Industry risk report hospitality.

INDUSTRY RISK REPORT HOSPITALITY

The hotel operators in this group count the weather risks of coastal
locations as one of their strongest concerns. Restaurant companies
that are pushing for market share in Asia must continue to be on the
lookout for bird flu and other pandemics that could impact food
supplies. Gaming companies have to keep a sharp eye on their flanks
as gaming competition continues to intensify globally.

Company Name            Location                 CRO

Marriott                Bethesda, Md.            Hector Mastrapa, V.P.
International Inc.                               Insurance

Harrah's                Las Vegas, Nev.          Lance Ewing, V.P.,
Entertainment Inc.                               Risk Management

Yum! Brands Inc.        Louisville, Ky.          Connie Hayes,
                                                 Assistant Treasurer,
                                                 Risk Management
                                                 and Cash Management

Starbucks Corp.         Seattle, Wash.           Steve Legg, Director
                                                 of Risk Management

MGM Mirage              Las Vegas, Nev.          Paula Gentile, V.P.
                                                 of Operations and
                                                 General Counsel

Starwood Hotels &       White Plains, N.Y.       Steve Truono, V.P.
Resorts Inc.                                     Global Risk Management

Brinker International   Dallas, Texas            Kim Sanders, Director
Inc.                                             of Risk Management

Wyndham Worldwide       Parsipanny, N.J.         James Iervolino, V.P.
Corp.                                            of Risk Management
                                                 and Insurance

Las Vegas Sands Corp.   Las Vegas, Nev.          Susan Waters, Risk
                                                 Manager

Penn National           Wyomissing, Pa.          Jacques Arragon,
Gaming Inc.                                      Director of Risk
                                                 Management

                                                 2007 Total
Company Name            CFO                      Revenue

Marriott                Carl T. Berquist, EVP    $12.99 billion
International Inc.      Financial Information
                        and Enterprise Risk
                        Management

Harrah's                Jonathan Halkyard, CFO   $10.82 billion
Entertainment Inc.

Yum! Brands Inc.        Richard Carucci, CFO     $10.41 billion

Starbucks Corp.         Peter Bocian, EVP, CAD   $9.41 billion
                        & CFO

MGM Mirage              James Murren,            $7.69 billion
                        President and CFO

Starwood Hotels &       Vasant Prabhu, EVP &     $6.15 billion
Resorts Inc.            CFO

Brinker International   Charles Sonsteby, EVP    $4.37 billion
Inc.

Wyndham Worldwide       Virginia Wilson, EVP &   $4.36 billion
Corp.                   CFO

Las Vegas Sands Corp.   Robert Rozek, EVP &      $3.10 billion
                        CFO

Penn National           William Clifford, CFO    $2.43 billion
Gaming Inc.

                        No. of                   Primary
Company Name            Employees                Broker

Marriott                151,000                  Beecher Carlson,
International Inc.                               Marsh

Harrah's                85,000                   Beecher Carlson,
Entertainment Inc.                               Willis

Yum! Brands Inc.        301,000                  Lockton

Starbucks Corp.         172,000                  Marsh

MGM Mirage              67,400                   Aon, Willis

Starwood Hotels &       155,000                  Aon, Regions
Resorts Inc.

Brinker International   113,900                  Marsh
Inc.

Wyndham Worldwide       33,200                   Aon
Corp.

Las Vegas Sands Corp.   28,000                   Aon, Kaercher

Penn National           15,289                   Marsh
Gaming Inc.

Company Name            Captives

Marriott                C.L. Intl. Insurance Co. Ltd.
International Inc.      (Bermuda), F.L. Insurance
                        Corp. (Hawaii), Marquis
                        Insurance Corp. (Hawaii)

Harrah's                Aster Insurance Ltd.
Entertainment Inc.      (Bermuda) Red Oak Ltd.
                        (Barbados), Romulus Risk
                        & Insurance Co. (Nevada)

Yum! Brands Inc.        Glenharney Insurance Co.
                        (Vermont)

Starbucks Corp.         Olympic Casualty
                        Insurance Co. (Vermont)

MGM Mirage              MGMM Insurance Co. (Vt.
                        M3 Nevada (Nevada)

Starwood Hotels &       Westel Insurance Co. (Vt.)
Resorts Inc.

Brinker International   Brinker Insurance Co. Ltd.
Inc.                    (Bermuda)

Wyndham Worldwide       No
Corp.

Las Vegas Sands Corp.   No

Penn National           No
Gaming Inc.

Company Name                  Risk Exposure:

Marriott International Inc.   As the owner or franchiser of numerous
                              lodgings located along desirable,
                              shorefront locations around the world,
                              Marriott Corporation properties are
                              exposed to acts of nature such as
                              tsunamis, earthquakes and hurricanes.
                              The company is also exposed
                              to such construction project risks as
                              workers' compensation and the
                              availability and cost of capital for
                              construction projects.

Harrah's Entertainment Inc.   As the owner of 48 casinos, domestically
                              and internationally, Harrah's faces
                              business risk from the global expansion
                              of gaming in general. The company also
                              faces management challenges as it
                              continues to integrate properties from
                              its acquisition of Ceasars and the
                              London Clubs International.

Yum! Brands Inc.              As a company that serves fried poultry
                              extensively throughout China and other
                              global locations, Yum! Brands considers
                              the possibility of avian flu outbreaks
                              to be a major point of concern. In
                              addition, the company has to guard
                              against outbreaks of E. Coli,
                              salmonella, trichinosis and other
                              food-borne illnesses.

Starbucks Corp.               Starbucks is expanding aggressively and
                              is counting on China to be its premier
                              international market. As such the
                              company is exposed to risks inherent
                              with cooperating with the Chinese
                              government. Among those risks are the
                              interpretation of laws and regulations
                              and enforcability of intellectual
                              property protection.

MGM Mirage                    MGM's primary market risk is interest
                              rate risk associated with the company's
                              long-term debt The company also owns
                              properties along the gulf coast region
                              that are exposed to wind and flood
                              damage from hurricanes.

Starwood Hotels & Resorts     The company counts scarcity scarcity of
                              capital reduced travel due to acts of
                              terrorism and the financial condition
                              of third-party owners as significant
                              risks. The company also lists
                              difficulties in monitoring the
                              unauthorized use of its intellectual
                              property as an important risk management
                              concern. In fiscal 2007, Starwood
                              subsidiaries generated $2 million in
                              revenues from hotels in Syria. The U.S.
                              considerers Syria a state sponsor
                              of terrorism.

Brinker International Inc.    As a food purveyor, under such brand
                              names as Chili's Bar & Grill and
                              Romano's Macaroni Grill, Brinker is
                              exposed to the threats, real or
                              perceived, posed by avian flu and
                              additional consumer perceptions of
                              product safety.

Wyndham Worldwide Corp.       Key risks for Wyndham are development
                              projects where the company has
                              significant construction and seasonal
                              fluctuations in the company business.
                              Vicarious liability claims are also big
                              because Wyndham is the world's largest
                              hotel franchise company. Because the
                              majority of the company's locations are
                              coastal, wind, flood and coastal
                              quake risks are also big for Wyndham.

Las Vegas Sands Corp.         The company lists ongoing construction
                              projects, such as the Cotai Strip,
                              Marina Bay Sands and Sands Bethworks as
                              presenting significant risks. The
                              corporation also lists global or
                              regional pandemics as a significant
                              risk. I cites the impact the 2003
                              outbreak of SARS in some Asian
                              countries had on the frequency of
                              tourist travel in that region and in
                              particular the negative impact I had on
                              tourist traffic to Macao, where the
                              company owns and operates a 163,000
                              square-foot casino.

Penn National Gaming Inc.     Although I owns 17 facilities, a
                              substantial amount of Penn National's
                              revenue is derived from just two of its
                              properties, the Charles Town, W.Va.,
                              racetrack and the Argosy Casino in
                              Lawrenceburg, Ind. With the increase in
                              gaming opportunities in nearby Delaware
                              and Pennsylvania, the West Virginia
                              facility is coming under more
                              competitive pressure.

Company Name                  Risk Strategies:

Marriott International Inc.   Marriott has comprehensive property and
                              liability insurance policies which it
                              believes are customary. The company also
                              periodically operates a synthetic fuels
                              operation that it uses to take advantage
                              of federal tax breaks for the production
                              of alternative energy.

Harrah's Entertainment Inc.   As of Dec. 31st, 2007, Harrah's had
                              received $849.5 million in advances and
                              settlements from claims related to
                              hurricane damage to its Gulf Coast
                              properties. The company also had in
                              place at the end of 2007 seven
                              variable-to-fixed rate interest rate
                              swap agreements to help it manage
                              interest rate risk. The company
                              estimates the notional amount of those
                              swaps to be at $1.5 billion.

Yum! Brands Inc.              Operating in the quick-service
                              restaurant industry gives Yum! Brands
                              cash liquidity which it uses to moderate
                              its exposures to interest rate risk.
                              That cash also allows the company to
                              self-insure for many exposures. The
                              company also spends significant
                              resources to combat product
                              contamination.

Starbucks Corp.               Unrestricted cash and liquid securities
                              held within the company's wholly owned
                              captive insurance company to fund claim
                              payouts totalled $98 million as of
                              Sept. 30,2007. The company also
                              evaluates its degree of cash flow risk
                              and how much financial flexibility
                              should be retained for future investment
                              opportunities.

MGM Mirage                    MGM seeks to mitigate its exposure to
                              interest rate risk by managing the mix
                              of its long term borrowings and
                              short-term borrowings.

Starwood Hotels & Resorts     Starwood carries insurance coverage for
                              general liability, property, business
                              interruption and other risks with
                              respect to its owned and leased
                              properties. The company's all-risk
                              property policies provide that coverage
                              is available on a per-occurrence basis.

Brinker International Inc.    The company is self-insured for certain
                              losses related to health, general
                              liability and workers' compensation. I
                              maintains stop-loss coverage with
                              third-party insurers to limit total
                              exposure.

Wyndham Worldwide Corp.       Wyndham uses a commission offset against
                              brokers fees as a way of controlling
                              insurance costs. The company also
                              provides insurance buying support to
                              franchisees and also makes available
                              sub-brokering arrangements for
                              franchisees that don't want to sever a
                              relationship with a local broker.

Las Vegas Sands Corp.         The company maintains accruals for
                              health and workers' compensation
                              self-insurance which are classified in
                              other accrual liabilities in the
                              consolidated balance sheets. The company
                              measures the adequacy of these accruals
                              by evaluating its historical experience
                              and projected trends.

Penn National Gaming Inc.     Penn National retains significant
                              property and business interruption
                              insurance for the two facilities I owns
                              in the hurricane-exposed Gulf coast of
                              Mississippi. The company withholds cash
                              dividends from investors and instead
                              uses that liquidity to moderate its
                              exposure to interest rate risk and to
                              fund further expansion.