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SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549




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FORM 10-K



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

| |                                                
| | -----------------------------------------------
| | For the Fiscal Year Ended December 31,
    2003

OR



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

| |                                                          
| | ---------------------------------------------------------
| | For the Transition Period
    from                     to

Commission File Number: 0-15097

WESTIN HOTELS LIMITED PARTNERSHIP

(Exact name of Registrant as specified in its
charters)


|                                                                   |  |                                                         
|------------------------------------------------------------------ |  | --------------------------------------------------------
|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)

Securities Registered Pursuant to
Section 12(b) of the
Act:None

Securities Registered Pursuant to
Section 12(g) of the Act:

Units of limited partnership interests


(Title of Class)


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 þ       No o

As of June 30, 2003, the last business day
of the Registrants most recently completed second fiscal
quarter, the aggregate market value of the units held by
non-affiliates was approximately $53,752,000, based upon an
average price per unit of $396.40, which was the average price
at which units were transferred during the second fiscal quarter.

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).

135,600 limited partnership units issued and
outstanding as of March 8, 2004.



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TABLE OF CONTENTS

|         |  |                                                                                               |  |      |    | 
|-------- |  | --------------------------------------------------------------------------------------------- |  | ---- | -- | 
|         |  |                                                                                               |  | Page
|         |  |                                                                                               |  |     
|PART I  
|         |  | Forward-Looking
    Statements                                                                |  |      | 2  | 
|Item 1.  |  | Business                                                                                      |  |      | 4  | 
|Item 2.  |  | Property                                                                                      |  |      | 7  | 
|Item 3.  |  | Legal Proceedings                                                                             |  |      | 8  | 
|Item 4.  |  | Submission of Matters to a
    Vote of Security Holders                                       |  |      | 8  | 
|PART II 
|Item 5.  |  | Market for Registrants
    Common Equity and Related Unitholder Matters                      |  |      | 9  | 
|Item 6.  |  | Selected Financial Data                                                                       |  |      | 11 | 
|Item 7.  |  | Managements Discussion
    and Analysis of Financial Condition and Results of Operations     |  |      | 11 | 
|Item 7A. |  | Quantitative and Qualitative
    Disclosures about Market Risk                                |  |      | 16 | 
|Item 8.  |  | Financial Statements and
    Supplementary Data                                               |  |      | 16 | 
|Item 9.  |  | Changes in and Disagreements
    with Accountants on Accounting and Financial Disclosure      |  |      | 30 | 
|Item 9A. |  | Controls and Procedures                                                                       |  |      | 30 | 
|PART III
|Item 10. |  | Directors and Executive
    Officers of the Registrant                                        |  |      | 30 | 
|Item 11. |  | Executive Compensation                                                                        |  |      | 31 | 
|Item 12. |  | Security Ownership of
    Certain Beneficial Owners and Management                            |  |      | 32 | 
|Item 13. |  | Certain Relationships and
    Related Transactions                                            |  |      | 32 | 
|Item 14. |  | Principal Accountant Fees
    and Services                                                    |  |      | 32 | 
|PART IV 
|Item 15. |  | Exhibits, Financial
    Statements, Financial Statement Schedules and Reports on
    Form 8-K |  |      | 33 | 
|Ex-31.1 
|Ex-31.2 
|Ex-32.1 
|Ex-32.2 



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PART I




Forward-Looking Statements

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 the Chicago
Partnership (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.

Where you can find more
information

We file annual, quarterly and special reports and
other information with the Securities and Exchange Commission
(the SEC). Our SEC filings are available to the
public over the Internet at the SECs web site at
http://www.sec.gov. Our SEC filings are also available at
http://www.starwood.com/corporate/investor-relations.htmlas soon as reasonably practicable after they are filed or
furnished to the SEC. You may also read and copy any document we
file with the SEC at its public reference rooms in
Washington, D.C., New York, NY and Chicago, IL.
Please call the SEC at (800) SEC-0330 for further information on
the public reference rooms. You may also obtain a copy of our
filings free of charge by calling our investor relations
manager, Phoenix American Financial Services, Inc.
(Phoenix American) at 1-800-323-5888.

Risks Relating to Hotel Operations

We Are Subject to All the Operating Risks
Common to the Hotel and Leisure
Industry.Operating risks common
to the hotel and leisure industry include:



| |   |                                                                                                                                                              
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | changes in local and general economic conditions,
    including the timing and robustness of a recovery from the
    current economic downturn;              
|
| |  | decreases in the level of demand for rooms and
    related services, including a 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 properties in its geographic market. During the
last five years a number of new hotels have opened near the
Michigan Avenue, substantially increasing the inventory of
available rooms in the Chicago area. Some of our competitors may
have substantially greater marketing and

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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s Results Are Partially Dependent on Conventions
and Trade Shows.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. Furthermore, a significant
portion of the Michigan Avenues business is dependent on
the conventions and trade shows held in the Chicago area. The
number and size of conventions and trade shows held in the
Chicago area change from year to year, causing fluctuations in
the Michigan Avenues financial results.

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 and tax laws, interest rate levels and the availability
of financing. 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 May
Negatively Impact Our Bookings.Some of the hotel rooms at the Michigan Avenue are booked
through internet travel intermediaries such as
Travelocity.com®, Expedia.com® and
Priceline.com®. 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.

Risks Relating to Acts of God, Terrorist
Activity and War

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.

Risks Relating to Disposition and Refinance
Opportunities

The Amended and Restated Agreement of Limited
Partnership of the Partnership, dated as of December 31,
1986, as amended (the Partnership Agreement),
provides that commencing in 1994, the General Partner will
actively review opportunities to sell or refinance the Hotel and
by the end of 2001, the General Partner will use its best
efforts to sell or refinance the Hotel. For discussion regarding
the efforts to sell or refinance the Hotel, see Item 1,
Business  Efforts to Sell and Refinance the
Hotel. There are risks associated with a sale or
refinancing of the Hotel.

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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 tender offers.                                                                 
|
| |  | We may be unable to find an acceptable buyer.                                                                                                                                                                               
|
| |  | We may be unable to sell the Michigan Avenue at a
    value that an independent financial advisor might consider fair.                                                                                                      
|
| |  | We may not be able to make a prompt distribution
    to the limited partners after the sale of the Hotel because the
    Partnership may need to retain funds to satisfy liabilities,
    including contingency liabilities.

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 low.
|
| |  | The valuation of the Hotel 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.






|        |          
|------- | ---------
|Item 1. | Business.

General Development of Business

Westin Hotels Limited Partnership (the
Partnership) and its primary subsidiary limited
partnership, The Westin Chicago Limited Partnership (the
Chicago Partnership), a Delaware limited
partnership, were formed on April 25, 1986. The Chicago
Partnership owns and operates the Michigan Avenue. The Michigan
Avenue has been managed as part of the Westin hotel chain since
1964. As a result of the acquisition of Westin Hotel Company
(Westin) by Starwood Hotels & Resorts
Worldwide, Inc. (Starwood) in 1998, the
management agreement for the Michigan Avenue was assigned to
909 North Michigan Avenue Corporation
(909 Corp.).

Westin Realty Corp. (Westin Realty)
is the sole general partner of the Partnership (the
General Partner) and 909 Corp. is the sole
general partner of the Chicago Partnership. Since
January 2, 1998, the General Partner has been a subsidiary
of Starwood.

Financial Information about Industry
Segments

The Partnership, through the Chicago Partnership,
is engaged solely in the business of owning and operating the
Hotel and is, therefore, engaged in only one industry segment.

Description of Business

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).

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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 Chicago
Partnership in the best interests of these entities and their
partners.

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

Competitive Conditions

The Hotel competes for customers with other hotel
properties in its geographic market. During the last five years
a number of new hotels have opened near the Michigan Avenue,
substantially increasing the inventory of available rooms in the
Chicago area. Many of the hotels that the Michigan Avenue
competes against are newer and have larger and more modern
facilities. In addition, some of the competitors have
substantially greater marketing and financial resources than the
Hotel. For 2004, 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 BathSM, Westin
amenities. Chicagos hospitality industry continued to
experience strong competition during 2003. Significant growth
for the Chicago market is not expected for 2004. The General
Partner believes that the Hotel will not experience significant
revenue and income growth in calendar 2004 due in part to a
reduced number of conventions in the Chicago area.

There is another Westin hotel located at the
OHare International Airport near Chicago and another in
close proximity to 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 Chicago, owns four hotels in downtown Chicago area
and manages five other 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.

Mortgage Loans

On August 21, 1986, a mortgage loan in the
amount of $32,800,000 with respect to the Michigan Avenue was
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 loan and entered into a
restructuring agreement (Restructuring Agreement)
with the Lender. On May 27, 1997, a second restructuring
agreement modifying the existing mortgage loan on the Hotel was
completed. The modifications to the mortgage loan consisted
primarily of a reduction of the effective interest rate, an
extension of the maturity date and revisions of prepayment
penalties. At December 31, 2003, the balance outstanding
under the mortgage loan was $19,386,000. The Partnership prepaid
$5,000,000 on this mortgage loan on March 1, 2003 and an
additional $5,000,000 on December 17, 2003.

Insurance

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 8 of the financial statements.

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Environmental Matters

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 Hotel uses certain substances
and generate certain wastes that may be deemed hazardous or
toxic under applicable Environmental Laws, and the Hotel from
time to time has 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 Hotel 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 Hotel, 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.

Efforts to Sell and Refinance the
Hotel

The Partnership Agreement obligated the General
Partner to review opportunities to sell the Michigan Avenue or
to refinance indebtedness secured by the Michigan Avenue,
beginning in 1994, and to use its best efforts to complete a
sale or refinancing transaction by the end of 2001.

In February 2001, after the completion of
significant renovations of the Michigan Avenue, the General
Partner, on behalf of the Partnership, retained Jones Lang
LaSalle Hotels (JLL), a nationally recognized
broker, to market the Michigan Avenue for sale. In April 2001,
formal marketing materials were distributed. Subsequently,
indications of interest were received by, and discussions were
commenced with, several potential purchasers. After the
terrorist attacks in New York City, Washington, D.C.
and Pennsylvania on September 11, 2001 (the
September 11 Attacks), however, certain of the
most qualified potential purchasers indicated that they would
expect significant discounts on the preliminary indications of
value that they made before the attacks. Based on the unstable
and depressed hotel real estate market resulting from the
September 11 Attacks and 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.

In mid-2002, the General Partner also engaged JLL
to assist in exploring a refinancing of the Partnerships
debt and directed JLL to focus its efforts towards pursuing
refinancing alternatives. JLL sent materials to a large number
of potential lenders and received several preliminary loan
proposals. In May 2003, the General Partner negotiated a loan
application with Column Financial, Inc.
(Column), an affiliate of Credit Suisse First
Boston, and made a $75,000 deposit with Column. On May 15,
2003, the General Partner filed a preliminary consent
solicitation statement (the Preliminary Proxy
Statement) with the SEC, which contemplated obtaining the
consent of the limited partners to effect a refinancing of the
Partnerships debt.

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Subsequent to filing the Preliminary Proxy
Statement, the General Partner learned that Column was unlikely
to be able to provide financing in accordance with the terms
outlined in the Preliminary Proxy Statement. At this time, the
General Partner is not optimistic it will be able to find a
lender willing to provide financing to the Partnership upon
terms set forth in the Preliminary Proxy Statement. There can be
no assurance that a refinancing proposal will be presented to
the limited partners.


From July 2003 until January 2004, several
parties (including an affiliate of the General Partner) made
tender offers for varying numbers of units of limited
partnership interest (the Units) of the Partnership.
The tender offers ranged from a low price of $525 per Unit
to a high price of $735 per Unit. The General Partners
expressed no opinion, made no recommendation and remained
neutral with respect to each tender offer.

During late-November and early-December 2003 a
public real estate investment trust not affiliated with Starwood
or the Partnership (the Public REIT) orally
indicated to JLL that it might be interested in an acquisition
of the Hotel. The Public REIT conducted a limited amount of due
diligence, including reviewing certain information provided by
the Partnership and touring the Hotel. After such due diligence
the Public REIT informed JLL that it was concerned with the
prospects of the hotel market in Chicago in calendar year 2004
and was not interested in actively pursuing a transaction.

The General Partner continues to evaluate its
options with respect to selling or refinancing the Hotel.
However, there can be no assurance that the General Partner will
be able to sell or refinance the Hotel at anytime in the near
future. Furthermore, if the Hotel is sold or refinanced, there
is no assurance that limited partners will receive a prompt
distribution of funds or the size of any distribution.






|        |          
|------- | ---------
|Item 2. | Property.

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.

Description

The Michigan Avenue has 751 guest rooms
(including 23 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 225 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 approximately 12% 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.

Location

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.

Capital Improvements

In 2003, the Hotel spent $1,052,000 for capital
expenditures. Of this amount, $423,000 was spent on renovations
of the lobby and meeting rooms; $394,000 on broadband equipment
and installation; $142,000 on the installation of an emergency
generator; and $93,000 on various other projects such as
engineering equipment upgrades and computers. 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.

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|        |                   
|------- | ------------------
|Item 3. | Legal Proceedings.

Because of the nature of the hotel business, the
Chicago Partnership is 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.

On or about November 18, 2003, Warren Heller
and Ralph Silver, two limited partners of the Partnership, filed
a six count complaint in the United States District Court for
the Southern District of New York against Starwood and its
wholly owned subsidiary, WHLP Acquisition LLC (collectively the
Starwood Defendants), the General Partner, and
Theodore W. Darnall and Alan M. Schnaid (together General
Partner Officers and Directors). Three counts of the
complaint, purportedly brought on behalf of all limited partners
of the Partnership, alleged violations of the federal securities
laws by the Starwood Defendants and the General Partner Officers
and Directors in connection with the Starwood Defendants
tender offer dated November 4, 2003, which sought to
acquire a majority of the outstanding interests in the
Partnership. The other counts of the complaint, also purportedly
brought on behalf of all of the limited partners of the
Partnership, alleged (i) breach of fiduciary duties against
each of the defendants in connection with the tender offer, and
their actions with respect thereto; (ii) and breach of
contract (and intentional interference with contractual
relations) relating to various matters of Partnership
management. The complaint sought compensatory and punitive
damages in an amount unspecified.

On or about January 26, 2004, defendants
filed motions to dismiss the complaint. On or about
February 17, 2004, plaintiffs counsel filed an
application for attorneys fees and reimbursement of
expenses in the amount of $101,803. The application contends
that certain actions taken by defendants subsequent to the
filing of the complaint, namely the Starwood Defendants
decision to increase its offer price to $735 per Unit and
to eliminate the condition that a majority of limited partners
consent to a subsequent merger between the Partnership and a
Starwood affiliate, benefited the class by providing much of the
relief sought in the complaint and rendered plaintiffs
claims substantially moot. On or about February 25, 2004,
plaintiffs voluntarily dismissed their claims against defendants
without prejudice. Accordingly, the only issue remaining in the
litigation is whether plaintiffs counsel is entitled to
recover attorneys fees and expenses from the defendants.
Defendants responsive papers were filed on March 8,
2004. The outcome cannot be predicted at the time of this filing.






|        |                                                         
|------- | --------------------------------------------------------
|Item 4. | Submission of Matters to a Vote of Security
    Holders.

No matters were submitted to a vote of the
unitholders during the fourth quarter of 2003.

On November 4, 2003, WHLP Acquisition LLC
(Purchaser), a wholly-owned subsidiary of Starwood,
began soliciting written consents of the limited partners of the
Partnership. Purchaser is seeking consents to the following
proposals:



| |     |                                                                                                                                                  
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) | A proposal to allow Purchaser to submit on behalf
    of the limited partners amendments to the Partnership Agreement
    that would, if adopted:



| |   |                                                                                                                                                                                                                                                                                                                                                                                                     
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | add the defined term Qualified Tender
    Offer, which is defined as an offer to purchase all
    Units for cash in which the offeror publicly discloses that it
    intends to consummate a Qualified Merger following the
    completion of such offer if, following the completion of the
    offer, the offeror owns a majority of the Units, to
    Article 1 of the Partnership Agreement;
|
| |  | add the defined term Qualified
    Merger, which is defined as any merger of the
    Partnership following a Qualified Tender Offer in which the
    other party is the offeror or its affiliate and the
    consideration paid in the merger is the same as the
    consideration offered in the Qualified Tender Offer, to
    Article 1 of the Partnership Agreement;                        

8



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                          
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | render the transfer restrictions contained in
    Article 11 of the Partnership Agreement inapplicable to the
    transfers in connection with Qualified Tender Offers and
    Qualified Mergers, including the offer and the merger between
    Purchaser or one of its affiliates and the Partnership (the
    Merger);                                              
|
| |  | prohibit the General Partner from suspending the
    transfer of Units in connection with Qualified Tender Offers or
    Qualified Mergers, including the Purchasers tender offer
    and the Merger;                                                                                                                                                                   
|
| |  | prohibit the General Partner from imposing any
    other transfer restrictions not set forth in the Partnership
    Agreement on transfers of Units made in connection with any
    Qualified Tender Offer or Qualified Merger;                                                                                                                                          
|
| |  | require the Partnership to immediately:
    (i) recognize transfers following these types of
    transactions, rather than waiting until the end of a calendar
    quarter as currently mandated under the Partnership Agreement
    and (ii) deem the transferee in such transactions a
    substituted limited partner as defined in the Partnership
    Agreement; and
|
| |  | permit the Merger or any other Qualified Merger
    to be consummated upon the approval of limited partners who
    collectively hold more than 50% of the Units, without the
    approval by any general partner of the Partnership;                                                                                                                                    



| |       |                                                                                                                                                                          
| | ----- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (ii)  | A proposal to adopt the foregoing amendments (the
    Amendments) to the Partnership Agreement following
    their submission for approval by the limited partners; and
|
| | (iii) | A proposal to approve the Merger and a merger
    agreement and to effect the Merger upon adoption of the
    Amendments.                                                

Purchaser has announced that its consent
solicitation will expire at 5:00 p.m., Eastern time, on
March 31, 2004.




PART II






|        |                                                                          
|------- | -------------------------------------------------------------------------
|Item 5. | Market for Registrants Common Equity
    and Related Unitholder Matters.

As of March 8, 2004, there were 5,724
holders of record of the 135,600 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 Chicago 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 Agreement before
it may be recognized as a substituted limited partner, including
the payment of all reasonable expenses connected with the
transfer of any interest. The limited partners or their
representatives must furnish, as to voluntary transfers,
sufficient information to counsel to permit the foregoing
determination to be made.

9



---



##### Table of Contents



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:

|                                         |  |                  |        |                   |  |  |                    | 
|---------------------------------------- |  | ---------------- | ------ | ----------------- |  |  | ------------------ | 
|                                         |  | Average Per Unit |        | Range of Per Unit
|                                         |  | Sales Price(1)   |        | Sales Price(1)   
|                                         |  |                  |        |                  
|2002                                     |  |                  |        |                   |  |  |                    | 
|2,563 Units (through December 31, 2002)  |  | $                | 434.35 |                   |  |  | $250.00 to $628.00 | 
|2003                                     |  |                  |        |                   |  |  |                    | 
|16,940 Units (through December 31, 2003) |  | $                | 524.10 |                   |  |  | $225.00 to $615.00 | 
|2004                                     |  |                  |        |                   |  |  |                    | 
|(through March 8, 2004)                  |  | $                | 690.67 |                   |  |  | $425.00 to $735.00 | 



---



|    |                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(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 tender offers.

As of March 8, 2004, the Partnership has
pending Unit sale transfer requests totaling approximately
40,735 Units for the first quarter of 2004. During the last
three quarters of 2003, the Partnership transferred a total of
15,987 Units. Because the Partnership limits the transfers
during any twelve month period to 40% of the outstanding Units
(54,240 Units), the Partnership will only process transfers
of 38,253 Units during the first quarter of 2004.

The following represents cash distributions made
in 2003, 2002 and 2001:

|             |  |               |      | 
|------------ |  | ------------- | ---- | 
|             |  | Distributions
|             |  | Per Unit     
|             |  |              
|2003         |  |               |      | 
|March 16     |  | $             | 6.72 | 
|June 10      |  | $             | 6.72 | 
|September 12 |  | $             | 6.72 | 
|December 15  |  | $             | 6.72 | 
|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 | 

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s investor relations
function is handled by Phoenix American at 2401 Kerner
Boulevard, San Rafael, CA 94901-5529. The toll-free number
for Phoenix American is 1-800-323-5888.

10



---



##### Table of Contents








|        |                         
|------- | ------------------------
|Item 6. | Selected Financial Data.

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

|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |        | 
|-------------------------------------------------------------- | ------------------------------------- | --------------------------------------- | ------ | ------ |  | ---- | ------- | ------- |  | ------- | ------- | ------ |  | - | ------- | ------ |  | - | ------- | ------ | 
|                                                               |                                       |                                        
|                                                               |                                       | Year Ended December 31,                
|                                                               |                                       |                                        
|                                                               |                                       | 2003                                    |        | 2002   |  | 2001 |         | 2000(1) |  | 1999(1)
|                                                               |                                       |                                         |        |        |  |      |         |         |  |        
|                                                               |                                       |                                        
|                                                               |                                       | (In thousands, except per Unit amounts)
|Operating revenues:                                            |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|                                                               | Rooms                                 |                                         | $      | 31,637 |  |      | $       | 28,943  |  |         | $       | 30,188 |  |   | $       | 58,232 |  |   | $       | 97,973 | 
|                                                               | Food and beverage                     |                                         |        | 9,804  |  |      |         | 8,160   |  |         |         | 7,610  |  |   |         | 20,771 |  |   |         | 45,277 | 
|                                                               | Other operating departments           |                                         |        | 3,721  |  |      |         | 3,615   |  |         |         | 4,117  |  |   |         | 7,873  |  |   |         | 13,047 | 
|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|Total operating revenues                                       |                                       |                                         | 45,162 |        |  |      | 40,718  |         |  |         | 41,915  |        |  |   | 86,876  |        |  |   | 156,297 |       
|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|Operating expenses:                                            |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|                                                               | Rooms                                 |                                         |        | 7,374  |  |      |         | 6,745   |  |         |         | 7,136  |  |   |         | 14,652 |  |   |         | 25,417 | 
|                                                               | Food and beverage                     |                                         |        | 6,983  |  |      |         | 6,453   |  |         |         | 6,264  |  |   |         | 16,109 |  |   |         | 35,189 | 
|                                                               | Administrative, general and marketing |                                         |        | 7,403  |  |      |         | 6,269   |  |         |         | 5,845  |  |   |         | 11,700 |  |   |         | 18,886 | 
|                                                               | Management fees                       |                                         |        | 4,716  |  |      |         | 4,126   |  |         |         | 3,974  |  |   |         | 5,358  |  |   |         | 13,300 | 
|                                                               | Depreciation                          |                                         |        | 7,572  |  |      |         | 8,555   |  |         |         | 8,124  |  |   |         | 7,222  |  |   |         | 11,679 | 
|                                                               | Other                                 |                                         |        | 6,994  |  |      |         | 4,544   |  |         |         | 7,635  |  |   |         | 13,063 |  |   |         | 22,629 | 
|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|Total operating expenses                                       |                                       |                                         | 41,042 |        |  |      | 36,692  |         |  |         | 38,978  |        |  |   | 68,104  |        |  |   | 127,100 |       
|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|Operating profit                                               |                                       | $                                       | 4,120  |        |  | $    | 4,026   |         |  | $       | 2,937   |        |  | $ | 18,772  |        |  | $ | 29,197  |       
|                                                               |                                       |                                         |        |        |  |      |         |         |  |         |         |        |  |   |         |        |  |   |         |       
|Net income                                                     |                                       | $                                       | 1,952  |        |  | $    | 1,383   |         |  | $       | 559     |        |  | $ | 66,139  | (2)    |  | $ | 16,831  |       
|Net income per Unit                                            |                                       | $                                       | 14.40  |        |  | $    | 10.20   |         |  | $       | 4.12    |        |  | $ | 487.75  |        |  | $ | 124.12  |       
|Total assets                                                   |                                       | $                                       | 92,056 |        |  | $    | 104,233 |         |  | $       | 106,585 |        |  | $ | 109,272 |        |  | $ | 295,834 |       
|Long-term obligations, net of current portion                  |                                       | $                                       | 28,921 |        |  | $    | 40,390  |         |  | $       | 40,461  |        |  | $ | 40,322  |        |  | $ | 166,049 |       
|Deferred incentive management fees, net of
    current portion |                                       | $                                       | 9,964  |        |  | $    | 6,829   |         |  | $       | 7,544   |        |  | $ | 7,447   |        |  | $ | 29,532  |       
|Distributions paid per Unit                                    |                                       | $                                       | 26.88  |        |  | $    | 26.88   |         |  | $       | 26.88   |        |  | $ | 690.94  |        |  | $ | 95.00   |       



---



|    |                                                                                                                                                                         
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes the results of the Westin St. Francis
    Hotel in San Francisco, California (the St.
    Francis) through the sale date of such hotel 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.

General

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. We believe that the Chicago
real estate market is currently at a relative low point in the
cycle but expect that the market will recover over the next few
years, although the timing and extent of any such recovery is
uncertain. We believe that the Hotel will not experience
significant revenue and income growth in calendar year 2004 due
in part to a reduced number of conventions in the Chicago area.
Although the hotel real estate market in the United States has
recently shown signs of improvement, there can be no assurance
that this improvement will be sustained. 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.

11



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##### Table of Contents



Results of Operations

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.

The Partnership believes the following to be its
critical accounting policies:

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.The Partnership
continually evaluates the carrying value of its plant and
equipment for impairment by comparing the expected undiscounted
future cash flows of the assets to the net book value of the
assets. If the expected undiscounted future cash flows are less
than the net book value of the assets, the excess of the net
book value over the estimated fair value is charged to current
earnings. Fair value is based upon discounted cash flows of the
assets at a rate deemed reasonable for the type of asset and
prevailing market conditions, appraisals and, if appropriate,
current estimated net sales proceeds from pending offers. The
Partnership evaluates the carrying value of its plant and
equipment based on its plans, at the time, for such assets and
such qualitative factors as future development in the
surrounding area, status of expected local competition and
projected incremental income from renovations. Changes to the
Partnerships plans, including a decision to dispose of or
change the intended use of an asset, can have a material impact
on the carrying value of the asset.

This section analyzes significant fluctuations in
items affecting the consolidated statements of income for the
years ended December 31, 2003, 2002 and 2001.

12



---



##### Table of Contents



2003 Compared with 2002

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

|                                              |                   |              |        |       |   |   |        |       |  
|--------------------------------------------- | ----------------- | ------------ | ------ | ----- | - | - | ------ | ----- | -
|                                              |                   |             
|                                              |                   | Year Ended  
|                                              |                   | December 31,
|                                              |                   |             
|                                              |                   | 2003         |        | 2002 
|                                              |                   |              |        |      
|REVPAR (revenue per available room)(1)        |                   | $            | 115.41 |       |   | $ | 105.59 |      
|Total revenue (in thousands)                  |                   | $            | 45,162 |       |   | $ | 40,718 |      
|Operating profit (in thousands)               |                   | $            | 6,021  |       |   | $ | 4,506  |      
|Operating profit as a percentage of revenues: |                   |              |        |       |   |   |        |      
|                                              | Rooms             |              |        | 76.69 | % |   |        | 76.70 | %
|                                              | Food and beverage |              |        | 28.77 | % |   |        | 20.91 | %



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | REVPAR is calculated by dividing room revenue
    which is derived from rooms and suites rented or leased, by
    total room nights available for a given period. We consider
    REVPAR to be a leading indicator for the performance of the
    Hotel since REVPAR measures the period-over-period growth in
    rooms revenue. REVPAR may not be comparable to similarly titled
    measures such as revenues.

The Michigan Avenue had net income of
approximately $4,197,000 in 2003, compared to $2,003,000 in
2002, which represents the majority of the results of the
Partnership. The Michigan Avenue had operating profit of
$6,021,000 for the year ended December 31, 2003, a 33.6% or
$1,515,000 increase from 2002.

The Michigan Avenues revenues were
$45,162,000 for the year ended December 31, 2003 compared
to $40,718,000 in 2002. The increase was primarily due to a 9.3%
or $2,694,000 increase in rooms revenue for the year ended
December 31, 2003 to $31,637,000 when compared to the prior
year. REVPAR for 2003 was $115.41 as compared to $105.59 in
2002. The Michigan Avenue reported an average daily room rate of
$149.78 and occupancy of 77.1% in the year ended
December 31, 2003 as compared to $151.86 and 69.5%,
respectively, in 2002. The REVPAR and rooms revenue increases
are due to increased occupancies primarily related to the return
of several large city-wide conventions during 2003. Furthermore,
in addition to the increase in group business, the occupancy
increase is attributable to the increase in transient travelers
in 2003. The slight decrease in average daily rate is
attributable to re-negotiated rates with several airline
partners. The Michigan Avenues rooms department profit
margin for 2003 was 76.7%, in line with 2002.

The Michigan Avenues food and beverage
revenue of $9,804,000 for 2003 represents a $1,644,000 or 20.1%
increase compared to 2002. This increase is due primarily to the
increased consumption associated with the increase in group
business and the reopening of a coffee cart in the lobby during
2003. The Michigan Avenues food and beverage department
profit margin for 2003 increased 7.9 percentage point to
28.8% from 2002 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
$3,721,000 for the year ended December 31, 2003, a $106,000
increase from 2002, primarily resulting from increased ancillary
revenues experienced as a result of higher group business
partially offset by fewer cancellation fees in 2003 when
compared to 2002.

The Michigan Avenues operating expenses for
2003 increased 8.1% or $2,929,000 to $39,141,000. The increase
was primarily due to higher room costs associated with increased
occupancy as well as increased management fees in accordance
with the terms of the management agreement. Management fees for
the year ended December 31, 2003 increased 14.3% or
$591,000 in 2003 to $4,716,000 when compared to 2002 due to
improved Partnership Net Operating Cash Flow, as defined in the
Partnership Agreement.

In addition to the operating expenses related to
the Michigan Avenue discussed above, the Partnership also
incurred $1,901,000 and $480,000 of costs for the years ended
December 31, 2003 and 2002, respectively, for investor
relations, professional services and other fees which are
included in the consolidated statements of income. The
$1,421,000 increase in 2003 over the prior year is due to
additional administrative legal and regulatory costs incurred in
connection with responding to the numerous tender offers made to
limited partners

13



---



##### Table of Contents



during 2003 and certain activities undertaken in
connection with a proposed refinancing of the Partnerships
debt.


2002 Compared with 2001

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

|                                              |                   |              |        |       |   |   |        |       |  
|--------------------------------------------- | ----------------- | ------------ | ------ | ----- | - | - | ------ | ----- | -
|                                              |                   |             
|                                              |                   | Year Ended  
|                                              |                   | December 31,
|                                              |                   |             
|                                              |                   | 2002         |        | 2001 
|                                              |                   |              |        |      
|REVPAR (revenue per available room)           |                   | $            | 105.59 |       |   | $ | 110.13 |      
|Total revenues (in thousands)                 |                   | $            | 40,718 |       |   | $ | 41,915 |      
|Operating profit (in thousands)               |                   | $            | 4,506  |       |   | $ | 3,602  |      
|Operating profit as a percentage of revenues: |                   |              |        |       |   |   |        |      
|                                              | Rooms             |              |        | 76.70 | % |   |        | 76.36 | %
|                                              | Food and beverage |              |        | 20.91 | % |   |        | 17.69 | %

The Michigan Avenue had net income of
approximately $2,003,000 in 2002, compared to $1,052,000 in
2001, which represents the majority of the results of the
Partnership. The Michigan Avenue had operating profit of
$4,506,000 for the year ended December 31, 2002, a $904,000
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 when compared to group business.
Transient travelers typically pay lower average rates than the
group business. 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 76.7%, 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. The 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 3.2 percentage points to
20.9% 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% over 2001 to
$4,125,000 due to improved Partnership Net Operating Cash Flow,
as defined in the Partnership Agreement.

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 statements of income.

14



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##### Table of Contents



Liquidity and Capital Resources

As of December 31, 2003, the Partnership had
cash and cash equivalents of approximately $33,358,000, a
$5,878,000 decrease from December 31, 2002. This decrease
is primarily due to the $10,000,000 prepayments on the mortgage
loan during 2003. During 2003, total net cash provided by
operating activities was $10,116,000.

In 2003, a total of $2,229,000 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 $15,000, 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 $23,000, is restricted and included in
cash and cash equivalents in the accompanying consolidated
balance sheet.

A total of $1,052,000 was spent for capital
improvements in 2003 for the Michigan Avenue. Of this amount,
$423,000 was spent on renovations of the lobby and meeting
rooms; $394,000 on broadband equipment and installation;
$142,000 on the installation of an emergency generator; and the
remaining $93,000 on various other projects, such as engineering
equipment upgrades and computers.

Capital improvements in 2004 are expected to
total approximately $2,786,000. Approximately $1,957,000 is
expected to be spent on meeting space and corridor upgrades;
$300,000 for renovation of the workout facilities; $187,000 for
engineering, computer and telecommunications upgrades; $116,000
for upgrading the exterior signage; $143,000 for miscellaneous
improvements; and the remaining $83,000 on continued renovation
of the lobby. All capital projects are subject to approval by
the Lender and the General Partner.

The Chicago Partnership has a fee simple interest
in the Hotel. The Michigan Avenue is encumbered by a mortgage
held by the Lender to secure indebtedness. The effective
interest rate on the indebtedness is 8.06% per annum
through maturity. The mortgage requires combined payments of
principal and interest each quarter in arrears, in such amount
as is necessary to repay the principal balance (together with
interest at the fixed interest rate) based on a 25 year
amortization schedule with a balloon payment on December 1,
2006. Annual payments of principal and interest on the mortgage
are $3,093,000, payable in quarterly installments through
December 1, 2006, at which time the remaining outstanding
principal balance plus all accrued and unpaid interest is due
and payable. Principal payments of $11,243,000 (including
prepayments of principal discussed below) and interest payments
of $1,850,000 were made on the mortgage during 2003. The
Partnership is permitted to make two prepayments of
$5 million each in any calendar year (up to a maximum of
$20 million over the term of the mortgage) without a
prepayment penalty. Two such $5 million payments were made
in 2003. Any other prepayment may only be made in full in the
amount equal to the then outstanding principal balance plus the
amount by which the present value of the remaining scheduled
principal and interest payments exceeds the then outstanding
principal balance. Present value is calculated using a discount
rate (compounded quarterly) equal to 1.0% plus the percent per
annum of the Treasury constant maturities having a maturity date
closest in time to November 30, 2006. The outstanding
principal amount of the mortgage as of December 31, 2003
was $19,386,000. The mortgage provides for scheduled principal
and interest payments of $3,093,000 in 2004.

In conjunction with the restructuring of the
Partnerships mortgage loan in 1994, the General Partner
loaned the Partnership $25 million to fund capital
improvements to the Michigan Avenue and the St. Francis, of
which $5 million was contributed to the Chicago Partnership
for capital improvements for the Michigan Avenue. This loan (the
Subordinated Loan), is subordinate to the
Partnerships current mortgage loan. The annual interest
rate on the Subordinated Loan is the prime rate, plus 1%. The
portion of the loan attributable to the St. Francis was repaid
upon the sale of the St. Francis. At December 31,
2003, the outstanding balance on the Subordinated Loan totaled
$10,950,000 (including $5,950,000 of accrued interest). The
Subordinated Loan (both principal and interest) will be payable
in full from the net proceeds of a refinancing or a sale of the
Michigan Avenue in accordance with the Partnership Agreement.
Interest expense on this loan was $546,000, $572,000, and
$734,000 in the years ended December 31, 2003, 2002 and
2001, respectively. Principal payments on the Subordinated Loan
are due on the fifteenth anniversary of each advance with the
first payment due in June 2009.

15



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##### Table of Contents



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
2004 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 2004. A distribution of $6.72 per
Unit is scheduled for March 15, 2004 to unitholders of
record on December 31, 2003. 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 is 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 had the following contractual
obligations outstanding as of December 31, 2003 (in
thousands):

|                              |  |       |        |           |  |           |       |           |  |         |        |  |  |   |   |  |  |   |        | 
|----------------------------- |  | ----- | ------ | --------- |  | --------- | ----- | --------- |  | ------- | ------ |  |  | - | - |  |  | - | ------ | 
|                              |  |       |        | Due in    |  |           |       |           |  | Due    
|                              |  |       |        | Less Than |  | Due in    |       | Due in    |  | After  
|                              |  | Total |        | 1 Year    |  | 1-3 Years |       | 4-5 Years |  | 5 Years
|                              |  |       |        |           |  |           |       |           |  |        
|Long-term debt                |  | $     | 30,336 |           |  | $         | 1,415 |           |  | $       | 17,971 |  |  | $ |  |  |  | $ | 10,950 | 
|Capital lease obligations     |  |       |       |           |  |           |      |           |  |         |       |  |  |   |  |  |  |   |       | 
|Operating lease obligations   |  |       | 110    |           |  |           | 51    |           |  |         | 59     |  |  |   |  |  |  |   |       | 
|Purchase obligations          |  |       |       |           |  |           |      |           |  |         |       |  |  |   |  |  |  |   |       | 
|Other long-term liabilities   |  |       | 9,964  |           |  |           |      |           |  |         |       |  |  |   |  |  |  |   | 9,964  | 
|                              |  |       |        |           |  |           |       |           |  |         |        |  |  |   |   |  |  |   |        | 
|Total contractual obligations |  | $     | 40,410 |           |  | $         | 1,466 |           |  | $       | 18,030 |  |  | $ |  |  |  | $ | 20,914 | 
|                              |  |       |        |           |  |           |       |           |  |         |        |  |  |   |   |  |  |   |        | 






|         |                                                                
|-------- | ---------------------------------------------------------------
|Item 7A. | Quantitative and Qualitative Disclosures
    about Market Risk.

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, 2003 consisted
of a note payable to the General Partner and a mortgage loan.






|        |                                                 
|------- | ------------------------------------------------
|Item 8. | Financial Statements and Supplementary
    Data.

The following documents are filed as part of this
report:

|                                                           |  |      |    | 
|---------------------------------------------------------- |  | ---- | -- | 
|Document                                                   |  | Page
|                                                           |  |     
|Report of Independent Auditors                             |  |      | 17 | 
|Predecessor Auditors Report                               |  |      | 18 | 
|Consolidated Balance Sheets                                |  |      | 19 | 
|Consolidated Statements of Income                          |  |      | 20 | 
|Consolidated Statements of Partners Capital
    (Deficit) |  |      | 21 | 
|Consolidated Statements of Cash Flows                      |  |      | 22 | 
|Notes to Consolidated Financial Statements                 |  |      | 23 | 

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.

16



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##### Table of Contents



REPORT OF INDEPENDENT AUDITORS

To Westin Hotels Limited Partnership:

We have audited the accompanying consolidated
balance sheets of the Westin Hotels Limited Partnership and
subsidiaries (the Partnership) (a Delaware limited
partnership) as of December 31, 2003 and 2002, and the
related consolidated statements of income, partners
capital (deficit) and cash flows for the years 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 for December 31,
2001 and for the period then ended, were audited by other
auditors who have ceased operations. Those auditors expressed an
unqualified opinion on those financial statements in their
report dated March 1, 2002.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 audits
provide 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, 2003 and
2002, and the consolidated results of their operations and their
cash flows for the years then ended in conformity with
accounting principles generally accepted in the United States.



| |                  
| | -----------------
| | ERNST & YOUNG LLP

New York, New York

February 13, 2004


17



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##### Table of Contents



PREDECESSOR AUDITORS REPORT

THIS REPORT IS A COPY OF THE REPORT PREVIOUSLY
ISSUED BY ARTHUR ANDERSEN LLP. THIS REPORT HAS NOT BEEN REISSUED
BY ARTHUR ANDERSEN LLP, NOR HAS ARTHUR ANDERSEN LLP PROVIDED ITS
CONSENT TO THE INCLUSION OF THEIR REPORT IN OUR
FORM 10-K.

To Westin Hotels Limited Partnership:

We have audited the accompanying consolidated
balance sheets of the Westin Hotels Limited Partnership and
subsidiaries (the Partnership) (a Delaware limited
partnership) as of December 31, 2001 and 2000, and the
related consolidated statements of income, partners
capital (deficit) and cash flows for each of the three
years in the period ended December 31, 2001. 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 audits.

We conducted our audits in accordance with
auditing standards generally accepted in the United States.
Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the 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 audits
provide a reasonable basis for our opinion.

In our opinion, the financial statements referred
to above present fairly, in all material respects, the financial
position of the Westin Hotels Limited Partnership and
subsidiaries as of December 31, 2001 and 2000, and the
results of their operations and their cash flows for each of the
three years in the period ended December 31, 2001 in
conformity with accounting principles generally accepted in the
United States.



| |                    
| | -------------------
| | ARTHUR ANDERSEN LLP

Phoenix, Arizona

March 1, 2002


18



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

(In thousands, except Units)


|                                                                  |                                                                                |                                |                        |              |        |       |         |        |        |       | 
|----------------------------------------------------------------- | ------------------------------------------------------------------------------ | ------------------------------ | ---------------------- | ------------ | ------ | ----- | ------- | ------ | ------ | ----- | 
|                                                                  |                                                                                | December 31,                   |                        | December 31,
|                                                                  |                                                                                | 2003                           |                        | 2002        
|                                                                  |                                                                                |                                |                        |             
|ASSETS                                                           
|Current assets:                                                   |                                                                                |                                |                        |              |        |       |         |       
|                                                                  | Cash and cash equivalents, including restricted
    cash of $3,219 and $3,143  |                                | $                      | 33,358       |        |       | $       | 39,236 |       
|                                                                  | Accounts receivable, net of allowance for
    doubtful accounts of $23 and $56 |                                |                        | 2,579        |        |       |         | 2,318  |       
|                                                                  | Inventories                                                                    |                                |                        | 238          |        |       |         | 233    |       
|                                                                  | Prepaid expenses and other current assets                                      |                                |                        | 320          |        |       |         | 410    |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | Total current assets           |                        |              | 36,495 |       |         |        | 42,197 |      
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|Property and equipment, at cost:                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  | Buildings and improvements                                                     |                                |                        | 56,037       |        |       |         | 55,597 |       
|                                                                  | Furniture, fixtures and equipment                                              |                                |                        | 62,887       |        |       |         | 62,275 |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                |                                | 118,924                |              |        |       | 117,872 |       
|                                                                  | Less accumulated depreciation                                                  |                                |                        | 74,161       |        |       |         | 66,589 |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                |                                | 44,763                 |              |        |       | 51,283  |       
|                                                                  | Land                                                                           |                                |                        | 8,835        |        |       |         | 8,835  |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|Land, property and equipment, net                                 |                                                                                |                                | 53,598                 |              |        |       | 60,118  |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|Other assets, including restricted cash of $1,624
    and $1,522  |                                                                                |                                | 1,963                  |              |        |       | 1,918   |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | $                              | 92,056                 |              |        | $     | 104,233 |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                 
|LIABILITIES AND PARTNERS CAPITAL
    (DEFICIT)                  
|Current liabilities:                                              |                                                                                |                                |                        |              |        |       |         |       
|                                                                  | Accounts payable  Trade and other                                             |                                | $                      | 493          |        |       | $       | 403    |       
|                                                                  |                                                                                | General Partner and affiliates |                        |              | 833    |       |         |        | 3,797  |      
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                |                                | Total accounts payable |              |        | 1,326 |         |        |        | 4,200 | 
|                                                                  | Current maturities of long-term obligations                                    |                                |                        | 1,415        |        |       |         | 643    |       
|                                                                  | Accrued expenses                                                               |                                |                        | 5,754        |        |       |         | 5,844  |       
|                                                                  | Other current liabilities                                                      |                                |                        | 495          |        |       |         | 527    |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | Total current liabilities      |                        |              | 8,990  |       |         |        | 11,214 |      
|Long-term obligations                                             |                                                                                |                                | 17,971                 |              |        |       | 29,986  |       
|Long-term obligation to General Partner                           |                                                                                |                                | 10,950                 |              |        |       | 10,404  |       
|Deferred incentive management fees payable to
    General Partner |                                                                                |                                | 9,964                  |              |        |       | 6,829   |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | Total liabilities              |                        |              | 47,875 |       |         |        | 58,433 |      
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|Minority interests                                                |                                                                                |                                | 4,585                  |              |        |       | 4,511   |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|Commitments and contingencies Partners
    capital (deficit):    |                                                                                |                                |                        |              |        |       |         |       
|                                                                  | General Partner                                                                |                                |                        | (997         | )      |       |         | (747   | )     
|                                                                  | Limited Partners (135,600 Units issued and
    outstanding)                    |                                |                        | 40,593       |        |       |         | 42,036 |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | Total Partners capital        |                        |              | 39,596 |       |         |        | 41,289 |      
|                                                                  |                                                                                |                                |                        |              |        |       |         |       
|                                                                  |                                                                                | $                              | 92,056                 |              |        | $     | 104,233 |       
|                                                                  |                                                                                |                                |                        |              |        |       |         |       

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

19



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except Unit data)


|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |        |  
|-------------------------------------------------------------- | ------------------------------------------------------------------- | ----------------------- | ------ | ------ | - | ---- | ------ | ------ | - | - | ------ | ------ | -
|                                                               |                                                                     |                        
|                                                               |                                                                     | Year Ended December 31,
|                                                               |                                                                     |                        
|                                                               |                                                                     | 2003                    |        | 2002   |   | 2001
|                                                               |                                                                     |                         |        |        |   |     
|Operating revenues:                                            |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|                                                               | Rooms                                                               |                         | $      | 31,637 |   |      | $      | 28,943 |   |   | $      | 30,188 |  
|                                                               | Food and beverage                                                   |                         |        | 9,804  |   |      |        | 8,160  |   |   |        | 7,610  |  
|                                                               | Other operating departments                                         |                         |        | 3,721  |   |      |        | 3,615  |   |   |        | 4,117  |  
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Total operating revenues                                       |                                                                     |                         | 45,162 |        |   |      | 40,718 |        |   |   | 41,915 |       
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Operating expenses:                                            |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|                                                               | Rooms                                                               |                         |        | 7,374  |   |      |        | 6,745  |   |   |        | 7,136  |  
|                                                               | Food and beverage                                                   |                         |        | 6,983  |   |      |        | 6,453  |   |   |        | 6,264  |  
|                                                               | Other operating departments                                         |                         |        | 694    |   |      |        | 633    |   |   |        | 713    |  
|                                                               | Administrative and general                                          |                         |        | 4,705  |   |      |        | 3,873  |   |   |        | 3,360  |  
|                                                               | Related party management fees                                       |                         |        | 4,716  |   |      |        | 4,126  |   |   |        | 3,974  |  
|                                                               | Advertising and business promotion                                  |                         |        | 2,698  |   |      |        | 2,396  |   |   |        | 2,485  |  
|                                                               | Property maintenance and energy                                     |                         |        | 2,884  |   |      |        | 2,635  |   |   |        | 2,609  |  
|                                                               | Local taxes, insurance and rent                                     |                         |        | 3,416  |   |      |        | 1,276  |   |   |        | 4,313  |  
|                                                               | Depreciation                                                        |                         |        | 7,572  |   |      |        | 8,555  |   |   |        | 8,124  |  
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Total operating expenses                                       |                                                                     |                         | 41,042 |        |   |      | 36,692 |        |   |   | 38,978 |       
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Operating profit                                               |                                                                     |                         | 4,120  |        |   |      | 4,026  |        |   |   | 2,937  |       
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|                                                               | Interest expense, net of interest income of $276,
    $486 and $954 |                         |        | (2,094 | ) |      |        | (2,590 | ) |   |        | (2,329 | )
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Income before minority interests                               |                                                                     |                         | 2,026  |        |   |      | 1,436  |        |   |   | 608    |       
|Minority interests in net income                               |                                                                     |                         | (74    | )      |   |      | (53    | )      |   |   | (49    | )     
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Net income                                                     |                                                                     | $                       | 1,952  |        |   | $    | 1,383  |        |   | $ | 559    |       
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       
|Net income per Unit (135,600 Units issued and
    outstanding) |                                                                     | $                       | 14.40  |        |   | $    | 10.20  |        |   | $ | 4.12   |       
|                                                               |                                                                     |                         |        |        |   |      |        |        |   |   |        |       

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

20



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF PARTNERS
CAPITAL (DEFICIT)

(In thousands)


|                             |                    |         |      |          |   |       |        |        |   |   |        |        |  
|---------------------------- | ------------------ | ------- | ---- | -------- | - | ----- | ------ | ------ | - | - | ------ | ------ | -
|                             |                    | General |      | Limited  |   |      
|                             |                    | Partner |      | Partners |   | Total
|                             |                    |         |      |          |   |      
|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 |       
|                             | Cash distributions |         |      |         |   |       |        | (3,645 | ) |   |        | (3,645 | )
|                             | Net income (loss)  |         |      | (250     | ) |       |        | 2,202  |   |   |        | 1,952  |  
|                             |                    |         |      |          |   |       |        |        |   |   |        |       
|Balance at December 31, 2003 |                    | $       | (997 | )        |   | $     | 40,593 |        |   | $ | 39,596 |       
|                             |                    |         |      |          |   |       |        |        |   |   |        |       

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

21



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH
FLOWS

(In thousands)


|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |       |        |  
|------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ------- | ----- | ------- | ---- | ------ | ----- | ------ | - | ------ | ----- | ------ | -
|                                                                                      |                                                                                               |                                                        
|                                                                                      |                                                                                               | Year Ended December 31,                                
|                                                                                      |                                                                                               |                                                        
|                                                                                      |                                                                                               | 2003                                                    |         | 2002  |         | 2001
|                                                                                      |                                                                                               |                                                         |         |       |         |     
|Operating Activities                                                                  |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Net income                                                                            |                                                                                               | $                                                       | 1,952   |       |         | $    | 1,383  |       |        | $ | 559    |      
|Adjustments to reconcile net income to net cash
    provided by operating activities: |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|                                                                                      | Depreciation                                                                                  |                                                         |         | 7,572 |         |      |        | 8,555 |        |   |        | 8,124 |       
|                                                                                      | Amortization of deferred loan fees                                                            |                                                         |         | 9     |         |      |        | 9     |        |   |        | 9     |       
|                                                                                      | Interest expense on long-term obligation to
    General Partner                               |                                                         |         | 546   |         |      |        | 572   |        |   |        | 734   |       
|                                                                                      | Minority interests in net income                                                              |                                                         |         | 74    |         |      |        | 53    |        |   |        | 49    |       
|Increase (decrease) in cash resulting from
    changes in:                            |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|                                                                                      | Accounts receivable                                                                           |                                                         |         | (261  | )       |      |        | (657  | )      |   |        | 1,603 |       
|                                                                                      | Inventories                                                                                   |                                                         |         | (5    | )       |      |        | (67   | )      |   |        | 34    |       
|                                                                                      | Prepaid expenses and other current assets                                                     |                                                         |         | 90    |         |      |        | 113   |        |   |        | (114  | )     
|                                                                                      | Trade and other accounts payable                                                              |                                                         |         | 90    |         |      |        | (8    | )      |   |        | 175   |       
|                                                                                      | Accounts payable and deferred incentive
    management fees to General Partner and affiliates |                                                         |         | 171   |         |      |        | (60   | )      |   |        | 478   |       
|                                                                                      | Accrued expenses and other current liabilities                                                |                                                         |         | (122  | )       |      |        | (53   | )      |   |        | (487  | )     
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|                                                                                      |                                                                                               | Net cash provided by operating activities               |         |       | 10,116  |      |        |       | 9,840  |   |        |       | 11,164 |  
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Investing Activities                                                                  |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Additions to property and equipment                                                   |                                                                                               |                                                         | (1,052  | )     |         |      | (2,264 | )     |        |   | (1,987 | )    
|Decrease (increase) in long-term restricted cash                                      |                                                                                               |                                                         | (102    | )     |         |      | 3,916  |       |        |   | (3,099 | )    
|Decrease in other assets                                                              |                                                                                               |                                                         | 48      |       |         |      | 56     |       |        |   | 48     |      
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|                                                                                      |                                                                                               | Net cash provided by (used in) investing
    activities |         |       | (1,106  | )    |        |       | 1,708  |   |        |       | (5,038 | )
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Financing Activities                                                                  |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Cash distributions                                                                    |                                                                                               |                                                         | (3,645  | )     |         |      | (3,645 | )     |        |   | (3,645 | )    
|Repayment of long-term obligations                                                    |                                                                                               |                                                         | (11,243 | )     |         |      | (594   | )     |        |   | (550   | )    
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|                                                                                      |                                                                                               | Net cash used in financing activities                   |         |       | (14,888 | )    |        |       | (4,239 | ) |        |       | (4,195 | )
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Net increase (decrease) in cash and cash
    equivalents                              |                                                                                               |                                                         | (5,878  | )     |         |      | 7,309  |       |        |   | 1,931  |      
|Cash and cash equivalents  beginning
    of period                                   |                                                                                               |                                                         | 39,236  |       |         |      | 31,927 |       |        |   | 29,996 |      
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Cash and cash equivalents  end of
    period                                         |                                                                                               | $                                                       | 33,358  |       |         | $    | 39,236 |       |        | $ | 31,927 |      
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Supplemental Disclosures of Cash Flow
    Information                                 |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      
|Cash paid during the year for interest                                                |                                                                                               | $                                                       | 1,850   |       |         | $    | 2,498  |       |        | $ | 2,544  |      
|                                                                                      |                                                                                               |                                                         |         |       |         |      |        |       |        |   |        |      

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

22



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP



NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS




|        |                                               
|------- | ----------------------------------------------
|Note 1. | Summary of Significant Accounting
    Policies

Basis of
Presentation.The accompanying
consolidated financial statements include the accounts of Westin
Hotels Limited Partnership, a Delaware limited partnership (the
Partnership), and its primary subsidiary limited
partnership, The Westin Chicago Limited Partnership (the
Chicago Partnership). The Chicago Partnership owns
and operates The Westin Michigan Avenue, Chicago (formerly The
Westin Hotel, Chicago) in downtown Chicago, Illinois (the
Michigan Avenue or the Hotel). All
significant intercompany transactions and accounts have been
eliminated.

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 4). 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.

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

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

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

23



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 $14,002,000 and $16,145,000 at December 31,
2003 and 2002, 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.

Reclassifications.Certain reclassifications have been made to the prior
years financial statements to conform to the current year
presentations.

Impact of Recently Issued Accounting
Standards.There were various
accounting standards and interpretations issued during 2003,
none of which are expected to have a material impact on the
Partnerships financial position, operations or cash flows.



|        |             
|------- | ------------
|Note 2. | Organization

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 Chicago
Partnership (which represented 91.62% of the then fair value of
the Chicago Partnerships net assets) and contributed these
interests (and other interests which have subsequently been
sold) 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 Chicago Partnership 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 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 Chicago Partnership.

The Chicago Partnerships profits and
losses, subject to certain contractual adjustments, are
generally allocated 99% to the Chicago 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 Chicago Partnerships 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.

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

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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

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 were made to the limited partners in each of the
years ended December 31, 2003, 2002 and 2001, respectively.



|        |                 
|------- | ----------------
|Note 3. | Accrued Expenses

Accrued expenses include the following at
December 31 (In thousands):

|                                           |       |      |       |       |  |   |       |       | 
|------------------------------------------ | ----- | ---- | ----- | ----- |  | - | ----- | ----- | 
|                                           |       | 2003 |       | 2002 
|                                           |       |      |       |      
|Salaries, wages and other related benefits |       | $    | 1,008 |       |  | $ | 869   |      
|Estimated property and other taxes         |       |      | 3,744 |       |  |   | 3,877 |      
|Other                                      |       |      | 1,002 |       |  |   | 1,098 |      
|                                           |       |      |       |       |  |   |       |      
|                                           | Total |      | $     | 5,754 |  |   | $     | 5,844 | 
|                                           |       |      |       |       |  |   |       |      



|        |                      
|------- | ---------------------
|Note 4. | Long-Term Obligations

Long-term obligations include the following at
December 31 (In thousands):

|                                                                                                                         |       |      |        |        |  |   |        |        | 
|------------------------------------------------------------------------------------------------------------------------ | ----- | ---- | ------ | ------ |  | - | ------ | ------ | 
|                                                                                                                         |       | 2003 |        | 2002  
|                                                                                                                         |       |      |        |       
|Mortgage loans bearing effective interest at 8.06%                                                                       |       | $    | 19,386 |        |  | $ | 30,629 |       
|Less current maturities                                                                                                  |       |      | (1,415 | )      |  |   | (643   | )     
|                                                                                                                         |       |      |        |        |  |   |        |       
|                                                                                                                         | Total |      | $      | 17,971 |  |   | $      | 29,986 | 
|                                                                                                                         |       |      |        |        |  |   |        |       
|Note payable to the General Partner, bearing
    interest at prime plus 1% (5.00% at December 31, 2003) (see
    Note 8) |       | $    | 10,950 |        |  | $ | 10,404 |       
|                                                                                                                         |       |      |        |        |  |   |        |       

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

The Restructuring Agreement provided for an
extension of the maturity date for the Hotels existing
mortgage loan from August 31, 2001 to November 30,
2006. The restructuring resulted in a decrease in the effective
interest rate on the mortgage loan 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
loan required the payment of interest only each quarter in
arrears. From December 1, 1999 to November 30, 2006,
the loan required combined payments of principal and interest
each quarter in arrears, in such amount necessary to repay the
principal balance of the 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 an
additional $5,000,000 on December 17, 2003.

As required by the Restructuring Agreement,
deposits to the Furniture, Fixtures and Equipment Reserve
Accounts (the FF&E Reserve Accounts) for
2003 and 2002 totaled $2,229,000 and $2,002,000, respectively.
FF&E Reserve Accounts are included in other assets in
the accompanying balance sheets. Interest

25



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

earned on the FF&E Reserve Accounts was
$15,000, $43,000 and $144,000 for the years ended
December 31, 2003, 2002 and 2001, respectively.

As required by the Restructuring Agreement,
$3,488,000 and $522,000 was deposited to tax escrow accounts in
2003 and 2002, 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 $1,415,000 in 2004, $1,698,000 in 2005 and $16,273,000 in
2006, after the impact of 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.



|        |                      
|------- | ---------------------
|Note 5. | Employee Benefit Plan

The Chicago Partnership participates in a 401(k)
plan (the Plan), sponsored by Starwood, an affiliate
of the General Partner. The Plan allows 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 Plan. The
Plan also contains 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 $68,000 in
2003, $64,000 in 2002, and $66,000 in 2001.



|        |                 
|------- | ----------------
|Note 6. | Operating Leases

The Hotel rents various property and equipment
under operating leases. Minimum future rents under the operating
leases in effect at December 31, 2003 are $51,000 for 2004,
$37,000 for 2005 and $22,000 for 2006.

Rental expense for operating leases, including
short-term leases, was $63,000, $89,000 and $158,000 for the
years ended December 31, 2003, 2002 and 2001, 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, 2003 are as follows:

|           |  |   |           | 
|---------- |  | - | --------- | 
|2004       |  | $ | 993,000   | 
|2005       |  | $ | 905,000   | 
|2006       |  | $ | 864,000   | 
|2007       |  | $ | 865,000   | 
|2008       |  | $ | 865,000   | 
|Thereafter |  | $ | 1,392,000 | 

Rental income from operating leases, including
contingent rental income, was $2,007,000, $1,923,000, and
$1,767,000 for the years ended December 31, 2003, 2002 and
2001, respectively.



|        |                              
|------- | -----------------------------
|Note 7. | Commitments and Contingencies

Because of the nature of the hotel business, the
Chicago Partnerships is 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

26



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

not have a material adverse effect upon the
business, financial condition or results of operations of the
Partnership.



|        |                           
|------- | --------------------------
|Note 8. | Related Party Transactions

Westin Realty is responsible for the management
and administration of the Partnership. In accordance with the
Partnership Agreement, the Partnership reimburses the General
Partner for expenses in connection with management and
administration of the Partnership. These reimbursements totaled
approximately $1,200,000 in the year ended December 31,
2003, and $467,000 and $725,000 in the years ended
December 31, 2002 and December 31, 2001, respectively.

The General Partners officers and directors
and the officers and directors of the Chicago Partnership are
full-time senior or executive-level employees of Starwood. In
addition, the Michigan Avenue is managed by 909 Corp., a wholly
owned subsidiary of Starwood. All the activities of the General
Partner and the 909 Corp. are carried out by Starwood employees,
since neither the General Partner nor the 909 Corp. has any
employees of its own.

The directors and officers of the General
Partner, in their capacities as Starwood employees and directors
and officers of a wholly owned subsidiary of Starwood, owe
fiduciary duties to Starwood in its capacity as the sole
stockholder of the General Partner. The directors and officers
of the General Partner and the General Partner, however, also
have fiduciary duties to the Partnership and the limited
partners that may conflict with their fiduciary duties to
Starwood.

Although they are not members of the Board of
Directors of the General Partner, the Chief Financial Officer,
the General Counsel and the President of the Real Estate Group
of Starwood each hold positions with the General Partner and the
909 Corp. The former Chief Financial Officer of Starwood was a
member of the Board of Directors of the General Partner until
October 19, 2001.

Each director and the President of the General
Partner is a full-time, senior or executive-level employee of
Starwood. Each has received salary and bonuses from Starwood in
amounts commensurate with his level of skill and experience and
comparable to similarly situated employees in the industry. Each
has received grants of options and restricted stock of Starwood
in each of the past two years and is also eligible to
participate in Starwoods benefit plans. Moreover, neither
the Partnership nor the Hotel Partnership are responsible for
the payment of any executive compensation to the officers of the
general partners.

The Michigan Avenue is operated as part of the
Westin international system of hotels pursuant to a management
agreement (the Management Agreement) initially
entered into on August 21, 1986 among the General Partner,
the Partnership, 909 Corp., the Chicago Partnership, as the
owner of the Michigan Avenue, and the Westin Hotel Company, as
hotel manager. When Starwood acquired the Westin Hotel Company
in 1998, the Westin Hotel Company was merged into one of
Starwoods affiliates and the Westin Hotel Company assigned
the Management Agreement to 909 Corp. The Management Agreement
does not terminate until 2026 without the consent of all
parties, absent a breach or a default by a party or the
occurrence of certain extraordinary events specified in the
agreement, which generally relate to the bankruptcy or
insolvency of the Partnership or 909 Corp.

The Management Agreement provides for a base
management fee equal to 3.5% of annual gross revenues of the
Michigan Avenue payable by the Chicago Partnership to the hotel
manager out of cash flow from the operations of the Michigan
Avenue. This fee is payable prior to the distribution of cash to
the partners of the Chicago Partnership, including the
Partnership as the sole limited partner of the Chicago
Partnership. Base management fees earned by 909 Corp. were
approximately $1,581,000 in the year ended December 31,
2003, and $1,426,000 and $1,467,000 in the years ended
December 31, 2002 and December 31, 2001, respectively.

27



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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

The Management Agreement also provides for an
incentive management fee, which is currently equal to 20% of the
net operating cash flow (as defined in the Management Agreement)
of the Partnership. Payment of the incentive management fee in
any year depends on the amount of distributable net cash flow of
the Partnership and is subordinated to the payment to the
limited partners of a preferred distribution of cash flow.
Unpaid incentive management fees are deferred and do not accrue
interest. Incentive management fees totaled approximately
$3,135,000 in the year ended December 31, 2003, and
$2,700,000 and $2,507,000 in the years ended December 31,
2002 and December 31, 2001, respectively.

Incentive management fee payments are subordinate
to the unitholders receipt of certain preferential
returns. The 2002 incentive management fees and approximately
$752,000 of previous years incentive management fees were
paid in the first quarter of 2003. At December 31, 2003,
all current and deferred incentive management fees with respect
to the Partnership were $9,964,000. Deferred incentive
management fees are payable from the proceeds of a sale or
refinancing of the Michigan Avenue or from available net cash
flow, as defined in the Partnership Agreement.

The Chicago Partnership paid marketing fees to
Starwood and its affiliates totaling approximately $677,000 in
the year ended December 31, 2003, and $611,000 and $629,000
in the years ended December 31, 2002 and December 31,
2001, respectively. Additionally, the Partnership paid Starwood
affiliates approximately $2,045,000, $1,856,000 and $1,852,000
in 2003, 2002 and 2001, respectively, for services provided by
Starwood affiliates primarily in connection with systems
support, reservations, advertising, property and workers
compensation insurance which payments include premiums paid to
Westel Insurance Company, a wholly owned subsidiary of Starwood.

In conjunction with the restructuring of the
Partnerships mortgage loan secured by the Michigan Avenue
in 1994, the General Partner loaned the Partnership
$25 million to fund capital improvements at the two hotels
owned by the Partnership at the time, of which $5 million
was contributed to the Chicago Partnership for capital
improvements for the Michigan Avenue. This loan (the
Subordinated Loan) is subordinate to the
Partnerships current mortgage loan. The annual interest
rate on the Subordinated Loan is the prime rate plus 1%. At
December 31, 2003, the outstanding balance on the
Subordinated Loan totaled $10,950,000 (including $5,950,000 of
accrued interest). The Subordinated Loan (both principal and
interest) will be payable in full from the net proceeds of a
refinancing or a sale of the Michigan Avenue in accordance with
the Partnership Agreement. Interest expense on this loan was
$546,000 in the year ended December 31, 2003, and $572,000
and $734,000 in the years ended December 31, 2002 and
December 31, 2001, respectively. Principal payments on the
Subordinated Loan are due on the fifteenth anniversary of each
advance with the first payment due in June 2009.

Pursuant to the Partnership Agreement, the
General Partner is generally allocated 1% of the
Partnerships taxable income and loss. In addition,
909 Corp., an affiliate of the General Partner, is
generally allocated 1% of the Chicago Partnerships taxable
income and loss.

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
made an equity investment in Grill Concepts in the third quarter
of 2001 and currently owns 12% 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. Grill Concepts operates The Grill on the Alley
pursuant to a ten-year operating lease which expires in 2008.
Rental revenues to the Partnership from Grill Concepts under the
operating lease for the restaurant were $289,000 in the year
ended December 31, 2003, and $238,000 and $242,000 in the
years ended December 31, 2002 and December 31, 2001,
respectively.

An entity in which the Chairman and Chief
Executive Officer of Starwood had an indirect ownership interest
held 259 Units. The units were acquired in 1995 and 1996. The
entity tendered all of its units to

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##### Table of Contents



WESTIN HOTELS LIMITED PARTNERSHIP


NOTES TO CONSOLIDATED FINANCIAL
STATEMENTS  (Continued)

Starwood in connection with Starwoods
tender offer. Starwood purchased all shares tendered to it and
the entity will receive approximately $190,000 for its units.

On February 23, 2004, Starwood announced
that its tender offer to purchase units of the partnership
expired at 5:00 p.m., Eastern Standard Time on
February 20, 2004. Based on a preliminary count, Starwood
indicates that approximately 33,873 units had been tendered
to it.



|        |                                                    
|------- | ---------------------------------------------------
|Note 9. | Summarized Quarterly Financial Data
    (Unaudited)

Summarized quarterly financial data is as follows:

|                           |  |                                         |        |        |  |       |        |        |  |       |        |  |  |   |        |  |  |   |        | 
|-------------------------- |  | --------------------------------------- | ------ | ------ |  | ----- | ------ | ------ |  | ----- | ------ |  |  | - | ------ |  |  | - | ------ | 
|                           |  | First                                   |        | Second |  | Third |        | Fourth |  | Total
|                           |  |                                         |        |        |  |       |        |        |  |      
|                           |  |                                        
|                           |  | (In thousands, except per Unit amounts)
|2003                       |  |                                         |        |        |  |       |        |        |  |       |        |  |  |   |        |  |  |   |        | 
|Operating revenues         |  | $                                       | 8,192  |        |  | $     | 12,546 |        |  | $     | 12,821 |  |  | $ | 11,603 |  |  | $ | 45,162 | 
|Operating profit (loss)    |  | $                                       | (1,328 | )      |  | $     | 2,194  |        |  | $     | 2,300  |  |  | $ | 954    |  |  | $ | 4,120  | 
|Net income (loss)          |  | $                                       | (1,998 | )      |  | $     | 1,608  |        |  | $     | 1,691  |  |  | $ | 651    |  |  | $ | 1,952  | 
|Net income (loss) per Unit |  | $                                       | (14.73 | )      |  | $     | 11.86  |        |  | $     | 12.46  |  |  | $ | 4.81   |  |  | $ | 14.40  | 
|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  | 

29



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##### Table of Contents








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

Not applicable.






|         |                        
|-------- | -----------------------
|Item 9A. | Controls and Procedures

The General Partners management conducted
an evaluation, under the supervision and with the participation
of the Partnerships Principal Executive Officer and
Principal Accounting Officer, of the effectiveness of the design
and operation of the Partnerships disclosure controls and
procedures as of December 31, 2003. Based on this
evaluation, the Principal Executive Officer and Principal
Accounting Officer concluded that the Partnerships
disclosure controls and procedures are effective in alerting
them in a timely manner to material information required to be
included in the Partnerships SEC reports. There have been
no changes in the Partnerships internal controls over
financial reporting that occurred during the period covered by
this report that has materially affected, or is reasonably
likely to materially affect, the Partnerships internal
control over financial reporting.




PART III






|         |                                                        
|-------- | -------------------------------------------------------
|Item 10. | Directors and Executive Officers of the
    Registrant.

The Chicago Partnership has no directors or
officers. Business policy-making functions of the Chicago
Partnership 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:

|                    |  |     |    |       |  |                                                                   
|------------------- |  | --- | -- | ----- |  | ------------------------------------------------------------------
|Name                |  | Age |    | Title
|                    |  |     |    |      
|Theodore W. Darnall |  |     | 46 |       |  | President, Assistant Secretary and Principal
    Executive Officer
|Alan M. Schnaid     |  |     | 37 |       |  | Vice President, Principal Accounting Officer and
    Director     
|Tom Smith           |  |     | 51 |       |  | Director                                                          

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
Division 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, Real Estate Group, 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.

30



---



##### Table of Contents



The following persons are directors and/or
officers of 909 Corp. as indicated:

|                    |  |     |    |       |  |                                                                   
|------------------- |  | --- | -- | ----- |  | ------------------------------------------------------------------
|Name                |  | Age |    | Title
|                    |  |     |    |      
|Theodore W. Darnall |  |     | 46 |       |  | President, Assistant Secretary and Principal
    Executive Officer
|Alan M. Schnaid     |  |     | 37 |       |  | Vice President, Principal Accounting Officer and
    Director     
|Tom Smith           |  |     | 51 |       |  | Director                                                          

Corporate Governance

The General Partner does not have a
separately-designated standing audit committee. However, the
entire Board of Directors of the General Partner acts as the
General Partners audit committee as specified in
section 3(a)(58)(B) of the Securities Exchange Act of 1934,
as amended (the Exchange Act). The Board of
Directors of the General Partner has determined that Alan M.
Schnaid is the audit committee financial expert, as defined by
applicable federal securities laws. The Board of Directors of
the General Partner has determined that Mr. Schnaid is not
independent, as defined by applicable federal
securities laws and the Listing Requirements of the
New York Stock Exchange, Inc.

The Partnership has a Finance Code of Ethics
applicable to its Principal Executive Officer, Principal
Accounting Officer and persons performing similar functions. The
text of this code of ethics may be found on Starwoods
website at
http://www.starwood.com/corporate/investor-relations.html.
Amendments to and waivers from the Finance Code of Ethics that
require disclosure under applicable SEC rules will be posted on
the Starwood website. You may obtain a free copy of this code in
print by contacting our investor relations manager, Phoenix
American, at 1-800-323-5888.






|         |                        
|-------- | -----------------------
|Item 11. | Executive Compensation.

As noted in Item 10 above, the Chicago
Partnership has no directors, officers or other employees.
However, under the respective limited partnership agreements for
the Chicago Partnership, Westin Realty, as General Partner of
the Partnership, is responsible for the administration and
management of the Partnership and 909 Corp., as general
partner of the Chicago Partnership, is responsible for the
administration and management of the Chicago Partnership. The
general partners, however, receive no fees for providing these
services to the Partnership. Moreover, neither the Partnership
nor the Chicago Partnership are responsible for the payment of
any executive compensation to the officers of the general
partners.

31



---



##### Table of Contents








|         |                                                                    
|-------- | -------------------------------------------------------------------
|Item 12. | Security Ownership of Certain Beneficial
    Owners and Management.

The following tables show the number of Units
beneficially owned by all persons known to the
Partnership to be the beneficial owners of more than 5% of the
outstanding Units at March 8, 2004. The information in the
tables is based upon information provided by each of the
Schedules 13D filed with the SEC by each of the beneficial
owners of more than 5% of the outstanding Units.

|                                                                                                                                                                        |                                                         |            |        |          |  |  |       |  | 
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------------------------- | ---------- | ------ | -------- |  |  | ----- |  | 
|                                                                                                                                                                        |                                                         | Amount of  |        |         
|                                                                                                                                                                        |                                                         | Beneficial |        | Percent 
|Name and Address of Beneficial Owner                                                                                                                                    |                                                         | Ownership  |        | of Class
|                                                                                                                                                                        |                                                         |            |        |         
|5% Unitholders                                                                                                                                                          |                                                         |            |        |          |  |  |       | 
|WHLP Acquisition LLC and Starwood
    Hotels & Resorts Worldwide, Inc.(1)                                                                                               |                                                         |            | 33,799 |          |  |  | 24.9% | 
|                                                                                                                                                                        | 1111 Westchester Avenue
    White Plains, NY 10604      |            |        |          |  |  |       |  | 
|Kalmia Investors, LLC, Smithtown Bay, LLC, Merced
    Partners Limited Partnership, Global Capital
    Management, Inc., Michael J. Frey and John D.
    Brandenborg(2) |                                                         |            | 25,077 |          |  |  | 18.5% | 
|                                                                                                                                                                        | 601 Carlson Parkway, Suite 200
    Minnetonka, MN 55304 |            |        |          |  |  |       |  | 
|The Harmony Group II, LLC(3)                                                                                                                                            |                                                         |            | 10,502 |          |  |  | 7.7%  | 
|                                                                                                                                                                        | 410 Park Avenue, Suite 540
    New York, NY 10022       |            |        |          |  |  |       |  | 



---



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Based on information contained in a
    Schedule 13D, dated February 20, 2004, filed with
    respect to the Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|   
|(2) | Based on information contained in a
    Schedule 13D/A, dated February 9, 2004, filed with
    respect to the Partnership.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 
|   
|(3) | Based on information contained in a
    Schedule 13D, dated December 17, 2003, filed with
    respect to the Partnership by Madison Liquidity
    Investors 103, LLC, Madison/WP Value Fund IV, LLC,
    Madison Avenue Investment Partners, LLC, Windy City Investments,
    LLC, Madison Windy City Investments, LLC, Madison Investment
    Partners 20, LLC, Madison Capital Group, LLC, Madison
    Liquidity Investors 100, LLC, Madison Liquidity
    Investors 120, LLC, Madison Opportunity Fund, LLC, Madison
    Investment Partners 13, LLC, Madison Liquidity
    Investors 112, LLC, Madison Value Fund, LLC, Madison
    Investment Partners 11, LLC, Madison Liquidity
    Investors 111, LLC, Madison/ WP Value Fund V, LLC,
    Madison Investment Partners 10, LLC, Madison Liquidity
    Investors 119, LLC, Madison/ WP Value Fund VII, LLC,
    Madison Investment Partners 18, LLC, The Madison Avenue
    Capital Group II, LLC, The Harmony Group II, LLC and
    Bryan E. Gordon (collectively, the Windy City
    Entities). The Partnership believes that although the
    Windy City Entities have not filed an amendment to their
    Schedule 13D, the Windy City Entities have tendered their
    shares and no longer collectively beneficially own five percent
    or more of the Units as of the date of this filing.






|         |                                                    
|-------- | ---------------------------------------------------
|Item 13. | Certain Relationships and Related
    Transactions.

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 8 of the Notes to Consolidated Financial
Statements included under Item 8, Financial
Statements and Supplementary Data.






|         |                                           
|-------- | ------------------------------------------
|Item 14. | Principal Accountant Fees and
    Services

Summary of Auditors Fees for
2002

Audit Fees.Ernst & Young LLPs
fees for the Partnerships annual audit were $68,000 in
2003 and $57,000 in 2002.

Audit-Related Fees.Ernst & Young LLP did not
have any audit-related fees in 2003 or 2002.

Tax Fees.Ernst & Young LLP did not
have any fees related to tax compliance, tax advice, and tax
planning services for the Partnership in 2003 or in 2002.

All Other Fees.Ernst & Young LLP had no
other fees in 2003 and 2002.

32



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##### Table of Contents



Pre-Approval Policies and Procedures

The Board of Directors of the General Partner,
acting as the Partnerships audit committee as specified in
section 3(a)(58)(B) of the Exchange Act, has adopted a
policy requiring pre-approval by the committee of all services
(audit and non-audit) to be provided to the Partnership by its
independent auditors. In accordance with that policy, the Board
of Directors has given its approval for the provision of audit
services by Ernst & Young LLP for fiscal 2004. All
other services must be specifically pre-approved by the full
Board of Directors of the General Partner or by a designated
member of the Board of Directors of the General Partner who has
been delegated the authority to pre-approve the provision of
services.




PART IV






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

(a) 1.     Financial
Statements.

The following documents are filed as part of this
report:

|                                                           |  |      |    | 
|---------------------------------------------------------- |  | ---- | -- | 
|Document                                                   |  | Page
|                                                           |  |     
|Report of Independent Accountants                          |  |      | 17 | 
|Predecessor Auditors Report                               |  |      | 18 | 
|Consolidated Balance Sheets                                |  |      | 19 | 
|Consolidated Statements of Income                          |  |      | 20 | 
|Consolidated Statements of Partners Capital
    (Deficit) |  |      | 21 | 
|Consolidated Statements of Cash Flows                      |  |      | 22 | 
|Notes to Consolidated Financial Statements                 |  |      | 23 | 

(a) 2.     Financial
Statement Schedules.

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.

(a) 3.     Exhibits.

| |  |     |  |                                                          |  |                                                                                                                                                                
| |  | --- |  | -------------------------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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)                                             

33



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##### Table of Contents



| |  |  |  |       |  |                                                                                                                                                                                                                    
| |  |  |  | ----- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  |  |  | 10.6  |  | Assignment and Assumption of Agreements between
    Westin Hotel Company and 909 North Michigan Avenue
    Corporation.(6)                                                                                         
| |  |  |  | 10.7  |  | 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)
| |  |  |  | 10.8  |  | First Amendment to Deed of Trust, Financing
    Statement, Security Agreement and Fixture Filing dated as of
    June 2, 1994.(3)                                                                                  
| |  |  |  | 10.9  |  | 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)                                       
| |  |  |  | 10.10 |  | Promissory Note of 909 North Michigan Avenue
    Corporation dated August 21, 1986 to Teacher Retirement
    System of Texas.(1)                                                                                   
| |  |  |  | 10.11 |  | First Amendment to Promissory Note of
    909 North Michigan Avenue Corporation dated as of
    June 2, 1994.(3)                                                                                                   
| |  |  |  | 10.12 |  | Second Amendment to Promissory Note of
    909 North Michigan Avenue Corporation dated as of
    May 27, 1997.(5)                                                                                                  
| |  |  |  | 10.13 |  | Mortgage and Security Agreement dated
    August 21, 1986 for The Westin Hotel, Chicago.(1)                                                                                                                        
| |  |  |  | 10.14 |  | First Amendment to Mortgage and Security
    Agreement dated as of June 2, 1994.(3)                                                                                                                                
| |  |  |  | 10.15 |  | Second Amendment to Mortgage and Security
    Agreement dated as of May 27, 1997.(5)                                                                                                                               
| |  |  |  | 10.16 |  | Chicago FF&E Escrow Agreement dated as of
    June 2, 1994. (3)                                                                                                                                                    
| |  |  |  | 10.17 |  | Promissory Note dated June 2, 1994 in favor
    of Westin Realty Corp. by Westin Hotels Limited
    Partnership.(3)                                                                                                
| |  |  |  | 10.18 |  | Loan Agreement dated as of June 2, 1994
    between Westin Hotels Limited Partnership and Westin Realty
    Corp.(3)                                                                                               
| |  |  |  | 10.19 |  | Second Amendment to Amended and Restated
    Management Agreement of The Westin Chicago Limited
    Partnership.(7)                                                                                                
| |  |  |  | 10.20 |  | Third Amendment to Amended and Restated
    Management Agreement of The Westin Chicago Limited
    Partnership.(9)                                                                                                 
| |  |  |  | 10.21 |  | Purchase and Sale Agreement, dated
    January 18, 2000, between The Westin St. Francis Limited
    Partnership and BRE/ St. Francis L.L.C.(8)                                                                     
| |  |  |  | 31.1  |  | Certification Pursuant to Rule 13a-14(a)
    under the Securities Exchange Act of 1934  Principal
    Executive Officer.(10)                                                                                      
| |  |  |  | 31.2  |  | Certification Pursuant to Rule 13a-14(a)
    under the Securities Exchange Act of 1934  Principal
    Accounting Officer.(10)                                                                                     
| |  |  |  | 32.1  |  | Certification Pursuant to Section 1350 of
    Chapter 63 of Title 18 of the United States
    Code  Principal Executive Officer.(10)                                                                              
| |  |  |  | 32.2  |  | Certification Pursuant to Section 1350 of
    Chapter 63 of Title 18 of the United States
    Code  Principal Accounting Officer.(10)                                                                             



---



| |     |                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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.                                                                                                                   

34



---



##### Table of Contents





| |     |                                                                                                                                                                                     
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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) | Incorporated by reference to Exhibit 10.26
    to the Partnerships 2001 Annual Report on Form 10-K.                                                                                



|     |                
|---- | ---------------
|(10) | Filed herewith.



|    |                     
|--- | --------------------
|(b) | Reports on Form 8-K.

During the fourth quarter of 2003, the
Partnership furnished the following Current Report on
Form 8-K:



| |   |                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------
| |  | October 14, 2003 reporting under
    Items 7 and 9 its press release announcing results of
    operations and financial condition for September 2003.
|
| |  | November 18, 2003 reporting under
    Items 7 and 9 its press release announcing results of
    operations and financial condition for October 2003. 

35



---



##### Table of Contents



SIGNATURES

Pursuant to the requirements of Section 13
or 15(d) of the Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized on March 11, 2004.



| |                                  
| | ---------------------------------
| | WESTIN HOTELS LIMITED PARTNERSHIP
| | (a Delaware limited partnership) 



| |     |                     
| | --- | --------------------
| | By: | WESTIN REALTY CORP.,

| |                         
| | ------------------------
| | Its sole General Partner



| |     |                    
| | --- | -------------------
| | By: | /s/ ALAN M. SCHNAID

| |                
| | ---------------
| |                
| | Alan M. Schnaid
| | Vice President 

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:

|                                           |  |                                                                                                                                           |  |                |  | 
|------------------------------------------ |  | ----------------------------------------------------------------------------------------------------------------------------------------- |  | -------------- |  | 
|                                           |  |                                                                                                                                           |  |               
|Signature                                  |  | Title                                                                                                                                     |  | Date          
|                                           |  |                                                                                                                                           |  |               
|                                          
|/s/ THEODORE W. DARNALLTheodore W. Darnall |  | President, Assistant Secretary and Principal
    Executive Officer of Westin Realty Corp. (Principal Executive
    Officer of Registrant) |  | March 11, 2004
|                                          
|/s/ ALAN M. SCHNAIDAlan M. Schnaid         |  | Vice President, Principal Accounting Officer and
    Director of Westin Realty Corp. (Principal Accounting Officer of
    Registrant)     |  | March 11, 2004
|/s/ TOM SMITHTom Smith                     |  | Director of Westin Realty Corp.                                                                                                           |  | March 11, 2004

36



---



##### Table of Contents



INDEX TO EXHIBITS

| |       |  |  |                                                                                                                                                                                                                    
| | ----- |  |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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)                                                                                     
| | 10.1  |  |  | 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)                                                                                                 
| | 10.6  |  |  | Assignment and Assumption of Agreements between
    Westin Hotel Company and 909 North Michigan Avenue
    Corporation.(6)                                                                                         
| | 10.7  |  |  | 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)
| | 10.8  |  |  | First Amendment to Deed of Trust, Financing
    Statement, Security Agreement and Fixture Filing dated as of
    June 2, 1994.(3)                                                                                  
| | 10.9  |  |  | 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)                                       
| | 10.10 |  |  | Promissory Note of 909 North Michigan Avenue
    Corporation dated August 21, 1986 to Teacher Retirement
    System of Texas.(1)                                                                                   
| | 10.11 |  |  | First Amendment to Promissory Note of 909 North
    Michigan Avenue Corporation dated as of June 2,
    1994.(3)                                                                                                   
| | 10.12 |  |  | Second Amendment to Promissory Note of 909 North
    Michigan Avenue Corporation dated as of May 27,
    1997.(5)                                                                                                  
| | 10.13 |  |  | Mortgage and Security Agreement dated
    August 21, 1986 for The Westin Hotel, Chicago.(1)                                                                                                                        
| | 10.14 |  |  | First Amendment to Mortgage and Security
    Agreement dated as of June 2, 1994.(3)                                                                                                                                
| | 10.15 |  |  | Second Amendment to Mortgage and Security
    Agreement dated as of May 27, 1997.(5)                                                                                                                               
| | 10.16 |  |  | Chicago FF&E Escrow Agreement dated as of
    June 2, 1994. (3)                                                                                                                                                    
| | 10.17 |  |  | Promissory Note dated June 2, 1994 in favor
    of Westin Realty Corp. by Westin Hotels Limited
    Partnership.(3)                                                                                                
| | 10.18 |  |  | Loan Agreement dated as of June 2, 1994
    between Westin Hotels Limited Partnership and Westin Realty
    Corp.(3)                                                                                               
| | 10.19 |  |  | Second Amendment to Amended and Restated
    Management Agreement of The Westin Chicago Limited
    Partnership.(7)                                                                                                
| | 10.20 |  |  | Third Amendment to Amended and Restated
    Management Agreement of The Westin Chicago Limited
    Partnership.(9)                                                                                                 
| | 10.21 |  |  | Purchase and Sale Agreement, dated
    January 18, 2000, between The Westin St. Francis Limited
    Partnership and BRE/ St. Francis L.L.C.(8)                                                                     
| | 31.1  |  |  | Certification Pursuant to Rule 13a-14(a)
    under the Securities Exchange Act of 1934  Principal
    Executive Officer.(10)                                                                                      
| | 31.2  |  |  | Certification Pursuant to Rule 13a-14(a)
    under the Securities Exchange Act of 1934  Principal
    Accounting Officer.(10)                                                                                     



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##### Table of Contents



| |      |  |  |                                                                                                                                       
| | ---- |  |  | --------------------------------------------------------------------------------------------------------------------------------------
| | 32.1 |  |  | Certification Pursuant to Section 1350 of
    Chapter 63 of Title 18 of the United States
    Code  Principal Executive Officer.(10) 
| | 32.2 |  |  | Certification Pursuant to Section 1350 of
    Chapter 63 of Title 18 of the United States
    Code  Principal Accounting Officer.(10)



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| |     |                                                                                                                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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) | Incorporated by reference to Exhibit 10.26
    to the Partnerships 2001 Annual Report on Form 10-K.                                                                                                                                               



|     |                
|---- | ---------------
|(10) | Filed herewith.