executive OÇcers of the Registrants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31
Item 11. Executive CompensationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35
Item 12. Security Ownership of Certain BeneÑcial Owners and Management ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35
Item 13. Certain Relationships and Related Transactions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35
PART IV
Item 14. Exhibits, Financial Statements, Financial Statement Schedules and Reports on
Form 8-K ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 38
This Joint Annual Report is Ñled by Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation
(the ""Corporation''), and its subsidiary, Starwood Hotels & Resorts, a Maryland real estate investment trust
(the ""Trust''). Unless the context otherwise requires, all references to the Corporation include those entities
owned or controlled by the Corporation, including SLC Operating Limited Partnership, a Delaware limited
partnership (the ""Operating Partnership''), but excluding the Trust; all references herein to the Trust include
the Trust and those entities owned or controlled by the Trust, including SLT Realty Limited Partnership, a
Delaware limited partnership (the ""Realty Partnership''); and all references to ""Starwood'' or the ""Company''
refer to the Corporation, the Trust and their respective subsidiaries, collectively. The shares of common stock,
par value $0.01 per share, of the Corporation (""Corporation Shares'') and the Class B shares of beneÑcial
interest, par value $0.01 per share, of the Trust (""Class B Shares'') are attached and trade together and may
be held or transferred only in units consisting of one Corporation Share and one Class B Share (a ""Share'').
Prior to the reorganization of Starwood (the ""Reorganization'') on January 6, 1999, the common shares of
beneÑcial interest, par value $0.01 per share, of the Trust were traded together with the Corporation Shares as
""Paired Shares,'' just as the Class B Shares and the Corporation Shares are currently traded as Shares. Unless
otherwise stated herein, all information with respect to Shares refers to Shares on and since January 6, 1999
and to Paired Shares for periods before January 6, 1999.
PART I
Forward-Looking Statements
This Joint Annual Report contains statements that constitute forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995. Such statements appear in a number of
places in this Joint Annual Report, including, without limitation, the section of Item 1, ""Business,'' captioned
""Business Strategy'' and Item 7, ""Management's Discussion and Analysis of Financial Condition and Results
of Operations.'' Such forward-looking statements may include statements regarding the intent, belief or
current expectations of Starwood, its Directors or Trustees or its oÇcers with respect to the matters discussed
in this Joint Annual Report. All such forward-looking statements involve risks and uncertainties that could
cause actual results to diÅer materially from those projected in the forward-looking statements including,
without limitation, the risks and uncertainties set forth below. The Company undertakes no obligation to
publicly update or revise any forward-looking statements to reÖect current or future events or circumstances.
Risks Relating to Hotel and Resort Operations

We Are Subject to All the Operating Risks Common to the Hotel and Leisure Industry. Operating risks
common to the hotel and leisure industry include:
¬ changes in general economic conditions, including the severity and duration of the current economic
downturn exacerbated by the September 11, 2001 terrorist attacks in New York, Washington, D.C. and
Pennsylvania (the ""September 11 Attacks'') and their aftermath;
¬ decreases in the level of demand for rooms and related services, including the recent reduction in
business travel as a result of general economic conditions and the September 11 Attacks;
¬ cyclical over-building in the hotel and leisure industry;
¬ restrictive changes in zoning and similar land use laws and regulations or in health, safety and
environmental laws, rules and regulations;
¬ changes in travel patterns;
¬ changes in operating costs including, but not limited to, energy and labor costs;
¬ the availability of capital to allow us and potential hotel owners and franchisees to fund investments;
and
¬ the Ñnancial condition of third-party property owners and franchisees.
1
In addition, our hotel management contracts are typically long-term arrangements, but most allow the
hotel owner to replace us if certain Ñnancial or performance criteria are not met. Our ability to meet these
Ñnancial and performance criteria is subject to, among other things, the risks described in this section.
Additionally, our operating results would be adversely aÅected if we could not maintain existing management,
franchise or representation agreements or obtain new agreements on favorable terms.
We Must Compete for Customers. The hotel and leisure industry is highly competitive. Our properties
compete for customers with other hotel and resort properties, and, with respect to our vacation ownership
resorts, with owners reselling their vacation ownership interests (""VOIs''), in their geographic markets. Some
of our competitors may have substantially greater marketing and Ñnancial resources than we do, and they may
improve their facilities, reduce their prices or expand or improve their marketing programs in ways that
adversely aÅect our operating results.
We Must Compete for Properties. We compete with other hotel and leisure companies for properties,
which may increase the cost of acquiring properties. Some of these competitors may have substantially greater
Ñnancial resources than we do and may be able to pay more to acquire properties than we are able to pay. In
addition, competition for properties may increase the cost of acquiring properties. We also compete with other
hotel and leisure companies for management and franchise agreements. As a result, the terms of such
agreements may not be as favorable. In connection with entering into management or franchise agreements,
we may be required to make investments in or guarantee the obligations of third parties.
The Hotel and Leisure Industry Is Seasonal in Nature. The hotel and leisure industry is seasonal in
nature; however, the periods during which we experience higher revenue vary from property to property and
depend principally upon location. Our revenue historically has been lower in the Ñrst quarter than in the
second, third or fourth quarters.
The Hotel and Leisure Business Is Capital Intensive. In order for our owned, managed and franchised
properties to remain attractive and competitive, we, the property owners and the franchisees have to spend
money periodically to keep them well maintained, modernized and refurbished. This creates an ongoing need
for cash and, to the extent we, property owners and franchisees cannot fund expenditures from cash generated
by operations, funds must be borrowed or otherwise obtained. Accordingly, our Ñnancial results may be
sensitive to the cost and availability of funds.
Real Estate Investments Are Subject to Numerous Risks. Because we own and lease hotels and resorts,
we are subject to the risks that generally relate to investments in real property. The investment returns
available from equity investments in real estate depend in large part on the amount of income earned and
capital appreciation generated by the related properties, as well as the expenses incurred. In addition, a variety
of other factors aÅect income from properties and real estate values, including governmental regulations, real
estate, zoning, tax and eminent domain laws, interest rate levels and the availability of Ñnancing. For example,
new or existing real estate, zoning or tax laws can make it more expensive and/or time-consuming to develop
real property or expand, modify or renovate hotels. When interest rates increase, the cost of acquiring,
developing, expanding or renovating real property increases and real property values may decrease as the
number of potential buyers decreases. Similarly, as Ñnancing becomes less available, it becomes more diÇcult
both to acquire and to sell real property. Finally, governments can, under eminent domain laws, take real
property. Sometimes this taking is for less compensation than the owner believes the property is worth. Any of
these factors could have a material adverse impact on our results of operations or Ñnancial condition, as well as
on our ability to make distributions to our shareholders. In addition, equity real estate investments, such as the
investments we hold and any additional properties that we may acquire, are relatively diÇcult to sell quickly.
If our properties do not generate revenue suÇcient to meet operating expenses, including debt service and
capital expenditures, our income will be adversely aÅected.
2
Hotel and Resort Development Is Subject to Timing, Budgeting and Other Risks. We intend to develop
hotel and resort properties as suitable opportunities arise, taking into consideration the general economic
climate. New project development has a number of risks, including risks associated with:
¬ 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, Öoods or Ñres that could adversely impact a
project;
¬ ability to raise capital; and
¬ governmental restrictions on the nature or size of a project.
We cannot assure you that any development project will be completed on time or within budget.
Our Vacation Ownership Business Is Subject to Extensive Regulation and Risk of Default. We market
and sell VOIs, which typically entitle the buyer to ownership of a fully-furnished resort unit for a one-week
period on either an annual or an alternate-year basis. We also acquire, develop and operate vacation ownership
resorts, and provide Ñnancing to purchasers of VOIs. These activities are all subject to extensive regulation by
the federal government and the states in which vacation ownership resorts are located and in which VOIs are
marketed and sold. In addition, the laws of most states in which we sell VOIs grant the purchaser of this type
of interest the right to rescind the purchase contract at any time within a statutory rescission period. Although
we believe that we are in material compliance with all applicable federal, state, local and foreign laws and
regulations to which vacation ownership marketing, sales and operations are currently subject, changes in
these requirements or a determination by a regulatory authority that we were not in compliance could
adversely aÅect us. Additionally, if the purchaser of a VOI defaults, we may not have recovered our
marketing, selling, and general and administrative costs related to the sale of the VOI.
Environmental Regulations Could Make Us Liable for Cleaning Up Hazardous Substances. Environ-
mental laws, ordinances and regulations of various federal, state, local and foreign governments regulate
certain of our properties and could make us liable for the costs of removing or cleaning up hazardous or toxic
substances on, under or in property we currently own or operate or that we previously owned or operated.
Those laws could impose liability without regard to whether we knew of, or were responsible for, the presence
of hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to properly
clean up such substances when present, could jeopardize our ability to develop, use, sell or rent the real
property or to borrow using the real property as collateral. If we arrange for the disposal or treatment of
hazardous or toxic wastes, we could be liable for the costs of removing or cleaning up wastes at the disposal or
treatment facility, even if we never owned or operated that facility. Other laws, ordinances and regulations
could require us to manage, abate or remove lead- or asbestos-containing materials. Similarly, the operation
and closure of storage tanks are often regulated by federal, state, local and foreign laws. Finally, certain laws,
ordinances and regulations, particularly those governing the management or preservation of wetlands, coastal
zones and threatened or endangered species, could limit our ability to develop, use, sell or rent our real
property.
General Economic Conditions May Negatively Impact Our Results. Moderate or severe economic
downturns or adverse conditions may negatively aÅect our operations. These conditions may be widespread or
isolated to one or more geographic regions. Our results in North America were negatively impacted by the
signiÑcant drop in industry-wide lodging demand, resulting primarily from the September 11 Attacks,
particularly impacting New York City, where we have seven owned hotels with approximately 3,900 rooms,
and where we manage three additional hotels with approximately 1,100 rooms. In addition, a tightening of the
labor markets in one or more geographic regions may result in fewer and/or less qualiÑed applicants for job
openings in our facilities and higher wages.
3
International Operations Are Subject to Special Political and Monetary Risks. We have signiÑcant
international operations which as of December 31, 2001 included 167 owned, managed or franchised
properties in Europe, Africa and the Middle East (including 34 properties with majority ownership);
41 owned, managed or franchised properties in Latin America (including 13 properties with majority
ownership); and 78 owned, managed or franchised properties in the Asia PaciÑc region (including 4 properties
with majority ownership). International operations generally are subject to various political and other risks
that are not present in U.S. operations. These risks include the risk of war or civil unrest, expropriation and
nationalization. In addition, some international jurisdictions restrict the repatriation of non-U.S. earnings.
Various international jurisdictions also have laws limiting the right and ability of non-U.S. entities to pay
dividends and remit earnings to aÇliated companies unless speciÑed conditions have been met. In addition,
sales in international jurisdictions typically are made in local currencies, which subject us to risks associated
with currency Öuctuations. Currency devaluations and unfavorable changes in international monetary and tax
policies could have a material adverse eÅect on our proÑtability and Ñnancing plans, as could other changes in
the international regulatory climate and international economic conditions. Other than Italy, where our risks
are heightened due to the 18 properties we own, our international properties are geographically diversiÑed and
are not concentrated in any particular region.
Acquisition Opportunities
We intend to make acquisitions that complement our business. There can be no assurance, however, that
we will be able to identify acquisition candidates or complete acquisitions on commercially reasonable terms
or at all. If additional acquisitions are made, there can be no assurance that any anticipated beneÑts will
actually be realized. Similarly, there can be no assurance that we will be able to obtain additional Ñnancing for
acquisitions, or that the ability to obtain such Ñnancing will not be restricted by the terms of our debt
agreements.
Investing Through Partnerships or Joint Ventures Decreases Our Ability to Manage Risk
In addition to acquiring or developing hotels and resorts directly, we have from time to time invested, and
may continue to invest, as a co-venturer. Joint venturers often have shared control over the operation of the
joint venture assets. Therefore, joint venture investments may involve risks such as the possibility that the co-
venturer in an investment might become bankrupt, or have economic or business interests or goals that are
inconsistent with our business interests or goals, or be in a position to take action contrary to our instructions
or requests or contrary to our policies or objectives. Consequently, actions by a co-venturer might subject
hotels and resorts owned by the joint venture to additional risk. Although we generally seek to maintain
suÇcient control of any joint venture, we may be unable to take action without the approval of our joint
venture partners. Alternatively, our joint venture partners could take actions binding on the joint venture
without our consent. Additionally, should a joint venture partner become bankrupt, we could become liable for
our partner's share of joint venture liabilities.
Disposition Opportunities
We periodically review our business with the view to identifying properties or other assets that we believe
either no longer complement our business or could be sold at signiÑcant premiums. There can be no assurance,
however, that if we identify such properties that we will be able to complete dispositions on commercially
reasonable terms or at all. In particular, we have initiated the formal sale process for the CIGA S.p.A.
(""CIGA'') portfolio of 25 luxury hotels, land, golf courses and marinas, potentially encumbered by our
management contracts in whole or in part. We began reviewing preliminary indications of interest in the Ñrst
quarter of 2002. There is, however, no guarantee that such a sale will materialize or be consummated within
our projected time frame, and if consummated, there is no guarantee of the terms of any such transaction.
Debt Financing
As a result of incurring debt, we are subject to the following risks associated with debt Ñnancing: (i) the
risk that cash Öow from operations will be insuÇcient to meet required payments of principal and interest;
4
(ii) the risk that (to the extent that we maintain Öoating rate indebtedness) interest rates will Öuctuate; and
(iii) risks resulting from the fact that the agreements governing our loan and credit facilities contain covenants
imposing certain limitations on our ability to acquire and dispose of assets. In addition, we have signiÑcant
indebtedness maturities in 2003, and although we anticipate that we will be able to repay or reÑnance our
existing indebtedness and any other indebtedness when it matures, there can be no assurance that we will be
able to do so or that the terms of such reÑnancings will be favorable. Our leverage may have important
consequences including the following: (i) our ability to obtain additional Ñnancing for acquisitions, working
capital, capital expenditures or other purposes, if necessary, may be impaired or such Ñnancing may not be
available on terms favorable to us; (ii) a substantial decrease in operating cash Öow or an increase in our
expenses could make it diÇcult for us to meet our debt service requirements and force us to modify our
operations; and (iii) our higher level of debt and resulting interest expense may place us at a competitive
disadvantage with respect to certain competitors with lower amounts of indebtedness and/or higher credit
ratings. While our senior debt is currently rated investment grade by one of the two major rating agencies,
there can be no assurance we will be able to maintain this rating. In the event our senior debt is not investment
grade, we would likely incur higher borrowing costs.
Risks Relating to Acts of God, Terrorist Activity and War

Our Ñnancial and operating performance may be adversely aÅected by acts of God, such as natural
disasters, in locations where we own and/or operate signiÑcant properties and areas of the world from which
we draw a large number of customers. Some types of losses, such as from earthquake and environmental
hazards may be either uninsurable or too expensive to justify insuring against. Should an uninsured loss or a
loss in excess of insured limits occur, we could lose all or a portion of the capital we have invested in a hotel or
resort, as well as the anticipated future revenue from the hotel or resort. In that event, we might nevertheless
remain obligated for any mortgage debt or other Ñnancial obligations related to the property. Similarly, wars,
terrorist activity (including threats of terrorist activity), political unrest and other forms of civil strife have
caused in the past, and may cause in the future, our results to diÅer materially from anticipated results.
Certain Interests
Barry S. Sternlicht is the Chairman and Chief Executive OÇcer the Corporation and the Trust.
Mr. Sternlicht also serves as the President and Chief Executive OÇcer of, and may be deemed to control,
Starwood Capital Group, L.L.C. (""Starwood Capital''), a real estate investment Ñrm. Starwood Capital and
the Company have entered into a non-compete agreement whereby Starwood Capital may not purchase a
hotel property in the United States until such opportunity is Ñrst presented to the Company. See Item 13,
""Certain Relationships and Related Transactions.'' Although Starwood Capital is free to compete with the
Company for hotel properties outside of the United States, as a matter of practice, all opportunities to
purchase such properties are also Ñrst presented to the Company. In each case, the Governance Committee of
the Board of Directors (or other committee of independent directors) will make a decision as to whether or
not the Company will pursue the opportunity. In addition, certain oÇcers and directors of the Company have
interests in businesses that may, from time to time, do business with the Company. To the extent such
individuals have a material interest in such businesses, any agreements relating thereto are subject to
Governance Committee (or other committee of independent directors) approval.
Ability to Manage Rapid Growth

Our future success and our ability to manage future growth depend in large part upon the eÅorts of our
senior management and our ability to attract and retain key oÇcers and other highly qualiÑed personnel.
Competition for such personnel is intense. There can be no assurance that we will continue to be successful in
attracting and retaining qualiÑed personnel. Accordingly, there can be no assurance that our senior
management will be able to successfully execute and implement our growth and operating strategies.
5
Internet Reservation Channels
Some of our hotel rooms are booked through internet travel intermediaries such as Travelocity.com, Inc.,
Expedia, Inc. and Priceline.com, Inc. As the percentage of internet bookings increases, these intermediaries
may be able to obtain higher commissions, reduced room rates or other signiÑcant contract concessions from
us. Moreover, some of these internet travel intermediaries are attempting to commoditize hotel rooms, by
increasing the importance of price and general indicators of quality (such as ""three-star downtown hotel'') at
the expense of brand identiÑcation. These agencies hope that consumers will eventually develop brand
loyalties to their reservations system rather than to our lodging brands. Although most of our business is
expected to be derived from traditional channels, if the amount of sales made through internet intermediaries
increases signiÑcantly, our business and proÑtability may be signiÑcantly harmed.
Tax Risks
Failure of the Trust to Qualify as a REIT Would Increase Our Tax Liability. Qualifying as a real estate
investment trust (a ""REIT'') requires compliance with highly technical and complex tax provisions that
courts and administrative agencies have interpreted only to a limited degree. Due to the complexities of our
ownership, structure and operations, the Trust is more likely than are other REITs to face interpretative issues
for which there are no clear answers. Also, facts and circumstances that we do not control may aÅect the
Trust's ability to qualify as a REIT. The Trust believes that since the taxable year ended December 31, 1995,
it has qualiÑed as a REIT under the Internal Revenue Code of 1986, as amended. The Trust intends to
continue to operate so as to qualify as a REIT. However, the Trust cannot assure you that it will continue to
qualify as a REIT. If the Trust failed to qualify as a REIT for any prior tax year, the Trust would be liable to
pay a signiÑcant amount of taxes for those years. Similarly, if the Trust fails to qualify as a REIT in the future,
our liability for taxes would increase.
Additional Legislation Could Eliminate or Reduce Certain BeneÑts of Our Structure. On January 6,
1999, we consummated the Reorganization pursuant to an Agreement and Plan of Restructuring dated as of
September 16, 1998, as amended, among the Corporation, ST Acquisition Trust, a wholly owned subsidiary of
the Corporation, and the Trust. Pursuant to the Reorganization, the Trust became a subsidiary of the
Corporation, which holds all the outstanding Class A shares of beneÑcial interest, par value $0.01 per share, of
the Trust (""Class A Shares''). The Reorganization was proposed in response to the Internal Revenue Service
Restructuring and Reform Act of 1998 (""H.R. 2676''), which made it diÇcult for us to acquire and operate
additional hotels while still maintaining our former status as a ""grandfathered paired share real estate
investment trust.'' While we believe that the Reorganization was the best alternative in light of H.R. 2676 and
that our new structure does not raise the same concerns that led Congress to enact such legislation, no
assurance can be given that additional legislation, regulations or administrative interpretations will not be
adopted that could eliminate or reduce certain beneÑts of the Reorganization and have a material adverse
eÅect on our results of operations, Ñnancial condition and prospects.
The Company undertakes global tax planning in the normal course of business. These activities may be
subject to review by tax authorities. As a result of the review process, uncertainties exist and it is possible that
some matters could be resolved adversely to the Company.
Risks Relating to Ownership of Our Shares

No Person or Group May Own More Than 8% of Our Shares. Our governing documents provide
(subject to certain exceptions) that no one person or group may own or be deemed to own more than 8% of
our outstanding stock or Shares of beneÑcial interest, whether measured by vote, value or number of Shares.
There is an exception for shareholders who owned more than 8% as of February 1, 1995, who may not own or
be deemed to own more than the lesser of 9.9% or the percentage of Shares they held on that date, provided,
that if the percentage of Shares beneÑcially owned by such a holder decreases after February 1, 1995, such a
holder may not own or be deemed to own more than the greater of 8% or the percentage owned after giving
eÅect to the decrease. We may waive this limitation if we are satisÑed that such ownership will not jeopardize
the Trust's status as a REIT. In addition, if Shares which would cause the Trust to be beneÑcially owned by
6
fewer than 100 persons are issued or transferred to any person, such issuance or transfer shall be null and void.
This ownership limit may have the eÅect of precluding a change in control of us by a third party without the
consent of our Board of Directors, even if such change in control would otherwise give the holders of Shares or
other of our equity securities the opportunity to realize a premium over then-prevailing market prices, and
even if such change in control would not reasonably jeopardize the status of the Trust as a REIT.
At Least Two Annual Meetings Must Be Held Before a Majority of Our Board of Directors Can Be
Changed. Our Board of Directors is divided into three classes. Each class is elected for a three-year term. At
each annual meeting of shareholders, approximately one-third of the members of the Board of Directors are
elected for a three-year term and the other directors remain in oÇce until their three-year terms expire.
Furthermore, our governing documents provide that no director may be removed without cause. Any removal
for cause requires the aÇrmative vote of the holders of at least two-thirds of all the votes entitled to be cast for
the election of directors.
Thus, control of the Board of Directors cannot be changed in one year without removing the directors for
cause as described above. Consequently, at least two annual meetings must be held before a majority of the
members of the Board of Directors can be changed. Our charter provides that the charter cannot be amended
without the approval of the holders of at least a majority of the outstanding Shares entitled to vote thereon.
Our Board of Directors May Issue Preferred Stock and Establish the Preferences and Rights of Any Such
Preferred Stock. Our charter provides that the total number of Shares of stock of all classes which the
Corporation has authority to issue is 1,350,000,000, initially consisting of one billion Shares of common stock,
50 million Shares of excess common stock, 200 million Shares of preferred stock and 100 million Shares of
excess preferred stock. Our Board of Directors has the authority, without a vote of shareholders, to establish
the preferences and rights of any preferred or other class or series of Shares to be issued and to issue such
Shares. The issuance of preferred shares or other shares having special preferences or rights could delay or
prevent a change in control even if a change in control would be in the interests of our shareholders. Because
our Board of Directors has the power to establish the preferences and rights of additional classes or series of
shares without a shareholder vote, our Board of Directors may give the holders of any class or series
preferences, powers and rights, including voting rights, senior to the rights of holders of our Shares.
Certain Provisions of Our Charter May Require the Approval of Two-Thirds of Our Shares and Only Our
Directors May Amend Our Bylaws. Our charter contains provisions relating to restrictions on transferability
of the Corporation Shares, which may be amended only by the aÇrmative vote of our shareholders holding
two-thirds of the votes entitled to be cast on the matter. As permitted under the Maryland General
Corporation Law, our Bylaws provide that directors have the exclusive right to amend our Bylaws.
Our Shareholder Rights Plan Would Cause Substantial Dilution to Any Shareholder That Attempts to
Acquire Us on Terms Not Approved by Our Board of Directors. We adopted a shareholder rights plan which
provides, among other things, that when speciÑed events occur, our shareholders will be entitled to purchase
from us a newly created series of junior preferred stock, subject to the ownership limit described above. The
preferred stock purchase rights are triggered by the earlier to occur of (i) ten days after the date of a public
announcement that a person or group acting in concert has acquired, or obtained the right to acquire,
beneÑcial ownership of 15% or more of our outstanding Corporation Shares or (ii) ten business days after the
commencement of or announcement of an intention to make a tender oÅer or exchange oÅer, the
consummation of which would result in the acquiring person becoming the beneÑcial owner of 15% or more of
our outstanding Corporation Shares. The preferred stock purchase rights would cause substantial dilution to a
person or group that attempts to acquire us on terms not approved by our Board of Directors.
Item 1. Business.
General
Starwood is one of the world's largest hotel and leisure companies. Starwood's status as one of the leading
hotel and leisure companies resulted from the 1998 acquisition of Westin Hotels & Resorts Worldwide, Inc.
and certain of its aÇliates (""Westin'') (the ""Westin Merger'') and the acquisition of ITT Corporation (the
7
""ITT Merger''), renamed Sheraton Holding Corporation (""Sheraton Holding''). The Company conducts its
hotel and leisure business both directly and through its subsidiaries. The Company's brand names include St.
Regis», The Luxury Collection», Sheraton», Westin», W» and Four Points» by Sheraton. Through these
brands, Starwood is well represented in most major markets around the world.(1)
The Company's revenue and earnings are derived primarily from hotel and leisure operations, which
include the operation of the Company's owned hotels; management fees earned from hotels the Company
manages pursuant to long-term management contracts; the receipt of franchise fees; and the development,
ownership and operation of vacation ownership resorts, marketing and selling VOIs in the resorts and
providing Ñnancing to customers who purchase such interests.
The Company's hotel and leisure business emphasizes the global operation of hotels and resorts primarily
in the luxury and upscale segment of the lodging industry. Starwood seeks to acquire interests in or
management rights with respect to properties in this segment. At December 31, 2001, the Company's portfolio
included owned, managed and franchised hotels totaling 743 hotels with approximately 224,000 rooms in over
80 countries and 15 vacation ownership resorts, all in the United States. The hotel portfolio is comprised of
165 hotels that Starwood owns or leases or in which Starwood has a majority equity interest (substantially all
of which hotels Starwood also manages), 265 hotels managed by Starwood on behalf of third-party owners
(including entities in which Starwood has a minority equity interest) and 313 hotels for which Starwood
receives franchise fees.
The Trust was organized in 1969, and the Corporation was incorporated in 1980, both under the laws of
Maryland. Sheraton Hotels & Resorts, Starwood's largest brand, has been serving guests for more than
60 years.
The Company's principal executive oÇces are located at 1111 Westchester Avenue, White Plains, New
York 10604, and its telephone number is (914) 640-8100.
For a discussion of the Company's revenues, proÑts, assets and geographical segments, see the notes to
Ñnancial statements of this Joint Annual Report. For additional information concerning the Company's
business, see Item 2, ""Properties,'' of this Joint Annual Report.
Competitive Strengths
Management believes that the following factors contribute to the Company's position as a leader in the
lodging industry and provide a foundation for the Company's business strategy:
Brand Strength. Starwood believes that it has strong brand leadership in major markets worldwide
based on the global recognition of the Company's lodging brands. The strength of the Company's brands is
evidenced, in part, by the superior ratings received from the Company's hotel guests and from industry
publications. For example, Starwood was again designated as the ""World's Best Global Hotel Company'' by
Global Finance magazine in their September 2001 issue. Also, for the third year in a row, Starwood brands
took top honors in Business Travel News' 2001 Survey of Top Hotel Chains. W Hotels and Westin Hotels &
Resorts earned Ñrst and second place in the upscale category, and Four Points by Sheraton was voted number
one in the mid-price category. With the Company's well known lodging brands, Starwood beneÑts from a
luxury and upscale branding strategy that provides strong operating performance from new customer
penetration and customer loyalty. During 2001, Starwood converted four of its owned hotels, which had been
operated on a non-branded or non-proprietary-branded basis, to proprietary brands owned by the Company.
These conversions have enhanced and expanded the Company's global presence and brand recognition. In
2001, the Company also added an additional 48 hotels with approximately 9,800 rooms to its branded hotel
system. In total, approximately 1,500 rooms were added to the W brand in 2001.
(1) The Company owns or has rights to various trademarks, trade names and service marks used in our business, including those listed
above, and related logos. This Joint Annual Report also includes trademarks, trade names and service marks owned by other
companies.
8
Frequent Guest Program. The Company's loyalty program, Starwood Preferred Guest» (""SPG''), was
awarded the 2000 Hotel Program of the Year for the second year in a row by consumers via the prestigious
Freddie Awards. SPG, despite being the newest hotel loyalty program in the industry, also received awards for
Best Customer Service, Best Web Site, Best Elite-Level Program and Best Award Redemption. SPG, deemed
unique in the hotel and leisure industry for its policy of no blackout dates and no capacity controls, enables
members to redeem stays when they want and where they want, a feature not oÅered by competitors.
SigniÑcant Presence in Top Markets. The Company's luxury and upscale hotel and resort assets are
well positioned in North America, Europe, Asia, Latin America and Africa. These assets are primarily located
in major cities and resort areas that management believes have historically demonstrated a strong breadth,
depth and growing demand for luxury and upscale hotels and resorts, in which the supply of sites suitable for
hotel development has been limited and in which development of such sites is relatively expensive.
Premier and Distinctive Properties. Starwood controls a distinguished and diversiÑed group of hotel
properties throughout the world, including The St. Regis in New York, New York; The Phoenician in
Scottsdale, Arizona; the Hotel Danieli in Venice, Italy; and the Westin Palace in Madrid, Spain. These are
among the leading hotels in the industry and are at the forefront of providing the highest quality and service.
The Condeπ Nast Traveler Magazine 2002 Gold List Readers' Choice Poll included 56 Starwood properties as
part of the top hotels to stay at in the world. Starwood owns or manages more Gold List winners than any other
hotel company in the world.
Scale. As one of the largest hotel and leisure companies focusing on the luxury and upscale full-service
lodging market, Starwood has the scale to support its core marketing and reservation functions. The Company
also believes that its scale will contribute to lowering its cost of operations through purchasing economies in
such areas as insurance, energy, telecommunications, employee beneÑts, food and beverage, furniture, Ñxtures
and equipment and operating supplies.
DiversiÑcation of Cash Flow and Assets. Management believes that the diversity of the Company's
brands, market segments served, revenue sources and geographic locations provides a broad base from which
to enhance revenue and proÑts and to strengthen the Company's global brands. This diversity limits the
Company's exposure to any particular lodging asset, brand or geographic region.
While Starwood focuses on the luxury and upscale portion of the full-service lodging market, the
Company's brands cater to a diverse group of sub-markets within this market. For example, the St. Regis
hotels cater to high-end hotel and resort clientele while Four Points by Sheraton hotels deliver extensive
amenities and services at more aÅordable rates. Management believes that the diversity of the Company's
brands and customer base reduces the likelihood of competition for customers at any one of the Company's
hotels from other hotels within its portfolio. Instead, management believes that this diversity serves to increase
the Company's market share within markets where Starwood operates more than one brand.
9
Starwood derives its cash Öow from multiple sources, including owned hotels, management and franchise
fees, and VOI sales, and is geographically diverse with operations on six continents. The following table
reÖects the Company's properties by revenue source as of December 31, 2001:
Number of
Properties Rooms
(a)
Owned hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 165 57,000
Managed hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 222 73,000
Franchised hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 313 78,000
Unconsolidated joint venture hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 43 16,000
Total hotel propertiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 743 224,000
Vacation ownership resorts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15 N/A
(a) Includes wholly owned, majority owned and leased hotels.
The following table shows the Company's geographical presence by major geographic area for the year
ended December 31, 2001:
Hotels Rooms
(a)
North America ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 457 149,000
Europe, Africa and the Middle East ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 167 40,000
Latin America ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 41 9,000
Asia PaciÑcÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 78 26,000
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 743 224,000
(a) Excludes 15 vacation ownership resorts.
Business Segment and Geographical Information

Incorporated by reference in Note 21, ""Business Segment and Geographical Information,'' in the notes to
Ñnancial statements set forth in Part II, Item 8, ""Financial Statements and Supplementary Data.''
Business Strategy
The Company's primary business objective is to maximize earnings and cash Öow by increasing the
proÑtability of the Company's existing portfolio; selectively acquiring interests in additional assets; increasing
the number of the Company's hotel management contracts and franchise agreements; acquiring, developing
and selling VOIs; and maximizing the value of its owned real estate properties, including selectively disposing
of non-core hotels and ""trophy'' assets that may be sold at signiÑcant premiums. The Company plans to meet
these objectives by leveraging its global assets, broad customer base and other resources and by taking
advantage of the Company's scale to reduce costs. The September 11 Attacks and their aftermath make
Ñnancial planning and implementation of our strategy more challenging.
Growth Opportunities. Management has identiÑed several growth opportunities with a goal of enhanc-
ing the Company's operating performance and proÑtability, including:
¬ Continuing to expand the Company's role as a third-party manager of hotels and resorts. This allows
Starwood to expand the presence of its lodging brands and gain additional cash Öow generally with
modest capital commitment;
¬ Franchising the Sheraton, Westin and Four Points by Sheraton brands to selected third-party
operators, thereby expanding the Company's market presence, enhancing the exposure of its hotel
brands and providing additional income through franchise fees;
10
¬ Expanding the Company's internet presence and sales capabilities to increase revenue and improve
customer service;
¬ Continuing to grow the Company's frequent guest program, thereby increasing occupancy rates while
providing the Company's customers with beneÑts based upon loyalty to the Company's hotels;
¬ Enhancing the Company's marketing eÅorts by integrating the Company's proprietary customer
databases, so as to sell additional products and services to existing customers, improve occupancy rates
and create additional marketing opportunities;
¬ Optimizing the Company's use of its real estate assets to improve ancillary revenue, such as restaurant,
beverage and parking revenue from the Company's hotels and resorts;
¬ Continuing to build the ""W'' hotel brand to appeal to upscale business travelers and other customers
seeking full-service hotels in major markets;
¬ ReÑning the positioning of the Company's brands to further its strategy of strengthening brand identity.
By re-branding certain owned hotels to one of Starwood's proprietary brands, Starwood will seek to
further solidify its brand reputation and market presence, leading to enhanced revenue per available
room (""REVPAR''), which we consider to be a meaningful indicator of our performance, as it
measures the period-over-period growth in rooms revenue for comparable properties;
¬ Developing additional vacation ownership resorts near select hotel locations, thereby allowing us to
leverage our hotel assets; and
¬ Becoming the Ñrst hospitality company in the world to embrace Six Sigma, the internationally
recognized program that dramatically accelerates and maximizes business performance. This initiative
is expected to deliver signiÑcant long-term Ñnancial beneÑts.
Starwood intends to explore opportunities to expand and diversify the Company's hotel portfolio through
minority investments and selective acquisitions of properties domestically and internationally that meet some
or all of the following criteria:
¬ Luxury and upscale hotels and resorts in major metropolitan areas and business centers;
¬ Major tourist hotels, destination resorts or conference centers that have favorable demographic trends
and are located in markets with signiÑcant barriers to entry or with major room demand generators
such as oÇce or retail complexes, airports, tourist attractions or universities;
¬ Undervalued hotels whose performance can be increased by re-branding to one of the Company's hotel
brands, the introduction of better and more eÇcient management techniques and practices and/or the
injection of capital for renovating, expanding or repositioning the property;
¬ Hotels or brands which would enable the Company to provide a wider range of amenities and services
to customers; 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 Starwood to obtain favorable pricing or obtain
attractive assets that would otherwise not be available.
Starwood may also selectively choose to develop and construct desirable hotels and resorts to help the
Company meet its strategic goals, such as the development of the W Times Square, the conversion of the
Days Inn Chicago to the W Lakeshore and the conversion of the Midland Hotel to the W Chicago, all
completed in the second half of 2001.
Competition
The hotel and leisure industry is highly competitive. Competition is generally based on quality and
consistency of room, restaurant and meeting facilities and services, attractiveness of locations, availability of a
global distribution system, price and other factors. Management believes that Starwood competes favorably in
11
these areas. Starwood's properties compete with other hotels and resorts, including facilities owned by local
interests and facilities owned by national and international chains, in their geographic markets. The principal
competitors of Starwood include other hotel operating companies, ownership companies (including hotel
REITs) and national and international hotel brands.
Starwood encounters strong competition as a hotel and resort operator and developer. While some of the
Company's competitors are private management Ñrms, several are large national and international chains that
own and operate their own hotels, as well as manage hotels for third-party owners, under a variety of brands
that compete directly with the Company's brands. In addition, hotel management contracts are typically long-
term arrangements, but most allow the hotel owner to replace the management Ñrm if certain Ñnancial or
performance criteria are not met.
Environmental Matters
Starwood is subject to certain requirements and potential liabilities under various federal, state and local
environmental laws, ordinances and regulations (""Environmental Laws''). For example, a current or previous
owner or operator of real property may become liable for the costs of removal or remediation of hazardous or
toxic substances on, under or in such property. Such laws often impose liability without regard to whether the
owner or operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The
presence of hazardous or toxic substances may adversely aÅect the owner's ability to sell or rent such real
property or to borrow using such real property as collateral. Persons who arrange for the disposal or treatment
of hazardous or toxic wastes may be liable for the costs of removal or remediation of such wastes at the
treatment, storage or disposal facility, regardless of whether such facility is owned or operated by such person.
Starwood uses certain substances and generates certain wastes that may be deemed hazardous or toxic under
applicable Environmental Laws, and Starwood from time to time has incurred, and in the future may incur,
costs related to cleaning up contamination resulting from historic uses of certain of the Company's current or
former properties or the Company's treatment, storage or disposal of wastes at facilities owned by others.
Other Environmental Laws require abatement or removal of certain asbestos-containing materials (""ACMs'')
(limited quantities of which are present in various building materials such as spray-on insulation, Öoor
coverings, ceiling coverings, tiles, decorative treatments and piping located at certain of the Company's hotels)
in the event of damage or demolition, or certain renovations or remodeling. These laws also govern emissions
of and exposure to asbestos Ñbers in the air. Environmental Laws also regulate polychlorinated biphenyls
(""PCBs''), which may be present in electrical equipment. A number of the Company's hotels have
underground storage tanks (""USTs'') and equipment containing chloroÖuorocarbons (""CFCs''); the opera-
tion and subsequent removal or upgrading of certain USTs and the use of equipment containing CFCs also are
regulated by Environmental Laws. In connection with the Company's ownership, operation and management
of its properties, Starwood could be held liable for costs of remedial or other action with respect to PCBs,
USTs or CFCs.
Environmental Laws are not the only source of environmental liability. Under the common law, owners
and operators of real property may face liability for personal injury or property damage because of various
environmental conditions such as alleged exposure to hazardous or toxic substances (including, but not limited
to, ACMs, PCBs and CFCs), poor indoor air quality, radon or poor drinking water quality.
Although Starwood has incurred and expects to incur remediation and other environmental costs during
the ordinary course of operations, management anticipates that such costs will not have a material adverse
eÅect on the operations or Ñnancial condition of the Company.
Seasonality and DiversiÑcation
The hotel and leisure industry is seasonal in nature; however, the periods during which the Company's
properties experience higher revenue activities vary from property to property and depend principally upon
location. Other than 2001, which was dramatically impacted by the September 11 Attacks, the Company's
12
revenues and EBITDA(1) historically have been lower in the Ñrst quarter than in the second, third or fourth
quarters.
Comparability of Owned Hotel Results

Starwood continually updates and renovates its owned, leased and consolidated joint venture hotels.
While undergoing renovation, these hotels are generally not operating at full capacity and, as such, these
renovations can initially negatively impact Starwood's revenues and EBITDA.
Employees
At December 31, 2001, Starwood employed approximately 115,000 persons at its corporate oÇces, owned
and managed hotels and vacation ownership resorts, of whom approximately 42% were employed in the United
States. At December 31, 2001, approximately 34% of the U.S.-based employees were covered by various
collective bargaining agreements providing, generally, for basic pay rates, working hours, other conditions of
employment and orderly settlement of labor disputes. Generally, labor relations have been maintained in a
normal and satisfactory manner, and management believes that the Company's employee relations are good.
Item 2. Properties.
Starwood is one of the largest hotel and leisure companies in the world, with operations in over 80
countries. Starwood considers its hotels generally to be premier establishments with respect to desirability of
location, size, facilities, physical condition, quality and variety of services oÅered in the markets in which they
are located. Although obsolescence arising from age and condition of facilities can adversely aÅect the
Company's hotels and resorts, Starwood and third-party owners of managed and franchised hotels expend
substantial funds to renovate and maintain their facilities in order to remain competitive. For further
information, see Item 7, ""Management's Discussion and Analysis of Financial Condition and Results of
Operations Ì Liquidity and Capital Resources Ì Capital Expenditures,'' in this Joint Annual Report.
The Company's hotel and leisure business included 743 owned, managed or franchised hotels with
approximately 224,000 rooms and 15 vacation ownership resorts at December 31, 2001, predominantly under
six brands. All brands are full-service properties that range in amenities from luxury, upscale hotels and resorts
to more moderately priced hotels:
St. Regis Hotels & Resorts (luxury full-service hotels and resorts) deliver the most discreet, personalized
and anticipatory level of service to high-end leisure and business travelers. St. Regis hotels typically have
individual design characteristics to accentuate each individual location and city. Most St. Regis hotels have
spacious, luxurious rooms and suites with highly designed, residential surroundings and include a 4- or 5-Star
restaurant on premise.
The Luxury Collection (luxury full-service hotels and resorts) is a group of unique hotels and resorts
oÅering exceptional service to an elite clientele. The Luxury Collection includes some of the world's most
renowned and legendary hotels. These hotels are distinguished by magniÑcent decor, spectacular settings and
impeccable service.
Sheraton Hotels & Resorts (upscale full-service hotels and resorts) is the Company's largest brand
serving the needs of upscale business and leisure travelers worldwide. Sheraton hotels oÅer the entire spectrum
of comfort, from full-service hotels in major cities to luxurious resorts. These hotels typically feature a wide
(1) EBITDA is deÑned as income before interest expense, income tax expense, depreciation and amortization. Special items and gains
and losses from sales of real estate and investments are also excluded from EBITDA as these items do not impact operating results
on a recurring basis. Management considers EBITDA to be one measure of the cash Öows from operations of the Company before
debt service that provides a relevant basis for comparison, and EBITDA is presented to assist investors in analyzing the performance
of the Company. This information should not be considered as an alternative to any measure of performance as promulgated under
accounting principles generally accepted in the United States, nor should it be considered as an indicator of the overall Ñnancial
performance of the Company. The Company's calculation of EBITDA may be diÅerent from the calculation used by other
companies and, therefore, comparability may be limited.
13
variety of on-site business services and a full range of amenities including rooms that feature generous work
spaces, allowing business travelers to stay productive on the road.
Westin Hotels & Resorts (luxury and upscale full-service hotels and resorts) are Ñrst-class, signature
hotels that typically make up an integral part of a city or region in which the hotels are located. Westin hotels
deliver unmatched comfort to aÉuent professional business and leisure travelers.
W Hotels (stylish boutique full-service urban hotels) was Ñrst established in December 1998 with the
opening of the W New York. W hotels provide a unique hotel alternative to business travelers. W hotels
feature modern, sophisticated design with custom-made furnishings and accessories, fully wired rooms with
the most advanced technology in the industry, and unique, high-quality signature restaurants and bars.
Four Points by Sheraton (moderately priced full-service hotels) deliver extensive amenities and services
such as room service, dry cleaning, Ñtness centers, meeting facilities and business centers to frequent business
travelers at reasonable prices. These hotels provide a comfortable, well-appointed room, which typically
includes a two-line telephone, a large desk for working or in-room dining, comfortable seating and full-service
restaurants.
Owned Hotels
The following table summarizes REVPAR(1), average daily rates (""ADR'') and average occupancy rates
on a year-to-year basis for the Company's 155 owned, leased and consolidated joint venture hotels (excluding
2 hotels under signiÑcant renovation in 2001, 8 hotels without prior year results and 10 hotels sold during 2000
and 2001) (""Same-Store Owned Hotels'') for the years ended December 31, 2001 and 2000:
Year Ended December 31,
2001 2000 Variance
Worldwide (155 hotels with approximately 53,000 rooms)

REVPAR ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $101.98 $115.01 (11.3)%
ADR ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $156.73 $161.59 (3.0)%
Occupancy ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 65.1% 71.2% (6.1)
North America (110 hotels with approximately 40,000 rooms)
International (45 hotels with approximately 13,000 rooms)
During the years ended December 31, 2001 and 2000, the Company invested approximately $477 million
and $544 million, respectively, for capital improvements primarily at owned hotel assets. These capital
expenditures included signiÑcant new growth investment for the acquisition of a second fully-entitled site
adjacent to the San Francisco Museum of Modern Art. Other major expenditures during 2001 included the
development of the W Times Square, the conversion of the Days Inn Chicago to the W Lakeshore and the
conversion of the Midland Hotel to the W Chicago. During 2000, the Company also expanded the Westin
Mission Hills Resort and completed signiÑcant renovation work at the Sheraton Bal Harbour and Westin
Maui. Internationally, during 2000 the 100-room expansion of the Westin Turnberry Resort in Scotland,
including the addition of a second golf course and the Colin Montgomerie links golf academy, was completed.
(1) REVPAR is calculated by dividing rooms 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 a revenues.
14
Hotel Management and Franchising
Hotel and resort properties in the United States are often owned by entities that neither manage hotels
nor own a brand name. Hotel owners typically enter into management contracts with hotel management
companies to operate their hotels. When a management company does not oÅer a brand aÇliation, the hotel
owner often chooses to pay separate franchise fees to secure the beneÑts of brand marketing, centralized
reservations and other centralized administrative functions, particularly in the sales and marketing area.
Management believes that companies, such as Starwood, that oÅer both hotel management services and well-
established worldwide brand names appeal to hotel owners by providing the full range of management and
marketing services.
Managed Hotels. Through its subsidiaries, Starwood manages hotels worldwide, usually under a long-
term agreement with the hotel owner (including entities in which Starwood has a minority equity interest).
The Company's responsibilities under hotel management contracts typically include hiring, training and
supervising the managers and employees that operate these facilities. For additional fees, Starwood provides
reservation services and coordinates national advertising and certain marketing and promotional services.
Starwood prepares and implements annual budgets for the hotels it manages and is responsible for allocating
property-owner funds for periodic maintenance and repair of buildings and furnishings. At December 31, 2001,
Starwood managed 265 hotels worldwide under long-term agreements.
Management contracts typically provide for base fees tied to gross revenue and incentive fees tied to
proÑts. In the Company's experience, owners seek hotel managers that can provide attractively priced base,
incentive, marketing and franchise fees combined with demonstrated sales and marketing expertise and
operations-focused management designed to enhance proÑtability. Some of the Company's management
contracts permit the hotel owner to terminate the agreement when the hotel is sold or otherwise transferred to
a third party, as well as if Starwood fails to meet established performance criteria. In addition, many hotel
owners seek equity, debt or other investments from Starwood to help Ñnance hotel renovations or conversion to
a Starwood brand so as to align the interests of the owner and the Company. The Company's ability or
willingness to make such investments may determine, in part, whether Starwood will be oÅered, will accept, or
will retain a particular management contract. During 2001, the Company signed management agreements
with 23 hotels with approximately 4,500 rooms.
Brand Franchising. Through its subsidiaries, Starwood franchises its Sheraton, Westin and Four Points
by Sheraton brand names and generally derives licensing and other fees from franchisees based on a Ñxed
percentage of the franchised hotel's room revenue, as well as fees for other services, including centralized
reservations, sales and marketing, public relations and national and international media advertising. In
addition, a franchisee may also purchase hotel supplies, including brand-speciÑc products, from certain
Starwood-approved vendors. Starwood approves certain plans for, and the location of, franchised hotels and
reviews their design. At December 31, 2001, there were 299 franchised properties with approximately
76,000 rooms operating under the Sheraton, Westin and Four Points by Sheraton brands. During 2001, the
Company signed franchise agreements with 25 hotels with approximately 4,600 rooms.
Vacation Ownership Interest
The Company currently has 15 interval ownership resorts in its portfolio with 10 currently selling VOIs,
two under construction and three that have sold all existing inventory. The Company invested $49 million and
$114 million in 2001 and 2000, respectively, on vacation ownership resort construction. Two and three new
interval ownership resorts were added in 2001 and 2000, respectively.
Item 3. Legal Proceedings.
Incorporated by reference to the description of legal proceedings in Note 20, ""Commitments and
Contingencies,'' in the notes to Ñnancial statements set forth in Part II, Item 8, ""Financial Statements and
Supplementary Data.''
15
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive OÇcers of the Registrants

See Part III, Item 10, of this Joint Annual Report for information regarding the executive oÇcers of the
Registrants, which information is incorporated herein by reference.
PART II
Item 5. Market for Registrants' Common Equity and Related Stockholder Matters.
Market Information
The Shares are traded on the New York Stock Exchange (the ""NYSE'') under the symbol ""HOT.'' The
Class A Shares are all currently held by the Corporation and have never been traded.
The following table sets forth, for the Ñscal periods indicated, the high and low sale prices per Share on
the NYSE Composite Tape.
High Low
2001
Fourth quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $29.95 $21.25
Third quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $37.50 $17.75
Second quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $40.77 $31.64
First quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $38.88 $32.10
2000
Fourth quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $37.50 $25.56
Third quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $35.18 $28.26
Second quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $33.14 $22.88
First quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $27.11 $19.30
Holders
As of March 15, 2002, there were approximately 20,000 holders of record of Shares and one holder of
record (the Corporation) of the Class A Shares.
16
Distributions Made/Declared
The following table sets forth the frequency and amount of distributions made by the Trust to holders of
Shares for the years ended December 31, 2001 and 2000:
Distributions
Made
2001
Fourth quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.20(a)
Third quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.20
Second quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.20
First quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.20
2000
Fourth quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.1725(a)
Third quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.1725
Second quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.1725
First quarter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $0.1725
(a) The Trust declared distributions for the fourth quarter of 2001 and 2000 to shareholders of record on December 31, 2001 and 2000,
respectively. The distributions were paid in January 2002 and 2001, respectively.
The Corporation has not paid any cash dividends since its organization and does not anticipate that it will
make any such distributions in the foreseeable future.
As a consequence of the Reorganization, holders of Class B Shares are entitled, subject to certain
conditions, to receive a non-cumulative annual dividend, which was set at an initial rate of $0.60 per Share for
1999, to the extent the dividend is authorized by the Board of Trustees of the Trust. The annual dividend was
increased to an annual rate of $0.69 and $0.80 per Share in 2000 and 2001, respectively. We intend to shift
from paying a quarterly dividend to holders of Shares to paying an annual dividend. The Ñnal determination of
the amount of the dividends will be subject to economic and Ñnancial consideration, as well as approval by our
Board of Trustees of the Trust. Unless dividends for the then current dividend period have been paid on the
Class B Shares, the Trust is not permitted to pay a dividend on the Class A Shares (except in certain
circumstances). Under the terms of the Company's Senior Credit Facility, the Trust may pay unlimited
dividends to the Corporation or any wholly owned subsidiary thereof and during any period of twelve
consecutive calendar months, the Trust may pay cash dividends to its shareholders (excluding the Corporation
and any wholly owned subsidiary) in an aggregate initial amount not to exceed the lesser of (a) $150,000,000
in 1999 and increasing 20% annually thereafter and (b) 10% of EBITDA as deÑned in the Senior Credit
Facility. In September 2001 and November 2001, the Company obtained waivers of this dividend restriction
from its lenders, allowing the Company to pay its regularly scheduled dividends for the third and fourth
quarters of 2001.
Conversion of Securities; Sale of Unregistered Securities

During 2001, the Trust consented to the exchange of approximately 1,939,000 shares of Class B
Exchangeable Preferred Shares (""Class B EPS'') by certain stockholders for an equal number of shares of
Class A Exchangeable Preferred Shares (""Class A EPS''). Additionally, the Trust consented to the exchange
of approximately 2.0 million shares of Class A EPS for an equal number of Shares.
During 2001, the Company exchanged approximately 1.8 million limited partnership units of the Realty
Partnership and the Operating Partnership held by third parties for Shares on a one-for-one basis.
Item 6. Selected Financial Data.

The following Ñnancial and operating data should be read in conjunction with the information set forth
under ""Management's Discussion and Analysis of Financial Condition and Results of Operations'' and the
17
consolidated Ñnancial statements of the Company and related notes thereto appearing elsewhere in this Joint
Annual Report and incorporated herein by reference. The historical information represents the historical
results of Sheraton Holding up to the date of the ITT Merger, because the ITT Merger was treated as a
reverse purchase for accounting purposes. This income statement and operating data excludes the results of
the discontinued lines of business, which include the Company's gaming operations, ITT Educational
Services, Inc. (""Educational Services'') and ITT World Directories (""WD''), all of which were substantially
disposed of in 1999 and 1998.
2001 2000 1999 1998 1997
(In millions, except per Share data)
Income Statement Data
Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,967 $4,345 $ 3,829 $ 3,281 $1,735
Operating income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 615 $1,028 $ 841 $ 537 $ (330)
Income (loss) from continuing operations ÏÏÏÏÏÏÏÏÏÏÏÏ $ 151 $ 401 $ (638) $ 220 $ (233)
Basic earnings (loss) per Share from continuing
operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.75 $ 1.99 $ (3.41) $ 1.06 $(1.85)
Operating Data
Cash from continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 761 $ 852 $ 571 $ 43 $ 8
Cash from (used for) investing activitiesÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (621) $ (659) $ 3,172 $ 2,340 $1,132
Cash from (used for) Ñnancing activities ÏÏÏÏÏÏÏÏÏÏÏÏ $ (169) $ (420) $(3,335) $(2,056) $ (425)
Aggregate cash distributions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 156 $ 134 $ 116 $ 324(a) $ Ì
Cash distribution per Share ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.80 $ 0.69 $ 0.60 $ 1.71 $ Ì
(a) Excludes approximately $3.0 billion of consideration paid to Sheraton Holding stockholders in connection with the ITT Merger.
At December 31,
2001 2000 1999 1998 1997
(In millions)
Balance Sheet Data
Total assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $12,461 $12,697 $12,940 $13,417 $6,790
Long-term debt, net of current maturities and
including redeemable Class B EPSÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 5,269 $ 5,074 $ 4,779 $ 5,951 $ Ì
The following table presents a reconciliation of operating income to EBITDA (in millions):
2001 2000 1999
Operating income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 615 $1,028 $ 841

Depreciation(a) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 460 418 394
Amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 93 90 82
Interest expense of unconsolidated joint ventures ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 25 18 16
Interest income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11 19 16
Restructuring and other special charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 Ì 3
Argentina foreign exchange gain ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (24) Ì Ì
EBITDA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,230 $1,573 $1,352
(a) Includes the Company's share of depreciation expense of unconsolidated joint ventures.
18
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results of Operations (""MD&A'')
discusses the Company's consolidated Ñnancial statements, which have been prepared in accordance with
accounting principles generally accepted in the United States. The preparation of these consolidated Ñnancial
statements requires management to make estimates and assumptions that aÅect the reported amounts of
assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated Ñnancial
statements and the reported amounts of revenues and costs and expenses during the reporting periods. On an
ongoing basis, management evaluates its estimates and judgments, including those relating to revenue
recognition, bad debts, inventories, investments, plant, property and equipment, goodwill and intangible assets,
income taxes, Ñnancing operations, frequent guest program liability, self-insurance claims payable, restructur-
ing costs, retirement beneÑts and contingencies and litigation.
Management bases its estimates and judgments on historical experience and on various other factors that
are believed to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that are not readily available from other sources.
Actual results may diÅer from these estimates under diÅerent assumptions and conditions.
On December 20, 2001, the Securities and Exchange Commission (""SEC'') requested that all registrants
list their most ""critical accounting policies'' in MD&A. The SEC indicated that a ""critical accounting policy''
is one which is both important to the portrayal of the Company's Ñnancial condition and results and requires
management's most diÇcult, subjective or complex judgments, often as a result of the need to make estimates
about the eÅect of matters that are inherently uncertain. The Company believes that the following accounting
policies Ñt this deÑnition:
Revenue Recognition. The Company's revenues are primarily derived from the following sources:
(1) hotel and resort revenues at the Company's owned, leased and consolidated joint venture properties;
(2) management and franchise fees; (3) vacation ownership revenues; and (4) other revenues which are
ancillary to the Company's operations. Generally, revenues are recognized when the services have been
rendered. The following is a description of the composition of revenues for the Company:
¬ Owned, Leased and Consolidated Joint Ventures Ì Represents revenue primarily derived from hotel
and leisure operations, including the rental of rooms and food and beverage sales, from a worldwide
network of owned, leased or consolidated joint venture hotels and resorts operated primarily under the
Company's proprietary brand names including St. Regis, The Luxury Collection, Sheraton, Westin, W
and Four Points by Sheraton. Revenue is recognized when rooms are occupied and services have been
rendered.
¬ Management and Franchise Fees Ì Represents fees earned on hotels managed worldwide, usually
under long-term contracts with the hotel owner, and franchise fees received in connection with the
franchise of the Company's Sheraton, Westin and Four Points by Sheraton brand names. 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 proÑtability. Base fee revenues are recognized
when earned in accordance with the terms of the contract. For any time during the year, incentive fees
are recognized for the fees due as if the contract was terminated at that date, exclusive of any
termination fees due or payable. Franchise fees are generally based on a percentage of hotel room
revenues and are recognized in accordance with Statement of Financial Accounting Standards
(""SFAS'') No. 45, ""Accounting for Franchise Fee Revenue,'' as the fees are earned and become due
from the franchisee. Management and franchise fees are recognized in other hotel and leisure revenues
in the consolidated statements of operations.
¬ Vacation Ownership Ì The Company recognizes revenue from VOI sales in accordance with SFAS
No. 66, ""Accounting for Sales of Real Estate.'' The Company recognizes sales when a minimum of
10% of the purchase price for the VOI has been received, the period of cancellation with refund has
19
expired and receivables are deemed collectible. For sales that do not qualify for full revenue recognition
as the project has progressed beyond the preliminary stages but has not yet reached completion, all
revenue and proÑt are initially deferred and recognized in earnings through the percentage-of-
completion method. Vacation ownership revenues are recognized in other hotel and leisure revenues in
the consolidated statements of operations.
Goodwill and Intangible Assets. Goodwill and intangible assets arise in connection with acquisitions,
including the acquisition of management contracts, and are amortized using the straight-line method over the
useful life of the asset. EÅective January 1, 2002, the Company adopted SFAS No. 142, ""Goodwill and Other
Intangible Assets.'' In accordance with this guidance, the Company will cease amortizing goodwill and
intangible assets with indeÑnite lives. Intangible assets with Ñnite lives will continue to amortize on a straight-
line basis over their respective useful lives. The Company will also review all goodwill and intangible assets for
impairment by comparisons of fair value to book value annually, or upon the occurrence of a trigger event.
Impairments, excluding those in the year of adoption, will be recognized in operating results. In connection
with the adoption of this standard, the Company has completed its initial recoverability test on goodwill and
intangible assets, which did not result in any impairment write-downs. Estimates based on existing goodwill
and intangible assets indicate that adoption will result in an annual increase in net income of approximately
$64 million in 2002.
Frequent Guest Program. SPG is the Company's frequent guest incentive marketing program. SPG
members earn points based on their spending at the Company's properties and, to a lesser degree, through
participation in aÇliated partners' programs, such as those oÅered by airlines. Points can be redeemed at most
Company owned, leased, managed and franchised properties; however, points cannot be redeemed for cash.
SPG is provided as a marketing program to the Company's properties. The cost of operating the program,
including the estimated cost of award redemption, is charged to properties based on members' qualifying
expenditures. Revenue is recognized by participating hotels and resorts when points are redeemed for hotel
stays.
The Company, through the services of third-party actuarial analysts, determines the fair value of the
future redemption obligation based on statistical formulas which project timing of future point redemption
based on historical experience, including an estimate of the ""breakage'' for points that will never be redeemed,
and an estimate of the points that will eventually be redeemed. These factors determine the required liability
for outstanding points. The Company's management and franchise agreements require that the Company be
reimbursed currently for the costs of operating the program, including marketing, promotion, communications
with, and performing member services for the SPG members. Actual expenditures for SPG may diÅer from
the actuarially determined liability.
The liability for the SPG program is included in other long-term liabilities and accrued expenses in the
accompanying consolidated balance sheets. The total actuarially determined liability as of December 31, 2001
and 2000 is $159 million and $137 million, respectively.
Valuation of Long-Lived Assets and Investments. The Company evaluates the carrying value of each of
the Company's long-lived assets for impairment. The expected undiscounted future cash Öows of the assets are
compared to the net book value of the assets. If the expected undiscounted future cash Öows are less than the
net book value of the assets, the excess of the net book value over the estimated fair value is charged to current
earnings. Fair value is based upon discounted cash Öows of the assets at a rate deemed reasonable for the type
of asset and prevailing market conditions, appraisals and, if appropriate, current estimated net sales proceeds
from pending oÅers.
The Company also assesses the carrying value of its long-term investments. The fair market value of
investments is based on the market prices for the last day of the period if the investment trades on quoted
exchanges. For non-traded investments, fair value is estimated based on the underlying value of the
investment, which is dependent on the performance of the companies or ventures in which the Company has
invested, as well as the volatility inherent in external markets for these types of investments.
20
In assessing potential impairment for these investments, the Company will consider these factors as well
as forecasted Ñnancial performance of its investees. If these forecasts are not met, the Company may have to
record impairment charges. Thus, the carrying value of investments at December 31, 2001 approximates fair
value based on market prices and the value of the underlying collateral.
The following discussion presents an analysis of results of our operations for the years ended Decem-
ber 31, 2001, 2000 and 1999.
Year Ended December 31, 2001 Compared with Year Ended December 31, 2000
Continuing Operations
The Company's operating results for 2001 were dramatically impacted by the continued weakening of the
general global economy and, in particular, the U.S. economy which was exacerbated by the September 11
Attacks, leading to an unprecedented decline in industry-wide demand in the U.S. and internationally. The
initial closing of all airports in the United States and the signiÑcant decline in business and leisure travel
following the September 11 Attacks resulted in signiÑcant decreases in revenues and earnings for September
and the fourth quarter of 2001 when compared to the same periods in 2000. Immediately following the
September 11 Attacks, the Company began developing operating plans commensurate with the reduced
demand levels and began implementing cost reduction plans at all owned and managed hotels worldwide as
well as corporate and division oÇces.
Revenues. Total revenues decreased 8.7% from $4.345 billion to $3.967 billion for the year ended
December 31, 2001 when compared to the corresponding period in 2000. The decrease in revenues reÖects an
8.6% decrease in revenues from the Company's owned, leased and consolidated joint venture hotels to
$3.343 billion for the year ended December 31, 2001 when compared to $3.659 billion in the corresponding
period of 2000 and a slight decrease in other hotel and leisure revenues to $624 million for the year ended
December 31, 2001 when compared to $686 million in the corresponding periods of 2000 due primarily to a
decline in management and franchise fees, oÅset by a slight increase in revenues from the sale of VOIs.
The decrease in revenues from owned, leased and consolidated joint venture hotels is due primarily to
decreased revenues at the Company's hotels owned during both periods (""Comparable Owned Hotels'') (157
hotels for the year ended December 31, 2001, excluding 10 hotels sold and 8 hotels without comparable results
during 2000 and 2001). Revenues at the Company's Comparable Owned Hotels decreased 10.8% to
$3.211 billion for the year ended December 31, 2001 when compared to the same period of 2000 due primarily
to a decrease in REVPAR. REVPAR at the Company's Same-Store Owned Hotels decreased 11.3% to
$101.98 for the year ended December 31, 2001 when compared to the corresponding 2000 period. The
decrease in REVPAR at these 155 Same-Store Owned Hotels was attributed to a decrease in occupancy to
65.1% from 71.2% in the year ended December 31, 2001 when compared to the same period of 2000. ADR
decreased slightly to $156.73 for the year ended December 31, 2001 when compared to $161.59 in the
corresponding 2000 period. REVPAR at Same-Store Owned Hotels in North America decreased 11.9% for
the year ended December 31, 2001 when compared to the same period of 2000 due to the weakening of the
U.S. economy which was exacerbated by the September 11 Attacks, resulting in an unprecedented decline in
industry-wide demand, particularly in New York City, where the Company has seven owned hotels with a
total of approximately 3,900 rooms. REVPAR at the Company's international Same-Store Owned Hotels,
which decreased by 9.6% for the year ended December 31, 2001 when compared to the same period of 2000,
was also impacted by the September 11 Attacks as international travel from the U.S. declined dramatically.
The unfavorable eÅect of foreign currency translation and adverse political and economic conditions, primarily
in countries like Argentina and Australia, also contributed to these declines in REVPAR. REVPAR for
Same-Store Owned Hotels in Europe, the Company's largest international presence, decreased 1.0% excluding
the unfavorable eÅect of foreign currency translation.
EBITDA. Total Company EBITDA decreased $343 million to $1.230 billion as of December 31, 2001,
primarily due to EBITDA declines at the Company's owned, leased and consolidated joint venture hotels.
EBITDA for the Company's owned, leased and consolidated joint venture hotels decreased $248 million to
$978 million for the year ended December 31, 2001 when compared to the corresponding period in 2000. This
21
decrease was primarily due to a $255 million or 21.0% decrease in EBITDA at the Company's Comparable
Owned Hotels, with North America accounting for most of this decline, due to a $209 million decrease in
EBITDA over the same period in 2000 resulting primarily from the weakening U.S. economy and the
September 11 Attacks. As mentioned above, the Company's signiÑcant presence in New York contributed to
the decline as EBITDA at seven owned hotels in this city decreased $73 million in 2001 when compared to
2000. The sale of nine hotels during 2000 and early 2001 and the eÅective closure of two hotels in Chicago
which were being converted to W hotels also contributed to the decline in EBITDA.
Selling, General, Administrative and Other. Selling, general, administrative and other expenses were
$411 million and $403 million for the years ended December 31, 2001 and 2000, respectively. The increase in
selling, general, administrative and other expenses is due primarily to increased expenses associated with
Starwood Vacation Ownership, Inc. (""SVO'') in connection with increased sales, oÅset by a $24 million
foreign exchange gain as a result of the devaluation of the Argentinean Peso and reduced corporate overhead,
including a $14 million pretax gain resulting from the termination of a pension plan.
Restructuring and Other Special Charges. During the year ended December 31, 2001, the Company
recorded $70 million in restructuring and other special charges related primarily to the September 11 Attacks
and the resulting decline in industry-wide demand.
Immediately following the September 11 Attacks, the Company began analyzing and implementing a
cost reduction plan and began reviewing the carrying value of certain assets for potential impairment, resulting
in restructuring and other special charges aggregating approximately $47 million. These charges consisted
primarily of severance and retention costs (approximately $25 million); bad debt expense associated with
receivables no longer deemed collectible (approximately $17 million); and impairments of certain investments
and other assets (approximately $5 million). Approximately $14 million of these special items represent cash
charges, with the remaining amount being non-cash. In addition, during the year ended December 31, 2001,
the Company recorded a charge to write down the Company's investments in various e-business ventures by
approximately $23 million.
These charges were oÅset in part by the reversal of a $20 million bad debt charge taken in 1998 relating to
a note receivable which is now fully performing.
Depreciation and Amortization. Depreciation and amortization expense increased to $433 million and
$93 million, respectively, in the year ended December 31, 2001 compared to $391 million and $90 million,
respectively, in the corresponding period of 2000. The increase in depreciation expense for the year ended
December 31, 2001 was primarily attributable to the additional depreciation resulting from capital expendi-
tures at many of the Company's owned, leased and consolidated joint venture hotels over the past two years.
Net Interest Expense. Interest expense for the years ended December 31, 2001 and 2000, which is net of
interest income of $11 million and $19 million, respectively, and discontinued gaming operations allocations of
$6 million in the year ended December 31, 2000, decreased to $358 million from $420 million. This decrease
was due primarily to lower interest rates compared to 2000 due to reduced LIBOR rates and the impact of
certain Ñnancing transactions, including the issuance of zero coupon convertible debt in May 2001. The
Company's weighted average interest rate was 5.10% at December 31, 2001 versus 7.44% at December 31,
2000.
Gain (Loss) on Asset Dispositions, Net, and Asset Impairments. Due to the September 11 Attacks and
the weakening of the U.S. economy, the Company conducted a comprehensive review of the carrying value of
certain assets for potential impairment. As a result, the Company recorded a net charge relating primarily to
the impairment of certain investments in the fourth quarter of 2001 totaling $57 million.
Income Tax Expense. The eÅective income tax rate for the year ended December 31, 2001 decreased to
23.2% compared to 33.0% in the corresponding period in 2000. The Company's eÅective income tax rate is
determined by the level and composition of pretax income subject to varying foreign, state and local taxes and
other items. The decrease from prior year is due to the combination of lower pretax income in 2001 due
primarily to the weakening U.S. economy and the September 11 Attacks, while maintaining the Company's
normal dividend level.
22
Year Ended December 31, 2000 Compared with Year Ended December 31, 1999
Continuing Operations
Revenues. Total revenues increased 13.5% to $4.345 billion for the year ended December 31, 2000 when
compared to the corresponding period in 1999. The increase in revenues was due to the 7.9% increase in
revenues for the Company's owned, leased and consolidated joint venture hotels to $3.659 billion for the year
ended December 31, 2000 when compared to $3.391 billion in the corresponding period of 1999 and the
increase in other hotel and leisure revenues to $686 million for the year ended December 31, 2000 when
compared to $438 million in the corresponding period of 1999.
The increase in revenues from owned, leased and consolidated joint venture hotels is due primarily to the
increased revenues at the Company's 158 Comparable Owned Hotels (excluding 16 hotels sold or without
comparable results during 1999 and 2000) and the addition of four hotels, including a full year of operations at
the W hotels in San Francisco, California and Seattle, Washington, which opened in May 1999 and
September 1999, respectively. These increases were oÅset by the loss of revenues on 12 hotels sold since April
1999 and the impact of hotels with rooms out of service due to signiÑcant renovations. The increase in
revenues was further oÅset by currency weaknesses, primarily in the Euro.
Revenues at the Company's Comparable Owned Hotels increased 6.7% to $3.527 billion for the year
ended December 31, 2000 when compared to the same period of 1999 due primarily to an increase in
REVPAR. REVPAR at 122 Same-Store Owned Hotels increased 7.3% to $114.90 for the year ended
December 31, 2000 when compared to the corresponding 1999 period. The increase in REVPAR at these
hotels was attributed to the increase in ADR of 4.5% to $160.55 for the year ended December 31, 2000 when
compared to the corresponding 1999 period. Occupancy for these 122 Same-Store Owned Hotels rose to
71.6% from 69.7% in the year ended December 31, 2000 when compared to the same period in 1999.
REVPAR at Same-Store Owned Hotels in North America increased 11.0% for the year ended December 31,
2000 when compared to the same period of 1999. REVPAR at the Company's international Same-Store
Owned Hotels, which decreased by 0.3% for the year ended December 31, 2000 when compared to the same
period of 1999, was impacted primarily by the unfavorable eÅect of foreign currency translation.
The increase in other hotel and leisure revenues resulted primarily from the acquisition of SVO in
October 1999. The increase is also due to the addition of hotels to the Company's management and franchise
system and the stronger performance at the Company's existing managed and franchised hotels.
EBITDA. Total Company EBITDA increased $221 million to $1.573 billion as of December 31, 2000
primarily due to EBITDA increases at the Company's owned, leased and consolidated joint venture hotels.
EBITDA for the Company's owned, leased and consolidated joint venture hotels increased $148 million or
13.7% to $1.226 billion for the year ended December 31, 2000 when compared to $1.078 billion in the
corresponding period in 1999. Most of this increase resulted from the Company's Comparable Owned Hotels,
which increased $115 million or 10.7% to $1.186 billion. These results were strongest in North America, where
the Company has its largest concentration of hotels, oÅset by weak results internationally due primarily to
unfavorable political and economic conditions. The addition of four hotels, including a full year of operations
at the W hotels in San Francisco, California and Seattle, Washington, which opened in May 1999 and
September 1999, respectively, contributed to the overall increase, oÅset by the sale of seven hotels since
December 31, 1999.
Selling, General, Administrative and Other. Selling, general, administrative and other expenses were
$403 million and $220 million for the years ended December 31, 2000 and 1999, respectively. The increase in
selling, general, administrative and other expenses is due primarily to a full year of costs associated with the
vacation ownership operations due to the acquisition of SVO in October 1999.
Depreciation and Amortization. Depreciation and amortization expense increased to $391 million and
$90 million, respectively, in the year ended December 31, 2000 compared to $370 million and $82 million,
respectively, in the corresponding period of 1999. The increase in depreciation expense for the year ended
December 31, 2000 was primarily attributable to the acquisition of SVO in October 1999, the addition of four
new hotels, including a full year of depreciation on the W hotels in San Francisco, California and Seattle,
23
Washington, which opened in May 1999 and September 1999, respectively, and the additional depreciation
resulting from an extensive renovation program, oÅset, in part, by the suspension of depreciation on hotels held
for sale and hotels sold during the year.
Net Interest Expense. Interest expense for the years ended December 31, 2000 and 1999, which is net of
interest income of $19 million and $16 million, respectively, and discontinued gaming operations allocations of
$6 million and $163 million, respectively, decreased to $420 million from $484 million. This decrease was due
primarily to the paydown of debt with approximately $3.3 billion of cash proceeds from the Caesars World,
Inc. (""Caesars'') and the Desert Inn Resort & Casino (the ""Desert Inn'') sales (interest reÖected in
discontinued operations and thereby excluded from net interest expense in 1999 was limited to $2.1 billion of
allocated debt) and cash repatriation from overseas, partially oÅset by additional borrowings during 1999 and
2000 for Share repurchases, capital expenditures and the acquisition of the CIGA minority interest.
Income Tax Expense. The eÅective income tax rate for 2000 was 33.0%. As a result of the Reorganiza-
tion, the tax provision for the year ended December 31, 1999 included a $936 million one-time charge to
establish a deferred tax liability related to the diÅerence between the book and tax basis in the assets of the
Trust. Excluding this charge, a one-time tax beneÑt of $37 million attributable to the resolution of certain
employment related contingencies and other one-time pro forma comparable adjustments, the Company's
eÅective tax rate for the year ended December 31, 1999 was 36.5%. The Company's eÅective income tax rate
is determined by the level and composition of pretax income subject to varying foreign, state and local taxes
and other items.
Minority Equity in Net Income. In June 2000, the Company completed the acquisition of the minority
ownership interest of CIGA not previously owned by Starwood. The aggregate purchase price of the
incremental shares was approximately $312 million. This acquisition resulted in an increase in net income of
$10 million in 2000 when compared to 1999, excluding the minority interest in the gain on the sale of CIGA's
investment in Lampsa, SA, a Greek company that owned the Grande Bretagne Hotel in Athens, Greece.
Discontinued Operations
During the Ñrst quarter of 1999, the Company provided for estimated after-tax losses on the gaming
dispositions of $180 million ($158 million pretax), which included anticipated operating results through the
expected closing date. In addition, the Company recorded, on an after-tax basis, a $173 million gain on the
sale of the Company's remaining interest in Educational Services during the Ñrst quarter of 1999.
Due to the sale of Caesars in December 1999 and the Desert Inn in June 2000, results for the Company's
gaming operations are included in discontinued operations in the years ended December 31, 1999 and 2000.
Results for the Desert Inn are included in discontinued operations through June 23, 2000 and for Caesars
through December 30, 1999. The gaming operations net loss of $8 million and $27 million for the years ended
December 31, 2000 and 1999, respectively, includes the allocation of pretax corporate interest expense of
$6 million and $163 million, respectively.
Gaming revenues decreased to $57 million for the year ended December 31, 2000 when compared to
$1.541 billion in the corresponding period of 1999, and operating income (loss) for year ended December 31,
2000 decreased to a loss of $3 million when compared to operating income of $154 million for the same period
of 1999. The decreases in 2000 were due to the sales of Caesars and the Desert Inn in December 1999 and
June 2000, respectively.
LIQUIDITY AND CAPITAL RESOURCES

Based upon the current level of operations, management believes that the Company's cash Öow from
operations, together with available borrowings under the Company's domestic and international revolving
facilities (approximately $487 million at December 31, 2001) and capacity with additional borrowings, will be
adequate to meet the Company's anticipated requirements for working capital, capital expenditures, marketing
and advertising expenditures, program and other discretionary investments, interest payments and scheduled
principal payments for the foreseeable future, including at least the next three years. Starwood had a
24
substantial amount of indebtedness and a working capital deÑciency of $690 million at December 31, 2001,
including $332 million of current maturities of long-term debt. The Company continues to monitor the credit
markets and in light of the possibility of a portion of the zero coupon convertible notes being put back to the
Company at a price of approximately $202 million in May 2002 and the maturities of certain existing credit
facilities totaling $2.187 billion in 2003, Starwood expects to access the credit markets this year as well as
enter into a new senior bank facility to reÑnance this indebtedness. There can be no assurance, however, that
the Company will be able to reÑnance the indebtedness and if reÑnanced, whether it can do so on favorable
terms, nor can there be any assurance that the Company's business will continue to generate cash Öow at or
above current levels or that currently anticipated improvements will be achieved. If Starwood is unable to
generate suÇcient cash Öow from operations in the future to service the Company's debt, the Company may
be required to sell assets, reduce capital expenditures, reÑnance all or a portion of its existing debt or obtain
additional Ñnancing. The Company's ability to make scheduled principal payments, to pay interest or to
reÑnance the Company's indebtedness depends on its future performance and Ñnancial results, which, to a
certain extent, are subject to general conditions in or aÅecting the hotel and leisure industry and to general
economic, political, Ñnancial, competitive, legislative and regulatory factors beyond the Company's control,
including the duration and severity of the current economic downturn exacerbated by the September 11
Attacks. There can be no assurance that suÇcient funds will be available to enable Starwood to service its
indebtedness or to make necessary capital expenditures, marketing and advertising expenditures and program
and other discretionary investments. Since the September 11 Attacks, the Company successfully amended
certain terms of its Senior Credit Facility. The amendment gives the Company greater Ñnancial Öexibility by
modifying various Ñnancial covenants until the expiration of the facility in early 2003. The amended provisions
include adjustments to the Company's combined leverage ratio and interest coverage ratio as well as
modiÑcation of the timing of amortization payments. See ""Debt Financing'' in Part I for risks.
The Company has been adversely aÅected in the aftermath of the September 11 Attacks. Since the
attacks, the Company's owned hotels have experienced signiÑcant short-term declines in occupancy compared
to the prior year. At present, it is not possible to predict either the severity or duration of such declines in the
medium- or long-term range, or the potential impact on the Company's results of operations, Ñnancial
condition or cash Öows. However, as a result of the signiÑcant short-term declines in occupancy, the Company
has taken steps to reduce costs, including reductions in force. The Company has undertaken a comprehensive
analysis of its cost structure including, among other things, overall staÇng levels and facilities related costs.
Furthermore, the Company has evaluated hotel Ñnancial performance subsequent to the September 11
Attacks and its impact on the Company's investments and contingent obligations. Impairments to investments
in hotel management contracts, receivables or other investments due to declines in hotel proÑtability and
reduced management and franchise fees have been reviewed and recognized where considered necessary. The
outcome of the Company's analysis has resulted in write-downs through restructuring and other special
charges and losses on asset dispositions as discussed in Notes 9 and 4, respectively, in the notes to Ñnancial
statements Ñled as part of this Joint Annual Report.
Capital Expenditures
Starwood incurs capital expenditures for upgrading and, in some cases, repositioning its owned hotels and
for ongoing maintenance of acquired and existing hotels in accordance with the Company's standards. During
the year ended December 31, 2001, the Company spent approximately $526 million on improving and
upgrading its owned hotels and resorts and VOI construction, including costs to convert two hotels in Chicago
to W hotels, expenditures at the W Times Square which opened in December 2001, continuing construction of
the St. Regis San Francisco and land in Maui for a VOI project. Due to the September 11 Attacks and the
continued weakening of the worldwide economies, the Company reevaluated its planned capital expenditures,
signiÑcantly reducing these expenditures until signs of the economic recovery become evident.
Cash Flow from Operating Activities

Cash Öow from operating activities is the principal source of cash to be used to fund the Company's
operating expenses, interest expense, capital expenditures and distributions. Starwood anticipates that cash
25
Öow provided by operating activities will be suÇcient to service short-term indebtedness, fund maintenance
capital expenditures and meet operating cash requirements, including distributions to shareholders. Other
general economic considerations, such as those experienced after the September 11 Attacks, may have a
negative impact on the Company's results of operations.
In addition, while our vacation ownership operations generate strong operating cash Öow, annual amounts
are aÅected by the timing of cash outlays for the acquisition and development of new resorts and cash received
from purchaser Ñnancing and asset securitizations. Cash proceeds from asset securitizations in 2001 were
$202 million. See Note 5 in the notes to Ñnancial statements Ñled as part of this Joint Annual Report.
Cash Flow from Investing and Financing Activities

In limited cases, the Company has made loans to owners or partners in hotel or resort ventures whereby
the Company has a management or franchise agreement. Loans outstanding under this program totaled
$155 million at December 31, 2001. The Company evaluates these loans for impairment, and at December 31,
2001, believes these loans are collectible. Unfunded commitments aggregating $26 million were outstanding at
December 31, 2001, of which $11 million are expected to be funded in 2002 and $13 million are expected to be
funded in total. These loans typically are secured by pledges of project ownership interests and/or mortgages
on the projects.
The Company participates in programs with unaÇliated lenders in which the Company may partially
guarantee loans made to facilitate third-party ownership of hotels that the Company manages or franchises. At
December 31, 2001, loan guarantees totaled $153 million relating to three projects: the St. Regis in Monarch
Beach, California, which opened in mid-2001; the Westin Kierland hotel in Arizona, which is scheduled to
open at the end of 2002; and the Westin in Charlotte, North Carolina, which is scheduled to open at the end of
2002. With respect to the Westin Kierland, the guarantee is joint and several with another equity partner. The
Company does not anticipate any funding under these loan guarantees in 2002, as all projects are well
capitalized.
Furthermore, in order to secure management and franchise contracts, the Company may provide
performance guarantees to third-party owners. Most of these performance guarantees allow the Company to
abandon a contract rather than fund shortfalls if certain performance levels are not met. In limited cases, the
Company is obliged to fund shortfalls in performance levels. As of December 31, 2001, the Company had six
management contracts with performance guarantees with possible cash outlays of up to $68 million,
$50 million of which, if required, would be funded over a period of 25 years. Many of the performance tests are
multi-year tests, are tied to the results of a competitive set of hotels, and have exclusions for force majeure
clauses and acts of war and terrorism. The Company does not anticipate any funding under the performance
guarantees in 2002. Lastly, the Company does not anticipate losing any signiÑcant management or franchise
contracts in 2002.
The Company had the following contractual obligations outstanding as of December 31, 2001 (in
millions):
Due in Less
Than 1 Due in Due in Due After
Total Year 1-3 Years 4-5 Years 5 Years
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,557 $330 $2,807(a) $548 $1,872

Capital lease obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2 Ì Ì Ì
Operating lease obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,087 82 152 130 723
Unconditional purchase obligations(b) ÏÏÏÏÏÏÏÏÏÏÏ 216 75 112 29 Ì
Other long-term obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì
Total contractual obligationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $6,862 $489 $3,071 $707 $2,595
(a) $2.187 billion due on February 23, 2003.

(b) The Company's owned, managed and franchised hotels participate in various national purchasing agreements. As these agreements
do not require speciÑc purchasing thresholds for the Company or the Company's owned, leased and consolidated joint venture hotels,
no such amounts are reÖected above.
26
The Company had the following commercial commitments outstanding as of December 31, 2001 (in
millions):
Amount of Commitment Expiration Per Period
Less Than After
Total 1 Year 1-3 Years 4-5 Years 5 Years
Standby letters of creditÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 49 $Ì $ 43 $Ì $ 6

Hotel loan guarantees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 153 Ì 78 45 30
Other commercial commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì
Total commercial commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $202 $Ì $121 $45 $36
In April 2001, the Company completed the acquisition of the remaining 50% interest not previously
owned by the Company in the 1,377-room Sheraton Centre Toronto for $75 million Canadian dollars
(approximately U.S. $48 million based on exchange rates at the time). Additionally, in April 2001, the
Company completed the acquisition of 44% of an entity which owns the Royal Orchid Hotel in Bangkok,
Thailand for $27 million.
In addition to cash Öow from operating activities, Starwood intends to Ñnance the acquisition of, or
investment in, additional hotels and resorts, hotel renovations and capital improvements and provide for
general corporate purposes through the Company's credit facilities described below, through dispositions of
certain non-core assets and, when market conditions warrant, through the issuance of additional equity or debt
securities. In January 2002, the Company announced that it has initiated the formal sale process of the CIGA
portfolio of 25 luxury hotels, land, golf courses and marinas potentially encumbered by the Company's
management contracts in whole or in part. Deutsche Bank, Jones Lang LaSalle Hotels and J.P. Morgan are
advising the Company on the disposition of this portfolio and have begun actively marketing these assets. The
Company began reviewing preliminary indications of interest in the Ñrst quarter of 2002.
27
Loans and Credit Facilities. Following is a summary of the Company's debt portfolio as of Decem-
ber 31, 2001:
Amount Interest Rate at
Outstanding at December 31, Average
December 31, 2001(a) Interest Terms 2001 Maturity
(Dollars in millions)
Floating Rate Debt
Senior Credit Facility:
Five-Year Term Loan ÏÏÏÏÏÏÏÏÏÏÏÏ $ 800 LIBOR°0.725% 2.60% 1.0 years
Term Loan Add-on ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 423 LIBOR°1.25% 3.12% 1.1 years
Revolving Credit Facility ÏÏÏÏÏÏÏÏÏ 664 LIBOR°0.725% 2.60% 1.1 years
Senior Secured Notes Facility:
Tranche II Loans ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 500 LIBOR°2.75% 4.62% 1.1 years
Euro Loan ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 240 Euribor°1.95% 5.25% 1.5 years
Mortgages and Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 302 Various 4.94% 2.9 years
Interest Rate Swaps ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (497) 3.23% Ì
Total/Average ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,432 3.53% 1.3 years
Fixed Rate Debt
Sheraton Holding Public DebtÏÏÏÏÏÏÏ $1,296 7.08% 9.2 years
Convertible Senior Notes Ì
Series A & B ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 507 2.36% 1.9 years
Mortgages and Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 827 7.38% 10.0 years
Interest Rate Swaps ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 497 6.68% Ì
Total/Average ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,127 6.32% 8.1 years
Total Debt
Total Debt and Average Terms ÏÏÏÏÏÏ $5,559 5.10% 4.5 years
(a) Excludes approximately $300 million of the Company's share of unconsolidated joint venture debt.
On February 23, 1998, Starwood entered into two credit facilities with Lehman Brothers, Bankers Trust
Company, The Chase Manhattan Bank and other Ñnancial institutions. The Senior Credit Facility and the
Senior Secured Notes Facility comprise Starwood's primary existing credit facilities. In September 1998, the
Company increased its borrowings under the Senior Secured Notes Facility with a $1 billion, Ñve-year term
borrowing facility (""Tranche II Loans''). In December 2000, the Company increased the amount available
under the Senior Credit Facility by $172.5 million (""Term Loan Add-on''). In January 2001 and May 2001,
the Company completed add-on Ñnancings to its Term Loan Add-on of $150 million and $100 million,
respectively. The proceeds from the Term Loan Add-ons were used to reduce the amount outstanding under
the Company's Revolving Credit Facility. In November 2001, the Company successfully amended certain
terms of its Senior Credit Facility. The amendment gives the Company greater Ñnancial Öexibility by
modiÑcation of the timing of amortization payments.
In January 1999, the Company completed a $542 million long-term Ñnancing (the ""Mortgage Loan''),
secured by mortgages on a portfolio of 11 hotels. The Mortgage Loan is due in February 2009, and the
proceeds from the Mortgage Loan were used to pay down the one-year term loan under the Senior Credit
Facility, which has subsequently been paid oÅ.
In July 2000, the Company entered into a one-year, Euro 270 million loan (approximately $252 million
based on exchange rates at the time) at an initial average interest rate of Euribor plus 112.5 basis points for
28
the Ñrst six months and increasing to Euribor plus 137.5 basis points for the remaining six months. The loan
was subsequently extended through July 2002. In December 2001, the Company entered into an 18-month
Euro 450 million loan (approximately $399 million based on exchange rates at the time) with an interest rate
of Euribor plus 195 basis points. The proceeds of the Euro 450 million loan were drawn down in two tranches:
the Ñrst 270 million Euros was drawn down in December 2001 and used to repay the previously outstanding
Euro 270 million facility and the remaining 180 million Euros was drawn down in January 2002, and the
proceeds were used to repay a portion of the Company's Revolving Credit Facility.
In May 2001, the Company sold an aggregate face amount of $816 million zero coupon convertible senior
notes due 2021 (the ""Notes''). The Company received gross proceeds from these sales of approximately
$500 million, which were used to repay a portion of its Tranche II Loans that bore interest at LIBOR plus 275
basis points. The Notes have an initial blended yield to maturity of 2.35%. The Notes, consisting of two series,
are convertible, subject to certain conditions, into an aggregate 9,657,000 Shares. On May 25, 2002, each
Series A holder may require the Company to purchase the notes, subject to certain conditions. Series A notes
that may be presented to the Company in May 2002 total approximately $202 million. These Series A notes
have been included in long-term debt at December 31, 2001 based upon the Company's ability and intent to
reÑnance them with availability under the Revolving Credit Facility. Series B holders may Ñrst present their
aggregate notes to the Company in May 2004 for approximately $330 million.
During each of the quarters of 2001, the Trust paid a distribution of $0.20 per Share, a 16% annual
increase over 2000. Total dividends paid in 2001 and 2000 were $156 million and $134 million, respectively. In
2002, the Company intends to shift from a quarterly dividend to an annual dividend. The Ñnal determination
of the amount of the dividend will be subject to economic and Ñnancial considerations and Board approval in
the fourth quarter of 2002.
Stock Sales and Repurchases
At December 31, 2001, Starwood had outstanding approximately 197.7 million Shares and 1.6 million
partnership units and 1.6 million exchangeable preferred shares outstanding, which are convertible into
Shares. Approximately 1.1 million of the Class B EPS can be put to the Company at $38.50 per Share in
2003.
In 1998, the Board of Directors of the Company approved the repurchase of up to $1 billion of Shares
under a Share repurchase program (the ""Share Repurchase Program''). On April 2, 2001, the Company's
Board of Directors authorized the repurchase of up to an additional $500 million of Shares under the Share
Repurchase Program, subject to the terms of the Senior Credit Facility. Pursuant to the Share Repurchase
Program, Starwood repurchased 3.2 million Shares in the open market for an aggregate cost of $96 million
during 2001. As of December 31, 2001, approximately $633 million remains available under the Share
Repurchase Program.
During 2001, the Trust consented to the exchange of approximately 1,939,000 shares of Class B EPS into
an equal number of shares of Class A EPS. Additionally, the Trust consented to the exchange of
approximately 2.0 million shares of Class A EPS for an equal number of Shares.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
The Company seeks to reduce earnings and cash Öow volatility associated with changes in interest rates
and foreign currency exchange rates by entering into Ñnancial arrangements intended to provide a hedge
against a portion of the risks associated with such volatility. The Company continues to have exposure to such
risks to the extent they are not hedged.
Interest rate swap agreements are the primary instruments used to manage interest rate risk. The
Company currently has Ñve outstanding long-term interest rate swap agreements under which the Company
pays a Ñxed interest rate and receives variable interest rates. At December 31, 2001, the Company also has
three long-term interest rate swap agreements under which the Company pays a variable interest rate and
29
receives a Ñxed interest rate. The following table sets forth the scheduled maturities and the total fair value of
the Company's debt portfolio:
Total Fair
Total at Value at
At December 31, December 31, December 31,
2002 2003 2004 2005 2006 Thereafter 2001 2001
Liabilities
Fixed rate (in millions) ÏÏÏÏÏÏÏÏÏ $ 23 $ 270 $19 $470 $20 $1,828 $2,630 $2,398
Average interest rate ÏÏÏÏÏÏÏÏÏÏÏ 6.26%
Floating rate (in millions)ÏÏÏÏÏÏÏ $309 $2,505 $13 $ 13 $45 $ 44 $2,929 $2,929
Average interest rate ÏÏÏÏÏÏÏÏÏÏÏ 3.63%
Interest Rate Swaps
Long-term variable to Ñxed
(in millions) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $247 $ 700 Ì Ì Ì Ì $ 947
Average pay rateÏÏÏÏÏÏÏÏÏÏÏÏÏ 5.80%
Average receive rateÏÏÏÏÏÏÏÏÏÏ LIBOR
Long-term Ñxed to variable
(in millions) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì $450 Ì Ì $ 450
Average pay rateÏÏÏÏÏÏÏÏÏÏÏÏÏ LIBOR
Average receive rateÏÏÏÏÏÏÏÏÏÏ 4.73%
Foreign currency forward transactions are used by the Company to hedge exposure to foreign currency
exchange rate Öuctuations. The gains or losses on the forward contracts are largely oÅset by the gains or losses
of the underlying transactions, and consequently, a sudden signiÑcant change in foreign currency exchange
rates would not have a material impact on future net income or cash Öows on such underlying transactions.
The Company monitors its foreign currency exposure on a monthly basis to maximize the overall eÅectiveness
of its foreign currency hedge positions. As of December 31, 2001, the Euro and the British Pound were the
principal currencies hedged by the Company. Changes in the value of forward foreign exchange contracts
designated as hedges of foreign currency denominated assets and liabilities are classiÑed in the same manner
as changes in the underlying assets and liabilities. At December 31, 2001, the notional amount of the
Company's open forward foreign exchange contracts protecting the value of the Company's foreign currency
denominated assets and liabilities was approximately $366 million. Of these contracts, $353 million matured
in January 2002. A hypothetical 10% change in currency exchange rates under the remaining contracts would
result in an increase or decrease of approximately $1.2 million to the fair value of the forward foreign exchange
contracts at December 31, 2001, which would be oÅset by an opposite eÅect on the related hedged positions.
The Company enters into a derivative Ñnancial arrangement only to the extent it meets the objectives
described above, and the Company does not engage in such transactions for trading or speculative purposes.
See Note 18 in the notes to Ñnancial statements Ñled as part of this Joint Annual Report and incorporated
herein by reference for further description of derivative Ñnancial instruments.
Item 8. Financial Statements and Supplementary Data.

The Ñnancial statements and supplementary data required by this Item are included in Item 14 of this
Joint Annual Report and are incorporated herein by reference.
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
30
PART III
Item 10. Directors, Trustees and Executive OÇcers of the Registrants.
The Board of Directors of the Corporation and the Board of Trustees of the Trust are currently comprised
of 11 members, each of whom is elected for a three-year term. The following table sets forth, for each of the
members of the Board of Directors and the Board of Trustees as of the date of this Joint Annual Report, the
class to which such Director or Trustee has been elected and certain other information regarding such Director
or Trustee.
Name (Age) Principal Occupation and Business Experience Service Period
Directors and Trustees Whose Terms Expire at the 2004 Annual Meeting
Eric Hippeau (50) ÏÏÏÏÏÏÏÏÏÏÏÏ President of Softbank International Ventures and Director since
Managing Director of Softbank Capital Partners, an April 1999
Internet venture capital Ñrm, since March 2000.
Trustee since
Mr. Hippeau served as Chairman and Chief
April 1999
Executive OÇcer of ZiÅ-Davis Inc., an integrated
media and marketing company, from 1993 to March
2000 and held various other positions with ZiÅ-Davis
from 1989 to 1993. Mr. Hippeau is a director of
CNET Networks, Inc., Asia Global Crossing Ltd.,
Key 3 Media Group, Inc. and Yahoo! Inc.
George J. Mitchell (68)ÏÏÏÏÏÏÏÏ Chairman of the law Ñrm of Verner, Liipfert, Director since
Bernhard, McPherson and Hand since November April 1999
2001, and Special Counsel to the Ñrm from January
Trustee since
1995 to October 2001. He served as a United States
November 1997
Senator from January 1980 to January 1995, and was
the Senate Majority Leader from 1989 to 1995. From
1995 to 1997, Senator Mitchell served as the Special
Advisor to the President of the United States on
economic initiatives in Ireland. At the request of the
British and Irish Governments, he served as
Chairman of the peace negotiations in Northern
Ireland. Senator Mitchell is a director of The Walt
Disney Company, Federal Express Corporation,
Xerox Corporation, UNUM Provident Corp., Casella
Waste Systems, Inc. and Staples, Inc. In addition,
Senator Mitchell serves as President of the Economic
Club of Washington.
Daniel W. Yih (43) ÏÏÏÏÏÏÏÏÏÏÏ Principal, Portfolio Management, with GTCR Golder Director since
Rauner, LLC, a venture capital Ñrm, since March August 1995
2000. From June 1995 until March 2000, Mr. Yih
Trustee since
was a general partner of Chilmark Partners, L.P., an
April 1999
investment advisory Ñrm. He is a director of US
Aggregates, Inc., Comsys, Cardinal Logistics
Management, American Sanitary, Inc., AETEA
Information Technology, Inc. and InteCap, Inc.
Kneeland C. Youngblood (46) ÏÏ Managing partner of Pharos Capital Group, L.L.C., a Director since
private equity fund focused on technology companies, April 2001
business service companies and health care
Trustee since
companies, since January 1998. From July 1985 to
April 2001
December 1997, he was in private medical practice.
He is a director of the American Advantage Funds, a
mutual fund company managed by AMR
Investments, an investment aÇliate of American
Airlines.
31
Jean-Marc Chapus (42)ÏÏÏÏÏÏÏÏ Group Managing Director and Portfolio Manager of Director from
Trust Company of the West, an investment August 1995 to
management Ñrm, and President of TCW/Crescent November 1997;
Mezzanine L.L.C., a private investment fund, since since April 1999
March 1995. Mr. Chapus is a director of MEMC
Trustee since
Electrical Materials, Inc. He also serves as a director
November 1997
of several privately held companies, including
Magnequench International, Inc. and TCW Asset
Management Company.
Thomas O. Ryder (57) ÏÏÏÏÏÏÏÏ Chairman of the Board and Chief Executive OÇcer Director since
and a Director of The Reader's Digest Association, April 2001
Inc. since April 1998. Mr. Ryder was President,
Trustee since
American Express Travel Related Services
April 2001
International, a division of American Express
Company, which provides travel, Ñnancial and
network services, from October 1995 to April 1998.
Barry S. Sternlicht (41)ÏÏÏÏÏÏÏÏ Chairman and Chief Executive OÇcer of the Director since
Company since September 1997 and January 1999, December 1994
respectively. Mr. Sternlicht has served as Chairman
Trustee since
and Chief Executive OÇcer of the Trust since
December 1994
January 1995. Mr. Sternlicht also has been the
President and Chief Executive OÇcer of Starwood
Capital and its predecessor entities since its
formation in 1991. Mr. Sternlicht was Chief
Executive OÇcer of iStar Financial, Inc. (""iStar''), a
real estate investment Ñrm, from September 1996 to
November 1997 and served as the Chairman of the
Board of Directors of iStar from September 1996 to
April 2000. Mr. Sternlicht has been a Director (or
Trustee, as applicable) of iStar since September
1996. Mr. Sternlicht is a member of the Urban Land
Institute and of the National Multi-Family Housing
Council. Mr. Sternlicht is a member of the Board of
Directors of the Juvenile Diabetes Research
Foundation and the Council for Christian and Jewish
Understanding. He is a member of the Young
Presidents Organization and is on the Board of
Directors of Junior Achievement for FairÑeld
County, Connecticut and the Board of Trustees of
Thirteen/WNET.
Charlene Barshefsky (51) ÏÏÏÏÏÏ Senior International Partner at the law Ñrm of Director since
Wilmer, Cutler & Pickering, Washington, D.C. From October 2001
April 1996 to January 2001, Ambassador Barshefsky
Trustee since
was the United States Trade Representative, the
October 2001
chief trade negotiator and principal trade policy
maker for the United States and a member of the
President's Cabinet. Ambassador Barshefsky is a
director of The Estee Lauder Companies, Inc.,
American Express Company and serves on the
Corporation Policy Advisory Board of Intel
Corporation.
32
Bruce W. Duncan (50) ÏÏÏÏÏÏÏÏ President of Equity Residential Properties Trust Director since
(""EQR'') eÅective April 8, 2002, the largest publicly April 1999
traded apartment company in the United States.
Trustee since
From April 2000 until March 2002, he was a private
August 1995
investor. From December 1995 until March 2000,
Mr. Duncan served as Chairman, President and
Chief Executive OÇcer of The Cadillac Fairview
Corporation Limited, a real estate operating
company. Mr. Duncan is a trustee of Amresco
Capital Trust, a director of EQR and a member of
the Partnership Committee of the Rubenstein
Company, L.P., a real estate operating company
focused on oÇce properties in the mid-atlantic
region. In addition, Mr. Duncan is a member and
past trustee of the International Council of Shopping
Centres.
Stephen R. Quazzo (42) ÏÏÏÏÏÏÏ Managing Director, Chief Executive OÇcer and co- Director since
founder of Transwestern Investment Company, April 1999
L.L.C., a real estate principal investment Ñrm, since
Trustee since
March 1996. From April 1991 to March 1996, Mr.
August 1995
Quazzo was President of Equity Institutional
Investors, Inc., a subsidiary of Equity Group
Investments, Inc., a Chicago-based holding company
controlled by Samuel Zell. Mr. Quazzo is an advisory
board member of City Year Chicago and a trustee of
The Latin School of Chicago.
Raymond S. Troubh (75) ÏÏÏÏÏÏ Financial Consultant and a former Governor of the Director since
American Stock Exchange. He was also a general April 1999
partner of Lazard Frﬁeres & Co., an investment
Trustee since
banking Ñrm. Mr. Troubh is a director of ARIAD
April 1998
Pharmaceuticals, Inc., Diamond OÅshore Drilling,
Inc., General American Investors Co., Inc., Gentiva
Health Services, Inc., Health Net, Inc., Hercules
Incorporated, Triarc Companies, Inc. and WHX
Corp. and is a trustee of Petrie Stores Liquidating
Trust. Mr. Troubh was appointed to the Enron Corp.
board of directors on November 27, 2001 after the
events that led to its Ñling for bankruptcy. Mr.
Troubh is one of the co-authors of The Powers
Report which investigated these events.
33
Executive OÇcers of the Registrants
The following table includes certain information with respect to each of Starwood's current executive
oÇcers.
Name Age Position(s)
Barry S. Sternlicht ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 41 Chairman, Chief Executive OÇcer and a Director of the
Corporation and Chairman, Chief Executive OÇcer and a
Trustee of the Trust
Robert F. Cotter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 Chief Operating OÇcer of the Corporation and a Vice
President of the Trust
Ronald C. Brown ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47 Executive Vice President and Chief Financial OÇcer of the
Corporation and Vice President, Chief Financial OÇcer
and Chief Accounting OÇcer of the Trust
Kenneth S. Siegel ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 46 Executive Vice President, General Counsel and Secretary
of the Corporation and Vice President, General Counsel
and Secretary of the Trust
David K. NortonÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 47 Executive Vice President Ì Human Resources of the
Corporation and Vice President Ì Human Resources of the
Trust
Steven R. Goldman ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 40 Executive Vice President, Acquisitions and Development,
of the Corporation and a Vice President of the Trust
Barry S. Sternlicht. Mr. Sternlicht has been Chairman and Chief Executive OÇcer of the Corporation
since September 1997 and January 1999, respectively. Mr. Sternlicht has served as Chairman and Chief
Executive OÇcer of the Trust since January 1995. Mr. Sternlicht also has been the President and Chief
Executive OÇcer of Starwood Capital and its predecessor entities since its formation in 1991. Mr. Sternlicht
was Chief Executive OÇcer of iStar, a real estate investment Ñrm, from September 1996 to November 1997
and served as the Chairman of the Board of Directors (previously the Board of Trustees) of iStar from
September 1996 to April 2000. Mr. Sternlicht has been a Director (or Trustee, as applicable) of iStar since
September 1996.
Robert F. Cotter. Mr. Cotter has been the Chief Operating OÇcer of the Corporation since February
2000 and a Vice President of the Trust since August 2000. From December 1999 to February 2000, he was
President, International Operations, and from March 1998 to December 1999, he served as President, Europe,
of the Company. Prior to joining the Company, Mr. Cotter was President, Sheraton Europe Division, from
June 1994 to March 1998 and previously held various other positions with Sheraton including President,
Sheraton Asia-PaciÑc Divisions, and numerous sales and marketing positions in the United States and Asia.
Ronald C. Brown. Mr. Brown has been the Executive Vice President and Chief Financial OÇcer of the
Corporation since March 1998 and has served as Vice President, Chief Financial OÇcer and Chief
Accounting OÇcer of the Trust since January 1999. From July 1995 to March 1998, he was the Senior Vice
President and Chief Financial OÇcer of the Trust.
Kenneth S. Siegel. Mr. Siegel has been the Executive Vice President and General Counsel of the
Corporation and Vice President and General Counsel of the Trust since November 2000. In February 2001, he
was also appointed as the Secretary to both the Corporation and the Trust. Mr. Siegel was formerly the Senior
Vice President and General Counsel of Gartner, Inc., a provider of research and analysis on information
technology industries, from January 2000 to November 2000. Prior to that time, he served as Senior Vice
President, General Counsel and Corporate Secretary of IMS Health Incorporated, an information services
company, and its predecessors from February 1997 to December 1999. Prior to that time, Mr. Siegel was a
Partner at Baker & Botts, LLP.
David K. Norton. Mr. Norton has been the Executive Vice PresidentÓHuman Resources of the
Corporation and Vice PresidentÓHuman Resources of the Trust since May 2000. Prior to joining the
Company, Mr. Norton held various positions with PepsiCo, Inc. from September 1990 to April 2000 including
34
Senior Vice President, Human Resources, of Frito-Lay, a division of PepsiCo, from November 1995 to April
2000 and Senior Vice President, Human Resources, of PepsiCo Food Systems from December 1994 to
October 1995.
Steven R. Goldman. Mr. Goldman has been the Executive Vice President, Acquisitions and Develop-
ment, of the Corporation and a Vice President of the Trust since January 1999. He was Executive Vice
President of the Trust from March 1998 to January 1999. From September 1996 March 1998, he was the
Senior Vice President of the Trust and from March 1995 to September 1996, he served as Senior Vice
President of the Corporation.
Section 16(a) BeneÑcial Ownership Reporting Compliance

Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that Directors and executive
oÇcers of the Company, and persons who own more than 10 percent of the outstanding Shares, Ñle with the
SEC (and provide a copy to the Company) certain reports relating to their ownership of Shares and other
equity securities of the Company.
To the Company's knowledge, based solely on a review of the copies of these reports furnished to the
Company for the Ñscal year ended December 31, 2001, and written representations that no other reports were
required, all Section 16(a) Ñling requirements applicable to its Directors, executive oÇcers and greater than
10 percent beneÑcial owners were complied with for the most recent Ñscal year.
Item 11. Executive Compensation.

The information called for by Item 11 is incorporated by reference from the information under the
following captions in the Proxy Statement: ""Compensation of Directors and Trustees,'' ""Summary of Cash
and Certain Other Compensation,'' ""Executive Compensation,'' ""Option Grants,'' ""Option Exercises and
Holdings,'' ""Employment and Compensation Agreements with Executive OÇcers,'' ""Compensation Commit-
tee Interlocks and Insider Participation'' and ""Certain Relationships and Related Transactions.''
Item 12. Security Ownership of Certain BeneÑcial Owners and Management.

The information called for by Item 12 is incorporated by reference from the information under the
caption ""Security Ownership of Certain BeneÑcial Owners and Management'' in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions.

Policies of the Board of Directors of the Corporation and the Board of Trustees of the Trust
The policy of the Board of Directors of the Corporation and the Board of Trustees of the Trust provides
that any contract or transaction between the Corporation or the Trust, as the case may be, and any other entity
in which one or more of its Directors, Trustees or oÇcers are directors or oÇcers, or have a Ñnancial interest,
must be approved or ratiÑed by the Governance Committee (which is comprised of Senator Mitchell and
Messrs. Ryder and Youngblood) or by a majority of the disinterested Directors or Trustees in either case after
the material facts as to the relationship or interest and as to the contract or transaction are disclosed or are
known to them.
Starwood Capital
General. Barry S. Sternlicht, Chairman, Chief Executive OÇcer and a Director of the Corporation, and
Chairman, Chief Executive OÇcer and a Trustee of the Trust, controls and has been the President and Chief
Executive OÇcer of Starwood Capital since its formation in 1991. Prior to joining Starwood in 1995,
Steven R. Goldman was an employee of Starwood Capital, and he continues to own an interest in a portfolio
investment of Starwood Capital.
Trademark License. An aÇliate of Starwood Capital has granted to Starwood, subject to Starwood
Capital's unrestricted right to use such name, an exclusive, non-transferable, royalty-free license to use the
35
""Starwood'' name and trademarks in connection with the acquisition, ownership, leasing, management,
merchandising, operation and disposition of hotels worldwide, and to use the ""Starwood'' name in its corporate
name worldwide, in perpetuity.
Starwood Capital Noncompete. In connection with a restructuring of the Company in 1995, Starwood
Capital agreed that, with certain exceptions, Starwood Capital would not compete directly or indirectly with
the Company within the United States and would present to the Company all opportunities presented to
Starwood Capital to acquire fee interests in hotels in the United States and debt interests in hotels in the
United States where it is anticipated that the equity will be acquired by the debt holder within one year from
the acquisition of such debt (the ""Starwood Capital Noncompete''). During the term of the Starwood Capital
Noncompete, neither Starwood Capital nor any of its aÇliates is permitted to acquire any such interest, or any
ground lease interest or other equity interest, in hotels in the United States. The Starwood Capital
Noncompete continues until no oÇcer, director, general partner or employee of Starwood Capital is on either
the Board of Directors of the Corporation or the Board of Trustees of the Trust (subject to exceptions for
certain restructurings, mergers or other combination transactions with unaÇliated parties). Several properties
owned or managed by the Company, including the Westin Innisbrook Resort (the ""Innisbrook Resort''), the
Westin Mission Hills Resort and the Turnberry Hotel, were opportunities brought to the Company or its
predecessors by Starwood Capital. With the approval in each case of the Audit Committee of the Board of
Directors of the Corporation and the Board of Trustees of the Trust, from time to time the Company has
waived the restrictions of the Starwood Capital Noncompete in whole or in part with respect to particular
acquisition opportunities in which the Company had no interest.
Portfolio Investments. An aÇliate of Starwood Capital holds an approximately 25% non-controlling

interest in Troon Golf (""Troon''), a golf course management company that currently manages over 100 high-
end golf courses. Mr. Sternlicht's indirect interest in Troon held through such aÇliate is approximately 12%.
Troon is the largest third-party manager of golf courses in the United States. In 2001, Troon managed thirteen
golf courses at resorts owned or managed by the Company. The Company paid Troon a total of $911,000
($432,000 of which represents management fees and payments for other services and $479,000 of which
represents reimbursement of expenses), $1,003,000 ($458,000 of which represents management fees and
payments for other services and $545,000 of which represents reimbursement of expenses) and $950,000
represents reimbursement of expenses) in 2001, 2000 and 1999, respectively, for the golf courses at the two
resorts owned by the Company. In January 2002, after extensive review of alternatives and with the unanimous
approval of the Governance Committee, the Company entered into a Master Agreement with Troon covering
the United States and Canada whereby the Company has agreed to have Troon manage all courses in the
United States and Canada that are owned by the Company and to use reasonable eÅorts to have Troon
manage courses at resorts that the Company manages and franchises. The Company believes that the terms of
the Troon agreement are at or better than market terms. Mr. Sternlicht did not participate in the negotiations
or the approval of the Troon Master Agreement.
An entity in which Mr. Sternlicht has a 38% interest owned the common area of the Sheraton Tamarron
Resort, which the Company managed until December 2001. As of the date of this Ñling, management fees
earned and paid were $197,000, $219,000 and $240,000 relating to 2001, 2000 and 1999, respectively. In
addition, approximately $620,000 of reimbursable expenses were also paid. The Company has outstanding
receivables of approximately $314,000, which arose as a result of the termination of the Tamarron
management agreement. The Company believes that the terms of the Tamarron agreement were at or better
than market terms.
In addition, a subsidiary of Starwood Capital is a general partner of a limited partnership which owns
approximately 45% in an entity that manages over 40 health clubs, including one health club and spa space in
a hotel owned by the Company. In 2001, the Company paid approximately $84,000 to the management
company for such management. The Company believes that the terms of the management agreement are at or
better than market terms.
36
Other Management-Related Investments. Mr. Sternlicht has a 38% interest in an entity (the ""Innis-
brook Entity'') that owns the common area facilities and certain undeveloped land (but not the hotel) at the
Innisbrook Resort. In May 1997, the Innisbrook Entity entered into a management agreement for the
Innisbrook Resort with Westin, which was then a privately held company partly owned by Starwood Capital
and Goldman, Sachs & Co. When the Company acquired Westin in January 1998, it acquired Westin's rights
and obligations under the management and other related agreements. Under these agreements, the hotel
manager was obligated to loan up to $12.5 million to the owner in the event certain performance levels were
not achieved. Management fees earned under these agreements were $716,000, $885,000 and $907,000 in
2001, 2000 and 1999, respectively. The Innisbrook Entity, the Company and other lenders are currently in
discussions regarding the terms and timing of payments owed to the Company and such other lenders. The
discussions relate to approximately $9 million in loans by the Company which funded resort operations and
approximately $5 million of deferred management fees and reimbursable expenses as well as amounts owed by
the Innisbrook Entity to other parties. Any settlement of this matter would be subject to the approval of the
Governance Committee.
Aircraft Lease. In February 1998, the Company leased a Gulfstream III Aircraft from Star Flight LLC,
an aÇliate of Starwood Capital. The term of the lease was one year and automatically renews for one-year
terms until either party terminates the lease upon 90 days' written notice. The rent for the aircraft, which was
set at approximately 90% of fair market value (based on two estimates from unrelated third parties), is (i) a
monthly payment of 1.25% of the lessor's total costs relating to the aircraft (approximately $123,000 at the
beginning of the lease with this amount increasing as additional costs are incurred by the lessor), plus
(ii) $300 for each hour that the aircraft is in use. Payments to Star Flight LLC were $1,682,000, $840,000 and
$910,000 in 2001, 2000 and 1999, respectively.
Other
Starwood has made non-interest-bearing loans to Steven R. Goldman, Executive Vice President,
Acquisitions and Development, and Ronald C. Brown, Executive Vice President and Chief Financial OÇcer,
during 1999 and to David K. Norton, Executive Vice President of Human Resources, during 2000. Each of
these loans was made in connection with such executive's employment and is secured by a second mortgage on
such executive's home. These loans had initial principal amounts of $525,000, $600,000 and $500,000,
respectively. The loans to Messrs. Goldman and Norton are currently outstanding. These loans are due Ñve
years from the date of issuance or, generally, upon the individual's termination. The loan made to Mr. Brown
was repaid in 2001.
In 2001, Starwood retained the law Ñrm Verner, Liipfert, Bernhard, McPherson and Hand, of which
Senator George J. Mitchell, a Director of the Corporation and Trustee of the Trust, serves as Chairman. We
expect that this Ñrm will continue to provide services to the Company in 2002.
37
PART IV
Item 14. Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K.
(a) The following documents are Ñled as a part of this Joint Annual Report:
1. The Ñnancial statements and Ñnancial statement schedules listed in the Index to Financial
Statements and Schedules following the signature pages hereof.
2. Exhibits:
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 Ñle
numbers of all Ñlings made by the Corporation and the Trust pursuant to the Securities 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 Ñled 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 (""Wood-
star''), 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 dated September 9, 1997, as
amended by the Form 8-K/A dated December 18, 1997).
2.4 Amended and Restated Agreement and Plan of Merger, dated as of November 12, 1997, by and
among the Corporation, the Trust, Chess Acquisition Corp. (""Chess'') and ITT Corporation
(incorporated by reference to Exhibit 2.1 to the Trust's and the Corporation's Joint Current Report
on Form 8-K dated November 13, 1997).
2.5 Agreement and Plan of Restructuring, dated as of September 16, 1998, and amended as of
November 30, 1998, among the Corporation, ST Acquisition Trust (""ST Trust'') and the Trust
(incorporated by reference to Annex A to the Trust's and the Corporation's Joint Proxy Statement
dated December 3, 1998 (the ""1998 Proxy Statement'')).
2.6 Form of Stock Purchase Agreement, dated as of February 23, 1998, between the Trust and the
Corporation (incorporated by reference to Exhibit 10.4 to the Trust's and the Corporation's Joint
Annual Report on Form 10-K for the year ended December 31, 1997 (the ""1997 Form 10-K'')).
3.1 Amended and Restated Declaration of Trust of the Trust, amended and restated as of January 6,
1999 (incorporated by reference to Exhibit 1 to the Trust's Registration Statement on Form 8-A Ñled
on December 21, 1998 (the ""Trust Form 8-A''), except that the following changes were made on
January 6, 1999, upon the Ñling by the Trust and ST Trust of the Articles of Merger of ST Trust into
the Trust (the ""Articles of Merger'') with, and the acceptance thereof for record by, the State
Department of Assessments and Taxation of the State of Maryland (the ""SDAT''): Section 6.14
speciÑes January 6, 1999 as the date of the Intercompany Agreement; Section 6.19.1 speciÑes
January 6, 1999 as the date of the acceptance for record by the SDAT of the Articles of Merger; and
the deÑnition of ""Intercompany Agreement'' in Section 6.19.2 speciÑes January 6, 1999 as the date
of the Intercompany Agreement).
38
Exhibit
3.2 Charter of the Corporation, amended and restated as of February 1, 1995, as amended through
March 26, 1999 (incorporated by reference to Exhibit 3.2 to the Trust's and the Corporation's Joint
Annual Report on Form 10-K for the year ended December 31, 1998, as amended by the
Form 10-K/A Ñled May 17, 1999 (as so amended, the ""1998 Form 10-K'')).
3.3 Bylaws of the Trust, as amended through April 16, 1999 (incorporated by reference to Exhibit 3.3 to
the Corporation's and the Trust's Joint Quarterly Report on Form 10-Q for the quarterly period
ended March 31, 1999 (the ""1999 Form 10-Q1'')).
3.4 Bylaws of the Corporation, as amended through March 15, 1999 (incorporated by reference to
Exhibit 3 to the Corporation's and the Trust's Joint Current Report on Form 8-K dated March 15,
1999 (the ""March 15 Form 8-K'')).
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
March 15 Form 8-K).
4.3 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 Ñled November 13, 1996).
4.4 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 Ñled January 8, 1999).
4.5 The Registrants hereby agree to Ñle with the Commission a copy of any instrument, including
indentures, deÑning 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 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 Amended and Restated Lease Agreement, entered into as of January 1, 1993, between the
Trust as Lessor and the Corporation (or a subsidiary) as Lessee (incorporated by reference to
Exhibit 10.19 to the Trust's and the Corporation's Joint Annual Report on Form 10-K for the year
ended December 31, 1992).
10.4 Employment Agreement, dated May 24, 1999, between the Corporation and Ronald C. Brown.
(incorporated by reference to Exhibit 10.4 to the Corporation's and the Trust's Joint Annual Report
on Form 10-K for the year ended December 31, 1999 (the ""1999 Form 10-K'')).(1)
10.5 Employment Agreement, dated March 25, 1998, between the Trust and Steven R. Goldman
(incorporated by reference to Exhibit 10.11 to the 1997 Form 10-K).(1)
10.6 Starwood Hotels & Resorts 1995 Long-Term Incentive Plan (Amended and Restated as of
December 3, 1998) (incorporated by reference to Annex D to the 1998 Proxy Statement).(1)
10.7 Starwood Hotels & Resorts Worldwide, Inc. 1995 Long-Term Incentive Plan (Amended and
Restated as of December 3, 1998) (incorporated by reference to Annex E to the 1998 Proxy
Statement).(1)
39
Exhibit
10.8 Incentive and Non-QualiÑed Share Option Plan (1986) of the Trust (incorporated by reference to
Exhibit 10.8 to the Trust's and the Corporation's Joint Annual Report on Form 10-K for the year
ended August 31, 1986 (the ""1986 Form 10-K'')).(1)
10.9 Corporation Stock Non-QualiÑed Stock Option Plan (1986) of the Trust (incorporated by reference
to Exhibit 10.9 to the 1986 Form 10-K).(1)
10.10 Stock Option Plan (1986) of the Corporation (incorporated by reference to Exhibit 10.10 to the 1986
Form 10-K).(1)
10.11 Trust Shares Option Plan (1986) of the Corporation (incorporated by reference to Exhibit 10.11 to
the 1986 Form 10-K).(1)
10.12 Form of IndemniÑcation Agreement and Amendment No. 1 to IndemniÑcation Agreement between
the Trust and each of its Trustees and executive oÇcers (incorporated by reference to Exhibit 10.7 to
the Trust's and the Corporation's Joint Annual Report on Form 10-K for the year ended
December 31, 1995 (the ""1995 Form 10-K'')).(1)
10.13 Form of IndemniÑcation Agreement and Amendment No. 1 to IndemniÑcation Agreement between
the Corporation and each of its Directors and executive oÇcers (incorporated by reference to
Exhibit 10.8 to the 1995 Form 10-K).(1)
10.14 Form of Amendment No. 2 to IndemniÑcation Agreement, dated June 26, 1997, between the Trust
and each of its Trustees and executive oÇcers (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, 1997 (the ""1997 Form 10-Q2'')).(1)
10.15 Form of Amendment No. 2 to IndemniÑcation Agreement, dated June 26, 1997, between the
Corporation and each of its Directors and executive oÇcers (incorporated by reference to Ex-
hibit 10.2 to the 1997 Form 10-Q2).(1)
10.16 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 1997 Form 10-K).
10.17 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'')).
10.18 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).
10.19 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'')).
10.20 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).
10.21 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
10.22 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).
40
Exhibit
10.23 Credit Agreement, dated as of September 10, 1997, between Realty Partnership and the Trust and
Bankers Trust Company (""BTC''), Lehman Brothers Holdings Inc. d/b/a Lehman Capital, a
division of Lehman Brothers Holdings Inc. (""Lehman Capital''), BankBoston, N.A., and Bank of
Montreal (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 September 30, 1997, as amended by
the Form 10-Q/A dated November 10, 1997).
10.24 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).
10.25 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).
10.26 Registration Rights Agreement, dated as of January 2, 1998, among, inter alia, the Trust, the
Corporation, and Woodstar (incorporated by reference to Exhibit 10.52 to the 1997 Form 10-K).
10.27 Credit Agreement, dated as of February 23, 1998, among the Trust, Realty Partnership, the
Corporation, Chess (and ITT Corporation as its successor by merger), certain additional borrowers,
various lenders, BTC and The Chase Manhattan Bank (""Chase Bank''), as Administrative Agents,
and Lehman Commercial Paper Inc. (""Lehman Paper'') and Bank of Montreal, as Syndication
Agents (incorporated by reference to Exhibit 10.1 to the Trust's and the Corporation's Joint Current
Report on Form 8-K dated February 23, 1998 (the ""ITT Form 8-K'')).
10.28 First Amendment to the Credit Agreement, dated as of March 3, 1998, among the Trust, Realty
Partnership, the Corporation, ITT Corporation, the lenders party to the Credit Agreement, BTC and
Chase Bank, as Administrative Agents, and Lehman Paper and Bank of Montreal, as Syndication
Agents, and the new lenders (incorporated by reference to Exhibit 10.2 to the ITT Form 8-K).
10.29 Second Amendment to the Credit Agreement, dated as of April 30, 1998, among the Trust, Realty
Agents (incorporated by reference to Exhibit 10.2 to the Trust's and the Corporation's Joint
Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1998 (the ""1998
Form 10-Q2'')).
10.30 Third Amendment to the Credit Agreement, dated as of June 15, 1998, among the Trust, Realty
Agents (incorporated by reference to Exhibit 10.3 to the 1998 Form 10-Q2).
10.31 Fourth Amendment to the Credit Agreement, dated as of July 15, 1998, among the Trust, Realty
10.32 Fifth Amendment to the Credit Agreement, dated as of August 26, 1998, among the Trust, Realty
10.33 Sixth Amendment to the Credit Agreement, dated as of December 15, 1998, among the Trust,
Realty Partnership, the Corporation, ITT Corporation, the lenders party to the Credit Agreement,
BTC and Chase Bank, as Administrative Agents, and Lehman Paper and Bank of Montreal, as
Syndication Agents (incorporated by reference to Exhibit 10.50 to the 1998 Form 10-K).
41
Exhibit
10.34 Seventh Amendment to the Credit Agreement, dated as of February 1999, among the Trust, Realty
Agents (incorporated by reference to Exhibit 10.51 to the 1998 Form 10-K).
10.35 Eighth Amendment to the Credit Agreement and ModiÑcation to Pledge and Security Agreement,
dated as of July 2, 1999, among the Trust, Realty Partnership, the Corporation, ITT Corporation, the
lenders party to the Credit Agreement, BTC and Chase Bank, as Administrative Agents, Lehman
Paper and Bank of Montreal, as Syndication Agents, and BTC, as Collateral Agent (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, 1999, as amended by the Form 10-Q/A Ñled
November 16, 1999 (as so amended, the ""1999 Form 10-Q3'')).
10.36 Ninth Amendment to the Credit Agreement and ModiÑcation to Pledge and Security Agreement,
dated as of September 20, 1999, among the Trust, Realty Partnership, the Corporation, ITT
Corporation, the lenders party to the Credit Agreement, BTC and Chase Bank, as Administrative
Agents, Lehman Paper and Bank of Montreal, as Syndication Agents, and BTC, as Collateral Agent
(incorporated by reference to Exhibit 10.2 to the 1999 Form 10-Q3).
10.37 Tenth Amendment to the Credit Agreement and ModiÑcation to Pledge and Security Agreement,
dated as of June 12, 2000, among the Trust, Realty Partnership, the Corporation, ITT Corporation,
the lenders party to the Credit Agreement, BTC and Chase Bank, as Administrative Agents, Lehman
Paper and Bank of Montreal, as Syndication Agents, and BTC, as Collateral Agent (incorporated by
reference to Exhibit 10.43 to the Corporation's and the Trust's Joint Annual Report on Form 10-K
for the year ended December 31, 2000 (the ""2000 Form 10-K'')).
10.38 Eleventh Amendment to the Credit Agreement, dated as of November 20, 2001, among the Trust,
Realty Partnership, the Corporation, Sheraton Holding, the lenders party to the Credit Agreement,
BTC and Chase Bank, as Administrative Agents, Lehman Paper and Bank of Montreal, as
Syndication Agents, and BTC, as Collateral Agent (incorporated by reference to Exhibit 10.1 to the
Corporation's and the Trust's Joint Current Report on Form 8-K Ñled December 4, 2001).
10.39 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 BTC as Collateral Agent
10.40 Second Amended and Restated Senior Secured Note Agreement, dated December 30, 1999, among
the Corporation, the Trust, the guarantors listed therein, the lenders listed therein, Lehman Paper, as
Arranger and Administrative Agent, and Alex Brown and Chase Securities Inc., as Syndication
Agents (incorporated by reference to Exhibit 10.46 to the 1999 Form 10-K).
10.41 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).
in the principal amount of $100,000,000 (incorporated by reference to Exhibit 10.66 to the 1997
Form 10-K).
in the principal amount of $50,000,000 (incorporated by reference to Exhibit 10.67 to the 1997
Form 10-K).
42
Exhibit
10.44 Loan Agreement, dated as of January 27, 1999, among the Borrowers named therein, as Borrowers,
Starwood Operator I LLC, as Operator, and Lehman Capital (incorporated by reference to
Exhibit 10.58 to the 1998 Form 10-K).
10.45 Aircraft Dry Lease Agreement, entered into as of February 6, 1998, between Star Flight, L.L.C. and
ITT Flight Operation, Inc., as amended by First Amendment thereto, dated as of August 25, 1998
(incorporated by reference to Exhibit 10.4 to the 1998 Form 10-Q3).
10.46 Form of Severance Agreement, dated December 1999, between the Corporation and each of Barry S.
Sternlicht, Ronald C. Brown and Steve R. Goldman (incorporated by reference to Exhibit 10.52 to
the 1999 Form 10-K).(1)
10.47 Amended and Restated Employment Agreement, eÅective as of January 1, 2000, between Barry S.
Sternlicht and the Company (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 March 31, 2000).(1)
10.48 Employment Agreement, dated as of April 7, 2000, between the Corporation and David K. Norton
(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 June 30, 2000).(1)
10.49 Employment Agreement, dated as of June 27, 2000, between the Corporation and Robert F. Cotter
Report on Form 10-Q for the quarterly period ended September 30, 2000).(1)
10.50 Form of Severance Agreement, dated as of August 14, 2000, between the Corporation and Robert F.
Cotter (incorporated by reference to Exhibit 10.56 to the 2000 Form 10-K).(1)
10.51 Employment Agreement, dated as of September 25, 2000, between the Corporation and Kenneth S.
Siegel (incorporated by reference to Exhibit 10.57 to the 2000 Form 10-K).(1)
10.52 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)
10.53 Form of Severance Agreement, dated as of June 9, 2000, between the Corporation and David K.
Norton (incorporated by reference to Exhibit 10.59 to the 2000 Form 10-K).(1)
10.54 Stock Purchase Agreement, dated as of April 27, 1999, among the Corporation, ITT Sheraton
Corporation, Starwood Canada Corp., Caesars World, Inc., Sheraton Desert Inn Corporation,
Sheraton Tunica Corporation and Park Place Entertainment Corporation (incorporated by reference
to Exhibit 10.5 to the 1999 Form 10-Q1).
10.55 Starwood Hotels & Resorts Worldwide, Inc. 1999 Long-Term Incentive Compensation Plan
Report on Form 10-Q for the quarterly period ended June 30, 1999 (the ""1999 Form 10-Q2'')).(1)
10.56 Starwood Hotels & Resorts Worldwide, Inc. 1999 Annual Incentive Plan for Certain Executives
(incorporated by reference to Exhibit 10.5 to the 1999 Form 10-Q2).(1)
10.57 First Amendment to the Starwood Hotels & Resorts Worldwide, Inc. 1999 Long-Term Incentive
Compensation Plan, 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)
10.58 Starwood Hotels & Resorts Worldwide, Inc. Deferred Compensation Plan, eÅective as of January 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 June 30, 2001 (the ""2001 Form 10-Q2'')).(1)
10.59 Indenture, dated as of May 25, 2001, by and among the Corporation, as Issuer, Guarantors and
Firstar Bank, N.A., as Trustee (incorporated by reference to Exhibit 10.2 to the 2001 Form 10-Q2).
10.60 Registration Rights Agreement, dated as of May 25, 2001, among the Corporation and Salomon
Smith Barney Inc. (incorporated by reference to Exhibit 10.3 to the 2001 Form 10-Q2).
43
Exhibit
12.1 Calculation of Ratio of Earnings to Total Fixed Charges.(2)

21.1 Subsidiaries of the Registrants.(2)
23.1 Consent of Arthur Andersen LLP.(2)
99.1 Letter from Starwood Hotels & Resorts Worldwide, Inc. related to Arthur Andersen LLP.(2)
99.2 Letter from Starwood Hotel & Resorts related to Arthur Andersen LLP.(2)
(1) Management contract or compensatory plan or arrangement required to be Ñled as an exhibit pursuant to Item 14(c) of Form 10-K.
(2) Filed herewith.
(b) Reports on Form 8-K.

During the fourth quarter of 2001, Starwood Ñled a Joint Current Report on Form 8-K dated
November 20, 2001, reporting under Items 5 and 7 the amendment of its Senior Credit Facility. In addition,
the Company reported that it will shift from a quarterly dividend to an annual dividend beginning in 2002.
44
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
STARWOOD HOTELS & RESORTS

WORLDWIDE, INC.
By: /s/ RONALD C. BROWN

Ronald C. Brown
Executive Vice President and
Chief Financial OÇcer
Date: March 27, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below
by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ BARRY S. STERNLICHT Chairman, Chief Executive OÇcer and March 27, 2002
Barry S. Sternlicht Director (Principal Executive OÇcer)
/s/ RONALD C. BROWN Executive Vice President and Chief March 27, 2002
Ronald C. Brown Financial OÇcer (Principal Financial
and Accounting OÇcer)
/s/ CHARLENE BARSHEFSKY Director March 27, 2002

Charlene Barshefsky
/s/ JEAN-MARC CHAPUS Director March 27, 2002

Jean-Marc Chapus
/s/ BRUCE W. DUNCAN Director March 27, 2002

Bruce W. Duncan
/s/ ERIC HIPPEAU Director March 27, 2002

Eric Hippeau
/s/ GEORGE J. MITCHELL Director March 27, 2002

George J. Mitchell
/s/ STEPHEN R. QUAZZO Director March 27, 2002

Stephen R. Quazzo
/s/ THOMAS O. RYDER Director March 27, 2002

Thomas O. Ryder
45
/s/ RAYMOND S. TROUBH Director March 27, 2002

Raymond S. Troubh
/s/ DANIEL W. YIH Director March 27, 2002

Daniel W. Yih
/s/ KNEELAND C. YOUNGBLOOD Director March 27, 2002

Kneeland C. Youngblood
46
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the
Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly
authorized.
By: /s/ RONALD C. BROWN

Ronald C. Brown
Vice President, Chief Financial OÇcer
and Chief Accounting OÇcer
Date: March 27, 2002

Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below
by the following persons on behalf of the Registrant in the capacities and on the dates indicated.
/s/ BARRY S. STERNLICHT Chairman, Chief Executive OÇcer and March 27, 2002
Barry S. Sternlicht Trustee (Principal Executive OÇcer)
/s/ RONALD C. BROWN Vice President, Chief Financial OÇcer March 27, 2002
Ronald C. Brown and Chief Accounting OÇcer
(Principal Financial and Accounting
OÇcer)
/s/ CHARLENE BARSHEFSKY Trustee March 27, 2002

Charlene Barshefsky
/s/ JEAN-MARC CHAPUS Trustee March 27, 2002

Jean-Marc Chapus
/s/ BRUCE W. DUNCAN Trustee March 27, 2002

Bruce W. Duncan
/s/ ERIC HIPPEAU Trustee March 27, 2002

Eric Hippeau
/s/ GEORGE J. MITCHELL Trustee March 27, 2002

George J. Mitchell
/s/ STEPHEN R. QUAZZO Trustee March 27, 2002

Stephen R. Quazzo
/s/ THOMAS O. RYDER Trustee March 27, 2002

Thomas O. Ryder
47
/s/ RAYMOND S. TROUBH Trustee March 27, 2002

Raymond S. Troubh
/s/ DANIEL W. YIH Trustee March 27, 2002

Daniel W. Yih
/s/ KNEELAND C. YOUNGBLOOD Trustee March 27, 2002

Kneeland C. Youngblood
48
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
AND STARWOOD HOTELS & RESORTS
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES

Page
Report of Independent Public Accountants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-2

Starwood Hotels & Resorts Worldwide, Inc.:
Consolidated Balance Sheets as of December 31, 2001 and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-3
Consolidated Statements of Operations for the Years Ended December 31, 2001, 2000 and 1999 ÏÏ F-4
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2001,
2000 and 1999 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-5
Consolidated Statements of Equity for the Years Ended December 31, 2001, 2000 and 1999 ÏÏÏÏ F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2001,
Starwood Hotels & Resorts:
Consolidated Balance Sheets as of December 31, 2001 and 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-8
Consolidated Statements of Income for the Years Ended December 31, 2001, 2000 and 1999ÏÏÏÏ F-9
Consolidated Statements of Cash Flows for the Years Ended December 31, 2001,
Notes to Financial Statements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ F-11
Schedules:
Schedule II Ì Valuation and Qualifying Accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-1
Schedule III Ì Real Estate and Accumulated Depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-2
Schedule IV Ì Mortgage Loans on Real Estate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ S-4
F-1
REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS
To Starwood Hotels & Resorts Worldwide, Inc. and Starwood Hotels & Resorts:
We have audited the accompanying consolidated balance sheets of Starwood Hotels & Resorts Worldwide,
Inc. (a Maryland corporation) and its subsidiaries (the ""Company'') and Starwood Hotels & Resorts (a
Maryland real estate investment trust) and its subsidiaries (the ""Trust'') as of December 31, 2001 and 2000,
and the related consolidated statements of operations, comprehensive income, equity and cash Öows of the
Company for each of the three years in the period ended December 31, 2001 and the consolidated statements
of income and cash Öows of the Trust for each of the three years in the period ended December 31, 2001 as set
forth in the accompanying Index to Financial Statements and Schedules. These Ñnancial statements and
schedules are the responsibility of the Company's and Trust's management. Our responsibility is to express an
opinion on these Ñnancial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the
Ñnancial statements are free of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Ñnancial statements. An audit also includes assessing the
accounting principles used and signiÑcant estimates made by management, as well as evaluating the overall
Ñnancial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the Ñnancial statements referred to above present fairly, in all material respects, the Ñnancial
position of the Company and the Trust as of December 31, 2001 and 2000, and the results of the Company's
and the Trust's operations and cash Öows for each of the three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the United States.
Our audits were made for the purpose of forming an opinion on the basic Ñnancial statements taken as a
whole. The schedules listed in the Index to Financial Statements and Schedules are presented for purposes of
complying with the Securities and Exchange Commission's rules and are not part of the basic Ñnancial
statements. These schedules have been subjected to the auditing procedures applied in the audits of the basic
Ñnancial statements and, in our opinion, fairly state in all material respects the Ñnancial data required to be set
forth therein in relation to the basic Ñnancial statements taken as a whole.
ARTHUR ANDERSEN LLP
New York, New York

January 30, 2002
F-2
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 157 $ 189
Accounts receivable, net of allowance for doubtful accounts of $48 and $45ÏÏÏÏÏÏÏ 432 538
Inventories ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 219 238
Prepaid expenses and otherÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 89 120
Total current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 897 1,085
InvestmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 400 412
Plant, property and equipment, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,835 7,889
Goodwill and intangible assets, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,825 2,881
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 504 430
$12,461 $12,697
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debtÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 332 $ 585
Accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 225 186
Accrued expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 556 584
Accrued salaries, wages and beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 154 164
Accrued taxes and other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 320 326
Total current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,587 1,845
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5,227 4,957
Deferred income taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,314 1,444
Other liabilitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 494 435
8,622 8,681
Minority interestÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 41 48
Class B exchangeable preferred shares of the Trust, at redemption value of $38.50 ÏÏÏ 42 117
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares of the Trust; $0.01 par value; authorized
30,000,000 shares; outstanding 549,951 and 609,576 shares at December 31, 2001
and 2000, respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì
Corporation common stock; $0.01 par value; authorized 1,050,000,000 shares;
outstanding 197,718,872 and 194,485,448 shares at December 31, 2001 and 2000,
respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2
Trust Class B shares of beneÑcial interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding 197,718,872 and 194,485,448 shares at
December 31, 2001 and 2000, respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2
Additional paid-in capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,861 4,796
Deferred compensation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (16) (4)
Accumulated other comprehensive incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (484) (353)
Accumulated deÑcitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (609) (592)
Total stockholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3,756 3,851
$12,461 $12,697
The accompanying notes to Ñnancial statements are an integral part of the above statements.
F-3
CONSOLIDATED STATEMENTS OF OPERATIONS

2001 2000 1999
Revenues
Owned, leased and consolidated joint venture hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,343 $3,659 $ 3,391
Other hotel and leisureÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 624 686 438
3,967 4,345 3,829
Costs and Expenses
Owned, leased and consolidated joint venture hotels ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,365 2,433 2,313
Selling, general, administrative and other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 411 403 220
Restructuring and other special charges ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 50 Ì 3
DepreciationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 433 391 370
Amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 93 90 82
3,352 3,317 2,988
Operating income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 615 1,028 841
Interest expense, net of interest income of $11, $19 and $16.ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (358) (420) (484)
Gain (loss) on asset dispositions, net, and asset impairments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (57) 2 191
Miscellaneous expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (15)
200 610 533
Income tax expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (46) (201) (1,076)
Minority equity in net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3) (8) (95)
Income (loss) from continuing operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 151 401 (638)
Discontinued operations:
Gain (loss) on dispositions, net of tax and minority interest of $0,
$2 and $125 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 5 (71)
Extraordinary item, net of tax ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (6) (3) (32)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 145 $ 403 $ (741)
Earnings (Loss) Per Share Ì Basic
Continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.75 $ 1.99 $ (3.41)
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 0.02 (0.38)
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.03) (0.01) (0.17)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.72 $ 2.00 $ (3.96)
Earnings (Loss) Per Share Ì Diluted
Continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.73 $ 1.96 $ (3.41)
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 0.02 (0.38)
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (0.03) (0.01) (0.17)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.70 $ 1.97 $ (3.96)
Weighted average number of Shares ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 201 202 189
Weighted average number of Shares assuming dilution ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 206 205 189
F-4
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
(In millions)

2001 2000 1999
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 145 $ 403 $(741)

Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments Ì
Foreign currency translation arising during the periodÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (106) (104) (128)
ReclassiÑcation adjustment for losses included in net income (loss) ÏÏÏÏÏÏÏÏ Ì Ì 1
Minimum pension liability adjustment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (5) Ì Ì
Unrealized gains (losses) on securities, net Ì
Unrealized holding gains (losses) arising during the period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 (11) 9
Derivative instruments, net Ì
Change in fair value of derivative instruments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (21) Ì Ì
(131) (115) (118)
Comprehensive income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 14 $ 288 $(859)
F-5
CONSOLIDATED STATEMENTS OF EQUITY
(In millions)
Forward Equity Accumulated Retained
Contracts Additional Other Earnings
and Equity Class B EPS Class A EPS Shares Paid-in Deferred Comprehensive (Accumulated
Put Options Shares Amount Shares Amount Shares Amount Capital Compensation Income(a) DeÑcit)
Balance at December 31, 1998 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 32 4 $149 4 $Ì 176 $ 4 $4,571 $ (1) $(120) $ 2
Net loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì Ì (741)
Stock option and restricted stock award
transactions, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì 1 Ì 12 (4) Ì Ì
Issuance of equity put options ÏÏÏÏÏÏÏÏÏÏÏÏÏ 19 Ì Ì Ì Ì Ì Ì (13) Ì Ì Ì
Settlement of equity put options ÏÏÏÏÏÏÏÏÏÏÏ (32) Ì Ì Ì Ì Ì Ì 17 Ì Ì Ì
Share repurchases ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì (3) Ì (64) Ì Ì Ì
Conversion and cancellation of Class A EPS,
Class B EPS and Partnership Units ÏÏÏÏÏÏ Ì Ì (13) Ì Ì 5 Ì 14 Ì Ì Ì
SVO acquisition ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì 10 Ì 248 Ì Ì Ì
Foreign currency translationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì (127) Ì
Unrealized gain on securities, net ÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì 9 Ì
Dividends declared ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì Ì (117)
Balance at December 31, 1999 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 19 4 136 4 Ì 189 4 4,785 (5) (238) (856)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì Ì 403
transactions, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì 2 Ì 47 1 Ì Ì
Settlement of equity put options ÏÏÏÏÏÏÏÏÏÏÏ (19) Ì Ì Ì Ì Ì Ì 13 Ì Ì Ì
F-6
Class B EPS and Partnership Units ÏÏÏÏÏÏ Ì (1) (19) (3) Ì 6 Ì 20 Ì Ì Ì
Unrealized loss on securities, net ÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì (11) Ì
Balance at December 31, 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 3 117 1 Ì 194 4 4,796 (4) (353) (592)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì Ì 145
transactions, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì 3 Ì 86 (12) Ì Ì
Class B EPS and Partnership Units ÏÏÏÏÏÏ Ì (2) (75) Ì Ì 4 Ì 75 Ì Ì Ì
Minimum pension liability adjustment ÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì (5) Ì
Unrealized loss on derivative instruments ÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì (21) Ì
Unrealized gain on securities, net ÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì 1 Ì
Balance at December 31, 2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì 1 $ 42 1 $Ì 198 $ 4 $4,861 $(16) $(484) $(609)
(a) As of December 31, 2001, this balance is comprised of $457 million of cumulative translation adjustments, $21 million of cumulative unrealized losses on derivative instruments, $1 million of cumulative
unrealized losses on securities and $5 million of cumulative minimum pension liability adjustment.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)
2001 2000 1999
Operating Activities
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 145 $ 403 $ (741)
Exclude:
Discontinued operations, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (5) 71
Extraordinary item, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 3 32
Income (loss) from continuing operationsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 151 401 (638)
Adjustments to income (loss) from continuing operations:
Depreciation and amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 526 481 452
Amortization of deferred loan costs ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 15 11 16
Amortization of hedge premiums ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 Ì Ì
Non-cash portion of restructuring and other special chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34 Ì 7
Non-cash foreign currency loss (gain)ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (27) 7 (3)
Non-cash portion of ReorganizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 936
Provision for doubtful accountsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 19 9
Minority equity in net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 8 95
Equity income, net of dividends received ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 13 (6)
Loss (gain) on asset dispositions, net, and asset impairments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 57 (2) (191)
Changes in working capital:
Accounts receivable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 98 (13) 7
Inventories ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 (63) (17)
Accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 34 (16) 37
Accrued expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (23) (37) (6)
Accrued and deferred income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (87) 22 8
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (56) 21 (135)
Cash from continuing operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 761 852 571
Cash from (used for) discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 3 (114)
Cash from operating activitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 761 855 457
Investing Activities
Purchases of plant, property and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (477) (544) (521)
Proceeds from asset sales, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39 261 3,853
Issuance/collection of notes receivable, netÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (23) (12) 78
Acquisitions, net of acquired cash ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (51) (284) (111)
Investments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (77) (45) (107)
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (32) (35) (20)
Cash from (used for) investing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (621) (659) 3,172
Financing Activities
Revolving credit facility and short-term borrowings, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (244) 547 (620)
Long-term debt issued ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,048 231 681
Long-term debt repaid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (743) (1,015) (3,165)
Settlement of forward equity contracts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (6) (16)
Dividends paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (156) (134) (116)
Share repurchasesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (96) (69) (64)
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 22 26 (35)
Cash used for Ñnancing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (169) (420) (3,335)
Exchange rate eÅect on cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3) (23) (15)
Increase (decrease) in cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (32) (247) 279
Cash and cash equivalents Ì beginning of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 189 436 157
Cash and cash equivalents Ì end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 157 $ 189 $ 436
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
InterestÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 360 $ 403 $ 651
Income taxes, net of refunds ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 141 $ 179 $ 132
F-7
CONSOLIDATED BALANCE SHEETS
(In millions, except share data)
December 31,
2001 2000
ASSETS
Current assets:
Cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 3 $ 9
Receivable, Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 34
Prepaid expenses and otherÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 4
Total current assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 39 47
Investments, Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 848 848
InvestmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 30 35
Plant, property and equipment, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4,201 4,260
Long-term receivables, Corporation, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,619 1,604
Goodwill and intangible assets, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 233 239
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 14 15
$ 6,984 $ 7,048
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debtÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 36 $ 35
Accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7 5
Accrued expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 64 57
Total current liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 107 97
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 447 483
554 580
Minority interestÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 31 39
Class B exchangeable preferred shares, at redemption value of $38.50ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 42 117
Commitments and contingencies
Stockholders' equity:
Class A exchangeable preferred shares; $0.01 par value; authorized 30,000,000
shares; outstanding 549,951 and 609,576 shares at December 31, 2001 and 2000,
respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì
Class A shares of beneÑcial interest; $0.01 par value; authorized 5,000 shares;
outstanding 100 shares at December 31, 2001 and 2000. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì
Trust Class B shares of beneÑcial interest; $0.01 par value; authorized
1,000,000,000 shares; outstanding 197,718,872 and 194,485,448 shares at
December 31, 2001 and 2000, respectively ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 2
Additional paid-in capital ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7,703 7,630
Accumulated deÑcitÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,348) (1,320)
Total stockholders' equity ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,357 6,312
$ 6,984 $ 7,048
F-8
CONSOLIDATED STATEMENTS OF INCOME
(In millions)

2001 2000 1999
Revenues
Unconsolidated joint ventures and other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 3 $ 3 $ 4
Rent and interest, Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 633 692 787
636 695 791
Costs and Expenses
Selling, general and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 3 5
Depreciation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 206 183 169
AmortizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6 7 6
215 193 180
421 502 611
Interest expense, net of interest income of $0 in all periodsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (37) (39) (47)
Gain (loss) on asset dispositions, net, and asset impairments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3) 1 (137)
Income tax expense ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (4) (1) (2)
Minority equity in net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) (3) (2)
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $376 $460 $ 423
F-9
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In millions)

2001 2000 1999
Operating Activities
Net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 376 $ 460 $ 423
Adjustments to net income:
Depreciation and amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 212 190 175
Minority equity in net income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 3 2
Equity income, net of dividends received ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 3 1
Loss (gain) on asset dispositions, net, and asset impairments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 (1) 137
Changes in working capital:
Receivable, Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) Ì 2
Accounts payable ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 Ì (2)
Accrued expensesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2 (14) 33
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 Ì 1
Cash from operating activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 602 641 772
Investing Activities
Purchases of plant, property and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (169) (204) (271)
Proceeds from asset sales, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 21 54 126
Acquisitions, net of acquired cash ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (6) Ì Ì
InvestmentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (1) (6)
Collections on notes receivableÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 56
Long-term receivables, Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10) 73 60
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 10 (1)
Cash used for investing activities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (164) (68) (36)
Financing Activities
Revolving credit facility and short-term borrowings, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (421)
Long-term debt issuedÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì 23 291
Long-term debt repaidÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (35) (106) (7)
Dividends paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (156) (134) (116)
Dividends paid to Corporation ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (243) (338) (470)
Share repurchases ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14) Ì Ì
Other, net ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 4 (10) (24)
Cash used for Ñnancing activitiesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (444) (565) (747)
Increase (decrease) in cash and cash equivalents ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (6) 8 (11)
Cash and cash equivalents Ì beginning of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9 1 12
Cash and cash equivalents Ì end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 3 $ 9 $ 1
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 37 $ 35 $ 36
Income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 4 $ 1 $ 2
F-10
NOTES TO FINANCIAL STATEMENTS
Note 1. Basis of Presentation

The accompanying consolidated balance sheets as of December 31, 2001 and 2000 and the consolidated
statements of operations/income, comprehensive income, equity and cash Öows for the years ended
December 31, 2001, 2000 and 1999 represent (i) Starwood Hotels & Resorts Worldwide, Inc. and its
subsidiaries (the ""Corporation''), including Sheraton Holding Corporation and its subsidiaries (""Sheraton
Holding'') (formerly ITT Corporation) and Starwood Hotels & Resorts and its subsidiaries (the ""Trust'' and,
together with the Corporation, ""Starwood'' or the ""Company''), and (ii) the Trust.
In the Ñrst quarter of 1998, Starwood completed two major transactions: the acquisition of Westin
Hotels & Resorts Worldwide, Inc. and certain of its aÇliates (""Westin'') (the ""Westin Merger'') and the
acquisition of ITT Corporation (the ""ITT Merger''), currently Sheraton Holding, and as a result is one of the
largest hotel companies in the world and the Trust is one of the largest real estate investment trusts
(""REITs'') in the United States. The Company's principal business is hotels and leisure, which is comprised
of a worldwide hospitality network of more than 700 full-service hotels as well as vacation ownership resorts
primarily serving two markets: luxury and upscale. The Company's hotel operations are represented in nearly
every major world market.
The Trust was formed in 1969 and elected to be taxed as a REIT under the Internal Revenue Code (the
""Code''). In 1980, the Trust formed the Corporation and made a distribution to the Trust's shareholders of
one share of common stock, par value $0.01 per share, of the Corporation (a ""Corporation Share'') for each
common share of beneÑcial interest, par value $0.01 per share, of the Trust (a ""Trust Share''). Until
January 6, 1999, the Corporation Shares and Trust Shares were paired on a one-for-one basis and, pursuant to
an agreement between the Corporation and the Trust, could be held or transferred only in units (""Paired
Shares'') consisting of one Corporation Share and one Trust Share.
During 1998, Congress enacted tax legislation that had the eÅect of eliminating the grandfathering for
certain interests in real property acquired after March 26, 1998 by a formation of a ""paired share REIT.'' In
response to this legislation, a reorganization of the Corporation and the Trust (the ""Reorganization'') was
proposed by the Company and was approved by the Corporation and Trust shareholders on January 6, 1999.
As a result of the Reorganization, the Trust became a subsidiary of the Corporation, which indirectly holds all
outstanding shares of the new Class A shares of beneÑcial interest in the Trust (""Class A Shares''). Each
outstanding Trust Share was converted into one share of the new non-voting Class B shares of beneÑcial
interest in the Trust (a ""Class B Share''). The Corporation Shares and the Class B Shares trade together on a
one-for-one basis, and pursuant to an agreement between the Corporation and the Trust, may be transferred
only in units (""Shares'') consisting of one Corporation Share and one Class B Share. The Reorganization was
accounted for as a reorganization of two companies under common control. As such, there was no revaluation
of the assets and liabilities of the combining companies. Unless otherwise stated herein, all information with
respect to Shares refers to Shares on or since January 6, 1999 and to Paired Shares for periods before
January 6, 1999.
During the Ñrst quarter of 1999, the Company recorded pretax charges of $15 million for costs directly
attributable to the Reorganization, such as legal, accounting and investment banking fees. As a result of the
Reorganization, the Company also recorded a one-time charge of $936 million to establish a deferred tax
liability relating to the diÅerence between the book and tax basis in the assets of the Trust.
The Corporation, through its subsidiaries, is the general partner of, and held, as of December 31, 2001, an
aggregate 97.8% partnership interest in, SLC Operating Limited Partnership (the ""Operating Partnership'').
The Trust, through its subsidiaries, is the general partner of, and held an aggregate 97.1% partnership interest
in, SLT Realty Limited Partnership (the ""Realty Partnership'' and, together with the Operating Partnership,
the ""Partnerships'') as of December 31, 2001. The units of the Partnerships (""LP Units'') held by the limited
F-11
NOTES TO FINANCIAL STATEMENTS Ì (Continued)
partners of the respective Partnerships are exchangeable on a one-for-one basis for Shares. At December 31,
2001, there were approximately 5.9 million LP Units outstanding (including 4.3 million LP Units held by the
Corporation). For all periods presented, the LP Units are assumed to have been converted to Shares for
purposes of calculating basic and diluted weighted average Shares outstanding.
Note 2. SigniÑcant Accounting Policies
Principles of Consolidation. The accompanying consolidated Ñnancial statements of the Company and
the Trust and their subsidiaries include the assets, liabilities, revenues and expenses of majority-owned
subsidiaries over which the Company and/or the Trust exercise control, and for which control is other than
temporary. Intercompany transactions and balances have been eliminated in consolidation.
Cash and Cash Equivalents. The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
Inventories. Inventories are comprised principally of vacation ownership interests (""VOIs'') and hotel
operating supplies. VOI inventory is carried at cost, which is lower than fair value less cost to sell. Operating
supplies are generally valued at the lower of cost (Ñrst-in, Ñrst-out) or market. Potential losses from obsolete
and slow-moving inventories are provided for in the current period.
Investments. Investments in partnerships and joint ventures are accounted for using the equity method
of accounting when the Company has a 20% to 50% ownership interest or exercises signiÑcant inÖuence over
the venture. If the Company's interest exceeds 50% and the Company exercises control over the venture, the
results of the partnership or joint venture are consolidated herein. All other investments are generally
accounted for under the cost method.
Equity in earnings of unconsolidated subsidiaries accounted for on the equity basis was $20 million,
$37 million and $32 million in 2001, 2000 and 1999, respectively, and is included in hotel and leisure revenues
in the accompanying consolidated Ñnancial statements.
The fair market value of investments is based on the market prices for the last day of the period if the
investment trades on quoted exchanges. For non-traded investments, fair value is estimated based on the
underlying value of the investment, which is dependent on the performance of the companies or ventures in
which the Company has invested, as well as the volatility inherent in external markets for these types of
investments.
In assessing potential impairment for these investments, the Company will consider these factors as well
as forecasted Ñnancial performance of its investees. If these forecasts are not met, the Company may have to
record impairment charges. Thus, the carrying value of other investments approximates fair value based on
market prices and the value of the underlying collateral.
Plant, Property and Equipment. Plant, property and equipment, including capitalized interest of
$7 million, $3 million and $8 million in 2001, 2000 and 1999, respectively, applicable to major project
expenditures, are recorded at cost. The cost of improvements that extend the life of plant, property and
equipment are capitalized. These capitalized costs may include structural improvements, equipment and
Ñxtures. Costs for normal repairs and maintenance are expensed as incurred. Depreciation is provided on a
straight-line basis over the estimated useful economic lives of 15 to 40 years for buildings and improvements; 3
to 10 years for furniture, Ñxtures and equipment; and the lesser of the lease term or 40 years for leasehold
improvements. Gains or losses on the sale or retirement of assets are included in income when the assets are
sold provided there is reasonable assurance of the collectibility of the sales price and any future activities to be
performed by the Company relating to the hotel assets sold are insigniÑcant.
F-12
The Company evaluates the carrying value of each of the Company's assets for impairment. For assets in
use, the expected undiscounted future cash Öows of the assets are compared to the net book value of the
assets. If the expected undiscounted future cash Öows are less than the net book value of the assets, the excess
of the net book value over the estimated fair value is charged to current earnings. When assets are identiÑed by
management as held for sale, the Company discontinues depreciating the assets and estimates the fair value of
such assets. If, in management's opinion, the fair value of the assets which have been identiÑed for sale is less
than the net book value of the assets, the carrying value of the assets is reduced to fair value. Fair value is
determined based upon discounted cash Öows of the assets at rates deemed reasonable for the type of property
and prevailing market conditions, appraisals and, if appropriate, current estimated net sales proceeds from
pending oÅers.
Goodwill and Intangible Assets. Goodwill and intangible assets arise in connection with acquisitions,
including the acquisition of management contracts, and are amortized using the straight-line method over the
useful life of the asset. EÅective January 1, 2002, the Company adopted Statement of Financial Accounting
Standards (""SFAS'') No. 141, ""Business Combinations,'' and SFAS No. 142, ""Goodwill and Other
Intangible Assets.'' In accordance with this guidance, the Company will cease amortizing goodwill and
intangible assets with indeÑnite lives. Intangible assets with Ñnite lives will continue to amortize on a straight-
line basis over their respective useful lives. The Company will also review all goodwill and intangible assets for
impairment by comparisons of fair value to book value annually, or upon the occurrence of a trigger event.
Impairments will be recognized in operating results. In connection with the adoption of this standard, the
Company has completed its initial recoverability test on goodwill and intangible assets, which did not result in
any impairment write-downs. Estimates based on existing goodwill and intangible assets indicate that adoption
will result in an annual increase in net income of approximately $64 million in 2002.
Frequent Guest Program. Starwood Preferred Guest» (""SPG'') is the Company's frequent guest
incentive marketing program. SPG members earn points based on their spending at the Company's properties
and, to a lesser degree, through participation in aÇliated partners' programs, such as those oÅered by airlines.
Points can be redeemed at most Company owned, leased, managed and franchised properties; however, points
cannot be redeemed for cash.
SPG is provided as a marketing program to the Company's properties. The cost of operating the program,
including the estimated cost of award redemption, is charged to properties based on members' qualifying
expenditures. Revenue is recognized by participating hotels and resorts when points are redeemed for hotel
stays.
The Company, through the services of third-party actuarial analysts, determines the fair value of the
future redemption obligation based on statistical formulas which project timing of future point redemption
based on historical experience, including an estimate of the ""breakage'' for points that will never be redeemed,
and an estimate of the points that will eventually be redeemed. These factors determine the required liability
for outstanding points. The Company's management and franchise agreements require that the Company be
reimbursed currently for the costs of operating the program, including marketing, promotion, communications
with, and performing member services for the SPG members. Actual expenditures for SPG may diÅer from
the actuarially determined liability.
The liability for the SPG program is included in other long-term liabilities and accrued expenses in the
accompanying consolidated balance sheets. The total actuarially determined liability as of December 31, 2001
and 2000 is $159 million and $137 million, respectively.
Derivative Financial Instruments. EÅective January 1, 2001, the Company adopted SFAS No. 133,
""Accounting for Derivative Instruments and Hedging Activities,'' as amended by SFAS No. 138, ""Account-
ing for Certain Derivative Instruments and Certain Hedging Activities,'' which established new accounting
F-13
rules and disclosure requirements for most derivative instruments and hedging activities. The adoption of
SFAS No. 133, as amended, resulted in an initial reduction of other comprehensive income of approximately
$6.2 million but did not impact earnings. The Company enters into interest rate swap agreements to manage
interest rate exposure. The net settlements to be paid or received under these agreements are accrued
consistent with the terms of the agreements and are recognized in interest expense over the term of the related
debt. The related fair value of the swaps is included in other liabilities or assets.
The Company enters into foreign currency forward contracts and foreign currency swaps as a means of
hedging exposure to foreign currency Öuctuations. All foreign currency forward contracts have an inverse
correlation to the hedged items and are designated as, and considered eÅective as, hedges of the underlying
assets or liabilities. Changes in the value of the derivative instruments designated as hedges of foreign currency
denominated assets and liabilities are classiÑed in the same manner as the classiÑcation of the changes in the
underlying assets and liabilities. Discounts or premiums related to the contracts are recognized in income over
the life of the contract.
The Company does not enter into derivative Ñnancial instruments for trading or speculative purposes and
monitors the Ñnancial stability and credit standing of its counterparties.
Foreign Currency Translation. Balance sheet accounts are translated at the exchange rates in eÅect at
each year-end and income and expense accounts are translated at the average rates of exchange prevailing
during the year. The national currencies of foreign operations are generally the functional currencies. Gains
and losses from foreign currency translation and the eÅect of exchange rate changes on intercompany
transactions of a long-term investment nature are generally included as a separate component of stockholders'
equity. Gains and losses from foreign currency translation of intercompany receivables and payables that are
not of a long-term investment nature are reported currently in costs and expenses and amounted to a gain
(loss) of $27 million, $(7) million and $3 million in 2001, 2000 and 1999, respectively. The $27 million gain
in 2001 includes a $24 million gain recorded in selling, general, administrative and other expenses related to
the translation of U.S. dollar intercompany receivables in Argentina as a result of the devaluation of the
Argentine Peso. Gains and losses from foreign currency transactions are reported currently in costs and
expenses and were insigniÑcant for all periods presented.
Income Taxes. Under the asset and liability method of accounting for income taxes, deferred tax assets
and liabilities are recognized for the estimated future tax consequences attributable to diÅerences between the
Ñnancial statement carrying amounts of existing assets, including net operating loss carryforwards, and
liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax
rates in eÅect for the year in which those temporary diÅerences are expected to be recovered or settled. The
eÅect on deferred tax assets and liabilities of a change in tax rates is recognized in earnings in the period when
the new rate is enacted.
The Trust has elected to be treated as a REIT under the provisions of the Code. As a result, the Trust is
not subject to federal income tax on its taxable income at corporate rates provided it distributes annually all of
its taxable income to its shareholders and complies with certain other requirements.
F-14
Earnings Per Share. The following reconciliation of basic earnings per Share to diluted earnings per
Share for income (loss) from continuing operations assumes the conversion of LP Units to Shares (in
millions, except per Share data):
2001 2000 1999(c)
Earnings Shares Per Share Earnings Shares Per Share Earnings Shares Per Share
Income (loss) from continuing

operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $151 $401 $(638)
Dividends on Class A EPS(a) and
Class B EPS(b) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (5)
Basic earnings (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏ 151 201 $0.75 401 202 $1.99 (643) 189 $(3.41)
EÅect of dilutive securities:
Employee stock options ÏÏÏÏÏÏÏÏÏ Ì 5 Ì 3 Ì Ì
Class A EPS and Class B EPS ÏÏ Ì Ì Ì Ì Ì Ì
Diluted earnings (loss) ÏÏÏÏÏÏÏÏÏÏÏ $151 206 $0.73 $401 205 $1.96 $(643) 189 $(3.41)
(a) Class A Exchangeable Preferred Shares.

(b) Class B Exchangeable Preferred Shares.
(c) For the period ended December 31, 1999, 8 million Class A and B EPS and 1 million stock options were excluded from the
computations of diluted earnings per Share as the eÅects were antidilutive.
In April 2001, the Emerging Issues Task Force (""EITF'') of the Financial Accounting Standards Board
(""FASB'') issued Topic No. D-95, ""EÅect of Participating Convertible Securities on the Computation of
Basic Earnings Per Share.'' EITF Topic No. D-95 clariÑes SFAS No. 128, ""Earnings Per Share,'' as it relates
to convertible securities that participate in the Company's dividends. The EITF Topic notes that these
securities should be included in the computation of basic earnings per share, if dilutive. Prior to the adoption
of this Topic, the Company included these securities (Class A and B EPS) in the computation of diluted
earnings per share. Prior periods aÅected by this EITF Topic have been restated. The adoption of this Topic
had no eÅect on diluted earnings per share.
Revenue Recognition. The Company's revenues are primarily derived from the following sources:
(1) hotel and resort revenues at the Company's owned, leased and consolidated joint venture properties;
(2) management and franchise fees; (3) vacation ownership revenues; and (4) other revenues which are
ancillary to the Company's operations. Generally, revenues are recognized when the services have been
rendered. The following is a description of the composition of revenues for the Company:
¬ Owned, Leased and Consolidated Joint Ventures Ì Represents revenue primarily derived from hotel
and leisure operations, including the rental of rooms and food and beverage sales, from a worldwide
network of owned, leased or consolidated joint venture hotels and resorts operated primarily under the
Company's proprietary brand names including St. Regis, The Luxury Collection, Sheraton, Westin, W
and Four Points by Sheraton. Revenue is recognized when rooms are occupied and services have been
rendered.
¬ Management and Franchise Fees Ì Represents fees earned on hotels managed worldwide, usually
under long-term contracts with the hotel owner, and franchise fees received in connection with the
franchise of the Company's Sheraton, Westin and Four Points by Sheraton brand names. 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 proÑtability. Base fee revenues are recognized
F-15
when earned in accordance with the terms of the contract. For any time during the year, incentive fees
are recognized for the fees due as if the contract was terminated at that date, exclusive of any
termination fees due or payable. Franchise fees are generally based on a percentage of hotel room
revenues and are recognized in accordance with SFAS No. 45, ""Accounting for Franchise Fee
Revenue,'' as the fees are earned and become due from the franchisee. Management and franchise fees
are recognized in other hotel and leisure revenues in the consolidated statements of operations.
¬ Vacation Ownership Ì The Company recognizes revenue from VOI sales in accordance with SFAS
No. 66, ""Accounting for Sales of Real Estate.'' The Company recognizes sales when a minimum of
10% of the purchase price for the VOI has been received, the period of cancellation with refund has
expired and receivables are deemed collectible. For sales that do not qualify for full revenue recognition
as the project has progressed beyond the preliminary stages but has not yet reached completion, all
revenue and proÑt are initially deferred and recognized in earnings through the percentage-of-
completion method. Vacation ownership revenues are recognized in other hotel and leisure revenues in
the consolidated statements of operations.
Self-Insurance. Through its captive insurance company, the Company provides insurance coverage for
workers' compensation, property and general liability claims arising at hotel properties owned or managed by
the Company through policies written directly and through assumed reinsurance arrangements. Estimated
insurance claims payable represent outstanding claims and those estimated to have been incurred but not
reported based upon historical loss experience. Actual costs may vary from estimates based on trends of losses
for Ñled claims and claims estimated to be incurred but not yet Ñled. Estimated costs of these self-insurance
programs are accrued, based on the analysis of third-party actuaries.
Use of Estimates. The preparation of Ñnancial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates and assumptions that aÅect
the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of
the Ñnancial statements and the reported amounts of revenues and expenses during the reporting period.
Actual results could diÅer from those estimates.
ReclassiÑcations. Certain reclassiÑcations have been made to the prior years' Ñnancial statements to
conform to the current year presentation.
Impact of Recently Issued Accounting Standards. In response to a FASB staÅ announcement in
November 2001, the Company is in the process of reviewing the reporting of the reimbursement of costs
incurred on behalf of managed hotel property owners and franchisees. The Company expects to record the
reimbursements received as revenues and the costs incurred on behalf of managed hotel property owners and
franchisees as expenses commencing in the Ñrst quarter of 2002. These costs relate primarily to payroll costs at
managed properties where the Company is the employer. Although the Company is in the process of
summarizing such amounts, it estimates that revenues and expenses would have been between $700 million
and $900 million higher had the change been made in 2001. The impact on years prior to 2001 is still being
accumulated since such information is not readily determinable from the Company's existing Ñnancial
reporting systems. Upon application of this staÅ announcement, comparative Ñnancial statements for prior
periods will be reclassiÑed to conform with the presentation in the 2002 Ñnancial statements. Since the
reimbursements are made based upon the costs incurred with no added margin, the adoption of this guidance
will have no eÅect on the operating income, total or per Share net income, cash Öows or Ñnancial position of
the Company.
In August 2001, the FASB issued SFAS No. 144, ""Accounting for the Impairment or Disposal of Long-
Lived Assets.'' The new rules apply to the classiÑcation and impairment analysis conducted on long-lived
assets other than intangible assets and became eÅective January 1, 2002. The new rules provide a single
F-16
accounting treatment for the impairment of long-lived assets and implementation guidance regarding
impairment calculations. This statement also modiÑes accounting and disclosure requirements for discontin-
ued operations. The adoption of SFAS No. 144 is not anticipated to have a material impact on the Company.
Note 3. Acquisitions
Acquisition of Sheraton Centre Toronto. In April 2001, the Company completed the acquisition of the
remaining 50% interest not previously owned by the Company in the 1,377-room Sheraton Centre Toronto for
$75 million Canadian dollars (approximately U.S. $48 million based on exchange rates at the time). The
Company accounted for the acquisition as a step acquisition in accordance with Accounting Principles Board
(""APB'') Opinion No. 16, ""Business Combinations.'' The results of the acquisition have been included in the
accompanying consolidated Ñnancial statements since the acquisition date.
Acquisition of Royal Orchid Hotel. In April 2001, the Company completed the acquisition of 44% of an
entity which owns the Royal Orchid Hotel in Bangkok, Thailand for $27 million.
Acquisition of CIGA S.p.A. In June 2000, the Company completed the acquisition of the minority
ownership interest of CIGA S.p.A. (""CIGA'') not previously owned by Starwood. The aggregate purchase
price of the incremental shares was approximately $312 million. The Company accounted for the acquisition
of the outstanding CIGA shares as a step acquisition in accordance with APB Opinion No. 16, resulting in an
allocation to property and goodwill of approximately $102 million. The results of the acquisition have been
included in the accompanying consolidated Ñnancial statements since the acquisition date.
Acquisition of Starwood Vacation Ownership, Inc. On October 1, 1999, the Company completed the
acquisition of Starwood Vacation Ownership, Inc. (formerly Vistana, Inc.) (""SVO''), whereby SVO merged
with and into a subsidiary of the Corporation and thereby became a wholly owned subsidiary of the
Corporation. The Company Ñnanced the acquisition of SVO with cash of approximately $110 million, the
assumption of approximately $280 million of debt and the issuance of approximately 10.1 million Shares.
SVO's principal operations include the acquisition, development and operation of vacation ownership resorts;
marketing and selling VOIs in the resorts; and providing Ñnancing to customers who purchase such interests.
The Company accounted for the acquisition of SVO as a purchase in accordance with APB Opinion No. 16.
As such, the carrying values of the assets acquired (including net cash of approximately $35 million) and
liabilities assumed were recorded at fair market value, resulting in goodwill of approximately $256 million. The
results of SVO's operations have been included in the accompanying Ñnancial statements since the acquisition
date.
The pro forma eÅect on the Company's revenues, net income and earnings per Share, as though these
acquisitions occurred as of January 1 of the respective years, is not material.
Note 4. Gain (Loss) on Asset Dispositions, Net, and Asset Impairments

Due to the September 11, 2001 terrorist attacks in New York, Washington, D.C. and Pennsylvania (the
""September 11 Attacks'') and the weakening of the U.S. economy, the Company conducted a comprehensive
review of the carrying value of certain assets for potential impairment. As a result, the Company recorded a
net charge relating primarily to the impairment of certain investments in the fourth quarter of 2001 totaling
$57 million.
In September and October of 1999, the Company sold its 52.8% stake in Lampsa, SA, a Greek company
that owns the Grande Bretagne Hotel in Athens, Greece. The Company owned its interest in Lampsa, SA
through its then 70.3% ownership of CIGA. The Company received gross proceeds (before minority interest)
of approximately $287 million as a result of this sale and recorded a pretax gain (before minority interest) of
$276 million.
F-17
During 2001 and 2000, the Company sold one and seven hotels, respectively. The Company recorded a
net gain on these sales of $2 million in 2000, which includes an impairment write-down of the hotel
subsequently sold in early 2001.
Note 5. Asset Securitizations

The Company accounted for asset securitizations as sales under SFAS No. 125, ""Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,'' through March 31, 2001 and
accounts for these transactions under SFAS No. 140, ""Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities Ì a Replacement of FASB Statement No. 125,'' thereafter.
During 2001, the Company sold, without recourse, through a bankruptcy-remote qualiÑed special purpose
entity (""QSPE''), notes receivable originated by the Company's vacation ownership operations in connection
with the sale of VOIs. The Company continues to service the notes. The Company retains interests in the
securitizations in the form of over-collateralization and interest-only strips (""BeneÑcial Interests''), both of
which provide credit enhancement to the third party investors in the QSPE. The Company's right to receive
cash Öows from these BeneÑcial Interests is limited to cash available after paying the QSPE's Ñnancing
expenses, program fees and absorbing the QSPE's credit losses. Gains from the sales of notes receivable
totaled $12 million in 2001 and are included in other hotel and leisure revenues in the consolidated statements
of operations.
At the date of securitization and at the end of each reporting period, the Company estimates the fair
value of the BeneÑcial Interests using a discounted cash Öow model. The BeneÑcial Interests are debt
securities that are accounted for under the provisions of SFAS No. 115, ""Accounting for Certain Investments
in Debt and Equity Securities,'' and classiÑed as either ""available-for-sale'' or ""trading.'' The Company has
elected to classify the BeneÑcial Interests as ""trading'' securities with changes in fair values reported through
operating results. During the year ended December 31, 2001, the Company recognized a $2 million gain,
included in gain (loss) on asset dispositions, net, and asset impairments relating to changes in the fair value of
these BeneÑcial Interests. The key assumptions used in measuring the fair value of the BeneÑcial Interests at
the time of securitization and at the end of each reporting period during the year ended December 31, 2001,
were as follows: discount rate of 16.0%; annual prepayment rate based upon a curve, which yields an average
expected life of prepayable notes receivable of 70 months; and expected annual gross credit losses of 1.7%. The
key assumptions are based on historical experience. To date, actual results compared with the assumptions
used at the time of securitization have not materially aÅected the carrying value of the BeneÑcial Interests.
Cash Öows between the Company and the QSPE during the year ended December 31, 2001 were as
follows: net proceeds to the Company from new securitizations of $202 million, servicing fees received of
$1 million and cash Öows received on BeneÑcial Interests of $10 million.
At December 31, 2001, $192 million of principal remains outstanding in all securitizations in which the
Company has a BeneÑcial Interest. Delinquencies of more than 90 days at December 31, 2001 amounted to
$5 million. The Company has been able to resell vacation ownership units underlying repurchased loans
without incurring material losses.
The Company has completed a sensitivity analysis on the net present value of the BeneÑcial Interests
with the objective of measuring the change in value associated with independent changes in individual key
variables. The methodology used applied unfavorable changes that would be considered statistically signiÑcant
for the key variables of prepayment rate, discount rate and expected gross credit losses. The net present value
of the BeneÑcial Interests was $31 million at December 31, 2001, before any sensitivity analysis changes were
applied. An increase of 100 basis points in the annual prepayment rate would decrease the year-end valuation
by $0.3 million, or 1.0%, and an increase of 200 basis points in the annual prepayment rate would decrease the
F-18
year-end valuation by $0.6 million, or 1.9%. An increase of 100 basis points in the discount rate would
decrease the year-end valuation by $0.4 million, or 1.3%, and an increase of 200 basis points in the discount
rate would decrease the year-end valuation by $0.9 million, or 3.0%. An increase of 100 basis points in the
expected gross annual rate of credit losses would decrease the year-end valuation by $2.1 million, or 6.8%, and
an increase of 200 basis points in the expected credit losses would decrease the year-end valuation by
$4.3 million, or 14.0%. These estimates should not be considered predictions of how the value of the
Company's BeneÑcial Interests would actually change in the future as they do not consider the interaction of
these factors which may move independently of each other.
The Company also periodically sells, without recourse, through special purpose entities (""SPEs''), notes
receivable originated by the Company's vacation ownership operations in connection with the sale of VOIs.
The Company continues to service the notes. The Company also holds retained interests in these mortgage-
receivable sales (""Retained Interests''). The Company's right to receive cash Öows from these Retained
Interests are limited to cash available after paying the related SPE's Ñnancing expenses, program fees and
absorbing the related SPE's credit losses. Gains from such sales totaled $0 in 2001, $14 million in 2000 and
$6 million in 1999 and are included in other hotel and leisure revenues in the consolidated statements of
operations. In connection with the 2001 securitization, the Company repurchased all existing receivables
under the SPEs.
Note 6. Discontinued Operations

Gaming. On December 30, 1999, the sale of Caesars World, Inc. (""Caesars'') was completed. On
June 23, 2000, the sale of the Desert Inn Resort & Casino (the ""Desert Inn'') was completed (together with
the sale of Caesars, the ""Gaming Dispositions''). The Company received approximately $3.3 billion in
proceeds from the Gaming Dispositions which was used to pay oÅ $2.5 billion of increasing rate notes and to
reduce its bank revolver. These sales constituted the disposition of Starwood's gaming operations.
As a result of the Gaming Dispositions, the accompanying consolidated Ñnancial statements were
restated in 1999 to reÖect the results of operations and net assets of the gaming segment as a discontinued
operation. This restatement includes the allocation of long-term debt of $165 million for the year ended
December 31, 1999 and the related interest expense of $6 million and $163 million for the years ended
December 31, 2000 and 1999, respectively, to the discontinued gaming operations. These allocations were
based upon the ratio of net gaming segment assets to the Company's total capitalization. During the Ñrst
quarter of 1999, the Company provided for estimated after-tax losses on the disposal of the discontinued
gaming operations of $180 million ($158 million pretax), which included anticipated operating income of
approximately $50 million prior to the disposal. In the fourth quarter of 1999, the Company provided for
additional losses on the sale of its gaming operations in the amount of $55 million (including tax of
$9 million), primarily due to the delay in the closing of the sale, lower than estimated operating proÑts prior to
the sale and certain adjustments to the sale price made at closing. Additionally, the Company provided for
additional losses on the disposal of the Desert Inn of $9 million (net of a $5 million tax beneÑt), primarily as a
result of additional anticipated operating losses prior to the sale. During 2000, the Company reversed
$5 million (after-tax) of the amount previously provided related to these dispositions following the Ñnalization
of the purchase price with the buyers.
F-19
Summary Ñnancial information of the discontinued gaming operations is as follows (in millions):
Period from Year Ended
January 1, 2000 December 31,
to June 23, 2000 1999
Income Statement Data

Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $57 $1,541
Operating income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(3) $ 154
Interest expense, including allocated interest ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(6) $ (174)
Income tax beneÑt (expense) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1 $ (11)
Minority equity in net loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $ 4
Loss from discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(8) $ (27)
ITT Educational Services, Inc. In February 1999, the Company completed the sale of its remaining
interest in ITT Educational Services, Inc. (""Educational Services''), selling 8.0 million shares of common
stock of Educational Services in an underwritten public oÅering at a price per share of $34.00 and sold
1.5 million shares of common stock at $32.73 per share directly to Educational Services. Starwood received
aggregate net proceeds of approximately $310 million from these transactions, which were used to repay a
portion of the Company's outstanding debt. The Company recognized a gain of $272 million, before income
taxes of $99 million, on the sale.
Note 7. Goodwill and Intangible Assets
Goodwill and intangible assets consisted of the following (in millions):

December 31,
2001 2000
Goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,737 $2,761

Trademarks and trade names ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 226 226
Management and franchise agreementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 143 128
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 57 15
3,163 3,130
Accumulated amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (338) (249)
$2,825 $2,881
Prior to the adoption of SFAS No. 142, goodwill and trademarks and trade names were amortized on a
straight-line basis over a 40-year period. Commencing January 1, 2002, goodwill and trademarks and trade
names, which are deemed intangible assets with an indeÑnite life, are no longer amortized. Intangible assets
associated with management and franchise contracts are amortized on a straight-line basis over the initial life
of the respective contract.
Note 8. Extraordinary Item
During the second quarter of 2001, the Company prepaid $500 million on the Tranche II Senior Secured
Notes Facility, resulting in an extraordinary loss on the early extinguishment of debt of $9 million (pretax).
During the Ñrst quarter of 2000, the Company prepaid $28.4 million on a mortgage loan resulting in an
extraordinary loss on the early extinguishment of debt of $3 million (pretax).
F-20
In December 1999, the Company used the proceeds from the sale of Caesars to pay oÅ $2.5 billion of
increasing rate notes. This early extinguishment of debt required termination fees of $38 million and the write-
oÅ of $10 million of deferred loan fees associated with this debt. This $48 million (pretax) charge was
recorded in December 1999 as an extraordinary loss on the early extinguishment of debt.
In August 1999, Caesars redeemed its senior subordinated notes for an aggregate payment of $152 mil-
lion, recognizing an extraordinary loss of $3 million (pretax).
Note 9. Restructuring and Other Special Charges
At December 31, 2001, the Company has remaining accruals related to restructuring and other special
charges, described below, of $98 million, $21 million of which is included in other long-term liabilities in the
accompanying 2001 consolidated balance sheet. These accruals consist of $65 million for certain litigation
costs and $33 million primarily related to severance payouts in connection with the 2001 reduction in force and
remaining lease commitments which expire through 2006.
2001 Restructuring and Other Special Charges. During 2001, the Company recorded restructuring and
other special charges of $70 million (pretax), primarily related to the September 11 Attacks and the resulting
decline in industry-wide demand, including a $23 million (pretax) write-down of the Company's investments
in various e-business ventures. These charges were oÅset by the reversal of a $20 million (pretax) bad debt
charge taken in 1998 related to a note receivable, which is now fully performing.
Due to the September 11 Attacks and the weakening of the U.S. economy, the Company began analyzing
and implementing a cost reduction plan and conducted a comprehensive review of the carrying value of certain
assets for potential impairment, resulting in restructuring and other special charges aggregating approximately
$47 million. These charges consisted primarily of severance and retention costs (approximately $25 million);
bad debt expense associated with receivables no longer deemed collectible (approximately $17 million); and
impairments of certain investments and other assets (approximately $5 million). Approximately $14 million of
these special items represent cash charges, with the remaining amount being non-cash.
1999 Restructuring and Other Special Charges (Credits). During 1999, the Company recorded
restructuring charges of $5 million (pretax) attributed to the rationalization of one of its technology centers.
In addition, the Company recorded other special charges of $13 million attributed to severance beneÑts for the
former President and Chief Operating OÇcer of the Corporation and $75 million attributed primarily to an
accrual for certain litigation costs related to an unfavorable judgment in a matter involving the former
Sheraton hotel in Washington, D.C. as well as expected legal costs associated with the Intelnet International
Corporation (""Intelnet'') dispute (see Note 20).
ITT Merger-Related Charges (Credits). In connection with the ITT Merger, the Company recorded
restructuring and other special charges totaling $172 million (pretax) in 1998 for ITT Merger-related costs
and the write-down of certain assets. During 1999, the Company reversed $8 million of these charges as the
ITT Merger costs were less than originally anticipated.
During 1997, Sheraton Holding recorded special charges as a result of the ITT Merger for conversion of
the accounting of Sheraton Holding's stock option plan to variable accounting due to limited stock
appreciation rights subject to exercise and related charges for tax reimbursements to employees of $404
million. During 1999, the Company reversed approximately $50 million in accruals related to the resolution of
certain employment related contingencies.
Other Sheraton Holding Restructuring and Other Special Charges (Credits). During 1997, Sheraton
Holding recorded pretax charges totaling $236 million to restructure and rationalize operations at its world
F-21
headquarters and the headquarters of its Ñeld operations. During 1999, the Company reversed $32 million of
these charges, as the costs were less than anticipated.
Note 10. Plant, Property and Equipment

Plant, property and equipment consisted of the following (in millions):
December 31,
2001 2000
Land and improvements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,354 $ 1,395

Buildings and improvements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,434 6,265
Furniture, Ñxtures and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,727 1,603
Construction work in process ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 160 113
9,675 9,376
Less accumulated depreciation and amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,840) (1,487)
$ 7,835 $ 7,889
As of December 31, 2000, the Company identiÑed six hotels totaling $70 million as non-core assets and
classiÑed them as held for sale. These hotels were included in plant, property and equipment in the
accompanying 2000 consolidated balance sheet. In January 2001, the Company sold one hotel for proceeds of
$21 million. As a result of the September 11 Attacks and the economic climate in the United States at the end
of 2001, the Company determined that it was not prudent at this time to sell the remaining hotels. The
Company has reclassiÑed the hotels from held for sale to in-service plant, property and equipment as of
December 31, 2001.
F-22
Note 11. Income Taxes

Income tax data from continuing operations of the Company is as follows (in millions):
2001 2000 1999
Pretax income
U.S. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 75 $437 $ 277
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 125 173 256
$200 $610 $ 533
Provision for income tax
Current:
U.S. federal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 57 $ 71 $ 65
State and localÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 9 13
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 70 95 95
135 175 173
Deferred:
U.S. federal ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (88) 19 718
State and localÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 180
Foreign ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) 7 5
(89) 26 903
$ 46 $201 $1,076
No provision was made for U.S. taxes payable on undistributed foreign earnings amounting to
approximately $117 million since these amounts are permanently reinvested.
Deferred income taxes represent the tax eÅect of the diÅerences between the book and tax bases of assets
and liabilities. Deferred tax assets (liabilities) include the following (in millions):
December 31,
2001 2000
Plant, property and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (712) $ (779)

Intangibles ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (342) (335)
Allowances for doubtful accounts and other reserves ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 193 161
Employee beneÑts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 35 36
Deferred gain on ITT World Directories disposition ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (524) (524)
Net operating loss and tax credit carryforwards ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 231 188
Deferred incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (121) (115)
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (19) (11)
(1,259) (1,379)
Less valuation allowance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (55) (65)
Deferred income taxesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(1,314) $(1,444)
F-23
At December 31, 2001, the Company has net operating loss and tax credit carryforwards of approximately
$591 million and $24 million, respectively, for federal income tax purposes. Substantially all operating loss
carryforwards, which are expected to provide future tax beneÑts, expire between 2018 and 2021.
In February 1998, the Company disposed of ITT World Directories. The Company provided for income
taxes of $524 million on this transaction, which are included in deferred income taxes in the accompanying
consolidated balance sheets. While the Company strongly believes this transaction was completed on a tax
deferred basis, this position is currently under review by the Internal Revenue Service. The results of such a
review are unpredictable. If this transaction were deemed fully taxable in 1998, then the Company's tax
liability would be approximately $524 million, the amount of deferred income tax indicated above, plus
interest, and would be partially oÅset by the Company's net operating loss discussed above. The Company
plans to vigorously defend its position in this matter.
A reconciliation of the tax provision of the Company at the U.S. statutory rate to the provision for income
tax as reported is as follows (in millions):
2001 2000 1999
Tax provision at U.S. statutory rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 70 $214 $ 187

U.S. state and local income taxes ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 5 6 8
Exempt Trust income ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (57) (49) (41)
Tax on repatriation of foreign earningsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13 21 16
Foreign tax rate diÅerential ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10 14 (5)
Non-deductible goodwill ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16 16 14
ReorganizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 936
Transaction costsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (58)
Deferred asset valuation allowance ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (10) (18) 5
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) (3) 14
Provision for income taxÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 46 $201 $1,076
F-24
Note 12. Debt
Long-term debt and short-term borrowings consisted of the following (in millions):
December 31,
2001 2000
Senior Credit Facility:

Five-year term loan, interest at LIBOR°0.725% (2.60% at December 31, 2001),
maturing through 2003. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 800 $ 925
Term Loan Add-on, interest at LIBOR°1.25% (3.12% at December 31, 2001),
maturing in 2003.ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 423 173
Revolving Credit Facility, interest at LIBOR°0.725% (2.60% at December 31,
2001), maturing in 2003. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 664 620
Senior Secured Notes Facility:
Tranche II Loans, interest at LIBOR°2.75% (4.62% at December 31, 2001),
maturing in 2003.ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 500 1,000
Sheraton Holding public debt, interest rates ranging from 6.75% to 7.75%, maturing
through 2025. ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,296 1,296
Convertible Senior Notes Ì Series A & BÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 507 Ì
Euro loan, Euribor°1.95% (5.25% at December 31, 2001) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 240 254
Mortgages and other, interest rates ranging from 3.1% to 11.9% ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,129 1,274
5,559 5,542
Less current maturities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (332) (585)
Long-term debt ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $5,227 $4,957
Aggregate debt maturities for each of the years ended December 31 are as follows (in millions):
2002 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 332
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2,775
2004 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,872
$5,559
On February 23, 1998, Starwood entered into two credit facilities with Lehman Brothers, Bankers Trust
Company, The Chase Manhattan Bank and other Ñnancial institutions. The Senior Credit Facility and the
Senior Secured Notes Facility comprise Starwood's primary existing credit facilities. In September 1998, the
Company increased its borrowings under the Senior Secured Notes Facility with a $1 billion, Ñve-year term
borrowing facility (""Tranche II Loans''). In December 2000, the Company increased the amount available
under the Senior Credit Facility by $172.5 million (""Term Loan Add-on''). In January 2001 and May 2001,
the Company completed add-on Ñnancings to its Term Loan Add-on of $150 million and $100 million,
respectively. The proceeds from the Term Loan Add-ons were used to reduce the amount outstanding under
the Company's Revolving Credit Facility. In November 2001, the Company successfully amended certain
terms of its Senior Credit Facility. The amendment gives the Company greater Ñnancial Öexibility by
F-25
modiÑcation of the timing of amortization payments.
In January 1999, the Company completed a $542 million long-term Ñnancing (the ""Mortgage Loan''),
secured by mortgages on a portfolio of 11 hotels. The Mortgage Loan is due in February 2009, and the
proceeds from the Mortgage Loan were used to pay down the one-year term loan under the Senior Credit
Facility, which was subsequently paid oÅ.
In July 2000, the Company entered into a one-year, Euro 270 million loan (approximately $252 million
based on exchange rates at the time) at an initial average interest rate of Euribor plus 112.5 basis points for
the Ñrst six months and increasing to Euribor plus 137.5 basis points for the remaining six months. This loan
was extended through July 2002. In December 2001, the Company entered into an 18-month Euro 450 million
loan (approximately $399 million based on exchange rates at the time) with an interest rate of Euribor plus
195 basis points. The proceeds of the Euro 450 million loan were drawn down in two tranches: the Ñrst
270 million Euros was drawn down in December 2001 and used to repay the previously outstanding Euro
270 million facility and the remaining 180 million Euros was drawn down in January 2002, and the proceeds
were used to repay a portion of the Company's domestic Revolving Credit Facility.
In May 2001, the Company sold an aggregate face amount of $816 million zero coupon convertible senior
notes due 2021 (the ""Notes''). The Company received gross proceeds from these sales of approximately
$500 million, which were used to repay a portion of its Tranche II Loans that bore interest at LIBOR plus 275
basis points. The Notes have an initial blended yield to maturity of 2.35%. The Notes, consisting of two series,
are convertible, subject to certain conditions, into an aggregate 9,657,000 Shares. On May 25, 2002, each
Series A holder may require the Company to purchase the notes, subject to certain conditions. Series A notes
that may be presented to the Company in May 2002 total approximately $202 million. These Series A notes
have been included in long-term debt at December 31, 2001 based upon the Company's ability and intent to
reÑnance. Series B holders may Ñrst present their aggregate notes to the Company in May 2004 for
approximately $330 million.
The Company has the ability to draw down on its Revolving Credit Facility in various currencies.
Drawdowns in currencies other than the U.S. dollar represent a natural hedge of the Company's international
net assets. At December 31, 2001, the Company had $43 million drawn in Canadian dollars, with the
remaining $621 million drawn in U.S. dollars.
Repayment of amounts borrowed under the Senior Credit Facility is guaranteed by the Trust, the
Company and substantially all their respective signiÑcant subsidiaries (including the Partnerships) other than
foreign subsidiaries and joint venture entities (the ""Guarantor Subsidiaries'') to the extent such entities are
not borrowers or co-borrowers, and is secured by a pledge of primarily all the capital stock, partnership
interests and other equity interests of the Guarantor Subsidiaries.
The Company maintains lines of credit under which bank loans and other short-term debt are drawn. In
addition, smaller credit lines are maintained by the Company's foreign subsidiaries. The Company had
approximately $487 million of available borrowing capacity under its domestic and international facilities as of
December 31, 2001.
The Company is subject to certain restrictive debt covenants under its short-term borrowing and long-
term debt obligations including deÑned Ñnancial covenants, escrow account funding requirements for capital
purchases, tax payments and insurance premiums, limitations on capital expenditures and on the Company's
right to incur further debt and restrictions on transactions with aÇliates and related persons, among other
restrictions. Under the terms of the Company's Senior Credit Facility, the Trust may pay unlimited dividends
to the Corporation or any wholly owned subsidiary thereof and during any period of twelve consecutive
F-26
calendar months, the Trust may pay cash dividends to its shareholders (excluding the Corporation and any
wholly owned subsidiary) in an aggregate initial amount not to exceed the lesser of (a) $150,000,000 in 1999
and increasing 20% annually thereafter and (b) 10% of EBITDA as deÑned in the Senior Credit Facility. In
September 2001 and November 2001, the Company obtained waivers of this dividend restriction from its
lenders, allowing the Company to pay its regularly scheduled dividends for the third and fourth quarter of
2001. The Company was in compliance with all of the short-term borrowing and long-term debt obligation
covenants, as amended, at December 31, 2001.
The weighted average interest rate for short-term borrowings was 4.85% and 6.04% at December 31, 2001
and 2000, respectively, and their fair values approximated carrying value given their short-term nature. These
average interest rates are composed of interest rates on both U.S. dollar and non-U.S. dollar denominated
indebtedness.
For adjustable rate debt, fair value approximates carrying value due to the variable nature of the interest
rates. For Ñxed rate debt, fair value is determined based upon discounted cash Öows for the debt at rates
deemed reasonable for the type of debt and prevailing market conditions and the length to maturity for the
debt. The estimated fair value of debt at December 31, 2001 and 2000 was $5.3 billion and $5.4 billion,
respectively, and was determined based on quoted market prices and/or discounted cash Öows.
Note 13. Employee BeneÑt Plans

Pension and Postretirement BeneÑt Plans. The Company and its subsidiaries sponsor numerous pension
plans, including the ITT Corporation Salaried Retirement Plan and the ITT Sheraton Corporation Pension
Plan for Hourly Employees (""ITT Plans''), the Starwood Hotels & Resorts Worldwide, Inc. Retirement Plan
for Foreign Service Employees and the Westin Supplemental Executive Retirement Plan. EÅective January 1,
2000, the ITT Plans were merged and the ITT Corporation Salaried Retirement Plan (""Salaried Plan'') name
was retained. Immediately after the merger, the merged Plans spun oÅ an allocated portion of assets and
liabilities to form the ITT Sheraton Corporation Ongoing Retirement Plan (""Ongoing Plan''). Additionally,
the Company Ñled a request for an Internal Revenue Service determination letter concerning the termination
of the Salaried Plan as of July 31, 2000, which was approved in April 2001.
Due to the termination of the Salaried Plan, all plan liabilities have been settled either as lump sum
disbursements, annuity purchases, transfers to the Ongoing Plan or transfers to Pension BeneÑt Guaranty
Corporation for the missing participants. Termination lump sum distributions of $85 million and an additional
$10 million of disbursements in the normal course of operations are reÖected in the 2001 activity in the table
below. The Company recorded $14 million of settlement gains as a result of the Salaried Plan's termination
primarily from the annuity purchases and lump sum distributions. As of December 31, 2001, the Ongoing Plan
assets included approximately 348,000 Shares of the Company's common stock.
The Ongoing Plan is funded; assets are comprised primarily of Ñxed income investments. The Westin
Supplemental Executive Retirement Plan is a non-contributory, non-qualiÑed plan that provides beneÑts for
certain executives. The plan is unfunded apart from general assets of the Company. The non-U.S.-based plans
are funded, except in certain countries where funding is not required.
The Company also sponsors the ITT Sheraton Post-Retirement Welfare Program. The plan provides
health care and life insurance beneÑts for certain eligible retired employees. The Company has prefunded a
portion of the health care and life insurance obligations through trust funds where such prefunding can be
accomplished on a tax eÅective basis. The Company also funds the health plan on a pay-as-you-go basis.
The following table sets forth the beneÑt obligation, fair value of plan assets, and the funded status of the
Company's pension and other beneÑt plans, amounts recognized in the Company's consolidated balance sheets
F-27
at December 31, 2001 and 2000, and the principal weighted average assumptions inherent in their
determination (amounts are in millions):
Foreign
Pension BeneÑts Pension BeneÑts Other BeneÑts
2001 2000 2001 2000 2001 2000
Change in BeneÑt Obligation

BeneÑt obligation at beginning of year ÏÏÏÏÏÏÏÏÏÏÏÏ $180 $ 240 $ 94 $ 53 $ 31 $ 31
Service costÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 3 1 Ì Ì
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 8 15 6 3 2 2
Actuarial (gain) loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (20) 31 Ì 4 (3) Ì
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì 37 Ì Ì
Settlements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (95) (105) Ì 2 Ì Ì
Annuity purchase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (24) Ì Ì Ì Ì Ì
EÅect of foreign exchange rates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (1) (4) Ì Ì
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) (1) (5) (2) (2) (2)
Premiums for missing participants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2) Ì Ì Ì Ì Ì
BeneÑt obligation at end of year ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 46 $ 180 $ 97 $ 94 $ 28 $ 31
Change in Plan Assets
Fair value of plan assets at beginning of yearÏÏÏÏÏÏÏ $168 $ 242 $103 $ 63 $ 22 $ 22
Actual return on plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (11) 31 (12) 6 (1) Ì
Employer contribution ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1 1 3 1 2 2
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì 37 Ì Ì
Settlements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (95) (105) Ì 2 Ì Ì
Annuity purchase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (24) Ì Ì Ì Ì Ì
EÅect of foreign exchange rates ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì (1) (4) Ì Ì
BeneÑts paid ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) (1) (5) (2) (2) (2)
Premiums for missing participants ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2) Ì Ì Ì Ì Ì
Fair value of plan assets at end of yearÏÏÏÏÏÏÏÏÏÏÏÏ $ 36 $ 168 $ 88 $103 $ 21 $ 22
Funded status ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(10) $ (12) $ (9) $ 9 $ (7) $ (9)
Unrecognized net actuarial gain ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (7) (20) 17 (4) (2) (3)
Unrecognized prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì (1)
Accrued beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(17) $ (32) $ 8 $ 5 $ (9) $ (13)
Amounts recognized in the consolidated balance
sheets consist of:
Prepaid beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ 5 $ 8 $ Ì $ Ì
Accrued beneÑt cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (17) (32) (4) (3) (9) (13)
Accumulated other comprehensive incomeÏÏÏÏÏÏÏ Ì Ì 7 Ì Ì Ì
Net amount recognized at end of year ÏÏÏÏÏÏÏÏÏÏÏÏ $(17) $ (32) $ 8 $ 5 $ (9) $ (13)
F-28
Foreign
2001 2000 2001 2000 2001 2000
Weighted Average Assumptions as of December 31,

Discount rate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6.00% 7.25% 6.44% 6.63% 7.25% 7.25%
Expected return on plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 7.00% 7.00% 8.11% 8.11% 9.75% 9.75%
Rate of compensation increase ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ N/A N/A 4.29% 4.51% N/A N/A
For measurement purposes, a 5.50% annual rate of increase in the per capita cost of covered health care
beneÑts was assumed for 2001. The rate was assumed to decrease gradually to 5.00% in 2002 and remain at
that level thereafter. Assumed health care cost trend rates can have a signiÑcant eÅect on the amounts
reported for the health care plans. A one-percentage-point change in assumed health care cost trend rates
would not have a material eÅect on the total of service and interest cost components or on the postretirement
beneÑt obligation.
Foreign
2001 2000 1999 2001 2000 1999 2001 2000 1999
Components of Net Periodic BeneÑt

Cost
Service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ 3 $ 2 $ 1 $ 1 $Ì $Ì $Ì
Interest cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 3 15 17 6 3 3 2 2 2
Expected return on plan assetsÏÏÏÏÏÏÏÏ (3) (14) (20) (8) (5) (3) (2) (2) (2)
Amortization of:
Prior service cost ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì (1) (1) (1)
Actuarial (gain) loss ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1) (1) Ì Ì Ì Ì Ì Ì Ì
SFAS 87 cost/SFAS 106 cost ÏÏÏÏÏÏÏÏ (1) Ì Ì Ì (1) 1 (1) (1) (1)
SFAS 88 charges:
Special termination beneÑt chargeÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì
Curtailment charge ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì Ì Ì Ì Ì
Settlement credit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (14) (8) Ì Ì Ì Ì Ì Ì Ì
Net periodic beneÑt costÏÏÏÏÏÏÏÏÏÏÏÏÏ $(15) $ (8) $ Ì $Ì $(1) $ 1 $(1) $(1) $(1)
Foreign
Pension BeneÑts Pension BeneÑts
2001 2000 2001 2000
Plans with ABO exceeding assets at end of year:

ABOÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $12 $12 $32 $ 1
PBO ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $Ì $Ì $ 1
Fair value of plan assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $Ì $Ì $Ì
DeÑned Contribution Plans. The Company sponsors the Starwood Hotels & Resorts Worldwide, Inc.
Savings and Retirement Plan (""Retirement Plan''), which is a voluntary deÑned contribution plan allowing
participation by employees on U.S. payroll who meet certain age and service requirements. On July 1, 2001,
the deÑned contribution plan maintained by SVO was merged into the Retirement Plan. Each participant may
contribute on a pretax basis between 1% and 18% of his or her compensation to the plan subject to certain
maximum limits. The plan also contains additional provisions for matching contributions to be made by the
F-29
Company which are based on a portion of a participant's eligible compensation. The amount of expense for
matching contributions totaled $15 million in 2001, $17 million in 2000 and $19 million in 1999.
Note 14. Leases and Rentals

The Corporation leases certain equipment for the hotels' operations under various lease agreements. The
leases extend for varying periods through 2038 and generally are for a Ñxed amount each month. In addition,
16 of the Corporation's hotels are subject to leases of building facilities from third parties which extend for
varying periods through 2064 and generally contain Ñxed and variable components. In September 2001, the
Company entered into a building lease of the Westin Dublin hotel in Dublin, Ireland. The lease term is
25 years with Ñxed annual payments of $3 million. In December 2001, the Company entered into a building
lease of the W Times Square hotel in New York City. This lease has a term of 25 years with Ñxed annual lease
payments of $16 million.
The Company's minimum future rents at December 31, 2001 payable under non-cancelable operating
leases with third parties are as follows (in millions):
2002 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $82
2003 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 76
Thereafter ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 723
Rent expense under non-cancelable operating leases was $75 million, $64 million and $41 million in 2001,
2000 and 1999, respectively.
The Trust owns equity interests in 91 hotels, all of which are leased to the Corporation as of
December 31, 2001. The leases between the Trust and the Corporation are generally for three-year terms and
provide for annual base, or minimum rents, plus contingent, or percentage rents based on the gross revenues of
the properties and are accounted for as operating leases. The leases are ""triple-net'' in that the lessee is
generally responsible for paying all operating expenses of the properties, including maintenance, insurance and
real property taxes. The lessee is also generally responsible for any payments required pursuant to underlying
ground leases. Total rental expense incurred by the Corporation under such leases with the Trust was
approximately $457 million for the year ended December 31, 2001, of which approximately $139 million
related to percentage rent. The Trust's rents receivable from the Corporation relating to leased hotel properties
at December 31, 2001 and 2000 was $35 million and $34 million, respectively.
The Corporation's minimum future rents at December 31, 2001 payable under non-cancelable operating
leases with the Trust, as if existing leases were extended under their original terms, are approximately
$335 million per year.
Note 15. Equity Put Options

In November 1999, in connection with the termination of a certain executive's employment, the
Company granted this executive the option to cause the Company to purchase from the executive 566,166
Shares for a purchase price of $34.25 per Share. This option was exercisable in the fourth quarter of 2000 at
which time the executive sold 366,166 of these Shares on the open market and put the remaining 200,000
Shares to the Company at a total cost of $6.9 million. The Company recorded the fair market value of the
options as compensation expense of $6.7 million in 1999.
F-30
Note 16. Stockholders' Equity
Share Repurchases. In 1998, the Board of Directors of the Company approved the repurchase of up to
$1 billion of Shares under a Share repurchase program (the ""Share Repurchase Program''). On April 2, 2001,
the Company's Board of Directors authorized the repurchase of up to an additional $500 million of Shares,
subject to the terms of the Senior Credit Facility. Pursuant to the Share Repurchase Program, through
December 31, 2001, Starwood has repurchased 19.0 million Shares (including 500,000 Shares under equity
put option contracts) in the open market for an aggregate cost of $618 million. As of December 31, 2001,
approximately $633 million remains available under the Share Repurchase Program.
Exchangeable Preferred Shares. During 1998, 6.3 million shares of Class A EPS and 5.5 million shares
of Class B EPS were issued by the Trust in connection with the Westin Merger. Class A EPS have a par value
of $0.01 per share and are convertible on a one-for-one basis (subject to certain adjustments) to Shares.
Class B EPS have a liquidation preference of $38.50 per share and provide the holders with the right, from and
after the Ñfth anniversary of the closing date of the Westin Merger which will begin on January 2, 2003, to
require the Trust to redeem such shares at a price of $38.50. Shares of Class B EPS are convertible on a one-
for-one basis (subject to certain adjustments) to Class A EPS. During 2001, the Trust consented to the
conversion of approximately 1,939,000 shares of Class B EPS by certain stockholders into an equal number of
shares of Class A EPS. Additionally, the Trust consented to the exchange of approximately 2.0 million shares
of Class A EPS into an equal number of Shares. At December 31, 2001, the Trust had 150 million preferred
shares authorized and approximately 550,000 and 1.1 million of Class A EPS and Class B EPS outstanding,
respectively.
Note 17. Stock Incentive Plans
In 1999, the Company adopted the 1999 Long-Term Incentive Compensation Plan (""1999 LTIP'')
which superseded the 1995 Share Option Plan (the ""1995 LTIP'') and provides for the purchase of Shares by
Directors, oÇcers, employees, consultants and advisors, pursuant to option grants. In August 2001, the
Company amended the 1999 LTIP for certain retiree provisions. Although no additional awards will be
granted under the 1995 LTIP, the 1995 LTIP will continue to govern awards that have been granted and
remain outstanding under the 1995 LTIP. The aggregate number of Shares subject to non-qualiÑed or
incentive stock options, performance shares, restricted stock or any combination of the foregoing which are
available to be granted under the 1999 LTIP at December 31, 2001 was approximately 9.7 million.
The Company applies APB Opinion No. 25, ""Accounting for Stock Issued to Employees,'' and related
interpretations; accordingly, compensation cost is not recognized for grants of stock options at market price.
Had compensation cost for grants been determined based on the fair value of the options at the grant dates
consistent with SFAS No. 123, ""Accounting for Stock-Based Compensation,'' the Company's net income
(loss) would have been negatively impacted by $67 million ($0.33 per basic Share), $60 million ($0.30 per
basic Share) and $49 million ($0.26 per basic Share) in 2001, 2000 and 1999, respectively. The fair value of
each option grant used in the 2001, 2000 and 1999 pro forma amounts was estimated on the date of grant using
the Black-Scholes option-pricing model with the following weighted average assumptions used for grants in
2001, 2000 and 1999, respectively: dividend yield of 2.2%, 2.4% and 2.9%, expected volatility of 47.0%, 46.1%
and 41.9%, risk-free interest rates of 4.3%, 6.5% and 6.3% and an expected life of three years for all options.
F-31
The following table summarizes stock option activity for the Company:
Weighted Average
Exercise
Options Price Per Share
Outstanding at December 31, 1998ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 18,122,776 $43.80

Granted ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9,155,246 23.76
Exercised ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (346,575) 22.46
Forfeited ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (6,009,005) 50.41
Outstanding at December 31, 1999ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 20,922,442 34.26
Exercised ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,682,653) 21.10
Outstanding at December 31, 2000ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 28,165,211 31.33
Exercised ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (1,686,986) 23.03
Outstanding at December 31, 2001ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 32,865,304 $33.22
Exercisable at December 31, 2000 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13,362,454 $37.00
Exercisable at December 31, 2001 ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 16,298,472 $35.88
The following table summarizes information about outstanding stock options at December 31, 2001:
Options Outstanding Options Exercisable
Weighted Average
Remaining Weighted Average Weighted Average
Range of Number Contractual Life Exercise Number Exercise
Exercise Prices Outstanding in Years Price/Share Exercisable Price/Share
$11.00 - $21.81 2,884,715 6.47 $19.42 2,267,840 $18.85

$22.00 - $23.92 2,779,098 5.49 23.21 2,335,549 23.38
$24.00 - $24.00 9,179,468 7.74 24.00 2,744,092 24.00
$24.25 - $35.97 3,600,708 7.68 30.26 1,423,846 30.76
$36.09 - $37.84 7,150,230 8.79 37.69 676,262 36.69
$38.00 - $50.23 2,651,405 6.31 45.90 2,320,500 46.03
$52.19 - $54.63 3,474,621 5.77 54.09 3,391,496 54.13
$54.85 - $58.81 1,145,059 6.03 54.88 1,138,887 54.88
Total/average 32,865,304 7.28 33.22 16,298,472 35.88
During 2001, the Company granted restricted stock awards for 1,232,339 Shares. Restricted stock awards
outstanding as of December 31, 2001 totaled 1,060,079 Shares, and approximately 95,193 Shares were vested.
Compensation expense of approximately $17.5 million, $3.8 million and $0.6 million was recorded during
2001, 2000 and 1999, respectively, related to restricted stock awards. The 2001 compensation expense includes
an $11 million special charge related to the accelerated amortization of 50% of restricted stock awards granted
in February 2001. The vesting was accelerated to enhance employee retention eÅorts following the
September 11 Attacks.
F-32
Note 18. Derivative Financial Instruments

The Company enters into interest rate swap agreements to manage interest rate risk. The Company's
objective is to manage the impact of interest rate changes on the results of operations, cash Öows and the
market value of the Company's debt. At December 31, 2001, the Company had Ñve outstanding interest rate
swap agreements under which the Company pays a Ñxed rate and receives variable rates of interest. These
swaps (the ""Cash Flow Swaps'') are classiÑed as cash Öow hedges and mature through 2003. The Company
adjusts the Cash Flow Swaps to current market value through other comprehensive income as they are
eÅective in oÅsetting the interest rate exposure of the interest payments being hedged. The Company
anticipates that the Cash Flow Swaps will continue to be eÅective but will recognize the unrealized loss
related to these contracts immediately into the results of operations if they are deemed to be no longer
eÅective. The aggregate notional amount of the Cash Flow Swaps was approximately $947 million and the
estimated unrealized loss on these interest rate swaps was approximately $31.1 million at December 31, 2001.
At December 31, 2001, the Company also had three outstanding interest rate swap agreements under
which the Company pays a Öoating rate and receives a Ñxed rate of interest (the ""Fair Value Swaps''). The
aggregate notional amount of the Fair Value Swaps was approximately $450 million. The Fair Value Swaps
hedge the change in fair value of certain Ñxed rate debt related to Öuctuations in interest rates and mature in
2005. The Fair Value Swaps modify the Company's interest rate exposure by eÅectively converting debt with a
Ñxed rate to a Öoating rate. The fair value of the Fair Value Swaps was a liability of approximately $840,000 at
December 31, 2001.
The Company also enters into forward foreign exchange contracts to hedge the potential volatility of
earnings and cash Öow associated with changing foreign exchange rates and the eÅects on the Company's
foreign currency denominated assets and liabilities. At December 31, 2001, the Company had seven forward
foreign exchange contracts outstanding with a dollar equivalent of the contractual amounts of these hedges at
December 31, 2001 of approximately $366 million. The aggregate fair value of these contracts outstanding at
December 31, 2001 was $162,000. These contracts matured in the Ñrst quarter of 2002.
The counterparties to the Company's derivative Ñnancial instruments are major Ñnancial institutions.
Note 19. Related Party Transactions

General. Barry S. Sternlicht, Chairman, Chief Executive OÇcer and a Director of the Corporation, and
Chairman, Chief Executive OÇcer and a Trustee of the Trust, controls and has been the President and Chief
Executive OÇcer of Starwood Capital Group, L.L.C. (""Starwood Capital'') since its formation in 1991. Prior
to joining Starwood in 1995, Steven R. Goldman was an employee of Starwood Capital, and he continues to
own an interest in a portfolio investment of Starwood Capital.
Trademark License. An aÇliate of Starwood Capital has granted to Starwood, subject to Starwood
Capital's unrestricted right to use such name, an exclusive, non-transferable, royalty-free license to use the
""Starwood'' name and trademarks in connection with the acquisition, ownership, leasing, management,
merchandising, operation and disposition of hotels worldwide, and to use the ""Starwood'' name in its corporate
name worldwide, in perpetuity.
Starwood Capital Noncompete. In connection with a restructuring of the Company in 1995, Starwood
Capital agreed that, with certain exceptions, Starwood Capital would not compete directly or indirectly with
the Company within the United States and would present to the Company all opportunities presented to
Starwood Capital to acquire fee interests in hotels in the United States and debt interests in hotels in the
United States where it is anticipated that the equity will be acquired by the debt holder within one year from
the acquisition of such debt (the ""Starwood Capital Noncompete''). During the term of the Starwood Capital
Noncompete, neither Starwood Capital nor any of its aÇliates is permitted to acquire any such interest, or any
F-33
ground lease interest or other equity interest, in hotels in the United States. The Starwood Capital
Noncompete continues until no oÇcer, director, general partner or employee of Starwood Capital is on either
the Board of Directors of the Corporation or the Board of Trustees of the Trust (subject to exceptions for
certain restructurings, mergers or other combination transactions with unaÇliated parties). Several properties
owned or managed by the Company, including the Westin Innisbrook Resort (the ""Innisbrook Resort''), the
Westin Mission Hills Resort and the Turnberry Hotel, were opportunities brought to the Company or its
predecessors by Starwood Capital. With the approval in each case of the Audit Committee of the Board of
Directors of the Corporation and the Board of Trustees of the Trust, from time to time the Company has
waived the restrictions of the Starwood Capital Noncompete in whole or in part with respect to particular
acquisition opportunities in which the Company had no interest.
Portfolio Investments. An aÇliate of Starwood Capital holds an approximately 25% non-controlling
interest in Troon Golf (""Troon''), a golf course management company that currently manages over 100 high-
end golf courses. Mr. Sternlicht's indirect interest in Troon held through such aÇliate is approximately 12%.
Troon is the largest third-party manager of golf courses in the United States. In 2001, Troon managed thirteen
golf courses at resorts owned or managed by the Company. The Company paid Troon a total of $911,000
represents reimbursement of expenses), $1,003,000 ($458,000 of which represents management fees and
payments for other services and $545,000 of which represents reimbursement of expenses) and $950,000
represents reimbursement of expenses) in 2001, 2000 and 1999, respectively, for the golf courses at the two
resorts owned by the Company. In January 2002, after extensive review of alternatives and with the unanimous
approval of the Governance Committee, the Company entered into a Master Agreement with Troon covering
the United States and Canada whereby the Company has agreed to have Troon manage all courses in the
United States and Canada that are owned by the Company and to use reasonable eÅorts to have Troon
manage courses at resorts that the Company manages and franchises. The Company believes that the terms of
the Troon agreement are at or better than market terms. Mr. Sternlicht did not participate in the negotiations
or the approval of the Troon Master Agreement.
An entity in which Mr. Sternlicht has a 38% interest owned the common area of the Sheraton Tamarron
Resort, which the Company managed until December 2001. As of the date of this Ñling, management fees
earned and paid were $197,000, $219,000 and $240,000 relating to 2001, 2000 and 1999, respectively. In
addition, approximately $620,000 of reimbursable expenses were also paid. The Company has outstanding
receivables of approximately $314,000, which arose as a result of the termination of the Tamarron
management agreement. The Company believes that the terms of the Tamarron agreement were at or better
than market terms.
In addition, a subsidiary of Starwood Capital is a general partner of a limited partnership which owns
approximately 45% in an entity that manages over 40 health clubs, including one health club and spa space in
a hotel owned by the Company. In 2001, the Company paid approximately $84,000 to the management
company for such management. The Company believes that the terms of the management agreement are at or
better than market terms.
Other Management-Related Investments. Mr. Sternlicht has a 38% interest in an entity (the ""Innis-
brook Entity'') that owns the common area facilities and certain undeveloped land (but not the hotel) at the
Innisbrook Resort. In May 1997, the Innisbrook Entity entered into a management agreement for the
Innisbrook Resort with Westin, which was then a privately held company partly owned by Starwood Capital
and Goldman, Sachs & Co. When the Company acquired Westin in January 1998, it acquired Westin's rights
and obligations under the management and other related agreements. Under these agreements, the hotel
manager was obligated to loan up to $12.5 million to the owner in the event certain performance levels were
F-34
not achieved. Management fees earned under these agreements were $716,000, $885,000 and $907,000 in
2001, 2000 and 1999, respectively. The Innisbrook Entity, the Company and other lenders are currently in
discussions regarding the terms and timing of payments owed to the Company and such other lenders. The
discussions relate to approximately $9 million in loans by the Company which funded resort operations and
approximately $5 million of deferred management fees and reimbursable expenses as well as amounts owed by
the Innisbrook Entity to other parties. Any settlement of this matter would be subject to the approval of the
Governance Committee.
Aircraft Lease. In February 1998, the Company leased a Gulfstream III Aircraft from Star Flight LLC,
an aÇliate of Starwood Capital. The term of the lease was one year and automatically renews for one-year
terms until either party terminates the lease upon 90 days' written notice. The rent for the aircraft, which was
set at approximately 90% of fair market value (based on two estimates from unrelated third parties), is (i) a
monthly payment of 1.25% of the lessor's total costs relating to the aircraft (approximately $123,000 at the
beginning of the lease with this amount increasing as additional costs are incurred by the lessor), plus
(ii) $300 for each hour that the aircraft is in use. Payments to Star Flight LLC were $1,682,000, $840,000 and
$910,000 in 2001, 2000 and 1999, respectively.
Note 20. Commitments and Contingencies
The Company had the following contractual obligations outstanding as of December 31, 2001 (in
millions):
Due in Less Due in Due in Due After
Total Than 1 Year 1-3 Years 4-5 Years 5 Years
Unconditional purchase obligations(a) ÏÏÏÏÏÏÏÏÏÏÏÏ $216 $75 $112 $29 $Ì

Other long-term obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì
Total contractual obligations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $216 $75 $112 $29 $Ì
(a) The Company's owned, managed and franchised hotels participate in various national purchasing agreements. As these agreements
do not require speciÑc purchasing thresholds for the Company or the Company's owned, leased and consolidated joint venture hotels,
no such amounts are reÖected above.
The Company had the following commercial commitments outstanding as of December 31, 2001 (in
millions):
Amount of Commitment Expiration Per Period
Less After
Total Than 1 Year 1-3 Years 4-5 Years 5 Years
Standby letters of credit ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 49 $ Ì $ 43 $Ì $ 6

Hotel loan guarantees ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 153 Ì 78 45 30
Other commercial commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì Ì Ì Ì
Total commercial commitments ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $202 $ Ì $121 $45 $36
Guaranteed Loans and Commitments. In limited cases, the Company has made loans to owners or
partners in hotel or resort ventures whereby the Company has a management or franchise agreement. Loans
outstanding under this program totaled $155 million at December 31, 2001. Unfunded commitments
aggregating $26 million were outstanding at December 31, 2001, of which $11 million are expected to be
funded in 2002 and $13 million are expected to be funded in total. These loans typically are secured by pledges
of project ownership interests and/or mortgages on the projects.
F-35
The Company participates in programs with unaÇliated lenders in which the Company may partially
guarantee loans made to facilitate third-party ownership of hotels that the Company manages or franchises. At
December 31, 2001, loan guarantees totaled $153 million relating to three projects: the St. Regis in Monarch
Beach, California, which opened in mid-2001; the Westin Kierland hotel in Arizona, which is scheduled to
open at the end of 2002; and the Westin in Charlotte, North Carolina, which is scheduled to open at the end of
2002. With respect to the Westin Kierland, the guarantee is joint and several with another equity partner. The
Company does not anticipate any funding under these loan guarantees in 2002, as all projects are well
capitalized.
Furthermore, in order to secure management and franchise contracts, the Company may provide
performance guarantees to third-party owners. Most of these performance guarantees allow the Company to
abandon a contract rather than fund shortfalls if certain performance levels are not met. In limited cases, the
Company is obliged to fund shortfalls in performance levels. As of December 31, 2001, the Company had six
management contracts with performance guarantees with possible cash outlays of up to $68 million,
$50 million of which, if required, would be funded over a period of 25 years. Many of the performance tests are
multi-year tests, are tied to the results of a competitive set of hotels, and have exclusions for force majeure
clauses and acts of war and terrorism. The Company does not anticipate any funding under the performance
guarantees in 2002. Lastly, the Company does not anticipate losing any signiÑcant management or franchise
contracts in 2002.
Litigation. The Sheraton Corporation (""Sheraton Corp.'') (formerly ITT Sheraton Corporation), a
subsidiary of the Company, is a defendant in certain litigation relating to Sheraton Corp.'s management of a
hotel. The case is titled 2660 Woodley Road Joint Venture v. ITT Sheraton Corporation, Civil Action
No. 97-450-JJF (U.S.D.C., D. Del.). In December 1999, following trial, the jury returned a verdict Ñnding
that Sheraton Corp. had violated its contractual obligations to the hotel owner and awarded contractual
damages totaling $11 million. The jury also found for the plaintiÅ on certain common law and other claims
and awarded compensatory and other damages of $2 million and punitive damages of $38 million. These
amounts were fully reserved for as of December 31, 1999. The jury found for Sheraton Corp. and rejected the
plaintiÅ's additional claims that Sheraton Corp. had violated the Racketeer InÖuenced and Corrupt
Organizations Act (""RICO''), and that Sheraton Corp. had engaged in fraud. Sheraton Corp. believes that
the jury's determination against it on liability issues was erroneous as a matter of law, and that the damage
awards were excessive and not supported by the evidence. Sheraton Corp. sought to have the verdict set aside
in the trial court. In response to Sheraton Corp.'s motion, the court, in January 2002, amended the judgment
and reduced the punitive damages award from $38 million to $17 million; the court also trebled the jury's
$750,000 award for Robinson-Patman Act violations to $2.25 million on the basis of the court's interpretation
of that statute. The amount of the judgment, as a result, will be $31.4 million. Sheraton has Ñled a Notice of
Appeal with the United States Court of Appeals and plaintiÅs have Ñled a Cross-Notice of Appeal. There can
be no assurance that Sheraton Corp. will be successful in having the verdict set aside, overturned or reduced
on appeal, or that other owners of properties managed by Sheraton Corp. will not seek to assert similar claims.
The Corporation, Sheraton Corp. and Sheraton Holding are defendants in certain litigations arising out of
purported contracts allegedly requiring the purchase of telecommunication, video and power services from
Intelnet. The Ñrst suit was commenced in late 1997 by Intelnet, alleging that Sheraton Corp. violated what
Intelnet claimed were Intelnet's exclusive rights to provide telecommunications and other services to Sheraton
Holding and its aÇliates. The complaint sought injunctive relief to enforce alleged exclusivity rights and
unquantiÑed monetary damages. The complaint was subsequently amended in November 1998 to seek speciÑc
monetary and unspeciÑed punitive damages. Sheraton Holding and Sheraton Corp. served an answer denying
Intelnet's claims, and asserting counterclaims seeking damages and a declaration that the purported contracts
at issue were unenforceable.
F-36
In June 1999, Intelnet commenced a second lawsuit naming Boardwalk Regency Corp. (formerly a
subsidiary of the Corporation) and the Corporation. The claims in this case are similar in nature to those made
in the Ñrst suit, and relate to an alleged breach of a purported exclusive contract to provide certain services to
the Caesar's Atlantic City hotel and casino. The two suits have been consolidated and were in mediation until
2001. The mediation ended during the Ñrst half of 2001 and the parties are now proceeding with discovery.
The Company believes that Intelnet's claims are meritless and will continue to contest them vigorously. The
Company does not expect that the resolution will have a material adverse eÅect on the consolidated results of
operations, Ñnancial position or cash Öows.
In November 2001, the Corporation, Sheraton Holding and Sheraton Corp. commenced a separate
litigation in the United States District Court for the District of New Jersey, asserting claims arising under
RICO as well as fraud claims against the principals of Intelnet.
The Company is involved in various other legal matters that have arisen in the normal course of business,
some of which include claims for substantial sums. Accruals have been recorded when the outcome is
probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be
determined, the Company does not expect that the resolution of all legal matters will have a material adverse
eÅect on its consolidated results of operations, Ñnancial position or cash Öow.
Environmental Matters. The Company is subject to certain requirements and potential liabilities under
various federal, state and local environmental laws, ordinances and regulations. Such laws often impose
liability without regard to whether the current or previous owner or operator knew of, or was responsible for,
the presence of such hazardous or toxic substances. Although the Company has incurred and expects to incur
remediation and other environmental costs during the ordinary course of operations, management anticipates
that such costs will not have a material adverse eÅect on the operations or Ñnancial condition of the Company.
Captive Insurance Company. Estimated insurance claims payable at December 31, 2001 were $54 mil-
lion. At December 31, 2001, standby letters of credit amounting to $28 million had been issued to provide
collateral for the estimated claims. The letters of credit are guaranteed by the Company's captive insurance
company.
ITT Industries. In 1995, the former ITT Corporation, renamed ITT Industries, Inc. (""ITT Indus-
tries''), distributed to its stockholders all of the outstanding shares of common stock of ITT Corporation, then
a wholly owned subsidiary of ITT Industries (the ""Distribution''). In connection with this Distribution, ITT
Corporation, which was then named ITT Destinations, Inc., changed its name to ITT Corporation.
For purposes of governing certain of the ongoing relationships between the Company and ITT Industries
after the Distribution and spin-oÅ of ITT Corporation and to provide for an orderly transition, the Company
and ITT Industries have entered into various agreements including a spin-oÅ agreement, Employee BeneÑts
Services and Liability Agreement, Tax Allocation Agreement and Intellectual Property Transfer and License
Agreements. The Company may be liable to or due reimbursement from ITT Industries relating to the
resolution of certain pre-spin-oÅ matters under these agreements. Based on available information, manage-
ment does not believe that these matters would have a material impact on the consolidated results of
operations, Ñnancial position or cash Öows.
For discussion of certain other matters, see Note 11, ""Income Taxes.''
Note 21. Business Segment and Geographical Information

The Company has one operating segment, hotels and leisure. The hotels and leisure segment represents a
worldwide network of owned, leased and consolidated joint venture hotels, VOIs and resorts operated
primarily under the Company's proprietary brand names including St. Regis, The Luxury Collection,
F-37
Sheraton, Westin, W and Four Points by Sheraton hotels and resorts which are managed or franchised under
these brand names in exchange for fees. Also included are earnings and losses from the Company's interest in
unconsolidated joint ventures.
The performance of the hotels and leisure segment is evaluated primarily on operating proÑt before
corporate selling, general and administrative expense, interest, gains on the sale of real estate, investments and
restructuring and other special charges. The Company does not allocate these items to the segment.
The following table presents revenues, operating income, assets and capital expenditures for the
Company's reportable segment (in millions):
2001 2000 1999
Revenues ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 3,967 $ 4,345 $ 3,829

Operating income(a) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 740 $ 1,118 $ 921
Depreciation and amortizationÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 526 $ 481 $ 452
Assets:
Hotel and leisureÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $12,352 $12,566 $12,668
Corporate ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 109 131 168
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì 104
$12,461 $12,697 $12,940
Capital expenditures:
Hotel and leisureÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 477 $ 544 $ 521
(a) The following costs are not allocated to hotel and leisure in evaluating operating income (in millions):
2001 2000 1999
Corporate selling, general and administrative ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $75 $90 $77

Restructuring and other special chargesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $50 $Ì $ 3
Revenues Long-Lived Assets

2001 2000 1999 2001 2000 1999
(In millions)
United States ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $2,871 $3,230 $2,705 $6,370 $6,362 $6,329
All other international ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,096 1,115 1,124 1,865 1,939 1,900
Total ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $3,967 $4,345 $3,829 $8,235 $8,301 $8,229
There were no individual international countries which comprised over 10% of the total revenues and
long-lived assets of the Company as of December 31, 2001, 2000 or 1999.
F-38
Note 22. Quarterly Results (Unaudited)

Three Months Ended
March 31 June 30 September 30 December 31 Year
2001
RevenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,014 $1,110 $ 965 $ 878 $3,967
Costs and expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 821 $ 856 $ 830 $ 845 $3,352
Income (loss) from continuing operations ÏÏÏÏÏ $ 62 $ 113 $ 30 $ (54) $ 151
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ Ì $ Ì $ Ì
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ (6) $ Ì $ Ì $ (6)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 62 $ 107 $ 30 $ (54) $ 145
Earnings (loss) per Share:
Basic Ì
Income (loss) from continuing operations ÏÏÏ $ 0.31 $ 0.56 $ 0.15 $(0.28) $ 0.75
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ Ì $ Ì $ Ì
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $(0.03) $ Ì $ Ì $(0.03)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.31 $ 0.53 $ 0.15 $(0.28) $ 0.72
Diluted Ì
Income (loss) from continuing operations ÏÏÏ $ 0.30 $ 0.55 $ 0.14 $(0.28) $ 0.73
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ Ì $ Ì $ Ì $ Ì
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $(0.03) $ Ì $ Ì $(0.03)
Net income (loss) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.30 $ 0.52 $ 0.14 $(0.28) $ 0.70
2000
RevenuesÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 996 $1,142 $1,102 $1,105 $4,345
Costs and expenses ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 811 $ 857 $ 834 $ 815 $3,317
Income from continuing operations ÏÏÏÏÏÏÏÏÏÏÏ $ 53 $ 114 $ 103 $ 131 $ 401
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ 5 $ Ì $ Ì $ 5
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (3) $ Ì $ Ì $ Ì $ (3)
Net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 50 $ 119 $ 103 $ 131 $ 403
Earnings per Share:
Basic Ì
Income from continuing operations ÏÏÏÏÏÏÏÏÏ $ 0.26 $ 0.57 $ 0.51 $ 0.65 $ 1.99
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ 0.02 $ Ì $ Ì $ 0.02
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.01) $ Ì $ Ì $ Ì $(0.01)
Net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.25 $ 0.59 $ 0.51 $ 0.65 $ 2.00
DilutedÌ
Income from continuing operations ÏÏÏÏÏÏÏÏÏ $ 0.26 $ 0.56 $ 0.50 $ 0.64 $ 1.96
Discontinued operations ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ Ì $ 0.02 $ Ì $ Ì $ 0.02
Extraordinary item ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(0.01) $ Ì $ Ì $ Ì $(0.01)
Net incomeÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 0.25 $ 0.58 $ 0.50 $ 0.64 $ 1.97
F-39
Note 23. Subsequent Event

We have initiated the formal sale process for the CIGA portfolio of 25 luxury hotels, land, golf courses
and marinas, potentially encumbered by our management contracts in whole or in part. The Company began
reviewing preliminary indications of interest in the Ñrst quarter of 2002.
F-40
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Additions (Deductions)
Charged
Balance Charged to/from Other Payments/ Balance
January 1, to Expenses Accounts(a) Other December 31,
2001
Trade receivables Ì allowance for doubtful
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 45 $ 3 $ Ì $ Ì $ 48
Notes receivable Ì allowance for doubtful
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 42 $17 $ Ì $(18) $ 41
Reserves included in accrued and other
liabilities:
Restructuring and other special charges ÏÏÏ $100 $50 $(19) $(33) $ 98
2000
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 62 $ 2 $ (8) $(11) $ 45
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 43 $17 $ 6 $(24) $ 42
liabilities:
Restructuring and other special charges ÏÏÏ $121 $Ì $(13) $ (8) $100
1999
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 55 $ 5 $ Ì $ 2 $ 62
accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 31 $ 4 $ Ì $ 8 $ 43
liabilities:
Restructuring and other special charges ÏÏÏ $202 $ 3(b) $(15) $(69) $121
(a) Charged to/from other accounts:

Trade and Notes
Receivable Ì Restructuring
Allowance for and Other
Doubtful Accounts Special Charges
2001
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $(19)
Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì Ì
Total charged to/from other accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $(19)
2000
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(2) $ Ì
Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (13)
Total charged to/from other accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $(2) $(13)
1999
Other assets ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $ (3)
Other liabilities ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì (12)
Total charged to/from other accounts ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $Ì $(15)
(b) Includes reversals of prior years' restructuring and other special charges reserves of $90 million.
S-1
SCHEDULE III
REAL ESTATE AND ACCUMULATED DEPRECIATION
December 31, 2001
(In millions)
Gross Amount
Initial Cost to Costs Subsequent Book Value
Company to Acquisition at December 31, 2001
(a) (a)(b)
Accumulated
Building and Building and Building and Depreciation & Year of Date
Description City State Land Improvements Land Improvements Land Improvements Amortization Construction Acquired Life
Hotel properties, each less than 5% of

totalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Various Various $457 $3,487 $1 $398 $458 $3,885 $415 Various Various Various
Land ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 458 Ì
Furniture, Ñxtures and equipment ÏÏÏÏÏ 536 276
Construction in progress ÏÏÏÏÏÏÏÏÏÏÏÏÏ 13 Ì
$4,892 $691
S-2
(a) As of December 31, 2001, land, building, furniture, Ñxtures and equipment and construction in progress have a cost basis of $391 million, $2,262 million, $197 million and $12 million,
respectively, for federal income tax purposes.
(b) Building and improvements include amounts allocated for leasehold interest in land.
SCHEDULE III (Continued)
REAL ESTATE AND ACCUMULATED DEPRECIATION
(In millions)
A reconciliation of the Trust's investment in real estate, furniture and Ñxtures and related accumulated
depreciation is as follows:
Year Ended
December 31, 2001
Real Estate and Furniture and Fixtures

Balance at beginning of periodÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,749
Additions during period:
Acquisitions ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
ImprovementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 169
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
Deductions during period:
Sale of properties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (26)
Balance at end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $4,892
Accumulated Depreciation
Balance at beginning of periodÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (489)
Additions during period:
Depreciation expenseÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (206)
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì
Deductions during period:
Sale of properties ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2
Other ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 2
Balance at end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ (691)
S-3
SCHEDULE IV
MORTGAGE LOANS ON REAL ESTATE
December 31, 2001
(In millions)
Principal Amount of
Original Carrying Loans Subject to
Interest Final Periodic Face Amount Amount of Delinquent
Description Rate Maturity Payment Terms Prior Liens of Mortgages Mortgages(a) Principal or Interest
First Mortgages:
(b)
Ramada Inn Ì Tucker, GA ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.00% 2002 No $ 2 $ 2 Ì
Second Mortgages:
(c)
Westin Portland Ì Portland, ORÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 11.50% 2003 Yes 2 2 Ì
$ 4 $ 4 Ì
Intercompany Mortgage Loans
First Mortgages:
(d)
W New York Ì New York, NYÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.50% 2006 No $ 40 $ 40 Ì
(e)
Westin Maui Ì Maui, HI ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10.00% 2006 No 105 132 Ì
(f)
Westin Regina Ì Cancun, Mexico ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.00% 2004 No 41 41 Ì
S-4
(f)
Westin Regina Ì Los Cabos, MexicoÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.00% 2004 No 53 42 Ì
(f)
Westin Regina Ì Puerto Vallarta, Mexico ÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 9.00% 2004 No 25 20 Ì
(g)
Westin Hotel Ì Turnberry, Scotland ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 10.00% 2005 No 27 17 Ì
(h)
Sheraton Holding Corporation Mortgage Note ÏÏÏÏÏÏÏÏÏÏ 10.00% 2014 No 2,489 1,289 Ì
(h)
Sheraton Holding Corporation Mortgage Note ÏÏÏÏÏÏÏÏÏÏ 8.50% 2014 No 210 210 Ì
(i)
Starwood Hotels & Resorts Worldwide, Inc. ÏÏÏÏÏÏÏÏÏÏÏÏ 8.50% 2014 No 150 150 Ì
$3,140 $1,941 Ì
(a) As of December 31, 2001, the aggregate cost (before allowance for loan losses) for federal income tax purposes is not signiÑcantly diÅerent from that used for book purposes.
(b) Payment of principal and interest due monthly and based upon an 18-year amortization schedule with interest rate of 9% per annum. Principal and all accrued and unpaid interest are due
June 1, 2002.
(c) Interest only payable monthly; interest calculated based upon 11.5% interest rate, $1.8 million principal balance and actual/365-day basis. Principal and all accrued and unpaid interest are
due June 4, 2003.
(d) Interest only payable monthly; principal and all accrued and unpaid interest due October 1, 2006.
(e) Interest only payable monthly; interest based on current principal balance and 10% interest rate. Principal balance comprised of initial advance of $105 million with additional advances up
to $121 million available. Principal and all accrued and unpaid interest are due January 2006.
(f) Interest only payable monthly; principal and all accrued and unpaid interest are due December 2004.
(g) Interest only payable monthly; principal and all accrued and unpaid interest are due December 2005.
(h) Interest only payable monthly; principal and all accrued and unpaid interest are due February 2014.
(i) Interest only payable monthly; principal and all accrued and unpaid interest are due February 2014.
SCHEDULE IV (Continued)
RECONCILIATION OF MORTGAGE LOANS
(In millions)

2001 2000 1999
Balance at beginning of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,935 $1,925 $ 3,189

Additions:
Accrued interest(a) ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 13 12 10
Deductions:
Principal repaymentsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (3) (2) (1,274)
Balance at end of period ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $1,945 $1,935 $ 1,925
(a) Per mortgage loan agreements, the Westin Regina Ì Cancun, Mexico, Westin Regina Ì Los Cabos, Mexico and Westin Hotel Ì
Turnberry, Scotland are not required to pay monthly interest if the cash Öows are insuÇcient. Thus, the Trust has accrued interest on
the notes.
S-5
CORPORATE OFFICES
1111 WESTCHESTER AVENUE
WHITE PLAINS, NY 10604
914 640 8100
WWW.STARWOODHOTELS.COM
STOCK REGISTRAR & TRANSFER AGENT
SHAREHOLDERS WITH QUESTIONS CONCERNING STOCK CERTIFICATES, ACCOUNT INFORMATION,
DIVIDEND PAYMENTS OR STOCK TRANSFERS SHOULD CONTACT OUR TRANSFER AGENT AT:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
P.O. BOX 3314, SOUTH HACKENSACK, NJ 07606-1914
800 350 6202 WWW.CHASEMELLON.COM
FORM 10-K AND OTHER INVESTOR INFORMATION A COPY OF THE JOINT ANNUAL REPORT OF STARWOOD HOTELS & RESORTS WORLDWIDE,
INC. ON FORM 10-K FILED WITH THE SECURITIES AND EXCHANGE COMMISSION MAY BE OBTAINED BY SHAREHOLDERS OF RECORD OF THE
CORPORATION AND THE TRUST WITHOUT CHARGE BY CALLING 914-640-8100 OR UPON WRITTEN REQUEST TO:
INVESTOR RELATIONS, STARWOOD HOTELS & RESORTS WORLDWIDE, INC.,
1111 WESTCHESTER AVENUE, WHITE PLAINS, NEW YORK 10604
Note: This Annual report contains certain statements that may be deemed “forward-looking statements” within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward-looking statements are not guarantees of future performance and
involve risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated at the time the forward-looking
statements are made, including, without limitation, risks and uncertainties associated with the following: the continued ability of Starwood Hotels and Resorts
(the “Trust”) to qualify for taxation as a REIT; Starwood’s ability to attract and retain personnel; completion, terms and timing of future acquisitions and
dispositions, the availability of capital for acquisitions and for renovations; execution of hotel renovation and expansion programs; the ability to maintain
existing management, franchise or representation agreements and to obtain new agreements on favorable terms; competition within the lodging industry and
from emerging technologies, the cyclicality of the real estate business and the hotel business; foreign exchange fluctuations and exchange control restrictions;
general real estate and national and international economic conditions; political, financial and economic conditions and uncertainties in countries in which
Starwood owns property and operates; and the other risks (including risks related to acts of God, terrorist activities and war) and uncertainties set forth in the
quarterly and current reports and proxy statements of the Trust and Starwood. Starwood undertakes no obligation to publicly update or revise any forward-
looking statement, whether as a result of new information, future events or otherwise).
S T A R W O O D . C O M
©2002 STARWOOD HOTELS & RESORTS WORLDWIDE, INC. ALL RIGHTS RESERVED.

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5 4/26/02 1:52 PM Page 2

one voice one vision

WE SUCCEED ONLY WE HAVE A PASSION

WHEN WE MEET AND EXCEED FOR EXCELLENCE AND

THE EXPECTATIONS OF WILL DELIVER THE

OUR CUSTOMERS, OWNERS HIGHEST STANDARDS OF

AND SHAREHOLDERS. INTEGRITY AND FAIRNESS.

WE IMPROVE WE ENCOURAGE INNOVATION,

THE COMMUNITIES ACCEPT ACCOUNTABILITY

IN WHICH WE WORK. AND EMBRACE CHANGE.

WE SEEK KNOWLEDGE A SENSE OF URGENCY,

AND GROWTH NIMBLENESS AND

THROUGH LEARNING. ENDEAVOR TO

HAVE FUN TOO.

us from the competition - we have global growth opportunities.

continued to climb. We trained more than one thousand

Starwood leads the SIX SIGMA INITIATIVE BEARING FRUIT

in the EBIDTA improvement achieved by Six Sigma-related programs.

the company’s quest fifth W in New York.

to continually exceed WESTIN: HEAVEN ON THE ROAD

BROADBAND: HIGH SPEED INTERNET ACCESS TAKES OFF

finest premier luxury Collection mark Ownership provides anywhere. An award

and anticipatory level of status symbols unto villa reflects a deep

service to each and themselves. commitment to the

every guest. comfort and care of our

owners and guests.

RESORT & SPA, CALIFORNIA ARIZONA VIRGIN ISLANDS HAWAII

JON ADLER, AN ASSOCIATE

FROM THE ST. REGIS, NEW BARRY S. STERNLICHT

YORK, CELEBRATES AFTER WELCOMES MAYOR

COMPLETING THE FOUR-DAY RUDOLF GIULIANI TO THE

AIDS RIDE FROM NEW YORK GRAND OPENING OF THE

TO BOSTON, TO RAISE FUNDS W NEW YORK TIMES SQUARE

TO SUPPORT AIDS SERVICES

TWO SHERATON STEAMBOAT

THE SHERATON CASABLANCA

HOTEL & TOWERS INVITED NEW YORK AREA

20 UNDERPRIVILEGED ASSOCIATES JOINED

CHILDREN FROM THE HABITAT FOR HUMANITY

NATIONAL CHARITY IN BUILDING A HOME IN

INSTITUTION WESTCHESTER COUNTY

W CHEF MICHEL NISCHAN OF

SHERATON PALACE HOTEL

THE EMPLOYEE ACTIVITIES

AROUND THE GLOBE, STARWOOD PROPERTIES ARE THE FAVORITES

ROME, ITALY, ST. REGIS GRAND, ROME, ITALY.

the Starwood Values

SOME OF THE WINNERS OF THE STARWOOD CHAIRMAN’S AWARD:

Sheraton Atlantic City Convention Center Hotel, North America Division.

KARRI TRAHIN PEREZ, CARMEN OSORIO LOPEZ,

DIRECTOR OF EXECUTIVE HOUSEKEEPER,

HUMAN RESOURCES, THE WESTIN REGINA

THE WESTIN RESORT GUAM, LOS CABOS,

ASIA PACIFIC LATIN AMERICA DIVISION

BRYAN ASHLOCK, MARY DALY,

DIRECTOR OF EXECUTIVE HOUSEKEEPER,

FOOD & BEVERAGE, SHERATON NEW YORK

SHERATON MAUI, HOTEL & TOWERS,