Starwood 2009 Annual Report Download - page 113

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Item 7A. Quantitative and Qualitative Disclosures about Market Risk.
In limited instances, we seek to reduce earnings and cash flow volatility associated with changes in interest
rates and foreign currency exchange rates by entering into financial arrangements intended to provide a hedge
against a portion of the risks associated with such volatility. We continue to have exposure to such risks to the extent
they are not hedged.
We enter into a derivative financial arrangement to the extent it meets the objectives described above, and we
do not engage in such transactions for trading or speculative purposes.
At year-end 2009, we were party to the following derivative instruments:
• Forward contracts to hedge forecasted transactions for management and franchise fee revenues earned in
foreign currencies. The aggregate dollar equivalent of the notional amounts was approximately $28 million,
and they expire in 2010.
• Forward foreign exchange contracts to manage the foreign currency exposure related to certain intercom-
pany loans not deemed to be permanently invested. The aggregate dollar equivalent of the notional amounts
of the forward contracts was approximately $669 million and they expire in 2010.
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