Starwood 2008 Annual Report Download - page 79

not generate revenue sufficient to meet operating expenses, including debt service and capital expenditures, our
income will be adversely affected.
Hotel and Resort Development Is Subject to Timing, Budgeting and Other Risks. We intend to develop
hotel and resort properties, including VOIs and residential components of hotel properties, as suitable opportunities
arise, taking into consideration the general economic climate. In addition, the owners and developers of new-build
properties that we have entered into management or franchise agreements with are subject to these same risks which
may impact the amount and timing of fees we had expected to collect from those properties. New project
development has a number of risks, including risks associated with:
• construction delays or cost overruns that may increase project costs;
• receipt of zoning, occupancy and other required governmental permits and authorizations;
• development costs incurred for projects that are not pursued to completion;
• so-called acts of God such as earthquakes, hurricanes, floods or fires that could adversely impact a project;
• defects in design or construction that may result in additional costs to remedy or require all or a portion of a
property to be closed during the period required to rectify the situation;
• ability to raise capital; and
• governmental restrictions on the nature or size of a project or timing of completion.
We cannot assure you that any development project, including sites held for development of vacation
ownership resorts, will in fact be developed, and if developed, the time period or the budget of such development
may be greater than initially contemplated and the actual number of units or rooms constructed may be less than
initially contemplated.
Environmental Regulations. Environmental laws, ordinances and regulations of various federal, state, local
and foreign governments regulate our properties and could make us liable for the costs of removing or cleaning up
hazardous or toxic substances on, under, or in property we currently own or operate or that we previously owned or
operated. These laws could impose liability without regard to whether we knew of, or were responsible for, the
presence of hazardous or toxic substances. The presence of hazardous or toxic substances, or the failure to properly
clean up such substances when present, could jeopardize our ability to develop, use, sell or rent the real property or
to borrow using the real property as collateral. If we arrange for the disposal or treatment of hazardous or toxic
wastes, we could be liable for the costs of removing or cleaning up wastes at the disposal or treatment facility, even
if we never owned or operated that facility. Other laws, ordinances and regulations could require us to manage, abate
or remove lead or asbestos containing materials. Similarly, the operation and closure of storage tanks are often
regulated by federal, state, local and foreign laws. Certain laws, ordinances and regulations, particularly those
governing the management or preservation of wetlands, coastal zones and threatened or endangered species, could
limit our ability to develop, use, sell or rent our real property.
In addition, existing environmental laws and regulations may be revised or new laws and regulations related to
global climate change, air quality, or other environmental and health concerns may be adopted or become applicable
to the Company. For example, legislative proposals that would impose mandatory requirements on greenhouse gas
emissions continue to be considered in Congress. Some states are also considering or have undertaken actions to
regulate and reduce greenhouse gas emissions. New or revised laws and regulations or new interpretations of
existing laws and regulations, such as those related to climate change, could affect the operation of our hotels and/or
result in significant additional expense and operating restrictions on us. The cost impact of such legislation,
regulation, or new interpretations would depend upon the specific requirements enacted and cannot be determined
at this time.
International Operations Are Subject to Special Political and Monetary Risks. We have significant
international operations which as of December 31, 2008 included 254 owned, managed or franchised properties
in Europe, Africa and the Middle East (including 17 properties with majority ownership); 59 owned, managed or
franchised properties in Latin America (including 10 properties with majority ownership); and 143 owned,
managed or franchised properties in the Asia Pacific region (including 4 properties with majority ownership).
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