Results for the Twelve Months Ended December 31, 2008

EPS from continuing operations decreased to $1.37 compared to $2.57 in 2007. Excluding special items, EPS from continuing operations was $2.19 compared to $2.76 in 2007. Excluding special items, income from continuing operations was $406 million compared to $582 million in 2007. Net income was $329 million and EPS was $1.77 compared to $542 million and $2.57, respectively, in 2007. Total Company Adjusted EBITDA, which was impacted by the sale or closure of 19 hotels since the beginning of 2007, was $1.157 billion compared to $1.356 billion in 2007.

Outlook

For the full year 2009:

At the current time, given significant uncertainty in the global economy, it is very difficult to provide any definitive guidance looking out four quarters. What the Company can provide are some broad parameters being used for 2009 planning purposes. In the hotel business, the Company is planning on a significant decline in Worldwide REVPAR. The Company also anticipates another difficult year in the vacation ownership business with declines in originated sales. As previously discussed, the Company’s extensive cost reduction activities at the hotel level, in the vacation ownership business and in corporate overhead have offset some of the impact of declining revenues. The Company is also significantly scaling back capital expenditures for owned hotels and the vacation ownership business.

Assuming REVPAR at Same-Store Company Operated Hotels Worldwide REVPAR declines 12% and REVPAR at Branded Same-Store Owned Hotels declines 15% at today’s exchange rates:

• Adjusted EBITDA would be approximately $875 million.
• EPS before special items would be approximately $1.10.
• Same-Store Branded Owned Hotel EBITDA will decline approximately 35% versus 2008.
• Management and Franchise revenues will decline approximately 10%.
• Operating income from our vacation ownership and residential business will be down approximately $50 million.
• Selling, General and Administrative expenses will decline approximately $50 million.
• Income from continuing operations, before special items, is expected to be approximately $200 million, reflecting an effective tax rate of approximately 31%.

Full year capital expenditures (excluding vacation ownership and residential inventory) would be approximately $150 million for maintenance, renovation and technology. In addition, in flight investment projects, including Bal Harbour, and prior commitments for joint ventures and other investments will total approximately $175 million.