Starwood 2003 Annual Report Download - page 45

Stock Sales and Repurchases
At December 31, 2003, Starwood had outstanding approximately 202 million Shares, 1 million
partnership units and 1 million Class A EPS and Class B EPS. Through December 31, 2003, in accordance
with the terms of the Class B EPS, which allow the shareholders to put these units back to the Company at
$38.50 per share for a one-year period beginning on the Ñfth anniversary of the Westin acquisition (ending
January 3, 2004), approximately 528,000 units of Class B EPS and Exchangeable Units were put back to the
Company for approximately $20 million. Mr. Sternlicht held, individually and through various family trusts,
an aggregate of 240,391 Class B EPS and limited partnership units of the Realty Partnership and Operating
Partnership convertible to Class B EPS on a one-to-one basis. On January 2, 2003, Mr. Sternlicht put all of
these Class B EPS for $38.50 per share.
In 1998, the Corporation's Board of Directors approved the repurchase of up to $1 billion of Shares under
a Share repurchase program (the ""Share Repurchase Program''). On April 2, 2001, the Corporation's Board
of Directors authorized the repurchase of up to an additional $500 million of Shares under the Share
Repurchase Program. Pursuant to the Share Repurchase Program, Starwood repurchased 3.2 million Shares
in the open market for an aggregate cost of $96 million during 2001. No shares were repurchased during 2002.
The Company repurchased the following Shares during 2003:
Maximum Number (or
Total Number of Approximate Dollar
Total Average Shares Purchased as Value) of Shares that
Number of Price Part of Publicly May Yet Be Purchased
Shares Paid for Announced Plans Under the Plans or Programs
Period Purchased Share or Programs (in millions)
October ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ Ì $ Ì Ì $633
November ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 315,700 $33.43 315,700 $623
December ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 503,000 $33.71 503,000 $606
TotalÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 818,700 $33.60 818,700
During 2003, approximately 13,000 shares of Class A EPS were exchanged for an equal number of
Shares. Also during 2003, the Company exchanged approximately 13,000 limited partnership units of the
Realty Partnership and the Operating Partnership held by third parties for Shares on a one-for-one basis.
OÅ-Balance Sheet Arrangements
The nature of the Company's oÅ-balance sheet arrangements include beneÑcial interest in securitizations
of $50 million, third-party loan guarantees of $144 million, letters of credit of $129 million, unconditional
purchase obligations of $89 million and surety bonds of $46 million. These items are more fully discussed
earlier in this section and in the Notes to Consolidated Financial Statements, Item 8 of Part II of this report.
Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
In limited instances, the Company seeks to reduce earnings and cash Öow volatility associated with
changes in interest rates and foreign currency exchange rates by entering into Ñnancial arrangements intended
to provide a hedge against a portion of the risks associated with such volatility. The Company continues to
have exposure to such risks to the extent they are not hedged.
Interest rate swap agreements are the primary instruments used to manage interest rate risk. At
December 31, 2003, the Company had Ñve outstanding long-term interest rate swap agreements under which
the Company pays variable interest rates and receives Ñxed interest rates. At December 31, 2003, the
Company had no interest rate swap agreements under which the Company pays a Ñxed rate and receives a
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