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SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

OR

Commission File Number: 0-15097

WESTIN HOTELS LIMITED PARTNERSHIP

Delaware

91-1328985

1111 Westchester Avenue

1-800-323-5888

     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 x     No o

      Indicate the number of shares (Units) outstanding of each of the issuer’s classes of common stock (Units), as of the latest practicable date:

135,600 limited partnership Units issued and outstanding

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PART I. FINANCIAL INFORMATION

WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED BALANCE SHEETS

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

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WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF OPERATIONS

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

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WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENT OF PARTNERS’ CAPITAL (DEFICIT)

The accompanying notes are an integral part of this consolidated financial statement.

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WESTIN HOTELS LIMITED PARTNERSHIP

CONSOLIDATED STATEMENTS OF CASH FLOWS

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

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WESTIN HOTELS LIMITED PARTNERSHIP

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. Basis of Presentation

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

      The consolidated financial statements and related information for the periods ended September 30, 2002 and September 30, 2001 are unaudited. In the opinion of the general partner of the Partnership (“General Partner”), all adjustments necessary for a fair statement of the results of these interim periods have been included. All such interim adjustments are of a normal recurring nature. The results of operations for the periods ended September 30, 2002 and September 30, 2001 should not be regarded as indicative of the results that may be expected for the full fiscal year ending December 31, 2002.

Note 2. Further Information

      Reference is made to “Notes to Consolidated Financial Statements” contained in the Partnership’s Form 10-K filed for the year ended December 31, 2001 for information regarding significant accounting policies, Partnership organization, accrued expenses, long-term obligations, the employee benefit plan, operating leases, commitments and contingencies and related party transactions. The consolidated financial statements should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included elsewhere herein.

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Item 2.     Management’s Discussion and Analysis of Financial Condition and Results of Operations.

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 forward-looking statements may include but are not limited to, statements relating to the Partnership’s objectives, strategies and plans and all statements (other than statements of historical fact) that address actions, events or circumstances that the Partnership or Hotel Partnerships or their respective general partners and their officers or directors expect, believe or intend will occur in the future. Forward looking statements are not guarantees of future performance and 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, risks and uncertainties associated with the following: the impacts of the September 11, 2001 terrorist attacks in New York, Washington, D.C. and Pennsylvania (the “September 11 Attacks”); competition within the lodging industry, both on a local and national level; general economic conditions, including the duration and severity of the recent downturn in the economy; the seasonality of the hotel business; general real estate and economic conditions; the availability of capital for renovations; changes in current laws, rules or regulations of government or other regulatory bodies; and the other risks and uncertainties set forth in the annual, quarterly and current reports of the Partnership. The Partnership undertakes no obligation to publicly update or revise any forward-looking statements to reflect current or future events or circumstances.

General

      The Michigan Avenue’s primary market focuses are 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. The Michigan Avenue generally experiences seasonal trends, with the lowest occupancy levels occurring during the first quarter, followed by higher occupancies during the last three quarters of the year.

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

      The Partnership Agreement requires that the General Partner use its best efforts to sell or refinance the Hotels by the end of 2001. On April 26, 2000, upon obtaining consent of a majority of the limited partners, the sale of the St. Francis was completed. In February 2001, the Partnership retained Jones Lang LaSalle Hotels, a nationally recognized broker (“JLL”), to market the Michigan Avenue for sale. In April 2001, formal marketing materials were distributed and discussions with several potential purchasers subsequently commenced. After the occurrence of the September 11 Attacks, certain of the most qualified potential purchasers indicated they would expect significant discounts on their preliminary offers made prior to the attacks. Based on the unstable and depressed hotel real estate market resulting from the weakened general worldwide economic environment, the General Partner did not feel that it was in the best interest of the limited partners to sell the Michigan Avenue in late 2001 or 2002.

      While the General Partner continues to explore a sale of the property, it has also engaged JLL to assist in exploring a refinancing and will continue to make efforts to pursue a sale or refinancing transaction that it believes is in the best interest of the limited partners.

      The General Partner cautions limited partners that there can be no assurance that: (i) the General Partner will be able to sell or refinance the hotel, and, if sold or refinanced, the timing of such a transaction, or

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Results of Operations

      Management’s Discussion and Analysis of Financial Condition and Results of Operations 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, property and equipment, financing operations, retirement benefits and contingencies and litigation.

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

(1)

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

     Three Months Ended September 30, 2002 Compared with Three Months Ended September 30, 2001. The Michigan Avenue had net income of approximately $1,073,000 for the three months ended September 30, 2002, a 48.0% or $348,000 increase in net income from the same period of 2001. EBITDA for the three months ended September 30, 2002 of $3,817,000 represents a 12.8% or $434,000 increase from the same period of 2001.

      The Michigan Avenue’s rooms revenue for the three months ended September 30, 2002 was $8,150,000 which represents a 0.2% or $17,000 decrease from the same period of 2001. REVPAR for the three months ended September 30, 2002 decreased slightly to $117.96, as compared to $118.20 in the same period of 2001. The rooms revenue and REVPAR decreases when compared to the prior year were due to the continued decline in transient travel revenues with respect to both volume and average room rates as a result of the weakened U.S. and global economies experienced in July and August of 2002, with noted increases in revenues for September of 2002 as compared to September 2001 as a result of the immediate impact of the September 11 Attacks on the prior year’s results. The Michigan Avenue reported a decrease in average daily room rate of 9.7% to $147.96, while its occupancy rate experienced an increase of 7.6 percentage points to 79.7%, attributed to the partial return of group business. The Michigan Avenue’s rooms department profit margin for the three months ended September 30, 2002 decreased by 100 basis points to 77.0% when

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      The Michigan Avenue’s food and beverage revenue of $2,162,000 for the three months ended September 30, 2002 increased approximately 23.9% or $417,000 as compared to $1,745,000 in the same period of 2001. This increase is primarily attributed to the additional spend resulting from the increase in occupancy in September 2002 as compared to September 2001. The Michigan Avenue’s food and beverage department profit margin for the three months ended September 30, 2002 increased 7.7 percentage points to 20.1% as compared with 12.4% for the same period of 2001, as the food and beverage operations in the three months September 30, 2002, consisted primarily of banquet and catering revenues, which have a higher profit margin than the room service and coffee bar revenues.

      The Michigan Avenue’s operating expenses for the three months ended September 30, 2002 remained primarily consistent at $9,591,000 as compared with $9,472,000 for the same period in 2001. Management fees for the three months ended September 30, 2002 decreased approximately $303,000 to $788,000 when compared to the same period of 2001 due to reduced Partnership Net Operating Cash Flow, as defined in the Partnership Agreement.

      Nine Months Ended September 30, 2002 Compared with Nine Months Ended September 30, 2001. The Michigan Avenue had a net loss of $401,000 for the nine months ended September 30, 2002, compared to net income of $295,000 in the same period of 2001. EBITDA for the nine months ended September 30, 2002 of $7,814,000 represents a 5.6% or $463,000 decrease from the same period of 2001.

      The Michigan Avenue’s rooms revenues for the nine months ended September 30, 2002 were $20,993,000, which represent a 8.3% or $1,898,000 decrease when compared to the rooms revenues from the same period of 2001. REVPAR for the nine months ended September 30, 2002 decreased 8.3% to $102.39 compared to $111.65 in the same period of 2001. This REVPAR decrease was due to the continued decline in transient travel revenues with respect to both volume and average rates as a result of the weakened U.S. and global economies and a higher percentage of discounted rate internet bookings, slightly offset by increased group bookings. The Michigan Avenue’s average daily room rate in the nine months ended September 30, 2002 decreased 10.9% to $148.56 when compared to the same period of 2001. Occupancy rates in the nine months ended September 30, 2002 increased 1.9 points to 68.9% when compared to the same period of 2001. The Michigan Avenue’s rooms department profit margin remained primarily consistent at 76.2% compared to 76.1% for the nine months ended September 30, 2002 and 2001, respectively.

      The Michigan Avenue’s food and beverage revenues of $6,104,000 for the nine months ended September 30, 2002 represent a $537,000 or 9.6% increase compared to the same period of 2001. This increase is due primarily to the banquet and catering revenues generated by the group bookings previously discussed. The Michigan Avenue’s food and beverage department profit margin for the nine months ended September 30, 2002 increased 5.4 percentage points to 20.5% over the same period of 2001 as food and beverage operations in the nine months ended September 30, 2002 consisted primarily of banquet and catering, which have higher profit margins than the room service and coffee bar operations.

      Other operating departments had revenues of $2,695,000 for the nine months ended September 30, 2002, a $459,000 decrease over the same period of 2001, primarily resulting from decreased ancillary revenues.

      The Michigan Avenue’s operating expenses for the nine months ended September 30, 2002 decreased 3.7% to $28,310,000 million. The decrease was due to reduced labor costs commensurate with lower sales volume and cost containment efforts initiated by the Hotel in late 2001. Management fees for the nine months ended September 30, 2002 decreased $484,000 over the same period of 2001 to $2,582,000 million due to reduced Partnership Net Operating Cash Flow, as defined in the Partnership Agreement.

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Liquidity and Capital Resources

      As of September 30, 2002, the Partnership had cash and cash equivalents of $35,923,000, a $3,996,000 increase from December 31, 2001. The increase in cash during the nine months ended September 30, 2002 was due, in part, to the reimbursement of payments for capital improvements from a restricted reserve account, offset by cash distributions to Limited Partners and a payment of the 2001 deferred management fees to Starwood. Total net cash provided by operating activities for the nine months ended September 30, 2002 was $4,223,000.

      Pursuant to the mortgage loan restructuring agreement (the “Restructuring Agreement”), the Partnership is required to make quarterly deposits to Furniture, Fixtures and Equipment (“FF&E”) Reserve Accounts, as defined in the Restructuring Agreement, based upon 5.0% of gross revenues through the maturity of the mortgage loan in 2006. The Michigan Avenue’s FF&E Reserve Account balance of $950,000 is included in other assets in the accompanying consolidated balance sheet as of September 30, 2002.

      The Restructuring Agreement also requires that the Hotel make deposits into a tax escrow account for payment of real and personal property taxes. The balance of this tax escrow account is included in cash and cash equivalents in the accompanying consolidated balance sheets.

      The Michigan Avenue spent $804,000 on capital expenditures during the three months ended September 30, 2002 ($1,577,000 in the nine months ended September 30, 2002), primarily related to the completion of the Hotel lobby renovation. All capital projects have been approved by the mortgage loan lender, as required by the Restructuring Agreement.

      Principal payments of approximately $441,000 and interest payments of $1,878,000 were made on the mortgage loan during the nine months ended September 30, 2002. Scheduled principal and interest payments for the remainder of 2002 total approximately $773,000.

      At this time, the Partnership anticipates that cash on hand and cash flow from operations will provide adequate funding for 2002 capital expenditures and principal and interest payments on the mortgage loan. Cash distributions of $6.72 per Unit were paid on March 16, 2002, June 14, 2002 and September 13, 2002. Future distributions will be based on Available Net Cash Flow, as defined in the Partnership Agreement, and are dependent upon the Net Cash Flow, as defined, generated by the Hotel and the adequacy of cash reserves. 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 Partnership’s limited partners within 75 days of the end of the quarter.

      As of September 30, 2002, an evaluation was performed under the supervision and with the participation of the Partnership’s management, including the President, Principal Executive Officer and Vice President, of the effectiveness of the design and operation of the Partnership’s disclosure controls and procedures. Based on that evaluation, the Partnership’s management, including the President, Principal Executive Officer and Vice President, concluded that the Partnership’s disclosure controls and procedures were effective as of September 30, 2002. There have been no significant changes in the Partnership’s internal controls or in other factors that could significantly affect internal controls subsequent to September 30, 2002.

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PART II. OTHER INFORMATION

Affiliate Transactions

      The Partnership reimbursed the General Partner for third-party general and administrative expenses incurred on behalf of the Partnership totaling approximately $47,000 during the third quarter of 2002 primarily for investor relations and external legal fees. Affiliates of the General Partner, acting as manager of the Hotel, received base management fees of approximately $396,000 in the third quarter of 2002. The Partnership accrued incentive management fees of approximately $392,000 for the third quarter of 2002. Marketing fees of approximately $169,000 were paid by the Partnership to the Hotel Manager for the third quarter of 2002.

Investor Relations

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

Unit Sales

      Through November 5, 2002, the General Partner has processed requests for the transfer of 1,670 Units. Sale requests processed through the date of this filing for 783 Units were in conjunction with tender offers at a range in price of $300 to $500 per Unit. The remaining 887 Unit sale requests were completed through limited partnership exchanges at a range in price of $250 to $628 per Unit. The per Unit sales prices are the actual contracted price agreed upon by the respective limited partner and new purchaser. This price does not reflect any reductions in the sales price due to distributions made to the limited partner, as specified by some of the mini-tender offers. Relying on the protection of the 5% safe harbor pursuant to Section 7704 of the Internal Revenue Code, the General Partner will suspend Unit sales once 6,848 transfer requests are completed. The General Partner, however, will continue to accept paperwork for Unit sales for processing in 2003.

Item 6.     Exhibits and Reports on Form 8-K.

(a) Exhibits.

(1)	Filed herewith

(b) Reports on Form 8-K.

      No reports on Form 8-K were filed during the third quarter of 2002.

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SIGNATURES

      Pursuant to the requirements 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.

	WESTIN HOTELS LIMITED PARTNERSHIP
	(a Delaware limited partnership)

	By:	WESTIN REALTY CORP.,

	Its sole General Partner

	By:	/s/ THEODORE W. DARNALL

	Theodore W. Darnall
	President, Principal Executive Officer

	By:	/s/ ALAN M. SCHNAID

	Alan M. Schnaid
	Vice President

Date: November 5, 2002

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I, Theodore W. Darnall, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of Westin Hotels Limited Partnership;
	2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

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

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

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

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

Date: November 5, 2002

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

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I, Alan M. Schnaid, certify that:

	1.	I have reviewed this quarterly report on Form 10-Q of Westin Hotels Limited Partnership;
	2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report;
	3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
	4.	The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:

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

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

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

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

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

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

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

Date: November 5, 2002

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

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Exhibit Index

(1)	Filed herewith

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