WESTIN HOTELS LTD PARTNERSHIP - 10-K Annual Report


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


	For the Fiscal Year Ended December 31, 2002

	OR


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


	For the Transition Period from to

There is no public market for Units of limited partnership interests in the Westin Hotels Limited Partnership.

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed 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 Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

Indicate by check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2). Yes o No þ

Indicate the number of shares (Units) outstanding of each of the issuer’s classes of common stock (Units), as of the latest practicable date (applicable only to corporate issuers).

Certain statements contained in this report 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 report, including, without limitation, the sections of Items 1, 2 and 5 captioned “Business,” “Property” and “Market for Registrant’s Common Equity and Related Unitholder Matters” 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 the Partnership or Hotel Partnerships (as defined below) or their respective general partners and their officers or directors with respect to the matters discussed in this report. All such forward-looking statements involve risks, uncertainties and other factors that could cause actual results to differ materially from those projected in the forward-looking statements, including, without limitation, the risks and uncertainties set forth below. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements to reflect current or future events or circumstances.

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;

	•	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;

	•	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; and

	•	changes in operating costs including, but not limited to, energy, insurance and labor costs.

The Hotel Business Is Capital Intensive. In order for The Westin Michigan Avenue, Chicago (the “Michigan Avenue” or the “Hotel”) to remain attractive and competitive, we have to spend money periodically to keep it well maintained, modernized and refurbished. This creates an ongoing need for cash and, to the extent expenditures cannot be funded from cash generated by our operations, we may be required to borrow or otherwise obtain these funds. Accordingly, our financial results may be sensitive to the cost and availability of funds.

We Must Compete for Customers. The hotel industry is highly competitive. The Michigan Avenue competes for customers with other hotel and resort properties in its geographic market. Some of our competitors may have substantially greater marketing and financial resources than we do, and they may improve their facilities, reduce their prices or expand or improve their marketing programs in ways that adversely affect our operating results.

The Hotel Industry Is Seasonal in Nature. The hotel industry is seasonal in nature and the periods during which the Michigan Avenue experiences higher revenue vary. Our revenue historically has been lower in the first quarter than in the second, third or fourth quarters.

Real Estate Investments Are Subject to Numerous Risks. Because we own the Michigan Avenue, 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, as well as the expenses incurred. In addition, a variety of other factors affect 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 financing. 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 expanding or renovating real property increases and real property values may decrease as the number of potential buyers decreases. Similarly, as financing becomes less available, it becomes more difficult 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 financial condition, as well as on our ability to make distributions to our Unitholders. In addition, equity real estate investments, such as the investment we hold, are relatively difficult to sell quickly. If our property does not generate revenue sufficient to meet operating expenses, including debt service and capital expenditures, our income will be adversely affected.

General Economic Conditions May Negatively Impact Our Results. Moderate or severe economic downturns or adverse conditions may negatively affect operations of the Hotel. In addition, a tightening of the labor markets may result in fewer and/or less qualified applicants for job openings at the Michigan Avenue and higher wages.

Internet Reservation Channels. Some of the hotel rooms at the Michigan Avenue are booked through internet travel intermediaries such as Travelocity.com, Expedia, Inc. and Priceline.com, Inc.. As this percentage increases, these intermediaries may be able to obtain higher commissions or reduced room rates. 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 identification. 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 significantly, the business and profitability of the Hotel may be significantly harmed.

Our financial and operating performance may be adversely affected by acts of God, such as natural disasters. 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 differ materially from anticipated results.

In February 2001, we retained Jones Lang LaSalle Hotels, a nationally recognized broker (“JLL”), to market the Michigan Avenue for sale. In April 2001, formal marketing materials were distributed and discussions with several potential purchasers subsequently commenced. After the occurrence of the September 11, 2001 terrorist attacks in New York, Washington, D.C. and Pennsylvania (the “September 11 Attacks”) and their aftermath, certain of the most qualified potential purchasers indicated they would expect significant discounts on their preliminary offers made prior to the attacks. Based on the unstable and depressed hotel real estate market resulting from the weakened general worldwide economic environment, the General Partner (as defined below) did not believe that it was in the best interest of the limited partners to sell the Michigan Avenue in late 2001 or 2002.

The General Partner has also engaged JLL to assist in exploring a refinancing of our debt and has recently directed JLL to focus its efforts towards pursuing refinancing alternatives. The General Partner has had discussions with potential lenders with a goal of presenting a refinancing proposal to the limited partners later this year. There can be no assurance however, that such a proposal will be presented to the limited partners.

The ultimate disposition of the Hotel (whether currently or in the future, whether or not a refinancing is effected) has a number of risks, including the following:


	•	Net proceeds distributed to the limited partners after the sale may not exceed amounts previously offered to the limited partners in mini-tender offers.


	•	We may be unable to find an acceptable buyer.

	•	We may be unable to sell the Michigan Avenue at or above its most recent appraised value.

	•	We may not be able to make a prompt distribution to the limited partners after the sale of the hotel.

Effecting a refinancing of our debt has a number of risks, including the following:


	•	We may be unable to obtain a satisfactory refinancing proposal.

	•	The prepayment penalty on the existing debt may make it uneconomical to refinance even though current interest rates are very low.

	•	The valuation of the Hotel in this unstable and depressed hotel real estate market may not support sufficient levels of debt to make refinancing attractive.

Both a sale and a refinancing of the existing debt will require approval of the limited partners. Therefore, even if an individual limited partner were to be in favor of a particular transaction, it may still not be consummated if it does not receive the requisite vote of the limited partners as a whole.

Westin Hotels Limited Partnership (the “Partnership”) and its subsidiary limited partnerships, The Westin St. Francis Limited Partnership (the “St. Francis Partnership”) and The Westin Chicago Limited Partnership (the “Chicago Partnership” or the “Hotel Partnership”), each a Delaware limited partnership (collectively the “Hotel Partnerships”), were formed on April 25, 1986 for the purpose of acquiring two hotels, The Westin St. Francis in San Francisco, California (the “St. Francis”) and the Michigan Avenue (formerly The Westin Hotel, Chicago) in downtown Chicago, Illinois (collectively the “Hotels”).

The St. Francis and the Michigan Avenue have been managed as part of the Westin hotel chain since 1945 and 1964, respectively. As a result of the acquisition of Westin Hotel Company (“Westin”) by Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”) in 1998, the management agreements for the St. Francis and the Michigan Avenue were assigned to St. Francis Hotel Corporation (“St. Francis Corp.”) and 909 North Michigan Avenue Corporation (“909 Corp.”), respectively.

Westin Realty Corp. (“Westin Realty”) is the sole general partner of the Partnership (the “General Partner”). 909 Corp. and St. Francis Corp. are the respective general partners of the subsidiary limited partnerships, the Chicago Partnership and the St. Francis Partnership, which directly own and operate (or in the case of the St. Francis Corp., owned and operated) each Hotel. Since January 2, 1998, the General Partner has been a subsidiary of Starwood.

On January 18, 2000, the St. Francis Partnership entered into a definitive agreement to sell the St. Francis to BRE/ St. Francis L.L.C., an affiliate of the Blackstone Group, for gross proceeds of $243,000,000. Upon obtaining the consent of a majority of the limited partners, the sale was consummated on April 26, 2000.

The Hotel Partnerships are engaged solely in the business of owning and operating the Hotels (as of April 26, 2000, only the Michigan Avenue) and are, therefore, engaged in only one industry segment.

The Michigan Avenue is operated by Starwood as part of the full-service, upscale Westin hotel chain. Starwood owns, manages and franchises hotels throughout the world and the inclusion of the Hotel within its global system provides the benefits of name recognition, centralized reservations and advertising, system-wide marketing programs, centralized purchasing and training and support services. The hotel business in general is highly competitive. To the extent hotel capacity expands or demand for hotel accommodations decreases,

competition will increase. The demand for particular accommodations and related services are subject to various factors, including, but not limited to, seasonal variance, changes in economic conditions, and changes in travel patterns and preferences (which may be affected by airline schedules, weather conditions or availability). Specific information regarding competitive conditions at the Michigan Avenue is set forth in Item 2, “Property.”

The Hotel is managed by a wholly owned subsidiary of Starwood. Because Starwood also owns, operates, manages and franchises hotels under the St. Regis®, The Luxury Collection®, Sheraton®, W® and Four Points® by Sheraton brands, including other hotels in the Chicago area, potential conflicts of interest may exist. While Starwood and its affiliates have the right to own, operate and develop competing hotels, the general partners have a fiduciary duty to conduct the affairs of the Partnership and the Hotel Partnerships in the best interests of these entities and their partners.

Neither the Partnership nor the Hotel Partnerships have any employees. Administrative and Hotel personnel are employees of either Starwood or the Hotel’s general partner. The Hotel and the Hotel Partnership reimburse Starwood and the general partner for the costs of such employees. However, neither the Partnership nor the Hotel Partnership is directly responsible for the payment of executive compensation to the officers of the general partners.

In February 2001, the Partnership retained JLL to market the Michigan Avenue for sale. In April 2001, formal marketing materials were distributed and discussions with several potential purchasers subsequently commenced. After the occurrence of the September 11 Attacks, certain of the most qualified potential purchasers indicated they would expect significant discounts on their preliminary offers made prior to the attacks. Based on the unstable and depressed hotel real estate market, resulting from the weakened general worldwide economic environment, the General Partner did not believe that it was in the best interest of the limited partners to sell the Michigan Avenue in late 2001 or 2002.

The General Partner has also engaged JLL to assist in exploring a refinancing of the Partnership’s debt has recently directed JLL to focus its efforts towards pursuing refinancing alternatives. The General Partner has had discussions with potential lenders with a goal of presenting a refinancing proposal to the limited partners later this year. There can be no assurance however, that such a proposal will be presented to the limited partners.

Chicago’s hospitality industry continued to experience strong competition during 2002. For 2003, the Hotel believes that it can maintain its share of the market by emphasizing its premier “Magnificent Mile” location and its new and improved rooms, as well as the Heavenly Bed® and Heavenly Bath^SM Westin amenities. Significant growth for the Chicago market is not expected for 2003. There is another Westin hotel located at the O’Hare International Airport near Chicago and another in the financial district of downtown Chicago. The General Partner believes that neither is in direct competition with the Michigan Avenue and that their close proximity allows for efficiencies in both staffing and productivity. Starwood also operates the Sheraton Chicago Hotel and Towers in downtown Chicago, owns four hotels in downtown Chicago (two of which were rebranded to W Hotels in the latter half of 2001) and manages five properties in the Chicago metropolitan area under management agreements. These properties are not considered to be primary competitors due to differences in their locations, orientations or facilities.

On August 21, 1986, mortgage loans in the amount of $83,800,000 with respect to the St. Francis and $32,800,000 with respect to the Michigan Avenue were refinanced by Teacher Retirement System of Texas (the “Lender”). On June 2, 1994, the General Partner, on behalf of the Partnership, successfully completed a restructuring of the mortgage loans and entered into a restructuring agreement (“Restructuring Agreement”) with the Lender. On May 27, 1997, a second restructuring agreement modifying the existing mortgage loans on the Partnership’s Hotels was completed. The modifications to the mortgage loans consist primarily of a

reduction of the effective interest rates, an extension of the maturity dates and revisions of prepayment penalties. On April 26, 2000, $99,433,000 of the mortgage loans and accrued interest was repaid in connection with the St. Francis sale. At December 31, 2002, the balance outstanding under the mortgage loan was $30,629,000. On March 1, 2003, the Partnership prepaid $5,000,000 on this mortgage loan, and has given notice to the lender of the intention to prepay an additional $5,000,000 of the loan balance on June 1, 2003.

The Michigan Avenue is covered by comprehensive general liability insurance, fire and extended property insurance (including earthquake coverage), business interruption, workers’ compensation, employer’s liability insurance, terrorism and such other insurance as is customarily obtained for similar properties.

The Michigan Avenue participates in Starwood’s insurance program, whereby general liability, property, casualty, workers’ compensation and other insurance coverage premiums are paid through Starwood primarily to Zurich American Insurance Group and Westel Insurance Company, the latter being a wholly owned subsidiary of Starwood. See Note 9 of the financial statements.

The Partnership 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 affect 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. The Hotels use certain substances and generate certain wastes that may be deemed hazardous or toxic under applicable Environmental Laws, and the Hotels from time to time have incurred, and in the future may incur, costs related to cleaning up contamination. Other Environmental Laws require abatement or removal of certain asbestos-containing materials (“ACMs”) (limited quantities of which may be present in various building materials such as spray-on insulation, floor coverings, ceiling coverings, tiles, decorative treatments and piping) in the event of damage or demolition, or certain renovations or remodeling. These laws also govern emissions of and exposure to asbestos fibers in the air. Environmental Laws also regulate polychlorinated biphenyls (“PCBs”), which may be present in electrical equipment. The Hotels may have equipment containing chlorofluorocarbons (“CFCs”). The use of equipment containing CFCs also is regulated by Environmental Laws. In connection with the Partnership’s ownership, operation and management of the Hotels, the Partnership could be held liable for costs of remedial or other action with respect to PCBs 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 the Partnership has incurred and expects to incur remediation and other environmental costs during the ordinary course of operations, we anticipate that such costs will not have a material adverse effect on the operations or financial condition of the Partnership.

The Partnership’s property consists of the Michigan Avenue, a first-class hotel operating under the Westin name and located in a premier central, urban location, providing guests with convenient access to business districts, shopping areas and convention facilities.

The Michigan Avenue has 751 guest rooms (including 28 suites) and 19 meeting rooms. The Hotel has a fitness center and a business center, provides retail space for several specialty stores and a gift shop, and has an underground parking garage with 209 spaces. The Grill on the Alley, an upscale 300-seat restaurant and bar operated by Grill Concepts of California (“Grill Concepts”), opened in June 2000. Starwood owns 27.4% of the outstanding common stock of Grill Concepts and has rights to acquire additional shares of Grill Concepts pursuant to a subscription agreement. An employee of Starwood serves on the Board of Directors of Grill Concepts.

The Michigan Avenue is located on a prime site in downtown Chicago at the north end of the famous “Magnificent Mile,” known for its first-class retail shopping, fine restaurants and cultural attractions. The Hancock Center is situated directly south of the Michigan Avenue, as is the Water Tower Place, offering a variety of shopping and entertainment possibilities. The Hotel is 18 miles from O’Hare International Airport and 12 miles from Midway Airport.

In 2002, the Hotel spent $2,264,000 for capital expenditures. Of this amount, $1,732,000 was spent on the renovation of the lobby and front office; $241,000 on room lock upgrades; and $291,000 on various other projects, such as engineering equipment upgrades and telephone cabling. For discussion regarding the funding of these capital expenditures, see Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Liquidity and Capital Resources.”

Because of the nature of the hotel business, the Hotel Partnerships are subject to various claims and legal actions incidental to the ordinary course of their operations, including such matters as contract and lease disputes and complaints alleging personal injury, property damage and employment discrimination. The General Partner believes that the outcome of any such pending claims or proceedings, individually or in the aggregate, will not have a material adverse effect upon the business, financial condition or results of operations of the Partnership.

No matters were submitted to a vote of the Unitholders during the fourth quarter of 2002.

Item 5. Market for Registrant’s Common Equity and Related Unitholder Matters.

As of March 17, 2003, there were 6,710 holders of record of the 135,600 limited partnership units (“Units”).

There is no public market for the Units, and it is not anticipated that a public market for the Units will develop. The transfer of Units, or any interest therein, is subject to a variety of restrictions. Limited partners may not transfer their interests in the Partnership if, in the opinion of the Partnership’s counsel, such transfers might violate the registration requirements of the Securities Act of 1933, as amended, or the laws of any other jurisdiction or agency applicable to the transfers, cause the Partnership to be regarded as an association taxable as a corporation, result in the dissolution or termination of the Partnership or result in the Hotel Partnership not being able to obtain or continue in effect any license permitting the service or sale of alcoholic beverages in the Hotel. The assignee must also meet certain other requirements set forth in the Partnership’s Amended and Restated Agreement of Limited Partnership (the “Partnership Agreement”) before it may be recognized as a substituted limited partner, including the payment of all reasonable expenses connected with

Beginning in 1996, the General Partner became aware of offers to purchase Units, which were mailed to limited partners, that have ranged from a low of $185 (in 1996) to a high of $1,119 (in 1999) per Unit. Recently, the General Partner became aware of offers to purchase Units in 2003 for prices ranging from $225 to $350 per Unit. For various reasons including limited revocability of offers, limited withdrawal rights, vague and ambiguous terms and price, the General Partner recommended that the limited partners not tender their Units under these recent offers.

The following information reflects the Partnership’s records of the average and range of Unit sale prices to date as quoted in the Limited Partnership Exchanges:


(1)	The Per Unit Sales Price is the actual contracted price agreed upon by the respective limited partner and new purchaser. This balance does not reflect any reductions in the sales price due to subsequent distributions made to the limited partners, as specified by some of the mini-tender offers.

In October 1996, the General Partner determined it to be in the best interest of the Partnership to implement a Unit transfer policy that relies on the protections of a 5% “safe harbor” provision, promulgated by the Internal Revenue Service, that prevents the Partnership from being deemed a “publicly traded partnership” pursuant to Section 7704 of the Internal Revenue Code of 1986, as amended. The safe harbor applies if the sum of the percentage interests in partnership capital or profits represented by Units traded during any calendar year does not exceed 5% of the aggregate Partnership interests outstanding (which approximates 6,848 Units).

As of March 17, 2003, the Partnership has pending Unit sale transfer requests totaling 533 Units for 2003. Unless cancelled by the transferor, each of these transfers will be processed and recorded on the books of the Partnership on March 31, 2003. The average price of these sales is $333.36 per Unit. If the Partnership reaches the safe harbor limits for Unit sale transfer requests in 2003, the General Partner will suspend its approval of any Unit sale transfer requests for the remainder of 2003.

Cash distributions of $6.72 per Unit were paid to the limited partners on March 16, 2002, June 14, 2002, September 13, 2002 and December 13, 2002. Future distributions will be based on available Net Cash Flow, as defined in the Partnership Agreement and cash availability, if a refinancing of the Partnership’s debt can be effected. The amount of each distribution will be determined by the General Partner at the end of each calendar quarter according to the terms of the Partnership Agreement and will be distributed to the limited partners within 75 days of the end of the quarter.

The Partnership Agreement required the General Partner to use its best efforts to sell or refinance the Hotels by the end of 2001. On January 18, 2000, the St. Francis Partnership entered into a definitive agreement to sell the St. Francis for gross proceeds of $243,000,000. Approval of the limited partners of record on February 15, 2000 was obtained and the St. Francis was sold on April 26, 2000. In February 2001, the Partnership retained JLL to market the Michigan Avenue for sale. In April 2001, formal marketing materials were distributed and discussions with several potential purchasers subsequently commenced. After the occurrence of the September 11 Attacks, certain of the most qualified potential purchasers indicated they would expect significant discounts on their preliminary offers made prior to the attacks. Based on the unstable and depressed hotel real estate market, resulting from the weakened general worldwide economic environ-

The General Partner has also engaged JLL to assist in exploring a refinancing of the Partnership’s debt and has recently directed JLL to focus its efforts towards pursuing refinancing alternatives. The General Partner has had discussions with potential lenders with a goal of presenting a refinancing proposal to the limited partners later this year. There can be no assurance however, that such a proposal will be presented to the limited partners. See related risk factors in Part I — “Risks Relating to Disposition and Refinancing Opportunities.”

The Partnership’s investor relations function is handled by Phoenix American Financial Services, Inc. (“Phoenix American”) at 2401 Kerner Boulevard, San Rafael, CA 94901-5529. The toll-free number for Phoenix American Financial Services, Inc. is 1-800-323-5888.

Several mini-tender offers to purchase Units have been made during the last several years. The Partnership’s position with respect to these mini-tender offers have been announced in press releases and sent in letters to limited partners. In order to reduce the cost of responding to these mini-tender offers, the Partnership will no longer send responses to individual limited partners. The Partnership will continue to issue a press release and limited partners may contact Phoenix American to get information regarding the response. The response will also be posted under the WHLP tab on the Investor Relations tab on Starwood’s website (www.Starwood.com). Copies of the Partnership’s filings with the SEC will also be posted at that site.

The following table sets forth selected financial information for the Partnership:


(1)	Includes St. Francis results through the sale date on April 26, 2000.

(2)	Includes $52,606 gain on the St. Francis sale.

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The Hotel’s primary market focus is on business travelers, conventions and other groups. The Hotel’s business activities generally follow national economic trends. The level of tourist business is influenced by the general global economic environment and political climate and, to a lesser extent, by the strength of the U.S. dollar in relation to foreign currencies. Due to the economic slowdown, the Chicago hotel industry is not expected to experience significant growth in 2003. The Michigan Avenue continues to experience seasonal trends, with the lowest occupancy levels occurring during the first quarter, followed by higher occupancies during the last three quarters of the year.

Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) discusses the Partnership’s consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the consolidated financial 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, plant, property and equipment, financing operations, commitments, 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 differ from these estimates under different assumptions and conditions.

Revenue Recognition. The Michigan Avenue’s revenues are derived from its operations and include revenues from the rental of rooms, food and beverage sales, telephone usage and other service revenue. Revenue is recognized when rooms are occupied and services have been performed.

Inventories. Inventories consist of food and beverage stock items as well as linens, china, glass, silver, utensils and guest room items (“Par Inventories”). The food and beverage inventory items are recorded at the lower of cost (first in, first out) or market. Significant purchases of Par Inventories are recorded at purchased cost and amortized to 50% of their cost over 36 months. Normal replacement purchases are expensed as incurred. Par Inventories are classified as a component of property and equipment.

Property and Equipment. Property and equipment are recorded at cost. The cost of improvements that extend the life of property and equipment are capitalized. These capitalized costs may include structural improvements, equipment and fixtures. 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 40 years for buildings; the remaining life of the building for building improvements; and 3 to 12 years for furniture and equipment. Gains or losses on the sale or retirement of assets are included in income when the assets are sold.

The Partnership evaluates the carrying value of the Hotel’s long-lived assets for impairment by comparing the expected undiscounted future cash flows of the long-lived assets to their net book value to determine if the long-lived assets are impaired.

This section analyzes significant fluctuations in items affecting the consolidated statements of income for the years ended December 31, 2002, 2001 and 2000.

The results of operations and key statistics below are for the Michigan Avenue only and do not include the costs related to Partnership administration.

(1)

EBITDA represents net earnings before interest expense, income tax expense, depreciation, amortization and minority interests. The General Partner considers EBITDA to be a measure of the Partnership’s operating performance due to the significance of the Partnership’s long-lived assets and because such data can be used to measure the Partnership’s ability to service debt, fund capital expenditures and pay cash distributions. EBITDA is not intended to represent cash flow from operations as defined by accounting principles generally accepted in the United States and such information should not be considered as an alternative to net income, cash flow from operations or any other performance measure prescribed by accounting principles generally accepted in the United States.

The following table represents a reconciliation of net income to EBITDA (in thousands):

The Michigan Avenue had operating profit of $4,506,000 for the year ended December 31, 2002, a 25.1% or $905,000 increase from 2001. EBITDA for the year of $13,062,000 represents an 11.4 % or $1,337,000 increase from 2001.

The Michigan Avenue’s revenues were $40,718,000 for the year ended December 31, 2002 compared to $41,915,000 in 2001. The decrease was primarily due to a 4.1% or $1,245,000 decrease in rooms revenue for the year ended December 31, 2002 to $28,943,000 when compared to the prior year. REVPAR for 2002 was $105.59 as compared to $110.13 in 2001. The Michigan Avenue reported an average daily room rate of $151.86 and occupancy of 69.5% in the year ended December 31, 2002 as compared to $166.33 and 66.2%, respectively, in 2001. The REVPAR and rooms revenue decreases are due to the weakened U.S. and global economies and are commensurate with the drop in rates at the competitive set of hotels. Furthermore, the mix of existing customers included more transient travelers in 2002, who usually pay lower average rates than the lost group business revenues. The 3.3 percentage points increase in occupancy is attributed to an increase in transient business from 2001. The Michigan Avenue’s rooms department profit margin for 2002 was 76.70%, in line with 2001.

The Michigan Avenue’s food and beverage revenue of $8,160,000 for 2002 represents a $550,000 or 7.2% increase compared to 2001. This increase is due primarily to the increased consumption associated with the increase in occupancy rates. The Michigan Avenue’s food and beverage department profit margin for 2002 increased 3.22 percentage point to 20.91% from 2001 due to the mix of revenues, which consisted primarily of high-margin banquet and catering services, as compared to the lower margin room service or coffee bar revenues.

Other operating departments had revenue of $3,615,000 for the year ended December 31, 2002, a $502,000 decrease from 2001, primarily resulting from decreased ancillary revenues experienced as a result of lower group business and fewer cancellation fees in 2002 when compared to 2001.

The Michigan Avenue’s operating expenses for 2002 decreased 5.5% or $2,101,000 to $36,212,000. The decrease primarily resulted from a $3,024,000 property tax refund and cost-containment efforts established immediately after the September 11 Attacks, partially offset by increased depreciation expense resulting from 2001 and 2002 renovations and an increase in management fees. Management fees for the year ended December 31, 2002 increased 5.7% or $223,000 in 2002 to $4,125,000 when compared to 2001 due to improved Partnership Net Operating Cash Flow, as defined in the Partnership Agreement, primarily resulting from lower capital expenditures in 2002 and the property tax refund discussed above.

In addition to the operating expenses related to the Michigan Avenue discussed above, the Partnership also incurred $480,000 and $664,000 of costs for the years ended December 31, 2002 and 2001, respectively, for investor relations, professional services and other fees which are included in the consolidated results of operations.

The Partnership. The Partnership’s operating revenues and operating profit of $41,915,000 and $2,937,000, respectively, for the year ended December 31, 2001 decreased $44,961,000 and $15,835,000, respectively, over the year ended December 31, 2000 due to the sale of the St. Francis in April 2000, the general economic downturn and the unprecedented declines in the hospitality industry experienced after the September 11 Attacks. Net income decreased $65,580,000 due primarily to the $52,606,000 gain on the sale

The Michigan Avenue. Due to the sale of the St. Francis on April 26, 2000, the results of operations and key statistics presented and discussed below are for the Michigan Avenue only.

The following table represents a reconciliation of net income to EBITDA (in thousands):

The Michigan Avenue had net income of $1,052,000 for the year ended December 31, 2001, an 83.8% or $5,433,000 decrease from 2000. EBITDA for the year of $11,725,000 represents a 28.1% or $4,574,000 decrease from 2000.

The Michigan Avenue’s rooms revenue for the year ended December 31, 2001 was $30,188,000, which represents a 13.4% or $4,683,000 decrease over the prior year. REVPAR for 2001 was $110.13 as compared to $126.87 in 2000. The Michigan Avenue reported an average daily room rate of $166.33 and occupancy of 66.2% in the year ended December 31, 2001 as compared to $174.66 and 72.6%, respectively, in 2000. The REVPAR and rooms revenue decreases are due to the general economic downturn which was worsened by reduced travel and cancellations experienced after the September 11 Attacks. As the competitive set of hotels in the area dropped their daily rates, the Hotel conformed to avoid losing customers. Also, the mix of existing customers included more transient travelers in 2001, who usually pay lower average rates than the lost business revenues. The Michigan Avenue’s rooms department profit margin for 2001 was 76.36% as compared with 76.71% in 2000 due to the reduction in revenues, offset by the close monitoring of hotel spending and staffing costs, as well as the elimination of several departmental management positions.

The Michigan Avenue’s food and beverage revenue of $7,610,000 for 2001 represents a $1,487,000 or 16.3% decrease compared to 2000. This decrease is due primarily to the transfer of the Hotel’s restaurant operations to Grill Concepts in June 2000 under an operating lease as well as lost banquet revenue associated with cancelled conventions, lost catering revenues due to cancellations of corporate annual holiday parties and reduced group bookings. As a result of the operating lease, the Hotel reports restaurant lease revenue in other operating departments revenue. The Michigan Avenue’s food and beverage department profit margin for 2001 decreased 2.09 percentage points to 17.69% from 2000 due to the lost high-margin banquet and catering services, which were a direct result of the cancelled conventions and group bookings noted above.

Other operating departments had revenue of $4,117,000 for the year ended December 31, 2001, a $313,000 decrease from 2000, primarily resulting from decreased ancillary revenues (such as telecommunications) experienced due to lower group bookings and waiving of cancellation fees after the September 11 Attacks, partially offset by the additional lease revenues discussed above.

The Michigan Avenue’s operating expenses for 2001 decreased 2.6% to $38,313,000. The decrease primarily resulted from cost-containment efforts established immediately after the September 11 Attacks,

partially offset by operating expense increases due to greater depreciation resulting from the fiscal year 2000 and 2001 renovations and an increase in management fees. Management fees for the year ended December 31, 2001 increased 107.1% over 2000 to $3,902,000 due to improved Partnership Net Operating Cash Flow, as defined in the Partnership Agreement, primarily resulting from lower capital expenditures in 2001.

In addition to the operating expenses related to the Michigan Avenue discussed above, the Partnership also incurred $664,000 and $695,000 of costs for the years ended December 31, 2001 and 2000, respectively, for investor relations, professional services and other fees, which are included in the consolidated results of operations.

As of December 31, 2002, the Partnership had cash and cash equivalents of approximately $39,236,000, a $7,309,000 increase from December 31, 2001. This increase is primarily due to the property tax refund discussed earlier, cost-containment efforts established immediately after the September 11 Attacks and reduced capital expenditures. During 2002, total net cash provided by operating activities was $9,840,000.

In 2002, a total of $2,002,000 was deposited into the Furniture, Fixtures and Equipment (“FF&E”) Reserve Account as required by the Restructuring Agreement. The balance in this account, together with interest of $43,000, is included in other assets in the accompanying consolidated balance sheet. The consolidated balance sheets also include a tax escrow account. The balance in the tax escrow account, together with interest of $67,000, is restricted and included in cash and cash equivalents in the accompanying consolidated balance sheet.

A total of $2,264,000 was spent for capital improvements in 2002 for the Michigan Avenue. Of this amount, $1,732,000 was spent on the renovation of the lobby and front office; $241,000 on room lock upgrades; and the remaining $291,000 on various other projects, such as engineering equipment upgrades and telephone cabling.

Capital improvements in 2003 are expected to total approximately $2,293,000. Approximately $1,177,000 is expected to be spent on meeting space and corridor upgrades; $468,000 for continued renovation of the lobby and $648,000 for engineering and computer enhancements. All capital projects are subject to approval by the Lender and the General Partner.

The Michigan Avenue mortgage loan, as restructured, provides for scheduled principal and interest payments of $3,093,000 in 2003. On March 1, 2003, the Partnership prepaid $5,000,000 on this mortgage loan, and has given notice to the lender of the intention to prepay an additional $5,000,000 of the loan balance on June 1, 2003.


(a)	Reflects the payout of net cash proceeds received from the St. Francis sale in accordance with the terms of the Partnership Agreement.

At this time, the General Partner anticipates that the cash on hand and cash flow from operations will provide adequate funding for payments on the remaining mortgage loan and 2003 capital expenditures. In addition, barring any unforeseen adverse occurrence, the General Partner anticipates that the Partnership will be in a position to continue regular distributions to the limited partners at an annual level of $26.88 per Unit in 2003. On March 16, 2003, $6.72 per Unit was distributed to Unitholders of record on December 31, 2002. Future distributions will be based on available Net Cash Flow, as defined in the Partnership Agreement and cash availability, if a refinancing of the Partnership’s debt can be affected. The amount of each distribution will be determined by the General Partner at the end of each calendar quarter according to the terms of the Partnership Agreement and will be distributed to the limited partners within 75 days of the end of the quarter.

The Partnership is exposed to market risk on its financial instruments from changes in interest rates. The Partnership does not use financial instruments for trading or speculative purposes or to manage interest rate risk. A hypothetical 1% change in interest rates would result in an increase or decrease in interest expense of approximately $110,000.

The Partnership’s financial instruments consist primarily of a variable rate note and fixed rate debt. The Partnership’s debt at December 31, 2002 consisted of notes payable to the General Partner and a mortgage loan.

Financial statement schedules are omitted for the reason that they are not required, are insignificant or because the required information is shown in the consolidated financial statements or notes thereto.

We have audited the accompanying consolidated balance sheet of the Westin Hotels Limited Partnership and subsidiaries (the “Partnership”) (a Delaware limited partnership) as of December 31, 2002, and the related consolidated statements of income, partners’ capital (deficit) and cash flows for the year then ended. These financial statements are the responsibility of the Partnership’s management. Our responsibility is to express an opinion on these financial statements based on our audit. The financial statements of the Partnership as of December 31, 2001 and for each of the two years in the period ended December 31, 2001, were audited by other auditors who have ceased operations and whose report dated March 1, 2002, expressed an unqualified opinion on those financial statements.

We conducted our audit 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 financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Westin Hotels Limited Partnership and subsidiaries as of December 31, 2002, and the consolidated results of their operations and their cash flows for the year then ended in conformity with accounting principles generally accepted in the United States.

The accompanying notes are an integral part of these consolidated financial statements.

Basis of Presentation. The accompanying consolidated financial statements include the accounts of Westin Hotels Limited Partnership, a Delaware limited partnership (the “Partnership”), and its subsidiary limited partnerships, The Westin St. Francis Limited Partnership (the “St. Francis Partnership”) and The Westin Chicago Limited Partnership (the “Chicago Partnership”) (collectively the “Hotel Partnerships”). The St. Francis Partnership owned and operated The Westin St. Francis in downtown San Francisco, California (the “St. Francis”) until it was sold in April 26, 2000, and the Chicago Partnership owns and operates The Westin Michigan Avenue, Chicago (formerly The Westin Hotel, Chicago) in downtown Chicago, Illinois (the “Michigan Avenue”) (individually a “Hotel,” collectively the “Hotels”). All significant intercompany transactions and accounts have been eliminated.

In February 2001, the Partnership retained Jones Lang LaSalle Hotels, a nationally recognized broker (“JLL”), to market the Michigan Avenue for sale. In April 2001, formal marketing materials were distributed and discussions with several potential purchasers subsequently commenced. After the occurrence of the September 11 Attacks, certain of the most qualified potential purchasers indicated they would expect significant discounts on their preliminary offers made prior to the attacks. Based on the unstable and depressed hotel real estate market, resulting from the weakened general worldwide economic environment, the General Partner (as defined below) did not believe that it was in the best interest of the limited partners to sell the Michigan Avenue in late 2001 or 2002.

Use of Estimates. The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could materially differ from those estimates.

Cash and Cash Equivalents and Restricted Cash. Cash and cash equivalents consist of short-term investments purchased with original maturities of three months or less. Restricted cash consists of amounts deposited in interest-bearing money market accounts restricted by a Partnership lender (see Note 5). The Partnership’s carrying amount approximates the fair value of cash and cash equivalents and restricted cash due to the short-term nature of these instruments.

Property and Equipment. Depreciation of property and equipment is provided on the straight-line method over the assets’ estimated useful lives as follows:

Depreciation of property and equipment under capital leases is provided on the straight-line method over the lesser of the assets’ estimated useful lives or the lease terms.

Expendable supplies (linens, china, silverware and glassware) have been depreciated to 50% of the cost of initial stock. Replacements are expensed when purchased.

Maintenance and repairs, including the cost of minor replacements, are charged to property maintenance expense accounts. Costs of additions and improvements to property are capitalized in property and equipment accounts.

In the event that facts and circumstances indicate that the cost of property and equipment may be impaired, an evaluation of recoverability would be performed. This evaluation would include the comparison of the future estimated undiscounted cash flows associated with the assets to the carrying amount of these assets to determine if a write-down to fair value is required.

Revenue Recognition. The Partnership’s revenues are primarily derived from hotel operations, including the rental of rooms and food and beverage sales. Generally, revenues are recognized when the services have been rendered.

Income Taxes. The Partnership does not record any provision for federal and state income taxes in its consolidated financial statements. All items of income, gain, loss, deduction or credit for federal and state income tax purposes are allocated to the partners of the Partnership for inclusion in their individual income tax returns. The reported amounts of the Partnership’s net assets and liabilities exceeded the related tax bases by approximately $16,145,000 and $18,692,000 at December 31, 2002 and 2001, respectively.

Concentration of Credit Risk. Financial instruments which potentially subject the Hotel to a concentration of credit risk consist principally of accounts receivable. Concentration of credit risk with respect to accounts receivable is limited due to the wide variety of customers and industries to which the Hotel’s services are sold, as well as the dispersion of customers across many geographic areas. Additionally, the Hotel performs ongoing credit evaluations of their customers’ financial condition and maintains allowances for potential credit losses.

Impact of Recently Issued Accounting Standards. In August 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” The new rules apply to the classification and impairment analysis conducted on long-lived assets other than intangible assets and became effective January 1, 2002. The new rules provide a single accounting treatment for the impairment of long-lived assets and implementation guidance regarding impairment calculations. The adoption of SFAS No. 144 did not have a material impact on the Partnership.

There were various other accounting standards and interpretations issued during 2002, none of which are expected to have a material impact on the Partnership’s financial position, operations or cash flows.

The Partnership was formed on April 25, 1986 to invest in hotel properties by acquiring limited partnership interests in the Hotel Partnerships. The Partnership will continue until December 31, 2036, unless terminated sooner under the provisions of the Partnership Agreement.

Westin Realty Corp. (“Westin Realty”), formerly a wholly owned subsidiary of Westin Hotel Company (“Westin”), now a wholly owned subsidiary of Starwood Hotels & Resorts Worldwide, Inc. (“Starwood”), is the sole general partner of the Partnership (the “General Partner”) and subject to the Partnership Agreement. On August 28, 1986, Westin Realty acquired all of the limited partnership interests in the Hotel Partnerships (which represented 91.62% of the then fair value of the Hotel Partnerships’ net assets) and contributed these

interests, valued at $135,600,000, to the Partnership in exchange for all of the limited partnership interests in the Partnership. Westin Realty then sold these limited partnership interests in a public offering. The remaining 8.38% interest in the Hotel Partnerships was retained by the predecessor owners, subsidiaries of Westin.

On January 2, 1998, Starwood completed the acquisition of Westin Hotels & Resorts Worldwide, Inc. (“Westin Worldwide”) (the “Westin Acquisition”). Westin Realty, St. Francis Hotel Corporation (“St. Francis Corp.”) and 909 North Michigan Avenue Corporation (“909 Corp.”), each formerly wholly owned subsidiaries of Westin Worldwide, are now wholly owned subsidiaries of Starwood. The Westin Acquisition did not change the structure of the general partners’ and limited partners’ ownership interest in either the Partnership or the Hotel Partnerships.

The Hotel Partnerships’ profits and losses, subject to certain contractual adjustments, are generally allocated 99% to the Hotel Partnership and 1% to minority interests. Partnership profits and losses are further allocated 99% to the limited partners and 1% to the General Partner, with the exception of depreciation expense, which is allocated 92.55% to the limited partners and 7.45% to the General Partner. Because of the allocation of depreciation expense, the General Partner’s share of profits and losses since inception is a net loss, resulting in a deficit balance in the General Partner capital account. The Partnership Agreement specifies that if a deficit balance exists after liquidation of both of the Hotel Partnerships’ assets, the General Partner would be obligated to contribute cash to the Partnership equal to the lesser of (i) the deficit balance in such capital account, or (ii) 1.01% of the capital contributions of the limited partners reduced by all capital contributions of the General Partner. On April 26, 2000, in connection with the gain on sale of the St. Francis, the General Partner’s deficit balance was restored to zero, as required by the terms of the Partnership Agreement.

Except for the following restrictions outlined in the mortgage loan restructuring agreement completed in June 1994 (hereinafter this agreement and any amendments to it are referred to as the “Restructuring Agreement”), Net Cash Flow of the Partnership, as defined in the Partnership Agreement, is distributed first to the limited partners until certain preferential distributions are achieved and then allocated to both the general partners and limited partners depending on factors related to the source of the Net Cash Flow and cash distributions as specified in the Partnership Agreement. The Restructuring Agreement permitted distributions beginning in 1997 once the Hotels had achieved certain performance levels in the three years prior to 1997. Aggregate distributions of $3,645,000, $3,645,000 and $93,692,000 (including $85,428,000 relating to the net cash proceeds from the sale of the St. Francis) were made to the limited partners in each of the years ended December 31, 2002, 2001 and 2000, respectively.

On April 26, 2000, upon obtaining consent of a majority of the limited partners, the sale of the St. Francis was completed for gross proceeds of $243,000,000, resulting in a gain of $52,606,000 after transaction costs. In accordance with the Partnership Agreement, $159,000,000 of the proceeds were used to repay the St. Francis’ portion of the mortgage loans, which was secured by the St. Francis; the St. Francis portion of the subordinated note due to the General Partner; deferred incentive management fees related to the St. Francis; and costs and expenses related to the sale. The remaining proceeds of $84,000,000 and additional Partnership cash of approximately $1,428,000 were distributed to the limited partners.

The following unaudited pro forma results reflect the sale of the St. Francis as if it had been sold at the beginning of the period presented and do not purport to present what actual results would have been had the sale, in fact, occurred at the beginning of the period presented:

On May 27, 1997, existing mortgage loans on the Hotels were restructured pursuant to the Restructuring Agreement between The Teacher Retirement System of Texas, the Partnership, the Hotel Partnerships, St. Francis Corp. (general partner of the St. Francis Partnership), 909 Corp. (general partner of the Chicago Partnership) and Westin Realty.

The Restructuring Agreement provided for an extension of the maturity date for each of the Hotel’s existing mortgage loans from August 31, 2001 to November 30, 2006. The restructuring resulted in a decrease in the effective interest rate on the mortgage loans from 8.55% per annum to 8.06% per annum from the date of the Restructuring Agreement through maturity.

Through November 30, 1999, the restructured loans required the payment of interest only each quarter in arrears. From December 1, 1999 to November 30, 2006, the loans require combined payments of principal and interest each quarter in arrears, in such amount necessary to repay the principal balance of each note (together with interest at the fixed interest rate) on the basis of a 25-year amortization schedule. Annual payments of principal and interest on the remaining Michigan Avenue mortgage loan are $3,093,000, payable quarterly through December 1, 2006, at which time the remaining outstanding principal balance plus all accrued and unpaid interest is due and payable. On March 1, 2003, the Partnership prepaid $5,000,000 on this mortgage

loan, and has given notice to the lender of the intention to prepay an additional $5,000,000 of the loan balance on June 1, 2003.

As required by the Restructuring Agreement, deposits to the Furniture, Fixtures and Equipment Reserve Accounts (“FF&E Escrow Accounts”) for 2002 and 2001 totaled $2,002,000 and $2,958,000, respectively. FF&E Escrow Accounts are included in other assets in the accompanying balance sheets. Interest earned on the FF&E Escrow Accounts was $43,000, $144,000 and $284,000 for the years ended December 31, 2002, 2001 and 2000, respectively.

As required by the Restructuring Agreement, $522,000 and $3,657,000 was deposited to tax escrow accounts in 2002 and 2001, respectively. These accounts are used to pay real and personal property taxes as they become due. The tax escrow accounts are included in cash and cash equivalents in the accompanying consolidated balance sheets.

Scheduled principal payments on the mortgage loan are $643,000 in 2003, $697,000 in 2004, $755,000 in 2005 and $28,534,000 in 2006, excluding the two $5,000,000 prepayments discussed above.

For debt based on prime rates, fair value approximates carrying value due to the variable nature of interest rates. For fixed rate debt, fair value is determined based on discounted cash flows for the debt at a rate deemed reasonable for the type of debt and prevailing market conditions and, if appropriate, the length to maturity for the debt. The carrying values of the Partnership’s mortgage loan and subordinated note approximate fair values, due to the interest rates being based on prime or in line with market rates.

The Hotel Partnerships participate in 401(k) plans (the “Plans”), sponsored by Starwood, an affiliate of the General Partner. The Plans allow for voluntary contributions by employees that meet certain age and service requirements. Each participant may contribute on a pretax basis between 1% and 18% of his or her compensation to the Plans. The Plans also contain additional provisions for matching and/or profit sharing contributions, both of which are based on a portion of a participant’s eligible compensation. The amount of expense for matching contributions totaled $64,000 in 2002, $66,000 in 2001 and $106,000 in 2000.

The Hotel rents various property and equipment under operating leases. Minimum future rents under the operating leases in effect at December 31, 2002 are $59,000 for 2003, $17,000 for 2004 and $7,000 for 2005.

Rental expense for operating leases, including short-term leases, was $89,000, $158,000 and $285,000 for the years ended December 31, 2002, 2001 and 2000, respectively.

The Hotel also rents restaurant, gift shop and retail space to third-party vendors under operating leases. Minimum annual rental income under the operating leases in effect at December 31, 2002 are as follows (in thousands):

Rental income from operating leases, including contingent rental income, was $1,923,000, $1,767,000 and $1,230,000 for the years ended December 31, 2002, 2001 and 2000, respectively.

Because of the nature of the hotel business, the Hotel Partnerships are subject to various claims and legal actions incidental to the ordinary course of their operations, including such matters as contract and lease disputes and complaints alleging personal injury, property damage and employment discrimination. The General Partner believes that the outcome of any such pending claims, individually or in the aggregate, will not have a material adverse effect upon the business, financial condition or results of operations of the Partnership.

Westin Realty is responsible for the management and administration of the Partnership. In accordance with the Partnership Agreement, the Partnership reimburses Westin Realty for expenses in connection with such services, which totaled approximately $467,000 in 2002, $725,000 in 2001 and $668,000 in 2000.

Subsidiaries of Starwood, an affiliate of the General Partner, manage the Michigan Avenue under a long-term management agreement, which expires in December 2026 and managed the St. Francis on behalf of the Partnership prior to its sale on April 26, 2000. Base management fees earned by the managers were approximately $1,426,000 in 2002, $1,467,000 in 2001 and $3,134,000 in 2000. The managers also earn incentive management fees of 20% of annual Net Operating Cash Flow, as defined in the management agreement. Earned incentive management fees, including the incentive management fees earned prior to the sale of the St. Francis on April 26, 2000, totaled approximately $2,700,000 in 2002, $2,507,000 in 2001 and $2,224,000 in 2000. The portion of the 2000 incentive management fees earned attributable to the St. Francis of $1,910,000, was paid from the proceeds of the sale of the St. Francis. Incentive management fee payments are subordinate to the limited partners receiving certain preferential returns. The 2002 incentive management fees as well as approximately $752,000 of previous years’ incentive management fees were paid in the first quarter of 2003. Deferred incentive management fees bear no interest and are payable from the proceeds of a sale or refinancing of the Hotel or available Net Cash Flow, as defined. Determining the fair value of the deferred incentive management fee liability is not practicable due to uncertainty as to when the liability will be paid; however, the fair value of the liability does not exceed the carrying amount.

The Partnership paid marketing fees to Starwood and affiliates totaling approximately $611,000 in 2002, $629,000 in 2001 and $1,650,000 in 2000. Additionally, the Hotels paid approximately $1,856,000, $1,852,000 and $6,370,000 in 2002, 2001 and 2000, respectively, to the General Partner for services provided by the General Partner primarily in connection with property and workers’ compensation insurance, systems support, reservations and advertising.

As disclosed in Note 5, at December 31, 2002, the subordinated loan from Westin Realty to the Partnership totaled $10,404,000, which includes $5,404,000 of accrued interest. At December 31, 2001, the balance was $9,832,000 and included $4,832,000 of accrued interest. Interest expense on this loan was $572,000, $734,000 and $1,862,000 for the years ended December 31, 2002, 2001 and 2000, respectively. Payments on the subordinated loan are due on the fifteenth anniversary of each advance with the first payment due in June 2009. Upon the sale of the St. Francis, the portion of the loan attributable to the St. Francis ($32,900,000) was paid in full.

In June 2000, the Michigan Avenue transferred the operations of its restaurant, The Grill on the Alley, to Grill Concepts of California (“Grill Concepts”). Starwood owns 27.4% of the outstanding common stock of Grill Concepts and has rights to acquire additional shares of Grill Concepts pursuant to a subscription agreement. An employee of Starwood also serves on the Board of Directors of Grill Concepts. Rental revenues from Grill Concepts of $238,000, $242,000 and $175,000 for 2002, 2001 and 2000, respectively, are included in other operating departments revenue in the accompanying consolidated financial statements.

The Hotel Partnerships have no directors or officers. Business policy-making functions of the Hotel Partnerships are carried out through the directors and officers of the general partners.

Westin Realty’s directors and executive officers and their current positions are as follows:

Theodore W. Darnall and Alan M. Schnaid assumed their current positions in September 1998. Tom Smith assumed his current position in October 2001.

Theodore Darnall has been the President of Starwood’s Real Estate Group since August 2002. From July 1999 to August 2002, he was the President of Starwood’s North America Group. From April 1998 to July 1999, Mr. Darnall was Executive Vice President, North American Operations for Starwood. Mr. Darnall was also Executive Vice President and Chief Operating Officer of Starwood Lodging Corporation (a predecessor Starwood company) between April 1996 and April 1998.

Alan M. Schnaid currently serves as a Vice President, Principal Accounting Officer and Director. Mr. Schnaid has been Senior Vice President, Corporate Controller of Starwood since 1998. Mr. Schnaid has been with Starwood since August 1994 and has previously served as Assistant Corporate Controller and Vice President, Corporate Controller.

Tom Smith currently serves as a Director. He is Senior Vice President, Portfolio Management, of Starwood. Mr. Smith has held various positions with Starwood since July 1998. Before joining Starwood, he was a Managing Director of CIGNA Real Estate Investment Corporation for eleven years.

The following persons are directors and/or officers of the general partners of both Hotel Partnerships as indicated:

As noted in Item 10 above, the Hotel Partnerships have no directors, officers or other employees. However, under the respective Limited Partnership Agreements for the Hotel Partnerships, Westin Realty, as General Partner of the Partnership, is responsible for the administration and management of the Partnership, and St. Francis Corp. and 909 Corp., as general partners of the Hotel Partnerships, are responsible for the administration and management of the Hotel Partnerships. The general partners, however, receive no fees for providing these services to the Partnership. Moreover, neither the Partnership nor the Hotel Partnerships are responsible for the payment of any executive compensation to the officers of the general partners.

Based on information contained in a Schedule 13D dated April 23, 1999 filed with respect to the Partnership as of the date of this filing, the Partnership believes that Kalmia Investors, LLC (“Kalmia”) owned 8.9% of the total number of Units of record. There are no pending Unit transfers to Kalmia as of the date of this filing.

Theodore W. Darnall, Alan M. Schnaid and Tom Smith serve as officers and/or directors of Westin Realty and as principal officers of Starwood. The Partnership has engaged various subsidiaries of Starwood to provide services to the Hotels. See Note 9 of the Notes to Consolidated Financial Statements included under Item 8, “Financial Statements and Supplementary Data.”

Based on their evaluation, as of a date within 90 days of the filing of this Form 10-K, the Partnership’s Principal Executive Officer and Principal Accounting Officer have concluded the Partnership’s disclosure controls and procedures (as defined in Rules 13a-14 and 15d-14 under the Securities Exchange Act of 1934, as amended) are effective.

There have been no significant changes in internal controls or in other factors that could significantly affect these controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


(1)	Incorporated by reference to Exhibits 4.1, 4.2, 4.3, 10.3, 10.4, 10.5 and 10.6, respectively, to the Partnership’s 1986 Annual Report on Form 10-K.


(2)	Incorporated by reference to Exhibits 10.1 and 10.2, respectively, of the Partnership’s Registration Statement on Form S-11 (No. 33-3918).

(3)	Incorporated by reference to Exhibits 4.3, 4.5, 10.1, 10.3, 10.6, 10.8, 10.10, 10.12, 10.13, 10.14, 10.15 and 10.16, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1994.

(4)	Incorporated by reference to Exhibit 10. to the Partnership’s Current Report on Form 8-K dated May 27, 1997.

(5)	Incorporated by reference to Exhibits 10.8, 10.11, 10.14 and 10.17, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997.

(6)	Incorporated by reference to Exhibits 10.5 and 10.6, respectively, to the Partnership’s 1997 Annual Report on Form 10-K.

(7)	Incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999.

(8)	Incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K dated January 18, 2000.

(9)	Filed herewith.

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 on March 19, 2003.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed by the following persons on behalf of the Registrant and in the capacities and on the dates indicated:


	1.	I have reviewed this annual report on Form 10-K of Westin Hotels Limited Partnership;

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

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

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the “Evaluation Date”); and


	c.	presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


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


	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and


	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6.	The registrant’s other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


	/s/ THEODORE W. DARNALL
	_______________________________________ Theodore W. Darnall
	President, Principal Executive Officer


	1.	I have reviewed this annual report on Form 10-K of Westin Hotels Limited Partnership;

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

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

	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:


	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;


	b.	evaluated the effectiveness of the registrant’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the “Evaluation Date”); and


	c.	presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;


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


	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant’s ability to record, process, summarize and report financial data and have identified for the registrant’s auditors any material weaknesses in internal controls; and


	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls; and


	6.	The registrant’s other certifying officer and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.


	/s/ ALAN M. SCHNAID
	_______________________________________ Alan M. Schnaid
	Vice President


(1)	Incorporated by reference to Exhibits 4.1, 4.2, 4.3, 10.3, 10.4, 10.5 and 10.6, respectively, to the Partnership’s 1986 Annual Report on Form 10-K.

(2)	Incorporated by reference to Exhibits 10.1 and 10.2, respectively, of the Partnership’s Registration Statement on Form S-11 (No. 33-3918).

(3)	Incorporated by reference to Exhibits 4.3, 4.5, 10.1, 10.3, 10.6, 10.8, 10.10, 10.12, 10.13, 10.14, 10.15 and 10.16, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1994.

(4)	Incorporated by reference to Exhibit 10. to the Partnership’s Current Report on Form 8-K dated May 27, 1997.

(5)	Incorporated by reference to Exhibits 10.8, 10.11, 10.14 and 10.17, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended June 30, 1997.

(6)	Incorporated by reference to Exhibits 10.5 and 10.6, respectively, to the Partnership’s 1997 Annual Report on Form 10-K.

(7)	Incorporated by reference to Exhibits 10.1 and 10.2, respectively, to the Partnership’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 1999.

(8)	Incorporated by reference to Exhibit 10.1 to the Partnership’s Current Report on Form 8-K dated January 18, 2000.

(9)	Filed herewith.


Delaware		91-1328985
(State or other jurisdiction of incorporation or organization)		(I.R.S. employer identification no.)
1111 Westchester Avenue White Plains, NY 10604		1-800-323-5888
(Address of principal executive offices, including zip code)		(Registrant’s telephone number, including area code)


PART I
	Forward-Looking Statements
	Item 1. Business.
	Item 2. Property.
	Item 3. Legal Proceedings.
	Item 4. Submission of Matters to a Vote of Security Holders.
PART II
	Item 5. Market for Registrant’s Common Equity and Related Unitholder Matters.
	Item 6. Selected Financial Data.
	Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
	Item 8. Financial Statements and Supplementary Data.
	Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.
WESTIN HOTELS LIMITED PARTNERSHIP
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF INCOME
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PART III
	Item 10. Directors and Executive Officers of the Registrant.
	Item 11. Executive Compensation.
	Item 12. Security Ownership of Certain Beneficial Owners and Management.
	Item 13. Certain Relationships and Related Transactions.
	Item 14. Controls and Procedures
PART IV
	Item 15. Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K.
SIGNATURES
EX-99.1
EX-99.2


		Page

PART I
	Forward-Looking Statements		1
Item 1.	Business		3
Item 2.	Property		5
Item 3.	Legal Proceedings		6
Item 4.	Submission of Matters to a Vote of Security Holders		6
PART II
Item 5.	Market for Registrant’s Common Equity and Related Unitholder Matters		6
Item 6.	Selected Financial Data		9
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations		9
Item 7A.	Quantitative and Qualitative Disclosures about Market Risk		14
Item 8.	Financial Statements and Supplementary Data		14
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		14
PART III
Item 10.	Directors and Executive Officers of the Registrant		27
Item 11.	Executive Compensation		27
Item 12.	Security Ownership of Certain Beneficial Owners and Management		27
Item 13.	Certain Relationships and Related Transactions		28
Item 14.	Controls and Procedures		28
PART IV
Item 15.	Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K		28


	Average Per Unit		Range of Per Unit
	Sales Price⁽¹⁾		Sales Price⁽¹⁾

2001
(through November 20, 2001, when sales were suspended)	$	542.63		$200.00 to $1,065.00
2002
2,563 units (through December 31, 2002)	$	434.35		$250.00 to $628.00
2003
(through March 17, 2003)	$	333.36		$225.00 to $465.00



		Year Ended December 31,

		2002		2001		2000⁽¹⁾			1999		1998


		(In thousands, except per Unit amounts)
Operating revenues:
	Rooms	$	28,943	$	30,188	$	58,232		$	97,973	$	94,724
	Food and beverage		8,160		7,610		20,771			45,277		37,354
	Other operating departments		3,615		4,117		7,873			13,047		12,158

Total operating revenues			40,718		41,915		86,876			156,297		144,236

Operating expenses:
	Rooms		6,745		7,136		14,652			25,417		25,493
	Food and beverage		6,453		6,264		16,109			35,189		26,946
	Administrative, general and marketing		6,269		5,845		11,700			18,886		19,857
	Management fees		4,126		3,974		5,358			13,300		9,949
	Depreciation		8,555		8,124		7,222			11,679		10,190
	Other		4,544		7,635		13,063			22,629		21,427

Total operating expenses			36,692		38,978		68,104			127,100		113,862

Operating profit		$	4,026	$	2,937	$	18,772		$	29,197	$	30,374

Net income		$	1,383	$	559	$	66,139	⁽²⁾	$	16,831	$	17,933
Net income per Unit		$	10.20	$	4.12	$	487.75		$	124.12	$	132.25
Total assets		$	104,233	$	106,585	$	109,272		$	295,834	$	285,661
Long-term obligations, net of current portion		$	40,390	$	40,461	$	40,322		$	166,049	$	165,050
Deferred incentive management fees, net of current portion		$	6,829	$	7,544	$	7,447		$	29,532	$	25,618
Distributions paid per Unit		$	26.88	$	26.88	$	690.94		$	95.00	$	95.00

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		Year Ended
		December 31,

		2002			2001

REVPAR (revenue per available room)		$	105.59		$	110.13
Operating profit as a percentage of revenues:
	Rooms		76.70	%		76.36	%
	Food and beverage		20.91	%		17.69	%
EBITDA (in thousands)⁽¹⁾		$	13,062		$	11,725


	2001		2000

Net income	$	1,052	$	6,485
Depreciation		8,124		7,222
Interest expense		2,549		2,592

EBITDA	$	11,725	$	16,299


	Distributions
	per Unit

2002
March 16	$	6.72
June 14	$	6.72
September 13	$	6.72
December 13	$	6.72
2001
March 15	$	6.72
June 14	$	6.72
September 13	$	6.72
December 14	$	6.72


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


Item 8.	*Financial Statements and Supplementary Data.*


Document	Page

Report of Independent Auditors		15
Consolidated Balance Sheets		16
Consolidated Statements of Income		17
Consolidated Statements of Partners’ Capital (Deficit)		18
Consolidated Statements of Cash Flows		19
Notes to Consolidated Financial Statements		20


Item 9.	*Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.*


		General			Limited
		Partner			Partners			Total

Balance at December 31, 1999		$	(2,926	)	$	77,116		$	74,190
	Cash distributions		—			(93,692	)		(93,692	)
	Net income		2,795			63,344			66,139

Balance at December 31, 2000			(131	)		46,768			46,637
	Cash distributions		—			(3,645	)		(3,645	)
	Net income (loss)		(299	)		858			559

Balance at December 31, 2001			(430	)		43,981			43,551
	Cash distributions		—			(3,645	)		(3,645	)
	Net income (loss)		(317	)		1,700			1,383

Balance at December 31, 2002		$	(747	)	$	42,036		$	41,289


Buildings		40 years
Building improvements		Remaining life of building
Furniture, fixtures and equipment		3 to 12 years


	Year Ended
	December 31, 2000

	(In thousands, except
	per Unit amount)
Operating revenues	$	48,397
Operating profit	$	8,381
Net income	$	6,657
Net income per Unit	$	49.09


Item 1.	*Business.*


Item 2.	*Property.*


	ERNST & YOUNG LLP


Note 1.	Summary of Significant Accounting Policies


		2002		2001

Salaries, wages and other related benefits		$	869	$	908
Estimated property and other taxes			3,877		4,038
Other			1,098		1,061

	Total	$	5,844	$	6,007


		2002		2001

Mortgage loans bearing effective interest at 8.06%		$	30,629	$	31,223
Less current maturities			643		594

	Total	$	29,986	$	30,629

Note payable to the General Partner, bearing interest at prime plus 1% (5.25% at December 31, 2002) (see Note 9)		$	10,404	$	9,832


2003	$	975,000
2004	$	996,000
2005	$	906,000
2006	$	869,000
2007	$	870,000
Thereafter	$	2,268,000


Note 10.	Summarized Quarterly Financial Data (Unaudited)


	First			Second		Third		Fourth		Total


	(In thousands, except per Unit amounts)
2002
Operating revenues	$	6,532		$	11,971	$	11,289	$	10,926	$	40,718
Operating profit (loss)	$	(2,224	)	$	1,705	$	1,609	$	2,936	$	4,026
Net income (loss)	$	(2,848	)	$	1,046	$	949	$	2,236	$	1,383
Net income (loss) per Unit	$	(21.00	)	$	7.71	$	7.00	$	16.49	$	10.20
2001
Operating revenues	$	7,650		$	13,129	$	10,833	$	10,303	$	41,915
Operating profit (loss)	$	(1,739	)	$	2,245	$	1,232	$	1,199	$	2,937
Net income (loss)	$	(2,246	)	$	1,625	$	615	$	565	$	559
Net income (loss) per Unit	$	(16.56	)	$	11.98	$	4.54	$	4.16	$	4.12


Item 10.	*Directors and Executive Officers of the Registrant.*


Theodore W. Darnall		President, Assistant Secretary and Principal Executive Officer
Alan M. Schnaid		Vice President, Principal Accounting Officer and Director
Tom Smith		Director


Item 12.	*Security Ownership of Certain Beneficial Owners and Management.*


Item 13.	*Certain Relationships and Related Transactions.*


Item 15.	*Exhibits, Financial Statements, Financial Statement Schedules and Reports on Form 8-K.*


Document	Page

Report of Independent Accountants		15
Consolidated Balance Sheets		16
Consolidated Statements of Operations		17
Consolidated Statements of Partners’ Capital (Deficit)		18
Consolidated Statements of Cash Flows		19
Notes to Consolidated Financial Statements		20


4.	Instruments defining the rights of security holders.
	4.1	Amended and Restated Agreement of Limited Partnership of Westin Hotels Limited Partnership.⁽¹⁾
	4.2	Amended and Restated Agreement of Limited Partnership of The Westin St. Francis Limited Partnership.⁽¹⁾
	4.3	First Amendment to Amended and Restated Agreement of Limited Partnership of The Westin St. Francis Limited Partnership. ⁽³⁾
	4.4	Amended and Restated Agreement of Limited Partnership of The Westin Chicago Limited Partnership.⁽¹⁾
	4.5	First Amendment to Amended and Restated Agreement of Limited Partnership of The Westin Chicago Limited Partnership.⁽³⁾


10.	Material contracts.
	10.1	Restructuring Agreement dated as of June 2, 1994.⁽³⁾
	10.2	Second Restructuring Agreement dated as of May 27, 1997. ⁽⁴⁾
	10.3	Amended and Restated Management Agreement between The Westin Chicago Limited Partnership and Westin Hotel Company, for property management services.⁽²⁾
	10.4	First Amendment to Amended and Restated Management Agreement of The Westin Chicago Limited Partnership.⁽³⁾
	10.5	Assignment and Assumption of Agreements between Westin Hotel Company and 909 North Michigan Avenue Corporation.⁽⁶⁾
	10.6	Contribution Agreement between 909 North Michigan Avenue Corporation and The Westin Chicago Limited Partnership, for contribution of Hotel assets and the transfer of limited partnership interests.⁽²⁾
	10.7	First Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing dated as of June 2, 1994.⁽³⁾
	10.8	Second Amendment to Deed of Trust, Financing Statement, Security Agreement and Fixture Filing (With Assignment of Rents and Leases) dated as of May 27, 1997.⁽⁵⁾
	10.9	Promissory Note of 909 North Michigan Avenue Corporation dated August 21, 1986 to Teacher Retirement System of Texas.⁽¹⁾
	10.10	First Amendment to Promissory Note of 909 North Michigan Avenue Corporation dated as of June 2, 1994.⁽³⁾
	10.11	Second Amendment to Promissory Note of 909 North Michigan Avenue Corporation dated as of May 27, 1997.⁽⁵⁾
	10.12	Mortgage and Security Agreement dated August 21, 1986 for The Westin Hotel, Chicago.⁽¹⁾
	10.13	First Amendment to Mortgage and Security Agreement dated as of June 2, 1994.⁽³⁾
	10.14	Second Amendment to Mortgage and Security Agreement dated as of May 27, 1997.⁽⁵⁾
	10.15	Chicago FF&E Escrow Agreement dated as of June 2, 1994. ⁽³⁾
	10.16	Promissory Note dated June 2, 1994 in favor of Westin Realty Corp. by Westin Hotels Limited Partnership.⁽³⁾
	10.17	Loan Agreement dated as of June 2, 1994 between Westin Hotels Limited Partnership and Westin Realty Corp.⁽³⁾
	10.18	Second Amendment to Amended and Restated Management Agreement of The Westin Chicago Limited Partnership.⁽⁷⁾
	10.19	Third Amendment to Amended and Restated Management Agreement of The Westin Chicago Limited Partnership.⁽⁹⁾
	10.20	Purchase and Sale Agreement, dated January 18, 2000, between The Westin St. Francis Limited Partnership and BRE/St. Francis L.L.C.⁽⁸⁾
99.	Additional exhibits.
	99.1	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Principal Executive Officer⁽⁹⁾
	99.2	Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Principal Accounting Officer⁽⁹⁾


	WESTIN HOTELS LIMITED PARTNERSHIP
	(a Delaware limited partnership)



Signature	Title	Date


/s/ THEODORE W. DARNALL Theodore W. Darnall	President, Assistant Secretary and Principal Executive Officer	March 19, 2003

/s/ ALAN M. SCHNAID Alan M. Schnaid	Vice President, Principal Accounting Officer and Director	March 19, 2003

/s/ TOM SMITH Tom Smith	Director	March 19, 2003