Starwood 2011 Annual Report Download - page 110

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We had the following commercial commitments outstanding as of December 31, 2011 (in millions):
Total
Less Than
1 Year 1-3 Years 3-5 Years
After 5
Years
Standby letters of credit .......................... $171 $168 $— $— $3
A dividend of $0.50 per share was paid in December 2011 to shareholders of record as of December 15,
2011.
A dividend of $0.30 per share was paid in December 2010 to shareholders of record as of December 16,
2010.
Off-Balance Sheet Arrangements
Our off-balance sheet arrangements include letters of credit of $171 million, unconditional purchase
obligations of $167 million and surety bonds of $21 million. These items are discussed in greater detail in Item 8,
Financial Statements and Supplementary Data, and in the Notes.
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 December 31, 2011, 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 $34
million. These contracts expire in 2012.
• Forward foreign exchange contracts to manage the foreign currency exposure related to certain
intercompany loans not deemed to be permanently invested. The aggregate dollar equivalent of the
notional amounts of the forward contracts was approximately $659 million. These contracts expire in
2012.
The following table sets forth the scheduled maturities and the total fair value of our debt portfolio and other
financial instruments as of December 31, 2011 (in millions, excluding average exchange rates):
Expected Maturity or Transaction Date
At December 31, Total at
December 31,
2011
Total Fair
Value at
December 31,
20112012 2013 2014 2015 2016 Thereafter
Liabilities
Fixed rate ...................... $ 3 $254 $351 $453 $ 4 $692 $1,757 $2,005
Average interest rate ............. 7.14%
Floating rate .................... $— $251 $151 $ 2 $35 $ 1 $ 440 $ 440
Average interest rate ............. 4.72%
Forward Foreign Exchange Hedge
Contracts:
Fixed (EUR) to Fixed (USD) ....... $34 $ — $ — $ — $— $ — $ 3 $ 3
Average Exchange rate ........... 1.44
42