Starwood Hotel & Resorts Worldwide 10-Q 6 Aug 09 2009 Q2 Quarterly report Financial data

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Jun. 30, 2009	Dec. 31, 2008
ASSETS
Cash and cash equivalents	$79	$389
Restricted cash	41	96
Accounts receivable, net of allowance for doubtful accounts of $57 and $49	476	552
Inventories	1,035	986
Prepaid expenses and other	149	143
Total current assets	1,780	2,166
Investments	345	372
Plant, property and equipment, net	3,593	3,599
Assets held for sale	0	10
Goodwill and intangible assets, net	2,237	2,235
Deferred tax assets	734	639
Other assets	615	682
Total assets	9,304	9,703
LIABILITIES AND STOCKHOLDERS' EQUITY
Short-term borrowings and current maturities of long-term debt	330	506
Accounts payable	142	171
Accrued expenses	1,092	1,274
Accrued salaries, wages and benefits	286	346
Accrued taxes and other	394	391
Total current liabilities	2,244	2,688
Long-term debt	3,422	3,502
Deferred income taxes	27	26
Other liabilities	1,779	1,843
Total liabilities	7,472	8,059
Stockholders' equity:
Common Stock; $.01 par value;authorized 1,000,000,000 shares; outstanding 186,898,723 and 182,827,483 shares at June 30, 2009 and December 31,2008, respectively	2	2
Additional paid-in capital	508	493
Accumulated other comprehensive loss	(357)	(391)
Retained earnings	1,657	1,517
Total Starwood stockholders' equity	1,810	1,621
Noncontrolling interest	22	23
Total equity	1,832	1,644
Total liabilities and stockholders' equity	$9,304	$9,703

Consolidated Balance Sheets [Pa

Consolidated Balance Sheets [Parenthetical] (USD $)
In Millions, except Share data, unless otherwise specified	Jun. 30, 2009	Dec. 31, 2008
Consolidated Balance Sheets [Parentheticals]
Allowance for Doubtful Accounts Receivable, Current	$57	$49
Common Stock, Par or Stated Value Per Share	0.01	0.01
Common Stock, authorized	1,000,000,000	1,000,000,000
Common Stock, outstanding	186,898,723	182,827,483

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Revenues
Owned, leased and consolidated joint venture hotels	$394	$620	$780	$1,180
Vacation ownership and residential sales and services (includes loss of $2 relating to 2009 Securitization)	126	194	261	387
Management fees, franchise fees and other income	187	218	352	424
Other revenues from managed and franchised properties	512	541	944	1,048
Total Revenues	1,219	1,573	2,337	3,039
Costs and Expenses
Owned, leased and consolidated joint venture hotels	329	454	663	892
Vacation ownership and residential	98	159	204	317
Selling, general, administrative and other	96	138	189	268
Restructuring and other special charges (credits), net	5	1	22	10
Depreciation	72	72	142	143
Amortization	7	9	14	16
Other expenses from managed and franchised properties	512	541	944	1,048
Total Costs and Expenses	1,119	1,374	2,178	2,694
Operating income	100	199	159	345
Equity earnings and gains and (losses) from unconsolidated ventures, net	3	5	(2)	11
Interest expense, net of interest income of $2, $1, $2 and $3	(53)	(55)	(96)	(102)
(Loss) gain on asset dispositions and impairments, net	(34)	1	(39)	0
Income from continuing operations before taxes	16	150	22	254
Income tax benefit (expense)	115	(42)	114	(68)
Income from continuing operations	131	108	136	186
Discontinued operations:
Gain (loss) on dispositions, net of tax benefit (expense) of $3, $(2), $2, and $(49)	3	(2)	2	(49)
Net income	134	106	138	137
Net loss (income) attributable to noncontrolling interests	0	(1)	2	0
Net income attributable to Starwood	134	105	140	137
Earnings (Loss) Per Share - Basic
Continuing operations	0.73	0.58	0.77	1.01
Discontinued operations	0.02	-0.01	0.01	-0.26
Net income	0.75	0.57	0.78	0.75
Earnings (Loss) Per Share - Diluted
Continuing operations	0.72	0.56	0.76	0.99
Discontinued operations	0.02	$0	0.01	-0.26
Net income	0.74	0.56	0.77	0.73
Amounts attributable to Starwood's Common Shareholders
Income from continuing operations	131	107	138	186
Discontinued operations	3	(2)	2	(49)
Net income	$134	$105	$140	$137
Weighted average number of shares	179	184	179	184
Weighted average number of shares assuming dilution	183	188	182	188

Consolidated Statements of Inc

Consolidated Statements of Income [Parenthetical] (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Consolidated Statements of Income [Parenthetical]
Interest income	$2	$1	$2	$3
Tax benefit (expense), discontinued ops	3	(2)	2	(49)
Note sale loss	$2	$0	$2	$0

Consolidated Statements of Comp

Consolidated Statements of Comprehensive Income (USD $)
In Millions	3 Months Ended Jun. 30, 2009	3 Months Ended Jun. 30, 2008	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Net income	$134	$106	$138	$137
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments	81	26	22	54
Pension liability adjustments	13	(6)	13	(6)
Change in fair value of derivatives	(3)	1	(2)	(3)
Change in fair value of investments	1	0	1	0
Total other comprehensive income (loss), net of taxes	92	21	34	45
Comprehensive income (loss)	226	127	172	182
Comprehensive (income) loss attributable to noncontrolling interests	0	(1)	2	0
Comprehensive income (loss) attributable to Starwood	$226	$126	$174	$182

Consolidated Condensed Statemen

Consolidated Condensed Statements of Cash Flows (USD $)
In Millions	6 Months Ended Jun. 30, 2009	6 Months Ended Jun. 30, 2008
Operating Activities
Net income	$138	$137
Adjustments to net income:
Discontinued operations, (gain) loss on dispositions, net	(2)	49
Depreciation and amortization	156	159
Amortization of deferred gains	(40)	(42)
Non-cash portion of restructuring and other special charges (credits), net	1	1
(Gain) loss on asset dispositions and impairments, net	39	0
Stock-based compensation expense	26	40
Excess stock based compensation	0	(18)
Distributions in excess of equity earnings	18	12
(Gain) loss on the sale of VOI notes receivable	(1)	(2)
Non-cash portion of income tax expense	(118)	30
Other non-cash adjustments to net income	32	22
Decrease (increase) in restricted cash	53	24
Other changes in working capital	(132)	(121)
VOI notes receivable activity, net	82	(74)
Accrued and deferred income taxes and other	(28)	27
Cash (used for) from operating activities	224	244
Investing Activities
Purchases of plant, property and equipment	(112)	(216)
Proceeds from asset sales, net of transaction costs	4	0
Collection of notes receivable, net	0	2
Proceeds from investments, net	20	16
Other, net	(7)	(13)
Cash (used for) from investing activities	(95)	(211)
Financing Activities
Revolving credit facility and short-term borrowings (repayments), net	(58)	(534)
Long-term debt issued	482	977
Long-term debt repaid	(677)	(2)
Dividends paid	(164)	(172)
Proceeds from employee stock option exercises	0	117
Excess stock based compensation	0	18
Share repurchases	0	(459)
Other, net	(25)	(23)
Cash (used for) from financing activities	(442)	(78)
Exchange rate effect on cash and cash equivalents	3	9
(Decrease) increase in cash and cash equivalents	(310)	(36)
Cash and cash equivalents ? beginning of period	389	151
Cash and cash equivalents ? end of period	79	115
Supplemental Disclosures of Cash Flow Information
Cash paid (received) during the period for interest	88	95
Cash paid (received) during the period for income taxes, net of refunds	($15)	$65

Basis of Presentation

Basis of Presentation
	6 Months Ended Jun. 30, 2009 USD / shares
Basis of Presentation
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block]	Note 1. Basis of Presentation The accompanying consolidated financial statements represent the consolidated financial position and consolidated results of operations of Starwood Hotels Resorts Worldwide, Inc. and its subsidiaries (the Company). The consolidated financial statements include the accounts of the Company and all of its controlled subsidiaries and partnerships. In consolidating, all material intercompany transactions are eliminated. We have evaluated all subsequent events through August6, 2009, the date the consolidated financial statements were filed. Starwood is one of the worlds largest hotel and leisure companies. The Companys principal business is hotels and leisure, which is comprised of a worldwide hospitality network of approximately 970 full-service hotels, vacation ownership resorts and residential developments primarily serving two markets: luxury and upscale. The principal operations of Starwood Vacation Ownership, Inc. (SVO) include the acquisition, development and operation of vacation ownership resorts; marketing and selling vacation ownership interests (VOIs) in the resorts; and providing financing to customers who purchase such interests.

Recently Issued Accounting Stan

Recently Issued Accounting Standards
	6 Months Ended Jun. 30, 2009 USD / shares
Recently Issued Accounting Standards
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Text Block]	Note 2. Recently Issued Accounting Standards Adopted Accounting Standards In April2009, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) Issue No.FAS No.157-4 Determining Fair Value When the Volume and Level of Activity for the Asset or Liability Have Significantly Decreased and Identifying Transactions that are not Orderly (FSP FAS No.157-4). FSP FAS No.157-4 provides additional guidance for estimating fair value in accordance with SFAS No.157. This FSP No.157-4 is effective in reporting periods ending after June15, 2009. On June30, 2009, the Company adopted FSP FAS No.157-4, which did not have a material impact on its consolidated financial statements. In April2009, the FASB issued FSP No.FAS No.107-1 and Accounting Principles Board (APB) No.28-1 Interim Disclosures about Fair Value of Financial Instruments (FSP FAS No.107-1 and APB No 28-1). FSP FAS No.107-1 and APB No.28-1 require disclosures about the fair value of financial instruments for annual and interim reporting periods of publicly traded companies. FSP No.107-1 and APB No.28-1 are effective in reporting periods ending after June15, 2009. On June 30, 2009, the Company adopted FSP FAS No.107-1 and APB No.28-1, which did not have a material impact on its consolidated financial statements. See Note 18 for disclosure. In April2009, the FASB issued FSP Issue No.FAS No.115-2 and FAS No.124-2 Recognition and Presentation of Other-Than-Temporary Impairments (FSP FAS No.115-2 and 124-2). FSP FAS No. 115-2 and 124-2 amend the other-than-temporary impairment guidance for debt securities to make the guidance more operational and to improve the disclosure of other-than-temporary impairments on debt and equity securities in the financial statements. FSP No.115-2 and 124-2 are effective in reporting periods ending after June15, 2009. On June30, 2009, the Company adopted FSP FAS No. 115-2 and 124-2, which did not have a material impact on its consolidated financial statements. In May2009, the FASB issued Statement of Financial Accounting Standards (SFAS) No.165, Subsequent Events (SFAS No.165). SFAS No.165 establishes the period in which management of a reporting entity should evaluate events and transactions for recognition or disclosure in the financial statements. It also describes the circumstances under which an entity should recognize events or transactions that occur after the balance sheet date. SFAS No.165 is effective for interim and annual reporting periods ending after June15, 2009. On June30, 2009, the Company adopted SFAS No.165, which did not have a material effect on its consolidated financial statements. In June2008, the FASB ratified FSP Issue No.Emerging Issues Task Force (EITF) 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (FSP No.EITF 03-6-1), which addresses whether instruments granted in share-based payment awards are participating securities prior to vesting and, therefore, must be included in the earnings allocation in calculating earnings per share under the two-class method described in SFAS No.128, Earnings per Share (SFAS No.128). FSP No.EITF 0

Earnings Per Share

Earnings Per Share
	6 Months Ended Jun. 30, 2009 USD / shares
Earnings Per Share
Earnings Per Share [Text Block]	Note 3. Earnings Per Share Basic and diluted earnings per share are calculated using income from continuing operations attributable to Starwoods common shareholders (i.e. excluding amounts attributable to non-controlling interests). The following is a reconciliation of basic earnings per share to diluted earnings per share for income from continuing operations (in millions, except per Share data): Three Months Ended June 30, 2009 2008 Earnings Shares Per Share Earnings Shares Per Share Basic earnings from continuing operations $ 131 179 $ 0.73 $ 107 184 $ 0.58 Effect of dilutive securities: Employee stock options and restricted stock awards 4 (0.01 ) 4 (0.02 ) Diluted earnings from continuing operations $ 131 183 $ 0.72 $ 107 188 $ 0.56 Six Months Ended June 30, 2009 2008 Earnings Shares Per Share Earnings Shares Per Share Basic earnings from continuing operations $ 138 179 $ 0.77 $ 186 184 $ 1.01 Effect of dilutive securities: Employee stock options and restricted stock awards 3 (0.01 ) 4 (0.02 ) Diluted earnings from continuing operations $ 138 182 $ 0.76 $ 186 188 $ 0.99 Approximately 9,694,000 and 2,640,000 shares for the three months ended June30, 2009 and 2008 and 10,782,000 and 5,183,000 shares for the six months ended June30, 2009 and 2008, respectively, were excluded from the computation of diluted shares, respectively, as their impact would have been anti-dilutive.

Dispositions

Dispositions
	6 Months Ended Jun. 30, 2009 USD / shares
Dispositions
Impairment or Disposal of Long-Lived Assets, Policy [Text Block]	Note 4. Dispositions During the second quarter of 2009, the Company sold a hotel in Minneapolis for cash proceeds of approximately $4million. The Company recorded a loss of approximately $3million on the sale. Also during the second quarter of 2009, the Company terminated the lease of the Sheraton Newton prior to its original term. As a result, the Company wrote down its leasehold improvements to fair value, resulting in an impairment charge of $10million. During the first quarter of 2009, the Company sold the Sheraton hotel in Brussels, Belgium in exchange for a long-term agreement to manage the hotel. The Company recorded a loss of approximately $5million on the sale.

Assets Held for Sale

Assets Held for Sale
	6 Months Ended Jun. 30, 2009 USD / shares
Assets Held for Sale
Disclosure of Long Lived Assets Held-for-sale [Text Block]	Note 5. Assets Held for Sale During the first quarter of 2008, the Company entered into a purchase and sale agreement for the sale of a hotel for total consideration of $10million. The Company received a non-refundable deposit from the prospective buyer during the first quarter of 2008. The Company recorded an impairment charge of approximately $1million in the first quarter of 2008 related to this hotel. In December2008, the Company and prospective buyer agreed to extend the closing period for up to 12months and the prospective buyer paid the Company an incremental non-refundable deposit of approximately $2million. During the second quarter of 2009, the agreement was terminated, and as a result, this hotel was reclassified as held for use during the second quarter of 2009.

Other Assets

Other Assets
	6 Months Ended Jun. 30, 2009 USD / shares
Other Non current Assets
Schedule of Other Assets, Noncurrent [Text Block]	Note 6. Other Assets Other assets include the following (in millions): June 30, December 31, 2009 2008 VOI notes receivable, net $ 335 $ 444 Other notes receivable, net 34 32 Prepaid taxes 128 130 Deposits and other 118 76 $ 615 $ 682

Notes Receivable Securitization

Notes Receivable Securitizations and Sales
	6 Months Ended Jun. 30, 2009 USD / shares
Notes Receibable Securitizations and Sales
Loans, Notes, Trade and Other Receivables Disclosure [Text Block]	Note 7. Notes Receivable Securitizations and Sales From time to time, the Company securitizes, without recourse, its fixed rate VOI notes receivable. To accomplish these securitizations, the Company transfers a pool of VOI notes receivable to third-party special purpose entities (together with the special purpose entities in the next sentence, the SPEs) and the SPEs transfer the VOI notes receivable to qualifying special purpose entities (QSPEs), as defined in SFAS No.140, Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities a Replacement of FASB Statement No.125 (SFAS No.140). The Company continues to service the securitized VOI notes receivable pursuant to servicing agreements negotiated at arms-length based on market conditions; accordingly, the Company has not recognized any servicing assets or liabilities. All of the Companys VOI notes receivable securitizations to date have qualified to be, and have been, accounted for as sales in accordance with SFAS No.140. With respect to those transactions still outstanding at June30, 2009, the Company retains economic interests (the Retained Interests) in securitized VOI notes receivables through SPE ownership of QSPE beneficial interests. The Retained Interests, which are comprised of subordinated interests and interest only strips in the related VOI notes receivable, provide credit enhancement to the third-party purchasers of the related QSPE beneficial interests. Retained Interests cash flows are limited to the cash available from the related VOI notes receivable, after servicing and other related fees, absorbing 100% of any credit losses on the related VOI notes receivable and QSPE fixed rate interest expense. With respect to those transactions still outstanding at June30, 2009, the Retained Interests are classified and accounted for as available-for-sale securities in accordance with SFAS No.115, Accounting for Certain Investments in Debt and Equity Securities, and SFAS No.140. The Companys securitization agreements prior to 2009 provide the Company with the option, subject to certain limitations, to repurchase or replace defaulted VOI notes receivable at their outstanding principal amounts. Such activity totaled $6million and $13million during the three and six months ended June30, 2009, respectively, and $5million and $11million during the three and six months ended June30, 2008, respectively. The Company has been able to resell the VOIs underlying the VOI notes repurchased or replaced under these provisions without incurring significant losses. The Companys replacement of the defaulted VOI notes receivable under the securitization agreements with new VOI notes receivable resulted in net gains of approximately $1 million and $2million during the three and six months ended June30, 2009 and 2008, respectively, which are included in vacation ownership and residential sales and services in the Companys consolidated statements of income. In June2009, the Company securitized approximately $181million of VOI notes receivable (the 2009 Securitization) resulting in cash proceeds of approximately $125million. The Company retained $44million

Fair Value

Fair Value
	6 Months Ended Jun. 30, 2009 USD / shares
Fair Value
Fair Value, by Balance Sheet Grouping [Text Block]	Note 8. Fair Value In accordance with SFAS No.157, the following table represents the Companys fair value hierarchy for its financial assets and liabilities measured at fair value on a recurring basis as of June30, 2009 (in millions): Level 1 Level 2 Level 3 Total Assets: Forward contracts $ $ 4 $ $ 4 Interest rate swaps 2 2 Retained Interests 10 10 $ $ 6 $ 10 $ 16 Liabilities: Forward contracts $ $ 4 $ $ 4 The forward contracts are over the counter contracts that do not trade on a public exchange. The fair values of the contracts are based on inputs such as foreign currency spot rates and forward points that are readily available on public markets, and as such, are classified as Level 2. The Company considered both its credit risk, as well as its counterparties credit risk in determining fair value and no adjustment was made as it was deemed insignificant based on the short duration of the contracts and the Companys rate of short-term debt. The interest rate swaps are valued using an income approach. Expected future cash flows are converted to a present value amount based on market expectations of the yield curve on floating interest rates. The Company estimates the fair value of its Retained Interests using a discounted cash flow model with unobservable inputs, which is considered Level 3. See Note 7 for the assumptions used to calculate the estimated fair value and sensitivity analysis based on changes in assumptions. The following table presents a reconciliation of the Companys Retained Interests measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three and six months ended June30, 2009 (in millions): Balance at March31, 2009 $ 20 Total losses (realized/unrealized) Included in earnings (13 ) Included in other comprehensive income Purchases, issuances, and settlements 3 Transfers in and/or out of Level 3 Balance at June30, 2009 $ 10 Balance at December31, 2008 $ 19 Total losses (realized/unrealized) Included in earnings (13 ) Included in other comprehensive income Purchases, issuances, and settlements 4 Transfers in and/or out of Level 3 Balance at June30, 2009 $ 10

Debt

Debt
	6 Months Ended Jun. 30, 2009 USD / shares
Debt
Debt Disclosure [Text Block]	Note 9. Debt Long-term debt and short-term borrowings consisted of the following (in millions): June 30, December 31, 2009 2008 Senior Credit Facilities: Revolving Credit Facility, interest rate of 3.125% at June30, 2009, maturing 2011 $ 157 $ 213 Term loans, interest rate of 3.125% at June30, 2009, maturing 2010 and 2011 700 1,375 Senior Notes, interest at 7.875%, maturing 2012 801 799 Senior Notes, interest at 6.25%, maturing 2013 601 601 Senior Notes, interest at 7.875%, maturing 2014 482 Senior Notes, interest at 7.375%, maturing 2015 449 449 Senior Notes, interest at 6.75%, maturing 2018 400 400 Mortgages and other, interest rates ranging from 5.80% to 8.56%, various maturities 162 171 3,752 4,008 Less current maturities (330 ) (506 ) Long-term debt $ 3,422 $ 3,502 On April27, 2009, the Company amended its revolving credit and term loan facilities (collectively with prior amendments the Amended Credit Facilities) with the consent of the lenders thereunder. The Amended Credit Facilities enhance the Companys financial flexibility by increasing the Companys maximum Consolidated Leverage Ratio (as defined in the Amended Credit Facilities) from 4.50x to 5.50x. Additionally, the definition of Consolidated EBITDA used in the Amended Credit Facilities has been modified to exclude certain cash severance expenses from Consolidated EBITDA. In connection with the amendment, the Company repaid $500million of its term loan that was due June2009 by drawing down on its revolver. In connection with the amendment, the Company agreed to increase the pricing on the outstanding Amended Credit Facilities based upon the Companys Consolidated Leverage Ratio, the Companys unsecured debt rating and the type of loan borrowed. The margin increases range from 2.00% to 3.50% for term loans maintained as Eurodollar Loans, 1.75% to 3.00% for revolving loans maintained as Euro Rate Loans, and 0.00% to 1.50% for Base Rate and Canadian Prime Rate Loans. The applicable margin for the Facility Fee ranges from 0.25% to 0.50%. The amendment further modifies the Amended Credit Facilities by (i.) restricting the Companys ability to pay dividends and repurchase stock depending on the Companys free cash flow and Consolidated Leverage Ratio and (ii.) decreasing the Companys permitted lien basket from 10% of Net Tangible Assets (as defined in the Amended Credit Facilities) to 5% of Net Tangible Assets. An amendment fee of 50 basis points was also paid to all consenting lenders who approved the Amended Credit Facilities, with no amendment fee being paid on the repaid portion of the term loan. On April30, 2009, the Company launched and priced a public offering of $500million of senior notes with a coupon rate of 7.875% (the Notes) due October15, 2014, issued at a discount price of

Deferred Gains

Deferred Gains
	6 Months Ended Jun. 30, 2009 USD / shares
Deferred Gains
Deferred Revenue Disclosure [Text Block]	Note 10. Deferred Gains The Company defers gains realized in connection with the sale of a property that the Company continues to manage through a long-term management agreement and recognizes the gains over the initial term of the related agreement. As of June30, 2009 and December31, 2008, the Company had total deferred gains of $1.118billion and $1.151billion, respectively, included in accrued expenses and other liabilities in the Companys consolidated balance sheets. Amortization of deferred gains is included in management fees, franchise fees and other income in the Companys consolidated statements of income and totaled approximately $20million and $40million and $21 million and $42million in the three and six months ended June30, 2009, and June30, 2008, respectively.

Restructuring and Other Special

Restructuring and Other Special Charges
	6 Months Ended Jun. 30, 2009 USD / shares
Restructuring and other special charges
Restructuring and Related Activities Disclosure [Text Block]	Note 11. Restructuring and Other Special Charges During the three and six months ended June30, 2009, the Company recorded restructuring charges of $5million and $22million, respectively, in connection with its ongoing initiative of rationalizing its cost structure in light of the decline in growth in its business units. During the three months ended June30, 2008, the Company recorded a $1million restructuring charge primarily related to further demolition costs at the Sheraton Bal Harbour Beach Resort (Bal Harbour), which is being redeveloped as a St. Regis hotel along with branded residences and fractional units. During the six months ended June30, 2008, the Company recorded an $8million restructuring charge in connection with the Companys ongoing initiative of rationalizing its cost structure and an additional $2million charge for further demolition costs related to Bal Harbour. Restructuring costs and other special charges, net, by segment are as follows (in millions): Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Hotel $ 4 $ 1 $ 13 $ 5 Vacation Ownership Residential 1 9 5 Total $ 5 $ 1 $ 22 $ 10 The Company had remaining accruals of $23million and $41million at June30, 2009 and December31, 2008, respectively, which are primarily recorded in accrued expenses and other liabilities. The following table summarizes activity in the restructuring and other special charges related accruals: December 31, Expenses Non-cash June 30, 2008 (Reversals) Payments Other 2009 Retained reserves established by Sheraton Holding prior to its merger with the Company in 1998 $ 8 $ $ $ $ 8 Le Mridien acquisition reserves (2 ) 2 Consulting fees associated with cost reduction initiatives 3 1 (4 ) Severance 23 18 (33 ) 8 Closure of vacation ownership facilities 7 5 (3 ) (2 ) 7 Total $ 41 $ 22 $ (40 ) $ $ 23

Derivative Financial Instrument

Derivative Financial Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Derivative financial instruments
Derivative Instruments and Hedging Activities Disclosure [Text Block]	Note 12. Derivative Financial Instruments The Company, based on market conditions, enters into forward contracts to manage foreign exchange risk. Beginning in January2008, the Company entered into forward contracts to hedge forecasted transactions based in certain foreign currencies, including the Euro and Canadian Dollar. These forward contracts have been designated and qualify as cash flow hedges under the provisions of SFAS No.133, and their change in fair value is recorded as a component of other comprehensive income and reclassified into earnings in the same period or periods in which the forecasted transaction occurs. The notional dollar amount of the outstanding Euro forward contracts at June30, 2009 is $50million, with average exchange rates of 1.5 and terms of primarily less than one year. The Canadian forward contracts expired during the second quarter of 2009. The Company reviews the effectiveness of its hedging instruments on a quarterly basis and records any ineffectiveness into earnings. The Company discontinues hedge accounting for any hedge that is no longer evaluated to be highly effective. From time to time, the Company may choose to de-designate portions of hedges when changes in estimates of forecasted transactions occur. In the second quarter of 2009, the Company de-designated notional amounts of $4million related to three hedges. Other than the de-designated portions, each of these hedges was highly effective in offsetting fluctuations in foreign currencies. An insignificant amount of gain due to ineffectiveness was recorded in the consolidated statements of income during 2009. Additionally, during the second quarter of 2009, eight forward contracts matured. The Company also enters into forward contracts to manage foreign exchange risk on intercompany loans that are not deemed permanently invested. These forward contracts are not designated as hedges under the provisions of SFAS No.133, and their change in fair value is recorded in the Companys consolidated statements of income at each reporting period. The Company enters into interest rate swap agreements to manage interest expense. The Companys objective is to manage the impact of interest rates on the results of operations, cash flows and the market value of the Companys debt. At June30, 2009, the Company has three interest rate swap agreements with an aggregate notional amount of $300million under which the Company pays floating rates and receives fixed rates of interest (Fair Value Swaps). The Fair Value Swaps hedge the change in fair value of certain fixed rate debt related to fluctuations in interest rates and mature in 2012 and 2013. The Fair Value Swaps modify the Companys interest rate exposure by effectively converting debt with a fixed rate to a floating rate. These interest rate swaps have been designated and qualify as fair value hedges under the provisions of SFAS No.133 and have met the requirements to assume zero ineffectiveness. In the Companys most recent securitization transaction, the unconsolidated QSPE entered into a balance guaranteed interest rate swap to fix the interest rate on its debt in order to mitigate interest rate risk

Discontinued Operations

Discontinued Operations
	6 Months Ended Jun. 30, 2009 USD / shares
Discontinued Operations
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block]	Note 13. Discontinued Operations For the three months ended June30, 2009 and 2008, the Company recorded tax benefits of $3 million and tax charges of $2million, respectively. The Company recorded $1million and $2 million of tax charges for the three months ending June30, 2009 and 2008, respectively, as a result of a 2008 administrative tax ruling for an unrelated taxpayer that impacts the tax liability associated with the disposition of one of its businesses several years ago. The charge for the three months ended June30, 2009 is offset by a benefit of approximately $4million related to the final settlement of an uncertain tax position related to an entity the Company sold several years ago. For the six months ended June30, 2009 and 2008, the Company recorded tax benefits of $2 million and tax charges of $49million, respectively. The Company recorded $2million and $49 million of tax charges for the six months ended June30, 2009 and 2008, respectively, as a result of a 2008 administrative tax ruling discussed above. The charge for the six months ended June30, 2009 is offset by a benefit of approximately $4million related to the settlement discussed above.

Pension and Postretirement Bene

Pension and Postretirement Benefit Plans
	6 Months Ended Jun. 30, 2009 USD / shares
Pension and Postretirement Benefit Plans
Pension and Other Postretirement Benefits Disclosure [Text Block]	Note 14. Pension and Postretirement Benefit Plans The following table presents the components of net periodic benefit cost for the three and six months ended June30, 2009 and 2008 (in millions): Three Months Ended June 30, 2009 2008 Foreign Foreign Pension Pension Postretirement Pension Pension Postretirement Benefits Benefits Benefits Benefits Benefits Benefits Service cost $ $ 1.2 $ $ $ 2.2 $ Interest cost 0.2 3.2 0.3 0.2 3.0 0.3 Expected return on plan assets (2.7 ) (3.0 ) (0.1 ) Amortization of: Actuarial loss 1.0 0.4 Prior service income (0.1 ) (0.1 ) Net period benefit cost $ 0.2 $ 2.6 $ 0.3 $ 0.2 $ 2.5 $ 0.2 Six Months Ended June 30, 2009 2008 Foreign Foreign Pension Pension Postretirement Pension Pension Postretirement Benefits Benefits Benefits Benefits Benefits Benefits Service cost $ $ 2.4 $ $ $ 3.3 $ Interest cost 0.5 6.3 0.5 0.4 6.0 0.6 Expected return on plan assets (5.0 ) (0.1 ) (5.9 ) (0.2 ) Amortization of: Actuarial loss 2.4 0.8 Prior service income (0.1 ) (0.2 ) Net periodic benefit cost $ 0.5 $ 6.0 $ 0.4 $ 0.4 $ 4.0 $ 0.4 During the three and six months ended June30, 2009, the Company contributed approximately $5million and $13million, respectively, to its pension and post retirement benefit plans. For the remainder of 2009, the Company expects to contribute approximately $8million to its pension and post-retirement benefit plans. A portion of these fundings will be reimbursed for costs related to employees of managed hotels.

Income Taxes

Income Taxes
	6 Months Ended Jun. 30, 2009 USD / shares
Income Taxes
Income Tax Disclosure [Text Block]	Note 15. Income Taxes The total amount of unrecognized tax benefits as of June30, 2009, was $998million, of which $149million would affect the Companys effective tax rate if recognized. The amount of unrecognized tax benefits includes approximately $499million related to the February1998 disposition of ITT World Directories which the Company strongly believes was completed on a tax deferred basis. In 2002, the IRS proposed an adjustment to tax the gain on disposition in 1998, and the issue has progressed to litigation in United States Tax Court. In January2009, the Company and the IRS reached an agreement in principle to settle the litigation pertaining to the tax treatment of this transaction. The Company expects to finalize the details of the agreement by the end of 2009 and obtain a refund of over $200million for previously paid tax. As a result, the Company expects to decrease its unrecognized tax benefits by approximately $499million within the next 12months. An estimate of the range of other possible changes cannot be made unless or until tax positions are further developed or examinations close. The Company recognizes interest and penalties related to unrecognized tax benefits through income tax expense. As of June30, 2009, the Company had $223million accrued for the payment of interest and no accrued penalties. The Company is subject to taxation in the U.S. federal jurisdiction, as well as various state and foreign jurisdictions. As of June30, 2009, the Company is no longer subject to examination by U.S. federal taxing authorities for years prior to 2004 and to examination by any U.S. state taxing authority prior to 1998. All subsequent periods remain eligible for examination. In the significant foreign jurisdictions in which the Company operates, the Company is no longer subject to examination by the relevant taxing authorities for any years prior to 2001. During the three months ended June30, 2009, the Company entered into an Italian tax incentive program through which the tax basis of its Italian owned hotels were stepped up in exchange for paying $9million of current tax over a three year period. As a result, the Company was able to recognize a tax benefit of $129million to establish the deferred tax asset related to the basis step up. This benefit was offset by a $9million tax charge to accrue the current tax payable under the program, resulting in a net benefit of $120million.

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 6/30/2009 USD / shares
Stockholder equity
Stockholders' Equity Note Disclosure [Text Block]	Note 16. Stockholders Equity Effect of SFAS No.160. The following table represents changes in stockholders equity that are attributable to Starwoods stockholders and non-controlling interests (in millions). Accumulated Equity Additional Other Attributable to Shares Paid-in Comprehensive Retained Noncontrolling Shares Amount Capital Loss Earnings Interests Total Balance at December31, 2008 183 $ 2 $ 493 $ (391 ) $ 1,517 $ 23 $ 1,644 Net income (loss) 140 (2 ) 138 Stock option and restricted stock award transactions, net 4 12 12 Foreign currency translation 23 1 24 Change in fair value of derivatives and investments 11 11 ESPP stock issuances 3 3 Balance at June30, 2009 187 $ 2 $ 508 $ (357 ) $ 1,657 $ 22 $ 1,832 Share Issuances and Repurchases. During the three and six months ended June30, 2009, the Company issued an insignificant amount of common shares as a result of stock option exercises. The Company has not repurchased any common stock during 2009. In November2007, the Board of Directors authorized the repurchase of up to $1billion of common stock under the Companys existing repurchase authorization (the Share Repurchase Authorization). As of June30, 2009, no repurchase capacity remained available under the Share Repurchase Authorization. Limited Partnership Units. At June30, 2009, there were approximately 178,000 Operating Limited Partnership (the Operating Partnership) units outstanding. The Operating Partnership units are convertible into common shares at the unit holders option, provided that the Company has the option to settle conversion requests in cash or common shares. Dividends. On January9, 2009, the Company paid a dividend of $0.90 per share to shareholders of record on December31, 2008.

Stock-Based Compensation

Stock-Based Compensation
	6 Months Ended Jun. 30, 2009 USD / shares
Stock-based compensation
Disclosure of Compensation Related Costs, Share-based Payments [Text Block]	Note 17. Stock-Based Compensation In accordance with the Companys 2004 Long-Term Incentive Compensation Plan, during the six month period ended June30, 2009, the Company granted approximately 5.3million stock options that had a weighted average grant date fair value of $4.69 per option. The weighted average exercise price of these options was $11.39. In addition, the Company granted approximately 5.3million restricted shares and restricted stock units that had a weighted average grant date fair value of $11.66 per share or unit. The Company recorded stock-based employee compensation expense, including the estimated impact of 2009 reimbursements from third parties, of $15million and $26million in the three and six months ended June30, 2009 respectively, and $22million and $40million in the three and six months ended June30, 2008, respectively. As of June30, 2009, there was approximately $31million of unrecognized compensation cost, net of estimated forfeitures, related to non-vested options, which is expected to be recognized, on a straight-line basis, over a weighted-average period of 3.42years. As of June30, 2009, there was approximately $167million of unrecognized compensation cost, net of estimated forfeitures, related to restricted stock and restricted stock units, which is expected to be recognized, on a straight-line basis, over a weighted-average period of 2.42years.

Fair Value of Financial Instrum

Fair Value of Financial Instruments
	6 Months Ended Jun. 30, 2009 USD / shares
Fair Value of Financial Instruments
Fair Value Disclosures [Text Block]	Note 18. Fair Value of Financial Instruments The following table presents the carrying amounts and estimated fair values of the Companys financial instruments (in millions): June 30, 2009 December 31, 2008 Carrying Fair Carrying Fair Amount Value Amount Value Assets : Restricted cash $ 6 $ 6 $ 6 $ 6 VOI notes receivable 335 349 444 419 Other notes receivable 34 34 32 32 Total financial assets $ 375 $ 389 $ 482 $ 457 Liabilities: Long-term debt $ 3,422 $ 3,231 $ 3,502 $ 2,725 Other long-term liabilities 8 8 7 7 Total financial liabilities $ 3,430 $ 3,239 $ 3,509 $ 2,732 Off-Balance sheet: Letters of credit $ $ 172 $ $ 115 Surety bonds 63 91 Total Off-Balance sheet $ $ 235 $ $ 206 The Company believes the carrying values of its financial instruments related to current assets and liabilities approximate fair value. The Company records its retained interests and derivative assets and liabilities at fair value. See Note 8 for recorded amounts and the methods and assumptions used to estimate fair value. The carrying value of the Companys restricted cash approximates its fair value. The Company estimates the fair value of its VOI notes receivable by discounting the expected future cash flows with discount rates commensurate with the risk of the underlying notes, primarily determined by the credit worthiness of the borrowers based on their Fair Isaac Corporation (FICO) scores. The fair value of other notes receivable is estimated based on terms of the instrument and current market conditions . These financial instrument assets are recorded in the other assets line item in the Companys consolidated balance sheet. The Company estimates the fair value of its publicly traded debt based on the bid prices in the public debt markets. The carrying amount of its floating rate debt is a reasonable basis of fair value due to the variable nature of the interest rates. The Companys non-public fixed rate debt fair value is determined based upon discounted cash flows for the debt rates deemed reasonable for the type of debt, prevailing market conditions and the length to maturity for the debt. Other long-term liabilities represent a financial guarantee. The carrying value of this liability approximates its fair

Business Segment Information

Business Segment Information
	6 Months Ended Jun. 30, 2009 USD / shares
Business Segment Information
Segment Reporting Disclosure [Text Block]	Note 19. Business Segment Information The Company has two operating segments: hotels and vacation ownership and residential. The hotel segment generally represents a worldwide network of owned, leased and consolidated joint venture hotels and resorts operated primarily under the Companys proprietary brand names including St. Regis, The Luxury Collection, Sheraton, Westin, W, Le Mridien, Aloft, Element, and Four Points by Sheraton as well as hotels and resorts which are managed or franchised under these brand names in exchange for fees. The vacation ownership and residential segment includes the development, ownership and operation of vacation ownership resorts, marketing and selling VOIs, providing financing to customers who purchase such interests and the sale of residential units. The performance of the hotels and vacation ownership and residential segments is evaluated primarily on operating profit before corporate selling, general and administrative expense, interest, gains and losses on the sale of real estate, restructuring and other special (charges) credits, and income taxes. The Company does not allocate these items to its segments. The following table presents revenues, operating income, capital expenditures and assets for the Companys reportable segments (in millions): Three Months Ended Six Months Ended June 30, June 30, 2009 2008 2009 2008 Revenues: Hotel $ 1,055 $ 1,344 $ 2,001 $ 2,585 Vacation ownership and residential 164 229 336 454 Total $ 1,219 $ 1,573 $ 2,337 $ 3,039 Operating income: Hotel $ 113 $ 216 $ 198 $ 397 Vacation ownership and residential 22 28 43 56 Total segment operating income 135 244 241 453 Selling, general, administrative and other (30 ) (44 ) (60 ) (98 ) Restructuring and other special charges, net (5 ) (1 ) (22 ) (10 ) Operating income 100 199 159 345 Equity earnings and gains and losses from unconsolidated ventures, net: Hotel 2 4 (3 ) 8 Vacation ownership and residential 1 1 1 3 Interest expense, net (53 ) (55 ) (96 ) (102 ) (Loss) gain on asset dispositions and impairments, net (34 ) 1 (39 ) Income from continuing operations before taxes $ 16 $ 150 $ 22 $ 254

Commitments and Contingencies

Commitments and Contingencies
	6 Months Ended Jun. 30, 2009 USD / shares
Commitments - Contingencies
Commitments and Contingencies Disclosure [Text Block]	Note 20. Commitments and Contingencies Variable Interest Entities. The Company has evaluated the 20 hotels in which it has a variable interest, generally in the form of investments, loans, guarantees, or equity. The Company determines if it is the primary beneficiary of the hotel by considering qualitative and quantitative factors. Qualitative factors include evaluating distribution terms, proportional voting rights, decision making ability, and the capital structure. Quantitatively, the Company evaluates financial forecasts under various scenarios to determine which variable interest holders would absorb over 50% of the expected losses of the hotel. The Company has determined it is not the primary beneficiary of any of the variable interest entities (VIEs) and therefore these entities are not consolidated in the Companys financial statements. In all cases, the VIEs associated with the Companys variable interests are hotels for which the Company has entered into management or franchise agreements with the hotel owners. The Company is paid a fee primarily based on financial metrics of the hotel. The hotels are financed by the owners, generally in the form of working capital, equity, and debt. At June30, 2009, the Company has approximately $68million of investments associated with 18 VIEs, equity investments of $10million associated with one VIE, and a loan balance of $5million associated with one VIE. As the Company is not obligated to fund future cash contributions under these agreements, the maximum loss equals the carrying value. In addition, the Company has not contributed amounts to the VIEs in excess of their contractual obligations. At December31, 2008, the Company had approximately $66million of investments associated with 19 VIEs, equity investments of $10million associated with one VIE, and a loan balance of $5 million associated with one VIE. Guaranteed Loans and Commitments. In limited cases, the Company has made loans to owners of or partners in hotel or resort ventures for which the Company has a management or franchise agreement. Loans outstanding under this program totaled $28million at June30, 2009. The Company evaluates these loans for impairment, and at June30, 2009, believes the net carrying value of these loans are collectible. Unfunded loan commitments aggregating $55million were outstanding at June30, 2009, none of which is expected to be funded in the next twelve months or in total. These loans typically are secured by pledges of project ownership interests and/or mortgages on the projects. The Company also has $87million of equity and other potential contributions associated with managed or joint venture properties, $49million of which is expected to be funded in the next twelve months. Surety bonds issued on behalf of the Company as of June30, 2009 totaled $63million, the majority of which were required by state or local governments relating to our vacation ownership operations and by our insurers to secure large deductible insurance programs. To secure management contracts, the Company may provide performance guarantees to third-party owners. Most of these performance guarantees allow t

Document Information

Document Information
	6 Months Ended Jun. 30, 2009 USD / shares
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-06-30

Entity Information

Entity Information (USD $)
In Millions	6 Months Ended Jun. 30, 2009	Jul. 29, 2009	Jun. 30, 2008
Entity Information [Line Items]
Entity Registrant Name	Starwood Hotels & Resorts Worldwide, Inc.
Entity Central Index Key	0000316206
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$7,447
Entity Common Stock, Shares Outstanding		186,832,341