& Resorts Worldwide, Inc.
Starwood Hotels
2008 Proxy Statement & 2007 Annual Report

Starwood Hotels & Resorts Worldwide, Inc.

Starwood Hotels & Resorts Worldwide, Inc.
Dear Fellow Shareholders
increasing returns on invested capital. Let me give you an example.
As you all know, I joined Starwood as the CEO in September
We would contend that the economics of W are better than any other
of 2007 and I am excited to be a part of such a great organiza-
luxury brand, which explains the explosive growth from an existing
tion. So while I can’t take credit for the terrific results our team
base of 20 hotels today to well over 50 in the coming years.
delivered in 2007, I’m very proud of their hard work and feel
fortunate to have such a strong team of talented Associates
Now let’s take a quick look at our distinctive and compelling
around the world that deliver industry-leading results year after
portfolio of brands. To start with, our Luxury Brands Group
year. This pool of industry veterans will be the foundation for our
offers unique and differentiated products for consumers and
future as we transform Starwood into the leading hotel company
developers through St Regis, The Luxury Collection and W. In
in the world.
the upper upscale category, Westin is one of the most sought-
after brands through its clear and consistent positioning around
First, let me list some of our top accomplishments in 2007:
personal renewal. Sheraton’s strong international presence
• We delivered worldwide system-wide RevPAR growth of affords us a platform to aggressively re-invigorate and bring con-
10.3%, driven by our strong international presence where sistency to the brands in the US. And Le Meridien complements
RevPAR jumped 15.5%. these upper upscale offerings with a chic European-flair that
can grow from its geographic base in Europe, Africa and the
• We also delivered strong results at our worldwide owned
Middle East. Meanwhile, aloft and Element bring excitement
hotels, with RevPAR gains of 11.0% and margin expansion
and personality to the select-serve category. And at the same
of 120bps.
time, we’ve transformed Four Points by Sheraton into a compelling
• We opened 67 hotels and signed 198 hotel contracts with brand, with stellar growth in RevPAR, GSI scores and pipeline.
47,000 rooms.
Our second pillar for Starwood is to be ‘Operationally-Driven’.
• SVO generated operating income of $246 million on industry-
We must consistently deliver the right brand experience for our
leading margins of roughly 26%.
guests. And we can measure our effectiveness at delivering on
that brand promise through tracking our Guest Satisfaction
• We returned approximately $2.0 billion to our shareholders,
Scores. But at the same time, we must also manage expenses
including $1.8 billion through our buyback program and
at our hotels to improve efficiencies. And because we own
almost $200 million in dividends.
hotels, we’re focused on growing not just the top-line, but also
But rather than just talking about yesterday’s results, I want to margins. I also believe we have an opportunity to streamline our
take this opportunity to walk you through my vision for processes and better allocate resources within the company to
Starwood’s future, our strengths and opportunities, and how we their highest and best use. Prioritization is key to our success as
will continue to create value for our shareholders over the long- we enter a period of great growth in our managed and fran-
term. We have identified five pillars that will direct our actions to chised businesses. An example is innovation, which has been a
deliver the growth, cost containment, and focused resource allo- hallmark for Starwood. Our goal going forward will be to focus
cation that our investors should expect from us. So let me take on fewer, more significant innovations that will resonate with our
you through each of these pillars, why they are important for guests and are aligned with owner interests.
Starwood, and how we’ll measure our success.
This leads me to our third pillar, ‘Growth’, as we believe that
The first pillar of our strategy is based on ‘World Class Brands’. Starwood is poised to gain market share over the coming years.
As you all know, Starwood has some of the best brands in the Our development team has led the charge in building a great
industry, especially in the upper upscale and luxury segments. pipeline to increase our penetration in the US. More importantly,
Our goal is to have distinctive and compelling brands. Distinctive these are exciting times for the upper upscale and luxury seg-
brand positioning means targeting a specific guest with exactly ments thanks to the extraordinary rise in global prosperity. This
the experience they are seeking. Our brands become compelling is most dramatic in China, India and the Middle East, but it’s
through delivering those experiences time after time. The role of also true in scores of other markets around the world. Our dis-
innovation is to keep our brands fresh, driving repeat business. tinctive and compelling brands will have a global appeal as
Successful delivery of the experience builds loyalty, which, in guests reach income levels where they can afford to travel. Our
the end, drives RevPAR growth ahead of the competition. So, optimism about our growth is reflected in our industry-leading
put simply, if we aren’t gaining share, we’re not doing our jobs. pipeline. With 120,000 rooms in the pipeline, our room count
To measure our success, we’ll focus on RevPAR index by brand. can grow by over 40% over the next four to five years. These
And at the same time, we’ll keep a sharp eye on the underlying are high quality rooms, with almost 70% in the upper upscale
economics for both ourselves and the development commu- and luxury categories, and over half in international locations.
nity. This should translate into additional pipeline growth and

Starwood Hotels & Resorts Worldwide, Inc.
the coming years, that’s likely to mean favoring high returns over
At the same time, we need to be sure that we ‘Grow Smart’ as
continued rapid growth as we concentrate our focus on key
we invest ahead of growth. The expenses we’re incurring today
existing markets.
to sign management contracts and build hotels won’t translate
into meaningful fee income for several years down the road.
As a management team, we’re also committed to controlling our
And because we’ve only ramped up our investments in growing
expenses. This would be an important discipline, even without
the pipeline over the past couple of years, there’s a lag between
the economic uncertainty for 2008. So we’re launching a thor-
today’s expenses and when fee revenues kick in. We also now
ough review of our spending, with an eye towards reducing
have the additional expense related to ensuring that we open
costs, improving productivity, and reinvesting against high
our pipeline of hotels ‘HOT’, which in our parlance means on-
priorities such as growth. We expect that this capital allocation
time, on-budget, and full. These expenses are incurred in antici-
and cost discipline should result in generating excess cash that
pation of future income. Delivering growth will require us to be
we intend to return to our shareholders. And as an example of
smart at how we deploy our resources over the coming years, as
this commitment, in 2007 we bought back $1.8 billion of stock
I believe we already have most of the people we will need to
and raised our dividend by 7% to $0.90 per share.
grow. This will allow the company to enjoy increasing econo-
mies of scale as our room count grows while we control
There is a lot of uncertainty surrounding the US economy as we
expenses. Remember, we’re working off half the base of rooms
enter 2008, but we see continued strong growth in our core
that Marriott and Hilton have, so the best economies of scale are
lodging business due in no small part to our great global foot-
yet to come as we’re investing heavily today for tomorrow’s growth.
print, our portfolio of strong brands, and the constrained supply
in the segments and locations where we operate. Today,
Our fourth pillar is ‘Building Great Teams’. After spending time
Starwood is the most global of the major lodging companies,
with our people in the field around the world, I can tell you that
and not nearly dependent on the US as it has been in prior
Starwood has a deep pool of talented lodging professionals. But
cycles. US owned hotels contribute roughly 20% of the
our biggest future challenge is managing our growth—100 new
company’s profits. Managed and franchised fee streams are
hotels means forming 100 new teams that are ready to deliver
now the largest contributors to our bottom line, and also increas-
the brand experiences. Our brands, growth and operational
ingly international. In fact, over half of our hotels are located in
effectiveness will depend on retaining, developing and attracting
international markets, and almost 55% of our fees are generated
talented Associates around the world, and we’re focused on
outside of the US. And we expect this evolution towards interna-
making Starwood a world-class organization. Also, I should add
tional and fee income to continue, especially as we expand our
that I expect to announce some additions to our leadership team
international presence and contemplate selling additional assets.
in 2008.
We believe this means we should be valued differently than during
the last cycle.
This leads us to our fifth and final pillar: ‘Delivering superior
returns to our shareholders’. As a baseline, we are committed to
So in summary, I’d like to emphasize three key points:
and focused on consistently exceeding our financial targets. And
looking forward, we need to bring discipline to two more areas:
1) Our business fundamentals were terrific in 2007.
First, investing in high growth areas that don’t tie up the
company’s capital, and second, managing our expenses through
2) We’re committed to continuing to deliver strong results in
discipline and prioritizing our activities.
2008 and beyond. And importantly, Starwood has never
been better positioned to weather US economic uncertainty,
For example, our view is that there aren’t many businesses quite
through our reduced reliance on owned hotels, and our
as compelling as managing and franchising hotels. The capital
global footprint.
requirements are minimal, there is great potential for growth,
3) We have a clear vision for the company’s future that can be
and the earnings can be sustained over the long-run. This
easily tracked and should generate significant shareholder
leads us to redefining our asset-right strategy and reviewing
value for years to come.
our criteria for determining which assets we continue to own
as market conditions change. In today’s market, for example,
Thank you for your continued support.
we see arbitrage opportunities between our underlying real
estate value and our share price.
This discipline in capital allocation also relates to our vacation
ownership business. Over the past few years, we’ve grown this
business dramatically and had another great year in 2007.
This growth has been fueled by our great brands and world-
class sales organization. As the economics of this business
change over time and across geographies, we need to apply
discipline to balancing our desire to grow in the future with the Frits van Paasschen
potential returns, as measured on a project-by-project basis. In Chief Executive Officer

Starwood Hotels & Resorts Worldwide, Inc.
2008 Proxy Statement & 2007 Annual Report

2008
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT

2008
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
AND
PROXY STATEMENT
March 19, 2008
Dear Stockholder:
You are cordially invited to attend Starwood’s Annual Meeting of Stockholders, which is being held on
Wednesday, April 30, 2008, at 10:00 a.m. (local time), at the Westin Boston Waterfront Hotel, 425 Summer Street,
Boston, MA 02210.
At this year’s Annual Meeting, you will be asked to (i) elect nine Directors and (ii) ratify the appointment of
Ernst & Young LLP as Starwood’s independent registered public accounting firm for 2008.
We are pleased to be among the first companies to take advantage of new Securities and Exchange
Commission rules that allow issuers to furnish proxy materials to their stockholders on the Internet. We believe
the new rules will allow us to provide our stockholders with the information they need, while lowering the costs of
delivery and reducing the environmental impact of our Annual Meeting.
As owners of Starwood, your vote is important. Whether or not you are able to attend the Annual Meeting in
person, it is important that your shares be represented. Please vote as soon as possible. Instructions on how to vote
are contained herein.
We appreciate your continued support and interest in Starwood.
Very truly yours,
Frits Van Paasschen Bruce Duncan
Chief Executive Officer Chairman of the Board

NOTICE OF 2008 ANNUAL MEETING OF STOCKHOLDERS
OF
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
A Maryland Corporation
DATE: April 30, 2008
TIME: 10:00 a.m., local time
PLACE: Westin Boston Waterfront Hotel
425 Summer Street
Boston, MA 02210
ITEMS OF BUSINESS: 1. To elect nine Directors to serve until the next Annual Meeting of
Stockholders and until their successors are duly elected and qualified.
2. To consider and vote upon the ratification of the appointment of Ernst &
Young LLP as Starwood Hotels & Resorts Worldwide, Inc.’s (the
“Company”) independent registered public accounting firm for the fiscal year
ending December 31, 2008.
3. To transact such other business as may properly come before the meeting or
any postponement or adjournment therof.
RECORD DATE: Holders of record of the Company’s stock at the close of business on March 3,
2008 are entitled to vote at the meeting.
ANNUAL REPORT: The Company’s 2007 Annual Report on Form 10-K, which is not a part of the
proxy soliciting material, is enclosed. The Annual Report may also be obtained
from the Company’s website at www.starwoodhotels.com/corporate/
investor_relations.html. Stockholders may also obtain, without charge, a copy of
the Annual Report by contacting Investor Relations at the Company’s
headquarters.
PROXY VOTING: It is important that your shares be represented and voted at the meeting. You can
authorize a proxy to vote your shares by completing and returning the proxy card
sent to you. Most stockholders can authorize a proxy over the Internet or by
telephone. If Internet or telephone authorization is available to you, instructions
are printed on your proxy card. You can revoke a proxy at any time prior to its
exercise at the meeting by following the instructions in the accompanying proxy
statement. Your promptness will assist us in avoiding additional solicitation costs.
Kenneth S. Siegel
Corporate Secretary
March 19, 2008
White Plains, New York

TABLE OF CONTENTS
WHO CAN HELP ANSWER YOUR QUESTIONS? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ii
THE ANNUAL MEETING AND VOTING — QUESTIONS AND ANSWERS . . . . . . . . . . . . . . . . . . . . 1
CORPORATE GOVERNANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ELECTION OF DIRECTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
COMPENSATION DISCUSSION & ANALYSIS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
COMPENSATION COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
SUMMARY COMPENSATION TABLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
GRANTS OF PLAN-BASED AWARDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF PLAN
BASED AWARDS SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
OPTION EXERCISES AND STOCK VESTED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
NONQUALIFIED DEFERRED COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL . . . . . . . . . . . . . . . . 35
DIRECTOR COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
AUDIT COMMITTEE REPORT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION . . . . . . . . . . . . . . . . 46
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
SOLICITATION COSTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48

WHO CAN HELP ANSWER YOUR QUESTIONS?
If you have any questions about the Annual Meeting, you should contact:
Starwood Hotels & Resorts Worldwide, Inc.
1111 Westchester Avenue
White Plains, New York 10604
Attention: Investor Relations
Phone Number: 1-914-640-8100
If you would like additional copies of this Proxy Statement or the Annual Report, or if you have questions
about the Annual Meeting or need assistance in voting your shares, you should contact:
D.F. King & Co., Inc.
48 Wall Street
New York, New York 10005
Phone Number: 1-800-859-8511 (toll free)
ii

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
1111 WESTCHESTER AVENUE
WHITE PLAINS, NY 10604
PROXY STATEMENT
FOR
ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD April 30, 2008
THE ANNUAL MEETING AND VOTING — QUESTIONS AND ANSWERS
Why did I receive this Proxy Statement?
Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the “Company” or “Starwood”), has
made these materials available to you on the Internet or, upon your request, has delivered printed versions of these
materials to you by mail, in connection with the solicitation of proxies by the Board of Directors (the “Board”) for
use at the Company’s 2008 Annual Meeting of Stockholders (the “Annual Meeting”), and at any postponement or
adjournment of the Annual Meeting. The Company is first making these materials available (and mailing the Notice
of Annual Meeting, this proxy statement and accompanying form of proxy to those stockholders who have
requested) on or about March 19, 2008.
When and where will the Annual Meeting be held?
The Annual Meeting will be held on April 30, 2008 at 10:00 a.m. (local time), at Westin Boston Waterfront
Hotel, 425 Summer Street, Boston, MA 02210. If you plan to attend the Annual Meeting and have a disability or
require special assistance, please contact the Company’s Investor Relations department at (914) 640-8100.
What proposals will be voted on at the Annual Meeting?
At the Annual Meeting, the stockholders of the Company will consider and vote upon:
1. The election of nine Directors to serve until the next Annual Meeting of Stockholders and until their
successors are duly elected and qualified.
2. The ratification of the appointment of Ernst & Young LLP (“Ernst & Young”) as the Company’s
independent registered public accounting firm for 2008.
3 Such other business as may properly come before the meeting or any adjournment or postponement thereof.
The Board is not aware of any matter that will be presented at the Annual Meeting that is not described above.
If any other matter is presented at the Annual Meeting, the persons named as proxies on the enclosed proxy card
will, in the absence of stockholder instructions to the contrary, vote the shares for which such persons have voting
authority in accordance with their discretion on any such matter.
Why did I receive a one-page notice in the mail regarding the Internet availability of proxy materials
this year instead of a full set of proxy materials?
Pursuant to the new rules recently adopted by the Securities and Exchange Commission, we have elected to
provide access to our proxy materials over the Internet. Accordingly, we sent a Notice of Internet Availability of
Proxy Materials (the “Notice”) to our stockholders of record and beneficial owners as of the Record Date. All
stockholders will have the ability to access the proxy materials on the website referred to in the Notice or request to
receive a printed set of the proxy materials. Instructions on how to access the proxy materials over the Internet or to
request a printed copy may be found on the Notice. In addition, stockholders may request to receive proxy materials
in printed form by mail or electronically by email on an ongoing basis.
1

How can I get electronic access to the proxy materials?
The Notice will provide you with instructions regarding how to:
• View our proxy materials for the Annual Meeting on the Internet; and
• Instruct us to send our future proxy materials to you electronically by email.
Choosing to receive your future proxy materials by email will save us the cost of printing and mailing
documents to you and will reduce the impact of our annual stockholders’ meetings on the environment. If you
choose to receive future proxy materials by email, you will receive an email next year with instructions containing a
link to those materials and a link to the proxy voting site. Your election to receive proxy materials by email will
remain in effect until you terminate it.
Who is entitled to vote at the Annual Meeting?
If you were a stockholder of the Company at the close of business on March 3, 2008 (the “Record Date”), you
are entitled to notice of, and to vote at, the Annual Meeting. You have one vote for each share of common stock of
the Company (“Shares”) you held at the close of business on the Record Date on each matter that is properly
submitted to a vote at the Annual Meeting, including Shares:
• Held directly in your name as the stockholder of record,
• Held for you in an account with a broker, bank or other nominee, and
• Credited to your account in the Company’s Savings and Retirement Plan (the “Savings Plan”).
On the Record Date there were 187,029,468 Shares outstanding and entitled to vote at the Annual Meeting and
there were 17,922 record holders of Shares. The Shares are the only outstanding class of voting securities of the
Company.
Who may attend the Annual Meeting?
Only stockholders of record, or their duly authorized proxies, may attend the Annual Meeting. Registration
and seating will begin at 9:00 a.m. To gain admittance, you must present valid picture identification, such as a
driver’s license or passport. If you hold Shares in “street name” (through a broker or other nominee), you will also
need to bring a copy of a brokerage statement (in a name matching your photo identification) reflecting your stock
ownership as of the Record Date. If you are a representative of a corporate or institutional stockholder, you must
present valid photo identification along with proof that you are a representative of such stockholder.
Please note that cameras, recording devices and other electronic devices will not be permitted at the Annual
Meeting.
How many Shares must be present to hold the Annual Meeting?
The presence in person or by proxy of holders of a majority of the outstanding Shares entitled to vote at the
Annual Meeting constitutes a quorum for the transaction of business. Your Shares are counted as present at the
meeting if you:
• are present in person at the Annual Meeting, or
• have properly executed and submitted a proxy card, or authorized a proxy over the telephone or the Internet,
prior to the Annual Meeting.
Abstentions and broker non-votes are counted for purposes of determining whether a quorum is present at the
Annual Meeting.
If a quorum is not present when the Annual Meeting is convened, or if for any other reason the presiding officer
believes that the Annual Meeting should be adjourned, the Annual Meeting may be adjourned by the presiding
officer. If a motion is made to adjourn the Annual Meeting, the persons named as proxies on the enclosed proxy card
will have discretion to vote on such adjournment all Shares for which such persons have voting authority.
2

What are broker non-votes?
If you have Shares that are held by a broker, you may give the broker voting instructions and the broker must
vote as you directed. If you do not give the broker any instructions, the broker may vote at its discretion on all
routine matters (i.e., election of Directors and the ratification of an independent registered public accounting firm).
For non-routine matters, however, the broker may NOT vote using its discretion. This is referred to as a broker non-
vote.
How are abstentions, withheld votes and broker non-votes counted?
Shares not voted due to withheld votes, abstentions or broker non-votes with respect to the election of a
Director or the ratification of the appointment of the independent registered public accounting firm will not have
any effect on the outcome of such matters. See “What happens if a director nominee does not receive a majority of
the votes cast?” below for information concerning our director resignation policy.
How many votes are required to approve each proposal?
Directors will be elected by a plurality of the votes cast at the Annual Meeting, either in person or represented
by properly authorized proxy. This means that the nine nominees who receive the largest number of “FOR” votes
cast will be elected as Directors. Stockholders cannot cumulate votes in the election of Directors.
Ratification of the appointment of Ernst & Young as the Company’s independent registered public accounting
firm requires “FOR” votes from a majority of the votes cast at the Annual Meeting, either in person or represented
by properly completed or authorized proxy. If a majority of the votes cast at the Annual Meeting vote “AGAINST”
ratification of the appointment of Ernst & Young, the Board and the Audit Committee will reconsider its
appointment.
What happens if a director nominee does not receive a majority of the votes cast?
Under our Bylaws, a director nominee, running uncontested, who receives more “Withheld” than “For” votes
is required to tender his or her irrevocable resignation for consideration by the Board. The Governance and
Nominating Committee will recommend to the Board whether to accept or reject the resignation. The Board will act
on the tendered resignation and publicly disclose its decision within 90 days following certification of the election
results. The Director who tenders his or her resignation will not participate in the Board’s decision with respect to
that resignation.
How do I vote?
If you are a stockholder of record, you may vote in person at the Annual Meeting. We will give you a ballot
when you arrive. If you do not wish to vote in person or if you will not be attending the Annual Meeting, you may
vote by proxy. You can vote by proxy over the Internet by following the instructions provided in the Notice, or, if
you request printed copies of the proxy materials by mail, you can also vote by mail or by telephone.
Each Share represented by a properly completed written proxy or properly authorized proxy by telephone or
over the Internet will be voted at the Annual Meeting in accordance with the stockholder’s instructions specified in
the proxy, unless such proxy has been revoked. If no instructions are specified, such Shares will be voted FOR the
election of each of the nominees for Director, FOR ratification of the appointment of Ernst & Young as the
Company’s independent registered public accounting firm for 2008 and in the discretion of the proxy holder on any
other business as may properly come before the meeting.
If you participate in the Savings Plan and have contributions invested in Shares, the proxy card will serve as a
voting instruction for the trustee of the Savings Plan. You must return your proxy card to the transfer agent on or
prior to April 25, 2008. If your proxy card is not received by the transfer agent by that date or if you sign and return
your proxy card without instructions marked in the boxes, the trustee will vote your Shares in the same proportion as
other Shares held in the Savings Plan for which the trustee received timely instructions unless contrary to ERISA
(Employee Retirement Income Security Act).
3

How can I revoke a previously submitted proxy?
You may revoke your proxy and change your vote at any time before the final vote at the meeting. You may
vote again on a later date on the Internet or by telephone (only your latest Internet or telephone proxy submitted
prior to the meeting will be counted), or by signing and returning a new proxy card with a later date, or by attending
the meeting and voting in person. However, your attendance at the Annual Meeting will not automatically revoke
your proxy unless you vote again at the meeting or specifically request in writing that your prior proxy be revoked.
What does it mean if I receive more than one proxy card?
If you receive more than one proxy card from the Company, it means your Shares are not all registered in the
same way (for example, some are in your name and others are jointly with a spouse) and are in more than one
account. Please sign and return all proxy cards you receive to ensure that all Shares held by you are voted.
How does the Board recommend that I vote?
The Board recommends that you vote FOR each of the Director nominees and FOR ratification of the
appointment of Ernst & Young as the Company’s independent registered public accounting firm for 2008.
4

CORPORATE GOVERNANCE
In addition to our charter and Bylaws, we have adopted Corporate Governance Guidelines, which are posted on
our web site at www.starwoodhotels.com/corporate/investor_relations.html, to address significant corporate gov-
ernance issues. The Guidelines provide a framework for the Company’s corporate governance and cover topics
including, but not limited to, Board and committee composition, Director share ownership guidelines, and Board
evaluations. The Governance and Nominating Committee is responsible for overseeing and reviewing the
Guidelines and reporting and recommending to the Board any changes to the Guidelines.
The charters for the Company’s Audit Committee, Capital Committee, Compensation and Option Committee
and Governance and Nominating Committee are posted on its website at www.starwoodhotels.com/corporate/
investor_relations.html.
The Company has adopted a Finance Code of Ethics applicable to its Chief Executive Officer, Chief Financial
Officer, Corporate Controller, Corporate Treasurer, Senior Vice President-Taxes and persons performing similar
functions. The Finance Code of Ethics is posted on the Company’s web site at www.starwoodhotels.com/corporate/
investor_relations.html. The Company intends to post amendments to, and waivers from, the Finance Code of
Ethics that require disclosure under applicable Securities and Exchange Commission (the “SEC”) rules on its web
site. In addition, the Company has a Code of Conduct applicable to all employees and directors that addresses the
legal and ethical issues employees may encounter in carrying out their duties and responsibilities. Subject to
applicable law, employees are required to report any conduct they believe to be a violation of the Code of Conduct.
The Code of Conduct is posted on the Company’s web site at www.starwoodhotels.com/corporate/
investor_relations.html.
You may obtain a free copy of any of these posted documents by sending a letter to the Company’s Investor
Relations Department, 1111 Westchester Avenue, White Plains, New York 10604. Please note that the information
on the Company’s website is not incorporated by reference in this Proxy Statement.
The Company has a Disclosure Committee, comprised of certain senior executives, to design, establish and
maintain the Company’s internal controls and other procedures with respect to the preparation of periodic reports
filed with the SEC, earnings releases and other written information that the Company will disclose to the investment
community (the “Disclosure Documents”). The Disclosure Committee evaluates the effectiveness of the Compa-
ny’s disclosure controls and procedures on a regular basis and maintains written records of the disclosure controls
and procedures followed in connection with the preparation of Disclosure Documents. The Company will continue
to monitor developments in the law and stock exchange regulations and will adopt new procedures consistent with
new legislation or regulations.
In accordance with New York Stock Exchange (the “NYSE”) rules, the Board makes an annual determination
as to the independence of the Directors and nominees for election as a director. No Director will be deemed to be
independent unless the Board affirmatively determines that the Director has no material relationship with the
Company, directly or as an officer, stockholder or partner of an organization that has a relationship with the
Company. A material relationship is one that impairs or inhibits — or has the potential to impair or inhibit — a
director’s exercise of critical and disinterested judgment on behalf of the Company and its stockholders. The Board
observes all criteria for independence established by the NYSE listing standards and other governing laws and
regulations. In its annual review of Director independence, the Board considers any commercial, banking,
consulting, legal, accounting, charitable or other business relationships each Director may have with the Company.
In addition, the Board consults with the Company’s counsel to ensure that the Board’s determinations are consistent
with all relevant securities and other laws and regulations regarding the definition of “independent director,”
including but not limited to those set forth in pertinent listing standards of the NYSE in effect from time to time. As a
result of its annual review, the Board has determined that all of the Directors, with the exception of
Mr. Van Paasschen, are independent directors. Mr. Van Paasschen is not independent because he is serving as
the Chief Executive Officer of the Company.
In making this determination, the Board took into account that other than Messrs. Duncan, Hippeau, Ryder,
Quazzo and Youngblood and Ambassador Barshefsky, none of the non-employee directors has any relationship
with the Company except as a Director and stockholder of the Company. With respect to Mr. Duncan, the Board
5

considered the fact that Mr. Duncan served as Chief Executive Officer on an interim basis from April 1, 2007 to
September 24, 2007 and received a salary and other benefits for his services. Prior to serving as Chief Executive
Officer on an interim basis, the Board determined that Mr. Duncan was an independent director. Yahoo! Inc.,
Amazon.com, Inc., Gap, Inc. and American Express Company, where Messrs. Hippeau, Mr. Ryder and Youngblood
and Ambassador Barshefky are directors, respectively, are the only companies to transact business with the
Company over the past three years in which any of the Company’s independent directors served as a director,
executive officer or is a partner, principal or greater than 10% stockholder. In the case of each of Yahoo! Inc.,
Amazon.com, Inc. and Gap, Inc., the combined annual payments from the Company to each such entity and from
each such entity to the Company has been less than .01% of the Company’s and/or each such other entity’s annual
consolidated revenues for each of the past three years. In the case of American Express Company, with which the
Company co-brands the American Express Starwood Preferred Guest credit card, the combined annual payments
from the Company to American Express Company and from American Express Company to the Company has been
less than .01% of American Express Company’s annual consolidated revenues for each of the past three years and
payments from American Express were slightly more than 2% of the Company’s annual consolidated revenues for
2006 and less than 2% for 2007 and 2005. Ambassador Barshefsky serves solely as a director of American Express
and derives no personal benefit from these payments. These relationships are consistent with the NYSE
independence standards. In addition, in the case of Mr. Quazzo, the Board considered that in January 2008 a
fund managed by Transwestern Investment Company, LLC purchased the office building in Phoenix where the
Company maintains an office. The Company’s lease for the office space was negotiated and entered into prior to the
acquisition with unaffiliated third parties at arms-length and was not amended in connection with the acquisition of
the building by the fund. Mr. Quazzo has informed the Company that he did not derive any direct personal benefit
from the office space lease, although his compensation does depend, in part, on Transwestern’s Investment
Company, LLC’s results of operations.
Mr. Duncan, who was an independent director prior to his interim appointment as Chef Executive Officer, has
served as non-executive Chairman of the Board since May 2005 until March 31, 2007 when he was appointed Chief
Executive Officer on an interim basis, and from September 24, 2007 to the present. As a result, prior to March 31,
2007 and following September 24, 2007, the Board did not have a “lead” Director but Mr. Duncan, as Chairman, ran
meetings of the Board. During Mr. Duncan’s appointment as Chief Executive Officer on an interim basis, the
Chairman of the Governance and Nominating Committee served as the lead director at the executive meetings of the
Board. Mr. Quazzo, an independent director, served as the Chairman of the Governance and Nominating Committee
in 2007.
The Company has adopted a policy which requires the Audit Committee to approve the hiring of any current or
former employee (within the last 5 years) of the Company’s independent registered public accounting firm into any
position (i) as a manager or higher, (ii) in its accounting or tax departments, (iii) where the hire would have direct
involvement in providing information for use in its financial reporting systems, or (iv) where the hire would be in a
policy setting position. When undertaking its review, the Audit Committee considers applicable laws, regulations
and related commentary regarding the definition of “independence” for independent registered public accounting
firms.
The Board has a policy under which Directors who are not employees of the Company or any of its subsidiaries
may not stand for re-election after reaching the age of 72. In addition, under this policy, Directors who are
employees of the Company must retire from the Board upon their retirement from the Company. Pursuant to the
Corporate Governance Guidelines, the Board also has a policy that directors who change their principal occupation
(including through retirement) should voluntarily tender their resignation to the Board.
The Company expects all Directors to attend the Annual Meeting and believes that attendance at the Annual
Meeting is as important as attendance at meetings of the Board of Directors and its committees. In fact, the
Company typically schedules Board of Directors’ and committee meetings to coincide with the dates of its Annual
Meetings. However, from time to time, other commitments prevent all Directors from attending each meeting. All
Directors attended the most recent annual meeting of stockholders, which was held on May 24, 2007.
The Company has adopted a policy which permits stockholders and other interested parties to contact the
Board of Directors. If you are a stockholder or interested party and would like to contact the Board of Directors you
6

may send a letter to the Board of Directors, c/o the Corporate Secretary, 1111 Westchester Avenue, White Plains,
New York 10604 or online at www.hotethics.com. You should specify in the communication that you are a
stockholder or an interested party. If the correspondence contains complaints about Starwood’s accounting, internal
or auditing matters or directed to the non-management directors, the Corporate Secretary will forward that
correspondence to a member of the Audit Committee. If the correspondence concerns other matters, the Corporate
Secretary will forward the correspondence to the Director to whom it is addressed or otherwise as would be
appropriate under the circumstances, attempt to handle the inquiry directly (for example where it is a request for
information or a stock-related matter), or not forward the communication if it is primarily commercial in nature or
relates to an improper or irrelevant topic. At each regularly scheduled Board meeting, the Corporate Secretary or
his/her designee will present a summary of all such communications received since the last meeting that were not
forwarded and shall make those communications available to the Directors upon request. This policy is also posted
on the Company’s website at www.starwoodhotels.com/corporate/investor_relations.html.
The Company indemnifies its Directors and officers to the fullest extent permitted by law so that they will be
free from undue concern about personal liability in connection with their service to the Company. This is required
under the Company’s Charter, and the Company has also signed agreements with each of those individuals
contractually obligating it to provide this indemnification to them.
ELECTION OF DIRECTORS
Under the Charter, each of the Company’s Directors is elected to serve until the next annual meeting of
stockholders and until his or her successor is duly elected and qualified. If a nominee is unavailable for election,
proxy holders and stockholders may vote for another nominee proposed by the Board or, as an alternative, the Board
may reduce the number of Directors to be elected at the meeting. Each nominee has agreed to serve on the Board if
elected. Mr. Jean-Marc Chapus will serve until the expiration of his current term but will not stand for reelection in
2008. Mr. Chapus has served on the Company’s Board (or affiliates of the Company) since August 1995. The
Company acknowledges and expresses its thanks to Mr. Chapus for the many years of devoted service he provided
to the Company. Set forth below is information as of March 1, 2008 regarding the nominees for election, which has
been confirmed by each of them for inclusion in this Proxy Statement.
Directors Nominated at the Annual Meeting will be Elected to Serve Until the 2009 Annual Meeting of
Stockholders and Until his or her Successor is Duly Elected and Qualified
Frits Van Paasschen, 46, has been Chief Executive Officer of the Company since September 2007. From
March 2005 until September 2007, he served as President and CEO of Molson Coors Brewing Company’s largest
division, Coors Brewing Company. Prior to joining Coors, from April 2004 until March 2005, Mr. Van Paasschen
worked independently through FPaasschen Consulting and Mercator Investments, evaluating, proposing, and
negotiating private equity transactions. Prior thereto, Mr. Van Paasschen spent seven years at Nike, Inc, most
recently as Corporate Vice President/General Manager, Europe, Middle East and Africa from 2000 to 2004. Mr. Van
Paasschen was appointed to the Board of the Company in September 2007 in connection with his employment as
Chief Executive Officer.
Bruce W. Duncan, 56, has been a private investor since January 2006 and has served as Chairman of the Board
since September 2007. From April 2007 to September 2007, Mr. Duncan served as Chief Executive Officer of the
Company on an interim basis and prior thereto was Chairman of the Board since May 2005. From May 2005 to
December 2005, Mr. Duncan was Chief Executive Officer and Trustee of Equity Residential (“EQR”), the largest
publicly traded apartment company in the United States. From January 2003 to May 2005, he was President, Chief
Executive Officer and Trustee, and from April 2002 to December 2002, President and Trustee, of EQR. From April
2000 until March 2002, he was a private investor. From December 1995 until March 2000, Mr. Duncan served as
Chairman, President and Chief Executive Officer of The Cadillac Fairview Corporation Limited, a real estate
operating company. Mr. Duncan has served as a Director of the Company since April 1999, and was a Trustee of
Starwood Hotels & Resorts, a real estate investment trust and former subsidiary of the Company (the “Trust”) since
August 1995.
7

Adam Aron, 53, has been Chairman and Chief Executive Officer of World Leisure Partners, Inc., a leisure
related consultancy, since 2006. From 1996 through 2006, Mr. Aron served as Chairman and Chief Executive
Officer of Vail Resorts, Inc. (an owner and operator of ski resorts and hotels). Mr. Aron is also a director of FTD
Group, Inc., Rewards Network, Inc. and Marathon Acquisition Corp. Mr. Aron has been a director of the Company
since August 2006.
Charlene Barshefsky, 57, has been Senior International Partner at the law firm of WilmerHale,
Washington, D.C. since September 2001. From March 1997 to January 2001, Ambassador Barshefsky was the
United States Trade Representative, the chief trade negotiator and principal trade policy maker for the United States
and a member of the President’s Cabinet. Ambassador Barshefsky is a director of The Estee Lauder Companies,
Inc., American Express Company and Intel Corporation. Ambassador Barshefsky also serves on the Board of
Directors of the Council on Foreign Relations. She has been a Director of the Company, and was a Trustee of the
Trust, since October 2001.
Lizanne Galbreath, 49, has been Managing Partner of Galbreath & Company, a real estate investment firm,
since 1999. From April 1997 to 1999, Ms. Galbreath was Managing Director of LaSalle Partners/Jones Lang
LaSalle where she also served as a Director. From 1984 to 1997, Ms. Galbreath served as a Managing Director then
Chairman and CEO of The Galbreath Company, the predecessor entity of Galbreath & Company. Ms. Galbreath has
been a director of the Company, and was a Trustee of the Trust, since May 2005.
Eric Hippeau, 56, has been Managing Partner of Softbank Capital, a technology venture capital firm, since
March 2000. Mr. Hippeau served as Chairman and Chief Executive Officer of Ziff-Davis Inc., an integrated media
and marketing company, from 1993 to March 2000 and held various other positions with Ziff-Davis from 1989 to
1993. Mr. Hippeau is a director of Yahoo! Inc. Mr. Hippeau has been a Director of the Company, and was a Trustee
of the Trust, since April 1999.
Stephen R. Quazzo, 48, is the Chief Executive Officer and has been the Managing Director and co-founder of
Transwestern Investment Company, L.L.C., a real estate principal investment firm, since March 1996. From April
1991 to March 1996, Mr. Quazzo was President of Equity Institutional Investors, Inc., a subsidiary of Equity Group
Investments, Inc. Mr. Quazzo has been a Director of the Company since April 1999, and was a Trustee of the Trust,
since August 1995.
Thomas O. Ryder, 63, retired as Chairman of the Board of The Reader’s Digest Association, Inc. in January
2007, a position he had held since January 1, 2006. Mr. Ryder was Chairman of the Board and Chief Executive
Officer of that company from April 1998 through December 31, 2005. Mr. Ryder was President, American Express
Travel Related Services International, a division of American Express Company, which provides travel, financial
and network services, from October 1995 to April 1998. In addition, he is a director of Amazon.com, Inc. and Virgin
Mobile USA, Inc. Mr. Ryder has been a Director of the Company, and was a Trustee of the Trust since April 2001.
Kneeland C. Youngblood, 52, has been a managing partner of Pharos Capital Group, L.L.C., a private equity
fund focused on technology companies, business service companies and health care companies, since January 1998.
From July 1985 to December 1997, he was in private medical practice. He is Chairman of the Board of the American
Beacon Funds, a mutual fund company managed by AMR Investments, an investment affiliate of American
Airlines. Mr. Youngblood is also a director of Burger King Holdings, Inc. and Gap, Inc. Mr. Youngblood has been a
Director of the Company, and was a Trustee of the Trust, since April 2001.
The Board unanimously recommends a vote FOR election of these nominees.
Board Meetings and Committees
The Board of Directors held 16 meetings during 2007. In addition to meetings of the full Board, Directors
attended meetings of individual Board committees. Each Director attended at least 75% of the total number of
meetings of the full Board and committees on which he or she serves.
The Board has established Audit, Compensation and Option, Corporate Governance and Nominating, and
Capital Committees, the principal functions of which are described below.
8

Audit Committee. The Audit Committee, which has been established in accordance with Section 3(a)(58)(A)
of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), is currently comprised of Messrs. Ryder
(chairman) and Youngblood and Ms. Galbreath, all of whom are “independent” Directors, as determined by the
Board in accordance with the NYSE listing requirements and applicable federal securities laws. The Board has
determined that Mr. Ryder is an “audit committee financial expert” under federal securities laws and has adopted a
written charter for the Audit Committee. The Audit Committee provides oversight regarding accounting, auditing
and financial reporting practices of the Company. The Audit Committee selects and engages the independent
registered public accounting firm to serve as auditors with whom it discusses the scope and results of their audit. The
Audit Committee also discusses with the independent registered public accounting firm and with management,
financial accounting and reporting principles, policies and practices and the adequacy of the Company’s
accounting, financial, operating and disclosure controls. The Audit Committee met 9 times during 2007.
Compensation and Option Committee. Under the terms of its charter, which may be viewed on the Company
website at www.starwoodhotels.com/corporate/investor relations.html, the Compensation Committee is required
to consist of three or more members of the Board of Directors who meet the independence requirements of the
NYSE, are “non-employee directors” pursuant to SEC Rule 16b-3, and are “outside directors” for purposes of
Section 162(m) of the Internal Revenue Code of 1986, as amended. The Compensation and Option Committee is
currently comprised of Messrs. Chapus (chairman), Hippeau and Aron, all of whom are “independent” Directors, as
determined by the Board in accordance with the NYSE listing requirements. The Compensation and Option
Committee makes recommendations to the Board with respect to the salaries and other compensation to be paid to
the Company’s executive officers and other members of senior management and administers the Company’s
employee benefits plans, including the Company’s Long-Term Incentive Compensation Plans. The Compensation
and Option Committee met 12 times during 2007.
Capital Committee. The Capital Committee is currently comprised of Ms. Galbreath (chairperson), and
Messrs. Duncan, Quazzo and Aron. The Capital Committee was established in November 2005 to exercise some of
the power of the Board relating to, among other things, capital plans and needs, mergers and acquisitions,
divestitures and other significant corporate opportunities between meetings of the Board. The Capital Committee
met 5 times during 2007.
Governance and Nominating Committee. The Governance and Nominating Committee is currently
comprised of Messrs. Quazzo (chairman), Duncan and Hippeau and Ambassador Barshefsky, all of whom are
“independent” Directors, as determined by the Board in accordance with the NYSE listing requirements.
Mr. Duncan did not serve on the committee from March 31, 2007 through September 30, 2007, when he was
serving as Chief Executive Officer on an interim basis. The Governance and Nominating Committee was
established in May 2004, combining the functions of the Corporate Governance Committee and the
Nominating Committee, to oversee compliance with the Company’s corporate governance standards and to
assist the Board in fulfilling its oversight responsibilities. The Governance and Nominating Committee
establishes, or assists in the establishment of, the Company’s governance policies (including policies that
govern potential conflicts of interest) and monitors and advises the Company as to compliance with those
policies. The Governance and Nominating Committee reviews, analyzes, advises and makes recommendations
to the Board with respect to situations, opportunities, relationships and transactions that are governed by such
policies, such as opportunities in which a Director or officer has a personal interest. In addition, the Governance and
Nominating Committee is responsible for making recommendations for candidates for the Board of Directors,
taking into account nominations made by officers, directors, employees and stockholders, recommending Directors
for service on Board committees, developing and reviewing background information for candidates, making
recommendations to the Board for changes to the Corporate Governance Guidelines as they pertain to the
nomination or qualifications of directors or the size of the Board, if applicable. The Governance and
Nominating Committee met 7 times during 2007.
There are no firm prerequisites to qualify as a candidate for the Board, although the Board seeks a diverse
group of candidates who possess the background, skills and expertise relevant to the business of the Company or
candidates that possess a particular geographical or international perspective. The Board looks for candidates with
qualities that include strength of character, an inquiring and independent mind, practical wisdom and mature
judgment. The Board seeks to insure that at least 2⁄3 of the Directors are independent under the Company’s
9

Governance Guidelines (or at least a majority are independent under the rules of the NYSE), and that members of
the Company’s Audit Committee meet the financial literacy requirements under the rules of the NYSE and at least
one of them qualifies as an “audit committee financial expert” under applicable federal securities laws. Annually
the Governance and Nominating Committee reviews the qualifications and backgrounds of the Directors, the
overall composition of the Board, and recommends to the full Board the slate of Directors to be recommended for
nomination for election at the annual meeting of stockholders.
The Board does not believe that its members should be prohibited from serving on boards and/or committees of
other organizations, and the Board has not adopted any guidelines limiting such activities. However, the
Governance and Nominating Committee and the full Board will take into account the nature of and time
involved in a Director’s service on other boards in evaluating the suitability of individual Directors and
making its recommendations to Company stockholders. Service on boards and/or committees of other
organizations should be consistent with the Company’s conflict of interest policies.
The Governance and Nominating Committee may from time-to-time utilize the services of a search firm to
help identify candidates for Director who meet the qualifications outlined above.
The Governance and Nominating Committee will consider candidates nominated by stockholders. Under the
Company’s Bylaws, stockholder nominations must be made in writing, delivered or mailed by first class United
States mail, postage prepaid, to the Corporate Secretary, 1111 Westchester Avenue, White Plains, New York 10604,
and be received by the Corporate Secretary no later than the close of business on the 75th day nor earlier than the
close of business on the 100th day prior to the first anniversary of the preceding year’s annual meeting. In
accordance with the Company’s Bylaws, such notice shall set forth as to each proposed nominee who is not an
incumbent Director (i) the name, age, business address and, if known, residence address of each nominee proposed
in such notice, and a statement as to the qualification of each nominee, (ii) the principal occupation or employment
of each such nominee, (iii) the number of Shares which are beneficially owned by each such nominee and by the
nominating stockholder, and (iv) any other information concerning the nominee that must be disclosed of nominees
in proxy solicitations regulated by Regulation 14A of the Exchange Act, including, without limitation, such
person’s written consent to being named in the proxy statement as a nominee and to serving as a Director if elected.
Although it has no formal policy regarding stockholder nominees, the Governance and Nominating Committee
believes that stockholder nominees should be reviewed in substantially the same manner as other nominees.
The Company provides a comprehensive orientation for all new Directors. It includes a corporate overview,
one-on-one meetings with senior management and an orientation meeting. In addition, all Directors are given
written materials providing information on the Company’s business.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Exchange Act requires that the Company’s Directors and executive officers, and persons
who own more than ten percent of the outstanding Shares, file with the SEC (and provide a copy to the Company)
certain reports relating to their ownership of Shares.
To the Company’s knowledge, based solely on a review of the copies of these reports furnished to the Company
for the fiscal year ended December 31, 2007, and written representations that no other reports were required, all
Section 16(a) filing requirements applicable to its Directors, executive officers and greater than 10 percent
beneficial owners were complied with for the most recent fiscal year.
RATIFICATION OF APPOINTMENT OF INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM
The Board has appointed and is requesting ratification by stockholders of the appointment of Ernst & Young as
the Company’s independent registered public accounting firm. While not required by law, the Board is asking the
stockholders to ratify the selection of Ernst & Young as a matter of good corporate practice. Representatives of
Ernst & Young are expected to be present at the Annual Meeting, will have an opportunity to make a statement, if
they desire to do so, and will be available to respond to appropriate questions. If the appointment of Ernst & Young
10

is not ratified, the Board and the Audit Committee will reconsider the selection of the independent registered public
accounting firm.
The Board unanimously recommends a vote FOR ratification of the appointment of Ernst & Young as the
Company’s independent registered public accounting firm for 2008.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS
The following tables show the number of Shares “beneficially owned” by (i) all persons known to the
Company to be the beneficial owners of more than 5% of the outstanding Shares at December 31, 2007 and (ii) each
of the Directors, nominees for Director and Named Executive Officers of the Company, and (iii) Directors,
nominees for Director, Named Executive Officers and executive officers (who are not Named Executive Officers) as
a group, at January 31, 2008. “Beneficial ownership” includes Shares a stockholder has the power to vote or the
power to transfer, and also includes stock options and other derivative securities that were exercisable at that date, or
as of that date will become exercisable within 60 days thereafter. In the case of holdings of Directors and executive
officers, percentages are based upon the number of Shares outstanding at January 31, 2008, plus, where applicable,
the number of Shares that the indicated person had a right to acquire within 60 days of such date. The information in
the tables is based upon information provided by each Director and executive officer and, in the case of the
beneficial owners of more than 5% of the outstanding Shares, the information is based upon Schedules 13G and 13D
filed with the SEC.
Certain Beneficial Owners
Amount and Nature of
Name and Address of Beneficial Owner Beneficial Ownership Percent of Class
Barclays Global Investors, NA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,259,550 8.16%(1)
45 Fremont Street
San Francisco, CA 94105
EGI-SSE I, L.P. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,750,000 7.72%(2)
Two North Riverside Plaza, Suite 600
Chicago, IL 60606
FMR LLC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,381,000 6.72%(3)
82 Devonshire St.
Boston, MA 02109
Morgan Stanley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,871,555 6.00%(4)
1585 Broadway
New York, New York 10036
(1) Based on information contained in a Schedule 13G, dated February 6, 2008 (the “Barclays 13G”), filed with
respect to the Company. Barclays Global Investors, NA (“Barclays”) filed the Barclays 13G in its capacity as
investment adviser. The Shares reported are held by Barclays in trust accounts for the economic benefit of the
beneficiaries of those accounts. Barclays, in its capacity as investment advisor, may be deemed to beneficially
own an aggregate amount of 16,259,550 Shares. Barclays is an investment adviser and has sole voting power
over 16,259,550 Shares and sole dispositive power over 14,351,038 Shares.
(2) Based on information contained in a Schedule 13D, dated January 23, 2008 (the “SSE 13D”), filed with respect
to the Company. Between October 2, 2007 and January 31, 2008, EGI-SSE I, L.P. (“SSE”) acquired
14,750,000 Shares in open market purchases in a price range from $39.63 to $62.37 per share. The
average purchase price per share was $49.97, for a total purchase price of $736,997,526.78. The
acquisition of Shares by SSE has been effected solely for the purpose of investment. SSE has no intention
of participating in the formulation, determination or direction of the basic business decisions of the Company or
any affiliate of the Company. SSE has shared voting power and shared dispositive power over
14,750,000 Shares.
11

(3) Based on information contained in a Schedule 13G/A, dated February 14, 2008 (the “FMR 13G”), filed with
respect to the Company, 11,945,227 Shares are held by Fidelity Management & Research Company
(“Fidelity”), a wholly-owned subsidiary of FMR LLC. (“FMR”); 140,130 Shares are held by Pyramis
Global Advisors, LLC, an indirect wholly-owned subsidiary of FMR; 820,611 Shares are held by Pyramis
Global Advisors Trust Company, an indirect wholly-owned subsidiary of FMR; 397,100 Shares are held by
Fidelity International Limited, a foreign based entity that provides investment advisory and management
services to non-U.S. investment companies (“FIL”) and 77,932 Shares are held by Strategic Advisers, Inc., a
registered investment adviser and wholly owned subsidiary of FMR. According to the FMR Schedule 13G,
FMR and Edward C. Johnson 3rd, Chairman of FMR, each have sole dispositive power and sole voting power
with respect to 820,611 Shares. FIL has sole power to vote and direct the voting of 380,700 Shares, no power to
vote or direct the voting of 16,400 Shares and the sole dispositive power with respect to 397,100 Shares.
Through ownership of voting common stock and the execution of a certain stockholders’ voting agreement,
members of the Edward C. Johnson 3rd family may be deemed, under the Investment Company Act of 1940, to
form a controlling group with respect to FMR.
(4) Based on information contained in a Schedule 13G/A, dated February 14, 2008 (the “Morgan Stanley 13G”),
filed with respect to the Company. Morgan Stanley filed the Morgan Stanley 13G solely in its capacity as the
parent company of, and indirect beneficial owner of securities held by, certain of its operating units. Morgan
Stanley beneficially owns an aggregate amount of 11,871,555 Shares. Morgan Stanley has sole voting power
with respect to 7,977,852 Shares, shared voting over 579 Shares and sole dispositive power over
11,871,555 Shares.
Directors and Executive Officers of the Company
Amount and Nature of
Name of Beneficial Owner Beneficial Ownership Percent of Class(1)
Adam Aron . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19,306(3) (4)
Charlene Barshefsky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41,730(2)(3) (4)
Jean-Marc Chapus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53,864(3) (4)
Bruce W. Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254,106(2)(3)(5) (4)
Lizanne Galbreath . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,173(2)(3) (4)
Raymond L. Gellein, Jr. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386,941(3) (4)
Eric Hippeau . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65,328(2)(3) (4)
Matt Ouimet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,407(3) (4)
Vasant Prabhu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 323,382(3) (4)
Stephen R. Quazzo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,368(3)(6) (4)
Thomas O. Ryder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48,125(2)(3) (4)
Kenneth S. Siegel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175,059(3) (4)
Frits Van Paasschen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (4)
Kneeland C. Youngblood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42,802(3) (4)
All Directors, Nominees for Directors and executive officers as
a group (14 persons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,519,591(7) (4)
(1) Based on the number of Shares outstanding on January 31, 2008 and Shares issuable upon exercise of options
exercisable within 60 days from January 31, 2008.
(2) Amount includes the following number of “phantom” stock units received as a result of the following Directors’
election to defer Directors’ Annual Fees: 15,677 for Mr. Hippeau; 11,203 for Mr. Duncan; 10,631 for Mr. Ryder;
2,675 for Ms. Galbreath and 1,990 for Ambassador Barshefsky.
(3) Includes Shares subject to presently exercisable options and options and restricted Shares that will become
exercisable or vest within 60 days of January 31, 2008, as follows: 337,897 for Mr. Gellein; 288,605 for
Mr. Prabhu; 117,284 for Mr. Siegel; 48,492 for Mr. Quazzo; 31,995 for Mr. Chapus; 49,651 for Mr. Hippeau;
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70,605 for Mr. Duncan; 37,494 for Messrs. Ryder and Youngblood; 31,995 for Ambassador Barshefsky; 16,118
for Mr. Ouimet; 15,498 for Ms. Galbreath and 7,875 for Mr. Aron.
(4) Less than 1%.
(5) Includes 171,954 Shares held by The Bruce W. Duncan Revocable Trust of which Mr. Duncan is a Trustee and
beneficiary.
(6) Includes 24,479 Shares held by a trust of which Mr. Quazzo is settlor and over which he shares investment
control, and 397 Shares owned by Mr. Quazzo’s wife in an Individual Retirement Account.
(7) Includes amounts held by the Named Executive Officers listed on the Summary Compensation Table who were
Named Executive Officers on March 1, 2008.
The following table provides information as of December 31, 2007 regarding Shares that may be issued under
equity compensation plans maintained by the Company.
Equity Compensation Plan Information — December 31, 2007
Number of Securities
Number of Securities Remaining Available for
to be Issued upon Weighted-Average Future Issuance Under
Exercise of Exercise Price of Equity Compensation Plans
Outstanding Options, Outstanding Options, (Excluding Securities
Warrants and Rights Warrants and Rights Reflected in Column (a))
Plan Category (a) (b) (c)
Equity compensation plans approved by
security holders. . . . . . . . . . . . . . . . . . 18,547,156 $25.21 70,242,819(1)
Equity compensation plans not approved
by security holders . . . . . . . . . . . . . . . — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,547,156 $25.21 70,242,819
(1) Does not include deferred share units (that vest over three years and may be settled in Shares) that have been
issued pursuant to the Executive Annual Incentive Plan for Certain Executives (“Executive AIP”). The
Executive AIP does not limit the number of deferred share units that may be issued. This plan has been amended
to provide for a termination date of May 26, 2009 to comply with new NYSE requirements. In addition,
10,740,292 Shares remain available for issuance under the Company’s Employee Stock Purchase Plan, a stock
purchase plan meeting the requirements of Section 423 of the Internal Revenue Code.
13

EXECUTIVE COMPENSATION
I. COMPENSATION DISCUSSION AND ANALYSIS
A. Overview of Starwood’s Executive Compensation Program
1. Program Objectives and Other Considerations
Objectives. As a consumer lifestyle company with a branded hotel portfolio at its core, the Company
operates in a competitive, dynamic and challenging business environment. In step with this mission and
environment, the Company’s executive compensation program for our principal executive officer, principal
financial officer and the other executive officers whose compensation is reported in this proxy (our “Named
Executive Officers”) has the following key objectives:
• Attract and Retain: We seek to attract and retain talented executives from within and outside the
hospitality industry who understand the importance of innovation, brand enhancement and consumer
experience. We are working to reinvent the hospitality industry, and one element of this endeavor is to bring
in key talent from other industries. Therefore, overall program competitiveness must take these other
markets into account.
• Motivate: We seek to motivate our executives to sustain high performance and achieve Company financial
and strategic/operational goals over the course of business cycles and various market conditions.
• Align Interests: We endeavor to align the interests of stockholders and our executives by tying executive
compensation to the Company’s business results and stock performance. Moreover, we strive to keep the
executive compensation program transparent, easily understood, in line with market practices and consistent
with high standards of good corporate governance.
What the Program Intends to Reward. Our executive compensation program is strongly weighted toward
variable compensation tied to Company results. Specifically, our compensation program for Named Executive
Officers is designed to reward the following:
• Alignment with Stockholders: A significant portion of Named Executive Officer compensation is delivered
in the form of equity, ensuring that long term compensation is strongly tied to stockholder returns.
• Achievement of Company Financial Objectives: A portion of Named Executive Officer compensation is
tied directly to the Company’s financial performance.
• Achievement of Strategic/Operational Objectives. A portion of Named Executive Officer compensation is
tied to achievement of specific individual objectives that are directly aligned with execution of our business
strategy. These objectives may be related to, among others, operational excellence, brand enhancement,
innovation, growth, customer experience and/or teamwork.
• Overall Leadership and Stewardship of the Company: Leadership, teambuilding, and development of
future talent are key success factors for the Company and a portion of compensation for the Named
Executive Officers is dependent on satisfaction of enumerated leadership competencies.
2. Roles and Responsibilities
Our Compensation and Option Committee (“Compensation Committee”) is responsible for, among other
things, the establishment and review of compensation policies and programs for our executive officers and ensuring
that these executive officers are compensated in a manner consistent with the objectives and principles outlined
above. It also monitors the Company’s executive succession plan, reviews and monitors the Company’s
performance as it affects the Company’s employees and the overall compensation policies for the Company’s
employees.
The Compensation Committee makes all compensation decisions for our Named Executive Officers. Our
Chief Executive Officer, together with the Chief Administrative Officer, annually reviews the performance of each
other Named Executive Officer and presents to the Compensation Committee his conclusions and
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recommendations, including salary adjustments and annual incentive compensation amounts (as described in more
detail in subsection B under the heading Incentive Compensation below). The Compensation Committee may
exercise its discretion in modifying any recommended salary adjustments or awards to these executives.
The role of the Company’s management is to provide reviews and recommendations for the Compensation
Committee’s consideration, and to manage operational aspects of the Company’s compensation programs, policies
and governance. Direct responsibilities include, but are not limited to, (i) providing an ongoing review of the
effectiveness of the compensation programs, including competitiveness, and alignment with the Company’s
objectives, (ii) recommending changes, if necessary, to ensure achievement of all program objectives and
(iii) recommending pay levels, payout and/or awards for executive officers other than the Chief Executive
Officer. Management also prepares tally sheets which describe and quantify all components of total
compensation for our Named Executive Officers, including salary, annual incentive compensation, long-term
incentive compensation, deferred compensation, outstanding equity awards, benefits, perquisites and potential
severance and change-in-control payments. The Compensation Committee reviews and considers these tally sheets
in making compensation decisions for our Named Executive Officers.
Management of the Company retained Pearl Meyer & Partners in 2007 to assist with the development and
structure of the 2007 equity program covering a broad group of employees, including the Chief Executive Officer
and Named Executive Officers, and in 2008 to assist in the review and determination of compensation awards for the
2007 performance period. Pearl Meyer provided advice regarding equity plan design alternatives in light of
Starwood’ business strategy, including specific plan design features. Pearl Meyer worked directly with
management. Management recommended the 2007 equity program to the Compensation Committee based on
the work developed in conjunction with Pearl Meyer. Pearl Meyer does not provide any other services to the
Company. The Compensation Committee approved the equity program recommendations and compensation
awards for the 2007 performance period.
B. Elements of Compensation
1. Primary Elements
The primary elements of the Company’s compensation program for our Named Executive Officers are:
• Base Salary
• Incentive Compensation
O Annual Incentive Compensation
O Long-Term Incentive Compensation
• Benefits and Perquisites
Mr. Van Paasschen’s compensation structure was established in 2007 pursuant to his employment agreement.
Mr. Van Paasschen and the Company agreed to a compensation structure which was heavily geared towards
performance and long term incentives, including equity awards in the form of restricted stock and stock options. As
a result, in the event of strong financial and individual performance, Mr. Van Paasschen would benefit greatly in the
form of long term incentive compensation (stock options and restricted stock), but his compensation would be
significantly lower if the Company did not perform well or if his employment with the Company was terminated
after a short period of time (due to the vesting requirements of the equity awards). For the other Named Executive
Officers, pay is also structured to award performance but to a lesser degree in order to provide the Named Executive
Officers with a minimum amount of compensation when the Company is unable to achieve its financial and
strategic goals.
We describe each of the compensation elements below and explain why we pay each element and how we determine
the amount of each element.
Base Salary. The Company believes it is essential to provide our Named Executive Officers with
competitive base salaries that will enable the Company to continue to attract and retain critical senior
executives from within and outside the hospitality industry. In the case of Named Executive Officers other
15

than the Chief Executive Officer, base salary typically accounts for approximately 20% of total compensation at
target, i.e., total compensation excluding benefits and perquisites, and is generally targeted at the median of the
Company’s peer group. In the case of Mr. Van Paasschen, base salary for 2007 was limited to $1 million in order to
keep this element of his compensation below the levels established by Section 162(m) of the Internal Revenue Code
of 1986, as amended (the “Code”) which limits the deductibility of non-performance-based compensation above
that amount. As a result, base salary accounted for approximately 12.5% of total compensation at target for Mr. Van
Paasschen. Base salary serves as a minimum level of compensation to Named Executive Officers in circumstances
when achieving Company financial and strategic/operational objectives becomes challenging and the level of
incentive compensation is impacted. Salaries for Named Executive Officers are generally based on the
responsibilities of each position and are reviewed annually against similar positions among a group of peer
companies developed by the Company and its advisors consisting of similarly-sized hotel and hospitality
companies as well as other companies representative of markets in which the Company competes for key
executive talent. See the Background Information on the Executive Compensation Program — Use of Peer
Data section beginning on page 24 below for a list of the peer companies used in this analysis. The Company
generally seeks to position base salaries of our Named Executive Officers at or near the market median for similar
positions.
Incentive Compensation. Incentive compensation includes annual incentive awards under the Company’s
Annual Incentive Plan for Certain Executives (the “Executive Plan”) as well as long-term incentive compensation in
the form of equity awards under the Company’s 2004 Long-Term Incentive Plan (“LTIP”). Incentive compensation
typically accounts for approximately 80% of total compensation at target (87.5% for Mr. Van Paasschen), with
annual incentive compensation and long term incentive compensation accounting for 20% and 60%, respectively
(25% and 62.5% for Mr. Van Paasschen, respectively). The Company’s emphasis on incentive compensation results
in total compensation at target that is set at approximately the 65th percentile level relative to the Company’s peer
group, but that is highly dependent on performance. The Company believes that this structure allows it to provide
each Named Executive Officer with substantial incentive compensation opportunities if performance objectives are
met. The Company believes that the allocation between base and incentive compensation is appropriate and
beneficial because:
• it promotes the Company’s competitive position by allowing it to provide Named Executive Officers with
competitive compensation if targets are met;
• it targets and attracts highly motivated and talented executives within and outside the hospitality industry;
• it aligns senior management’s interests with those of stockholders;
• it promotes achievement of business and individual performance objectives; and
• it provides long-term incentives for Named Executive Officers to remain in the Company’s employ.
Annual Incentive Compensation. Annual incentives are a key part of the Company’s executive
compensation program. The incentives directly link the achievement of Company financial and strategic/
operational performance objectives to executive pay. Annual incentives also provide a complementary balance
to equity incentives (discussed below). Each Named Executive Officer has an annual opportunity to receive an
award under the stockholder-approved Executive Plan. If and when earned, awards are typically paid to Named
Executive Officers partly in cash and, unless the Compensation Committee otherwise elects, partly as deferred
equity awards in the form of deferred stock units (under the Executive Plan). The deferred stock units vest over
a three year period. See additional detail regarding these deferred equity awards in the Long-Term Incentive
Compensation section below.
Minimum Thresholds.
For the Named Executive Officers, the annual incentive award for 2007 was paid under the Executive
Plan. Each year, the Compensation Committee establishes in advance a threshold level of earnings before
interest, taxes, depreciation and amortization (“EBITDA”) that the Company must achieve in order for any
bonus to be paid under the Executive Plan for that year (the “EP Threshold”). The Executive Plan also specifies
a maximum bonus amount, in dollars, that may be paid to any executive for any 12-month performance period.
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When the threshold is established at the beginning of a year, the achievement of the threshold is considered
substantially uncertain for purposes of Section 162(m) of the Code, which is one of the requirements for
compensation paid under the Executive Plan to be deductible as performance-based compensation under
Section 162(m). For 2007, the EP Threshold was $680,000,000.
Generally, a Named Executive Officer will receive payment of an award under the Executive Plan only if
he remains employed by the Company on the award payment date. However, pro rata awards may be paid at the
discretion of the Compensation Committee in the event of death, disability or retirement. To determine the
actual bonus to be paid for a year, if the threshold is met and subject to the maximum described above, the
Compensation Committee also establishes specific annual Company financial and strategic/operational
performance targets and a related target bonus amount for each executive. These financial and strategic/
operational targets are described below.
Additional Criteria.
If the EP Threshold under the Executive Plan is met for a year, the Company financial and strategic/
operational goals referenced above are then used to determine a Named Executive Officer’s actual bonus, as
follows:
Financial Goals.
The Company financial goals for Named Executive Officers under the Executive Plan consist of operating
income and earnings per share targets, with each criteria accounting for half of the financial goal portion of the
annual bonus. As the Company generally sets target incentive award opportunities above market median, the
Company financial and strategic/operational goals to achieve such award levels are considered stretch but
achievable, representing above-market performance. Consistent with maintaining these high standards and
subject to achieving the EP Threshold, the Compensation Committee retains the ability to consider whether an
adjustment of the financial goals for any year is necessitated by exceptional circumstances, e.g., an
unanticipated and material downturn in the business cycle that triggers, in response, an increased focus by
the Compensation Committee on the Company’s performance relative to the industry. This ability is intended
to be narrowly and infrequently used and would, if applicable, be detailed in the proxy.
Performance against the financial targets determined 60% of Mr. Van Paasschen’s total target opportunity
and 50% of the total target opportunities for the other Named Executive Officers. Subject to achieving the EP
Threshold, actual incentives paid to Named Executive Officers for financial performance may range from 0%
to 200% of the pre-determined target bonus for this category of performance. For Named Executive Officers
other than Mr. Gellein, the Company performance portion is based 50% on earnings per share and 50% on
operating income of the Company. For Mr. Gellein, the Company performance portion is based 50% on
earnings per share and 50% on the net income for SVO, the Company’s vacation ownership subsidiary.
Even if the EP Threshold is achieved, nothing is generally paid on a component of the “Financial Goals”
portion of the annual bonus unless certain minimum levels of performance for the applicable metric are
achieved (i.e., the “performance minimum”). Further, once a certain level of performance is achieved, the
bonus payout for the applicable metric is limited to 200% (i.e., the “performance maximum”). The table below
sets forth for each metric the performance levels for 2007 which would have resulted in 100% payout (i.e.
“target”), the performance minimum level that would have resulted in a 50% payout and the performance
maximum level that would have resulted in a 200% payout. In addition, the table sets forth the mid-points of
performance and payout between the performance minimum to target and from target to performance
maximum:
Minimum Mid-point Target Mid-point Maximum
(50%) (75%) (100%) (150%) (200%)
Earnings per Share . . $ 2.01 $ 2.26 $ 2.51 $ 2.82 $ 3.14
Company Operating
Income . . . . . . . . . $793,800,000 $893,100,000 $992,300,000 $1,116,300,000 $1,244,900,000
SVO Net Income . . . $162,800,000 $183,200,000 $203,500,000 $ 244,200,000 $ 284,900,000
17

For the 2007 performance period, EBITDA for purposes of determining bonuses was $1,356,000 (which
exceeded the EP Threshold). Actual results for earnings per share, Company operating income and SVO net
income were $2.71, $982,100,000 and $196,800,000, respectively. Using the metrics described above resulted
in a payout at 115% of target for the Company performance portions of bonuses for the 2007 performance
period for the Named Executive Officers other than Mr. Gellein. For Mr. Gellein, the financial performance
component was paid at 112% of target.
Strategic/Operational Goals.
The strategic/operational performance goals for Named Executive Officers under the Executive Plan
consists of “Big 5” and leadership competency objectives that link individual contributions to execution of our
business strategy and major financial and operating goals. “Big 5” refers to each executive’s specific
deliverables within the Company’s critical performance categories — operational excellence, brand enhance-
ment, innovation, growth, and customer experience. As part of a structured process that cascades down
throughout the Company, these objectives are developed at the beginning of the year, and they integrate and
align an executive with the Company’s strategic and operational plan. Achievement of “Big 5” objectives
typically accounts for 80% of the strategic/operational performance evaluation, and achievement of leadership
competency objectives typically accounts for 20% of such evaluation. The portion of annual incentive awards
attributable to strategic/operational/talent management performance represents 40% of Mr. Van Paasschen’s
total target opportunity and 50% of the total target opportunities for the other Named Executive Officers.
Actual incentives paid to Named Executive Officers for strategic/operational performance may range from 0%
to 175% of the pre-determined target amount for this category of performance. The evaluation process for Mr.
Van Paasschen and the other Named Executive Officers with respect to each executive’s strategic/operational
goals is described below.
Mr. Siegel’s individual accomplishments for the 2007 performance year included the following:
• Successfully completed labor negotiations with unions without any work stoppages
• Actively managed and supported the deal development process at a lower average cost than 2006 (while
significantly reducing outside counsel spend)
• Lead the creation of a brand compliance function with new assessment methodology and performance
management program.
• Significantly enhanced Starwood’s ethics and compliance programs, implementing a low cost computer
based training program for associates
• Assumed day to day responsibility for the Human Resources organization while continuing full time role as
General Counsel and maintained benefit programs at a lower cost while raising overall employee satisfaction
In light of Mr. Siegel’s accomplishments, he received an “exceeds expectations” performance rating and
was awarded 145% of his individual bonus target. Combined with the 115% financial performance component,
Mr. Siegel’s 2007 bonus was 130% of target.
Mr. Prabhu’s accomplishments for the 2007 performance year included the following:
• Delivered financial results that exceeded the budget for each quarter
• Completed asset sale program announced in 2007 generating significant amount of net proceeds
• Successfully delivered a company income tax rate and property tax rate on the Company’s owned hotels
below the target set
• Led the management team responsible for a major upgrade of key reservation systems and implemented
other key IT initiatives
• Ensured adequate liquidity to fund operations at optimal cost, enhanced cash management, devised
strategies to repatriate offshore cash and maintained an optimal balance between short/long term and
fixed/variable cost debt
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In light of Mr. Prabhu’s accomplishments, he received an “exceeds expectations” performance rating and
was awarded 120% of his individual bonus target. Combined with the 115% financial performance component,
Mr. Prabhu’s 2007 bonus was 117.5% of target.
In December 2007, Mr. Gellein announced his retirement effective no later than March 31, 2008. In
connection with his retirement, the Company amended Mr. Gellein’s employment agreement as more fully
discussed on page 38. As part of the amendment, Mr. Gellein’s bonus for the 2007 performance year was not to
be less than target for the individual performance portion. The Compensation Committee considered
Mr. Gellein’s years of dedicated service to the Company, his role as President Global Development Group
and head of the Company’s vacation ownership subsidiary, and his achievements and awarded Mr. Gellein
100% of his individual bonus target. Combined with the 112% financial performance component for the SVO
business, Mr. Gellein’s 2007 bonus was 106% of target.
Mr. Ouimet’s accomplishments for the 2007 performance year included the following:
• Successfully served as interim leader for marketing, brand management and distribution
• Led each hotel division in exceeding financial targets for each quarter
• Actively managed and strengthened relationships with hotel owners leading to stronger relationships and
growth in the Company’s pipeline
• Directed the Sheraton brand revitalization plan
• Led the restructuring of the marketing division and began planning the restructuring for other groups
In light of Mr. Ouimet’s accomplishments in 2007, he received an “exceeds expectations” performance
rating and was awarded 120% of his individual bonus target. Combined with the 115% financial performance
component, Mr. Ouimet’s 2007 bonus was 117.5% of target.
Mr. Van Paasschen joined Starwood in September 2007. Pursuant to his employment agreement, Mr.
Van Paasschen was entitled to receive at least a pro-rata portion of his target bonus for the 2007 performance
period. The Compensation Committee considered Mr. Van Paasschen’s immediate impact on the Company
and awarded him a bonus of $538,400, the minimum amount permissible under his employment agreement.
Mr. Heyer resigned as Chief Executive Officer effective March 31, 2007. Since he was not employed at
the end of the performance period and pursuant to his separation agreement, Mr. Heyer received no incentive
compensation for the 2007 performance year.
Following Mr. Heyer’s resignation, Bruce Duncan assumed the role of Chief Executive Officer on an
interim basis. As part of Mr. Duncan’s employment agreement, he was entitled to a pro-rated bonus at target in
the event that he remained in the role of Chief Executive Officer for at least three months. Mr. Duncan served as
Chief Executive Officer for approximately six months and was awarded a bonus of $960,000 pursuant to the
terms of his employment agreement.
Overall, the Compensation Committee paid the majority of the Named Executive Officers individual
bonuses that were above target in consideration of outstanding individual performance, recognition of
expanded roles and responsibilities in light of other executive departures.
Conclusion.
Viewed on a combined basis once minimum performance is attained, the annual incentive payments
attributable to both Company financial and strategic/operational performance range from 0% - 187.5% of
target for the Named Executive Officers, other than the Chief Executive Officer.
Equity awards are generally granted in February of each year following the announcement of the
Company’s earnings for the previous year. Performance reviews and bonus awards for the prior operating year
are made at that time. In determining the equity awards granted in 2007, the Compensation Committee
considered and took into account the Company’s performance and the individual performance of each Named
Executive Officer in 2006 as well as the expected performance of the Company for 2007. In addition, the
19

Compensation Committee considers structural changes to the equity program and the fact that the Compen-
sation Committee targets the median of the peer group for base salary but targets total compensation at the 65%
percentile resulting in larger long term incentive awards. Based on the factors set forth above, including the
Company’s performance and individual performance of each Named Executive Officer, the Compensation
Committee believes that equity award grants in 2007 were appropriate.
Total compensation for this group is evaluated against the peer group identified in this proxy statement.
Evaluated on this basis, the Compensation Committee believes the actual cash and equity compensation
delivered was appropriate in light of the Company’s overall performance and individual executive
performance.
Evaluation Process for Strategic/Operational and Other Goals.
Mr. Heyer. Mr. Heyer resigned his position as Chief Executive Officer effective March 31, 2007. As a
result and pursuant to his separation agreement, Mr. Heyer did not receive any incentive compensation for
2007.
Mr. Duncan. Mr. Duncan served as Chief Executive Officer on an interim basis following Mr. Heyer’s
resignation. Upon Mr. Van Paasschen’s hiring, Mr. Duncan resigned as Chief Executive Officer and resumed
his role as Non-executive Chairman of the Board. Pursuant to his employment agreement, Mr. Duncan is
entitled to a pro-rated target bonus for 2007 because he served as Chief Executive Officer for more than three
months. The Compensation Committee awarded Mr. Duncan the minimum amount permitted under his
employment agreement and did not exercise its discretion to award amounts in excess of the minimum.
Mr. Van Paasschen. Mr. Van Paasschen joined the Company in September 2007. Pursuant to his
employment agreement, Mr. Van Paasschen is entitled to at least a pro-rated target bonus for 2007. The
Compensation Committee awarded Mr. Van Paasschen the minimum amount permitted under his employment
agreement and did not exercise its discretion to award amounts in excess of the minimum.
Other Named Executive Officers. With oversight and input from the Compensation Committee, the
Chief Executive Officer, together with the Chief Administrative Officer, conducts a formal performance
review process each year during which he evaluates how each other Named
Executive Officer performed against the officer’s strategic/operational performance goals for the prior
year. The Chief Executive Officer conducts this evaluation through the Performance Management Process
(“PMP”), which results in a PMP rating for each executive. This PMP rating corresponds to a payout range
under the AIP determined annually by the Compensation Committee for that rating. As noted, for 2007 the
portion of the AIP payouts based on PMP ratings could range from 0% to 175% of target. Where necessary to
preserve the competitive position of the Company’s compensation scale, the Chief Executive Officer may
recommend a market adjustment to the base amount that is subjected to this percentage. At the conclusion of
his review, the Chief Executive Officer submits his recommendations to the Compensation Committee for final
review and approval. In determining the actual award payable to a Named Executive Officer under the
Executive Plan, the Compensation Committee reviews the Chief Executive Officer’s evaluation and makes a
final determination as to how the executive performed against his strategic/operational goals for the year. The
Compensation Committee also determines, based on management’s report, the extent to which the Company’s
financial performance goals were achieved and whether the Company achieved the applicable minimum
threshold(s) required to pay awards. The Chief Executive Officer also meets in executive session with the
Board of Directors to inform the Board of his performance assessments regarding the Named Executive
Officers and the basis for the compensation recommendations he presented to the Compensation Committee.
Annual Incentive awards made to our Named Executive Officers under the Executive Plan with respect to
2007 performance are reflected in the Summary Compensation Table on page 27 and described in the
accompanying narrative.
Long-Term Incentive Compensation. Like the annual incentives described above, long-term incentives
are a key part of the Company’s executive compensation program. Long-term incentives are strongly tied to
returns achieved by stockholders, providing a direct link between the interests of stockholders and the Named
20

Executive Officers. Long-term incentive compensation for our Named Executive Officers consists primarily of
equity compensation awards granted annually under the Company’s 2004 Long-Term Incentive Plan (“LTIP”)
and secondarily of the portion of the Executive Plan and AIP awards that are deferred in the form of deferred
stock units and shares of restricted stock, respectively. Taken together, approximately 60-65% of total
compensation at target is equity-based long term incentive compensation.
In light of Mr. Heyer’s resignation in March of 2007, he received no equity awards during 2007.
In connection with his appointment as Chief Executive Officer on an interim basis, Mr. Duncan received
an award of 14,742 shares of restricted stock and 44,225 options with an exercise price of $67.835 on May 24,
2007, the date the Board approved the terms of the agreement. Following the appointment of Mr. Van Paasschen
as Chief Executive Officer, 50% of Mr. Duncan’s restricted stock and options awards vested. The remainder of
the restricted stock will vest 50% on the third anniversary of the award and 50% on the fourth anniversary of
the award. The remainder of the options will become exercisable as to one fourth of the number of shares
subject thereto on each anniversary of the date of grant. In structuring his compensation and employment
arrangements, the Compensation Committee took into account Mr. Duncan’s willingness to serve as Chief
Executive Officer on an interim basis on very little notice, the impact of traveling to the Company’s
headquarters in New York from his Chicago home, his qualifications and experience, including his prior
experience as a chief executive officer and knowledge of the Company from his service on the Board, including
as Non-executive Chairman of the Board. The Compensation Committee feels that Mr. Duncan’s employment
arrangements properly aligned his interests with that of stockholders, especially since the vast majority of his
compensation was in the form of equity awards. In addition, in agreeing to provide change in control payments
to Mr. Duncan, the Compensation Committee desired to align his interests with stockholders so that
Mr. Duncan would properly evaluate any offers that may have been received.
In order to retain Mr. Van Paasschen, the Compensation Committee awarded Mr. Van Paasschen restricted
stock units with a value on the date of grant of $1,500,000 as a sign on bonus. In addition, Mr. Van Paasschen
received an equity award with a value of $5,000,000 consisting of 75% in restricted stock and 25% in stock
options. Mr. Van Paasschen’s employment agreement, which reflects a significant emphasis on equity awards,
provides for a minimum value of equity to be granted each year, with the type of equity award (stock options or
restricted stock) to be in the same proportion as other executives of the Company. We believe an emphasis on
long term incentive compensation was particularly appropriate for the leader of a management team
committed to the creation of stockholder value. The Compensation Committee feels that the amounts awarded
to Mr. Van Paasschen were reasonable in light of his appointment as Chief Executive Officer and the value of
equity that he had built up at his previous employer.
The Compensation Committee generally grants awards under the LTIP annually to all other Named
Executive Officers that are a combination of stock options and restricted stock awards. In 2007 we used a grant
approach in which the award is articulated as a dollar value. Under this approach, an overall award value, in
dollars, was determined for each executive based upon our compensation strategy and competitive market
positioning. We generally targeted the value of these awards so that total compensation at target is set at the
65th percentile of our peer group, though individual awards may have been higher or lower based on individual
performance (determined as described in the AIP assessment above). The number of restricted stock shares is
calculated by dividing 75% of the award value by the fair market value of the Company’s stock on the grant
date. The number of stock options has generally been determined by dividing the remaining 25% of the award
value by the fair market value of the company’s stock on the grant date and multiplying the result by three.
The exercise price for each stock option is equal to fair market value of the Company’s common stock on
the option grant date. See the section entitled Equity Grant Practices on page 26 below for a description of
the manner in which we determine fair market value for this purpose. Currently, most stock options vest in 25%
increments annually starting with the first anniversary from the date of grant, subject to accelerated vesting of
options granted in 2007 on the 18 month anniversary of the grant date for associates who are retirement
eligible, as defined in the LTIP (Mr. Gellein is currently retirement eligible); different rules regarding
accelerated vesting upon retirement apply to options granted prior to 2006 (see footnote 2 to the Outstanding
Equity Awards at Fiscal Year-End table on page 32). If unexercised, stock options expire 8 years from the
21

date of grant, or earlier in the event of termination of employment. Stock options provide compensation only
when vested and only if the Company’s stock price appreciates and exceeds the exercise price of the option.
Therefore, during business downturns, option awards may not represent any economic value to an executive.
Restricted stock units and restricted stock provide some measure of mitigation of business cyclicality
while maintaining a direct tie to share price. The Company seeks to enhance the link to stockholder
performance by building a strong retention incentive into the equity program. Consequently, for 2007 grants,
50% of restricted stock units and awards vest on the third anniversary of the date of grant and the remaining
50% vests on the fourth anniversary of the date of grant, subject to accelerated vesting of awards granted in
2007 on the 18 month anniversary of the grant date for associates who are retirement eligible under the LTIP
(Mr. Gellein is currently retirement eligible); different rules regarding accelerated vesting upon retirement
apply to awards granted prior to 2006 (see footnote 3 to the Outstanding Equity Awards at Fiscal Year-End
table on page 32). This delayed vesting places an executive’s long term compensation at risk to share price
performance for a significant portion of the business cycle, while encouraging long-term retention of
executives.
As mentioned above, Named Executive Officers have a mandatory deferral of 25% of their awards under
the Executive Plan in the form of deferred stock units, unless reduced in the discretion of the Compensation
Committee (as done, for example, for Mr. Gellein’s 2007 award in light of his retirement). As such, the awards
combine performance-based compensation with a further link to stockholder interests. First, amounts must be
earned based on annual Company financial and strategic/operational performance under the Executive Plan.
Second, these already earned amounts are put at risk through a vesting schedule. Vesting occurs in installments
for employment over a three year period. Third, these earned amounts become subject to share price
performance. Primarily in consideration of this vesting risk being applied to already earned compensation
(but also taking into account the enhanced stockholder alignment that results from being subject to share
performance), the deferred amount is increased by 33% of value. The Compensation Committee has the
discretion to accelerate vesting or pay out deferred amounts in cash (without interest and without the
percentage increase in value) in a limited number of termination circumstances (e.g., involuntary terminations
or retirements).
Mr. Van Paasschen agreed not to sell any Company stock awards or shares received on exercise of options
(except as may be withheld for taxes) for the first two years of his employment and thereafter only in
consultation with the Board of Directors.
Benefits and Perquisites. Base salary and incentive compensation are supplemented by benefits and
perquisites.
Current Benefits. The Company provides employee benefits that are consistent with local practices and
competitive markets, including group health benefits, life and disability insurance, medical and dependent care
flexible spending accounts and a pre-tax premium payment arrangement. Each of these benefits is provided to
a broad group of employees within the Company and our Named Executive Officers participate in the
arrangements on the same basis as other employees.
Perquisites. As reflected in the Summary Compensation Table below, the Company provides certain
perquisites to select Named Executive Officers when necessary to provide an appropriate compensation
package to those Named Executive Officers, particularly in connection with enabling the executives and their
families to smoothly transition from previous positions which may require relocation.
For example, in 2007 the Company reimbursed Mr. Van Paasschen for $44,556 of legal fees incurred
negotiating his employment agreement with the Company. In addition, Mr. Van Paasschen’s employment
agreement provides that the Company will provide Mr. Van Paasschen with up to a $500,000 credit (based on
the Standard Industry Fare Level formula) for personal use of the Company’s aircraft during the first 12 months
of his employment with the Company. The Company also provided Mr. Van Paasschen with relocation benefits
associated with the sale of his home in Colorado and relocation to the White Plains, New York area.
Mr. Van Paasschen and his immediate family had access to a Company owned or leased airplane on an “as
available” basis for personal travel, i.e., assuming such plane was not needed for business purposes, with an
22

obligation to reimburse for personal use based upon the Company’s operating cost, subject to the credit
described above.
The Company also reimburses Named Executive Officers generally for travel expenses and other out-of-
pocket costs incurred with respect to attendance by their spouses at one meeting of the Board each year.
Retirement Benefits. The Company maintains a tax-qualified retirement savings plan pursuant to Code
section 401(k) for a broadly-defined group of eligible employees that includes the Company’s Named
Executive Officers. Eligible employees may contribute a portion of their eligible compensation to the plan on a
before-tax basis, subject to certain limitations prescribed by the Code. For 2007, the Company matched 100%
of the first 2% of eligible compensation and 50% of the next 2% of eligible compensation that an eligible
employee contributes. These matching contributions, as adjusted for related investment returns, become fully
vested upon the eligible employee’s completion of three years of service with the Company. Our Named
Executive Officers, in addition to certain other eligible employees, were permitted to make additional deferrals
of base pay and regular annual incentive awards under our nonqualified deferred compensation plan. This plan
is discussed in further detail under the heading Nonqualified Deferred Compensation on page 34.
2. Change of Control Arrangements
Following the consummation of the sale of 33 hotels to Host Hotels & Resorts and the related return of capital
to stockholders, the Board reviewed the change of control arrangements then in place with the Named Executive
Officers and decided to enter into new change of control agreements with certain Named Executive Officers. On
March 25, 2005, the Company adopted a policy proscribing certain terms of severance agreements triggered upon a
change in control of the Company. Pursuant to the policy, the Company is required to seek shareholder approval of
severance agreements with executive officers that provide Benefits (as defined in the policy) in excess of 2.99 times
base salary plus most recent bonus.
The Company also included change of control arrangements in Mr. Van Paasschen’s employment agreement.
These change of control arrangements are described in more detail beginning on page 35 under the heading entitled
Potential Payments Upon Termination or Change-of-Control. The Change of Control Severance Agreements are
intended to promote stability and continuity of senior management. The Company believes that the provision of
severance pay to these Named Executive Officers upon a change of control aligns their interests with those of
stockholders. By making severance pay available, the Company is able to mitigate executive concern over
employment termination in the event of a change of control that benefits stockholders. In addition, the acceleration
of equity compensation vesting in connection with a change of control provides these Named Executive Officers
with protection against equity forfeiture due to termination and ample incentive to achieve Company goals,
including facilitating a sale of the Company at the highest possible price per share, which would benefit both
stockholders and executives. In addition, the Company acknowledges that seeking a new senior position is a long
and time consuming process. Lastly, each severance agreement permits the executive to maintain certain benefits
for a period of two years following termination and to receive outplacement services. The aggregate effect of our
change of control provisions is intended to focus executives on maximizing value to stockholders. In addition,
should a change of control occur, benefits will be paid after a “double trigger” event as described in Potential
Payments Upon Termination or Change-in-Control. Benefit levels have been set to be competitive with peer
group practices.
3. Additional Severance Arrangements
On August 14, 2007, the Company entered into letter agreements with each of Messrs. Siegel and Ouimet. The
letter agreements provided for the acceleration of 50% of each of Mr. Siegel’s and Ouimet’s then unvested restricted
stock and options in the event his employment was terminated without cause or by the executive for good reason
within two years of the hiring of a new Chief Executive Officer. The purpose of the letter agreements was to support
retention, stability and continuity and succession planning and to provide assurance to key executives in a time of
uncertainty regarding the Company’s chief executive officer position.
In addition, the Company entered into a letter agreement with Mr. Prabhu clarifying that his severance
included the acceleration of 50% of unvested restricted stock and options in the event that his employment was
23

terminated without cause or by him for good reason. The clarification formally documented Mr. Prabhu’s existing
severance arrangements as part of his employment by the Company as disclosed in the Company’s other filings with
the Securities & Exchange Commission.
C. Background Information on the Executive Compensation Program
1. Use of Peer Data
In determining competitive compensation levels, the Compensation Committee reviews data from several
major compensation consulting firms that reflects compensation practices for executives in comparable positions in
a peer group consisting of companies in the hotel and hospitality industries and companies with similar revenues in
other industries relevant to key talent recruitment needs. The executive team and Compensation Committee review
the peer group bi-annually to ensure it represents a relevant market perspective. The Compensation Committee
utilizes the peer group for a broad set of comparative purposes, including levels of total compensation, pay mix,
incentive plan and equity usage and other terms of employment. The Compensation Committee also reviews
Company performance against the performance of companies in this peer group. The Company believes that by
conducting the competitive analysis using a broad peer group, which includes companies outside the hospitality
industry, it is able to attract and retain talented executives from outside the hospitality industry. The Company’s
experience has proven that key executives with diversified experience prove to be major contributors to its
continued growth and success.
Accordingly, the Company was able to attract and retain:
• Frits Van Paasschen, the Company’s Chief Executive Officer, who has over 20 years of experience with
consumer-focused, global lifestyle brands, most recently serving with Coors Brewing Company, as Pres-
ident and Chief Executive Officer, and prior to that, Nike, Inc.
• Vasant M. Prabhu, the Company’s Executive Vice President and Chief Financial Officer, who prior to joining
the Company served as Executive Vice President and Chief Financial Officer of Safeway Inc., a food and
drug retailer; President of Information and Media Group for The McGraw Hill Companies, and Senior Vice
President of Finance and Chief Financial Officer for Pepsi Cola International.
• Kenneth S. Siegel, the Company’s Chief Administrative Officer, General Counsel and Secretary, who prior
to joining the Company served as Senior Vice President and General Counsel of Gartner, Inc., a provider of
research and analysis on information technology industries and was a partner in the law firms of Baker &
Botts LLP and O’Sullivan Graev & Karabell LLP.
• Matthew A. Ouimet, the Company’s President, Hotel Operations, who prior to joining the Company spent
17 years with The Walt Disney Company, most recently serving as President of the Disneyland Resort.
The peer group approved by the Compensation Committee for 2007 is set out below. We expect that it will be
necessary to update the list periodically.
American Express Co. McDonald’s Corp.
Anheuser-Busch Cos. Inc. MGM Mirage
Avon Products Nike Inc.
Carnival Corp. Nordstrom Inc.
Estee Lauder Cos. Inc. Simon Property Group Inc.
Harrah’s Entertainment Inc. Staples Inc.
Hilton Hotels Corp. Starbucks Corp.
Host Hotels & Resorts Inc. Vornado Realty Trust
Gap Inc. Williams-Sonoma Inc.
Limited Brands Inc. Wyndham Worldwide Corporation
Marriott International, Inc. Yum Brands Inc.
24

In performing its competitive analysis, the Compensation Committee typically reviews:
• base pay;
• target and actual total cash compensation, consisting of salary and target and actual bonus awards in prior
years; and
• direct total compensation consisting of salary, target and actual bonus awards, and the value of option and
restricted stock/restricted stock unit awards.
During 2007, compensation paid to the Company’s Named Executive Officers was compared to peer group
data reported in 2007 proxy statements, as provided by compensation consulting firms and reflecting 2006
compensation. The Company’s Named Executive Officer compensation data taken into account for this comparison
included 2007 salary, AIP bonuses paid in 2008 for 2007 performance and equity grants awarded in 2007.
The competitive position of the Company’s compensation based on total cash (salary and bonus) ranged from
the median to the lower quartile while the competitive position of its compensation based on total compensation at
target, which includes the equity grants, ranged from the median to the upper quartile.
2. Tax and Accounting Considerations
Tax. Section 162(m) of the Code generally disallows a federal income tax deduction to public companies for
compensation in excess of $1,000,000 paid to the chief executive officer and the four other most highly
compensated executive officers. Qualified performance-based compensation is not subject to the deduction limit
if certain requirements are met. The Company believes that compensation paid under the Executive Plan meets
these requirements and is generally fully deductible for federal income tax purposes. In designing the Company’s
compensation programs, the Compensation Committee carefully considers the effect of this provision together with
other factors relevant to its business needs. Therefore, in certain circumstances the Company may approve
compensation that does not meet these requirements in order to advance the long-term interests of its stockholders.
At the same time, the Company has historically taken, and intends to continue taking, reasonably practicable steps
to minimize the impact of Section 162(m). Accordingly, the Compensation Committee has determined that each of
the Named Executive Officers will participate under the Executive Plan for 2008.
On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law, adding Section 409A to the
Code and thereby changing the tax rules applicable to nonqualified deferred compensation arrangements effective
January 1, 2005. While final Section 409A regulations are not effective until January 1, 2009, the Company believes
it is operating in good faith compliance with Section 409A and the Interpretive guidance thereunder. A more
detailed discussion of the Company’s nonqualified deferred compensation plan is provided on page 34 under the
heading Nonqualified Deferred Compensation.
Accounting. Beginning on January 1, 2006, the Company began accounting for awards under its LTIP in
accordance with the requirements of FASB Statement 123(R) (“SFAS 123(R)”).
3. Share Ownership Guidelines
In 2007, the Company adopted share ownership guidelines for our executive officers, including the Named
Executive Officers. Pursuant to the guidelines, the Named Executive Officers, including the Chief Executive
Officer, are required to hold that number of Shares having a market value equal to or greater than a multiple of each
executive’s base salary. For the Chief Executive Officer, the multiple is five (5) times base salary and for the other
Named Executive Officers, the multiple is four (4) times base salary. A retention requirement of 35% is applied to
restricted Shares upon vesting (net shares after tax withholding) and Shares obtained from option exercises until the
executive meets the target, or if an executive falls out of compliance. Shares owned, stock equivalents (vested/
unvested units), and unvested restricted stock (pre-tax) count towards meeting ownership targets. However, stock
options do not count towards meeting the target. Officers have five years from the date of hire or the date they first
become subject to the policy to meet the ownership requirements.
25

4. Equity Grant Practices
Determination of Option Exercise Prices. The Compensation Committee grants stock options with an
exercise price equal to the fair market value of a share of our common stock on the grant date. Under the LTIP, the
fair market value of our common stock on a particular date is determined as the average of the high and low trading
prices of a share of the stock on the New York Stock Exchange on that date.
Timing of Equity Grants. The Compensation Committee generally makes annual equity compensation
grants to Named Executive Officers at its first regularly scheduled meeting that occurs after the release of the
Company’s earnings for the prior year (typically in February). The timing of this meeting is determined based on
factors unrelated to the pricing of equity grants.
The Compensation Committee approves equity compensation awards to a newly hired Executive Officer at the
time that the Board meets to approve the executive’s employment package. Generally, the date on which the Board
approves the employment package becomes the grant date of the newly-hired Executive Officer’s equity com-
pensation awards. However, if the Company and the new Executive Officer will enter into an employment
agreement regarding the employment relationship, the Company requires the Executive Officer to sign his
employment agreement shortly following the date of Board approval of the employment package; the later of
the date on which the executive signs his employment agreement or the date that the executive begins employment
becomes the grant date of these equity compensation awards.
The Company’s policy is that the grant date of equity compensation awards is always on or shortly after the
date the Compensation Committee approves the grants.
Although, as discussed above, annual grants are generally made in February, under unusual circumstances
grants may be made at other times during the year. For example, the economic downturn at the beginning of the
current decade as well as the September 11 terrorist attacks and aftermath had a significant negative impact on the
Company (and the hospitality industry generally) and its stock price. This severely weakened the retention aspect of
the Company’s equity awards outstanding at the time, particularly in the case of outstanding option awards,
virtually all of which had exercise prices above the then-current trading price of the Company’s common stock. To
respond to this concern, the Company made the 2003 option grants in December 2002 with the intention of keeping
executives focused on business results (including the Company’s stock price), restoring financial motivation to
succeed and retaining the Company’s top performers.
II. COMPENSATION COMMITTEE REPORT
The Compensation and Option Committee of the Board of the Company has reviewed and discussed the
Compensation Discussion and Analysis required by Item 402(b) of Regulation S-K with management and, based on
such review and discussions, recommended to the Board that the Compensation Discussion and Analysis be
included in this Proxy Statement.
COMPENSATION AND OPTION COMMITTEE
Jean-Marc Chapus, Chairman
Eric Hippeau
Adam M. Aron
26

III. SUMMARY COMPENSATION TABLE
Non-equity
Stock Option incentive plan All other
Name and Principal Salary Bonus awards awards compensation compensation Total
Position Year ($) ($) ($)(1) ($)(2) ($)(3) ($)(4) ($)
Frits Van Paasschen, . . . . . . . . . . 2007 270,833 1,500,000 568,350 89,315 403,800 347,402 3,179,700
Chief Executive Officer
since September 24, 2007
Matthew A. Ouimet, . . . . . . . . . . 2007 721,000 — 897,772 273,034 639,082 1,011,005 3,541,893
President, Hotel 2006 291,667 — 170,009 51,268 564,375 473,562 1,550,881
Operations
Vasant Prabhu, . . . . . . . . . . . . . 2007 617,927 — 1,497,164 890,260 550,809 85,896 3,642,056
Executive Vice President 2006 578,667 — 1,216,698 1,136,806 567,840 29,674 3,529,685
and Chief Financial Officer
Kenneth S. Siegel,. . . . . . . . . . . . 2007 583,232 — 1,618,424 829,762 585,037 51,908 3,668,363
Chief Administrative Officer, 2006 496,000 — 1,117,399 992,287 505,440 23,586 3,134,712
General Counsel
and Secretary
Raymond L. Gellein, Jr., . . . . . . . 2007 794,657 700,000 3,219,492 1,425,667 795,053 42,791 6,977,660
President, Global 2006 599,541 — 1,342,463 1,347,498 740,250 48,646 4,078,398
Development Group
Bruce W. Duncan, . . . . . . . . . . . 2007 479,167 — 500,012 450,717 720,000 — 2,149,896
Chief Executive Officer
from April 1 through
September 24, 2007
Steven J. Heyer, . . . . . . . . . . . . 2007 330,766 — — 245,613 — 251,462 827,841
Chief Executive Officer . . . . . . . 2006 1,000,000 — 1,753,355 4,631,937 2,000,000 578,134 9,963,426
until March 31, 2007
(1) Represents the expense recognized for financial statement reporting purposes with respect to 2007 for the fair
value of restricted stock and restricted stock units granted in 2007 as well as in prior years, in accordance with
SFAS 123(R). Pursuant to SEC rules, the amounts shown exclude the impact of estimated forfeitures related to
service-based vesting conditions. For additional information, refer to Note 20 of the Company’s financial
statements filed with the SEC as part of the Form 10-K for the year ended December 31, 2007. These amounts
reflect the Company’s accounting expense for these awards and do not correspond to the actual value that will
be recognized by the Named Executive Officers. See the Grants of Plan-Based Awards table on page 30 for
information on awards granted in 2007.
(2) Represents the expense recognized for financial statement reporting purposes with respect to 2007 for the fair
value of stock options granted in 2007 as well as in prior years, in accordance with SFAS 123(R). Pursuant to
SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting
conditions. For additional information, refer to Note 20 of the Company’s financial statements filed with the
SEC as part of the Form 10-K for the year ended December 31, 2007. These amounts reflect the Company’s
accounting expense for these awards and do not correspond to the actual value that will be recognized by the
Named Executive Officers. See the Grants of Plan-Based Awards table on page 30 for information on awards
granted in 2007.
(3) Represents cash awards paid in March 2008 and March/April 2007 with respect to 2007 and 2006, respectively,
performance under the Executive Plan (for each of the Named Executive Officers for 2007 performance and for
Messrs. Heyer and Ouimet for 2006 performance) and the AIP (for Messrs. Prabhu, Siegel and Gellein for 2006
performance), as discussed under the Annual Incentive Compensation section beginning on page 16. Cash
incentive awards exclude the following amounts that were deferred into deferred stock units (Executive Plan) or
shares of restricted stock (AIP) and increased by 33% in accordance with the Executive Plan and AIP:
27

Name 2006 Amount Deferred 2007 Amount Deferred
Van Paasschen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 134,600
Ouimet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 188,125 213,028
Prabhu . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 189,280 183,603
Siegel. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168,480 195,013
Gellein . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246,750 —
Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 240,000
Heyer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
(4) Pursuant to SEC rules, perquisites and personal benefits are not reported for any Named Executive Officer for
whom such amounts were less than $10,000 in the aggregate for 2007 and 2006 but must be identified by type
for each Named Executive Officer for whom such amounts were equal to or greater than $10,000 in the
aggregate. In that regard, the All Other Compensation column of the Summary Compensation Table includes
perquisites and other personal benefits consisting of the following: annual physical examinations, COBRA
premiums paid by the Company, Company contributions to the Company’s tax-qualified 401(k) plan, country
club dues, dividends on restricted stock, legal fees paid by the Company, personal use of Company automobiles,
rent and utilities paid by the Company, spousal accompaniment while on business travel, and tax and financial
planning services. SEC rules require specification of the cost of any perquisite or personal benefit when this
cost exceeds $25,000. This applies to Mr. Heyer’s personal travel (discussed below). It also applies to
Mr. Ouimet’s commuting via commercial air carriers and chartered aircraft, which had an aggregate cost of
$892,204 ($53,594 commercial, based on actual ticket cost, and $838,610 charter, based on actual charter fees)
in 2007 and $197,036 ($33,130 commercial, based on actual ticket cost, and $163,906 charter, based on actual
charter fees) in 2006, and his relocation benefits, which had an aggregate cost 2006 of $122,756 (the amount
paid to the relocation company) and $68,547 in 2007. These amounts are included in the All Other
Compensation column.
The amount reported as All Other Compensation for Mr. Heyer does not include business travel expenses
incurred by Mr. Heyer that the Company determined do not constitute perquisites or personal benefits. For
example, the employment agreement between the Company and Mr. Heyer provided that in addition to
Mr. Heyer’s office at the Company’s headquarters in White Plains, New York, the Company would provide
Mr. Heyer with an office in Atlanta and reimburse Mr. Heyer for travel from the Company’s Atlanta office to the
Company’s headquarters office in White Plains, not exceeding an average of one round trip per week. For
income tax purposes, Mr. Heyer is a resident of the State of Georgia. The net aggregate incremental cost to the
Company for (i) Mr. Heyer’s travel on the Company-owned airplane or chartered aircraft between New York
and Atlanta, (ii) the use of a car and driver while in New York, and (iii) stays at our hotels in the New York area
was $349,869 in 2007 and $866,178 in 2006. The net aggregate incremental cost of Mr. Heyer’s personal use of
the Company-owned plane and chartered aircraft was $33,122 in 2007 and $284,669 in 2006. The value of the
hotel stays for Mr. Heyer was determined on the same basis as payments to hotels for guests staying under the
Starwood Preferred Guest Program. Chartered aircraft were used when the Company-owned airplane was out of
service. The Company’s use of chartered aircraft increased in 2006 because maintenance issues caused the
Company-owned airplane to be out of service. The Company received a recovery from the maintenance
company, and the amount of the recovery been taken into account to reduce the cost reported for personal use of
the airplane as well as for the trips between New York and Atlanta for Mr. Heyer.
Prior to his promotion to President — Global Development Group, Mr. Gellein was Chairman and Chief
Executive Officer of Starwood Vacation Ownership, Inc. (Formerly Vistana, Inc.), the Company’s vacation
ownership subsidiary, and maintained an office at its headquarters in Orlando, Florida. The aggregate
incremental cost to the Company without deducting costs attributable to business use for (i) Mr. Gellein’s
travel on the Company-owned airplane or chartered aircraft between New York and Orlando, (ii) ground
transportation costs and (iii) stays at our hotels in the New York area was $1,092,081 in 2007 and $418,599 in
2006. The value of the hotel stays for Mr. Gellein was determined based on the actual amounts billed to
Mr. Gellein and reimbursed by the Company.
28

For income tax purposes, Mr. Duncan is a resident of the State of Illinois. The aggregate incremental cost to the
Company for (i) Mr. Duncan’s travel on commercial aircraft, the Company-owned airplane or chartered aircraft
between New York and Chicago, (ii) ground transportation costs and (iii) stays at our hotels in the New York
area was $254,363 in 2007. The value of hotel stays for Mr. Duncan was determined based on the actual
amounts billed to Mr. Duncan and reimbursed by the Company. The net aggregate incremental cost to the
Company of Mr. Van Paasschen’s personal use of the Company-owned plane and chartered aircraft was
$165,606 in 2007. For 2007, also includes relocation benefits which had an aggregate cost of $132,275 and the
reimbursement of $44,556 for legal fees incurred in connection with the negotiation of his employment
agreement. These amounts are included in the All Other Compensation column. The cost of the Company-
owned plane includes the cost of fuel, ground services and landing fees, navigation and telecommunications,
catering and aircraft supplies, crew expenses, aircraft cleaning and an allocable share of maintenance. Pursuant
to SEC rules, the following table specifies the value for each element of All Other Compensation not specified
above other than perquisites and personal benefits that is valued in excess of $10,000.
Dividend Premiums Paid by
Rent & Equivalents on Tax & Financial Company for Life Tax Gross-Up
Utilities Restricted Stock Services Insurance($) Payments
Name ($) (2007) ($) (2007) ($) (2007) (2006) ($) (2006)
Ouimet . . . . . . . . . . 25,992 — — — 126,698
Prabhu . . . . . . . . . . — 63,530 — — —
Heyer . . . . . . . . . . . — 123,807 69,608 142,750 102,858
29

IV. GRANTS OF PLAN-BASED AWARDS
All Other All Other
Grant Stock Option
Date (or Awards: Awards: Exercise Grant Date
year with Number of Number of or Base Fair Value
Estimated Future Payouts Under
respect to Compensation Shares of Securities Price of of Stock
Non-Equity Incentive Plan Awards(1)
non-equity Committee Stock or Underlying Option and Option
incentive plan Threshold Target Maximum Approval Units Options Awards Awards
Name award) ($) ($) ($) Date (#) (#) (2) ($/Sh) ($) (3)
Van Paasschen . . 9/24/07 8/30/07 63,895 58.69 1,331,521
9/24/07 8/30/07 63,895(7) 3,749,998
9/24/07 8/30/07 25,558(7) 1,499,999
2007 0 2,000,000 9,000,000(8)
Ouimet . . . . . . . 2/28/07 2/12/07 34,538 65.15 715,804
2/28/07 2/12/07 34,538(6) 2,249,978
3/01/07 (4) 3,866(4) 250,208
2007 181,300 725,200 1,359,750
Prabhu . . . . . . . 2/28/07 2/12/07 34,538 65.15 715,804
2/28/07 2/12/07 34,538(6) 2,249,978
3/01/07 (5) 3,890(5) 251,761
2007 156,258 625,032 1,171,935
Siegel . . . . . . . . 2/28/07 2/12/07 34,538 65.15 715,804
2/28/07 2/12/07 34,538(6) 2,249,978
3/01/07 (5) 3,462(5) 224,061
2007 150,010 600,038 1,125,071
Gellein . . . . . . . 2/28/07 2/12/07 40,295 65.15 835,118
2/28/07 2/12/07 40,295(6) 2,625,018
3/01/07 (5) 5,071(5) 328,195
2007 187,513 750,050 1,406,344
Duncan . . . . . . . 5/24/07 5/23/07 44,225 67.84 901,434
5/24/07 5/23/07 14,742(6) 1,000,024
2007 0 2,000,000 9,000,000(8)
(1) Represents the potential values of the awards granted to the Named Executive Officers under the Executive Plan
or the AIP, as applicable, if the threshold, target and maximum goals are satisfied for all applicable performance
measures. See detailed discussion of these awards in section V. below.
(2) The options generally vest in equal installments on the first, second, third and fourth anniversary of their grant.
If the grantee is eligible for retirement, the options vest upon the completion of 18 months of continuous service
from the grant date.
(3) Represents the fair value of the awards disclosed in columns (g) and (h) on their respective grant dates. For
restricted stock and restricted stock units, fair value is calculated in accordance with SFAS 123(R) using the
average of the high and low price of the Company’s stock on the grant date. For stock options, fair value is
calculated in accordance with SFAS 123(R) using a lattice valuation model. For additional information, refer to
Note 20 of the Company’s financial statements filed with the SEC as part of the Form 10-K for the year ended
December 31, 2007. There can be no assurance that these amounts will correspond to the actual value that will
be recognized by the Named Executive Officers.
(4) On March 1, 2007, in accordance with the Executive Plan, 25% of Mr. Ouimet’s annual bonus with respect to
2006 performance was credited to a deferred stock unit account on the Company’s balance sheet, which number
of shares was increased by 33%. These deferred stock units vest in equal installments on the first, second and
third fiscal year-ends following the date of grant. Dividends are paid to Mr. Ouimet in amounts equal to those
paid to holders of shares of Company stock. No separate Compensation Committee approval was required for
these shares, which are provided by plan terms.
(5) On March 1, 2007, in accordance with the AIP, 25% of Messrs. Prabhu’s, Siegel’s and Gellein’s annual bonus
with respect to 2006 performance was paid in shares of restricted stock, which number of shares was increased
by 33%. These shares of restricted stock generally vest in equal installments on the first and second anniversary
30

of their grant. Dividends are paid to holders of such restricted stock awards in amounts equal to those paid to
holders of shares of Company stock. No separate Compensation Committee approval was required for these
shares, which are provided by plan terms.
(6) These awards generally vest 50% on each of the third and fourth anniversary of their grant date. If the grantee is
eligible for retirement, the award vests upon the completion of 18 months of continuous service from the grant
date. Mr. Duncan’s restricted stock award provided for accelerated vesting of 50% upon his termination as
Chief Executive Officer on an interim basis with the remaining 50% continuing to vest in accordance with its
terms.
(7) Upon the commencement of Mr. Van Paasschen’s employment with the Company, he received option and
restricted stock awards in accordance with his employment agreement. The options vest in equal installments
on the first, second, third and fourth anniversaries of their grant. The restricted stock will vest 50% on each of
the third and fourth anniversary of the grant date. The restricted stock units vest on the first anniversary of the
date of grant but are not converted into Shares until the third anniversary of the date of grant.
(8) Represents the maximum amount payable to any participant under the terms of the Executive Plan.
V. NARRATIVE DISCLOSURE TO SUMMARY COMPENSATION TABLE AND GRANTS OF
PLAN-BASED AWARDS SECTION
We describe below the Executive Plan awards granted to our Named Executive Officers for 2007. These
awards are reflected in both the Summary Compensation Table on page 27 and the Grants of Plan-Based Awards
table on page 30.
Mr. Van Paasschen and Mr. Duncan each received an incentive award in March 2008 relating to their 2007
performance. Under the terms of their respective employment agreements, Messrs. Van Paasschen and Duncan
were each entitled to receive at least a pro-rata target bonus. The Committee awarded the minimum amount
pursuant to the employment agreement and did not exercise any discretion with respect thereto.
Each of the other Named Executive Officers (other than Mr. Heyer) received an award in March 2008 relating
to his 2007 performance. The table below presents for each such Named Executive Officer his salary, target as both
a percentage of salary and a dollar amount, actual award, the portion of the award that is deferred into restricted
stock units and the 33% increase in this restricted stock units.
Increased
Award Award Deferred Award Deferred
Target into Restricted into Restricted
Relative Award Actual Stock/Restricted Stock/Restricted
Salary to Salary Target Award Stock Units Stock Units
Name ($) (%) ($) ($) ($) ($)
Van Paasschen . . . . . . . . . 1,000,000 200 538,400(1) 538,400 134,600 179,018
Ouimet . . . . . . . . . . . . . . . 725,200 100 725,200 852,110 213,028 283,327
Prabhu . . . . . . . . . . . . . . . 625,032 100 625,032 734,412 183,603 244,192
Siegel . . . . . . . . . . . . . . . . 600,038 100 600,038 780,050 195,013 259,367
Gellein . . . . . . . . . . . . . . . 750,050 100 750,050 795,053 — —
Duncan . . . . . . . . . . . . . . . 1,000,000 200 2,000,000 960,000 240,000 319,200
(1) Mr. Van Paasschen’s target bonus is $2,000,000. Amount reflected has been adjusted to reflect pro-rata portion
of bonus given Mr. Van Paasschen’s start date with the Company.
The following factors contributed to the Compensation Committee’s determination of the 2007 AIP awards for
these Named Executive Officers:
• the Company’s 2007 financial performance as measured by operating income and earnings per share;
• the 2007 PMP ratings assigned to such executives; and
• the bonuses paid to executive officers performing comparable functions in peer companies.
31

VI. OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END
The following table provides information on the current holdings of stock options and stock awards by the
Named Executive Officers. This table includes unexercised and unvested stock options, unvested restricted stock
and unvested restricted stock units. Each equity grant is shown separately for each Named Executive Officer. The
market value of the stock awards is based on the closing price of Company stock on December 31, 2007, which was
$44.03.
Option Awards Stock Awards
Number of Number of Market Value
Securities Securities Number of of Shares
Underlying Underlying Shares or or Units of
Unexercised Unexercised Units of Stock Stock That
Options- Options Option Option That Have Have Not
Grant Exercisable Unexercisable Exercise Price Expiration Not Vested Vested
Name Date (#) (1) (2) (#) (1) (2) ($) (1) Date (#) (1) ($)
Van Paasschen . . . . . . . . . 9/24/2007 63,895 58.69 9/24/2015
9/24/2007 63,895(3) 2,813,297
9/24/2007 25,558(3) 1,125,319
Ouimet . . . . . . . . . . . . . . 2/28/2007 34,538 65.15 2/28/2015
8/01/2006 7,483 22,448 52.52 8/1/2014
8/01/2006 13,425(3) 591,103
8/01/2006 9,918(3) 436,690
2/28/2007 34,538(3) 1,520,708
3/01/2007 2,577(4) 113,465
Prabhu . . . . . . . . . . . . . . 2/02/2004 61,200 61,100 29.02 2/2/2012
2/18/2004 12,220 12,220 31.71 2/18/2012
2/10/2005 41,243 41,242 48.39 2/10/2013
2/07/2006 19,979 59,934 48.80 2/7/2014
2/28/2007 34,538 65.15 2/28/2015
2/10/2005 27,495(3) 1,210,605
2/07/2006 30,736(3) 1,353,306
3/01/2006 1,969(5) 86,695
2/28/2007 34,538(3) 1,520,708
3/01/2007 3,890(5) 171,277
Siegel . . . . . . . . . . . . . . . 2/18/2004 30,550 31.71 2/18/2012
2/10/2005 45,824 48.39 2/10/2013
2/07/2006 63,396 48.80 2/7/2014
2/28/07 34,538 65.15 2/28/2015
2/10/2005 30,550(3) 1,345,117
2/07/2006 32,274(3) 1,421,024
3/01/2006 1,774(5) 78,109
2/28/2007 34,538(3) 1,520,708
3/01/2007 3,462(5) 152,432
32

Option Awards Stock Awards
Number of Number of Market Value
Securities Securities Number of of Shares
Underlying Underlying Shares or or Units of
Unexercised Unexercised Units of Stock Stock That
Options- Options Option Option That Have Have Not
Grant Exercisable Unexercisable Exercise Price Expiration Not Vested Vested
Name Date (#) (1) (2) (#) (1) (2) ($) (1) Date (#) (1) ($)
Gellein . . . . . . . . . . . . . . 10/01/2002 7,637 18.42 10/01/2010
12/23/2002 24,440 20.36 12/23/2010
10/01/2003 15,274 28.99 10/1/2011
2/18/2004 61,650 30,550 31.71 2/18/2012
2/10/2005 38,188 38,187 48.39 2/10/2013
2/23/2006 70,696 52.25 2/23/2014
2/28/2007 40,295 65.15 2/28/2015
2/10/2005 25,457(3) 1,120,872
3/01/2006 2,080(5) 91,582
3/01/2007 5,071(5) 223,276
Duncan . . . . . . . . . . . . 5/24/2007 22,113 22,113 67.84 5/24/2015
5/24/2007 7,371(3) 324,545
(1) In connection with the Host Transaction, Starwood’s stockholders received 0.6122 Host shares and $0.503 in
cash for each of their Class B Shares. Holders of Starwood employee stock options and restricted stock did not
receive this consideration while the market price of the Company’s publicly traded shares was reduced to reflect
the payment of this consideration directly to the holders of the Class B Shares. In order to preserve the value of
the Company’s restricted stock and options immediately before and after the Host Transaction, the Company
increased the number of shares of restricted stock and adjusted its stock options to reduce the strike price and
increase the number of stock options using the intrinsic value method based on the Company’s stock price
immediately before and after the transaction. The stock and option information above reflects the number of
shares and options granted and the option exercise prices after these adjustments were made.
(2) These options generally vest in equal installments on the first, second, third and fourth anniversary of their
grant. For options granted in 2006 and 2007, if the grantee is eligible for retirement, the options vest upon the
completion of 18 months of continuous service from the grant date. For options granted prior to 2006, if the
grantee is eligible for retirement, the options continue to vest following retirement (subject to compliance with a
non-compete covenant) with the exercise period limited to five years from retirement (or the remainder of the
option term if less).
(3) These shares of restricted stock or restricted stock units granted prior to 2007 generally vest upon the third
anniversary of their grant date. For awards granted in 2007, the restricted stock or restricted stock units
generally vest 50% on each of the third and fourth anniversaries of their grant date. For awards granted in 2006
and 2007, if the grantee is eligible for retirement, the shares vest upon the completion of 18 months of
continuous service from the grant date. For awards granted prior to 2006, if the grantee is eligible for retirement,
the shares continue to vest following retirement subject to compliance with a non-compete covenant.
(4) These deferred restricted stock units vest in equal installments on the first, second and third fiscal year-ends
following the date of grant, subject to acceleration in the event certain performance criteria are met.
(5) These shares of restricted stock generally vest in equal installments on the first and second anniversary of their
grant.
VII. OPTION EXERCISES AND STOCK VESTED
The following table discloses, for each Named Executive Officer, (i) shares of Company stock acquired
pursuant to exercise of stock options during 2007, (ii) shares of restricted Company stock that vested in 2007, and
(iii) shares of Company stock acquired in 2007 on account of vesting of restricted stock units. The table also
33

discloses the value realized by the Named Executive Officer for each such event, calculated prior to the deduction of
any applicable withholding taxes and brokerage commissions.
Option Awards Stock Awards
Number of Number of Shares
Shares Acquired Value Realized Acquired Upon Value Realized
Upon Exercise on Exercise Vesting on Vesting
Name (#) ($) (#) ($)
Van Paasschen . . . . . . . . . . . . . — — — —
Ouimet . . . . . . . . . . . . . . . . . . . — — — —
Prabhu . . . . . . . . . . . . . . . . . . . — — 32,629 2,158,505
Siegel . . . . . . . . . . . . . . . . . . . . 97,508 2,843,121 14,177 958,365
Gellein . . . . . . . . . . . . . . . . . . . — — 78,582 4,563,945
Duncan . . . . . . . . . . . . . . . . . . . — — 7,371 432,604
Heyer . . . . . . . . . . . . . . . . . . . . — — 73,959 4,578,667
VIII. NONQUALIFIED DEFERRED COMPENSATION
The Company’s Deferred Compensation Plan (the “Plan”) permits eligible executives, including our Named
Executive Officers, to defer up to 100% of their Executive Plan or AIP bonus, as applicable, and up to 75% of their
base salary for a calendar year. The Company does not contribute to the Plan. Prior to his departure, Mr. Heyer made
deferrals under the Plan, but no other Named Executive Officer has made deferrals under the Plan. Following his
departure from the Company, Mr. Heyer received a distribution in October 2007 in accordance with his elections at
the time of deferral. The general terms of the Plan are described below (different rules apply to amounts deferred
prior to 2005).
Executive Registrant Aggregate Aggregate Aggregate
Contributions Contributions Earnings Withdrawals/ Balance at
in Last FY in Last FY in Last FY Distributions Last FYE
Name ($) ($) ($) ($) ($)
Van Paasschen . . . . . . . . . . . . — — — — —
Ouimet . . . . . . . . . . . . . . . . . . — — — — —
Prabhu . . . . . . . . . . . . . . . . . . — — — — —
Siegel . . . . . . . . . . . . . . . . . . . — — — — —
Gellein . . . . . . . . . . . . . . . . . . — — — — —
Duncan. . . . . . . . . . . . . . . . . . — — — — —
Heyer . . . . . . . . . . . . . . . . . . . — — — 1,425,280 —
Deferral elections are made in December for base salary paid in pay periods beginning in the following
calendar year. Deferral elections are made in June for annual incentive awards that are earned for performance in
that calendar year. Deferral elections are irrevocable.
Elections as to the time and form of payment are made at the same time as the corresponding deferral election.
A participant may elect to receive payment on February 1 of a calendar year while still employed or either 6 or
12 months following employment termination. Payment will be made immediately in the event a participant
terminates employment on account of death, disability or on account of certain changes in control. A participant
may elect to receive payment of his account balance in either a lump sum or in annual installments, so long as the
account balance exceeds $50,000; otherwise payment will be made in a lump sum.
If a participant elects an in-service distribution, the participant may change the scheduled distribution date or
form of payment so long as the change is made at least 12 months in advance of the scheduled distribution date. Any
such change must provide that distribution will commence at least five years later than the scheduled distribution
date. If a participant elects to receive distribution upon employment termination, that election and the corre-
sponding form of payment election are irrevocable. Withdrawals for hardship that results from an unforeseeable
emergency are available, but no other unscheduled withdrawals are permitted.
34

The Plan uses the investment funds listed below as potential indices for calculating investment returns on a
participant’s Plan account balance. The deferrals the participant directs for investment into these funds are adjusted
based on a deemed investment in the applicable funds. The participant does not actually own the investments that he
selects. The Company may, but is not required to, make identical investments pursuant to a variable universal life
insurance product. When it does, participants have no direct interest in this life insurance.
1-Year Annualized
Rate of Return
Name of Investment Fund (as of 1/31/08)
Nationwide NVIT Money Market — Class V . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.27%
PIMCO VIT Total Return — Admin Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.28%
Fidelity VIP High Income — Service Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.42%
Nationwide NVIT Inv Dest Moderate — Class 2 . . . . . . . . . . . . . . . . . . . . . . . . . . 0.45%
T. Rowe Price Equity Income — Class II. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.88%
Dreyfus Stock Index — Initial Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.92%
Dreyfus VIF Appreciation — Initial Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.30%
Fidelity VIP II Contrafund — Service Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.08%
Fidelity VIP Growth — Service Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.80%
Nationwide NVIT Mid Cap Index — Class I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.96%
Oppenheimer Mid Cap VA — Non-Service Shares . . . . . . . . . . . . . . . . . . . . . . . . . 5.57%
Dreyfus IP Small Cap Stock Index — Service Shares . . . . . . . . . . . . . . . . . . . . . . . 7.87%
Fidelity VIP Overseas — Service Class . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.35%
AIM V.I. International Growth — Series I Shares. . . . . . . . . . . . . . . . . . . . . . . . . . 3.26%
IX. POTENTIAL PAYMENTS UPON TERMINATION OR CHANGE-IN-CONTROL
The Company provides certain benefits to our Named Executive Officers in the event of employment
termination, both in connection with a change in control and otherwise. These benefits are in addition to benefits
available generally to salaried employees, such as distributions under the Company’s tax-qualified retirement
savings plan, disability insurance benefits and life insurance benefits. These benefits are described below.
A. Termination Before Change in Control: Involuntary Other than for Cause, Voluntary for Good Rea-
son, Death or Disability
Pursuant to Mr. van Paaschen’s employment agreement, if Mr. Van Paasschen’s employment is terminated by
the Company other than for cause or by Mr. Van Paasschen for good reason, the Company will pay Mr. Van Paas-
schen as a severance benefit (i) two times the sum of his base salary and target annual bonus, (ii) a pro rated target
bonus for the year of termination and (iii) Mr. Van Paasschen’s sign on restricted stock unit award (25,558 units)
would be payable. None of the other equity awards granted to Mr. Van Paasschen would be accelerated. If
Mr. Van Paasschen’s employment were terminated because of his death or permanent disability, Mr. Van Paasschen
(or his estate) would be entitled to receive a pro rated target bonus for the year of termination and all of his equity
awards would accelerate and vest.
Pursuant to Mr. Ouimet’s employment agreement, if Mr. Ouimet’s employment is terminated by the Company
other than for cause or by Mr. Ouimet for good reason during the first two years of employment, the Company will
pay Mr. Ouimet as a severance benefit (i) base salary and target annual incentive through July 1, 2009, (ii) continued
health benefit coverage, at active employee rates, for the same period, and (iii) accelerated vesting of Mr. Ouimet’s
sign-on equity award. If Mr. Ouimet’s employment is terminated by the Company other than for cause or by
Mr. Ouimet for good reason after the first two years of employment, the Company shall pay him as a severance
benefit (i) his base salary for twelve months, (ii) his target annual incentive for one year, (iii) 50% of his target
annual incentive pro-rated for the number of days elapsed in the calendar year to the date of termination;
(iv) continued heath benefit coverage, at active employee rates, for twelve months; and (v) accelerated vesting of his
sign-on equity award. Pursuant to a letter agreement entered into on August 14, 2007, Mr. Ouimet will also be
35

entitled to acceleration of 50% of his then unvested restricted stock and options if he is terminated without cause
prior to September 24, 2009.
Pursuant to Mr. Siegel’s employment agreement, in the event Mr. Siegel’s employment is terminated by the
Company without cause, Mr. Siegel will receive severance benefits of twelve months of base salary plus 100% of his
target annual incentive and the Company will continue to provide medical benefits coverage for up to twelve
months after the date of termination. Pursuant to a letter agreement entered into on August 14, 2007, Mr. Siegel will
also be entitled to acceleration of 50% of his then unvested restricted stock and options if he is terminated without
cause prior to September 24, 2009.
Pursuant to his employment agreement, if Mr. Prabhu’s employment is terminated by the Company without
cause or by Mr. Prabhu voluntarily with good reason, he will receive severance benefits equal to one year’s base
salary and he will be reimbursed for COBRA expenses minus his last level of contribution for up to twelve months
following termination. In addition, the Company will accelerate the vesting of 50% of Mr. Prabhu’s unvested
restricted stock and options. The Company entered into a letter agreement on August 14, 2007 confirming the terms
of the agreement as it relates to the acceleration of 50% of Mr. Prabhu’s unvested restricted stock and options.
Pursuant to his employment agreement, if Mr. Gellein’s employment is terminated by the Company without
cause or by Mr. Gellein voluntarily with good reason, he will receive severance benefits equal to one year’s base
salary plus one year’s target bonus and he will be reimbursed for COBRA expenses minus his last level of
contribution for up to twelve months following termination. In addition, the Company will accelerate the vesting of
all of Mr. Gellein’s unvested restricted stock and options.
B. Termination in the Event of Change in Control
On August 2, 2006, the Company and each of Messrs. Prabhu, Ouimet, Siegel and Gellein entered into
severance agreements. Each severance agreement provides for a term of three years, with an automatic one-year
extension until either the executive or the Company notifies the other that such party does not wish to extend the
agreement. If a Change in Control (as described below) occurs, the agreement will continue for at least 24 months
following the date of such Change in Control.
Each agreement provides that if, following a Change in Control, the executive’s employment is terminated
without Cause (as defined in the agreement) or with Good Reason (as defined in the agreement), the executive
would receive the following in addition to the items described in A. above:
• two times the sum of his base salary plus the average of the annual bonuses earned by the executive in the
three fiscal years ending immediately prior to the fiscal year in which the termination occurs;
• continued medical benefits for two years, reduced to the extent benefits of the same type are received by or
made available to the executive from another employer;
• a lump sum amount, in cash, equal to the sum of (A) any unpaid incentive compensation which had been
allocated or awarded to the executive for any measuring period preceding termination under any annual or
long-term incentive plan and which, as of the date of termination, is contingent only upon the continued
employment of the executive until a subsequent date, and (B) the aggregate value of all contingent incentive
compensation awards allocated or awarded to the executive for all then uncompleted periods under any
such plan that the executive would have earned on the last day of the performance award period, assuming
the achievement, at the target level, of the individual and corporate performance goals established with
respect to such award;
• immediate vesting of stock options and restricted stock held by the executive under any stock option or
incentive plan maintained by the Company;
• outplacement services suitable to the executive’s position for a period of two years or, if earlier, until the
first acceptance by the executive of an offer of employment, the cost of which will not exceed 20% of the
executive’s base salary;
36

• a lump sum payment of the executive’s deferred compensation paid in accordance with Section 409A
distribution rules; and
• immediate vesting of all unvested 401(k) contributions in the executive’s 401(k) account or payment by the
Company of an amount equal to any such unvested amounts that are forfeited by reason of the executive’s
termination of employment.
In addition, to the extent that any executive becomes subject to the “golden parachute” excise tax imposed
under Section 4999 of the Code, the executive would receive a gross-up payment in an amount sufficient to offset
the effects of such excise tax.
Under the severance agreements, a “Change in Control” is deemed to occur upon any of the following events:
• any person becomes the beneficial owner of securities of the Company (not including in the securities
beneficially owned by such person any securities acquired directly from the Company or its affiliates)
representing 25% or more of the combined voting power of the Company;
• a majority of the directors cease to serve on the Company’s Board in connection with a successful hostile
proxy contest;
• a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any
other corporation, other than:
O a merger or consolidation in which securities of the Company would represent at least 70% of the voting
power of the surviving entity; or
O a merger or consolidation effected to implement a recapitalization of the Company in which no person
becomes the beneficial owner of 25% or more of the voting power of the Company; or
• approval of a plan of liquidation or dissolution by the stockholders or the consummation of a sale of all or
substantially all of the Company’s assets, other than a sale to an entity in which the Company’s stockholders
would hold, at least 70% of the voting power in substantially the same proportions as their ownership of the
Company immediately prior to such sale. However, a “Change in Control” does not include a transaction in
which Company stockholders continue to hold substantially the same proportionate ownership in the entity
which would own all or substantially all of the Company’s assets following such transaction. Mr. Van Paas-
schen’s employment agreement provides that he would be entitled to the following benefits if his
employment were terminated without cause or he resigned with good reason following a Change in
Control:
• two times the sum of his base salary plus the average of the annual bonuses earned in the three fiscal years ending
immediately prior to the fiscal year in which the termination occurs;
• a lump sum amount, in cash, equal to the sum of (A) any unpaid incentive compensation which had been
allocated or awarded for any measuring period preceding termination under any annual or long-term
incentive plan and which, as of the date of termination, is contingent only upon his continued employment
until a subsequent date, and (B) the aggregate value of all contingent incentive compensation awards
allocated or awarded to him for all then uncompleted periods under any such plan that he would have
earned on the last day of the performance award period, assuming the achievement, at the target level, of the
individual and corporate performance goals established with respect to such award;
• immediate vesting of stock options and restricted stock held under any stock option or incentive plan
maintained by the Company;
• a lump sum payment of his deferred compensation paid in accordance with Section 409A distribution
rules; and
• immediate vesting of all unvested 401(k) contributions in his 401(k) account or payment by the Company
of an amount equal to any such unvested amounts that are forfeited by reason of his termination of
employment.
37

In addition, to the extent that Mr. Van Paasschen becomes subject to the “golden parachute” excise tax imposed
under Section 4999 of the Code, he would receive a gross-up payment in an amount sufficient to offset the effects of
such excise tax.
C. Named Executive Officer Departures
1. Mr. Heyer
Effective March 31, 2007, Mr. Heyer resigned his positions as Chief Executive Officer of the Company and as
a member of its Board of Directors. In connection with Mr. Heyer’s resignation, the Company entered into an
agreement and general release of claims with Mr. Heyer (the “Release Agreement”) pursuant to which Mr. Heyer’s
employment agreement dated September 20, 2004, and amended as of May 4, 2005 (the “Employment Agree-
ment”), was terminated effective March 31, 2007.
The Release Agreement provides for Mr. Heyer receiving the following: (i) cash incentive compensation for
2006 in the gross amount of $2,000,000 (the “Bonus”), (ii) issuance of 73,959 shares of Company stock to Mr. Heyer
in settlement of his restricted stock units that were vested as of March 31, 2007 (valued at $4,796,241 based on the
$64.85 per share closing price of the Company’s common stock on March 30, 2007, the last trading day prior to
March 31, 2007), (iii) payment of Mr. Heyer’s account balance under the Starwood Hotels & Resorts Worldwide,
Inc. Deferred Compensation Plan in accordance with the terms of such plan and Starwood Hotels & Resorts
Worldwide, Inc. Savings and Retirement Plan, as described in the section entitled Nonqualified Deferred
Compensation on page 34 ($1,712,641 as of March 31, 2007); and (iv) reimbursement for 21 unused vacation
days (valued at $80,769) and for business expenses incurred on or prior to March 31, 2007. The Company also
agreed to take all actions reasonably requested by Mr. Heyer to transfer to Mr. Heyer, at no cost to Mr. Heyer, the
Company’s interest in the life insurance policy maintained on Mr. Heyer’s life (valued at $117,407 effective
March 31, 2007). In addition, all outstanding stock options and restricted stock units that were unvested as of
March 31, 2007 were canceled. Other than the amounts specified above, Mr. Heyer received no severance pay or
benefits on account of his resignation and received no additional benefits other than those set forth in his
employment agreement for a voluntary resignation without good reason.
Pursuant to the Release Agreement, Mr. Heyer agreed to release the Company, its affiliates and their directors,
officers and employees from any claims that he may have against any of them. The Company agreed to release
Mr. Heyer from any claims arising out of Mr. Heyer’s exercise of any restricted stock awards or stock option grants
during his employment with the Company. In addition, Mr. Heyer agreed that until March 31, 2009, he will not
(i) acquire any equity securities of the Company, offer to enter into any change of control of the Company, or
propose or disclose any request for consent to any of the foregoing; (ii) engage in any business that competes with
the Company in any geographic area where the Company then conducts business; or (iii) solicit any of the
Company’s employees or customers.
2. Mr. Gellein
In December 2007, Mr. Gellein’s employment agreement was amended in connection with his retirement,
which was to be no later than March 31, 2008. Pursuant to the amendment, Mr. Gellein’s 2007 equity awards were
amended to provide for their immediate vesting. In addition, the Compensation Committee exercised its discretion
not to defer (or subject to gross up) 25% of Mr. Gellein’s bonus award for the 2007 performance year that was paid
on March 1, 2008 and subject to the satisfaction of the financial targets established for the Annual Incentive Plan for
Certain Executives, agreed to set the individual component of his bonus at no less than target. The Compensation
Committee approved the amendment in recognition of Mr. Gellein’s years of devoted service to the Company and
his willingness to accept the new role as President, Global Development Group in 2006. In addition, the
Compensation Committee took into consideration that Mr. Gellein would be subject to non-competition provisions
following his retirement.
38

3. Mr. Duncan
In September 2007, with the hiring of Mr. Van Paasschen, Mr. Duncan ceased being Chief Executive Officer on
an interim basis and resumed his position as Non-executive Chairman of the Board. In connection therewith, the
vesting of 50% of Mr. Duncan’s equity grant for serving as Chief Executive Officer was accelerated. The remaining
50% will continue to vest in accordance with its terms, with service as a director counting as continued employment
for purposes of the awards. In addition, because he served as Chief Executive Officer on an interim basis,
Mr. Duncan became entitled to receive at least a pro-rata target bonus for 2007 performance. $960,000 was paid on
March 1, 2008 to satisfy this obligation (with 25% of such amount being deferred into stock units and grossed up by
33% pursuant to the Executive Plan). The bonus amount is reflected in the summary compensation table set forth
above.
D. Estimated Payments Upon Termination
The tables below reflect the estimated amounts payable to Messrs. Van Paasschen, Ouimet, Siegel, Prabhu and
Gellein in the event their employment with the Company had terminated on December 31, 2007 under various
circumstances, and includes amounts earned through that date. The actual amounts that would become payable in
the event of an actual employment termination can only be determined at the time of such termination.
Given that Messrs. Duncan and Heyer were not employed by the Company as of December 31, 2007 and that
quantitative disclosure of the amounts payable to them in connection therewith has been provided in Section C.
above, the Company has not included in this section quantitative disclosure of the payments that might have been
made to them in the event their employment had terminated on December 31, 2007.
1. Involuntary Termination without Cause or Voluntary Termination for Good Reason
The following table discloses the amounts that would have become payable on account of an involuntary
termination without cause or a voluntary termination for good reason outside of the change in control context.
Severance Medical Vesting of Vesting of
Pay Benefits Restricted Stock Stock Options Total
Name ($) ($) ($) ($) ($)
Van Paasschen . . . . . . . . . . . . 4,749,900 0 1,125,319 0 5,875,219
Ouimet . . . . . . . . . . . . . . . . . . 2,296,418 21,413 1,549,328 0 3,867,159
Siegel(1) . . . . . . . . . . . . . . . . . 1,200,076 19,699 2,258,695 188,246 3,666,716
Prabhu . . . . . . . . . . . . . . . . . . 625,032 10,260 2,171,296 533,916 3,340,504
Gellein. . . . . . . . . . . . . . . . . . . 1,500,100 7,451 1,435,730 376,492 3,319,773
(1) Mr. Siegel’s employment agreement provides for payments in the event of involuntary termination other than
for cause but does not provide for payments in the event of voluntary termination for good reason.
2. Termination on Account of Death or Disability
Vesting of Vesting of
Severance Medical Restricted Stock
Pay Benefits Stock Options Total
Name ($) ($) ($) ($) ($)
Van Paasschen . . . . . . . . . . . . . . . .. 538,000 0 3,938,616 0 4,476,616
Ouimet . . . . . . . . . . . . . . . . . . . . . .. 0 0 2,661,966 0 2,661,966
Siegel . . . . . . . . . . . . . . . . . . . . . . . . 1,200,076 19,699 4,517,390 376,492 6,113,657
Prabhu . . . . . . . . . . . . . . . . . . . . . .. 625,032 10,260 4,342,591 1,067,832 6,045,715
Gellein . . . . . . . . . . . . . . . . . . . . . .. 750,050 0 1,435,730 376,492 2,562,272
39

3. Change in Control
The following table discloses the amounts that would have become payable on account of an involuntary
termination without cause following a change in control or a voluntary termination with good reason following a
change in control.
Vesting of Vesting of
Severance Medical Restricted Stock Outplace- 401(k) Tax
Pay Benefits Stock Options ment Payment Gross Up Total
Name ($) ($) ($) ($) ($) ($) ($) ($)
Van Paasschen . . . . . . . . . . . . . . 8,000,000 39,408 3,938,616 0 0 0 3,855,216(1) 15,833,240
Ouimet . . . . . . . . . . . . . . . . . . . 3,680,600 27,048 2,661,966 0 145,040 0 1,942,641(1) 8,457,295
Siegel . . . . . . . . . . . . . . . . . . . . 3,147,954 39,398 4,517,390 376,492 99,840 0 0 8,181,074
Prabhu . . . . . . . . . . . . . . . . . . . 3,389,336 20,520 4,342,591 1,067,832 125,006 0 0 8,945,285
Gellein . . . . . . . . . . . . . . . . . . . 3,987,200 14,902 1,435,730 376,492 150,010 0 0 5,964,334
(1) If the amount of severance pay and other benefits payable on change in control is greater than three times certain
base period taxable compensation for Messrs. Van Paasschen and Ouimet, a 20% excise tax is imposed on the
excess amount of such severance pay and other benefits. Because of Messrs. Van Paasschen’s and Ouimet’s
recent hires, their base period taxable compensation does not reflect the total compensation paid to such
executives, artificially increasing the excise tax that would apply on a change in control and, correspondingly,
the tax-gross up payment due under the estimate.
X. DIRECTOR COMPENSATION
The Company uses a combination of cash and stock-based awards to attract and retain qualified candidates to
serve on the Board. In setting director compensation, the Company considers the significant amount of time that
members of the Board spend in fulfilling their duties to the Company as well as the skill level required by the
Company of its directors. The Company revised the compensation structure for directors in the summer of 2007 and
the current structure is described below.
Under the Company’s director share ownership guidelines, each Director is required to acquire Shares (or
deferred compensation stock equivalents) that have a market price equal to two times the annual director’s fees paid
to such director. New directors are given a period of three years to satisfy this requirement.
Company employees who serve as members of the Board receive no fees for their services in this capacity.
Non-employee members of the Board (“Directors”) receive compensation for their services as described below.
A. Annual Fees
Each Director receives an annual fee in the amount of $80,000, payable in four equal installments of Shares
issued under our LTIP. The number of Shares to be issued is based on the fair market value of a Share on the previous
December 31.
A Director may elect to receive up to one half of the annual fee in cash and to defer (at an annual interest rate of
LIBOR plus 11⁄2% for deferred cash amounts) any or all of the annual fee payable in cash. Deferred cash amounts are
payable in accordance with the Director’s advance election. A Director is also permitted to elect to defer to a
deferred unit account any or all of the annual fee payable in shares of Company stock. Deferred stock amounts are
payable in accordance with the Director’s advance election.
Directors serving as members of the Audit Committee received an additional annual fee in cash of $10,000
($25,000 for the chairman of the Audit Committee). The chairperson of each other committee of the Board received
an additional annual fee in cash of $10,000. For 2007, the Chairman of the Board received an additional retainer of
$150,000, payable quarterly in Shares.
41

B. Attendance Fees
Directors do not receive fees for attendance at meetings. However, the Company reimburses Directors for
expenses they incurred related to 2007 meeting attendance, including attendance by spouses at one meeting each
year.
C. Equity grant
Prior to 2008, each Director received an annual grant (made at the same time as the annual grant is made to
other employees) under our LTIP of a nonqualified stock option with respect to 4,500 shares of Company stock with
an exercise price equal to the fair market value of the shares on the option grant date. The options are fully vested
and exercisable upon grant and are scheduled to expire eight years after the grant date. Beginning in 2008, each
Director will receive an annual equity grant (made at the same time as the annual grant is made to other employees)
under our LTIP with a value of $100,000. The equity grant will be delivered 50% in stock units and 50% in stock
options. The number of stock units is determined by dividing the value ($50,000) by the average of the high and low
price on the date of grant. The number of options is determined by dividing the value ($50,000) by the average of the
high and low price on the date of grant (also the exercise price) and multiplying by three. The options are fully
vested and exercisable upon grant and are scheduled to expire eight years after the grant date.
D. Starwood Preferred Guest Program Points and Rooms
In 2007, each Director received an annual grant of 750,000 Starwood Preferred Guest (“SPG”) Points to
encourage our Directors to visit and personally evaluate our properties.
E. Other Compensation
The Company makes available to the Chairman of the Board administrative assistant services and health
insurance coverage on terms comparable to those available to Starwood executives until the Chairman turns 70 years
old and thereafter on terms available to Company retirees (including required contributions). The Company also
reimburses directors for travel expenses, other out-of-pocket costs they incur when attending meetings and, for one
meeting per year, expenses related to attendance by spouses.
We have summarized the compensation paid by the Company to our non-employee Directors in 2007 in the
table below.
Stock
Fees Earned Awards (2) Option All Other
or Paid in Cash (3) Awards (4) Compensation (5) Total
Name of Director(1) ($) ($) ($) ($) ($)
Adam M. Aron . . . . . . . . . . 12,250 65,070 86,270 12,676 176,266
Charlene Barshefsky . . . . . . 7,750 65,070 86,270 17,329 176,419
Jean-Marc Chapus . . . . . . . 17,250 65,070 86,270 13,879 182,469
Bruce W. Duncan . . . . . . . . 6,000 127,070 86,270 83,751 303,091
Lizanne Galbreath . . . . . . . 44,750 65,070 86,270 14,703 210,793
Eric Hippeau. . . . . . . . . . . . 10,500 65,070 86,270 29,452 191,292
Stephen R. Quazzo . . . . . . . 16,250 65,070 86,270 12,946 180,536
Thomas O. Ryder . . . . . . . . 53,250 65,070 86,270 24,279 228,869
Kneeland C. Youngblood . . 63,000 32,472 86,270 — 181,742
(1) Mr. Van Paasschen is not included in this table because he was an employee of the Company and thus received
no compensation for his services as a Director. Mr. Van Paasschen’s 2007 compensation from the Company is
disclosed in the Summary Compensation Table on page 27. For Mr. Duncan, excludes compensation received
for serving as Chief Executive Officer on an interim basis, which is disclosed in the Summary Compensation
Table on page 27. While Mr. Duncan was serving as Chief Executive Officer on an interim basis, he received no
compensation for his service as a Director.
42

(2) Includes 1,034 Shares granted to each Director, except Mr. Duncan and Mr. Youngblood, in 2007 in two
installments of 199 Shares each and two installments of 318 Shares each. Mr. Youngblood elected to receive
half of his annual fee in cash, and therefore, his amount only includes 516 Shares granted in 2007 in two
installments of 99 Shares each and two installments of 159 Shares each. Mr. Duncan did not receive any director
fees while he was serving as Chief Executive Officer on an interim basis, and therefore, his amount only
includes 543 Shares granted in 2007 in one installment of 199 Shares, one installment of 26 Shares and one
installment of 318 Shares plus restricted stock units granted for serving as Chairman of the Board. As of
December 31, 2007, each Director has the following aggregate number of Shares (deferred or otherwise)
outstanding: Mr. Aron, 11,431; Ambassador Barshefsky, 9,735; Mr. Chapus, 21,869; Mr. Duncan, 183,501;
Ms. Galbreath, 2,675; Mr. Hippeau, 15,677; Mr. Quazzo, 24,876; Mr. Ryder, 10,631; Mr. Youngblood, 5,308.
(3) Represents the expense recognized for financial statement reporting purposes with respect to 2007 for the fair
value of restricted stock and restricted stock units granted in 2007, in accordance with SFAS 123(R). Pursuant to
SEC rules, the amounts shown exclude the impact of estimated forfeitures related to service-based vesting
conditions. For additional information, refer to Note 20 of the Company’s financial statements filed with the
SEC as part of the Form 10-K for the year ended December 31, 2007. These amounts reflect the Company’s
accounting expense for these awards and do not correspond to the actual value that will be recognized by the
Directors. The grant date fair value of each stock award is set forth below:
Number of Shares of
Director Grant Date Stock/Units Gant Date Fair Value
All Directors other than Messrs. Duncan
and Youngblood . . . . . . . . . . . . . . . . . . . 3/31/2007 199 $12,523
6/30/2007 199 $12,523
9/30/2007 318 $20,012
12/31/2007 318 $20,012
Bruce W. Duncan . . . . . . . . . . . . . . . . . . . . 3/31/2007 199 $12,523
3/31/2007 596 $37,506
9/30/2007 26 $ 1,636
9/30/2007 50 $ 3,147
12/31/2007 318 $20,012
12/31/2007 596 $37,506
Kneeland Youngblood . . . . . . . . . . . . . . . . . 3/31/2007 99 $ 6,230
6/30/2007 99 $ 6,230
9/30/2007 159 $10,006
12/31/2007 159 $10,006
(4) Represents the expense recognized for financial statement reporting purposes with respect to 2007 for the fair
value of stock options granted in 2007, in accordance with SFAS 123(R). Pursuant to SEC rules, the amounts
shown exclude the impact of estimated forfeitures related to service-based vesting conditions. For additional
information, refer to Note 20 of the Company’s financial statements filed with the SEC as part of the Form 10-K
for the year ended December 31, 2007. These amounts reflect the Company’s accounting expense for these
awards and do not correspond to the actual value that will be recognized by the Directors. As of December 31,
2007, each Director has the following aggregate number of stock options outstanding: Mr. Aron, 7,875;
Ambassador Barshefsky, 31,995; Mr. Chapus, 31,995; Mr. Duncan, 48,492; Ms. Galbreath, 15,498;
Mr. Hippeau, 49,651; Mr. Quazzo, 48,492; Mr. Ryder, 37,494; Mr. Youngblood, 37,494. All directors
received a grant of 4,500 options on February 28, 2007 with a grant date fair value of $86,270.
(5) We reimburse directors for travel expenses, other out-of-pocket costs they incur when attending meetings and,
for one meeting per year, attendance by spouses. In addition, in 2007 Directors received 750,000 SPG Points
valued at $11,250 (the Company mistakenly credited Mr. Youngblood’s account with a lesser amount of SPG
Points in 2007, which was corrected with an adjustment in 2008) and the cost of an administrative assistant for
the Chairman of the Board. Directors also receive interest on deferred dividends. Pursuant to SEC rules,
43

perquisites and personal benefits are not reported for any Director for whom such amounts were less than
$10,000 in the aggregate for 2007 but must be identified by type for each Named Executive Officer for whom
such amounts were equal to or greater than $10,000 in the aggregate. SEC rules do not require specification of
the value of any type of perquisite or personal benefit provided to the Directors because no such value exceeded
$25,000. Pursuant to SEC rules, the following table specifies the value for each other element of All Other
Compensation that is valued in excess of $10,000 and not disclosed above.
Deferred Dividends Deferred Dividends
on Restricted on Restricted Administrative
Stock Units Stock Units Assistant
Name ($) 2007 ($) 2006. ($) 2007
Duncan . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,398 13,420 53,552
Hippeau . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,109 10,860 —
44

AUDIT COMMITTEE REPORT
The information contained in this Audit Committee Report shall not be deemed to be “soliciting material” or
“filed” or “incorporated by reference” in future filings with the SEC, or subject to the liabilities of Section 18 of the
Exchange Act, except to the extent that the Company specifically incorporates it by reference into a document filed
under the Securities Act of 1933, as amended, or the Exchange Act.
The Audit Committee, which is comprised entirely of “independent” Directors, as determined by the Board in
accordance with the NYSE listing requirements and applicable federal securities laws, serves as an independent and
objective party to assist the Board in fulfilling its oversight responsibilities including, but not limited to,
(i) monitoring the quality and integrity of the Company’s financial statements, (ii) monitoring compliance with
legal and regulatory requirements, (iii) assessing the qualifications and independence of the independent registered
public accounting firm and (iv) establishing and monitoring the Company’s systems of internal controls regarding
finance, accounting and legal compliance. The Audit Committee operates under a written charter which meets the
requirements of applicable federal securities laws and the NYSE requirements.
In the first quarter of 2008, the Audit Committee reviewed and discussed the audited financial statements for
the year ended December 31, 2007 with management, the Company’s internal auditors and the independent
registered public accounting firm, Ernst & Young. The Audit Committee discussed with the independent registered
public accounting firm the matters required to be discussed by the Statement on Auditing Standards No. 61,
“Communication with Audit Committees,” as amended, and reviewed the results of the independent registered
public accounting firm’s examination of the financial statements.
The Audit Committee also received and reviewed the written disclosures and the letter from the independent
registered public accounting firm required by Independence Standard No. 1, “Independence Discussion with Audit
Committees,” as amended, and discussed with the registered public accounting firm their independence.
Based on the reviews and discussions referred to above, the Audit Committee recommended to the Board of
Directors that the financial statements referred to above be included in the Company’s Annual Report on Form 10-K
for the year ended December 31, 2007.
Audit Committee of the Board of Directors
Thomas O. Ryder (chairman)
Kneeland C. Youngblood
Lizanne Galbreath
Audit Fees
The aggregate amounts paid by the Company for the fiscal years ended December 31, 2007 and 2006 to the
Company’s principal accounting firm, Ernst & Young, are as follows (in millions):
2007 2006
Audit Fees(1) . . . . . . . . . . . . . . . . . . . . . . . . . ............... $5.0 $4.5
Audit-Related Fees(2) . . . . . . . . . . . . . . . . . . . ............... $0.9 $1.8
Tax Fees(3) . . . . . . . . . . . . . . . . . . . . . . . . . . ............... $0.3 $0.2
All other fees . . . . . . . . . . . . . . . . . . . . . . . . . ............... — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ............... $6.2 $6.5
(1) Audit fees include the fees paid for the annual audit, the review of quarterly financial statements and assistance
with regulatory and statutory filings, the audit of the Company’s internal controls over financial reporting with
the objective of obtaining reasonable assurance about whether effective internal controls over financial
reporting were maintained in all material respects and for the attestation of management’s report on the
effectiveness of internal controls over financial reporting.
45

(2) Audit-related fees include approximately $2.2 million associated with the sale of 33 hotels to Host Hotels &
Resorts ($1.2 million of which was reimbursed to the Company) and fees for the audits of employee benefit
plans and audits required by debt or other contractual agreements.
(3) Tax fees include fees for the preparation and review of certain foreign tax returns.
Pre-Approval of Services
The Audit Committee pre-approves all services, including both audit and non-audit services, provided by the
Company’s independent registered public accounting firm. For audit services (including statutory audit
engagements as required under local country laws), the independent registered public accounting firm provides
the Audit Committee with an engagement letter outlining the scope of the audit services proposed to be performed
during the year. The engagement letter must be formally accepted by the Audit Committee before any audit
commences. The independent registered public accounting firm also submits an audit services fee proposal, which
also must be approved by the Audit Committee before the audit commences. The Audit Committee may delegate
authority to one of its members to pre-approve all audit/non-audit services by the independent registered public
accounting firm, as long as these approvals are presented to the full Audit Committee at its next regularly scheduled
meeting.
Management submits to the Audit Committee all non-audit services that it recommends the independent
registered public accounting firm be engaged to provide and an estimate of the fees to be paid for each. Management
and the independent registered public accounting firm must each confirm to the Audit Committee that the
performance of the non-audit services on the list would not compromise the independence of the registered public
accounting firm and would be permissible under all applicable legal requirements. The Audit Committee must
approve both the list of non-audit services and the budget for each such service before commencement of the work.
Management and the independent registered public accounting firm report to the Audit Committee at each of its
regular meetings as to the non-audit services actually provided by the independent registered public accounting firm
and the approximate fees incurred by the Company for those services.
All audit and permissible non-audit services provided by Ernst & Young to the Company for the fiscal years
ended December 31, 2007 and 2006 were pre-approved by the Audit Committee.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
All members of the Compensation Committee during fiscal year 2007 were independent directors, and no
member was an employee or former employee. No Compensation Committee member had any relationship
requiring disclosure under “Certain Relationships and Related Transactions,” below. During fiscal year 2007, none
of our executive officers served on the compensation committee (or its equivalent) or board of directors of another
entity whose executive officer served on our Compensation Committee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Policies of the Board of Directors of the Company
The Governance and Nominating Committee (the “Committee”) is charged with establishing and reviewing
(on a periodic basis) the Company’s Corporate Opportunity Policy pursuant to which each director, trustee and
executive officer is required to submit to the Committee any opportunity that such person reasonably believes (1) is
within the Company’s existing line of business or (2) is one in which the Company either has an existing interest or a
reasonable expectancy of an interest, and (3) the Company is reasonably capable of pursuing. The Corporate
Opportunity Policy is a written policy that provides that the Committee should consider all relevant facts and
circumstances to determine whether it should (i) reject the proposed transaction on behalf of Company; (ii) conclude
that the proposed transaction is appropriate and suggest that the Company pursue it on the terms presented or on
different terms, and in the case of a Corporate Opportunity suggest that the Company pursue the Corporate
Opportunity on its own, with the party who brought the proposed transaction to the Company’s attention or with
another third party; or (iii) ask the full Board to consider the proposed transaction so the Board may then take either
46

of the actions described in (i) or (ii) above, and, at the Committee’s option, in connection with (iii), make
recommendations to the Board. Any person bringing a proposed transaction to the Committee is obligated to
provide any and all information available to the Committee and to recuse himself from any vote or other
deliberation.
Other
Brett Gellein is Director, Acquisitions and Pre-Development for Starwood Vacation Ownership and is the son
of Raymond L. Gellein, Jr., who is the Chairman of the Board and Chief Executive Officer of Starwood Vacation
Ownership and President of the Global Development Group. Mr. Gellein’s salary and bonus were $133,857 for 2007
and $106,287 for 2006. On February 28, 2008, Mr. Gellein received a restricted stock award of 1,029 Shares. On
February 28, 2007, Mr. Gellein also received a restricted stock award of 691 Shares. On February 10, 2005,
Mr. Gellein received an option to purchase 611 Shares with an exercise price of $48.39 (as adjusted for the
transaction with Host Hotels & Resorts, Inc.).
OTHER MATTERS
The Board is not aware of any matters not referred to in this proxy statement that will be presented for action at
the Annual Meeting. If any other matters properly come before the Annual Meeting, it is the intention of the persons
named in the enclosed proxy to vote the Shares represented thereby in accordance with their discretion.
SOLICITATION COSTS
The Company will pay the cost of soliciting proxies for the Annual Meeting, including the cost of mailing. The
solicitation is being made by mail and may also be made by telephone or in person using the services of a number of
regular employees of the Company at nominal cost. The Company will reimburse banks, brokerage firms and other
custodians, nominees and fiduciaries for expenses incurred in sending proxy materials to beneficial owners of
Shares. The Company has engaged D.F. King & Co., Inc. to solicit proxies and to assist with the distribution of
proxy materials for a fee of $15,000 plus reasonable out-of-pocket expenses.
HOUSEHOLDING
The SEC allows us to deliver a single proxy statement and annual report to an address shared by two or more of
our stockholders. This delivery method, referred to as “householding,” can result in significant cost savings for us.
In order to take advantage of this opportunity, the Company and banks and brokerage firms that hold your shares
have delivered only one proxy statement and annual report to multiple stockholders who share an address unless one
or more of the stockholders has provided contrary instructions. The Company will deliver promptly, upon written or
oral request, a separate copy of the proxy statement and annual report to a stockholder at a shared address to which a
single copy of the documents was delivered. A stockholder who wishes to receive a separate copy of the proxy
statement and annual report, now or in the future, may obtain one, without charge, by addressing a request to
Investor Relations, Starwood Hotels & Resorts Worldwide, Inc., White Plains, NY 10604 or by calling
(914) 640-8100. You may also obtain a copy of the proxy statement and annual report from the investor
relations page on the Company’s website (www.starwoodhotels.com/corporate/investor relations.html).
Stockholders of record sharing an address who are receiving multiple copies of proxy materials and annual
reports and wish to receive a single copy of such materials in the future should submit their request by contacting us
in the same manner. If you are the beneficial owner, but not the record holder, of the Company’s shares and wish to
receive only one copy of the proxy statement and annual report in the future, you will need to contact your broker,
bank or other nominee to request that only a single copy of each document be mailed to all stockholders at the shared
address in the future.
47

STOCKHOLDER PROPOSALS FOR NEXT ANNUAL MEETING
If you want to make a proposal or nominate a director for consideration at next year’s Annual Meeting and have
it included in the Company’s proxy materials, the Company must receive your proposal by November 19, 2008, and
the proposal must comply with the rules of the SEC.
If you want to make a proposal or nominate a director for consideration at next year’s Annual Meeting without
having the proposal included in the Company’s proxy materials, you must comply with the current advance notice
provisions and other requirements set forth in the Company’s Bylaws, including that the Company must receive
your proposal on or after January 9, 2009 and on or prior to February 13, 2009, with certain exceptions if the date of
the Annual Meeting is advanced by more than 30 days or delayed by more than 60 days from the anniversary date of
the 2008 Annual Meeting.
If the Company does not receive your proposal or nomination by the appropriate deadline, then it may not be
brought before the 2009 Annual Meeting.
The fact that the Company may not insist upon compliance with these requirements should not be construed as
a waiver by the Company of its right to do so at any time in the future.
You should address your proposals or nominations to the Corporate Secretary, Starwood Hotels & Resorts
Worldwide, Inc., 1111 Westchester Avenue, White Plains, New York 10604.
By Order of the Board of Directors
STARWOOD HOTELS & RESORTS
WORLDWIDE, INC.
Kenneth S. Siegel
Corporate Secretary
March 19, 2008
48

General Directions To
The Westin Boston Waterfront Hotel
From East
Follow signs out of Boston Logan International Airport to Interstate 90 West/Massachusetts Turnpike West by way
of the Ted Williams Tunnel. Take Exit 25 to South Boston. Keep right at the fork and exit onto Congress Street. Turn
right on D Street. Turn right on Summer Street and the hotel is on the left.
From North
Take Interstate Interstate 93 South to Exit 20A towards South Station. Turn left at the light onto Summer Street. The
hotel is approximately 0.7 miles ahead on the right just past the convention center.
From West
Take Interstate 90 East to Exit 24A (South Station). Go straight onto Atlantic Avenue. Turn right onto Summer
Street. The hotel is approximately 0.7 miles ahead on the right, just past the convention center.
From South
Take Interstate 93 North to Exit 20 (South Station). Turn right at the end of the ramp on Kneeland Street and then
turn at the 2nd left onto Atlantic Avenue. Turn right on Summer Street and the hotel is ahead approximately
0.7 miles ahead on the right.
49

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-K
¥ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2007
OR
n TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period from to
Commission File Number: 1-7959
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
(Exact name of Registrant as specified in its charter)
Maryland
(State or other jurisdiction
of incorporation or organization)
52-1193298
(I.R.S. employer identification no.)
1111 Westchester Avenue
White Plains, NY 10604
(Address of principal executive
offices, including zip code)
(914) 640-8100
(Registrant’s telephone number,
including area code)
Securities Registered Pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share New York Stock Exchange
Securities Registered Pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities
Yes ¥ No n
Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the
Act. Yes n No ¥
Note: Checking the box above will not relieve any registrant required to file reports pursuant to Section 13 or 15(d) of the Exchange
Act from their obligations under those Sections.
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes ¥ No n
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of the Registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. ¥
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See definition of “large accelerated filer”, “accelerated filer” and smaller reporting company in Rule 12b-2 of the
Exchange Act.
Large accelerated filer ¥ Accelerated filer n Non-accelerated filer n Smaller Reporting company n
(Do not check if a smaller reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes n No ¥
As of June 30, 2007, the aggregate market value of the Registrant’s voting and non-voting common equity (for purposes of this Annual
Report only, includes all Shares other than those held by the Registrant’s Directors and executive officers) was $14,035,246,740.
As of February 15, 2008, the Corporation had outstanding 188,283,937 shares of common stock.
For information concerning ownership of Shares, see the Proxy Statement for the Company’s Annual Meeting of Stockholders that is
currently scheduled for April 30, 2008 (the “Proxy Statement”), which is incorporated by reference under various Items of this Annual
Report.
Document Incorporated by Reference:
Document Where Incorporated
Proxy Statement Part III (Items 11, 12, 13 and 14)

TABLE OF CONTENTS
Page
PART I
Forward-Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 1A. Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Executive Officers of the Registrants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
PART II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases
of Equity Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations . . . 26
Item 7A. Quantitative and Qualitative Disclosures about Market Risk . . . . . . . . . . . . . . . . . . . . . . . . . 40
Item 8. Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure . . . 41
Item 9A. Controls and Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
PART III
Item 10. Directors, Executive Officers and Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Item 13. Certain Relationships and Related Transactions and Director Independence . . . . . . . . . . . . . . 48
Item 14. Principal Accountant Fees and Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
PART IV
Item 15. Exhibits, Financial Statements, Financial Statement Schedule and Reports on Form 8-K . . . . 49

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This Annual Report is filed by Starwood Hotels & Resorts Worldwide, Inc., a Maryland corporation (the
“Corporation”). Unless the context otherwise requires, all references to the Corporation include those entities
owned or controlled by the Corporation, including SLC Operating Limited Partnership, a Delaware limited
partnership (the “Operating Partnership”), which prior to April 10, 2006 included Starwood Hotels & Resorts, a
Maryland real estate investment trust (the “Trust”), which was sold in the Host Transaction (defined below); all
references to the Trust include the Trust and those entities owned or controlled by the Trust, including SLT Realty
Limited Partnership, a Delaware limited partnership (the “Realty Partnership”); and all references to “we”, “us”,
“our”, “Starwood”, or the “Company” refer to the Corporation, the Trust and its respective subsidiaries, collectively
through April 7, 2006. Until April 7, 2006, the shares of common stock, par value $0.01 per share, of the
Corporation (“Corporation Shares”) and the Class B shares of beneficial interest, par value $0.01 per share, of the
Trust (“Class B Shares”) were attached and traded together and were held or transferred only in units consisting of
one Corporation Share and one Class B Share (a “Share”). On April 7, 2006, in connection with a transaction (the
“Host Transaction”) with Host Hotels & Resorts, Inc., its subsidiary Host Marriot L.P. and certain other subsidiaries
of Host Hotels & Resorts, Inc. (collectively, “Host”), the Shares were depaired and the Corporation Shares became
transferable separately from the Class B Shares. As a result of the depairing, the Corporation Shares trade alone
under the symbol “HOT” on the New York Stock Exchange (“NYSE”). As of April 10, 2006, neither Shares nor
Class B Shares are listed or traded on the NYSE.
PART I
Forward-Looking Statements
This Annual Report contains statements that constitute forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. Such statements appear in several places in this Annual Report,
including, without limitation, the section of Item 1. Business, captioned “Business Strategy” and Item 7.
Management’s Discussion and Analysis of Financial Condition and Results of Operations. Such forward-looking
statements may include statements regarding the intent, belief or current expectations of Starwood, its Directors or
its officers with respect to the matters discussed in this Annual Report. All forward-looking statements involve risks
and uncertainties that could cause actual results to differ materially from those projected in the forward-looking
statements including, without limitation, the risks and uncertainties set forth below. Starwood undertakes no
obligation to publicly update or revise any forward-looking statements to reflect current or future events or
circumstances.
Item 1. Business.
General
We are one of the world’s largest hotel and leisure companies. We conduct our hotel and leisure business both
directly and through our subsidiaries. Our brand names include the following:
St. Regis» (luxury full-service hotels, resorts and residences) are for connoisseurs who desire the finest
expressions of luxury. They provide flawless and bespoke service to high-end leisure and business travelers. St.
Regis hotels are located in the ultimate locations within the world’s most desired destinations, important emerging
markets and yet to be discovered paradises, and they typically have individual design characteristics to capture the
distinctive personality of each location.
The Luxury Collection» (luxury full-service hotels and resorts) is a group of unique hotels and resorts
offering exceptional service to an elite clientele. From legendary palaces and remote retreats to timeless modern
classics, these remarkable hotels and resorts enable the most discerning traveler to collect a world of unique,
authentic and enriching experiences indigenous to each destination that capture the sense of both luxury and place.
They are distinguished by magnificent decor, spectacular settings and impeccable service.
W» (luxury and upscale full service hotels, retreats and residences) feature world class design, world class
restaurants and “on trend” bars and lounges and its signature Whatever\\Whenever» service standard. It’s a sensory
multiplex that not only indulges the senses, it delivers an emotional experience. Whether it’s “behind the scenes”
1

access at Whappenings, or our cutting edge music, lighting and scent programs, W hotels delivers an experience
unmatched in the hotel segment.
Westin» (luxury and upscale full-service hotels, resorts and residences) is a lifestyle brand competing in the
upper upscale sector in nearly 30 countries around the globe. Each hotel offers renewing experiences that inspire
guests to be at their best. First impressions at any Westin hotel are fueled by signature sensory experiences of light,
music, white tea scent and botanicals. Westin revolutionized the industry with its famous Heavenly Bed» and
Heavenly Bath» and launched a multi-million dollar retail program featuring these products. Westin is the first
global brand to offer in-room spa treatments at every hotel and the first to go smoke-free in North America. Westin
guests stay in shape at WestinWORKOUT» Powered by Reebok (SM). The new Westin Superfoods» menu is the
latest way we bring renewal to guests, with foods considered best for providing disease-fighting and health-
enhancing benefits due to their high nutrient and antioxidant content.
Le Méridien» (luxury and upscale full-service hotels, resorts and residences) is a European-inspired brand
with a French accent. Each of its hotels, whether city, airport or resort has a distinctive character driven by its
individuality and the Le Méridien brand values. With its underlying passion for food, art and style and its classic yet
stylish design, Le Méridien offers a unique experience at some of the world’s top travel destinations.
Sheraton» (luxury and upscale full-service hotels and resorts) is the Company’s largest brand serving the
needs of luxury and upscale business and leisure travelers worldwide. We offer the entire spectrum of comfort. From
full-service hotels in major cities to luxurious resorts by the water, Sheraton can be found in the most sought-after
cities and resort destinations around the world. Every guest at Sheraton hotels and resorts feels a warm and
welcoming connection, the feeling you have when you walk into a place and your favorite song is playing — a sense
of comfort and belonging. Our most recent innovation, the Link@SheratonSM with Microsoft, encourages hotel
guests to come out of their rooms to enjoy the energy and social opportunities of traveling. At Sheraton, we help our
guests connect to what matters most to them, the office, home and the best spots in town.
Four Points» (select-service hotels) delights the self-sufficient traveler with a new kind of comfort,
approachable style and spirited, can-do service — all at the honest value our guests deserve. Our guests start
their day feeling energized and finish up relaxed and free to enjoy little indulgences that make their time away from
home special.
AloftSM (select-service hotels), a brand introduced in 2005 with the first hotel expected to open in 2008,
provides new heights, an oasis where you least expect it, a spirited neighborhood outpost, a haven at the side of the
road. Bringing a cozy harmony of modern elements to the classic American on-the-road tradition, aloft offers a
sassy, refreshing, ultra effortless alternative for both the business and leisure traveler. Fresh, fun, and fulfilling, aloft
is an experience to be discovered and rediscovered, destination after destination, as you ease on down the road.
ElementSM (extended stay hotels), a brand introduced in 2006 with the first hotel expected to open in 2008,
provides a modern, upscale and intuitively designed hotel experience that allows guests to live well and feel in
control. Inspired by Westin, Element hotels promote balance through a thoughtful, upscale environment. Decidedly
modern with an emphasis on nature, Element is intuitively constructed with an efficient use of space that encourages
guests to stay connected, feel alive, and thrive while they are away. Element is the smart, renewing haven for
extended stay travel.
Through our brands, we are well represented in most major markets around the world. Our operations are
grouped into two business segments, hotels and vacation ownership and residential operations.
Our revenue and earnings are derived primarily from hotel operations, which include management and other
fees earned from hotels we manage pursuant to management contracts, the receipt of franchise and other fees and
the operation of our owned hotels.
Our hotel business emphasizes the global operation of hotels and resorts primarily in the luxury and upscale
segment of the lodging industry. We seek to acquire interests in, or management or franchise rights with respect to
properties in this segment. At December 31, 2007, our hotel portfolio included owned, leased, managed and
franchised hotels totaling 897 hotels with approximately 275,000 rooms in approximately 100 countries, and is
comprised of 74 hotels that we own or lease or in which we have a majority equity interest, 415 hotels managed by
2

us on behalf of third-party owners (including entities in which we have a minority equity interest) and 408 hotels for
which we receive franchise fees.
Our revenues and earnings are also derived from the development, ownership 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. Generally these resorts are marketed under the brand names
described above. Additionally, our revenues and earnings are derived from the development, marketing and selling
of residential units at mixed use hotel projects owned by us as well as fees earned from the marketing and selling of
residential units at mixed use hotel projects developed by third-party owners of hotels operated under our brands. At
December 31, 2007, we had 28 owned vacation ownership resorts and residential properties, including sites held for
development, in the United States, Mexico, and the Bahamas.
The Corporation was incorporated in 1980 under the laws of Maryland. Sheraton Hotels & Resorts and
Westin Hotels & Resorts, Starwood’s largest brands, have been serving guests for more than 60 years. Starwood
Vacation Ownership (and its predecessor, Vistana, Inc.) has been selling VOIs for more than 20 years.
Our principal executive offices are located at 1111 Westchester Avenue, White Plains, New York 10604, and
our telephone number is (914) 640-8100.
For a discussion of our revenues, profits, assets and geographical segments, see the notes to financial
statements of this Annual Report. For additional information concerning our business, see Item 2. Properties, of this
Annual Report.
Competitive Strengths
Management believes that the following factors contribute to our position as a leader in the lodging and
vacation ownership industry and provide a foundation for the Company’s business strategy:
Brand Strength. We have assumed a leadership position in markets worldwide based on our superior global
distribution, coupled with strong brands and brand recognition. Our upscale and luxury brands continue to capture
market share from our competitors by aggressively cultivating new customers while maintaining loyalty among the
world’s most active travelers. The strength of our brands is evidenced, in part, by the superior ratings received from
our hotel guests and from industry publications.
Frequent Guest Program. Our loyalty program, Starwood Preferred Guest» (“SPG”), made headlines when
it launched in 1999 with a breakthrough policy of no blackout dates and no capacity controls, allowing members to
redeem free nights anytime, anywhere. Since then, the program has grown to include more than 41 million members
and continues to be cited for its hassle-free award redemption, outstanding customer service, dedicated member
website and innovative promotions and benefits for elite members. The program yields repeat guest business by
uniting a world of distinctive hotels and rewarding customers with the rewards and recognition they want — from
points that can be used for free hotel stays, indulgent experiences and airline miles with 32 participating airlines.
Significant Presence in Top Markets. Our luxury and upscale hotel and resort assets are well positioned
throughout the world. These assets are primarily located in major cities and resort areas that management believes
have historically demonstrated a strong breadth, depth and growing demand for luxury and upscale hotels and
resorts, in which the supply of sites suitable for hotel development has been limited and in which development of
such sites is relatively expensive.
Premier and Distinctive Properties. We control a distinguished and diversified group of hotel properties
throughout the world, including the St. Regis in New York, New York; The Phoenician in Scottsdale, Arizona; the
Hotel Gritti Palace in Venice, Italy; and the St. Regis in Beijing, China. These are among the leading hotels in the
industry and are at the forefront of providing the highest quality and service. Our properties are consistently
recognized as the best of the best by readers of Condé Nast Traveler, who are among the world’s most sophisticated
and discerning group of travelers.
Scale. As one of the largest hotel and leisure companies focusing on the luxury and upscale full-service
lodging market, we have the scale to support our core marketing and reservation functions. We also believe that our
scale will contribute to lower our cost of operations through purchasing economies in areas such as insurance,
3

energy, telecommunications, technology, employee benefits, food and beverage, furniture, fixtures and equipment
and operating supplies. We feel we are well-positioned for significant growth based on our headcount. We currently
have approximately half of the base of rooms compared to our major competitors, and as a result, as we increase our
room count, our economies of scale should provide a favorable impact to our operations given our existing cost
structure.
Diversification of Cash Flow and Assets. Management believes that the diversity of our brands, market
segments served, revenue sources and geographic locations provide a broad base from which to enhance revenue
and profits and to strengthen our global brands. This diversity limits our exposure to any particular lodging or
vacation ownership asset, brand or geographic region.
While we focus on the luxury and upscale portion of the full-service lodging, vacation ownership and
residential markets, our brands cater to a diverse group of sub-markets within this market. For example, the St.
Regis hotels cater to high-end hotel and resort clientele while Four Points by Sheraton hotels deliver extensive
amenities and services at more affordable rates. The aloft brand will provide a youthful alternative to the
“commodity lodging” of currently existing brands in the select-service market segment, and the Element brand
will provide modern, upscale hotels for extended stay travel.
We derive our cash flow from multiple sources within our hotel and vacation ownership and residential
segments, including owned hotels’ operations, management and franchise fees and the sale of VOIs and residential
units. These operations are in geographically diverse locations around the world. The following tables reflect our
hotel and vacation ownership and residential properties by type of revenue source and geographical presence by
major geographic area as of December 31, 2007:
Number of
Properties Rooms
Managed and unconsolidated joint venture hotels . . . . . . . . . . . . . . . . . . . . . . 415 140,800
Franchised hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 109,100
Owned hotels(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 24,700
Vacation ownership resorts and residential properties . . . . . . . . . . . . . . . . . . . 28 7,400
Total properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925 282,000
(a) Includes wholly owned, majority owned and leased hotels.
Number of
Properties Rooms
North America (and Caribbean) . . . . . . . . . . . . ....................... 472 160,200
Europe, Africa and the Middle East . . . . . . . . . ....................... 261 63,800
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . ....................... 136 46,100
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . ....................... 56 11,900
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 925 282,000
Business Segment and Geographical Information
Incorporated by reference in Note 23. Business Segment and Geographical Information, in the notes to
financial statements set forth in Part II, Item 8. Financial Statements and Supplementary Data.
Business Strategy
We have implemented a strategy of reducing our investment in owned real estate and increasing our focus on
the management and franchise business. In furtherance of this strategy, during 2006 and 2007 we sold a total of 51
hotels for approximately $4.6 billion, including 33 properties to Host for approximately $4.1 billion in stock, cash
and debt assumption. As a result, our primary business objective is to maximize earnings and cash flow by
increasing the number of our hotel management contracts and franchise agreements; acquiring and developing
4

vacation ownership resorts and selling VOIs; and investing in real estate assets where there is a strategic rationale
for doing so, which may include selectively acquiring interests in additional assets and disposing of non-core hotels
(including hotels where the return on invested capital is not adequate) and “trophy” assets that may be sold at
significant premiums. We plan to meet these objectives by leveraging our global assets, broad customer base and
other resources and by taking advantage of our scale to reduce costs. The implementation of our strategy and
financial planning are impacted by the uncertainty relating to geopolitical and economic environments around the
world and their consequent impact on travel in their respective regions and the rest of the world.
Growth Opportunities. Management has identified several growth opportunities with a goal of enhancing
our operating performance and profitability, including:
• Continuing to build our brands to appeal to upscale business travelers and other customers seeking full-
service hotels in major markets by establishing emotional connections to our brands by offering signature
experiences at our properties. We plan to accomplish this in the following ways: (i) by continuing our
tradition of innovation started with the Heavenly Bed» and Heavenly Bath», the Westin Heavenly Spa, the
Superfoods» menu, the Sheraton Sweet SleeperSM Bed, the Sheraton Service PromiseSM and the Four Points
by Sheraton Four Comfort Bed SM, (ii) with such ideas as Westin being the first major brand to go “smoke-
free” in North America, aloft’s “see green” program created to introduce and promote ecologically friendly
programs and services; our newest innovation, the Link@SheratonSM; and (iii) by placing Bliss» Spas,
RemèdeSM Spas and their branded amenities, including the Sheraton Shine» by Bliss bath product line, and
upscale restaurants in certain of our branded hotels;
• Renovating, upgrading and expanding our branded hotels to further our strategy of strengthening brand
identity;
• Continuing to expand our role as a third-party manager of hotels and resorts including through the roll out of
our new brands, aloft and Element, and the introduction of other new brands. This allows us to expand the
presence of our lodging brands and gain additional cash flow generally with modest capital commitment;
• Franchising certain of our brands to third-party operators and licensing certain of our brands to third parties
in connection with luxury residential condominiums, thereby expanding our market presence, enhancing the
exposure of our hotel brands and providing additional income through franchise and license fees;
• Expanding our internet presence and sales capabilities to increase revenue and improve customer service;
• Continuing to grow our frequent guest program, thereby increasing occupancy rates while providing our
customers with benefits based upon loyalty to our hotels, vacation ownership resorts and branded residential
projects;
• Enhancing our marketing efforts by integrating our proprietary customer databases, so as to sell additional
products and services to existing customers, improve occupancy rates and create additional marketing
opportunities;
• Increasing operating efficiencies through increased use of technology;
• Optimizing use of our real estate assets to improve ancillary revenue, such as restaurant, beverage and
parking revenue from our hotels and resorts;
• Establishing relationships with third parties to enable us to provide attractive restaurants, programs and other
amenities at our branded properties such as our partnering with Jean Georges Vongerichten and his world-
class restaurant concepts, the opening of Adour with Alaine Ducasse at the St. Regis New York and
establishing the LM 100, a group of cultural innovators and artists who will offer their creativity and develop
original and interactive programs for Le Méridien hotels ;
• Developing additional vacation ownership resorts and leveraging our hotel real estate assets where possible
through VOI construction or conversion and residential sales; and
• Leveraging the Bliss and Remède product lines and distribution channels, most recently unveiling our
Sheraton Shine» by Bliss bath product line.
5

We intend to explore opportunities to expand and diversify our hotel portfolio through internal development,
minority investments and selective acquisitions of properties domestically and internationally that meet some or all
of the following criteria:
• Luxury and upscale hotels and resorts in major metropolitan areas and business centers;
• Hotels or brands which would enable us to provide a wider range of amenities and services to customers or
provide attractive geographic distribution;
• Major tourist hotels, destination resorts or conference centers that have favorable demographic trends and
are located in markets with significant barriers to entry or with major room demand generators such as office
or retail complexes, airports, tourist attractions or universities;
• Undervalued hotels whose performance can be increased by re-branding to one of our hotel brands, the
introduction of better and more efficient management techniques and practices and/or the injection of capital
for renovating, expanding or repositioning the property; and
• Portfolios of hotels or hotel companies that exhibit some or all of the criteria listed above, where the
purchase of several hotels in one transaction enables us to obtain favorable pricing or obtain attractive assets
that would otherwise not be available or realize cost reductions on operating the hotels by incorporating
them into the Starwood system.
We may also selectively choose to develop and construct desirable hotels and resorts to help us meet our
strategic goals, such as the construction of a dual hotel campus in Lexington, Massachusetts featuring both an aloft
hotel and an Element hotel.
Competition
The hotel industry is highly competitive. Competition is generally based on quality and consistency of room,
restaurant and meeting facilities and services, attractiveness of locations, availability of a global distribution
system, price, the ability to earn and redeem loyalty program points and other factors. Management believes that we
compete favorably in these areas. Our properties compete with other hotels and resorts in their geographic markets,
including facilities owned by local interests and facilities owned by national and international chains. Our principal
competitors include other hotel operating companies, ownership companies (including hotel REITs) and national
and international hotel brands.
We encounter strong competition as a hotel, residential, resort and vacation ownership operator and developer.
While some of our competitors are private management firms, several are large national and international chains
that own and operate their own hotels, as well as manage hotels for third-party owners and develop and sell VOIs,
under a variety of brands that compete directly with our brands. Our timeshare and residential business depends on
our ability to obtain land for development of our timeshare and residential products and to utilize land already
owned by us but used in hotel operations. Changes in the general availability of suitable land or the cost of acquiring
or developing such land could adversely impact the profitability of our timeshare and residential business.
Environmental Matters
We are subject to certain requirements and potential liabilities under various federal, state and local
environmental laws, ordinances and regulations (“Environmental Laws”). For example, a current or previous
owner or operator of real property may become liable for the costs of removal or remediation of hazardous or toxic
substances on, under or in such property. Such laws often impose liability without regard to whether the owner or
operator knew of, or was responsible for, the presence of such hazardous or toxic substances. The presence of
hazardous or toxic substances may adversely affect the owner’s ability to sell or rent such real property or to borrow
using such real property as collateral. Persons who arrange for the disposal or treatment of hazardous or toxic wastes
may be liable for the costs of removal or remediation of such wastes at the treatment, storage or disposal facility,
regardless of whether such facility is owned or operated by such person. We use certain substances and generate
certain wastes that may be deemed hazardous or toxic under applicable Environmental Laws, and we from time to
time have incurred, and in the future may incur, costs related to cleaning up contamination resulting from historic
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uses of certain of our current or former properties or our treatment, storage or disposal of wastes at facilities owned
by others. Other Environmental Laws require abatement or removal of certain asbestos-containing materials
(“ACMs”) (limited quantities of which are present in various building materials such as spray-on insulation, floor
coverings, ceiling coverings, tiles, decorative treatments and piping located at certain of our hotels) in the event of
damage or demolition, or certain renovations or remodeling. These laws also govern emissions of and exposure to
asbestos fibers in the air. Environmental Laws also regulate polychlorinated biphenyls (“PCBs”), which may be
present in electrical equipment. A number of our hotels have underground storage tanks (“USTs”) and equipment
containing chlorofluorocarbons (“CFCs”); the operation and subsequent removal or upgrading of certain USTs and
the use of equipment containing CFCs also are regulated by Environmental Laws. In connection with our
ownership, operation and management of our properties, we could be held liable for costs of remedial or other
action with respect to PCBs, USTs or CFCs.
Environmental Laws are not the only source of environmental liability. Under the common law, owners and
operators of real property may face liability for personal injury or property damage because of various environ-
mental conditions such as alleged exposure to hazardous or toxic substances (including, but not limited to, ACMs,
PCBs and CFCs), poor indoor air quality, radon or poor drinking water quality.
Although we have incurred and expect to incur remediation and various environmental-related costs during the
ordinary course of operations, management anticipates that such costs will not have a material adverse effect on our
operations or financial condition.
Seasonality and Diversification
The hotel industry is seasonal in nature; however, the periods during which our properties experience higher
revenue activities vary from property to property and depend principally upon location. Generally, our revenues and
operating income have been lower in the first quarter than in the second, third or fourth quarters.
Comparability of Owned Hotel Results
We continually update and renovate our owned, leased and consolidated joint venture hotels. While under-
going renovation, these hotels are generally not operating at full capacity and, as such, these renovations can
negatively impact our owned hotel revenues and operating income. Other events, such as the occurrence of natural
disasters may cause a full or partial closure or sale of a hotel, and such events can negatively impact our revenues
and operating income. Finally as we pursue our strategy of reducing our investment in owned real estate assets, the
sale of such assets can significantly reduce our revenues and operating income.
Regulation and Licensing of Gaming Facilities
We have a minority interest in the gaming operations of the Planet Hollywood Hotel & Casino, a Sheraton
Resort in Las Vegas, Nevada and we and certain of our affiliates and officers have obtained from the Nevada
Gaming Authorities (herein defined) the various registrations, approvals, permits and licenses required to engage in
these gaming activities in Nevada. The casino gaming licenses are not transferable and must be renewed
periodically by the payment of various gaming license fees and taxes. The gaming authorities may deny an
application for licensing for any cause which they deem reasonable and may find an officer or key employee
unsuitable for licensing or unsuitable to continue having a relationship with us in which case all relationships with
such person would be required to be severed. In addition, the gaming authorities may require us to terminate the
employment of any person who refuses to file the appropriate applications or disclosures.
The ownership and/or operation of casino gaming facilities in the United States where permitted are subject to
federal, state and local regulations which under federal law, govern, among other things, the ownership, possession,
manufacture, distribution and transportation in interstate commerce of gaming devices, and the recording and
reporting of currency transactions, respectively. Our Nevada casino gaming operations are subject to the Nevada
Gaming Control Act and the regulations promulgated thereunder (the “Nevada Act”), and the licensing and
regulatory control of the Nevada Gaming Commission (the “Nevada Commission”) and the Nevada State Gaming
Control Board (the “Nevada Board”), as well as certain county government agencies (collectively referred to as the
“Nevada Gaming Authorities”).
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If it were determined that applicable laws or regulations were violated, the gaming licenses, registrations and
approvals held by us and our affiliates and officers could be limited, conditioned, suspended or revoked and we and
the persons involved could be subject to substantial fines for each separate violation. Furthermore, a supervisor
could be appointed by the Nevada Commission to operate the gaming property and, under certain circumstances,
earnings generated during the supervisor’s appointment (except for reasonable rental value of the affected gaming
property) could be forfeited to the State of Nevada. Any suspension or revocation of the licenses, registrations or
approvals, or the appointment of a supervisor, would not have a material adverse effect on us given the limited
nature and extent of the investment by us in casino gaming.
We are also required to submit certain financial and operating reports to the Nevada Commission. Further,
certain loans, leases, sales of securities and similar financing transactions by us must be reported to or approved by
the Nevada Commission. We have a Nevada “shelf” approval for certain public offerings that expires in November
2008. We intend to apply for a renewed Nevada shelf approval to become effective in November 2008 for a two year
period.
The Nevada Gaming Authorities may investigate and require a finding of suitability of any holder of any class
of our voting securities at any time. Nevada law requires any person who acquires more than 5 percent of any class
of our voting securities to report the acquisition to the Nevada Commission and we also must report the acquisition
within ten days of becoming aware of this fact. Any person who becomes a beneficial owner of more than 10 percent
of any class of our voting securities must apply for finding of suitability by the Nevada Commission within 30 days
after the Nevada Board Chairman mails a written notice requiring such filing. The applicant must pay the costs and
fees incurred by the Nevada Board in connection with the investigation.
Under certain circumstances, an “institutional investor,” as defined by the Nevada Act, that acquires more than
10 percent but no more than 19 percent of our voting securities may apply to the Nevada Commission for a waiver of
such finding of shareholder suitability requirements if such institutional investor holds the voting securities for
investment purposes only. An institutional investor will not be deemed to hold voting securities for investment
purposes unless the voting securities were acquired and are held in the ordinary course of business as a institutional
investor and not for the purpose of causing, directly or indirectly, the election of a majority of the members of either
our Board of Directors, any change in our corporate charter, bylaws, management, policies or operations or any of
our casino gaming operations, or any other action which the Nevada Commission finds to be inconsistent with
holding our voting securities for investment purposes only. The Nevada Commission also may in its discretion
require the holder of any debt security of a registered company to file an application, be investigated and be found
suitable to own such debt security.
Any beneficial owner of our voting securities who fails or refuses to apply for a finding of suitability or a
license within 30 days after being ordered to do so by the Nevada Commission or by the Chairman of the Nevada
Board may be found unsuitable. Any person found unsuitable who holds, directly or indirectly, any beneficial
ownership of our debt or equity voting securities beyond such periods or periods of time as may be prescribed by the
Nevada Commission may be guilty of a gross misdemeanor. We could be subject to disciplinary action if, without
prior approval of the Nevada Commission, and after receipt of notice that a person is unsuitable to be an equity or
debt security holder or to have any other relationship with us, we either (i) pay to the unsuitable person any dividend,
interest or any distribution whatsoever; (ii) recognize any voting right by such unsuitable person in connection with
such securities; (iii) pay the unsuitable person remuneration in any form; (iv) make any payment to the unsuitable
person by way of principal, redemption, conversion, exchange, liquidation or similar transaction; or, (v) fail to
pursue all lawful efforts to require such unsuitable person to relinquish his securities including, if necessary, the
immediate purchase of such securities for cash at fair market value.
Regulations of the Nevada Commission provide that control of a registered publicly traded corporation cannot
be changed through merger, consolidation, acquisition or assets, management or consulting agreements, or any
form of takeover without the prior approval of the Nevada Commission. Persons seeking approval to control a
registered publicly traded corporation must satisfy the Nevada Commission as to a variety of stringent standards
prior to assuming control of such corporation. The failure of a person to obtain such approval prior to assuming
control over the registered publicly traded corporation may constitute grounds for finding such person unsuitable.
Such regulations may impact the timing of consummating any such transaction.
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Regulations of the Nevada Commission also prohibit certain repurchases of securities by registered publicly
traded corporations without the prior approval of the Nevada Commission. Transactions covered by these
regulations are generally aimed at discouraging repurchases of securities at a premium over market price from
certain holders of more than 3 percent of the outstanding securities of the registered publicly traded corporation.
The regulations of the Nevada Commission also require approval for a “plan of recapitalization.” Generally a plan of
recapitalization is a plan proposed by the management of a registered publicly traded corporation that contains
recommended action in response to a proposed corporate acquisition opposed by management of the corporation if
such acquisition would require the prior approval of the Nevada Commission.
Any person who is licensed, required to be licensed, registered, required to be registered, or is under common
control with such persons (collectively “Licensees”), and who proposes to become involved in a gaming operation
outside the State of Nevada is required to deposit with the Nevada Board, and thereafter maintain, a revolving fund
in the amount of $10,000 to pay the expenses of investigation by the Nevada Board of the Licensees’ participation in
such foreign gaming. The revolving fund is subject to an increase or decrease in the discretion of the Nevada
Commission. Once such revolving fund is established, the Licensees may engage in gaming activities outside the
State of Nevada without seeking the approval of the Nevada Commission provided (i) such activities are lawful in
the jurisdiction where they are to be conducted; and (ii) the Licensees comply with certain reporting requirements
imposed by the Nevada Act. Licensees are subject to disciplinary action by the Nevada Commission if they
(i) knowingly violate any laws of the foreign jurisdiction pertaining to the foreign gaming operation; (ii) fail to
conduct the foreign gaming operation in accordance with the standards of honesty and integrity required of Nevada
gaming operations; (iii) engage in activities that are harmful to the State of Nevada or its ability to collect gaming
taxes and fees; or, (iv) employ a person in the foreign operation who has been denied a license or finding of
suitability in Nevada on the ground of personal unsuitability. We manage gaming operations at the Sheraton Cairo
Hotel, Towers & Casino in Gaza, Egypt.
Employees
At December 31, 2007, approximately 155,000 people were employed at our corporate offices, owned and
managed hotels and vacation ownership resorts, of whom approximately 37% were employed in the United States.
At December 31, 2007, approximately 33% of the U.S.-based employees were covered by various collective
bargaining agreements providing, generally, for basic pay rates, working hours, other conditions of employment
and orderly settlement of labor disputes. Generally, labor relations have been maintained in a normal and
satisfactory manner, and management believes that our employee relations are satisfactory.
Where you can find more information
We file annual, quarterly and special reports, proxy statements and other information with the Securities &
Exchange Commission (“SEC”). Our SEC filings are available to the public over the Internet at the SEC’s web site
at http://www.sec.gov. Our SEC filings are also available on our website at http://www.starwoodhotels.com/
corporate/investor relations.html as soon as reasonably practicable after they are filed with or furnished to the SEC.
You may also read and copy any document we file with the SEC at its public reference rooms in Washington, D.C.
Please call the SEC at (800) SEC-0330 for further information on the public reference rooms. Our filings with the
SEC are also available at the New York Stock Exchange. For more information on obtaining copies of our public
filings at the New York Stock Exchange, you should call (212) 656-5060. You may also obtain a copy of our filings
free of charge by calling Investor Relations at (914) 640-8165.
Item 1A. Risk Factors.
Risks Relating to Hotel, Resort, Vacation Ownership and Residential Operations
We Are Subject to All the Operating Risks Common to the Hotel and Vacation Ownership and Residential
Industries. Operating risks common to the hotel and vacation ownership and residential industries include:
• changes in general economic conditions, including the severity and duration of any downturn in the US or
global economy;
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• impact of war and terrorist activity (including threatened terrorist activity) and heightened travel security
measures instituted in response thereto;
• domestic and international political and geopolitical conditions;
• travelers’ fears of exposures to contagious diseases;
• decreases in the demand for transient rooms and related lodging services, including a reduction in business
travel as a result of general economic conditions;
• decreases in demand or increases in supply for vacation ownership interests;
• the impact of internet intermediaries on pricing and our increasing reliance on technology;
• cyclical over-building in the hotel and vacation ownership industries;
• restrictive changes in zoning and similar land use laws and regulations or in health, safety and environmental
laws, rules and regulations and other governmental and regulatory action;
• changes in travel patterns;
• changes in operating costs including, but not limited to, energy, labor costs (including the impact of
unionization), food costs, workers’ compensation and health-care related costs, insurance and unanticipated
costs such as acts of nature and their consequences;
• disputes with owners of properties, including condominium hotels, franchisees and homeowner associations
which may result in litigation;
• the availability and cost of capital to allow us and potential hotel owners and franchisees to fund
construction, renovations and investments;
• foreign exchange fluctuations;
• the financial condition of third-party property owners, project developers and franchisees, which may impact
our ability to recover indemnity payments that may be owed to us and their ability to fund amounts required
under development, management and franchise agreements and in most cases our recourse is limited to the
equity value said party has in the property; and
• the financial condition of the airline industry and the impact on air travel.
We are also impacted by our relationships with owners and franchisees. Our hotel management contracts are
typically long-term arrangements, but most allow the hotel owner to replace us if certain financial or performance
criteria are not met and in certain cases, upon a sale of the property. Our ability to meet these financial and
performance criteria is subject to, among other things, the risks described in this section. Additionally, our operating
results would be adversely affected if we could not maintain existing management, franchise or representation
agreements or obtain new agreements on as favorable terms as the existing agreements.
We utilize our brands in connection with the residential portions of certain properties that we develop and
license our brands to third parties to use in a similar manner for a fee. Residential properties using our brands could
become less attractive due to changes in mortgage rates and the availability of mortgage financing generally, market
absorption or oversupply in a particular market. As a result, we and our third party licensees may not be able to sell
these residences for a profit or at the prices that we or they have anticipated.
General Economic Conditions May Negatively Impact Our Results. Moderate or severe economic down-
turns or adverse conditions may negatively affect our operations. These conditions may be widespread or isolated to
one or more geographic regions. A tightening of the labor markets in one or more geographic regions may result in
fewer and/or less qualified applicants for job openings in our facilities. Higher wages, related labor costs and the
increasing cost trends in the insurance markets may negatively impact our results as wages, related labor costs and
insurance premiums increase.
We Must Compete for Customers. The hotel, vacation ownership and residential industries are highly
competitive. Our properties compete for customers with other hotel and resort properties, and, with respect to our
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vacation ownership resorts and residential projects, with owners reselling their VOIs, including fractional own-
ership, or apartments. Some of our competitors may have substantially greater marketing and financial resources
than we do, and they may improve their facilities, reduce their prices or expand or improve their marketing
programs in ways that adversely affect our operating results.
We Must Compete for Management and Franchise Agreements. We compete with other hotel companies
for management and franchise agreements. As a result, the terms of such agreements may not be as favorable as our
current agreements. In connection with entering into management or franchise agreements, we may be required to
make investments in or guarantee the obligations of third parties or guarantee minimum income to third parties.
Any Failure to Protect our Trademarks Could Have a Negative Impact on the Value of our Brand Names
and Adversely Affect our Business. We believe our trademarks are an important component of our business. We
rely on trademark laws to protect our proprietary rights. The success of our business depends in part upon our
continued ability to use our trademarks to increase brand awareness and further develop our brand in both domestic
and international markets. Monitoring the unauthorized use of our intellectual property is difficult. Litigation has
been and may continue to be necessary to enforce our intellectual property rights or to determine the validity and
scope of the proprietary rights of others. Litigation of this type could result in substantial costs and diversion of
resources, may result in counterclaims or other claims against us and could significantly harm our results of
operations. In addition, the laws of some foreign countries do not protect our proprietary rights to the same extent as
do the laws of the United States. From time to time, we apply to have certain trademarks registered. There is no
guarantee that such trademark registrations will be granted. We cannot assure you that all of the steps we have taken
to protect our trademarks in the United States and foreign countries will be adequate to prevent imitation of our
trademarks by others. The unauthorized reproduction of our trademarks could diminish the value of our brand and
its market acceptance, competitive advantages or goodwill, which could adversely affect our business.
Significant Owners of Our Properties May Concentrate Risks. Generally there has not been a concentration
of ownership of hotels operated under our brands by any single owner. Following the acquisition of the Le Méridien
brand business and the Host Transaction, single ownership groups own significant numbers of hotels operated by us.
While the risks associated with such ownership are no different than exist generally (i.e., the financial position of the
owner, the overall state of the relationship with the owner and their participation in optional programs and the
impact on cost efficiencies if they choose not to participate), they are more concentrated.
The Hotel Industry Is Seasonal in Nature. The hotel industry is seasonal in nature; however, the periods
during which we experience higher revenue vary from property to property and depend principally upon location.
Our revenue historically has been lower in the first quarter than in the second, third or fourth quarters.
Third Party Internet Reservation Channels May Negatively Impact our Bookings. Some of our hotel
rooms are booked through third party internet travel intermediaries such as Travelocity.com», Expedia.com» and
Priceline.com». As the percentage of internet bookings increases, these intermediaries may be able to obtain higher
commissions, reduced room rates or other significant contract concessions from us. Moreover, some of these
internet travel intermediaries are attempting to commoditize hotel rooms by increasing the importance of price and
general indicators of quality (such as “three-star downtown hotel”) at the expense of brand identification. These
agencies hope that consumers will eventually develop brand loyalties to their reservations system rather than to our
lodging brands. Although we expect to derive most of our business from traditional channels and our websites, if the
amount of sales made through internet intermediaries increases significantly, our business and profitability may be
significantly harmed.
We Place Significant Reliance on Technology. The hospitality industry continues to demand the use of
sophisticated technology and systems including technology utilized for property management, brand assurance and
compliance, procurement, reservation systems, operation of our customer loyalty program, distribution and guest
amenities. These technologies can be expected to require refinements, including to comply with legal requirements
such as privacy regulations and requirements established by third parties such as the payment card industry, and
there is the risk that advanced new technologies will be introduced. Further, the development and maintenance of
these technologies may require significant capital. There can be no assurance that as various systems and
technologies become outdated or new technology is required we will be able to replace or introduce them as
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quickly as our competition or within budgeted costs and timeframes for such technology. Further, there can be no
assurance that we will achieve the benefits that may have been anticipated from any new technology or system.
Our Businesses Are Capital Intensive. For our owned, managed and franchised properties to remain
attractive and competitive, the property owners and we have to spend money periodically to keep the properties well
maintained, modernized and refurbished. This creates an ongoing need for cash and, to the extent the property
owners and we cannot fund expenditures from cash generated by operations, funds must be borrowed or otherwise
obtained. In addition, to continue growing our vacation ownership business and residential projects, we need to
spend money to develop new units. Accordingly, our financial results may be sensitive to the cost and availability of
funds and the carrying cost of VOI and residential inventory.
Real Estate Investments Are Subject to Numerous Risks. We are subject to the risks that generally relate to
investments in real property because we own and lease hotels and resorts. The investment returns available from
equity investments in real estate depend in large part on the amount of income earned and capital appreciation
generated by the related properties, and the expenses incurred. In addition, a variety of other factors affect income
from properties and real estate values, including governmental regulations, insurance, zoning, tax and eminent
domain laws, interest rate levels and the availability of financing. For example, new or existing real estate zoning or
tax laws can make it more expensive and/or time-consuming to develop real property or expand, modify or renovate
hotels. When interest rates increase, the cost of acquiring, developing, expanding or renovating real property
increases and real property values may decrease as the number of potential buyers decreases. Similarly, as financing
becomes less available, it becomes more difficult both to acquire and to sell real property. Finally, under eminent
domain laws, governments can take real property. Sometimes this taking is for less compensation than the owner
believes the property is worth. Any of these factors could have a material adverse impact on our results of operations
or financial condition. In addition, equity real estate investments are difficult to sell quickly and we may not be able
to adjust our portfolio of owned properties quickly in response to economic or other conditions. If our properties do
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
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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.
International Operations Are Subject to Special Political and Monetary Risks. We have significant
international operations which as of December 31, 2007 included 261 owned, managed or franchised properties
in Europe, Africa and the Middle East (including 21 properties with majority ownership); 53 owned, managed or
franchised properties in Latin America (including 9 properties with majority ownership); and 136 owned, managed
or franchised properties in the Asia Pacific region (including 4 properties with majority ownership). International
operations generally are subject to various political, geopolitical, and other risks that are not present in U.S. oper-
ations. These risks include the risk of war, terrorism, civil unrest, expropriation and nationalization as well as the
impact in cases in which there are inconsistencies between U.S. law and the laws of an international jurisdiction. In
addition, some international jurisdictions restrict the repatriation of non-U.S. earnings. Various other international
jurisdictions have laws limiting the ability of non-U.S. entities to pay dividends and remit earnings to affiliated
companies unless specified conditions have been met. In addition, sales in international jurisdictions typically are
made in local currencies, which subject us to risks associated with currency fluctuations. Currency devaluations and
unfavorable changes in international monetary and tax policies could have a material adverse effect on our
profitability and financing plans, as could other changes in the international regulatory climate and international
economic conditions. Other than Italy, where our risks are heightened due to the 9 properties we owned as of
December 31, 2007, our international properties are geographically diversified and are not concentrated in any
particular region.
Risks Relating to Operations in Syria
During fiscal 2007, Starwood subsidiaries generated approximately $2 million of revenue from management
and other fees from hotels located in Syria, a country that the United States has identified as a state sponsor of
terrorism. This amount constitutes significantly less than 1% of our worldwide annual revenues. The United States
does not prohibit U.S. investments in, or the exportation of services to, Syria, and our activities in that country are in
full compliance with U.S. and local law. However, the United States has imposed limited sanctions as a result of
Syria’s support for terrorist groups and its interference with Lebanon’s sovereignty, including a prohibition on the
exportation of U.S.-origin goods to Syria and the operation of government-owned Syrian air carriers in the United
States except in limited circumstances. The United States may impose further sanctions against Syria at any time for
foreign policy reasons. If so, our activities in Syria may be adversely affected, depending on the nature of any
further sanctions that might be imposed. In addition, our activities in Syria may reduce demand for our stock among
certain investors.
Debt Financing
As a result of our debt obligations, we are subject to: (i) the risk that cash flow from operations will be
insufficient to meet required payments of principal and interest and (ii) interest rate risk. Although we anticipate
that we will be able to repay or refinance our existing indebtedness and any other indebtedness when it matures,
there can be no assurance that we will be able to do so or that the terms of such refinancings will be favorable. Our
leverage may have important consequences including the following: (i) our ability to obtain additional financing for
acquisitions, working capital, capital expenditures or other purposes, if necessary, may be impaired or such
financing may not be available on terms favorable to us and (ii) a substantial decrease in operating cash flow or a
13

substantial increase in our expenses could make it difficult for us to meet our debt service requirements and force us
to sell assets and/or modify our operations.
Risks Relating to So-Called Acts of God, Terrorist Activity and War
Our financial and operating performance may be adversely affected by so-called acts of God, such as natural
disasters, in locations where we own and/or operate significant properties and areas of the world from which we
draw a large number of customers. Similarly, wars (including the potential for war), terrorist activity (including
threats of terrorist activity), political unrest and other forms of civil strife and geopolitical uncertainty have caused
in the past, and may cause in the future, our results to differ materially from anticipated results.
Some Potential Losses are Not Covered by Insurance
We carry insurance coverage for general liability, property, business interruption and other risks with respect to
our owned and leased properties and we make available insurance programs for owners of properties we manage.
These policies offer coverage terms and conditions that we believe are usual and customary for our industry.
Generally, our “all-risk” property policies provide that coverage is available on a per occurrence basis and that, for
each occurrence, there is a limit as well as various sub-limits on the amount of insurance proceeds we will receive in
excess of applicable deductibles. In addition, there may be overall limits under the policies. Sub-limits exist for
certain types of claims such as service interruption, debris removal, expediting costs or landscaping replacement,
and the dollar amounts of these sub-limits are significantly lower than the dollar amounts of the overall coverage
limit. Our property policies also provide that for the coverage of critical earthquake (California and Mexico),
hurricane and flood, all of the claims from each of our properties resulting from a particular insurable event must be
combined together for purposes of evaluating whether the annual aggregate limits and sub-limits contained in our
policies have been exceeded and any such claims will also be combined with the claims of owners of managed
hotels that participate in our insurance program for the same purpose. Therefore, if insurable events occur that affect
more than one of our owned hotels and/or managed hotels owned by third parties that participate in our insurance
program, the claims from each affected hotel will be added together to determine whether the per occurrence limit,
annual aggregate limit or sub-limits, depending on the type of claim, have been reached and if the limits or sub-
limits are exceeded each affected hotel will only receive a proportional share of the amount of insurance proceeds
provided for under the policy. In addition, under those circumstances, claims by third party owners will reduce the
coverage available for our owned and leased properties.
In addition, there are also other risks including but not limited to war, certain forms of terrorism such as
nuclear, biological or chemical terrorism, political risks, some environmental hazards and/or acts of God that may
be deemed to fall completely outside the general coverage limits of our policies or may be uninsurable or may be too
expensive to justify insuring against.
We may also encounter challenges with an insurance provider regarding whether it will pay a particular claim
that we believe to be covered under our policy. Should an uninsured loss or a loss in excess of insured limits occur,
we could lose all or a portion of the capital we have invested in a hotel or resort, as well as the anticipated future
revenue from the hotel or resort. In that event, we might nevertheless remain obligated for any mortgage debt or
other financial obligations related to the property.
Acquisitions/Dispositions and New Brands
We will consider corporate as well as property acquisitions and investments that complement our business. In
many cases, we will be competing for these opportunities with third parties who may have substantially greater
financial resources or different or lower acceptable financial metrics then we do. There can be no assurance that we
will be able to identify acquisition or investment candidates or complete transactions on commercially reasonable
terms or at all. If transactions are consummated, there can be no assurance that any anticipated benefits will actually
be realized. Similarly, there can be no assurance that we will be able to obtain additional financing for acquisitions
or investments, or that the ability to obtain such financing will not be restricted by the terms of our debt agreements.
We periodically review our business to identify properties or other assets that we believe either are non-core,
no longer complement our business, are in markets which may not benefit us as much as other markets during an
14

economic recovery or could be sold at significant premiums. We are focused on restructuring and enhancing real
estate returns and monetizing investments and from time to time, may attempt to sell these identified properties and
assets. There can be no assurance, however, that we will be able to complete dispositions on commercially
reasonable terms or at all or that any anticipated benefits will actually be received.
We have developed and launched two new hotel brands, aloft and Element, and may develop and launch
additional brands in the future. There can be no assurance regarding the level of acceptance of these brands in the
development and consumer marketplaces, that the cost incurred in developing the brands will be recovered or that
the anticipated benefits from these new brands will be realized.
Investing Through Partnerships or Joint Ventures Decreases Our Ability to Manage Risk
In addition to acquiring or developing hotels and resorts or acquiring companies that complement our business
directly, we have from time to time invested, and expect to continue to invest, as a co-venturer. Joint venturers often
have shared control over the operation of the joint venture assets. Therefore, joint venture investments may involve
risks such as the possibility that the co-venturer in an investment might become bankrupt or not have the financial
resources to meet its obligations, or have economic or business interests or goals that are inconsistent with our
business interests or goals, or be in a position to take action contrary to our instructions or requests or contrary to our
policies or objectives. Consequently, actions by a co-venturer might subject hotels and resorts owned by the joint
venture to additional risk. Further, we may be unable to take action without the approval of our joint venture
partners. Alternatively, our joint venture partners could take actions binding on the joint venture without our
consent. Additionally, should a joint venture partner become bankrupt, we could become liable for our partner’s
share of joint venture liabilities.
Our Vacation Ownership Business is Subject to Extensive Regulation and Risk of Default
We market and sell VOIs, which typically entitle the buyer to ownership of a fully-furnished resort unit for a
one-week period (or in the case of fractional ownership interests, generally for three or more weeks) on either an
annual or an alternate-year basis. We also acquire, develop and operate vacation ownership resorts, and provide
financing to purchasers of VOIs. These activities are all subject to extensive regulation by the federal government
and the states in which vacation ownership resorts are located and in which VOIs are marketed and sold including
regulation of our telemarketing activities under state and federal “Do Not Call” laws. In addition, the laws of most
states in which we sell VOIs grant the purchaser the right to rescind the purchase contract at any time within a
statutory rescission period. Although we believe that we are in material compliance with all applicable federal,
state, local and foreign laws and regulations to which vacation ownership marketing, sales and operations are
currently subject, changes in these requirements or a determination by a regulatory authority that we were not in
compliance, could adversely affect us. In particular, increased regulations of telemarketing activities could
adversely impact the marketing of our VOIs.
We bear the risk of defaults under purchaser mortgages on VOIs. If a VOI purchaser defaults on the mortgage
during the early part of the loan amortization period, we will not have recovered the marketing, selling (other than
commissions in certain events), and general and administrative costs associated with such VOI, and such costs will
be incurred again in connection with the resale of the repossessed VOI. Accordingly, there is no assurance that the
sales price will be fully or partially recovered from a defaulting purchaser or, in the event of such defaults, that our
allowance for losses will be adequate.
Privacy Initiatives
We collect information relating to our guests for various business purposes, including marketing and
promotional purposes. The collection and use of personal data are governed by privacy laws and regulations
enacted in the United States and other jurisdictions around the world. Privacy regulations continue to evolve and on
occasion may be inconsistent from one jurisdiction to another. Compliance with applicable privacy regulations may
increase our operating costs and/or adversely impact our ability to market our products, properties and services to
our guests. In addition, non-compliance with applicable privacy regulations by us (or in some circumstances non-
15

compliance by third parties engaged by us) or a breach of security on systems storing our data may result in fines,
payment of damages or restrictions on our use or transfer of data.
Ability to Manage Growth
Our future success and our ability to manage future growth depend in large part upon the efforts of our senior
management and our ability to attract and retain key officers and other highly qualified personnel. Competition for
such personnel is intense. Since January 2004, we have experienced significant changes in our senior management,
including executive officers (See Item 10. “Directors, Executive Officers and Corporate Governance” of this
Annual Report). There can be no assurance that we will continue to be successful in attracting and retaining
qualified personnel. Accordingly, there can be no assurance that our senior management will be able to successfully
execute and implement our growth and operating strategies.
Over the last few years we have been pursuing a strategy of reducing our investment in owned real estate and
increasing our focus on the management and franchise business. As a result, we are planning on substantially
increasing the number of hotels we open every year and increasing the overall number of hotels in our system. This
increase will require us to recruit and train a substantial number of new associates to work at these hotels as well as
increasing our capabilities to enable hotels to open on time and successfully. There can be no assurance that our
strategy will be successful.
Tax Risks
Failure of the Trust to Qualify as a REIT Would Increase Our Tax Liability. Qualifying as a real estate
investment trust (a “REIT”) requires compliance with highly technical and complex tax provisions that courts and
administrative agencies have interpreted only to a limited degree. Due to the complexities of our ownership,
structure and operations, the Trust is more likely than are other REITs to face interpretative issues for which there
are no clear answers. We believe that for the taxable years ended December 31, 1995 through April 10, 2006, the
date which Host acquired the Trust, the Trust qualified as a REIT under the Internal Revenue Code of 1986, as
amended. If the Trust failed to qualify as a REIT for any prior tax year, we would be liable to pay a significant
amount of taxes for those years. Subsequent to the Host Transaction, the Trust is no longer owned by us and we are
not subject to this risk for actions following the transaction.
Evolving government regulation could impose taxes or other burdens on our business. We rely upon
generally available interpretations of tax laws and other types of laws and regulations in the countries and locales in
which we operate. We cannot be sure that these interpretations are accurate or that the responsible taxing or other
governmental authority is in agreement with our views. The imposition of additional taxes or causing us to change
the way we conduct our business could cause us to have to pay taxes that we currently do not collect or pay or
increase the costs of our services or increase our costs of operations.
Our current business practice with our internet reservation channels is that the intermediary collects hotel
occupancy tax from its customer based on the price that the intermediary paid us for the hotel room. We then remit
these taxes to the various tax authorities. Several jurisdictions have stated that they may take the position that the tax
is also applicable to the intermediaries’ gross profit on these hotel transactions. If jurisdictions take this position,
they should seek the additional tax payments from the intermediary; however, it is possible that they may seek to
collect the additional tax payment from us and we would not be able to collect these taxes from the customers. To the
extent that any tax authority succeeds in asserting that the hotel occupancy tax applies to the gross profit on these
transactions, we believe that any additional tax would be the responsibility of the intermediary. However, it is
possible that we might have additional tax exposure. In such event, such actions could have a material adverse effect
on our business, results of operations and financial condition.
Risks Relating to Ownership of Our Shares
Our Board of Directors May Issue Preferred Stock and Establish the Preferences and Rights of Such
Preferred Stock. Our charter provides that the total number of shares of stock of all classes which the Corporation
has authority to issue is 1,200,000,000, consisting of one billion shares of common stock and 200 million shares of
preferred stock. Our Board of Directors has the authority, without a vote of shareholders, to establish the preferences
16

and rights of any preferred or other class or series of shares to be issued and to issue such shares. The issuance of
preferred shares or other shares having special preferences or rights could delay or prevent a change in control even
if a change in control would be in the interests of our shareholders. Since our Board of Directors has the power to
establish the preferences and rights of additional classes or series of shares without a shareholder vote, our Board of
Directors may give the holders of any class or series preferences, powers and rights, including voting rights, senior
to the rights of holders of our shares.
Our Board of Directors May Implement Anti-Takeover Devices and our Charter and By-Laws Contain
Provisions which May Prevent Takeovers. Certain provisions of Maryland law permit our Board of Directors,
without stockholder approval, to implement possible takeover defenses that are not currently in place, such as a
classified board. In addition, our charter contains provisions relating to restrictions on transferability of the
Corporation Shares, which provisions may be amended only by the affirmative vote of our shareholders holding
two-thirds of the votes entitled to be cast on the matter. As permitted under the Maryland General Corporation Law,
our Bylaws provide that directors have the exclusive right to amend our Bylaws.
Our Shareholder Rights Plan Would Cause Substantial Dilution to Any Shareholder That Attempts to
Acquire Us on Terms Not Approved by Our Board of Directors. We adopted a shareholder rights plan which
provides, among other things, that when specified events occur, our shareholders will be entitled to purchase from
us a newly created series of junior preferred stock. The preferred stock purchase rights are triggered by the earlier to
occur of (i) ten days after the date of a public announcement that a person or group acting in concert has acquired, or
obtained the right to acquire, beneficial ownership of 15% or more of our outstanding Corporation Shares or (ii) ten
business days after the commencement of or announcement of an intention to make a tender offer or exchange offer,
the consummation of which would result in the acquiring person becoming the beneficial owner of 15% or more of
our outstanding Corporation Shares. The preferred stock purchase rights would cause substantial dilution to a
person or group that attempts to acquire us on terms not approved by our Board of Directors.
Item 2. Properties.
We are one of the largest hotel and leisure companies in the world, with operations in approximately 100
countries. We consider our hotels and resorts, including vacation ownership resorts (together “Resorts”), generally
to be premier establishments with respect to desirability of location, size, facilities, physical condition, quality and
variety of services offered in the markets in which they are located. Although obsolescence arising from age,
condition of facilities, and style can adversely affect our Resorts, Starwood and third-party owners of managed and
franchised Resorts expend substantial funds to renovate and maintain their facilities in order to remain competitive.
For further information see Item 7. Management’s Discussion and Analysis of Financial Condition and Results of
Operations — Liquidity and Capital Resources in this Annual Report.
Our hotel business included 897 owned, managed or franchised hotels with approximately 275,000 rooms and
our owned vacation ownership and residential business included 28 vacation ownership resorts and residential
properties at December 31, 2007, predominantly under seven brands. All brands (other than the Four Points by
Sheraton and the newly announced aloft and Element brands) represent full-service properties that range in
amenities from luxury hotels and resorts to more moderately priced hotels. We also lease three stand-alone Bliss
Spas, two in New York, New York and one in London, England and have leased Bliss Spas in five of the W Hotels. In
addition, we own, lease or manage Remède Spas in four of the St. Regis hotels.
17

The following table reflects our hotel and vacation ownership properties, by brand as of December 31, 2007:
VOI and
Residential(a)
Hotels
Properties Rooms Properties Rooms
St. Regis and Luxury Collection . . . . . . . . . . . . . . . . . . 70 12,300 4 100
W. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 20 6,000 — —
Westin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 61,900 12 2,500
Le Méridien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116 31,200 — —
Sheraton . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 399 138,900 8 4,500
Four Points . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128 22,000 — —
Independent / Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 2,300 4 300
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 897 274,600 28 7,400
(a) Includes sites held for development.
Hotel Business
Managed and Franchised Hotels. Hotel and resort properties in the United States are often owned by
entities that do not manage hotels or own a brand name. Hotel owners typically enter into management contracts
with hotel management companies to operate their hotels. When a management company does not offer a brand
affiliation, the hotel owner often chooses to pay separate franchise fees to secure the benefits of brand marketing,
centralized reservations and other centralized administrative functions, particularly in the sales and marketing area.
Management believes that companies, such as Starwood, that offer both hotel management services and well-
established worldwide brand names appeal to hotel owners by providing the full range of management, marketing
and reservation services.
Managed Hotels. We manage hotels worldwide, usually under a long-term agreement with the hotel owner
(including entities in which we have a minority equity interest). Our responsibilities under hotel management
contracts typically include hiring, training and supervising the managers and employees that operate these facilities.
For additional fees, we provide centralized reservation services and coordinate national advertising and certain
marketing and promotional services. We prepare and implement annual budgets for the hotels we manage and are
responsible for allocating property-owner funds for periodic maintenance and repair of buildings and furnishings. In
addition to our owned and leased hotels, at December 31, 2007, we managed 415 hotels with approximately 141,000
rooms worldwide. During the year ended December 31, 2007, we generated management fees by geographic area as
follows:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 39.8%
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 18.8%
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 17.6%
Middle East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 16.0%
Americas (Latin America, Caribbean & Canada) . . . . . . . . . . . . . . . . . . . . . . . ........... 7.8%
Management contracts typically provide for base fees tied to gross revenue and incentive fees tied to profits as
well as fees for other services, including centralized reservations, sales and marketing, public relations and national
and international media advertising. In our experience, owners seek hotel managers that can provide attractively
priced base, incentive and marketing fees combined with demonstrated sales and marketing expertise and
operations-focused management designed to enhance profitability. Some of our management contracts permit
the hotel owner to terminate the agreement when the hotel is sold or otherwise transferred to a third party, as well as
if we fail to meet established performance criteria. In addition, many hotel owners seek equity, debt or other
investments from us to help finance hotel renovations or conversions to a Starwood brand so as to align the interests
of the owner and the Company. Our ability or willingness to make such investments may determine, in part, whether
we will be offered, will accept, or will retain a particular management contract. During the year ended December 31,
18

2007, we opened 25 managed hotels with approximately 7,000 rooms, and 22 managed hotels with approximately
5,000 rooms left our system. In addition, during 2007, we signed management agreements for 83 hotels with
approximately 27,000 rooms, a portion of which opened in 2007 and a portion of which will open in the future.
Brand Franchising and Licensing. We franchise our Sheraton, Westin, Four Points by Sheraton, Luxury
Collection, Le Méridien, aloft and Element brand names and generally derive licensing and other fees from
franchisees based on a fixed percentage of the franchised hotel’s room revenue, as well as fees for other services,
including centralized reservations, sales and marketing, public relations and national and international media
advertising. In addition, a franchisee may also purchase hotel supplies, including brand-specific products, from
certain Starwood-approved vendors. We approve certain plans for, and the location of, franchised hotels and review
their design. At December 31, 2007, there were 408 franchised properties with approximately 109,000 rooms
operating under the Sheraton, Westin, Four Points by Sheraton, Luxury Collection and Le Méridien brands. During
the year ended December 31, 2007, we generated franchise fees by geographic area as follows:
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 60.6%
Europe . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 15.5%
Americas (Latin America, Caribbean & Canada) . . . . . . . . . . . . . . . . . . . . . . . ........... 12.8%
Asia Pacific . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 10.2%
Middle East and Africa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ........... 0.9%
In addition to the franchise contracts we retained in connection with the sale of hotels discussed earlier, during
the year ended December 31, 2007, we opened 42 franchised hotels with approximately 12,000 rooms, and 11
franchised hotels with approximately 4,000 rooms left our system. In addition, during 2007, we signed franchise
agreements for 115 hotels with approximately 20,000 rooms, a portion of which opened in 2007 and a portion of
which will open in the future.
Owned, Leased and Consolidated Joint Venture Hotels. Historically, we have derived the majority of our
revenues and operating income from our owned, leased and consolidated joint venture hotels and a significant
portion of these results are driven by these hotels in North America. However, in 2006 and 2007 we have sold 51
wholly owned hotels which has substantially reduced our revenues and operating income from owned, leased and
consolidated joint venture hotels. The majority of these hotels were sold subject to long-term management or
franchise contracts. Total revenues generated from our owned, leased and consolidated joint venture hotels
worldwide for the years ending December 31, 2007 and 2006 were $2.429 billion and $2.692 billion, respectively
(total revenues from our owned, leased and consolidated joint venture hotels in North America were $1.587 billion
and $1.881 billion for 2007 and 2006, respectively). The following represents our top five markets in the United
States by metropolitan area as a percentage of our total owned, leased and consolidated joint venture revenues for
the year ended December 31, 2007 (with comparable data for 2006):
Top Five Metropolitan Areas in the United States as a % of Total Owned
Revenues for the Year Ended December 31, 2007 with Comparable Data for 2006(1)
2007 2006
Metropolitan Area Revenues Revenues
New York, NY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13.1% 12.6%
Phoenix, AZ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.6% 5.1%
San Francisco, CA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.2% 4.3%
Maui, HI . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.5% 3.8%
Chicago, IL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.8% 3.2%
19

The following represents our top five international markets by country as a percentage of our total owned,
leased and consolidated joint venture revenues for the year ended December 31, 2007 (with comparable data for
2006):
Top Five International Markets as a % of Total Owned Revenues
for the Year Ended December 31, 2007 with Comparable Data for 2006(1)
2007 2006
Country Revenues Revenues
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.6% 7.9%
Canada . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.0% 6.3%
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.1% 4.5%
Australia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.3% 3.0%
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.3% 3.0%
(1) Includes the revenues of hotels sold for the period prior to their sale.
Following the sale of a significant number of our hotels in the past two years, we currently own or lease 74
hotels. Our owned, leased and consolidated joint venture hotel revenues and operating income is generated
substantially from the following hotels:
Hotel Location Rooms
U.S. Hotels:
The St. Regis Hotel, New York New York, NY 229
St. Regis Resort, Aspen Aspen, CO 179
The Phoenician Scottsdale, AZ 647
W New York — Times Square New York, NY 507
W Chicago Lakeshore Chicago, IL 520
W San Francisco San Francisco, CA 410
W Los Angeles Westwood Los Angeles, CA 258
W Chicago City Center Chicago, IL 369
W New York — The Court and Tuscany New York, NY 318
W Atlanta at Perimeter Center Atlanta, GA 275
The Westin Maui Resort & Spa Maui, HI 759
The Westin Peachtree Plaza, Atlanta Atlanta, GA 1068
The Westin Horton Plaza San Diego San Diego, CA 450
The Westin San Francisco Airport San Francisco, CA 397
Sheraton Manhattan Hotel New York, NY 665
Sheraton Kauai Resort Kauai, HI 394
Sheraton Steamboat Springs Resort Steamboat Springs, CO 312
The Boston Park Plaza Hotel & Towers Boston, MA 941
International Hotels:
St. Regis Grand Hotel, Rome Rome, Italy 161
Grand Hotel Florence, Italy 107
Hotel Gritti Palace Venice, Italy 91
Park Tower Buenos Aires, Argentina 181
Hotel Alfonso XIII Seville, Spain 147
Hotel Imperial Vienna, Austria 138
The Westin Excelsior, Rome Rome, Italy 319
20

Hotel Location Rooms
The Westin Resort & Spa, Los Cabos Los Cabos, Mexico 243
The Westin Resort & Spa, Puerto Vallarta Puerto Vallarta, Mexico 279
The Westin Excelsior, Florence Florence, Italy 171
The Westin Resort & Spa Cancun Cancun, Mexico 379
The Westin St. John Resort & Villas St John, Virgin Islands 175
Sheraton Centre Toronto Hotel Toronto, Canada 1377
The Park Lane Hotel, London London, England 302
Sheraton On The Park Sydney, Australia 557
Sheraton Buenos Aires Hotel & Convention Center Buenos Aires, Argentina 739
Sheraton Rio Hotel and Resort Rio de Janeiro, Brazil 559
Sheraton Maria Isabel Hotel & Towers Mexico City, Mexico 755
Sheraton Gateway Hotel in Toronto International
Airport Toronto, Canada 474
Le Centre Sheraton Montreal Hotel Montreal, Canada 825
Sheraton Paris Airport Hotel & Conference Centre Paris, France 252
Sheraton Brussels Hotel and Towers Brussels, Belgium 511
Four Points by Sheraton Sydney Sydney, Australia 630
An indicator of the performance of our owned, leased and consolidated joint venture hotels is revenue per
available room (“REVPAR”)(1), as it measures the period-over-period growth in rooms revenue for comparable
properties. This is particularly the case in the United States where there is no impact on this measure from foreign
exchange rates.
The following table summarizes REVPAR, average daily rates (“ADR”) and average occupancy rates on a
year-to-year basis for our 66 owned, leased and consolidated joint venture hotels (excluding 56 hotels sold or closed
and 8 hotels undergoing significant repositionings or without comparable results in 2007 and 2006) (“Same-Store
Owned Hotels”) for the years ended December 31, 2007 and 2006:
Year Ended
December 31,
2007 2006 Variance
Worldwide (66 hotels with approximately 22,000 rooms)
REVPAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160.38 $145.57 10.2%
ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $222.03 $203.31 9.2%
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72.2% 71.6% 0.6
North America (35 hotels with approximately 14,000 rooms)
REVPAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $160.87 $149.95 7.3%
ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $217.20 $202.77 7.1%
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74.1% 73.9% 0.2
International (31 hotels with approximately 8,000 rooms)
REVPAR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $159.52 $138.05 15.6%
ADR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $230.97 $204.33 13.0%
Occupancy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69.1% 67.6% 1.5
(1) REVPAR is calculated by dividing room revenue, which is derived from rooms and suites rented or leased, by
total room nights available for a given period. REVPAR may not be comparable to similarly titled measures
such as revenues.
21

During the years ended December 31, 2007 and 2006, we invested approximately $211 million and
$245 million, respectively, for capital improvements at owned hotels. These capital expenditures include the
renovations of the Westin Maui Resort in Maui, Hawaii, the Phoenician in Scottsdale, Arizona, the W Los Angeles
in Los Angeles, California and the W San Francisco in San Francisco, California. Additionally, in 2007 we acquired
the Sheraton Steamboat in Steamboat Springs, Colorado, for $58 million.
Vacation Ownership and Residential Business
We develop, own and operate vacation ownership resorts, market and sell the VOIs in the resorts and, in many
cases, provide financing to customers who purchase such ownership interests. Owners of VOIs can trade their
interval for intervals at other Starwood vacation ownership resorts, for intervals at certain vacation ownership
resorts not otherwise sponsored by Starwood through an exchange company, or for hotel stays at Starwood
properties. From time to time, we securitize or sell the receivables generated from our sale of VOIs.
We have also entered into arrangements with several owners for mixed use hotel projects that will include a
residential component. We have entered into licensing agreements for the use of certain of our brands to allow the
owners to offer branded condominiums to prospective purchasers. In consideration, we typically receive a licensing
fee equal to a percentage of the gross sales revenue of the units sold. The licensing arrangement generally terminates
upon the earlier of sell-out of the units or a specified length of time.
At December 31, 2007, we had 28 residential and vacation ownership resorts and sites in our portfolio with 16
actively selling VOIs and residences, 8 sites being held for possible future development and 4 that have sold all
existing inventory. During 2007 and 2006, we invested approximately $448 million and $411 million, respectively,
for vacation ownership capital expenditures, including VOI construction at Westin Ka’anapali Ocean Resort Villas
North in Maui, Hawaii, and the Westin Princeville Resort in Kauai, Hawaii and the purchase of a leasehold interest
in land in Aruba.
In late 2004, we began selling residential units at the St. Regis Museum Tower in San Francisco, California
which opened in November 2005. We recognized revenues of approximately $53 million in 2006 related to the sale
of these residential units which were sold out in the first half of 2006. In 2006 we began selling residential units at
the St. Regis Hotel in New York, New York and recognized revenues of approximately $3 million and $41 million in
2007 and 2006, respectively. During 2007 and 2006, we invested approximately $19 million and $23 million,
respectively, for residential inventory.
Item 3. Legal Proceedings.
Incorporated by reference to the description of legal proceedings in Note 22. Commitments and Contingencies,
in the notes to financial statements set forth in Part II, Item 8. Financial Statements and Supplementary Data.
Item 4. Submission of Matters to a Vote of Security Holders.
Not applicable.
Executive Officers of the Registrants
See Part III, Item 10. of this Annual Report for information regarding the executive officers of the Registrants,
which information is incorporated herein by reference.
22

PART II
Item 5. Market for Registrants’ Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities.
Market Information
The Corporation Shares are traded on the New York Stock Exchange (the “NYSE”) under the symbol “HOT.”
The following table sets forth, for the fiscal periods indicated, the high and low sale prices per Corporation
Share (and Share until April 7, 2006) on the NYSE Composite Tape(a).
High Low
2007
Fourth quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $62.83 $42.78
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $75.45 $52.63
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $74.35 $65.35
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $69.65 $59.63
2006
Fourth quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $68.00 $56.22
Third quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $61.85 $49.68
Second quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $68.87 $52.41
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .............. $68.50 $58.99
(a) On April 7, 2006, in connection with the Host Transaction, the Shares were depaired and the Corporation
Shares became transferable separately from the Class B Shares of the Trust. As a result of the depairing, the
Corporation Shares now trade alone on the NYSE. Starwood shareholders received approximately $2.8 billion
in the form of Host common stock valued at $2.68 billion and $119 million in cash for their Class B Shares.
Based on Host’s closing price on April 7, 2006, this consideration had a per — Class B Share value of $13.07.
As of April 10, 2006 neither Shares nor Class B Shares are listed or traded on the NYSE.
Holders
As of February 15, 2008, there were approximately 18,000 holders of record of Corporation Shares.
Distributions and Dividends Made/Declared
The following table sets forth the frequency and amount of distributions made by the Trust and dividends made
by the Corporation to holders of Corporation Shares (and Shares until April 7, 2006) for the years ended
December 31, 2007 and 2006:
Distributions/Dividends
Declared
2007
$0.90(a)
Annual distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
2006
$0.42(b)
Fourth quarter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.21(c)
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$0.21(d)
First quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a) The Corporation declared a dividend in the fourth quarter of 2007 to shareholders of record on December 31,
2007, which was paid in January 2008.
(b) The Corporation declared a dividend in the fourth quarter of 2006 to shareholders of record on December 31,
2006, which was paid in January 2007.
23

(c) In connection with the Host Transaction, the Trust declared a distribution of $0.21 per Share in March 2006 to
shareholders of record on March 27, 2006, which was paid in April 2006.
(d) In connection with the Host Transaction, the Trust declared a distribution of $0.21 per Share in February 2006
to shareholders of record on February 28, 2006, which was paid in March 2006.
Conversion of Securities; Sale of Unregistered Securities
In 2006, we completed the redemption of the remaining 25,000 outstanding shares of Class B Exchangeable
Preferred Shares of the Trust (“Class B EPS”) for approximately $1 million in cash. Also in 2006, in connection
with the Host Transaction, we redeemed all of the Class A Exchangeable Preferred Shares of the Trust (“Class A
EPS”) (approximately 562,000 shares) and Realty Partnership units (approximately 40,000 units) for approximately
$34 million in cash. SLC Operating Limited Partnership units are convertible into Corporation Shares at the unit
holder’s option, provided that the Company has the option to settle conversion requests in cash or Corporation
Shares. In 2006, we redeemed approximately 926,000 SLC Operating Limited Partnership units for approximately
$56 million in cash, and there were approximately 179,000 of these units outstanding at December 31, 2007 and
2006.
Issuer Purchases of Equity Securities
Pursuant to the Share Repurchase Program, Starwood repurchased 29.6 million Corporation Shares in the open
market for an aggregate cost of $1.787 billion during 2007. The Company repurchased the following Corporation
Shares during the three months ended December 31, 2007:
Maximum Number (or
Approximate Dollar
Total Number of Shares Value) of Shares
Average Purchased as Part of that May Yet Be
Total Number of Price Paid Publicly Announced Plans Purchased Under the
Period Shares Purchased for Share or Programs Plans or Programs
(In millions)
October . . . . . . . . . . . 2,325,000 $59.16 2,325,000 $ 18
November . . . . . . . . . 6,103,600 $52.59 6,103,600 $697
December . . . . . . . . . 1,968,600 $53.13 1,968,600 $593
Total . . . . . . . . . . . . . 10,397,200 $54.16 10,397,200
In November 2007, the Board of Directors of the Company authorized an additional $1 billion of Share
repurchases under our existing Share repurchase authorization.
Information relating to securities authorized for issuance under equity compensation plans is provided under
Item 12 of this Annual Report and is incorporated herein by reference.
24

STOCKHOLDER RETURN PERFORMANCE
Set forth below is a line graph comparing the cumulative total stockholder return on the Corporation Shares
(and Shares until April 7, 2006) against the cumulative total return on the S&P 500 and the S&P 500 Hotel Index
(the “S&P 500 Hotel”) for the five fiscal years beginning December 31, 2002 and ending December 31, 2007. The
graph assumes that the value of the investments was 100 on December 31, 2002 and that all dividends and other
distributions were reinvested. In addition, the Share prices for the periods prior to the Host Transaction on April 10,
2006 have been adjusted based on the value shareholders received for their Class B shares. The comparisons are
provided in response to SEC disclosure requirements and are not intended to forecast or be indicative of future
performance.
400
Starwood
350
S&P 500
300 S&P 500 Hotel
DOLLARS
250
200
150
100
50
0
2002 2003 2004 2005 2006 2007
2002 2003 2004 2005 2006 2007
Starwood 100.00 155.17 255.54 283.15 347.52 249.78
S&P 500 100.00 126.38 137.75 141.88 161.20 166.89
S&P 500 Hotel 100.00 150.11 216.39 217.05 245.55 211.55
25

Item 6. Selected Financial Data.
The following financial and operating data should be read in conjunction with the information set forth under
“Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our consolidated
financial statements and related notes thereto appearing elsewhere in this Annual Report and incorporated herein by
reference.
Year Ended December 31,
2007 2006 2005 2004 2003
(In millions, except per Share data)
Income Statement Data
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,153 $ 5,979 $5,977 $5,368 $4,630
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . $ 858 $ 839 $ 822 $ 653 $ 427
Income from continuing operations . . . . . . . . . . . . . $ 543 $ 1,115 $ 423 $ 369 $ 105
Diluted earnings per Share from continuing
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.57 $ 5.01 $ 1.88 $ 1.72 $ 0.51
Operating Data
Cash from operating activities . . . . . . . . . . . . . . . . . $ 895 $ 500 $ 764 $ 578 $ 766
Cash from (used for) investing activities . . . . . . . . . . $ (215) $ 1,402 $ 85 $ (415) $ 515
Cash used for financing activities . . . . . . . . . . . . . . . $ (712) $(2,635) $ (253) $ (273) $ (979)
Aggregate cash distributions paid . . . . . . . . . . . . . . . $ 90 $ 276 $ 176 $ 172 $ 170
Cash distributions and dividends declared per
$ 0.90 $ 0.84(a) $ 0.84 $ 0.84 $ 0.84
Share. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a) In connection with the Host Transaction, in February and March 2006, the Trust declared distributions totaling
$0.42 per Share. In December 2006, the Corporation declared a dividend of $0.42 per Corporation Share.
At December 31,
2007 2006 2005 2004 2003
(In millions)
Balance Sheet Data
Total assets. . . . . . . . . . . . . . . . . . . . . . . . . . . $9,622 $9,280 $12,494 $12,298 $11,857
Long-term debt, net of current maturities and
including exchangeable units and Class B
preferred shares . . . . . . . . . . . . . . . . . . . . . $3,590 $1,827 $ 2,926 $ 3,823 $ 4,424
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
Management’s Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”)
discusses our consolidated financial statements, which have been prepared in accordance with accounting
principles generally accepted in the United States. The preparation of these consolidated financial statements
requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities,
the disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported
amounts of revenues and costs and expenses during the reporting periods. On an ongoing basis, management
evaluates its estimates and judgments, including those relating to revenue recognition, bad debts, inventories,
investments, plant, property and equipment, goodwill and intangible assets, income taxes, financing operations,
frequent guest program liability, self-insurance claims payable, restructuring costs, retirement benefits and
contingencies and litigation.
Management bases its estimates and judgments on historical experience and on various other factors that are
believed to be reasonable under the circumstances, the results of which form the basis for making judgments about
the carrying value of assets and liabilities that are not readily available from other sources. Actual results may differ
from these estimates under different assumptions and conditions.
26

CRITICAL ACCOUNTING POLICIES
We believe the following to be our critical accounting policies:
Revenue Recognition. Our revenues are primarily derived from the following sources: (1) hotel and resort
revenues at our owned, leased and consolidated joint venture properties; (2) vacation ownership and residential
revenues; (3) management and franchise revenues; (4) revenues from managed and franchised properties; and
(5) other revenues which are ancillary to our operations. Generally, revenues are recognized when the services have
been rendered. The following is a description of the composition of our revenues:
• Owned, Leased and Consolidated Joint Ventures — Represents revenue primarily derived from hotel
operations, including the rental of rooms and food and beverage sales from owned, leased or consolidated
joint venture hotels and resorts. Revenue is recognized when rooms are occupied and services have been
rendered. These revenues are impacted by global economic conditions affecting the travel and hospitality
industry as well as relative market share of the local competitive set of hotels. REVPAR is a leading indicator
of revenue trends at owned, leased and consolidated joint venture hotels as it measures the period-over-
period growth in rooms revenue for comparable properties.
• Vacation Ownership and Residential — We recognize revenue from VOI sales and financings and the sales
of residential units which are typically a component of mixed use projects that include a hotel. Such revenues
are impacted by the state of the global economies and, in particular, the U.S. economy, as well as interest rate
and other economic conditions affecting the lending market. Revenue is generally recognized upon the buyer
demonstrating a sufficient level of initial and continuing involvement, the period of cancellation with refund
has expired and receivables are deemed collectible. We determine the portion of revenues to recognize for
sales accounted for under the percentage of completion method based on judgments and estimates including
total project costs to complete. Additionally, we record reserves against these revenues based on expected
default levels. Changes in costs could lead to adjustments to the percentage of completion status of a project,
which may result in differences in the timing and amount of revenues recognized from the projects. We have
also entered into licensing agreements with third-party developers to offer consumers branded condomin-
iums or residences. Our fees from these agreements are generally based on the gross sales revenue of units
sold.
• Management and Franchise Revenues — Represents fees earned on hotels managed worldwide, usually
under long-term contracts, franchise fees received in connection with the franchise of our Sheraton, Westin,
Four Points by Sheraton, Le Méridien and Luxury Collection brand names, termination fees and the
amortization of deferred gains related to sold properties for which we have significant continuing
involvement, offset by payments by us under performance and other guarantees. Management fees are
comprised of a base fee, which is generally based on a percentage of gross revenues, and an incentive fee,
which is generally based on the property’s profitability. For any time during the year, when the provisions of
our management contracts allow receipt of incentive fees upon termination, incentive fees are recognized for
the fees due and earned as if the contract was terminated at that date, exclusive of any termination fees due or
payable. Therefore, during periods prior to year-end, the incentive fees recorded may not be indicative of the
eventual incentive fees that will be recognized at year-end as conditions and incentive hurdle calculations
may not be final. Franchise fees are generally based on a percentage of hotel room revenues. As with hotel
revenues discussed above, these revenue sources are affected by conditions impacting the travel and
hospitality industry as well as competition from other hotel management and franchise companies.
• Revenues from Managed and Franchised Properties — These revenues represent reimbursements of costs
incurred on behalf of managed hotel properties and franchisees. These costs relate primarily to payroll costs
at managed properties where we are the employer. Since the reimbursements are made based upon the costs
incurred with no added margin, these revenues and corresponding expenses have no effect on our operating
income and our net income.
Frequent Guest Program. SPG is our frequent guest incentive marketing program. SPG members earn
points based on spending at our properties, as incentives to first time buyers of VOIs and residences and through
participation in affiliated programs. Points can be redeemed at substantially all of our owned, leased, managed and
27

franchised properties as well as through other redemption opportunities with third parties, such as conversion to
airline miles. Properties are charged based on hotel guests’ qualifying expenditures. Revenue is recognized by
participating hotels and resorts when points are redeemed for hotel stays.
We, through the services of third-party actuarial analysts, determine the fair value of the future redemption
obligation based on statistical formulas which project the timing of future point redemption based on historical
experience, including an estimate of the “breakage” for points that will never be redeemed, and an estimate of the
points that will eventually be redeemed as well as the cost of reimbursing hotels and other third parties in respect of
other redemption opportunities for point redemptions. Actual expenditures for SPG may differ from the actuarially
determined liability. The total actuarially determined liability as of December 31, 2007 and 2006 is $536 million
and $409 million, respectively. A 10% reduction in the “breakage” of points would result in an estimated increase of
$71 million to the liability at December 31, 2007.
Long-Lived Assets. We evaluate the carrying value of our long-lived assets for impairment by comparing the
expected undiscounted future cash flows of the assets to the net book value of the assets if certain trigger events
occur. If the expected undiscounted future cash flows are less than the net book value of the assets, the excess of the
net book value over the estimated fair value is charged to current earnings. Fair value is based upon discounted cash
flows of the assets at a rate deemed reasonable for the type of asset and prevailing market conditions, appraisals and,
if appropriate, current estimated net sales proceeds from pending offers. We evaluate the carrying value of our long-
lived assets based on our plans, at the time, for such assets and such qualitative factors as future development in the
surrounding area, status of expected local competition and projected incremental income from renovations.
Changes to our plans, including a decision to dispose of or change the intended use of an asset, can have a
material impact on the carrying value of the asset.
Assets Held for Sale. We consider properties to be assets held for sale when management approves and
commits to a formal plan to actively market a property or group of properties for sale and a signed sales contract and
significant non-refundable deposit or contract break-up fee exist. Upon designation as an asset held for sale, we
record the carrying value of each property or group of properties at the lower of its carrying value which includes
allocable segment goodwill or its estimated fair value, less estimated costs to sell, and we stop recording
depreciation expense. Any gain realized in connection with the sale of a property for which we have significant
continuing involvement (such as through a long-term management agreement) is deferred and recognized over the
initial term of the related agreement. The operations of the properties held for sale prior to the sale date are recorded
in discontinued operations unless we will have continuing involvement (such as through a management or franchise
agreement) after the sale.
Legal Contingencies. We are subject to various legal proceedings and claims, the outcomes of which are
subject to significant uncertainty. Statement of Financial Accounting Standards (“SFAS”) No. 5, “Accounting for
Contingencies,” requires that an estimated loss from a loss contingency should be accrued by a charge to income if it
is probable that an asset has been impaired or a liability has been incurred and the amount of the loss can be
reasonably estimated. We evaluate, among other factors, the degree of probability of an unfavorable outcome and
the ability to make a reasonable estimate of the amount of loss. Changes in these factors could materially impact our
financial position or our results of operations.
Income Taxes. We provide for income taxes in accordance with SFAS No. 109, “Accounting for Income
Taxes,” and Financial Accounting Standards Board Interpretation No. 48, “Accounting for Uncertainty in Income
Taxes” (“FIN 48”). The objectives of accounting for income taxes are to recognize the amount of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that
have been recognized in an entity’s financial statements or tax returns. Judgment is required in assessing the future
tax consequences of events that have been recognized in our financial statements or tax returns.
28

RESULTS OF OPERATIONS
The following discussion presents an analysis of results of our operations for the years ended December 31,
2007, 2006 and 2005.
Year Ended December 31, 2007 Compared with Year Ended December 31, 2006
Continuing Operations
Revenues. Total revenues, including other revenues from managed and franchised properties, were
$6.153 billion, an increase of $174 million when compared to 2006 levels. Revenues reflected a 9.8% decrease
in revenues from our owned, leased and consolidated joint venture hotels to $2.429 billion for the year ended
December 31, 2007 when compared to $2.692 billion in the corresponding period of 2006, a 20.4% increase in
management fees, franchise fees and other income to $839 million for the year ended December 31, 2007 when
compared to $697 million in the corresponding period of 2006, a 2.0% increase in vacation ownership and
residential revenues to $1.025 billion for the year ended December 31, 2007 when compared to $1.005 billion in the
corresponding period of 2006, and an increase of $275 million in other revenues from managed and franchised
properties to $1.860 billion for the year ended December 31, 2007 when compared to $1.585 billion in the
corresponding period of 2006.
The $263 million decrease in revenues from owned, leased and consolidated joint venture hotels was primarily
due to lost revenues from 56 wholly owned hotels sold or closed in 2007 and 2006. The sold or closed hotels had
revenues of $121 million in the year ended December 31, 2007, compared to $570 million in the corresponding
period of 2006. The decrease in revenues from sold or closed hotels was partially offset by improved results at our
remaining owned, leased and consolidated joint venture hotels. Revenues at our Same-Store Owned Hotels (66
hotels for the year ended December 31, 2007 and 2006, excluding 56 hotels sold or closed and 8 hotels undergoing
significant repositionings or without comparable results in 2007 and 2006) increased 9.1%, or $173 million, to
$2.068 billion for the year ended December 31, 2007 when compared to $1.895 billion in the same period of 2006
due primarily to an increase in REVPAR. REVPAR at our Same-Store Owned Hotels increased 10.2% to $160.38
for the year ended December 31, 2007 when compared to the corresponding 2006 period. The increase in REVPAR
at these Same-Store Owned Hotels was attributed to a 9.2% increase in ADR to $222.03 for the year ended
December 31, 2007 compared to $203.31 for the corresponding 2006 period and due to a slight increase in
occupancy rates to 72.2% in the year ended December 31, 2007 when compared to 71.6% in the same period in
2006. REVPAR at Same-Store Owned Hotels in North America increased 7.3% for the year ended December 31,
2007 when compared to the same period of 2006. REVPAR growth was particularly strong at our owned hotels in
Kauai, Hawaii, New York, New York, San Francisco, California and New Orleans, Louisiana. REVPAR at our
international Same-Store Owned Hotels increased by 15.6% for the year ended December 31, 2007 when compared
to the same period of 2006. REVPAR growth was particularly strong at our owned hotels in Australia, Austria and
Italy. REVPAR for Same-Store Owned Hotels internationally increased 7.8% excluding the favorable effects of
foreign currency translation.
The increase in management fees, franchise fees and other income of $142 million was primarily a result of a
$123 million increase in management and franchise revenue to $687 million for the year ended December 31, 2007.
The increase was due to the strong growth in REVPAR at existing hotels under management and the net addition of
34 managed and franchised hotels to our system. The increase in management and franchise fees also resulted from
the full year impact of revenues from the 33 hotels sold to Host in the second quarter of 2006. Management fees
from these hotels in the year ended December 31, 2007 totaled $63 million, as compared to $44 million in the same
period of 2006. Revenues from the amortization of the deferred gain associated with the Host Transaction was
$49 million in the year ended December 31, 2007, as compared to $34 million in the corresponding period of 2006.
Other income increased $19 million and includes $18 million of income earned in the first quarter of 2007 from our
carried interest in a managed hotel that was sold in January 2007. These increases were partially offset by lost fees
from contracts that were terminated in the last 12 months.
The increase in vacation ownership and residential sales and services of $20 million was primarily due to the
revenue recognition from ongoing projects under construction in Hawaii which are being accounted for under
percentage of completion accounting. This net increase was offset, in part, by a decrease in residential sales as the
29

year ended December 31, 2007 included $3 million of revenues from the sale of residential units at the St. Regis in
New York compared to 2006 which included $94 million in revenues from the sale of residential units at the St.
Regis Museum Tower in San Francisco, which sold out in 2006, and at the St. Regis in New York, where only a few
residential units remained available for sale in 2007. Additionally, during the year ended December 31, 2006, we
recorded a gain of $17 million on the sale of $133 million of vacation ownership receivables. We did not sell any
such receivables in 2007 and therefore no gain was recognized.
Originated contract sales of VOI inventory, which represents vacation ownership revenues before adjustments
for percentage of completion accounting and rescission, decreased 3.8% in the year ended December 31, 2007 when
compared to the same period in 2006 as the mix of products sold during 2007 differed from that sold in 2006.
Additionally, sales and profits in Hawaii were negatively impacted by a decline in closing rates (the percentage of
tours that were converted to actual sales of vacation ownership intervals) in the second half of 2007 due to the
impending sell out of our project on Maui, partially offset by higher sales and profits at other timeshare projects.
Other revenues and expenses from managed and franchised properties increased to $1.860 billion from
$1.585 billion for the year ended December 31, 2007 and 2006, respectively, primarily due to an increase in the
number of our managed and franchised hotels. These revenues represent reimbursements of costs incurred on behalf
of managed hotel and vacation ownership properties and franchisees and relate primarily to payroll costs at
managed properties where we are the employer. Since the reimbursements are made based upon the costs incurred
with no added margin, these revenues and corresponding expenses have no effect on our operating income and our
net income.
Selling, General, Administrative and Other. Selling, general, administrative and other expenses, which
includes costs and expenses from our Bliss spas and from the sale of Bliss products, was $513 million in the year
ended December 31, 2007 when compared to $470 million in the same period in 2006. The increase was primarily
due to investments in our global development capability and costs associated with the launch of our new brands,
aloft and Element, and other brand initiatives.
Restructuring and Other Special Charges, Net. During the year ended December 31, 2007, we recorded
$53 million in net restructuring and other special charges primarily related to accelerated depreciation of property,
plant and equipment at the Sheraton Bal Harbour in Florida (“Bal Harbour”) and demolition costs associated with
our redevelopment of that hotel. Bal Harbour was closed for business on July 1, 2007, and the majority of its
employees were terminated. The hotel was demolished and we are in the process of building a St. Regis hotel along
with branded residences and fractional units.
During the year ended December 31, 2006, we recorded $20 million in net restructuring and other special
charges primarily related to transition costs associated with the acquisition of the Le Méridien brand and
management and franchise business (“the Le Méridien Acquisition”) in November 2005 and severance costs
primarily related to certain executives in connection with the continued corporate restructuring that began at the end
of 2005. These charges were offset, in part, by the reversal of accruals for a lease we assumed as part of the merger
with Sheraton Holding Corporation (“Sheraton Holding”) and its subsidiaries (formerly ITT Corporation) in 1998
as the lease matured at the end of 2006 and the accruals exceeded our maximum remaining obligation under the
lease.
Depreciation and Amortization. Depreciation expense was $280 million during the year ended Decem-
ber 31, 2007, consistent with the corresponding period of 2006. We sold or closed 45 wholly owned hotels during
2006. However, the majority of these hotels were classified as held for sale as of December 31, 2005 and
consequently, no depreciation was recognized for either the year ended December 31, 2007 or 2006 for those hotels.
Amortization expense was $26 million in the year ended December 31, 2007, consistent with the corre-
sponding period of 2006.
Operating Income. Operating income increased 2.3% or $19 million to $858 million for the year ended
December 31, 2007 when compared to $839 million in the same period in 2006, primarily due to the increase in
management fees, franchise fees and other income, partially offset by the restructuring and other special charges
and the decline in revenues from owned, leased and consolidated joint venture hotels discussed above.
30

Equity Earnings and Gains and Losses from Unconsolidated Ventures, Net. Equity earnings and gains and
losses from unconsolidated joint ventures increased to $66 million for the year ended December 31, 2007 from
$61 million in the same period of 2006 partially due to our share of gains on the sale of several hotels in an
unconsolidated joint venture during 2007.
Net Interest Expense. Net interest expense decreased to $147 million for the year ended December 31, 2007
as compared to $215 million in the same period of 2006, primarily due to $37 million of expenses recorded in the
first quarter of 2006 related to the early extinguishment of debt in connection with two transactions whereby we
defeased and were released from certain debt obligations that allowed us to sell certain hotels that previously served
as collateral for such debt. The decrease was also due to an increase in capitalized interest related to vacation
ownership projects under construction and a decrease in our overall interest rate. Our weighted average interest rate
was 6.52% at December 31, 2007 versus 6.97% at December 31, 2006.
Loss on Asset Dispositions and Impairments, Net. During 2007, we recorded a net loss of $44 million,
primarily related to a net loss of $58 million on the sale of eight wholly owned hotels, $20 million of which related
to four hotels that closed in the fourth quarter. These losses were offset in part by $20 million of net gains primarily
on the sale of assets in which we held a minority interest and a gain of $6 million as a result of insurance proceeds
received for property damage caused by storms at two owned hotels in prior years.
During 2006, we recorded a net loss of $3 million primarily related to several offsetting gains and losses,
including the sale of ten wholly-owned hotels, which were sold unencumbered by management agreements,
impairment charges related to various properties, including the Sheraton Cancun which was damaged by Hurricane
Wilma in 2005, and an adjustment to reduce the previously recorded gain on the sale of a hotel consummated in
2004 as certain contingencies associated with the sale became probable in 2006. These losses were primarily offset
by a gain of $29 million on the sale of our interests in two joint ventures and a $13 million gain as a result of
insurance proceeds received as reimbursement for property damage caused by Hurricane Wilma.
Income Tax Expense. We recorded income tax expense from continuing operations of $189 million for the
year ended December 31, 2007 compared to a benefit of $434 million in the corresponding period of 2006. The 2007
expense was favorably impacted by a $114 million benefit related to the reversal of capital loss valuation allowance,
a $28 million benefit associated with the Company’s election to claim foreign tax credits generated in 1999 and
2000 and a $35 million benefit associated with the utilization of capital losses. Offsetting these benefits were a
$97 million charge associated with the Host Transaction and a $13 million charge associated with interest accrued
for uncertain tax positions. The 2006 tax benefit includes a one-time benefit of approximately $524 million realized
in connection with the Host Transaction, a $59 million benefit due primarily to the completion of various state and
federal income tax audits of prior years, a $34 million benefit associated with Company’s election to claim foreign
tax credits in 2006 and 2005 and a $32 million benefit associated with the Trust prior to its acquisition by Host.
Discontinued Operations
For the year ended December 31, 2007, the loss on disposition represented a $1 million tax assessment
associated with the disposition of our gaming business in 1999. For the year ended December 31, 2006, the loss on
disposition represented a $2 million tax assessment associated with the disposition of our gaming business in 1999.
Cumulative Effect of Accounting Change, Net of Tax
On January 1, 2007, we adopted FIN 48 and recorded a benefit of $35 million to the beginning balance of
retained earnings.
On January 1, 2006, we adopted SFAS No. 152 and recorded a charge of $70 million, net of a $46 million tax
benefit, in cumulative effect of accounting change.
31

Year Ended December 31, 2006 Compared with Year Ended December 31, 2005
Continuing Operations
Revenues. Total revenues, including other revenues from managed and franchised properties, were
$5.979 billion, an increase of $2 million when compared to 2005 levels. Revenues reflected a 23.5% decrease
in revenues from our owned, leased and consolidated joint venture hotels to $2.692 billion for the year ended
December 31, 2006 when compared to $3.517 billion in the corresponding period of 2005, a 39.1% increase in
management fees, franchise fees and other income to $697 million for the year ended December 31, 2006 when
compared to $501 million in the corresponding period of 2005, a 13.0% increase in vacation ownership and
residential revenues to $1.005 billion for the year ended December 31, 2006 when compared to $889 million in the
corresponding period of 2005, and an increase of $515 million in other revenues from managed and franchised
properties to $1.585 billion for the year ended December 31, 2006 when compared to $1.070 billion in the
corresponding period of 2005.
The decrease in revenues from owned, leased and consolidated joint venture hotels of $825 million was
primarily due to lost revenues from 45 wholly owned hotels sold or closed during 2006. These hotels had revenues
of $384 million in the year ended December 31, 2006 compared to $1.299 billion in the corresponding period of
2005. The decrease in revenues from sold hotels was partially offset by business interruption insurance proceeds
received in 2006 of approximately $33 million, primarily related to Hurricane Katrina and Hurricane Wilma in
2005, and by improved results at our remaining owned, leased and consolidated joint venture hotels. Revenues at
our Same-Store Owned Hotels (74 hotels for the years ended December 31, 2006 and 2005, excluding 56 hotels sold
or closed and 11 hotels undergoing significant repositionings or without comparable results in 2006 and
2005) increased 8.8%, or $157 million, to $1.942 billion for the year ended December 31, 2006 when compared
to $1.785 billion in the same period of 2005 due primarily to an increase in REVPAR. REVPAR at our Same-Store
Owned Hotels increased 10.1% to $136.33 for the year ended December 31, 2006 when compared to the
corresponding 2005 period. The increase in REVPAR at these Same-Store Owned Hotels was attributed to
increases in occupancy rates to 71.2% in the year ended December 31, 2006 when compared to 69.9% in the same
period in 2005, and an 8.2% increase in ADR to $191.56 for the year ended December 31, 2006 compared to
$177.04 for the corresponding 2005 period. REVPAR at Same-Store Owned Hotels in North America increased
10.2% for the year ended December 31, 2006 when compared to the same period of 2005. REVPAR growth was
particularly strong at our owned hotels in Chicago, Illinois, Boston, Massachusetts, and Seattle, Washington.
REVPAR at our international Same-Store Owned Hotels increased by 10.0% for the year ended December 31, 2006
when compared to the same period of 2005. REVPAR for Same-Store Owned Hotels internationally increased 9.5%
excluding the favorable effects of foreign currency translation.
The increase in management fees, franchise fees and other income of $196 million was primarily a result of a
$202 million increase in management and franchise revenue to $564 million for the year ended December 31, 2006
due to the addition of new managed and franchised hotels. The increase included approximately $44 million of
management and franchise fees from the 33 hotels sold to Host, as well as approximately $34 million of revenues
from the amortization of the deferred gain associated with the Host Transaction. The increase was also due to
$58 million of management and franchise fees from the Le Méridien hotels in 2006 as compared to $5 million in
2005. We acquired the Le Méridien brand and related management and franchise business in November 2005.
Additionally, improved operating results at the underlying managed and franchised hotels, increased revenue from
our Bliss spas and from the sale of Bliss products and income associated with the settlement of a dispute related to
an agreement to manage a hotel contributed to the increase in 2006. These increases were partially offset by lost fees
from contracts that were terminated in the last 12 months and by lost income on the Le Méridien debt participation
which was used to fund a portion of the Le Méridien Acquisition.
The increase in vacation ownership and residential sales and services of $116 million was primarily due to
increased sales at ongoing projects in Hawaii and Orlando as well as sales of $41 million at a new project in New
York City. In addition, we recorded a gain of $17 million on the sale of approximately $133 million of vacation
ownership receivables in 2006. The gain on the sale of VOI notes receivable in 2005, prior to our adoption of
SFAS No. 152, “Accounting for Real Estate Time-Sharing Transactions,” of $25 million was reflected in a separate
line in the consolidated statement of income, below operating income. Contract sales of VOI inventory, which
32

represents vacation ownership revenues before adjustments for percentage of completion accounting and rescission,
increased 19.2% in the year ended December 31, 2006 when compared to the same period in 2005. These increases
were offset by a decrease in residential sales associated with the residences at the St. Regis Museum Tower in
San Francisco which sold out in the first half of 2006.
Other revenues and expenses from managed and franchised properties increased to $1.585 billion from
$1.070 billion for the year ended December 31, 2006 and 2005, respectively. These revenues represent reim-
bursements of costs incurred on behalf of managed hotel properties and franchisees and relate primarily to payroll
costs at managed properties where we are the employer. Since the reimbursements were made based upon the costs
incurred with no added margin, these revenues and corresponding expenses had no effect on our operating income
and our net income.
Selling, General, Administrative and Other. Selling, general, administrative and other expenses, which
includes costs and expenses from our Bliss spas and from the sale of Bliss products, was $470 million in the year
ended December 31, 2006 when compared to $370 million in 2005. The increase was primarily due to the impact of
stock-based compensation, including stock option expense of $47 million. The remaining increase includes
investments in our global development capability and costs associated with the launch of our new brands, aloft and
Element, as well as the addition of the Le Méridien business.
Operating Income. Our total operating income was $839 million in the year ended December 31, 2006
compared to $822 million in 2005. Excluding depreciation and amortization of $306 million and $407 million for
the years ended December 31, 2006 and 2005, respectively, operating income decreased 6.8% or $84 million to
$1.145 billion for the year ended December 31, 2006 when compared to $1.229 billion in the same period in 2005,
primarily due to the lost income from the 45 wholly owned hotels sold or closed during 2006 and approximately
$47 million of stock option expense recorded in 2006 as a result of the implementation of SFAS No. 123(R), “Share-
Based Payment, a revision of the FASB Statement No. 123, Accounting for Stock-Based Compensation,” on
January 1, 2006. These items were offset, in part, by the increase in management fees, franchise fees and other
income discussed above.
Restructuring and Other Special Charges, Net. During the year ended December 31, 2006, we recorded
$20 million in net restructuring and other special charges primarily related to transition costs associated with the Le
Méridien Acquisition in November 2005 and severance costs primarily related to certain executives in connection
with the continued corporate restructuring that began at the end of 2005. These charges were offset, in part, by the
reversal of accruals for a lease we assumed as part of the merger with Sheraton Holding and its subsidiaries
(formerly ITT Corporation) in 1998 as the lease matured at the end of 2006 and the accruals exceeded our maximum
remaining obligation under the lease.
During the year ended December 31, 2005, we recorded $13 million in restructuring and other special charges
primarily related to severance costs in connection with our corporate restructuring as a result of our planned
disposition of significant real estate assets and transition costs associated with the Le Méridien Acquisition.
Depreciation and Amortization. Depreciation expense decreased $107 million to $280 million during the
year ended December 31, 2006 compared to $387 million in the corresponding period of 2005 primarily because,
beginning in November 2005, we ceased depreciation on the hotels included in the Host Transaction, partially offset
by additional depreciation expense resulting from capital expenditures at our owned, leased and consolidated joint
venture hotels in the past 12 months. Amortization expense increased to $26 million in the year ended December 31,
2006 compared to $20 million in the corresponding period of 2005 primarily due to amortization of intangible assets
that we acquired in connection with the Le Méridien Acquisition in November 2005.
Gain on Sale of VOI Notes Receivable. Gain on sale of VOI receivable was $25 million in 2005, primarily
due to the sale of approximately $221 million of vacation ownership receivables during the year ended Decem-
ber 31, 2005. In 2006 we recorded a $17 million gain on sale of VOI notes receivable related to the sale of
approximately $133 million of vacation ownership receivables during 2006. However, as discussed above, the gain
is now included in vacation ownership and residential sales and services revenue.
33

Equity Earnings and Gains and Losses from Unconsolidated Ventures, Net. Equity earnings and gains and
losses from unconsolidated joint ventures decreased to $61 million for the year ended December 31, 2006 from
$64 million in the same period of 2005.
Net Interest Expense. Net interest expense decreased to $215 million for the year ended December 31, 2006
as compared to $239 million in the same period of 2005, primarily due to interest savings from the reduction of our
debt with proceeds from the asset sales discussed earlier offset in part by increased interest rates. In addition, we
recorded interest income in 2006 of approximately $13 million in association with the full payment of principal and
interest on a loan receivable which was previously reserved. The decrease was partially offset by $37 million of
expenses related to the early extinguishment of debt in connection with two transactions completed in the first
quarter of 2006 whereby we defeased and were released from certain debt obligations that allowed us to sell certain
hotels that previously served as collateral for such debt. These transactions also resulted in the release of other
owned hotels as collateral, providing us with flexibility to sell or reposition those hotels. Our weighted average
interest rate was 6.97% at December 31, 2006 versus 6.27% at December 31, 2005.
Loss on Asset Dispositions and Impairments, Net. During 2006, we recorded a net loss of $3 million
primarily related to several offsetting gains and losses, including the sale of ten wholly-owned hotels, which were
sold unencumbered by management agreements, impairment charges related to various properties, including the
Sheraton Cancun which was damaged by Hurricane Wilma in 2005, and an adjustment to reduce the previously
recorded gain on the sale of a hotel consummated in 2004 as certain contingencies associated with the sale became
probable in 2006. These losses were primarily offset by a gain of $29 million on the sale of our interests in two joint
ventures and a $13 million gain as a result of insurance proceeds received as reimbursement for property damage
caused by Hurricane Wilma.
During 2005, we recorded a net loss of $30 million primarily related to the impairment of a hotel and
impairment charges associated with the Sheraton Cancun in Cancun, Mexico which was demolished in order to
build vacation ownership units. These losses were offset by net gains recorded on the sale of several hotels in 2005.
Income Tax Expense. We recorded an income tax benefit from continuing operations of $434 million for the
year ended December 31, 2006 compared to an expense of $219 million in the corresponding period of 2005. The
2006 tax benefit includes a one-time benefit of approximately $524 million realized in connection with the Host
Transaction, a $59 million benefit due primarily to the completion of various state and federal income tax audits of
prior years, a $34 million benefit associated with Company’s election to claim foreign tax credits in 2006 and 2005
and a $32 million benefit associated with the Trust prior to its acquisition by Host. The income tax expense for the
year ended December 31, 2005 included the recognition of $47 million of tax expense as a result of the adoption of a
plan to repatriate foreign earnings in accordance with the American Jobs Creation Act and the recording of an
additional provision of $52 million related to our 1998 disposition of ITT World Directories. The income tax
expense for the year ended December 31, 2005 also included a net tax credit of $15 million related to the deferred
gain on the sale of the Hotel Danieli in Venice, Italy, an $8 million benefit related to tax refunds for tax years prior to
the 1995 split-up of ITT Corporation, and a $64 million benefit associated with the Trust. Our effective income tax
rate is determined by the level and composition of pre-tax income subject to varying foreign, state and local taxes.
Discontinued Operations
For the year ended December 31, 2006, the loss on disposition represented a $2 million tax assessment
associated with the disposition of our gaming business in 1999. For the year ended December 31, 2005, the loss
from operations represented a $2 million sales and use tax assessment related to periods prior to our disposal of our
gaming business, offset by a $1 million income tax benefit related to this business.
LIQUIDITY AND CAPITAL RESOURCES
Cash From Operating Activities
Cash flow from operating activities is generated primarily from management and franchise revenues,
operating income from our owned hotels and sales of VOIs and residential units. It is the principal source of
34

cash used to fund our operating expenses, interest payments on debt, capital expenditures, dividend payments and
share repurchases. Our day-to-day operations are financed through a net working capital deficit, a practice that is
common in our industry. The ratio of our current assets to current liabilities was 0.87 and 0.74 as of December 31,
2007 and 2006, respectively. Consistent with industry practice, we sweep the majority of the cash at our hotels on a
daily basis and fund payables as needed by drawing down on our existing revolving credit facility. We believe that
our existing borrowing availability together with capacity for additional borrowings and cash from operations will
be adequate to meet all funding requirements for our operating expenses, principal and interest payments on debt,
capital expenditures, dividend payments and share repurchases in the foreseeable future.
State and local regulations governing sales of VOIs and residential properties allow the purchaser of such a
VOI or property to rescind the sale subsequent to its completion for a pre-specified number of days. In addition, cash
payments received from buyers of products under construction are held in escrow during the period prior to
obtaining a certificate of occupancy. These payments and the deposits collected from sales during the rescission
period are the primary components of our restricted cash balances in our consolidated balance sheets. At
December 31, 2007 and 2006, we had short-term restricted cash balances of $196 million and $329 million,
respectively.
Cash From Investing Activities
In limited cases, we have made loans to owners of or partners in hotel or resort ventures for which we have a
management or franchise agreement. Loans outstanding under this program, excluding the Westin Boston, Seaport
Hotel discussed below, totaled $34 million at December 31, 2007. We evaluate these loans for impairment, and at
December 31, 2007, believe these loans are collectible. Unfunded loan commitments aggregating $69 million were
outstanding at December 31, 2007, of which $1 million are expected to be funded in 2008 and $51 million are
expected to be funded in total. These loans typically are secured by pledges of project ownership interests and/or
mortgages on the projects. We also have $100 million of equity and other potential contributions associated with
managed or joint venture properties, $28 million of which is expected to be funded in 2008.
During 2004, we entered into a long-term management contract to manage the Westin Boston, Seaport Hotel in
Boston, Massachusetts, which opened in June 2006. In connection with this project, we agreed to provide up to
$28 million in mezzanine loans and other investments (all of which was funded). In January 2007, this hotel was
sold and the senior debt was repaid in full. In connection with this sale, the $28 million in mezzanine loans and other
investments, together with accrued interest, were repaid in full. In accordance with the management agreement, the
sale of the hotel also resulted in the payment of a fee to us of approximately $18 million, which is included in
management fees, franchise fees and other income in the consolidated statement of income for the year ended
December 31, 2007. We continue to manage this hotel subject to the pre-existing management agreement.
Surety bonds issued on our behalf at December 31, 2007 totaled $99 million, 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, we may provide performance guarantees to third-party owners. Most of these
performance guarantees allow us to terminate the contract rather than fund shortfalls if certain performance levels
are not met. In limited cases, we are obliged to fund shortfalls in performance levels through the issuance of loans.
At December 31, 2007, excluding the Le Méridien management agreement mentioned below, we had six
management contracts with performance guarantees with possible cash outlays of up to $74 million, $50 million
of which, if required, would be funded over several years and would be largely offset by management fees received
under these contracts. Many of the performance tests are multi-year tests, are tied to the results of a competitive set
of hotels, and have exclusions for force majeure and acts of war and terrorism. We do not anticipate any significant
funding under these performance guarantees in 2008. In connection with the Le Méridien Acquisition, discussed
below, we assumed the obligation to guarantee certain performance levels at one Le Méridien managed hotel for the
periods 2007 through 2013. This guarantee is uncapped. However, we have estimated the exposure under this
guarantee and do not anticipate that payments made under the guarantee will be significant in any single year. The
estimated present fair value of this guarantee of $7 million and $6 million is reflected in other liabilities in the
35

accompanying consolidated balance sheet at both December 31, 2007 and 2006, respectively. We do not anticipate
losing a significant number of management or franchise contracts in 2008.
In November 2005, we completed the Le Méridien Acquisition for a purchase price of approximately
$252 million. The purchase price was funded from available cash and the return of funds from our original purchase
of an interest in Le Méridien debt in late 2003. In connection with the Le Méridien Acquisition, we were
indemnified for certain of Le Méridien’s historical liabilities by the entity that bought Le Méridien’s owned and
leased hotel portfolio. The indemnity is limited to the financial resources of that entity. However, at this time, we
believe that it is unlikely that we will have to fund any of these liabilities.
In connection with the sale of 33 hotels to Host in 2006, we agreed to indemnify Host for certain liabilities,
including operations and tax liabilities. At this time, we believe that we will not have to make any material payments
under such indemnities.
During the second quarter of 2007, we purchased the Sheraton Steamboat Resort & Conference Center for
approximately $58 million in cash from a joint venture in which we held a 10% interest.
During the first quarter of 2007, we entered into a joint venture that acquired the Sheraton Grande Tokyo Bay
Hotel. This hotel has been managed by us since its opening and will continue to be operated by us under a long-term
management agreement with the joint venture. We invested approximately $19 million in this venture in exchange
for a 25.1% ownership interest.
In December 2006, we completed a transaction to, among other things, purchase real assets from Club Regina
Resorts (“CRR”) in Mexico. These assets included land and fixed assets adjacent to The Westin Resort & Spa in Los
Cabos, Mexico and terminated CRR’s rights to solicit guests at three Westin properties in Mexico. In addition to the
purchase of these assets, the transaction included the settlement of all pending and threatened legal claims between
the parties and the exchange of a new issue of CRR notes with a lower principal amount for notes we previously held
from an affiliate of CRR. Total consideration of approximately $41 million was paid by us for these items. The
portion related to the legal settlement was expensed.
In May 2006, we partnered with Chef Jean-Georges Vongerichten and a private equity firm to create a joint
venture that will develop, own, operate, manage and license world-class restaurant concepts created by Jean-
Georges Vongerichten, including operating the existing Spice Market restaurant located in New York City. The
concepts owned by the venture will be available for Starwood’s upper-upscale and luxury hotel brands including W,
Westin, Le Méridien and St. Regis. Additionally, the venture may own and operate freestanding restaurants outside
of Starwood’s hotels. We invested approximately $22 million in this venture for a 32.7% equity interest.
We intend to finance the acquisition of additional hotel properties (including equity investments), hotel
renovations, VOI and residential construction, capital improvements, technology spend and other core and ancillary
business acquisitions and investments and provide for general corporate purposes (including dividend payments and
share repurchases) through our credit facilities described below, through the net proceeds from dispositions, through
the assumption of debt, through the issuance of additional equity or debt securities and from cash generated from
operations.
We periodically review our business to identify properties or other assets that we believe either are non-core
(including hotels where the return on invested capital is not adequate), no longer complement our business, are in
markets which may not benefit us as much as other markets during an economic recovery or could be sold at
significant premiums. We are focused on enhancing real estate returns and monetizing investments. In the second
quarter of 2006, in connection with the Host Transaction, we completed the sale of 33 hotels and the stock of certain
controlled subsidiaries to Host for consideration valued at $4.1 billion which consisted of approximately $2.8 billion
in the form of Host common stock and cash paid directly to our shareholders and $1.3 billion of consideration paid
to Starwood, including $1.2 billion in cash, $77 million in debt assumption and $61 million in Host common stock.
During the year ended December 31, 2006, we sold ten additional owned hotels and interests in nine unconsolidated
joint ventures for gross proceeds of approximately $588 million in cash. During the year ended December 31, 2007,
we sold eight additional owned hotels and interests in four unconsolidated joint ventures for gross proceeds of
approximately $209 million in cash. There can be no assurance, however, that we will be able to complete future
dispositions on commercially reasonable terms or at all.
36

Cash Used for Financing Activities
The following is a summary of our debt portfolio (including capital leases) as of December 31, 2007:
Amount
Outstanding at Interest Rate at
December 31, December 31, Average
2007(a) 2007 Maturity
(Dollars in millions) (In years)
Floating Rate Debt
Bank Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,787 5.47% 2.5
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 7.30% 2.0
Interest Rate Swaps . . . . . . . . . . . . . . . . . . . . . . . . . 300 9.14%
Total/Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,125 6.02% 2.5
Fixed Rate Debt
$1,641(b)
Senior Notes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.34% 5.5
Mortgages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127 7.55% 10.4
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 9.11% 22.6
Interest Rate Swaps . . . . . . . . . . . . . . . . . . . . . . . . . (300) 7.88%
Total/Average . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,470 7.25% 5.9
Total Debt
Total Debt and Average Terms . . . . . . . . . . . . . . . . . $3,595 6.52% 4.2
(a) Excludes approximately $572 million of our share of unconsolidated joint venture debt, all of which is non-
recourse.
(b) Includes approximately $(6) million at December 31, 2007 of fair value adjustments related to existing fixed-
to-floating interest rate swaps for the Senior Notes.
Fiscal 2007 Developments. On September 13, 2007, we completed a public offering of $400 million
6.25% Senior Notes due February 15, 2013 (“6.25% Notes”). We received net proceeds of approximately
$396 million, which were used to reduce outstanding borrowings under our Revolving Credit Facility. Interest
on the 6.25% Notes is payable semi-annually on February 15 and August 15. At any time, we may redeem all or a
portion of the 6.25% Notes at a price equal to the greater of (1) 100% of the aggregate principal plus accrued and
unpaid interest and (2) the sum of the present values of the remaining scheduled payments of principal and interest
discounted at the redemption rate on a semi-annual basis at the Treasury rate plus 35 basis points, plus accrued and
unpaid interest. The 6.25% Notes rank parri passu with all other unsecured and unsubordinated obligations. Upon a
change in control of Starwood, the holders of the 6.25% Notes will have the right to require repurchase of the
6.25% Notes at 101% of the principal amount plus accrued and unpaid interest. Certain covenants in the
6.25% Notes include restrictions on liens, sale and leaseback transactions, mergers, consolidations and sale of
assets.
On June 29, 2007, we entered into a credit agreement that provides for two term loans of $500 million each.
One term loan matures on June 29, 2009, and the other matures on June 29, 2010. Each loan has a current interest
rate of LIBOR + 0.50%. Proceeds from these loans were used to repay balances under our Revolving Credit Facility
(established under the 2006 Facility referenced below), which remains in effect. We may prepay the outstanding
aggregate principal amount, in whole or in part, at any time. The covenants in this credit agreement are the same as
those in our existing Revolving Credit Facility.
On April 27, 2007 we amended our Revolving Credit Facility to both reduce the interest rate (from the original
rate of LIBOR + 0.475% to LIBOR + 0.400%) and increase commitments by $450 million, to a total of
$2.250 billion. Of this commitment, $375 million will expire on April 27, 2008, and the remaining $1.875 billion
37

will expire in February 2011. On May 1, 2007 we borrowed on our Revolving Credit Facility to finance the
redemption of $700 million of the 7.375% Senior Notes.
Fiscal 2006 Developments. On March 15, 2006, we completed the redemption of the remaining 25,000
outstanding Class B EPS for approximately $1 million in cash. On April 10, 2006, in connection with the Host
Transaction, we redeemed all of the Class A EPS and Realty Partnership units for approximately $34 million in
cash. In the year ended December 31, 2006, we redeemed approximately 926,000 SLC Operating Limited
Partnership units for approximately $56 million in cash.
In February 2006, we closed a five-year $1.5 billion Senior Credit Facility (“2006 Facility”). The 2006 Facility
replaced the previous $1.45 billion Revolving and Term Loan Credit Agreement (“Pre-2006 Facility”) which would
have matured in October 2006. Approximately $240 million of the Term Loan balance under the Pre-2006 Facility
was paid down with cash and the remainder was refinanced with the 2006 Facility. The 2006 Facility is expected to
be used for general corporate purposes. The 2006 Facility matures February 10, 2011 and had an original interest
rate of LIBOR + 0.475%. We currently expect to be in compliance with all covenants of the 2006 Facility.
During March 2006, we gave notice to receive additional commitments totaling $300 million under our 2006
Facility (“2006 Facility Add-On”) on a short-term basis to facilitate the close of the Host Transaction and for
general working capital purposes. In June 2006, we amended the 2006 Facility such that the 2006 Facility Add-On
would not mature until June 30, 2007.
In the first quarter of 2006 in two separate transactions we defeased approximately $510 million of debt
secured in part by several hotels that were part of the Host Transaction. In one transaction, in order to accomplish
this, we purchased Treasury securities sufficient to make the monthly debt service payments and the balloon
payment due under the loan agreement. The Treasury securities were then substituted for the real estate and hotels
that originally served as collateral for the loan. As part of the defeasance, the Treasury securities and the debt were
transferred to a third party successor borrower that is responsible for all remaining obligations under this debt. In the
second transaction, we deposited Treasury securities in an escrow account to cover the debt service payments. As
such, neither debt is reflected on our consolidated balance sheet as of December 31, 2006. In connection with the
defeasance, we incurred early extinguishment of debt costs of approximately $37 million which was recorded in
interest expense in our consolidated statement of income.
In the second quarter of 2006, we gave notice to redeem the $360 million of 3.5% convertible notes, originally
issued in May 2003. Under the terms of the convertible indenture, prior to the redemption date of June 5, 2006, the
note holders had the right to convert their notes into Shares at the stated conversion rate. Under the terms of the
indenture, we settled the conversions by paying the principal portion of the notes in cash and the excess amount by
issuing approximately 3 million Corporation Shares. The notes that were not converted prior to the redemption date
were redeemed at the price of par plus accrued interest, effective June 5, 2006.
In connection with the Host Transaction, a total of $600 million of notes issued by Sheraton Holding were
assumed by the Corporation. On June 2, 2006, we redeemed $150 million in principal amount of these notes which
had a coupon of 7.75% and a maturity in 2025. The stated redemption price for these notes was 103.186%. We
borrowed under the 2006 Facility and used existing unrestricted cash balances to fund the cash portions of these
transactions.
Other. Based upon the current level of operations, management believes that our cash flow from operations
and asset sales, together with our significant cash balances (approximately $366 million at December 31, 2007,
including $204 million of short-term and long-term restricted cash), available borrowings under the Revolving
Credit Facility (approximately $1.330 billion at December 31, 2007), available borrowing capacity from inter-
national revolving lines of credit (approximately $37 million at December 31, 2007), and capacity for additional
borrowings will be adequate to meet anticipated requirements for scheduled maturities, dividends, working capital,
capital expenditures, marketing and advertising program expenditures, other discretionary investments, interest and
scheduled principal payments and share repurchases for the foreseeable future. However, there can be no assurance
that we will be able to refinance our indebtedness as it becomes due and, if refinanced, on favorable terms. In
addition, there can be no assurance that our continuing business will generate cash flow at or above historical levels,
38

that currently anticipated results will be achieved or that we will be able to complete dispositions on commercially
reasonable terms or at all.
We maintain non-U.S.-dollar-denominated debt, which provides a hedge of our international net assets and
operations but also exposes our debt balance to fluctuations in foreign currency exchange rates. During the year
ended December 31, 2007, the effect of changes in foreign currency exchange rates was a net increase in debt of
approximately $5 million. Our debt balance is also affected by changes in interest rates as a result of our interest rate
swap agreements under which we pay floating rates and receive fixed rates of interest (the “Fair Value Swaps”). The
fair market value of the Fair Value Swaps is recorded as an asset or liability and as the Fair Value Swaps are deemed
to be effective, an adjustment is recorded against the corresponding debt. At December 31, 2007, our debt included a
decrease of approximately $6 million related to the fair market value of current Fair Value Swap liabilities. At
December 31, 2006 our debt included a decrease of approximately $17 million related to the unamortized gains on
terminated Fair Value Swaps and the fair market value of current Fair Value Swap liabilities.
If we are unable to generate sufficient cash flow from operations in the future to service our debt, we may be
required to sell additional assets, reduce capital expenditures, refinance all or a portion of our existing debt or obtain
additional financing. Our ability to make scheduled principal payments, to pay interest on or to refinance our
indebtedness depends on our future performance and financial results, which, to a certain extent, are subject to
general conditions in or affecting the hotel and vacation ownership industries and to general economic, political,
financial, competitive, legislative and regulatory factors beyond our control.
We had the following contractual obligations(1) outstanding as of December 31, 2007 (in millions):
Due in Less Due in Due in Due After
Total Than 1 Year 1-3 Years 3-5 Years 5 Years
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,593 $5 $1,048 $1,590 $ 950
Capital lease obligations(2) . . . . . . . . . . . . 2 — — — 2
Operating lease obligations . . . . . . . . . . . . 1,144 82 160 136 766
Unconditional purchase obligations(3) . . . . 114 43 49 19 3
Other long-term obligations . . . . . . . . . . . 4 — — 4 —
Total contractual obligations . . . . . . . . . . . $4,857 $130 $1,257 $1,749 $1,721
(1) The table below does not reflect unrecognized tax benefits of $469 million, the timing of which is uncertain.
Refer to Note 13 of the Consolidated Financial Statements for additional discussion on this matter.
(2) Excludes sublease income of $2 million.
(3) Included in these balances are commitments that may be satisfied by our managed and franchised properties.
We had the following commercial commitments outstanding as of December 31, 2007 (in millions):
Amount of Commitment Expiration Per Period
Less Than After
Total 1 Year 1-3 Years 3-5 Years 5 Years
Standby letters of credit . . . . . . . . . . . . . . . . . . $133 $133 $— $— $—
On July 26, 2006, Standard & Poor’s upgraded our rating to BBB- from BB+ and revised their outlook from
positive to stable.
On August 28, 2006, Moody’s Investors Service upgraded our rating to Baa3 from Bal and revised their
outlook from positive to stable.
On October 24, 2006, Fitch’s Investors Service upgraded our rating to BBB- from BB+ and revised their
outlook from positive to stable.
A distribution of $0.90 per Share was paid in January 2008 to shareholders of record as of December 31, 2007.
In connection with the Host Transaction, on February 17, 2006, the Trust declared a distribution of $0.21 per Share
to shareholders of record on February 28, 2006, which was paid on March 10, 2006. In addition, on March 15, 2006,
the Trust declared a distribution of $0.21 per Share to shareholders of record on March 27, 2006, which was paid on
39

April 7, 2006. In December 2006 the Corporation declared a dividend of $0.42 per Corporation Share to
shareholders of record on December 31, 2006, which was paid in January 2007.
Stock Sales and Repurchases
Share Repurchases. In April of 2007, the Board of Directors authorized an additional $1 billion in Share
repurchases under our existing Corporate Share Repurchase Authorization (the “Share Repurchase Authoriza-
tion”). In November 2007, the Board of Directors of Starwood further authorized the repurchase of up to an
additional $1 billion of Corporation Shares under the Share Repurchase Authorization. During the year ended
December 31, 2007, we repurchased 29.6 million Corporation Shares at a total cost of $1.8 billion. As of
December 31, 2007, approximately $593 million remains available under the Share Repurchase Authorization.
On March 15, 2006 we completed the redemption of the remaining 25,000 shares of Class B EPS for
approximately $1 million in cash. In April 2006, in connection with the Host Transaction, we redeemed all of the
Class A EPS (approximately 562,000 shares) and Realty Partnership units (approximately 40,000 units) for
approximately $34 million in cash. SLC Operating Limited Partnership units are convertible into Shares at the unit
holder’s option, provided that we have the option to settle conversion requests in cash or Shares. In the year ended
December 31, 2007, there were no redemptions. At December 31, 2007, we had outstanding approximately
191 million Corporation Shares and 179,000 SLC Operating Limited Partnership units.
Off-Balance Sheet Arrangements
Our off-balance sheet arrangements include retained interests in securitizations of $40 million, letters of credit
of $133 million, unconditional purchase obligations of $114 million and surety bonds of $99 million. These items
are more fully discussed earlier in this section and in the Notes to Financial Statements and Item 8 of Part II of this
report.
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.
Interest rate swap agreements are the primary instruments used to manage interest rate risk. At December 31,
2007, we had two outstanding long-term interest rate swap agreements under which we pay variable interest rates
and receive fixed interest rates. At December 31, 2007, we had no interest rate swap agreements under which we pay
a fixed rate and receive a variable rate.
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.
See Note 21. Derivative Financial Instruments in the notes to financial statements filed as part of this Annual
Report and incorporated herein by reference for further description of derivative financial instruments.
40

The following table sets forth the scheduled maturities and the total fair value of our debt portfolio:
Total Fair
Expected Maturity or Transaction Date Total at Value at
At December 31, December 31, December 31,
2008 2009 2010 2011 2012 Thereafter 2007 2007
Liabilities
Fixed rate (in millions) . . . $4 $5 $ 5 $ 6 $798 $952 $1,770 $1,848
Average interest rate . . . . . 7.36%
Floating rate (in
millions) . . . . . . . . . . . . $1 $538 $500 $786 $— $— $1,825 $1,825
Average interest rate . . . . . 5.50%
Interest Rate Swaps
Fixed to variable
(in millions) . . . . . . . . . . . $— $— $— $— $300 $— $ 300
Average pay rate . . . . . . 9.14%
Average receive rate . . . . 7.88%
Item 8. Financial Statements and Supplementary Data.
The financial statements and supplementary data required by this Item are included in Item 15 of this Annual
Report and are incorporated herein by reference
Item 9. Changes In and Disagreements with Accountants on Accounting and Financial Disclosure.
Not applicable.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
The Company’s management conducted an evaluation, under the supervision and with the participation of the
Company’s Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of
the Company’s disclosure controls and procedures as of December 31, 2007. Based on this evaluation, the Chief
Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures are
effective in alerting them in a timely manner to material information required to be included in the Company’s SEC
reports.
Management’s Report on Internal Control over Financial Reporting
Management of Starwood Hotels & Resorts Worldwide Inc. and its subsidiaries is responsible for establishing
and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act
Rule 13a-15(f) or 15(d)-15(f). Those rules define internal control over financial reporting as a process designed to
provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial
statements for external purposes in accordance with generally accepted accounting principles (“GAAP”) and
includes those policies and procedures that:
• Pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions
and dispositions of the assets of the Company;
• Provide reasonable assurance that the transactions are recorded as necessary to permit the preparation of
financial statements in accordance with GAAP, and the receipts and expenditures of the Company are being
made only in accordance with authorizations of management and directors of the Company; and
• Provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or
disposition of the Company’s assets that could have a material effect on the financial statements.
41

Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that controls
may become inadequate because of changes in conditions, or that the degree of compliance with policies or
procedures may deteriorate.
The Company’s management assessed the effectiveness of the Company’s internal controls over financial
reporting as of December 31, 2007. In making this assessment, the Company’s management used the criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission (COSO). Based on our assessment and those criteria, management believes that, as of
December 31, 2007, the Company’s internal control over financial reporting is effective.
Management has engaged Ernst & Young LLP, the independent registered public accounting firm that audited
the financial statements included in this Annual Report on Form 10-K, to attest to the Company’s internal control
over financial reporting. Its report is included herein.
42

Report of Independent Registered Public Accounting Firm
The Board of Directors and Shareholders of Starwood Hotels & Resorts Worldwide, Inc.
We have audited Starwood Hotels & Resorts Worldwide, Inc.’s (the “Company”) internal control over financial
reporting as of December 31, 2007, based on criteria established in Internal Control — Integrated Framework
issued by the Committee of Sponsoring Organizations of the Treadway Commission (the COSO criteria). The
Company’s management is responsible for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting included in the accompanying
Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion
on the Company’s internal control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether effective internal control over financial reporting was maintained in all material respects. Our audit
included obtaining an understanding of internal control over financial reporting, assessing the risk that a material
weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the
assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe
that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s
assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, the Company maintained, in all material respects, effective internal control over financial
reporting as of December 31, 2007, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of the Company as of December 31, 2007 and 2006, and the related
consolidated statements of income, comprehensive income, equity, and cash flows of the Company for each of the
three years in the period ended December 31, 2007 and our report dated February 22, 2008, expressed an
unqualified opinion thereon.
/s/ Ernst & Young LLP
New York, New York
February 22, 2008
43

Changes in Internal Controls
There has not been any change in our internal control over financial reporting identified in connection with the
evaluation that occurred during the year ended December 31, 2007 that has materially affected, or is reasonably
likely to materially affect, those controls.
Item 10. Directors, Executive Officers and Corporate Governance.
The Board of Directors of the Company is currently comprised of 10 members, each of whom is elected for a
one-year term. The following table sets forth, for each of the members of the Board of Directors as of the date of this
Annual Report, certain information regarding such Director.
Name (Age) Principal Occupation and Business Experience Service Period
Frits van Paasschen (46) Chief Executive Officer of the Company since CEO and Director since
September 2007. From March 2005 until September September 2007
2007, he served as President and CEO of Molson
Coors Brewing Company’s largest division, Coors
Brewing Company. Prior to joining Coors, from
April 2004 until March 2005, Mr. van Paasschen
worked independently through FPaasschen
Consulting and Mercator Investments, evaluating,
proposing, and negotiating private equity
transactions. Prior thereto, Mr. van Paasschen spent
seven years at Nike, Inc, most recently as Corporate
Vice President/General Manager, Europe, Middle
East and Africa from 2000 to 2004.
Adam M. Aron (53) Chairman and Chief Executive Officer of World Director since August
Leisure Partners, Inc., a leisure related consultancy, 2006
since 2006 From 1996 through 2006, Mr. Aron
served as Chairman and Chief Executive Officer of
Vail Resorts, Inc. (an owner and operator of ski
resorts and hotels). Mr. Aron is also a director of
FTD Group, Inc., Rewards Network, Inc. and
Marathon Acquisition Corp.
Director and Trustee(1)
Charlene Barshefsky (57) Senior International Partner at the law firm of
Wilmer Cutler Pickering Hale & Dorr LLP, since October 2001
Washington, D.C. since 2001. From March 1997 to
January 2001, Ambassador Barshefsky was the
United States Trade Representative, the chief trade
negotiator and principal trade policy maker for the
United States and a member of the President’s
Cabinet. Ambassador Barshefsky is a director of
The Estee Lauder Companies, Inc., American
Express Company and Intel Corporation.
Ambassador Barshefsky also serves on the Board of
Directors of the Council on Foreign Relations.
Jean-Marc Chapus (48) Group Managing Director and Portfolio Manager of Director from August
Trust Company of the West, an investment 1995 to November 1997
management firm, and President of TCW/ Crescent and since April 1999;
Trustee(1) since November
Mezzanine L.L.C., a private investment fund, since
March 1995. 1997
44

Name (Age) Principal Occupation and Business Experience Service Period
Bruce W. Duncan (56) Private investor since January 2006. From April to Chairman of the Boards
September 2007, Mr. Duncan served as Chief since May 2005; Director
Executive Officer of the Company on an interim since April 1999;
Trustee(1) since August
basis. From May 2005 to December 2005
Mr. Duncan was Chief Executive Officer and 1995
Trustee of Equity Residential (“EQR”) the largest
publicly traded apartment company in the United
States. From January 2003 to May 2005, he was
President, Chief Executive Officer and Trustee, and
from April 2002 to December 2002, President and
Trustee of EQR. From April 2000 until March
2002, he was a private investor. From December
1995 until March 2000, Mr. Duncan served as
Chairman, President and Chief Executive Officer of
The Cadillac Fairview Corporation Limited, a real
estate operating company.
Director and Trustee(1)
Lizanne Galbreath (50) Managing Partner of Galbreath & Company, a real
estate investment firm, since 1999. From April 1997 since May 2005
to 1999, Ms. Galbreath was Managing Director of
LaSalle Partners/Jones Lang LaSalle where she also
served as a Director. From 1984 to 1997,
Ms. Galbreath served as a Managing Director then
Chairman and CEO of The Galbreath Company, the
predecessor entity of Galbreath & Company.
Director and Trustee(1)
Eric Hippeau (56) Managing Partner of Softbank Capital Partners, a
technology venture capital firm, since March 2000. since April 1999
Mr. Hippeau served as Chairman and Chief
Executive Officer of Ziff-Davis Inc., an integrated
media and marketing company, from 1993 to March
2000 and held various other positions with Ziff-
Davis from 1989 to 1993. Mr. Hippeau is a director
of Yahoo! Inc.
Stephen R. Quazzo (48) Managing Director, Chief Executive Officer and co- Director since April 1999;
Trustee(1) since August
founder of Transwestern Investment Company,
L.L.C., a real estate principal investment firm, since 1995
March 1996. From April 1991 to March 1996,
Mr. Quazzo was President of Equity Institutional
Investors, Inc., a subsidiary of Equity Group
Investments, Inc.
Director and Trustee(1)
Thomas O. Ryder (63) Retired as Chairman of the Board of The Reader’s
Digest Association, Inc. on January 1, 2007. Prior since April 2001
to his retirement, Mr. Ryder was Chairman of the
Board of Reader’s Digest Association, Inc. since
January 1, 2006 and Chairman of the Board and
Chief Executive Officer from April 1998 through
December 31, 2005. Mr. Ryder was President,
American Express Travel Related Services
International, a division of American Express
Company, which provides travel, financial and
network services, from October 1995 to April 1998.
He is a director of Amazon.com, Inc.
45

Name (Age) Principal Occupation and Business Experience Service Period
Director and Trustee(1)
Kneeland C. Managing partner of Pharos Capital Group, L.L.C.,
Youngblood (52) a private equity fund focused on technology since April 2001
companies, business service companies and health
care companies, since January 1998. From July
1985 to December 1997, he was in private medical
practice. He is Chairman of the Board of the
American Beacon Funds, a mutual fund company
managed by AMR Investments, an investment
affiliate of American Airlines. He is also a director
of Burger King Holdings, Inc. and Gap, Inc.
(1) Prior to the Host Transaction, the Trust was a subsidiary of the Corporation and directors may have also served
as Trustees of the Trust. On April 10, 2006, in connection with the Host Transaction, the Trustees resigned.
Executive Officers of the Registrants
The following table includes certain information with respect to each of the Company’s executive officers.
Name Age Position
Frits van Paasschen . . . . . . . . . . . 46 Chief Executive Officer and a Director of the Corporation
Matthew A. Ouimet . . . . . . . . . . 49 President, Hotel Group
Vasant M. Prabhu . . . . . . . . . . . . 48 Executive Vice President and Chief Financial Officer of the
Corporation
Kenneth S. Siegel . . . . . . . . . . . . 52 Chief Administrative Officer, General Counsel and Secretary of the
Corporation
Raymond L. Gellein Jr. . . . . . . . . 60 Chairman of the Board and Chief Executive Officer of Starwood
Vacation Ownership and President of the Global Development
Group
Frits van Paasschen. See Item 10. Directors, Executive Officers and Corporate Governance above.
Matthew A. Ouimet. Mr. Ouimet has been President, Hotel Group since August 2006. Prior to joining the
Company Mr. Ouimet spent 17 years at The Walt Disney Company, most recently serving as President of the
Disneyland Resort. Mr. Ouimet joined The Walt Disney Company in 1989 and began his career there in a variety of
finance and business development roles. During his tenure with Disney, Mr. Ouimet served as Executive General
Manager of Disney’s Vacation Club; President of Disney’s Cruise Line and, most recently President of the
Disneyland Resort.
Vasant M. Prabhu. Mr. Prabhu has been the Executive Vice President and Chief Financial Officer of the
Corporation and has served as Vice President and Chief Financial Officer of the Company since January 2004. Prior
to joining the Company, Mr. Prabhu served as Executive Vice President and Chief Financial Officer for Safeway
Inc., from September 2000 through December 2003. Mr. Prabhu was previously the President of the Information
and Media Group at the McGraw-Hill Companies, Inc., from June 1998 to August 2000, and held several senior
positions at divisions of PepsiCo, Inc. from June 1992 to May 1998. From August 1983 to May 1992 he was a
partner at Booz Allen Hamilton, an international management consulting firm.
Kenneth S. Siegel. Mr. Siegel has been the Chief Administrative Officer, General Counsel and Secretary of
the Corporation since March 2006 and Executive Vice President and General Counsel of the Corporation from
November 2000 to March 2006. In February 2001, he was also appointed as the Secretary to the Corporation.
Mr. Siegel was formerly the Senior Vice President and General Counsel of Gartner, Inc., a provider of research and
analysis on information technology industries, from January 2000 to November 2000. Prior to that time, he served
as Senior Vice President, General Counsel and Corporate Secretary of IMS Health Incorporated, an information
services company, and its predecessors from February 1997 to December 1999. Prior to that time, Mr. Siegel was a
Partner in the law firm of Baker & Botts, LLP.
46

Raymond L. Gellein Jr. Mr. Gellein has been Chairman and Chief Executive Officer of Starwood Vacation
Ownership, Inc. (formerly Vistana, Inc.), our vacation ownership division, since 1980. He was appointed President
of the Global Development Group in July of 2006. Mr. Gellein has announced his retirement from the Corporation
effective March 31, 2008.
Corporate Governance
The Company has an Audit Committee that is currently comprised of directors Thomas O. Ryder (chairman),
Kneeland C. Youngblood and Lizanne Galbreath. The Board of Directors has determined that each member of the
Audit Committee is “independent” as defined by applicable federal securities laws and the Listing Requirements of
the New York Stock Exchange, Inc. and that Mr. Ryder is an audit committee financial expert, as defined by federal
securities laws.
The Company has adopted a Finance Code of Ethics applicable to our Chief Executive Officer, Chief Financial
Officer, Corporate Controller, Corporate Treasurer, Senior Vice President-Taxes and persons performing similar
functions. The text of this code of ethics may be found on the Company’s web site at http://starwoodhotels.com/
corporate/investor relations.html. We intend to post amendments to and waivers from, the Finance Code of Ethics
that require disclosure under applicable SEC rules on our web site. You may obtain a free copy of this code in print
by writing to our Investor Relations Department, 1111 Westchester Avenue, White Plains, New York 10604.
The Company has adopted a Worldwide Code of Conduct applicable to all of its directors, officers and
employees. The text of this code of conduct may be found on the Company’s website at http://starwoodhotels.com/
corporate/investor relations.html. You may also obtain a free copy of this code in print by writing to our Investor
Relations Department, 1111 Westchester Avenue, White Plains, New York 10604.
The Company’s Corporate Governance Guidelines and the charters of its Audit Committee, Compensation and
Options Committee, Governance and Nominating Committee are also available on its website at
http://starwoodhotels.com/corporate/investor relations.html.
The information on our website is not incorporated by reference into this Annual Report on Form 10-K.
We have submitted the CEO certification to the NYSE pursuant to NYSE Rule 303A.12(a) following the 2007
Annual Meeting of Shareholders.
Section 16(a) Beneficial Ownership Reporting Compliance
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires that Directors, Trustees and
executive officers of the Company, and persons who own more than 10 percent of the outstanding Shares, file with
the SEC (and provide a copy to the Company) certain reports relating to their ownership of Shares and other equity
securities of the Company.
To the Company’s knowledge, based solely on a review of the copies of these reports furnished to the Company
for the fiscal year ended December 31, 2007, and written representations that no other reports were required, all
Section 16(a) filing requirements applicable to its Directors, executive officers and greater than 10 percent
beneficial owners were complied with for the most recent fiscal year.
Item 11. Executive Compensation.
The information called for by Item 11 is incorporated by reference to the information under the following
captions in the Proxy Statement: “Executive Compensation,” “Compensation Discussion and Analysis,” “Com-
pensation Committee Report,” “Summary Compensation Table,” “Grants of Plan-Based Awards,” “Narrative
Disclosure to Summary Compensation Table and Grants of Plan-Based Awards,” “Outstanding Equity Awards at
Fiscal Year-End,” “Option Exercises and Stock Vested,” “Nonqualified Deferred Compensation,” “Potential
Payments upon Termination or Change-in-Control,” and “Director Compensation.”
47

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters.
Equity Compensation Plan Information-December 31, 2007
(c)
Number of
Securities
(a) Remaining Available
Number of for Future Issuance
Securities to be (b) Under Equity
Issued Upon Weighted-Average Compensation Plans
Exercise of Exercise Price of (Excluding
Outstanding Outstanding Securities
Options, Warrants Options, Warrants Reflected in Column
and Rights and Rights (a))
Equity compensation plans approved by
70,242,819(1)
security holders . . . . . . . . . . . . . . . . . . 18,547,156 $25.21
Equity compensation plans not approved
by security holders . . . . . . . . . . . . . . . . — — —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,547,156 $25.21 70,242,819
(1) Does not include deferred share units (that vest over three years and may be settled in Shares) that have been
issued pursuant to the Executive Annual Incentive Plan (“Executive AIP”). The Executive AIP does not limit
the number of deferred share units that may be issued. This plan has been amended to provide for a termination
date of May 26, 2009 to comply with new NYSE requirements. In addition, 10,740,292 Corporation Shares
remain available for issuance under our Employee Stock Purchase Plan, a stock purchase plan meeting the
requirements of Section 423 of the Internal Revenue Code.
The remaining information called for by Item 12 is incorporated by reference to the information under the
caption “Security Ownership of Certain Beneficial Owners and Management” in the Proxy Statement.
Item 13. Certain Relationships and Related Transactions and Director Independence.
The information called for by Item 13 is incorporated by reference to the information under the captions
“Certain Relationships and Related Transactions” and “Corporate Governance” in the Proxy Statement.
Item 14. Principal Accountant Fees and Services.
The Audit Committee has adopted a policy requiring pre-approval by the committee of all services (audit and
non-audit) to be provided to the Company by its independent auditors. In accordance with that policy, the Audit
Committee has given its approval for the provision of audit services by Ernst & Young LLP for fiscal 2007. All other
services must be specifically pre-approved by the full Audit Committee or by a designated member of the Audit
Committee who has been delegated the authority to pre-approve the provision of services.
Fees paid by the Company to its independent auditors are set forth in the proxy statement under the heading
“Audit Fees” and are incorporated herein by reference.
48

PART IV
Item 15. Exhibits, Financial Statements, Financial Statement Schedule and Reports on Form 8-K.
(a) The following documents are filed as a part of this Annual Report:
1-2. The financial statements and financial statement schedule listed in the Index to Financial Statements
and Schedule following the signature pages hereof.
3. Exhibits:
Exhibit
Number Description of Exhibit
2.1 Formation Agreement, dated as of November 11, 1994, among the Trust, the Corporation, Starwood
Capital and the Starwood Partners (incorporated by reference to Exhibit 2 to the Trust’s and the
Corporation’s Joint Current Report on Form 8-K dated November 16, 1994). (The SEC file numbers
of all filings made by the Corporation and the Trust pursuant to the Securities Exchange Act of 1934, as
amended, and referenced herein are: 1-7959 (the Corporation) and 1-6828 (the Trust)).
2.2 Form of Amendment No. 1 to Formation Agreement, dated as of July 1995, among the Trust, the
Corporation and the Starwood Partners (incorporated by reference to Exhibit 10.23 to the Trust’s and the
Corporation’s Joint Registration Statement on Form S-2 filed with the SEC on June 29, 1995 (Registration
Nos. 33-59155 and 33-59155-01)).
2.3 Master Agreement and Plan of Merger, dated as of November 14, 2005, among Host Marriott
Corporation, Host Marriott, L.P., Horizon Supernova Merger Sub, L.L.C., Horizon SLT Merger Sub,
L.P., Starwood Hotels & Resorts Worldwide, Inc., Starwood Hotels & Resorts, Sheraton Holding
Corporation and SLT Realty Limited Partnership (the “Merger Agreement”) (incorporated by
reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Current Report on From 8-K filed
November 14, 2005).
2.4 Amendment Agreement, dated as of March 24, 2006, to the Merger Agreement (incorporated by reference
to Exhibit 2.1 of the Joint Current Report on Form 8-K filed with the SEC on March 29, 2006).
3.1 Articles of Amendment and Restatement of the Corporation, as of May 30, 2007 (incorporated by
reference to Appendix A to the Corporation’s 2007 Notice of Annual Meeting and Proxy Statement).
3.2 Amended and Restated Bylaws of the Corporation, as amended and restated through April 10, 2006
(incorporated by reference to Exhibit 3.2 to the Corporation’s Current Report on Form 8-K filed with the
SEC on April 13, 2006 (the “April 13 Form 8-K”).
4.1 Termination Agreement dated as of April 7, 2006 between the Corporation and the Trust (incorporated by
reference to Exhibit 4.1 of the April 13 Form 8-K).
4.2 Amended and Restated Rights Agreement, dated as of April 7, 2006, between the Corporation and
American Stock Transfer and Trust Company, as Rights Agent (which includes the form of Amended and
Restated Articles Supplementary of the Series A Junior Participating Preferred Stock as Exhibit A, the
form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Preferred Stock as
Exhibit C) (incorporated by reference to Exhibit 4.2 of the April 13 Form 8-K).
4.3 Amended and Restated Indenture, dated as of November 15, 1995, as Amended and Restated as of
December 15, 1995 between ITT Corporation (formerly known as ITT Destinations, Inc.) and the First
National Bank of Chicago, as trustee (incorporated by reference to Exhibit 4.A.IV to the First Amendment
to ITT Corporation’s Registration Statement on Form S-3 filed November 13, 1996).
4.4 First Indenture Supplement, dated as of December 31, 1998, among ITT Corporation, the Corporation and
The Bank of New York (incorporated by reference to Exhibit 4.1 to the Trust’s and the Corporation’s Joint
Current Report on Form 8-K filed January 8, 1999).
4.5 Second Indenture Supplement, dated as of April 9, 2006, among the Corporation, Sheraton Holding
Corporation and Bank of New York Trust Company, N.A., as trustee (incorporated by reference to
Exhibit 4.3 of the April 13 Form 8-K).
4.6 Indenture, dated as of May 25, 2001, by and among the Corporation, as Issuer, the guarantors named
therein and Firstar Bank, N.A., as Trustee (incorporated by reference to Exhibit 10.2 to the Corporation’s
and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2001 (the
“2001 Form 10-Q2”)).
49

Exhibit
Number Description of Exhibit
4.7 Indenture, dated as of April 19, 2002, among the Corporation, the guarantor parties named therein and
U.S. Bank National Association, as trustee (incorporated by reference to Exhibit 4.1 to the Corporation’s
and Sheraton Holding Corporation’s Joint Registration Statement on Form S-4 filed on November 19,
2002 (the “2002 Forms S-4”)).
4.8 Indenture dated May 16, 2003 between the Corporation, the Trust, the Guarantor and U.S. Bank National
Association as trustee (incorporated by reference to Exhibit 4.9 to the July 8, 2003 Form S-3)
(Registration Nos. 333-106888, 333-106888-01, 333-106888-02) (the “Form S-3”).
4.9 First Indenture Supplement, dated as of January 11, 2006, between the Corporation, the Trust, the
Guarantor and U.S. Bank National Association as trustee (incorporated by reference to Exhibit 10.1 to the
Trust’s and the Corporation’s Joint Current Report on Form 8-K filed January 17, 2006).
4.10 Indenture, dated as of September 13, 2007, between the Company and the U.S. Bank National
Association, as trustee (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on
Form 8-K filed September 17, 2007 (the “September 17 Form 8-K”)).
4.11 Supplemental Indenture, dated as of September 13, 2007, between the Company and the U.S. Bank
National Association, as trustee Incorporated by reference to Exhibit 4.2 to the September 17 Form 8-K”).
The Registrants hereby agree to file with the Commission a copy of any instrument, including indentures,
defining the rights of long-term debt holders of the Registrants and their consolidated subsidiaries upon
the request of the Commission.
10.1 Third Amended and Restated Limited Partnership Agreement for Operating Partnership, dated January 6,
1999, among the Corporation and the limited partners of Operating Partnership (incorporated by reference
to Exhibit 10.2 to the 1998 Form 10-K).
10.2 Form of Trademark License Agreement, dated as of December 10, 1997, between Starwood Capital and
the Trust (incorporated by reference to Exhibit 10.22 to the Trust’s and the Corporation’s Joint Annual
Report on Form 10-K for the fiscal year ended December 31, 1997 (the “1997 Form 10-K”)).
10.3 Credit Agreement, dated as of February 10, 2006, among Starwood Hotels & Resorts Worldwide, Inc.,
Starwood Hotels & Resorts, certain additional Dollar Revolving Loan Borrowers, certain additional
Alternate Currency Revolving Loan Borrowers, various Lenders, Deutsche Bank AG New York Branch,
as Administrative Agent, JPMorgan Chase Bank, N.A. and Societe Generale, as Syndication Agents,
Bank of America, N.A. and Calyon New York Branch, as Co-Documentation Agents, Deutsche Bank
Securities Inc., J.P. Morgan Securities Inc. and Banc of America Securities LLC, as Lead Arrangers and
Book Running Managers, The Bank of Nova Scotia, Citicorp North America, Inc., and the Royal Bank of
Scotland PLC, as Senior Managing Agents and Nizvho Corporate Bank, Ltd. as Managing Agent (the
“Credit Agreement”) (incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint
Current Report on Form 8-K filed February 15, 2006).
10.4 First Amendment, dated as of March 31, 2006, to the Credit Agreement (incorporated by reference to
Exhibit 10.1 of the Joint Current Report on Form 8-K filed with the SEC on April 4, 2006).
10.5 Second Amendment, dated as of June 29, 2006, to the Credit Agreement (incorporated by reference to
Exhibit 10.1 of the Current Report on Form 8-K filed with the SEC on July 6, 2006).
10.6 Third Amendment dated as of April 27, 2007, to the Credit Agreement (Incorporated by reference to
Exhibit 10.1 to the Company’s Current Report on Form 8-K filed on April 30, 2007).
Fourth Amendment, dated as of December 20, 2007, to the Credit Agreement(2)
10.7
10.8 Credit Agreement, dated as of June 29, 2007, among Starwood Hotels & Resorts Worldwide, Inc., Bank of
America, N.A., as administrative agent and various lenders party thereto (incorporated by reference to
Exhibit 10.01 to the Company’s Current Report on Form 8-K, filed with the SEC on July 5, 2007).
10.9 Loan Agreement, dated as of January 27, 1999, among the Borrowers named therein, as Borrowers,
Starwood Operator I LLC, as Operator, and Lehman Brothers Holding Inc., d/b/a Lehman Capital, a
division of Lehman Brothers Holdings Inc. (incorporated by reference to Exhibit 10.58 to the 1998
Form 10-K).
10.10 Starwood Hotels & Resorts Worldwide, Inc. 1995 Long-Term Incentive Plan (the “Corporation 1995
LTIP”) (Amended and Restated as of December 3, 1998) (incorporated by reference to Annex E to the
1998 Proxy Statement).(1)
50

Exhibit
Number Description of Exhibit
10.11 Second Amendment to the Corporation 1995 LTIP (incorporated by reference to Exhibit 10.3 to the 2003
10-Q1).(1)
10.12 Form of Non-Qualified Stock Option Agreement pursuant to the Corporation 1995 LTIP (incorporated by
reference to Exhibit 10.26 to the 2004 Form 10-K).(1)
10.13 Starwood Hotels & Resorts Worldwide, Inc. 1999 Long-Term Incentive Compensation Plan (the “1999
LTIP”) (incorporated by reference to Exhibit 10.4 to the Corporation’s and the Trust’s Joint Quarterly
Report on Form 10-Q for the quarterly period ended June 30, 1999 (the “1999 Form 10-Q2”)).(1)
10.14 First Amendment to the 1999 LTIP, dated as of August 1, 2001 (incorporated by reference to Exhibit 10.1
to the Corporation’s and the Trust’s Joint Quarterly Report on Form 10-Q for the quarterly period ended
September 30, 2001).(1)
Second Amendment to the 1999 LTIP (incorporated by reference to Exhibit 10.2 to the 2003 10-Q1).(1)
10.15
10.16 Form of Non-Qualified Stock Option Agreement pursuant to the 1999 LTIP (incorporated by reference to
Exhibit 10.30 to the 2004 Form 10-K).(1)
10.17 Form of Restricted Stock Agreement pursuant to the 1999 LTIP (incorporated by reference to
Exhibit 10.31 to the 2004 Form 10-K).(1)
10.18 Starwood Hotels & Resorts Worldwide, Inc. 2002 Long-Term Incentive Compensation Plan (the “2002
LTIP”) (incorporated by reference to Annex B of the Corporation’s 2002 Proxy Statement).(1)
First Amendment to the 2002 LTIP (incorporated by reference to Exhibit 10.1 to the 2003 10-Q1).(1)
10.19
10.20 Form of Non-Qualified Stock Option Agreement pursuant to the 2002 LTIP (incorporated by reference to
Exhibit 10.49 to the 2002 Form 10-K filed on February 28, 2003 (the “2002 10-K”)).(1)
10.21 Form of Restricted Stock Agreement pursuant to the 2002 LTIP (incorporated by reference to
Exhibit 10.35 to the 2004 Form 10-K).(1)
10.22 2004 Long-Term Incentive Compensation Plan (“2004 LTIP”) (incorporated by reference to the
Corporation’s 2004 Notice of Annual Meeting of Stockholders and Proxy Statement, pages A-1
through A-20).(1)
10.23 Amendment No. 1 to the Starwood Hotels & Resorts Worldwide, Inc. 2004 Long-Term Incentive
Compensation Plan (incorporated by reference to Exhibit 99.2 of the April 13 Form 8-K).(1)
10.24 Amendment to the Starwood Hotels & Resorts Worldwide, Inc. 2004 Long-Term Incentive Compensation
Plan (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with
the SEC on May 31, 2007).(1)
10.25 Form of Non-Qualified Stock Option Agreement pursuant to the 2004 LTIP (incorporated by reference to
Exhibit 10.4 to the 2004 Form 10-Q2).(1)
10.26 Form of Restricted Stock Agreement pursuant to the 2004 LTIP (incorporated by reference to
Exhibit 10.38 to the 2004 Form 10-K).(1)
10.27 Form of Non-Qualified Stock Option Agreement pursuant to the 2004 LTIP (incorporated by reference to
Exhibit 10.2 to the Corporation’s and the Trust’s Joint Current Report on Form 8-K filed February 13,
2006 (the February 2006 Form 8-K”)).(1)
10.28 Form of Restricted Stock Agreement pursuant to the 2004 LTIP (incorporated by reference to Exhibit 10.1
to the February 2006 Form 8-K).(1)
10.29 Form of Amended and Restated Non-Qualified Stock Option Agreement pursuant to the 2004 LTIP
(incorporated by reference to Exhibit 10.1 to the Corporation’s Quarterly Report on Form 10-Q for the
period ended June 30, 2006 (the 2006 Form 10-Q2”)).(1)
10.30 Form of Amended and Restated Restricted Stock Agreement pursuant to the 2004 LTIP (incorporated by
reference to Exhibit 10.2 to the 2006 Form 10-Q2).(1)
10.31 Starwood Hotels & Resorts Worldwide, Inc. 2005 Annual Incentive Plan for Certain Executives
(incorporated by reference to Appendix A to the Corporation’s 2005 Proxy Statement).(1)
10.32 Amendment No. 1 to the Starwood Hotels & Resorts Worldwide, Inc. Annual Incentive Plan for Certain
Executives (incorporated by reference to Exhibit 99.3 of the April 13 Form 8-K).(1)
51

Exhibit
Number Description of Exhibit
10.33 Starwood Hotels & Resorts Worldwide, Inc. Annual Incentive Plan, dated as of November 3, 2005
(incorporated by reference to Exhibit 10.1 to the Corporation’s and the Trust’s Joint Quarterly Report on
Form 10-Q for the quarterly period ended September 30, 2005 (the “2005 Form 10-Q3”)).(1)
10.34 First Amendment to the Starwood Hotels & Resorts Worldwide, Inc. 2005 Annual Incentive Plan,
amended as of November 3, 2005 (incorporated by reference to Exhibit 99.5 of the April 13 Form 8-K).(1)
10.35 Starwood Hotels & Resorts Worldwide, Inc. Amended and Restated Deferred Compensation Plan,
effective as of January 22, 2008.(1)(2)
10.36 Form of Indemnification Agreement between the Corporation, the Trust and each of its Directors/Trustees
and executive officers (incorporated by reference to Exhibit 10.10 to the 2003 Form 10-K).(1)
10.37 Employment Agreement, dated as of November 13, 2003, between the Corporation and Vasant Prabhu
(incorporated by reference to Exhibit 10.68 to the 2003 10-K).(1)
10.38 Letter Agreement, dated August 14, 2007, between the Company and Vasant Prabhu (incorporated by
reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed August 17, 2007 (the
“August 17 Form 8-K”)).(1)
10.39 Employment Agreement, dated as of September 20, 2004, between the Corporation and Steven J. Heyer
(incorporated by reference to Exhibit 10.1 to the Trust’s and the Corporation’s Joint Current Report on
Form 8-K filed with the SEC on September 24, 2004).(1)
10.40 Amendment, dated as of May 4, 2005, to Employment Agreement between the Corporation and
Steve J. Heyer (incorporated by reference to Exhibit 10.1 to the Corporation’s and Trust’s Joint
Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2005).(1)
10.41 Separation Agreement and Mutual General Release of Claims between the Corporation and
Steven J. Heyer (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on
Form 8-K filed with the SEC on April 2, 2007).(1)
10.42 Form of Non-Qualified Stock Option Agreement between the Corporation and Steven J. Heyer pursuant to
the 2004 LTIP (incorporated by reference to Exhibit 10.70 to the 2004 Form 10-K)(1)
10.43 Form of Restricted Stock Unit Agreement between the Corporation and Steven J. Heyer pursuant to the
2004 LTIP (incorporated by reference to Exhibit 10.71 to the 2004 Form 10-K).(1)
10.44 Employment Agreement, dated as of November 13, 2003, between the Corporation and Kenneth Siegel
(incorporated by reference to Exhibit 10.57 to the Corporation’s and Trust’s Joint Annual Report on
Form 10-K for the fiscal year ended December 31, 2000 (the “2000 Form 10-K”)).(1)
10.45 Letter Agreement, dated July 22, 2004 between the Corporation and Kenneth Siegel (incorporated by
reference to Exhibit 10.73 to the 2004 Form 10-K).(1)
10.46 Letter Agreement, dated August 14, 2007, between the Company and Kenneth S. Siegel (incorporated by
reference to Exhibit 10.1 to the Corporation’s Current Report on Form 8-K filed August 17, 2007 (the
“August 17 Form 8-K”)).(1)
10.47 Employment Agreement, dated July 18, 1999, between Starwood Vacation Ownership and Raymond
Gellein, Jr. (incorporated by reference to Exhibit 10.45 to the Corporation’s Annual Report on Form 10-K
for the period ended December 31, 2006 (the “2006 Form 10-K”)).(1)
10.48 Form of cash bonus award between the Company and Raymond L. Gellein, Jr. (incorporated by reference
to the Corporation’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2007
(the 2007 10-Q3).(1)
10.49 Amendment agreement, dated December 6, 2007, among Starwood Vacation Ownership, the Company
and Raymond Gellein, Jr.(1)(2)
10.50 Employment Agreement, dated as of September 21, 2006, between the Corporation and
Matthew A. Ouimet (incorporated by reference to Exhibit 10.1 to the Corporation’s and Trust’s Joint
Current Report on Form 8-K filed with the SEC on September 27, 2006).(1)
10.51 Letter Agreement, dated August 14, 2007, between the Company and Matthew A. Ouimet (incorporated
by reference to Exhibit 10.2 to the August 17 Form 8-K).(1)
52

Exhibit
Number Description of Exhibit
10.52 Employment Agreement, dated as of August 2, 2007, between the Corporation and Bruce W. Duncan
(incorporated by reference to Exhibit 10.5 to the Corporation’s quarterly report on Form 10-Q for the
quarterly period ended June 30, 2007).(1)
10.53 Form of Restricted Stock Unit Agreement between the Corporation and Bruce W. Duncan pursuant to the
2004 LTIP (incorporated by reference to Exhibit 10.2 to the 2007 Form 10-Q1).(1)
10.54 Employment Agreement, dated as of August 31, 2007, between the Company and Frits van Paasschen
(incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed
September 4, 2007).(1)
10.55 Form of Non-Qualified Stock Option Agreement between the Company and Frits van Paasschen pursuant
to the 2004 LTIP (incorporated by reference to Exhibit 10.5 to the 2007 Form 10-Q3).(1)
10.56 Form of Restricted Stock Unit Agreement between the Company and Frits van Paasschen pursuant to the
2004 LTIP (incorporated by reference to Exhibit 10.6 to the 2007 Form 10-Q3).(1)
10.57 Form of Restricted Stock Grant between the Company and Frits van Paasschen pursuant to the 2004 LTIP
(incorporated by reference to Exhibit 10.7 to the 2007 Form 10-Q3).(1)
10.58 Form of Severance Agreement between the Corporation and each of Messrs. Ouimet, Siegel, Gellein, and
Prabhu (incorporated by reference to Exhibit 10.3 to the 2006 Form 10-Q2.(1)
Calculation of Ratio of Earnings to Total Fixed Charges.(2)
12.1
Subsidiaries of the Registrants.(2)
21.1
Consent of Ernst & Young LLP.(2)
23.1
31.1 Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Executive
Officer — Corporation.(2)
31.2 Certification Pursuant to Rule 13a-14 under the Securities Exchange Act of 1934 — Chief Financial
Officer — Corporation.(2)
32.1 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief
Executive Officer — Corporation.(2)
32.2 Certification Pursuant to Section 1350 of Chapter 63 of Title 18 of the United States Code — Chief
Financial Officer — Corporation.(2)
(1) Management contract or compensatory plan or arrangement required to be filed as an exhibit pursuant to
Item 14(a)(iii) of Form 10-K.
(2) Filed herewith.
53

SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has
duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.
STARWOOD HOTELS & RESORTS WORLD-
WIDE, INC.
By: /s/ FRITS VAN PAASSCHEN
Frits van Paasschen
Chief Executive Officer and Director
Date: February 22, 2008
Pursuant to the requirements of the Securities Exchange Act of 1934, this Report has been signed below by the
following persons on behalf of the Registrant in the capacities and on the dates indicated.
Signature Title Date
/s/ FRITS VAN PAASSCHEN Chief Executive Officer and Director February 22, 2008
Frits van Paasschen
/s/ BRUCE W. DUNCAN Chairman and Director February 22, 2008
Bruce W. Duncan
/s/ VASANT M. PRABHU Executive Vice President and Chief February 22, 2008
Financial Officer (Principal Financial
Vasant M. Prabhu
Officer)
/s/ ALAN M. SCHNAID Senior Vice President, Corporate February 22, 2008
Controller and Principal Accounting
Alan M. Schnaid
Officer
Director February , 2008
Adam M. Aron
/s/ CHARLENE BARSHEFSKY Director February 22, 2008
Charlene Barshefsky
Director February , 2008
Jean-Marc Chapus
/s/ LIZANNE GALBREATH Director February 22, 2008
Lizanne Galbreath
/s/ ERIC HIPPEAU Director February 22, 2008
Eric Hippeau
54

Signature Title Date
Director February , 2008
Stephen R. Quazzo
/s/ THOMAS O. RYDER Director February 22, 2008
Thomas O. Ryder
/s/ KNEELAND C. YOUNGBLOOD Director February 22, 2008
Kneeland C. Youngblood
55

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
INDEX TO FINANCIAL STATEMENTS AND SCHEDULE
Page
Report of Independent Registered Public Accounting Firm. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Consolidated Balance Sheets as of December 31, 2007 and 2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Consolidated Statements of Income for the Years Ended December 31, 2007, 2006 and 2005 . . . . . . . . . F-4
Consolidated Statements of Comprehensive Income for the Years Ended December 31, 2007, 2006 and
2005. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Consolidated Statements of Equity for the Years Ended December 31, 2007, 2006 and 2005 . . . . . . . . . . F-6
Consolidated Statements of Cash Flows for the Years Ended December 31, 2007, 2006 and 2005. . . . . . F-7
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8
Schedule:
Schedule II — Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-1
F-1

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Shareholders of Starwood Hotels & Resorts Worldwide, Inc.
We have audited the accompanying consolidated balance sheets of Starwood Hotels & Resorts Worldwide,
Inc. (the “Company”) as of December 31, 2007 and 2006, and the related consolidated statements of income,
comprehensive income, equity, and cash flows for each of the three years in the period ended December 31, 2007.
Our audits also included the financial statement schedule listed in the Index at Item 15(a). These financial
statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an
opinion on these financial statements and schedule based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board
(United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of the Company at December 31, 2007 and 2006, and the consolidated results
of its operations and its cash flows for each of the three years in the period ended December 31, 2007, in conformity
with U.S. generally accepted accounting principles. Also, in our opinion, the related financial statement schedule,
when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects
the information set forth therein.
As discussed in Note 2 to the consolidated financial statements, the Company adopted Financial Accounting
Standards Board Interpretation No. 48, Accounting for Uncertainty in Income Taxes an Interpretation of FASB
Statement No. 109, on January 1, 2007, Statement of Financial Accounting Standards (“SFAS”) No. 152,
Accounting for Real Estate Time-Sharing Transactions, and SFAS No. 123 (revised 2004), Share-based Payment,
on January 1, 2006 and SFAS No. 158, Employers’ Accounting for Defined Benefit Pension and Other Postre-
tirement Plans, on December 31, 2006.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the Company’s internal control over financial reporting as of December 31, 2007, based on criteria
established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the
Treadway Commission and our report dated February 22, 2008 expressed an unqualified opinion thereon.
/s/ Ernst & Young LLP
New York, New York
February 22, 2008
F-2

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
2007 2006
(In millions, except
share data)
ASSETS
Current assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 162 $ 183
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 329
Accounts receivable, net of allowance for doubtful accounts of $50 and $49 . . . . . . . . . . 616 593
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 714 566
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 136 139
Total current assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,824 1,810
Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 423 436
Plant, property and equipment, net. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,850 3,831
Assets held for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2
Goodwill and intangible assets, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,302 2,302
Deferred tax assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 729 518
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 494 381
$9,622 $9,280
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Short-term borrowings and current maturities of long-term debt . . . . . . . . . . . . . . . . . . . $ 5 $ 805
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 179
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,175 955
Accrued salaries, wages and benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 405 383
Accrued taxes and other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 315 139
Total current liabilities . ............................................. 2,101 2,461
Long-term debt . . . . . . . . . . . . ............................................. 3,590 1,827
Deferred income taxes. . . . . . . ............................................. 28 31
Other liabilities . . . . . . . . . . . . ............................................. 1,801 1,928
7,520 6,247
Minority interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 25
Commitments and contingencies Stockholders’ equity:
Corporation common stock; $0.01 par value; authorized 1,000,000,000 shares;
outstanding 190,998,585 and 213,484,439 shares at December 31, 2007 and 2006,
respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 2
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 868 2,286
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147) (228)
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,353 948
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,076 3,008
$9,622 $9,280
The accompanying notes to financial statements are an integral part of the above statements.
F-3

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF INCOME
Year Ended December 31,
2007 2006 2005
(In millions, except per Share
data)
Revenues
Owned, leased and consolidated joint venture hotels . . . . . . . . . . . . . . . . . . . . . . $2,429 $2,692 $3,517
Vacation ownership and residential sales and services (including note sale gains
of $0 in 2007 and $17 in 2006) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,025 1,005 889
Management fees, franchise fees and other income . . . . . . . . . . . . . . . . . . . . . . . 839 697 501
Other revenues from managed and franchised properties . . . . . . . . . . . . . . . . . . . 1,860 1,585 1,070
6,153 5,979 5,977
Costs and Expenses
Owned, leased and consolidated joint venture hotels . . . . . . . . . . . . . . . . . . . . . . 1,805 2,023 2,634
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 758 736 661
Selling, general, administrative and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 513 470 370
Restructuring and other special charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53 20 13
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280 280 387
Amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 26 20
Other expenses from managed and franchised properties . . . . . . . . . . . . . . . . . . . 1,860 1,585 1,070
5,295 5,140 5,155
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 858 839 822
Gain on sale of VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 25
Equity earnings and gains and losses from unconsolidated ventures, net . . . . . . . 66 61 64
Interest expense, net of interest income of $21, $29 and $19 . . . . . . . . . . . . . . . . (147) (215) (239)
Loss on asset dispositions and impairments, net . . . . . . . . . . . . . . . . . . . . . . . . . (44) (3) (30)
Income from continuing operations before taxes and minority equity . . . . . . . . . . 733 682 642
Income tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (189) 434 (172)
Tax expense on repatriation of foreign earnings under the American Jobs
Creation Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (47)
Minority equity in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (1) —
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543 1,115 423
Discontinued operations:
Loss from operations, net of tax benefit of $0, $0 and $(1) . . . . . . . . . . . . . . . — — (1)
Loss on dispositions, net of tax expense of $1, $2 and $0 . . . . . . . . . . . . . . . . (1) (2) —
Cumulative effect of accounting change, net of tax . . . . . . . . . . . . . . . . . . . . . . . — (70) —
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 542 $1,043 $ 422
Earnings (Losses) Per Share — Basic
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.67 $ 5.25 $ 1.95
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... — (0.01) —
Cumulative effect of accounting change . . . . . . . . . . . . . . . . . . . . . . ......... — (0.33) —
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.67 $ 4.91 $ 1.95
Earnings (Losses) Per Share — Diluted
Continuing operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.57 $ 5.01 $ 1.88
Discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ......... — (0.01) —
Cumulative effect of accounting change . . . . . . . . . . . . . . . . . . . . . . ......... — (0.31) —
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2.57 $ 4.69 $ 1.88
Weighted average number of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 213 217
Weighted average number of Shares assuming dilution . . . . . . . . . . . . . . . . . . . . 211 223 225
Distributions and dividends declared per Share . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.90 $ 0.84 $ 0.84
The accompanying notes to financial statements are an integral part of the above statements.
F-4

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
Year Ended December 31,
2007 2006 2005
(In millions)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $542 $1,043 $422
Other comprehensive income (loss), net of taxes:
Foreign currency translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 72 (60)
Recognition of accumulated foreign currency translation adjustments on sold
hotels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 29 —
Pension liability adjustments(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 2 (6)
Unrealized holding losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (1) (1)
81 102 (67)
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $623 $1,145 $355
(a) Includes actuarial gain of $1 million and amortization included in net periodic pension cost of $2 million for
the year ended December 31, 2007.
The accompanying notes to financial statements are an integral part of the above statements.
F-5

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF EQUITY
Exchangeable Accumulated Retained
Units and Additional Other Earnings
Class B EPS Class A EPS Shares Paid-in Deferred Comprehensive (Accumulated
Shares Amount Shares Amount Shares Amount Capital(b) Compensation Loss(a) Deficit)
(In millions)
Balance at December 31, 2004 . . . . . . . . — $— 1 $— 209 $4 $ 5,121 $(14) $(255) $ (68)
Net income . . . . . . . . . . . . . . . . . . — — — — — — — — — 422
Stock option and restricted stock award
transactions, net . . . . . . . . . . . . . . — — — — 12 — 542 (39) — —
ESPP stock issuances . . . . . . . . . . . . — — — — — — 12 — — —
Share repurchases . . . . . . . . . . . . . . . — — — (4) — (253) — — —
Conversion or redemption and
cancellation of Class A EPS, Class B
EPS and Partnership Units . . . . . . . . — — — — — — (10) — — —
Foreign currency translation . . . . . . . . — — — — — — — — (60) —
Minimum pension liability adjustment . . — — — — — — — — (6) —
Unrealized loss on securities, net . . . . . — — — — — — — — (1) —
Distributions declared . . . . . . . . . . . . — — — — — — — — — (184)
Balance at December 31, 2005 . . . . . . . . — — 1 — 217 4 5,412 (53) (322) 170
Net income . . . . . . . . . . . . . . . . . . — — — — — — — — — 1,043
Implementation of SFAS No. 123(R) . . . — — — — — — (53) 53 — —
Disposition of the Trust(c) . . . . . . . . . . — — — — — — (2,368) — — (83)
Stock option and restricted stock award
transactions, net . . . . . . . . . . . . . . — — — — 15 — 588 — — —
ESPP stock issuances . . . . . . . . . . . . — — — — — — 7 — — —
Share repurchases . . . . . . . . . . . . . . . — — — — (22) — (1,263) — — —
Redemption of convertible debt . . . . . . — — 3 — — — — —
Conversion or redemption and
cancellation of Class A EPS, Class B
EPS and Partnership Units . . . . . . . . — — (1) — — (2) (37) — — —
Foreign currency translation . . . . . . . . — — — — — — — — 72 —
Recognition of accumulated foreign
currency translation adjustments on
sold hotels . . . . . . . . . . . . . . . . . — — — — — — — — 29
Minimum pension liability adjustment . . — — — — — — — — 2 —
Implementation of SFAS No. 158, net . . — — — — — — — — (8)
Unrealized loss on securities, net . . . . . — — — — — — — — (1) —
Distributions declared . . . . . . . . . . . . — — — — — — — — — (182)
Balance at December 31, 2006 . . . . . . . . — — — — 213 2 2,286 — (228) 948
Net income . . . . . . . . . . . . . . . . . . — — — — — — — — — 542
Stock option and restricted stock award
transactions, net . . . . . . . . . . . . . . — — — — 7 — 358 — — —
ESPP stock issuances . . . . . . . . . . . . — — — — — — 7 — — —
Share repurchases . . . . . . . . . . . . . . . — — — — (29) — (1,787) — — —
Tax adjustments related to the disposition
of the Trust . . . . . . . . . . . . . . . . . — — — — — — 4 — — —
FIN 48 implementation . . . . . . . . . . . — — — — — — — — — 35
Foreign currency translation . . . . . . . . — — — — — — — — 84 —
Unrealized loss on securities, net . . . . . — — — — — — — — (6) —
Pension adjustments . . . . . . . . . . . . . — — — — — — — — 3 —
Distributions declared . . . . . . . . . . . . — — — — — — — — — (172)
Balance at December 31, 2007 . . . . . . . . — $— — $— 191 $2 $ 868 $— $(147) $1,353
(a) As of December 31, 2007, this balance is comprised of $114 million of cumulative translation adjustments and $33 million of cumulative
pension adjustments.
(b) Stock option and restricted stock award transactions are net of a tax benefit of $65 million, $143 million and $66 million in 2007, 2006 and
2005, respectively.
(c) As part of the Host Transaction, the Company sold the Class A Shares of the Trust and shareholders sold the Class B Shares of the Trust. The
book value of the Trust associated with this sale was removed through retained earnings up to the amount of retained earnings that existed at
the sale date with the remaining balance reducing additional paid-in capital. See Note 1 for additional information on the Host Transaction.
The accompanying notes to financial statements are an integral part of the above statements.
F-6

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
Year Ended December 31,
2007 2006 2005
(In millions)
Operating Activities
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 542 $ 1,043 $ 422
Adjustments to net income:
Discontinued operations:
Loss on dispositions, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 —
Other adjustments relating to discontinued operations. . . . . . . . . . . . . . . . . . . . . . . . . 1 — 11
Cumulative effect of accounting change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 70 —
Stock-based compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 99 103 31
Excess stock-based compensation tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (46) (87) —
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 306 407
Amortization of deferred loan costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 5 12
Non-cash portion of restructuring and other special charges (credits), net . . . . . . . . . . . . . 48 (7) (3)
Non-cash foreign currency losses (gains), net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 (8) 2
Amortization of deferred gains . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (81) (62) (12)
Provision for doubtful accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 25 6
Minority equity in net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — —
Equity earnings, net of distributions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (30) (7)
Gain on sale of VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (17) (25)
Loss on asset dispositions and impairments, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 3 30
Non-cash portion of income tax (benefit) expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (142) (620) (110)
Changes in working capital:
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 134 (35) 50
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23) 49 (152)
Inventories . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (143) (82) 105
Prepaid expenses and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (11) (8)
Accounts payable and accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 177 12 157
Accrued income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 (64) (135)
VOI notes receivable activity, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (242) (138) (40)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56) 43 23
Cash from operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895 500 764
Investing Activities
Purchases of plant, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (384) (371) (464)
Proceeds from asset sales, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133 1,515 510
Collection of notes receivable, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45 95 11
Acquisitions, net of acquired cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (74) (25) (242)
Proceeds from investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63 191 47
Proceeds from senior debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 221
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (3) 2
Cash from (used for) investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (215) 1,402 85
Financing Activities
Revolving credit facility and short-term borrowings, net . . . . . . . . . . . . . . . . . . . . . . . . . . 341 73 333
Long-term debt issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,400 2 9
Long-term debt repaid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (799) (1,534) (583)
Distributions paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (90) (276) (176)
Proceeds from employee stock option exercises . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 190 380 405
Excess stock-based compensation tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46 87 —
Share repurchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,787) (1,287) (228)
Other, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (80) (13)
Cash used for financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (712) (2,635) (253)
Exchange rate effect on cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 19 (25)
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (714) 571
Cash and cash equivalents — beginning of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 897 326
Cash and cash equivalents — end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 162 $ 183 $ 897
Supplemental Disclosures of Cash Flow Information
Cash paid during the period for:
Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 164 $ 247 $ 274
Income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 128 $ 249 $ 447
The accompanying notes to financial statements are an integral part of the above statements.
F-7

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
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
“Corporation”). Unless the context otherwise requires, all references to the Corporation include those entities
owned or controlled by the Corporation, which prior to April 10, 2006 included Starwood Hotels & Resorts (the
“Trust”). All references to “Starwood” or the “Company” refer to the Corporation, the Trust and its respective
subsidiaries, collectively through April 7, 2006. As a result of the Host Transaction (as defined below) in April
2006, the financial statements for the Trust are no longer required to be consolidated or presented separately, nor are
we required to include a guarantor footnote containing certain financial information for Sheraton Holding
Corporation (“Sheraton Holding”), a former subsidiary of the Corporation.
Starwood is one of the world’s largest hotel and leisure companies. The Company’s principal business is hotels
and leisure, which is comprised of a worldwide hospitality network of almost 900 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.
The Trust was formed in 1969 and elected to be taxed as a real estate investment trust under the Internal
Revenue Code. In 1980, the Trust formed the Corporation and made a distribution to the Trust’s shareholders of one
share of common stock, par value $0.01 per share, of the Corporation (a “Corporation Share”) for each common
share of beneficial interest, par value $0.01 per share, of the Trust (a “Trust Share”).
Pursuant to a reorganization in 1999, the Trust became a subsidiary of the Corporation, which indirectly held
all outstanding shares of the new Class A shares of beneficial interest of the Trust (“Class A Shares”). In the 1999
reorganization, each Trust Share was converted into one share of the new non-voting Class B Shares of beneficial
interest in the Trust (a “Class B Share”). Prior to the Host Transaction discussed below and in detail in Note 5, the
Corporation Shares and the Class B Shares traded together on a one-for-one basis, consisting of one Corporation
Share and one Class B Share (the “Shares”).
On April 7, 2006, in connection with the transaction (the “Host Transaction”) with Host Hotels & Resorts, Inc.,
its subsidiary Host Marriot, L.P. and certain other subsidiaries of Host Hotels & Resorts, Inc. (collectively, “Host”)
described below, the Shares were depaired and the Corporation Shares became transferable separately from the
Class B Shares. As a result of the depairing, the Corporation Shares trade alone under the symbol “HOT” on the
New York Stock Exchange (“NYSE”). As of April 10, 2006, neither Shares nor Class B Shares are listed or traded
on the NYSE.
On April 10, 2006, in connection with the Host Transaction, certain subsidiaries of Host acquired the Trust and
Sheraton Holding from the Corporation. As part of the Host Transaction, among other things, (i) a subsidiary of
Host was merged with and into the Trust, with the Trust surviving as a subsidiary of Host, (ii) all the capital stock of
Sheraton Holding was sold to Host and (iii) a subsidiary of Host was merged with and into SLT Realty Limited
Partnership (the “Realty Partnership”) with the Realty Partnership surviving as a subsidiary of Host.
Note 2. Significant Accounting Policies
Principles of Consolidation. The accompanying consolidated financial statements of the Company and its
subsidiaries include the assets, liabilities, revenues and expenses of majority-owned subsidiaries over which the
Company exercises control. Intercompany transactions and balances have been eliminated in consolidation.
Cash and Cash Equivalents. The Company considers all highly liquid investments purchased with an
original maturity of three months or less to be cash equivalents.
F-8

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Restricted Cash. Restricted cash primarily consists of deposits received on sales of VOIs and residential
properties that are held in escrow until a certificate of occupancy is obtained, the legal rescission period has expired
and the deed of trust has been recorded in governmental property ownership records. At December 31, 2007 and
2006, the Company had short-term restricted cash balances of $196 million and $329 million.
Inventories. Inventories are comprised principally of VOIs of $620 million and $472 million as of
December 31, 2007 and 2006, respectively, residential inventory of $33 million and $38 million at December 31,
2007 and 2006, respectively, hotel inventory and Bliss inventory. VOI and residential inventory is carried at the
lower of cost or net realizable value and includes $37 million, $22 million and $15 million of capitalized interest
incurred in 2007, 2006 and 2005, respectively. Hotel inventory includes operating supplies and food and beverage
inventory items which are generally valued at the lower of FIFO cost (first-in, first-out) or market. Hotel inventory
also includes linens, china, glass, silver, uniforms, utensils and guest room items. Significant purchases of these
items are recorded at purchased cost and amortized to 50% of their cost over 36 months. Normal replacement
purchases are expensed as incurred. Bliss inventory is valued at lower of cost or market.
Loan Loss Reserves. For the hotel segment, the Company measures loan impairment based on the present
value of expected future cash flows discounted at the loan’s original effective interest rate or the estimated fair value
of the collateral. For impaired loans, the Company establishes a specific impairment reserve for the difference
between the recorded investment in the loan and the present value of the expected future cash flows or the estimated
fair value of the collateral. The Company applies the loan impairment policy individually to all loans in the portfolio
and does not aggregate loans for the purpose of applying such policy. For loans that the Company has determined to
be impaired, the Company recognizes interest income on a cash basis.
For the vacation ownership and residential segment, the Company provides for estimated mortgages receivable
cancellations and defaults at the time the VOI sales are recorded with a charge to vacation ownership and residential
sales and services. The Company performs an analysis of factors such as economic condition and industry trends,
defaults, past due aging and historical write-offs of mortgages and contracts receivable to evaluate the adequacy of
the allowance.
Assets Held for Sale. The Company considers properties to be assets held for sale when management
approves and commits to a formal plan to actively market a property or group of properties for sale and a signed
sales contract and significant non-refundable deposit or contract break-up fee exist. Upon designation as an asset
held for sale, the Company records the carrying value of each property or group of properties at the lower of its
carrying value which includes allocable segment goodwill or its estimated fair value, less estimated costs to sell, and
the Company stops recording depreciation expense. Any gain realized in connection with the sale of a property for
which the Company has significant continuing involvement (such as through a long-term management agreement)
is deferred and recognized over the initial term of the related agreement (See Note 11). The operations of the
properties held for sale prior to the sale date, if material, are recorded in discontinued operations unless the
Company will have continuing involvement (such as through a management or franchise agreement) after the sale.
Investments. Investments in joint ventures are accounted for using the guidance of the revised Financial
Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities,” for all
ventures deemed to be variable interest entities (“VIEs”). See additional information regarding the Company’s VIEs
in Note 22. All other joint venture investments are accounted for under the equity method of accounting when the
Company has a 20% to 50% ownership interest or exercises significant influence over the venture. If the Company’s
interest exceeds 50% or in certain cases, if the Company exercises control over the venture, the results of the joint
venture are consolidated herein. All other investments are generally accounted for under the cost method.
The fair market value of investments is based on the market prices for the last day of the period if the
investment trades on quoted exchanges. For non-traded investments, fair value is estimated based on the underlying
value of the investment, which is dependent on the performance of the investment as well as the volatility inherent in
external markets for these types of investments. In assessing potential impairment for these investments, the
F-9

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Company will consider these factors as well as forecasted financial performance of its investment. If these forecasts
are not met, the Company may have to record impairment charges.
Plant, Property and Equipment. Plant, property and equipment, including capitalized interest of $10 mil-
lion, $5 million and $10 million incurred in 2007, 2006 and 2005, respectively, applicable to major project
expenditures are recorded at cost. The cost of improvements that extend the life of plant, property and equipment are
capitalized. These capitalized costs may include structural improvements, equipment and fixtures. Costs for normal
repairs and maintenance are expensed as incurred. Depreciation is provided on a straight-line basis over the
estimated useful economic lives of 15 to 40 years for buildings and improvements; 3 to 10 years for furniture,
fixtures and equipment; 3 to 7 years for information technology software and equipment and the lesser of the lease
term or the economic useful life for leasehold improvements. Gains or losses on the sale or retirement of assets are
included in income when the assets are sold provided there is reasonable assurance of the collectibility of the sales
price and any future activities to be performed by the Company relating to the assets sold are insignificant.
The Company evaluates the carrying value of its assets for impairment. For assets in use when the trigger
events specified in Statement of Financial Accounting Standards (“SFAS”) No. 144, “Accounting for the Impair-
ment or Disposal of Long-Lived Assets,” occur, the expected undiscounted future cash flows of the assets are
compared to the net book value of the assets. If the expected undiscounted future cash flows are less than the net
book value of the assets, the excess of the net book value over the estimated fair value is charged to current earnings.
Fair value is based upon discounted cash flows of the assets at rates deemed reasonable for the type of asset and
prevailing market conditions, appraisals and, if appropriate, current estimated net sales proceeds from pending
offers.
Goodwill and Intangible Assets. Goodwill and intangible assets arise in connection with acquisitions,
including the acquisition of management contracts. In accordance with the guidance in SFAS No. 141, “Business
Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets,” the Company does not amortize
goodwill and intangible assets with indefinite lives. Intangible assets with finite lives are amortized on a straight-
line basis over their respective useful lives. The Company reviews all goodwill and intangible assets for impairment
by comparisons of fair value to book value annually, or upon the occurrence of a trigger event. Impairment charges,
if any, are recognized in operating results.
Frequent Guest Program. Starwood Preferred Guest» (“SPG”) is the Company’s frequent guest incentive
marketing program. SPG members earn points based on spending at the Company’s properties, as incentives to first-
time buyers of VOIs and residences, and through participation in affiliated partners’ programs such as co-branded
credit cards. Points can be redeemed at substantially all of the Company’s owned, leased, managed and franchised
properties as well as through other redemption opportunities with third parties, such as conversion to airline miles.
Properties are charged based on hotel guests’ expenditures. Revenue is recognized by participating hotels and
resorts when points are redeemed for hotel stays.
The Company, through the services of third-party actuarial analysts, determines the fair value of the future
redemption obligation based on statistical formulas which project the timing of future point redemption based on
historical experience, including an estimate of the “breakage” for points that will never be redeemed, and an
estimate of the points that will eventually be redeemed as well as the cost of reimbursing hotels and other third
parties in respect of other redemption opportunities for point redemptions. The Company’s management and
franchise agreements require that the Company be reimbursed currently for the costs of operating the program,
including marketing, promotion, communications with, and performing member services for the SPG members.
Actual expenditures for SPG may differ from the actuarially determined liability.
The liability for the SPG program is included in other long-term liabilities and accrued expenses in the
accompanying consolidated balance sheets. The total actuarially determined liability as of December 31, 2007 and
2006 is $536 million and $409 million, respectively, of which $182 million and $132 million, respectively, is
included in accrued expenses.
F-10

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Legal Contingencies. The Company is subject to various legal proceedings and claims, the outcomes of
which are subject to significant uncertainty. SFAS No. 5, “Accounting for Contingencies,” requires that an estimated
loss from a loss contingency be accrued with a corresponding charge to income if it is probable that an asset has been
impaired or a liability has been incurred and the amount of the loss can be reasonably estimated. Disclosure of a
contingency is required if there is at least a reasonable possibility that a loss has been incurred. The Company
evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a
reasonable estimate of the amount of loss. Changes in these factors could materially impact the Company’s
financial position or its results of operations.
Derivative Financial Instruments. The Company enters into interest rate swap agreements to manage
interest rate exposure. The net settlements paid or received under these agreements are accrued consistent with the
terms of the agreements and are recognized in interest expense over the term of the related debt. The fair value of the
swaps is included in other liabilities or assets.
The Company enters into foreign currency hedging contracts to manage exposure to foreign currency
fluctuations. All foreign currency hedging instruments have an inverse correlation to the hedged assets or liabilities.
Changes in the fair value of the derivative instruments are classified in the same manner as the classification of the
changes in the underlying assets or liabilities due to fluctuations in foreign currency exchange rates.
The Company does not enter into derivative financial instruments for trading or speculative purposes and
monitors the financial stability and credit standing of its counterparties.
Foreign Currency Translation. Balance sheet accounts are translated at the exchange rates in effect at each
period end and income and expense accounts are translated at the average rates of exchange prevailing during the
year. The national currencies of foreign operations are generally the functional currencies. Gains and losses from
foreign exchange and the effect of exchange rate changes on intercompany transactions of a long-term investment
nature are generally included in other comprehensive income. Gains and losses from foreign exchange rate changes
related to intercompany receivables and payables that are not of a long-term investment nature are reported
currently in costs and expenses and amounted to a net loss of $11 million in 2007 and net gains of $8 million and
$2 million in 2006 and 2005, respectively. Gains and losses from foreign currency transactions are reported
currently in costs and expenses and amounted to a net loss of $4 million in 2005. Gains and losses from foreign
currency transactions were insignificant in 2007 and 2006.
Income Taxes. The Company provides for income taxes in accordance with SFAS No. 109, “Accounting for
Income Taxes.” The objectives of accounting for income taxes are to recognize the amount of taxes payable or
refundable for the current year and deferred tax liabilities and assets for the future tax consequences of events that
have been recognized in an entity’s financial statements or tax returns.
Deferred tax assets and liabilities are measured using enacted tax rates in effect for the year in which those
temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a
change in tax rates is recognized in earnings in the period when the new rate is enacted.
Revenue Recognition. The Company’s revenues are primarily derived from the following sources: (1) hotel
and resort revenues at the Company’s owned, leased and consolidated joint venture properties; (2) vacation
ownership and residential revenues; (3) management and franchise revenues; (4) revenues from managed and
franchised properties; and (5) other revenues which are ancillary to the Company’s operations. Generally, revenues
are recognized when the services have been rendered. Taxes collected from customers and submitted to taxing
authorities are not recorded in revenue. The following is a description of the composition of revenues for the
Company:
• Owned, Leased and Consolidated Joint Ventures — Represents revenue primarily derived from hotel
operations, including the rental of rooms and food and beverage sales, from owned, leased or consolidated
F-11

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
joint venture hotels and resorts. Revenue is recognized when rooms are occupied and services have been
rendered.
• Vacation Ownership and Residential — The Company recognizes revenue from VOI and residential sales in
accordance with SFAS No. 152, “Accounting for Real Estate Time Sharing Transactions,” and SFAS No. 66,
“Accounting for Sales of Real Estate,” as amended. The Company recognizes sales when the buyer has
demonstrated a sufficient level of initial and continuing involvement, the period of cancellation with refund
has expired and receivables are deemed collectible. For sales that do not qualify for full revenue recognition
as the project has progressed beyond the preliminary stages but has not yet reached completion, all revenue
and profit are initially deferred and recognized in earnings through the percentage-of-completion method.
Interest income associated with timeshare notes receivable is also included in vacation ownership and
residential sales and services revenue and totaled $40 million, $30 million and $24 million in 2007, 2006 and
2005, respectively. The Company has also entered into licensing agreements with third-party developers to
offer consumers branded condominiums or residences. The fees from these arrangements are generally
based on the gross sales revenue of the units sold.
• Management and Franchise Revenues — Represents fees earned on hotels managed worldwide, usually
under long-term contracts, franchise fees received in connection with the franchise of the Company’s
Sheraton, Westin, Four Points by Sheraton, Le Méridien, St. Regis, W and Luxury Collection brand names,
termination fees and the amortization of deferred gains related to sold properties for which we have
significant continuing involvement, offset by payments by the Company under performance and other
guarantees. Management fees are comprised of a base fee, which is generally based on a percentage of gross
revenues, and an incentive fee, which is generally based on the property’s profitability. Base fee revenues are
recognized when earned in accordance with the terms of the contract. For any time during the year, when the
provisions of the management contracts allow receipt of incentive fees upon termination, incentive fees are
recognized for the fees due and earned as if the contract was terminated at that date, exclusive of any
termination fees due or payable. Franchise fees are generally based on a percentage of hotel room revenues
and are recognized in accordance with SFAS No. 45, “Accounting for Franchise Fee Revenue,” as the fees
are earned and become due from the franchisee.
• Revenues from Managed and Franchised Properties — These revenues represent reimbursements of costs
incurred on behalf of managed hotel properties and franchisees. These costs relate primarily to payroll costs
at managed properties where the Company is the employer. Since the reimbursements are made based upon
the costs incurred with no added margin, these revenues and corresponding expenses have no effect on the
Company’s operating income or net income.
Insurance Retention. Through its captive insurance company, the Company provides insurance coverage for
workers’ compensation, property and general liability claims arising at hotel properties owned or managed by the
Company through policies written directly and through reinsurance arrangements. Estimated insurance claims
payable represent expected settlement of outstanding claims and a provision for claims that have been incurred but
not reported. These estimates are based on our assessment of potential liability using an analysis of available
information including pending claims, historical experience and current cost trends. The amount of the ultimate
liability may vary from these estimates. Estimated costs of these self-insurance programs are accrued, based on the
analysis of third-party actuaries.
Costs Incurred to Sell VOIs. The Company capitalizes direct costs attributable to the sale of VOIs until the
sales are recognized. Selling and marketing costs capitalized under this methodology were approximately $6 million
and $21 million as of December 31, 2007 and 2006, respectively, and all such capitalized costs are included in
prepaid expenses and other assets in the accompanying consolidated balance sheets. Costs eligible for capitalization
follow the guidelines of SFAS No. 152. If a contract is cancelled, the Company charges the unrecoverable direct
selling and marketing costs to expense and records forfeited deposits as income.
F-12

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
VOI and Residential Inventory Costs. Real estate and development costs are valued at the lower of cost or
net realizable value. Development costs include both hard and soft construction costs and together with real estate
costs are allocated to VOIs and residential units on the relative sales value method. Interest, property taxes and
certain other carrying costs incurred during the construction process are capitalized as incurred. Such costs
associated with completed VOI and residential units are expensed as incurred.
Advertising Costs. The Company enters into multi-media ad campaigns, including television, radio, internet
and print advertisements. Costs associated with these campaigns, including communication and production costs,
are aggregated and expensed the first time that the advertising takes place in accordance with the American Institute
of Certified Public Accountants (“AICPA”) Statement of Position (“SOP”) No. 93-7, “Reporting on Advertising
Costs.” If it becomes apparent that the media campaign will not take place, all costs are expensed at that time.
During the years ended December 31, 2007, 2006 and 2005, the Company incurred approximately $116 million,
$135 million and $117 million of advertising expense, respectively, a significant portion of which was reimbursed
by managed and franchised hotels.
Retained Interests. The Company periodically sells notes receivable originated by our vacation ownership
business in connection with the sale of VOIs. The Company retains interests in the assets transferred to qualified and
non-qualified special purpose entities which are accounted for as over-collateralizations and interest only strips.
These retained interests are treated as “available-for-sale” transactions under the provisions of SFAS No. 115,
“Accounting for Certain Investments in Debt and Equity Securities.” The Company reports changes in the fair
values of these Retained Interests through the accompanying consolidated statement of comprehensive income. The
Company had Retained Interests of $40 million and $51 million at December 31, 2007 and 2006, respectively.
Use of Estimates. The preparation of financial statements in conformity with accounting principles gen-
erally accepted in the United States requires management to make estimates and assumptions that affect the
reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the
financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
Reclassifications. Certain reclassifications have been made to the prior years’ financial statements to
conform to the current year presentation.
Impact of Recently Issued Accounting Standards.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial
Liabilities Including an Amendment of FASB Statement No. 115.” This standard permits entities to choose to
measure financial instruments and certain other items at fair value and is effective for the first fiscal year beginning
after November 15, 2007. SFAS No. 159 must be applied prospectively, and the effect of the first re-measurement to
fair value, if any, should be reported as a cumulative — effect adjustment to the opening balance of retained
earnings. The adoption of SFAS No. 159 is not expected to have a material impact on the Company’s consolidated
financial statements.
In June 2007, the FASB ratified the consensus reached by the Emerging Issues Task Force of the FASB (“EITF”)
in Issue No. 06-11, “Accounting for Income Tax Benefits of Dividends on Share-Based Payment Awards.” Under this
consensus, a realized income tax benefit from dividends or dividend equivalents that are charged to retained earnings
and are paid to employees under certain equity-based benefit plans should be recognized as an increase in additional
paid-in capital. The consensus is effective in fiscal years beginning after December 15, 2007 and should be applied
prospectively for income tax benefits derived from dividends declared after adoption. The adoption of EITF 06-11 is
not expected to have a material impact on the Company’s consolidated financial statements.
In December 2007, the FASB issued SFAS No. 141 (revised 2007) (SFAS 141(R)), “Business Combinations,”
which is a revision of SFAS 141, “Business Combinations.” The primary requirements of SFAS 141(R) are as
follows: (I.) Upon initially obtaining control, the acquiring entity in a business combination must recognize 100% of
F-13

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
the fair values of the acquired assets, including goodwill, and assumed liabilities, with only limited exceptions even
if the acquirer has not acquired 100% of its target. As a consequence, the current step acquisition model will be
eliminated. (II.) Contingent consideration arrangements will be fair valued at the acquisition date and included on
that basis in the purchase price consideration. The concept of recognizing contingent consideration at a later date
when the amount of that consideration is determinable beyond a reasonable doubt, will no longer be applicable.
(III.) All transaction costs will be expensed as incurred. SFAS 141 (R) is effective as of the beginning of an entity’s
first fiscal year beginning after December 15, 2008. Adoption is prospective and early adoption is not permitted.
The Company is currently evaluating the impact that the adoption of SFAS 141 (R) will have on its consolidated
financial statements.
In December 2007, the FASB issued SFAS No. 160, “Non-controlling Interests in Consolidated Financial
Statements — An Amendment of ARB No. 51, or SFAS No. 160.” SFAS No. 160 establishes new accounting and
reporting standards for the non-controlling interest in a subsidiary and for the deconsolidation of a subsidiary.
SFAS No. 160 is effective for fiscal years beginning on or after December 15, 2008. The Company does not believe
that SFAS 160 will have a material impact on the consolidated financial statements.
In December 2007, the EITF reached a consensus on EITF issue No. 07-6 “Accounting for the Sale of Real
Estate Subject to the Requirements of FASB Statement No. 66 When the Agreement Includes a Buy-Sell
Clause”(“EITF 07-6”). EITF 07-6 establishes that a buy-sell clause, in and of itself does not constitute a prohibited
form of continuing involvement that would preclude partial sales treatment under FASB Statement No. 66.
EITF 07-6 will be effective for new arrangements entered into in fiscal years beginning after December 15, 2007
and interim periods within those fiscal years. The Company does not believe the adoption of EITF 07-6 will have a
material impact on the consolidated financial statements.
In November 2006, the EITF reached a consensus on EITF Issue No. 06-8, “Applicability of the Assessment of
a Buyer’s Continuing Investment under FASB Statement No. 66, Accounting for Sales of Real Estate, for Sales of
Condominiums” (“EITF 06-8”). EITF 06-8 will require condominium sales to meet the continuing involvement
criterion of SFAS No. 66 in order for profit to be recognized under the percentage of completion method. EITF 06-8
will be effective for annual reporting periods beginning after March 15, 2007. The cumulative effect of applying
EITF 06-8, if any, is to be reported as an adjustment to the opening balance of retained earnings in the year of
adoption. The adoption of EITF 06-8 will not have a significant impact on the Company’s financial statements or
require a cumulative effect adjustment.
In September 2006, the FASB issued SFAS No. 158, “Employers’ Accounting for Defined Benefit Pension and
Other Postretirement Plans — an amendment of FASB Statements No. 87, 88, 106, and 132(R),” which requires
plan sponsors of defined benefit pension and other postretirement benefit plans (collectively, “Benefit Plans”) to
recognize the funded status of their Benefit Plans in the consolidated balance sheet, measure the fair value of plan
assets and benefit obligations as of the date of the fiscal year-end statement of financial position, and provide
additional disclosures. On December 31, 2006, the Company adopted the recognition and disclosure provisions of
SFAS No. 158. The effect of adopting SFAS No. 158 on the Company’s financial condition at December 31, 2006
has been included in the accompanying consolidated financial statements. SFAS No. 158 has been applied
prospectively and does not impact the Company’s prior year financial statements. SFAS No. 158’s provisions
regarding the change in the measurement date of Benefit Plans are not applicable as the Company currently uses a
measurement date of December 31 for its benefit plans.
In September 2006, the FASB issued SFAS No. 157, “Fair Value Measurements,” which provides enhanced
guidance for using fair value to measure assets and liabilities. SFAS No. 157 establishes a common definition of fair
value, provides a framework for measuring fair value under U.S. generally accepted accounting principles and
expands disclosure requirements about fair value measurements. SFAS No. 157 is effective for financial statements
issued in fiscal years beginning after November 15, 2007, and interim periods within those fiscal years. The
Company does not believe that the adoption of SFAS No. 157 will have a material impact on the consolidated
financial statements.
F-14

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
In June 2006, the FASB issued Interpretation No. 48, “Accounting for Uncertainty in Income Taxes”
(“FIN 48”). This interpretation, among other things, creates a two step approach for evaluating uncertain tax
positions. Recognition (step one) occurs when an enterprise concludes that a tax position, based solely on its
technical merits, is more-likely-than-not to be sustained upon examination. Measurement (step two) determines the
amount of benefit that more-likely-than-not will be realized upon settlement. Derecognition of a tax position that
was previously recognized would occur when a company subsequently determines that a tax position no longer
meets the more-likely-than-not threshold of being sustained. FIN 48 specifically prohibits the use of a valuation
allowance as a substitute for derecognition of tax positions, and it has expanded disclosure requirements. The
Company adopted FIN 48 on January 1, 2007, and recorded an increase of approximately $35 million as a
cumulative-effect adjustment to the beginning balance of retained earnings. See Note 13 for additional information.
In March 2006, the FASB issued SFAS No. 156, “Accounting for Servicing of Financial Assets, an amendment
of FASB Statement No. 140,” which amends SFAS No. 140, “Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities.” SFAS No. 156 changes SFAS No. 140 by requiring that Mortgage
Servicing Rights (“MSRs”) be initially recognized at their fair value and by providing the option to either: (1) carry
MSRs at fair value with changes in fair value recognized in earnings; or (2) continue recognizing periodic
amortization expense and assess the MSRs for impairment as originally required by SFAS No. 140. This option may
be applied by class of servicing asset or liability. SFAS No. 156 is effective for all separately recognized servicing
assets and liabilities acquired or issued after the beginning of an entity’s fiscal year that begins after September 15,
2006, with early adoption permitted. As the Company’s servicing agreements have been negotiated at arms-length
based on market conditions, the Company has not recognized any servicing assets or liabilities. As such,
SFAS No. 156 has no impact on the Company.
In December 2004, the FASB issued SFAS No. 123(R), “Share Based Payment,” a revision of FASB Statement
No. 123, “Accounting for Stock Based Compensation.” It requires all share-based payments, including grants of
employee stock options, to be recognized in the income statement based on their fair value. Proforma disclosure is
no longer an alternative. In accordance with the transition rules, the Company adopted SFAS No. 123(R) effective
January 1, 2006 under the modified prospective method. The Company recorded $23 million and $47 million of
stock option expense for the years ended December 31, 2007 and 2006, respectively, net of the estimated impact of
reimbursements from third parties.
In December 2004, the FASB issued SFAS No. 152, which amends SFAS No. 66, and SFAS No. 67,
“Accounting for Costs and Initial Rental Operations of Real Estate Projects,” in association with the issuance of
AICPA SOP 04-2, “Accounting for Real Estate Time-Sharing Transactions.” These statements were issued to
address the diversity in practice caused by a lack of guidance specific to real estate time-sharing transactions.
Among other things, the standard addresses the treatment of sales incentives provided by a seller to a buyer to
consummate a transaction, the calculation of accounting for uncollectible notes receivable, the recognition of
changes in inventory cost estimates, recovery or repossession of VOIs, selling and marketing costs, associations and
upgrade and reload transactions. The standard also requires a change in the classification of the provision for loan
losses for VOI notes receivable from an expense to a reduction in revenue.
In accordance with SFAS No. 66, as amended by SFAS No. 152, the Company recognizes sales when the
period of cancellation with refund has expired, receivables are deemed collectible and the buyer has demonstrated a
sufficient level of initial and continuing involvement. For sales that do not qualify for full revenue recognition as the
project has progressed beyond the preliminary stages but has not yet reached completion, all revenue and associated
direct expenses are initially deferred and recognized in earnings through the percentage-of-completion method.
The Company adopted SFAS No. 152 on January 1, 2006 and recorded a charge of $70 million, net of a
$46 million tax benefit, as a cumulative effect of accounting change in its 2006 consolidated statement of income.
F-15

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 3. Earnings per Share
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):
Year Ended December 31,
2007 2006 2005
Per Per Per
Earnings Shares Share Earnings Shares Share Earnings Shares Share
Basic earnings from continuing operations . . . . . . . . . . $543 203 $2.67 $1,115 213 $5.25 $423 217 $1.95
Effect of dilutive securities:
Employee options and restricted stock awards . . . . . . — 8 — 9 — 8
Convertible debt . . . . . . . . . . . . . . . . . . . . . . . . . . — — — 1 — —
Diluted earnings from continuing operations . . . . . . . . . $543 211 $2.57 $1,115 223 $5.01 $423 225 $1.88
Approximately 1 million Shares, 2 million Shares and 4 million Shares were excluded from the computation of
diluted Shares in 2007, 2006 and 2005, respectively, as their impact would have been anti-dilutive.
On March 15, 2006, the Company completed the redemption of the remaining 25,000 shares of Class B
Exchangeable Preferred Shares of the Trust (“Class B EPS”) for approximately $1 million. In April 2006 the
Company completed the redemption of the remaining 562,000 shares of Class A Exchangeable Preferred Shares of
the Trust (“Class A EPS”) for approximately $33 million. For the period prior to the redemption dates,
157,000 shares of Class A and Class B EPS are included in the computation of basic Shares for the year ended
December 31, 2006. Approximately 1 million shares of Class A EPS and Class B EPS are included in the
computation of the basic Share numbers for the year ended December 31, 2005.
Prior to June 5, 2006, the Company had contingently convertible debt, the terms of which allowed for the
Company to redeem such instruments in cash or Shares. The Company, in accordance with SFAS No. 128,
“Earnings per Share,” utilized the if-converted method to calculate dilution once certain trigger events were met.
One of the trigger events for the Company’s contingently convertible debt was met during the first quarter of 2006
when the closing sale price per Share was $60 or more for a specified length of time. On May 5, 2006, the Company
gave notice of its intention to redeem the convertible debt on June 5, 2006. Under the terms of the convertible
indenture, prior to this redemption date, the note holders had the right to convert their notes into Shares at the stated
conversion rate. Under the terms of the indenture, the Company settled conversions by paying the principal portion
of the notes in cash and the excess amount of the conversion spread in Corporation Shares. For the period prior to the
conversion dates, approximately 1 million Shares were included in the computation of diluted Shares for the year
ended December 31, 2006.
At December 31, 2005, approximately 400,000 Shares issuable under the above described convertible debt
were included in the calculation of diluted Shares as the trigger events for conversion had occurred.
In connection with the Host Transaction, Starwood’s shareholders received 0.6122 Host shares and $0.503 in
cash for each of their Class B Shares. Holders of Starwood employee stock options did not receive this consideration
while the market price of our publicly traded shares was reduced to reflect the payment of this consideration directly
to the holders of the Class B Shares. In order to preserve the value of the Company’s options immediately before and
after the Host Transaction, in accordance with the stock option agreements, the Company adjusted its stock options
to reduce the strike price and increase the number of stock options using the intrinsic value method based on the
Company’s stock price immediately before and after the transaction. As a result of this adjustment, the diluted stock
options increased by approximately 1 million Corporation Shares effective as of the closing of the Host Transaction.
In accordance with SFAS No. 123(R), this adjustment did not result in any incremental fair value, and as such, no
additional compensation cost was recognized. Furthermore, in order to preserve the value of the contingently
convertible debt discussed above, the Company modified the conversion rate of the contingently convertible debt in
accordance with the indenture.
F-16

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 4. Significant Acquisitions
Acquisition of the Sheraton Steamboat Resort and Conference Center
During the second quarter of 2007, the Company purchased the Sheraton Steamboat Resort & Conference
Center for approximately $58 million in cash from a joint venture in which the Company held a 10% interest. The
sale resulted in the recognition of a gain by the joint venture, and the Company’s portion of the gain was
approximately $7 million, which was recorded as a reduction in the basis of the assets purchased by the Company.
Acquisition of interest in a Joint Venture that Purchased the Sheraton Grande Tokyo Bay Hotel
During the first quarter of 2007, the Company entered into a joint venture that acquired the Sheraton Grande
Tokyo Bay Hotel. This hotel has been managed by the Company since its opening and will continue to be operated
by the Company under a long-term management agreement with the joint venture. The Company invested
approximately $19 million in this venture in exchange for a 25.1% ownership interest.
Acquisition of Certain Assets from Club Regina Resorts
In December 2006, the Company completed a transaction to, among other things, purchase certain assets from
Club Regina Resorts (“CRR”) in Mexico. These assets included land and fixed assets adjacent to The Westin
Resort & Spa in Los Cabos, Mexico, and terminated CRR’s rights to solicit guests at three Westin properties in
Mexico. In addition to the purchase of these assets, the transaction included the settlement of all pending and
threatened legal claims between the parties and the exchange of a new issue of CRR notes with a lower principal
amount for notes the Company previously held from an affiliate of CRR. Total consideration of approximately
$41 million was paid by Starwood for these items. The portion related to the legal settlement was expensed.
Development of Restaurant Concepts with Chef Jean-Georges Vongerichten
In May 2006, the Company partnered with Chef Jean-Georges Vongerichten and a private equity firm to create
a joint venture that will develop, own, operate, manage and license world-class restaurant concepts created by
Jean-Georges Vongerichten, including operating the existing Spice Market restaurant located in New York City. The
concepts owned by the venture will be available for Starwood’s upper-upscale and luxury hotel brands including
W, Westin, Le Meridien and St. Regis. Additionally, the venture may own and operate freestanding restaurants
outside of Starwood’s hotels. Starwood invested approximately $22 million in this venture for a 32.7% equity
interest.
Acquisition of Le Méridien
In November 2005, the Company acquired the Le Méridien brand and the related management and franchise
business for the portfolio of 122 hotels and resorts (the “Le Méridien Acquisition”). The purchase price of
approximately $252 million was funded from available cash and the return of funds from the Company’s original
purchase of an interest in Le Méridien debt in late 2003. The Company has accounted for this acquisition under the
purchase method in accordance with SFAS No. 141 and has allocated $114 million of the purchase price to goodwill
with the remainder assigned to the estimated fair value of the assets acquired and liabilities assumed.
Note 5. Asset Dispositions and Impairments
During 2007, the Company recorded a net loss of $44 million, primarily related to a net loss of $58 million on
the sale of eight wholly owned hotels which were sold in multiple transactions, $20 million of which related to four
hotels that closed in the fourth quarter. These losses were offset in part by $20 million of net gains primarily on the
sale of assets in which we held a minority interest and a gain of $6 million as a result of insurance proceeds received
for property damage caused by storms at two owned hotels in prior years. Other activity resulted in a loss of
$12 million.
F-17

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
During the second quarter of 2006, the Company consummated the Host Transaction whereby subsidiaries of
Host acquired 33 properties and the stock of certain controlled subsidiaries, including Sheraton Holding and the
Trust. The stock and cash transaction was valued at approximately $4.1 billion, including debt assumption (based on
Host’s closing stock price on April 7, 2006 of $20.53). In the first phase of the transaction, 28 hotels and the stock of
certain controlled subsidiaries, including Sheraton Holding and the Trust, were acquired by Host for consideration
valued at $3.54 billion. On May 3, 2006, four additional hotels located in Europe were sold to Host for net proceeds
of approximately $481 million in cash. On June 13, 2006, the final hotel in Venice, Italy was sold to Host for net
proceeds of approximately $74 million in cash. In connection with the first phase of the transaction, Starwood
shareholders received approximately $2.8 billion in the form of Host common stock valued at $2.68 billion and
$119 million in cash for their Class B shares. Based on Host’s closing price on April 7, 2006, this consideration had
a per Class B share value of $13.07. Starwood directly received approximately $738 million of consideration
in the first phase, including $600 million in cash, $77 million in debt assumption and $61 million in Host common
stock. In addition, the Corporation assumed from its subsidiary, Sheraton Holding, debentures with a principal
balance of $600 million. As the sale of the Class B shares involved a transaction with Starwood’s shareholders, the
book value of the Trust associated with this sale was treated as a non-reciprocal transaction with owners and was
removed through retained earnings up to the amount of retained earnings that existed at the sale date with the
remaining balance reducing additional paid in capital. This portion of the transaction was treated as a non-cash
exchange by Starwood and, consequently, was excluded from the consolidated statement of cash flows. The portion
of the transaction between the Company and Host was recorded as a disposition under the provisions of
SFAS No. 144. As Starwood sold these hotels subject to long-term management contracts, the calculated gain
on the sale of approximately $962 million has been deferred and is being amortized over the initial management
contract term of 20 years. This transaction also generated a capital loss, net of carry back and 2006 utilization, of
$2.4 billion for federal tax purposes. The entire tax benefit of the loss was offset by a valuation allowance due to the
uncertainty of realizing the tax benefit of this capital loss carryforward before its expiration in 2011. See Note 13.
The Company sold all of the Host common stock in the second quarter of 2006 and recorded a net gain of
approximately $1 million.
During 2006, the Company sold ten additional hotels in multiple transactions for approximately $437 million
in cash. The Company recorded a net loss of approximately $7 million associated with these sales. In addition, the
Company recorded a $5 million adjustment to reduce the gain on the sale of a hotel consummated in 2004 as certain
contingencies associated with that sale became probable in 2006.
Also in 2006, the Company recorded a loss of approximately $23 million primarily in connection with the
impairment of two properties, one of which has been demolished and is being rebuilt under the aloft and Element
brands and another which represents land that was sold to a developer who is building two Starwood branded hotels
on the site. This loss was offset by a gain of approximately $29 million on the sale of the Company’s interests in two
joint ventures.
Also during 2006, the Company recorded an impairment charge of $11 million related to the Sheraton Cancun
in Cancun, Mexico that was damaged by Hurricane Wilma in 2005 and will now be completely demolished in order
to build additional vacation ownership units. This impairment charge was offset by a $13 million gain as a result of
insurance proceeds received primarily for the Sheraton Cancun and the Company’s other owned hotel in Cancun,
the Westin Cancun, as reimbursement for property damage caused by the same storm.
In September 2006, a joint venture, in which the Company has a minority interest, completed the sale of the
Westin Kierland hotel in Scottsdale, Arizona and the Company realized net proceeds of approximately $45 million.
The Company continues to manage the hotel subject to a newly amended, long-term management contract.
Accordingly, the Company’s share of the gain on the sale of approximately $46 million was deferred and is being
recognized in earnings over the remaining 21 years of the management contract.
In December 2005, the Company sold the Hotel Danieli in Venice, Italy for approximately 177 million euros
(approximately $213 million based on the exchange rate at the time the sale closed) in cash. The Company
F-18

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
continues to manage the hotel subject to a long-term management contract. Accordingly, the gain on the sale of
approximately $128 million was deferred and is being recognized in earnings over the 10-year life of the
management contract.
The Company sold four additional hotels for approximately $53 million in cash during 2005 and recorded
losses totaling approximately $13 million associated with these sales. The Company had recorded impairment
charges of $17 million in 2004 related to one of these properties.
Also during 2005, the Company sold three hotels unencumbered by long-term management contracts for
approximately $171 million in cash and recorded gains totaling approximately $38 million associated with these
sales.
In August 2005 the Company completed the sale of the St. Regis hotel in Washington D.C. for approximately
$47 million in cash. The Company continues to manage the hotel subject to a long-term management contract.
Accordingly, the gain on the sale of approximately $32 million was deferred and is being recognized in earnings
over the 15-year life of the management contract.
In April 2005, the Company completed the sale of the Sheraton Lisboa Hotel and Towers in Lisbon, Portugal
for approximately $31 million in cash. The Company continues to manage the hotel subject to a long-term
management contract. Accordingly, the gain on the sale of approximately $6 million was deferred and is being
recognized in earnings over the 20-year life of the management contract.
The Company recorded an impairment charge of approximately $17 million in 2005 associated with the
Sheraton Cancun that was demolished to build vacation ownership units. The Company also recorded an
impairment charge of approximately $32 million in accordance with SFAS No. 144 in order to write down one
hotel to its fair market value.
The hotels sold in 2007, 2006 and 2005 were generally encumbered by long-term management or franchise
contracts, and therefore, their operations prior to the sale date are not classified as discontinued operations.
Note 6. Assets Held for Sale
In October 2006, the Company closed on the sale of land near the Montreal Airport to a developer who is
building two Starwood branded hotels on the site. The purchase agreement contains a provision that may allow, but
not obligate, Starwood to repurchase the land for the purchase price it received less a non-refundable amount if the
hotels are not built. As a result of this provision, the Company had not treated this transaction as a sale, and the
Company classified this asset as held for sale at December 31, 2006. As discussed in Note 5, the Company also
recorded an impairment charge of approximately $5 million in 2006 related to this land. During the third quarter of
2007, the hotels reached the stage of development that terminated Starwood’s right to purchase the land in
accordance with the purchase agreement. As such, the sale has now been recognized.
F-19

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 7. Plant, Property and Equipment
Plant, property and equipment, excluding assets held for sale, consisted of the following (in millions):
December 31,
2007 2006
Land and improvements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 714 $ 760
Buildings and improvements. . . . . . . . . . . . . . ......................... 3,589 3,603
Furniture, fixtures and equipment . . . . . . . . . . ......................... 1,690 1,566
Construction work in process . . . . . . . . . . . . . ......................... 221 153
6,214 6,082
Less accumulated depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . (2,364) (2,251)
$ 3,850 $ 3,831
Note 8. Goodwill and Intangible Assets
The changes in the carrying amount of goodwill for the year ended December 31, 2007 are as follows (in
millions):
Vacation
Hotel Ownership
Segment Segment Total
Balance at January 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,470 $241 $1,711
Purchase price adjustments related to the Le Méridien Acquisition . . (6) — (6)
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . 17 — 17
Asset dispositions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16) — (16)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,465 $241 $1,706
Intangible assets consisted of the following (in millions):
December 31,
2007 2006
Trademarks and trade names . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 320 $315
Management and franchise agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 310 291
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90 81
720 687
Accumulated amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (124) (96)
$ 596 $591
The intangible assets related to management and franchise agreements have finite lives, and accordingly, the
Company recorded amortization expense of $26 million, $25 million and $19 million, respectively, during the years
ended December 31, 2007, 2006 and 2005. The other intangible assets noted above have indefinite lives.
F-20

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Amortization expense relating to intangible assets with finite lives for each of the years ended December 31 is
expected to be as follows (in millions):
2008 . .................................................. ................ $28
2009 . .................................................. ................ $26
2010 . .................................................. ................ $26
2011 . .................................................. ................ $24
2012 . .................................................. ................ $24
Note 9. Other Assets
Other assets include notes receivable of $414 million and $293 million, net of allowance for doubtful accounts,
at December 31, 2007 and 2006, respectively. Included in these balances at December 31, 2007 and 2006 are the
following fixed rate notes receivable related to the financing of VOIs (in millions):
December 31,
2007 2006
Gross VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $484 $296
Allowance for uncollectible VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . (68) (31)
Net VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 416 265
Less current maturities of gross VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . (50) (25)
Current portion of the allowance for uncollectible VOI notes receivable. . . . . . . . . . . 7 2
Long-term portion of net VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $373 $242
The current maturities of net VOI notes receivable are included in accounts receivable in the Company’s
balance sheets.
The interest rates of the owned VOI notes receivable are as follows:
December 31,
2007 2006
Range of stated interest rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0% - 18% 0% - 18%
Weighted average interest rate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.8% 11.9%
The maturities of the gross VOI notes receivable are as follows (in millions):
December 31,
2007 2006
Due in 1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 50 $ 25
Due in 2 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 22
Due in 3 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 24
Due in 4 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 26
Due in 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 28
Due beyond 5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255 171
Total gross VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $484 $296
F-21

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The activity in the allowance for VOI loan losses was as follows (in millions):
Balance at January 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 31
Provision for loan losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Write-offs of uncollectible receivables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 68
Note 10. Notes Receivable Securitizations and Sales
From time to time, the Company securitizes or sells, without recourse, its fixed rate VOI notes receivable. To
accomplish these securitizations, the Company transfers a pool of VOI notes receivable to 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. To accomplish these sales,
the Company transfers a pool of VOI notes receivable to SPEs and the SPEs transfer the VOI notes receivables to a
third party purchaser. The Company continues to service the securitized and sold 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 Company’s VOI notes receivable securitizations and sales 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 December 31, 2007, 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, provides 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 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 December 31, 2007, the Retained Interests are
classified and accounted for as “available-for-sale” securities in accordance with SFAS No. 115 and SFAS No. 140.
The Company’s securitization and sale agreements provide the Company with the option, subject to certain
limitations, to repurchase defaulted VOI notes receivable at their outstanding principal amounts. Such repurchases
totaled $21 million, $15 million and $13 million during 2007, 2006, and 2005, respectively. The Company has been
able to resell the VOIs underlying the VOI notes repurchased under these provisions without incurring significant
losses. As allowed under the related agreements, the Company replaced the defaulted VOI notes receivable under
the securitization and sale agreements with new VOI notes receivable, resulting in net gains of approximately
$2 million, $1 million, and $1 million annually in 2007, 2006 and 2005, respectively, which amounts are included in
vacation ownership and residential sales and services in 2007 and 2006, and in gain on sale of VOI notes receivable
in 2005 in the Company’s consolidated statements of income. These amounts are excluded from the gain amounts
indicated below.
In September 2006, the Company repurchased all of the VOI notes receivables still outstanding ($20 million)
that had been securitized in 2001 for $18 million. In addition, in November 2006 the Company securitized
approximately $133 million of VOI notes receivable (the “2006 Securitization”) resulting in net cash proceeds of
approximately $116 million. In accordance with SFAS No. 152, the related gain of $17 million is included in
vacation ownership and residential sales and services in the Company’s consolidated statements of income. Prior to
SOP 04-2, gains on note securitizations were included as a separate line in the Company’s statements of income.
Key assumptions used in measuring the fair value of the Retained Interests at the time of the 2006
Securitization and at December 31, 2006, relating to the 2006 Securitization, were as follows: discount rate of
10%; annual prepayments, which yields an average expected life of the prepayable VOI notes receivable of
94 months; and expected gross VOI notes receivable balance defaulting as a percentage of the total initial pool of
14.2%. These key assumptions are based on the Company’s experience.
F-22

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
In November 2005, the Company securitized approximately $221 million of VOI notes receivable (the “2005
Securitization”), resulting in gross cash proceeds of approximately $197 million. The related gain of $24 million is
included in gain on sale of VOI notes receivable in the Company’s consolidated statements of income. In connection
with the 2005 Securitization, the Company used a portion of the proceeds to repurchase all the remaining VOI notes
receivable sold under the 2004 Purchase Facility for approximately $64 million.
Key assumptions used in measuring the fair value of the Retained Interests at the time of the 2005
Securitization and at December 31, 2005, relating to the 2005 Securitization, were as follows: discount rate of
10%; annual prepayments, which yields an average expected life of the prepayable VOI notes receivable of
99 months; and expected gross VOI notes receivable balance defaulting as a percentage of the total initial pool of
11.0%. These key assumptions are based on the Company’s experience.
At December 31, 2007, the aggregate outstanding principal balance of VOI notes receivable that have been
securitized or sold was $285 million. The principal amounts of those VOI notes receivables that were more than
90 days delinquent at December 31, 2007 was approximately $4 million.
Gross credit losses for all VOI notes receivable were $23 million, $17 million, and $17 million during 2007,
2006, and 2005, respectively.
The Company received aggregate cash proceeds of $33 million, $36 million and $35 million from the Retained
Interests during 2007, 2006, and 2005, respectively, and aggregate servicing fees of $4 million, $4 million and
$3 million related to these VOI notes receivable in 2007, 2006, and 2005, respectively.
At the time of each VOI notes receivable sale and at the end of each financial reporting period, the Company
estimates the fair value of its Retained Interests using a discounted cash flow model. All assumptions used in the
models are reviewed and updated, if necessary, based on current trends and historical experience.
F-23

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
At December 31, 2007, the Company completed a sensitivity analysis on the net present value of the Retained
Interests to measure the change in value associated with independent changes in individual key variables. The
methodology applied unfavorable changes for the key variables of expected prepayment rates, discount rates and
expected gross credit losses as of December 31, 2007. The aggregate net present value and carrying value of
Retained Interests for the Company’s three note sales at December 31, 2007 was approximately $40 million, with
the following key assumptions used in measuring the fair value: an average discount rate of 10.4%, an average
expected annual prepayment rate, including defaults, of 7.7%, and an expected weighted average remaining life of
prepayable notes receivable of 78 months. The decreases in value of the Retained Interests that would result from
various independent changes in key variables are shown in the chart that follows (dollar amounts are in millions).
The factors may not move independently of each other.
Annual prepayment rate:
100 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.3
100 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.8%
200 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.6
200 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.5%
Discount rate:
100 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.8
100 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1%
200 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.6
200 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.1%
Gross annual rate of credit losses:
100 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6.6
100 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16.9%
200 basis points-dollars . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12.9
200 basis points-percentage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32.9%
Note 11. Deferred Gains
The Company defers gains realized in connection with the sale of a property for which the Company continues
to manage the property through a long-term management agreement and recognizes the gains over the initial term of
the related agreement. As of December 31, 2007 and 2006, the Company had total deferred gains of $1.216 billion
and $1.258 billion, respectively, included in accrued expenses and other liabilities in the Company’s consolidated
balance sheets. Amortization of deferred gains is included in management fees, franchise fees and other income in
the Company’s consolidated statements of income and totaled approximately $81 million, $62 million and
$12 million in 2007, 2006 and 2005, respectively. The increase in deferred gain amortization in 2007 and
2006 is primarily due to the Host Transaction discussed in Note 5.
Note 12. Restructuring and Other Special Charges, Net
During the year ended December 31, 2007, the Company recorded net restructuring and other special charges
of approximately $53 million primarily related to the Company’s redevelopment of the Sheraton Bal Harbour Beach
Resort (“Bal Harbour”). The Company demolished the hotel in late 2007 and plans to rebuild a St. Regis hotel along
with branded residences and fractional units. Bal Harbour was closed for business on July 1, 2007, and the majority
F-24

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
of employees were terminated. The Company has recorded the following expenses in 2007 related to Bal Harbour in
restructuring and other special charges (in millions):
Accelerated depreciation of the hotel’s property, plant & equipment and charges related to
inventory that was not salvageable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $48
Demolition costs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Severance costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Accrual for asbestos abatement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $55
In the first quarter of 2007, the Company recorded net restructuring and other special credits of $2 million
primarily related to the refund of premium payments related to the termination of a retired executive officer’s life
insurance policy that were previously recorded as a restructuring charge in conjunction with the acquisition of
Sheraton Holding in 1998.
The Company had remaining accruals related to restructuring charges of $9 million and $11 million at
December 31, 2007 and December 31, 2006, respectively, of which $6 million is included in other liabilities in the
accompanying consolidated balance sheets for both periods. The following table summarizes the activity in the
restructuring accruals in 2007 (in millions):
December 31, Expenses Cash Reversal of December 31,
2006 Accrued Payments Accruals 2007
Retained reserves established by Sheraton
Holding prior to its merger with the
Company in 1998 . . . . . . . . . . . . . . . . . $8 $— $— $— $8
Severance costs related to a corporate
restructuring which began in 2005 . . . . . 3 — (3) — —
Costs related to the Bal Harbour
demolition . . . . . . . . . . . . . . . . . . . . . . — 4 (4) — —
Severance costs related to the Bal Harbour
redevelopment . . . . . . . . . . . . . . . . . . . . — 2 (2) — —
Bal Harbour asbestos abatement . . . . . . . . — 1 — — 1
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11 $7 $ (9) $— $9
2006 Restructuring and Other Special Charges, Net. During the year ended December 31, 2006, the
Company incurred and paid approximately $21 million of transition costs associated with the Le Méridien
Acquisition. Also during 2006, the Company recorded a charge of approximately $7 million related to severance
costs primarily related to certain executives in connection with the continued corporate restructuring that began at
the end of 2005, of which approximately $4 million related to compensation expense due to the accelerated vesting
of previously granted stock-based awards. These charges were offset by the reversal of $8 million of accruals for a
lease the Company assumed as part of the merger with Sheraton Holding in 1998 as the reserve exceeded the
Company’s maximum obligation.
2005 Restructuring and Other Special Charges, Net. During the year ended December 31, 2005, the
Company recorded a $13 million charge primarily related to severance costs in connection with the Company’s
restructuring as a result of its planned disposition of significant real estate assets. The Company also recorded
$3 million of transition costs associated with the acquisition of the Le Méridien brand and management business in
November 2005. These charges were offset by the reversal of $3 million of reserves related to the Company’s
acquisition of Sheraton Holding Corporation and its subsidiaries in 1998 as the related obligations no longer exist.
F-25

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 13. Income Taxes
Income tax data from continuing operations of the Company is as follows (in millions):
Year Ended December 31,
2007 2006 2005
Pretax income
U.S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 517 $ 556 $ 535
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 126 107
$ 733 $ 682 $ 642
Provision (benefit) for income tax
Current:
U.S. federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 166 $ 104 $ 258
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 31 14
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 157 51 57
331 186 329
Deferred:
U.S. federal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (105) (517) (19)
State and local . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (84) (60)
Foreign . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (37) (19) (31)
(142) (620) (110)
$ 189 $(434) $ 219
No provision has been made for U.S. taxes payable on undistributed foreign earnings amounting to approx-
imately $412 million as of December 31, 2007 since these amounts are permanently reinvested.
In December 2004, the FASB issued FASB Staff Position No. 109-2, “Accounting and Disclosure Guidance for
the Foreign Repatriation Provision within the American Jobs Creation Act of 2004,” in response to the American
Jobs Creation Act of 2004 (the “Act”) which provided for a special one-time dividends received deduction of
85 percent for certain foreign earnings that were repatriated (as defined in the Act) in either an enterprise’s last tax
year that began before the December 2004 enactment date, or the first tax year that began during the one-year period
beginning on the date of the enactment. In 2005, Starwood’s Board of Directors adopted a plan to repatriate
approximately $550 million and, accordingly, the Company recorded a tax liability of approximately $47 million.
The Company borrowed these funds in Italy, repatriated them to the United States and reinvested them pursuant to
the terms of a domestic reinvestment plan which has been approved by the Company’s Board of Directors in
accordance with the Act.
F-26

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Deferred income taxes represent the tax effect of the differences between the book and tax bases of assets and
liabilities. Deferred tax assets (liabilities) include the following (in millions):
December 31,
2007 2006
Plant, property and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 312 $ 236
Intangibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 6
Allowances for doubtful accounts and other reserves . . . . . . . . . . . . . . . . . . . . . 160 151
Employee benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 80
Net operating loss, capital loss and tax credit carryforwards . . . . . . . . . . . . . . . . 723 1,052
Deferred income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (102) (103)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 74
1,316 1,496
Less valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (615) (1,009)
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 701 $ 487
As a result of the Host Transaction, discussed in Note 5, certain deferred tax liabilities related to plant, property
and equipment of the assets sold, including those owned by the Trust, were no longer necessary and were adjusted
accordingly at the consummation dates. In addition, the tax basis of certain assets, including plant, property and
equipment and intangibles, retained by the Company was adjusted to the then fair market value resulting in an
overall increase in deferred tax assets on the consolidated balance sheet.
At December 31, 2007, the Company had federal and state net operating losses of approximately $38 million
and $3.2 billion, respectively, and federal tax credit carryforwards of $88 million. The Company also had foreign
net operating loss and tax credit carryforwards of approximately $31 million and $19 million, respectively.
Substantially all federal and state net operating losses from which the Company expects to realize future tax
benefits, expire by 2026. The Company has established a valuation allowance against substantially all of the tax
benefit for the remaining federal and state carryforwards as it is unlikely that the benefit will be realized prior to
their expiration. The Company is currently considering certain tax-planning strategies that may allow it to utilize
these tax attributes within the statutory carryforward period.
The Company generated a federal capital loss in connection with the Host Transaction which was originally
estimated at approximately $2.6 billion at December 31, 2006. During 2007, the Company completed its 2006 tax
return which included the Host Transaction and adopted FIN 48. As a result, the Company reduced its original
estimate of this capital loss and corresponding valuation allowance by approximately $1.2 billion, resulting in a
revised amount of $1.4 billion at December 31, 2006. Through December 31, 2007, approximately $324 million of
this loss has been utilized to offset 2007 and prior years’ capital gains. The remaining $1.1 billion of capital loss is
available to offset federal capital gains through 2011. The Company also had state capital losses related to the Host
Transaction of approximately $1.0 billion, substantially all of which expire in 2011. Due to the uncertainty of
realizing the tax benefit of the federal and state capital loss carryforwards, the entire tax benefit of the losses has
been offset by a valuation allowance.
In February 1998, the Company disposed of ITT World Directories. The Company recorded $551 million of
income taxes relating to this transaction, which were included in deferred income taxes as of December 31, 2004.
While the Company strongly believes this transaction was completed on a tax-deferred basis, in 2002 the IRS
proposed an adjustment to fully tax the gain in 1998, which would increase Starwood’s taxable income by
approximately $1.4 billion in that year. During 2004, the Company filed a petition in United States Tax Court to
contest the IRS’s proposed adjustment. Starwood will continue to vigorously defend its position with the IRS and
anticipates that litigation proceedings will begin in 2008.
F-27

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
As a result of an August 2005 United States Tax Court decision against another taxpayer, the Company decided
to treat this transaction as if it were taxable in 1998 for accounting purposes and reclassified the taxes associated
with this transaction to a current liability. As such, the Company applied substantially all of its federal net operating
loss carryforwards against the gain and accrued interest, resulting in a $360 million net current liability and an
additional charge of approximately $52 million. The charge was comprised of $103 million in federal tax expense
primarily related to interest on the disputed tax adjustment and $51 million in state tax benefits. All of the current
liability was fully paid to the IRS in October 2005 in order to eliminate any future interest accruals associated with
the pending dispute.
A reconciliation of the tax provision of the Company at the U.S. statutory rate to the provision for income tax as
reported is as follows (in millions):
Year Ended December 31,
2007 2006 2005
Tax provision at U.S. statutory rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 257 $ 239 $225
U.S. state and local income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 (10) (14)
Exempt Trust income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (32) (64)
Tax on repatriation of foreign earnings . . . . . . . . . . . . . . . . . . . . . . . . . . (29) (16) 11
Tax on repatriation of foreign earnings under the American Jobs Creation
Act of 2004 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 47
Foreign tax rate differential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 (15) (28)
Change in uncertain tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 — —
Deferred gain on ITT World Directories disposition . . . . . . . . . . . . . . . . — — 52
Tax settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (59) (8)
Tax benefit on the deferred gain from the Host Transaction . . . . . . . . . . . (3) (356) —
Tax benefits recognized on Host Transaction . . . . . . . . . . . . . . . . . . . . . . 97 (1,017) —
Basis difference on asset sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (41) —
Change in of valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (158) 884 7
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13) (11) (9)
Provision for income tax (benefit). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 189 $ (434) $219
During 2007, the Company completed an evaluation of its ability to claim U.S. foreign tax credits generated in
prior years on its federal tax return. As a result of this analysis, the Company determined that it can realize the
credits for the 1999 and 2000 tax years. The Company had not previously accrued this benefit since the realization
of the benefit was determined to be unlikely. Therefore, during 2007, a $28 million tax benefit, net of incremental
taxes and interest, was recorded. In addition, during 2006, the Company determined that it could claim the credits
for the 2005 and 2006 tax years. The Company had not previously accrued this benefit since the realization of the
benefit was determined to be unlikely. Therefore, during 2006, a $15 million and $19 million tax benefit was
recorded for 2006 and 2005, respectively.
Pursuant to FIN 48, the Company is required to accrue tax and associated interest and penalty on uncertain tax
positions. During 2007, the Company recorded a $13 million charge, primarily associated with interest due on
existing uncertain tax positions.
During 2006, the IRS completed its audits of the Company’s 2001, 2002 and 2003 tax returns and issued its
final audit adjustments to the Company. In addition, state income tax audits for various jurisdictions and tax years
were completed during the year. As a result of the completion of these audits, the Company recorded a $50 million
tax benefit. The Company also recognized a $9 million tax benefit related to the reversal of previously accrued
income taxes after an evaluation of the applicable exposures and the expiration of the related statutes of limitations.
F-28

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
As discussed in Note 5, the Company completed the Host Transaction during the second quarter of 2006 which
included the sale of 33 hotel properties. As the Company sold these hotels subject to long-term management
contracts, the gain of approximately $962 million has been deferred and is being recognized over the life of those
contracts. Accordingly, the Company has established a deferred tax asset and recognized the related tax benefit of
approximately $359 million for the book-tax difference on the deferred gain liability. Additional tax benefits of
$1.017 billion resulted from the Host Transaction consisting primarily of the tax benefit of $832 million on the
$2.4 billion federal capital loss, net of carrybacks and 2006 utilization. The remaining benefit consisted of an
adjustment to deferred income taxes for the increased tax basis of certain retained assets, partially offset by current
tax liabilities generated in the transaction. During 2007, the Company completed its 2006 tax return which included
the Host Transaction. As a result, the Company recognized a net $97 million tax charge during 2007 as an
adjustment to the original tax benefit accrued in 2006. The net charge was comprised of a $114 million charge
related to an adjustment to the amount of capital loss generated in the transaction offset by a $17 million tax benefit
related to other aspects of the transaction. As a valuation allowance fully offsets the capital loss carryforward, the
Company also recorded a $114 million tax benefit for the reversal of capital loss valuation allowance.
During 2007, the Company completed certain transactions that generated capital gains for U.S. tax purposes.
These gains were completely offset by the capital loss generated in the Host Transaction. The Company had not
previously accrued a benefit for the capital loss since the realization was determined to be unlikely. Therefore,
during 2007, a $35 million tax benefit was recorded to reverse the capital loss valuation allowance.
During 2005, the Company was notified by ITT Industries that a refund of tax and interest had been approved
by the IRS for payment to ITT Industries related to its 1993-1995 tax returns. In connection with its acquisition of
Sheraton Holding, the Company is party to a tax sharing agreement between ITT Industries, Hartford Insurance and
Sheraton Holding as a result of their 1995 split of ITT Industries into these companies and is entitled to one-third of
this refund. As a result of this notification, the Company recorded an $8 million tax benefit during 2005.
As a result of the implementation of FIN 48, the Company recognized a $35 million cumulative effect
adjustment to the beginning balance of retained earnings in the period. As of December 31, 2007, the Company had
approximately $469 million of total unrecognized tax benefits, of which $158 million would affect its effective tax
rate if recognized. The Company does not expect any significant increases or decreases to the amount of
unrecognized tax benefits within 12 months of December 31, 2007. A reconciliation of the beginning and ending
balance of unrecognized tax benefits is as follows (in millions):
Balance at January 1, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $465
Additions based on tax positions related to the current year . . . . . . . . . . . . . . . . . . . . . . . . 6
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Settlements with tax authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2)
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
Reductions due to the lapse of applicable statutes of limitation . . . . . . . . . . . . . . . . . . . . . . (1)
Balance at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $469
The Company recognizes interest and penalties related to unrecognized tax benefits through income tax
expense. The Company had $29 million and $16 million accrued for the payment of interest and no accrued
penalties as of December 31, 2007 and December 31, 2006, respectively.
The Company is subject to taxation in the U.S. federal jurisdiction, as well as various state and foreign
jurisdictions. As of December 31, 2007, 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 we operate, we
are no longer subject to examination by the relevant taxing authorities for any years prior to 2001.
F-29

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 14. Debt
Long-term debt and short-term borrowings consisted of the following (in millions):
December 31,
2007 2006
Senior Credit Facilities:
Revolving Credit Facility, interest rates ranging from 4.70% to 7.25% at December 31,
2007, maturing 2011 (5.58% at December 31, 2007) . . . . . . . . . . . . . . . . . . . . . . . . . . $ 787 $ 435
Term loan, interest at LIBOR + 0.50%, (5.37% at December 31, 2007) maturing 2009
and 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000 —
Senior Notes, interest rates of 7.875%, maturing 2012 (at December 31, 2006, also had
interest at 7.375%, maturing 2007). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792 1,481
Sheraton Holding public debt, interest at 7.375%, maturing in 2015 . . . . . . . . . . . . . . . . . . 449 449
Senior Notes, interest at 6.25%, maturing 2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400 —
Mortgages and other, interest rates ranging from 5.85% to 8.56%, various maturities. . . . . . 167 267
3,595 2,632
Less current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) (805)
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,590 $1,827
Aggregate debt maturities for each of the years ended December 31 are as follows (in millions):
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 543
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 505
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 792
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 798
Thereafter. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 952
$3,595
On September 13, 2007 the Company completed a public offering of $400 million 6.25% Senior Notes
(“6.25% Notes”) due February 13, 2013. The Company received net proceeds of approximately $396 million, which
were used to reduce the outstanding borrowings under its Revolving Credit Facility. Interest on the 6.25% Notes is
payable semi-annually on February 15 and August 15. At any time, we may redeem all or a portion of the
6.25% Notes at the Company’s option at a price equal to the greater of (1) 100% of the aggregate principal plus
accrued and unpaid interest and (2) the sum of the present values of the remaining scheduled payments of principal
and interest discounted at the redemption rate on a semi-annual basis at the Treasury rate plus 35 basis points, plus
accrued and unpaid interest. The 6.25% Notes rank parri passu with all other unsecured and unsubordinated
obligations. Upon a change in control of the Company, the holders of the 6.25% Notes will have the right to require
repurchase of the respective Notes at 101% of the principal amount plus accrued and unpaid interest. Certain
covenants in the 6.25% Notes include restrictions on liens, sale and leaseback transactions, mergers, consolidations
and sale of assets.
On June 29, 2007, the Company entered into a credit agreement that provides for two term loans of
$500 million each. One term loan matures on June 29, 2009, and the other matures on June 29, 2010. Proceeds
from these loans were used to repay balances under the existing Revolving Credit Facility (established under the
2006 Facility referenced below), which remains in effect. The Company may prepay the outstanding aggregate
principal amount, in whole or in part, at any time. The covenants in this credit agreement are the same as those in the
Company’s existing Revolving Credit Facility.
F-30

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
On April 27, 2007 the Company amended its Revolving Credit Facility to reduce the interest rate (from the
original rate of LIBOR + 0.475% to LIBOR + 0.400%) and increase commitments by $450 million, to a total of
$2.250 billion. Of this amount, $375 million will expire on April 27, 2008, and the remaining $1.875 billion will
expire in February 2011.
In February 2006, the Company closed a new, five-year $1.5 billion Senior Credit Facility (“2006 Facility”).
The 2006 Facility replaced the previous $1.45 billion Revolving and Term Loan Credit Agreement (“Pre-2006
Facility”) which would have matured in October 2006. Approximately $240 million of the Term Loan balance
under the Pre-2006 Facility was paid down with cash and the remainder was refinanced with the 2006 Facility. The
2006 Facility is expected to be used for general corporate purposes. The 2006 Facility matures February 10, 2011.
During March 2006, the Company gave notice to receive additional commitments totaling $300 million under
the 2006 Facility (“2006 Facility Add-On”) on a short-term basis to facilitate the close of the Host Transaction and
for general working capital purposes. In June 2006, the Company amended the 2006 Facility such that the 2006
Facility Add-On would not mature until June 30, 2007.
In the first quarter of 2006 in two separate transactions the Company defeased approximately $510 million of
debt secured in part by several hotels that were part of the Host Transaction. In one transaction, in order to
accomplish this, the Company purchased Treasury securities sufficient to make the monthly debt service payments
and the balloon payment due under the loan agreement. The Treasury securities were then substituted for the real
estate and hotels that originally served as collateral for the loan. As part of the defeasance, the Treasury securities
and the debt were transferred to a third party successor borrower that is responsible for all remaining obligations
under this debt. In the second transaction, the Company deposited Treasury securities in an escrow account to cover
the debt service payments. As such, neither debt is reflected on the Company’s consolidated balance sheet as of
December 31, 2006. In connection with the defeasance, the Company incurred early extinguishment of debt costs of
approximately $37 million which was recorded in interest expense in the Company’s consolidated statement of
income.
In the second quarter of 2006, the Company gave notice to redeem the $360 million of 3.5% convertible notes,
originally issued in May 2003. Under the terms of the convertible indenture, prior to the redemption date of June 5,
2006, the note holders had the right to convert their notes into Shares at the stated conversion rate. Under the terms
of the indenture, the Company settled the conversions by paying the principal portion of the notes in cash and the
excess amount by issuing approximately 3 million Corporation Shares. The settlement of the excess amount was
treated as a non-cash exchange and, consequently, was excluded from the consolidated statement of cash flows. The
notes that were not converted prior to the redemption date were redeemed at the price of par plus accrued interest,
effective June 5, 2006.
In connection with the Host Transaction, a total of $600 million of notes issued by Sheraton Holding were
assumed by the Corporation. On June 2, 2006, we redeemed $150 million in principal amount of these notes which
had a coupon of 7.75% and a maturity in 2025. The stated redemption price for these notes was 103.186%. We
borrowed under the 2006 Facility and used existing unrestricted cash balances to fund the cash portions of these
transactions.
On October 22, 2004, the President signed the American Jobs Creation Act of 2004 (the “Act”). The Act
created a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing
an 85 percent dividends received deduction for certain dividends from controlled foreign corporations. In order to
repatriate funds in accordance with the Act, in October 2005 the Company increased several existing bank credit
lines available to its wholly owned subsidiary, Starwood Italia, from 129 million euros to 399 million euros,
350 million euros of which was borrowed at that time. These credit lines had interest rates ranging from
Euribor + 0.50% to Euribor + 0.85% and maturities ranging from April 1, 2006 to May 8, 2007. These proceeds,
along with approximately 100 million euros which Starwood Italia borrowed from the Corporate Credit Line (total
F-31

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
borrowings of 450 million euros) were used to temporarily finance the repatriation of approximately $550 million
pursuant to the Act. As of December 31, 2006, the majority of these temporary borrowings were repaid.
The Company has the ability to draw down on its Revolving Credit Facility in various currencies. Drawdowns
in currencies other than the U.S. dollar represent a natural hedge of the Company’s foreign denominated net assets
and operations. At December 31, 2007, the Company had $6 million drawn in Canadian dollars and $123 million
drawn in Euros.
The Company maintains lines of credit under which bank loans and other short-term debt are drawn. In
addition, smaller credit lines are maintained by the Company’s foreign subsidiaries. The Company had approx-
imately $1.367 billion of available borrowing capacity under its domestic and foreign lines of credit as of
December 31, 2007.
The Company is subject to certain restrictive debt covenants under its short-term borrowing and long-term debt
obligations including defined financial covenants, limitations on incurring additional debt, escrow account funding
requirements for debt service, capital expenditures, tax payments and insurance premiums, among other restric-
tions. The Company was in compliance with all of the short-term and long-term debt covenants at December 31,
2007.
The short-term borrowings at December 31, 2007 were insignificant. The weighted average interest rate for
short-term borrowings was 4.40% at December 31, 2006 and the fair value approximated carrying value given their
short-term nature. The average interest rates were composed of interest rates on both U.S. dollar and non-U.S. dollar
denominated indebtedness.
For adjustable rate debt, fair value approximates carrying value due to the variable nature of the interest rates.
For non-public fixed rate debt, fair value is determined based upon discounted cash flows for the debt at rates
deemed reasonable for the type of debt and prevailing market conditions and the length to maturity for the debt. The
estimated fair value of debt at December 31, 2007 and 2006 was $3.7 billion and $2.7 billion, respectively, and was
determined based on quoted market prices and/or discounted cash flows. See Note 21. Derivative Financial
Instruments for additional discussion regarding the Company’s interest rate swap agreements.
Note 15. Other Liabilities
Other liabilities consisted of the following (in millions):
December 31,
2007 2006
Deferred gains on asset sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,133 $1,178
SPG point liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 354 277
Deferred income including VOI and residential sales . . . . . . . . . . . . . . . . . . . . . . 34 161
Benefit plan liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 74
Insurance reserves . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68 73
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 165
$1,801 $1,928
F-32

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 16. Discontinued Operations
Summary financial information for discontinued operations is as follows (in millions):
Year Ended December 31,
2007 2006 2005
Income Statement Data
Operating loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... $— $— $ (2)
Income tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .......... $— $— $1
Loss from operations, net of tax . . . . . . . . . . . . . . . . . . . . . . .......... $— $— $ (1)
Loss on disposition, net of tax . . . . . . . . . . . . . . . . . . . . . . . .......... $ (1) $ (2) $—
For the year ended December 31, 2007, the loss on disposition represents a $1 million tax assessment
associated with the disposition of the Company’s former gaming business in 1999.
For the year ended December 31, 2006, the loss on disposition represents a $2 million tax assessment
associated with the disposition of the Company’s former gaming business in 1999.
For the year ended December 31, 2005, the loss from operations represents a $2 million sales and use tax
assessment related to periods prior to the Company’s disposal of its gaming business in 1999, offset by a $1 million
income tax benefit related to this business.
Note 17. Employee Benefit Plans
On December 31, 2006, the Company adopted the recognition and disclosure provisions of SFAS No. 158.
SFAS No. 158 required the Company to recognize the funded status (i.e., the difference between the fair value of
plan assets and the projected benefit obligations) of its pension plans in the December 31, 2006 consolidated
balance sheet, with a corresponding adjustment to accumulated other comprehensive income, net of tax. The
incremental effects of adopting the provisions of SFAS No. 158 on the Company’s consolidated balance sheet at
December 31, 2006 increased net liabilities by $6 million, with a corresponding decrease to accumulated other
comprehensive income. The adoption of SFAS No. 158 had no effect on the Company’s consolidated statement of
income for the year ended December 31, 2006, or for any prior period presented, and it will not effect the
Company’s operating results in future periods.
The net actuarial gain recognized in accumulated other comprehensive income for the year ended
December 31, 2007 was $1 million (net of tax). The amortization of actuarial gain/loss, a component of
accumulated other comprehensive income, for the year ended December 31, 2007 was $2 million.
Included in accumulated other comprehensive income at December 31, 2007 is unrecognized actuarial losses
of $43 million ($33 million, net of tax) that have not yet been recognized in net periodic pension cost. The actuarial
loss included in accumulated other comprehensive income and expected to be recognized in net periodic pension
cost during the year ended December 31, 2008 is $1 million ($1 million, net of tax).
Defined Benefit and Postretirement Benefit Plans. The Company and its subsidiaries sponsor or previously
sponsored numerous funded and unfunded domestic and international pension plans. All defined benefit plans
covering U.S. employees are frozen. Certain plans covering non-U.S. employees remain active.
As a result of annuity purchases and lump sum distributions from our domestic pension plans, the Company
recorded a net settlement gain of approximately $0.1 million during the year ended December 31, 2007 and net
settlement losses of $0.1 million and $0.3 million during the years ended December 31, 2006 and 2005,
respectively.
The Company also sponsors the Starwood Hotels & Resorts Worldwide, Inc. Retiree Welfare Program. This
plan provides health care and life insurance benefits for certain eligible retired employees. The Company has
F-33

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
prefunded a portion of the health care and life insurance obligations through trust funds where such prefunding can
be accomplished on a tax effective basis. The Company also funds this program on a pay-as-you-go basis.
The following table sets forth the projected benefit obligation, fair value of plan assets, the funded status and
the accumulated benefit obligation of the Company’s defined benefit pension and postretirement benefit plans at
December 31, 2007 and 2006 (in millions):
Postretirement
Pension Benefits Foreign Pension Benefits Benefits
2007 2006 2007 2006 2007 2006
Change in Projected Benefit Obligation
Benefit obligation at beginning of year . . . . . $ 17 $ 16 $196 $187 $ 19 $ 23
Service cost . . . . . . . . . . . . . . . . . . . . . . . — — 5 4 — —
Interest cost . . . . . . . . . . . . . . . . . . . . . . . 1 1 12 10 1 1
Actuarial loss (gain) . . . . . . . . . . . . . . . . . — 1 (4) (3) 2 (3)
Settlements and curtailments . . . . . . . . . . — — — (2) — —
Effect of foreign exchange rates . . . . . . . . — — 5 11 — —
Benefits paid . . . . . . . . . . . . . . . . . . . . . . (1) (1) (8) (8) (2) (2)
Adjustment to pension plans acquired . . . . — — — (3) — —
Benefit obligation at end of year . . . . . . . . . $ 17 $ 17 $206 $196 $ 20 $ 19
Change in Plan Assets
Fair value of plan assets at beginning of
year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $— $161 $129 $ 7 $ 9
Actual return on plan assets, net of
expenses . . . . . . . . . . . . . . . . . . . . . . . — — 12 16 — —
Employer contribution . . . . . . . . . . . . . . . 1 1 16 16 2 2
Effect of foreign exchange rates . . . . . . . . — — 4 8 — —
Asset transfer . . . . . . . . . . . . . . . . . . . . . . — — — — (2) (2)
Benefits paid . . . . . . . . . . . . . . . . . . . . . . (1) (1) (8) (8) (2) (2)
Fair value of plan assets at end of year . . . . . $— $— $185 $161 $ 5 $ 7
Funded status . . . . . . . . . . . . . . . . . . . . . . . $(17) $(17) $ (21) $ (35) $ (15) $ (12)
Accumulated benefit obligation . . . . . . . . . . $ 17 $ 17 $186 $181 $N/A $N/A
The underfunded status of the plans at December 31, 2007 was $2 million and $53 million, and is recognized in
the accompanying consolidated balance sheet in accrued expenses and other liabilities, respectively. The over-
funded status of the plan of $2 million at December 31, 2007 is recognized in other assets in the Company’s
consolidated balance sheet.
All domestic pension plans are frozen plans, where employees do not accrue additional benefits. Therefore, at
December 31, 2007 and 2006, the projected benefit obligation is equal to the accumulated benefit obligation. In
March 2006, the Company elected to freeze its pension plans in the United Kingdom. Its other foreign pension plans
are not frozen, and accordingly, at December 31, 2007 and 2006, the accumulated benefit obligation for the foreign
pension plans was $186 million and $181 million, respectively.
F-34

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The following table presents the components of net periodic benefit cost for the years ended December 31,
2007, 2006 and 2005 (in millions):
Pension Benefits Foreign Pension Benefits Postretirement Benefits
2007 2006 2005 2007 2006 2005 2007 2006 2005
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . $— $— $— $5 $4 $4 $— $— $—
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . 1 1 1 12 10 8 1 1 1
Expected return on plan assets . . . . . . . . . . . — — — (11) (9) (8) (1) (1) (1)
Amortization of actuarial loss . . . . . . . . . . . . — — — 2 3 3 — — —
SFAS No. 87 cost/SFAS No. 106 cost . . . . . . 1 1 1 8 8 7 — — —
SFAS No. 88 settlement and curtailment
gain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (3) — — — —
Net periodic benefit cost . . . . . . . . . . . . . . . . $1 $1 $1 $8 $5 $7 $— $— $—
For measurement purposes, a 9% annual rate of increase in the per capita cost of covered health care benefits
was assumed for 2008, gradually decreasing to 5% in 2013. A one-percentage-point change in assumed health care
cost trend rates would have approximately a $0.4 million effect on the postretirement obligation and a nominal
impact on the total of service and interest cost components of net periodic benefit cost.
The weighted average assumptions used to determine benefit obligations at December 31 were as follows:
Foreign Pension Postretirement
Pension Benefits Benefits Benefits
2007 2006 2007 2006 2007 2006
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.75% 5.75% 5.88% 5.46% 5.74% 5.74%
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . N/A N/A 3.90% 3.90% N/A N/A
The weighted average assumptions used to determine net periodic benefit cost for the years ended December
31 were as follows:
Pension Benefits Foreign Pension Benefits Postretirement Benefits
2007 2006 2005 2007 2006 2005 2007 2006 2005
Discount rate . . . . . . . . . . . . . . . . . . . . . 5.75% 5.50% 5.51% 5.46% 5.09% 5.49% 5.74% 5.49% 5.50%
Rate of compensation increase . . . . . . . . N/A N/A N/A 3.90% 3.60% 3.62% N/A N/A N/A
Expected return on plan assets . . . . . . . . N/A N/A N/A 6.40% 6.91% 7.10% 7.50% 7.50% 8.00%
A number of factors were considered in the determination of the expected return on plan assets. These factors
included current and expected allocation of plan assets, the investment strategy, historical rates of return and
Company and investment expert expectations for investment performance over approximately a ten year period.
The weighted average asset allocations at December 31, 2007 and 2006 for the Company’s defined benefit
pension and postretirement benefit plans and the Company’s current target asset allocation ranges are as follows:
Pension Benefits Foreign Pension Benefits Postretirement Benefits
Percentage of Percentage of Percentage of
Plan Assets Plan Assets Plan Assets
Target Target Target
Allocation 2007 2006 Allocation 2007 2006 Allocation 2007 2006
Equity securities . . . . . . . . . . . . . N/A N/A N/A 36% 45% 59% 63% 63% 75%
Debt securities . . . . . . . . . . . . . . N/A N/A N/A 62% 48% 39% 35% 35% 25%
Cash and other . . . . . . . . . . . . . . N/A N/A N/A 2% 7% 2% 2% 2% 0%
100% 100% 100% 100% 100% 100%
F-35

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The investment objective of the foreign pension plans and postretirement benefit plan is to seek long-term
capital appreciation and current income by investing in a diversified portfolio of equity and fixed income securities
with a moderate level of risk. At December 31, 2007, all remaining domestic pension plans are unfunded plans.
The Company expects to contribute approximately $1 million to its domestic pension plans, approximately
$14 million to its foreign pension plans, and approximately $2 million to the postretirement benefit plan in 2007.
The following table represents the Company’s expected pension and postretirement benefit plan payments for the
next five years and the five years thereafter (in millions):
Pension Foreign Pension Postretirement
Benefits Benefits Benefits
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $8 $2
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $8 $2
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $8 $2
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $9 $2
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $10 $2
2013 — 2017 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7 $63 $7
Defined Contribution Plans. The Company and its subsidiaries sponsor various defined contribution plans,
including the Starwood Hotels & Resorts Worldwide, Inc. Savings and Retirement Plan, which is a voluntary
defined contribution plan allowing participation by employees on U.S. payroll who meet certain age and service
requirements. Each participant may contribute on a pretax basis between 1% and 18% of his or her compensation to
the plan subject to certain maximum limits. The plan also contains provisions for matching contributions to be made
by the Company, which are based on a portion of a participant’s eligible compensation. The amount of expense for
matching contributions totaled $28 million in 2007, $25 million in 2006 and $22 million in 2005. Included as an
investment choice is the Company’s publicly traded common stock, which had a balance of $62 million and
$88 million at December 31, 2007 and 2006, respectively.
Multi-Employer Pension Plans. Certain employees are covered by union sponsored multi-employer pen-
sion plans. Pursuant to agreements between the Company and various unions, contributions of $9 million in 2007,
$8 million in 2006 and $11 million in 2005 were made by the Company and charged to expense.
Note 18. Leases and Rentals
The Company leases certain equipment for the hotels’ operations under various lease agreements. The leases
extend for varying periods through 2014 and generally are for a fixed amount each month. In addition, several of the
Company’s hotels are subject to leases of land or building facilities from third parties, which extend for varying
periods through 2089 and generally contain fixed and variable components, including a 25-year building lease of
the Westin Dublin hotel in Dublin, Ireland (19 years remaining under the lease) with fixed annual payments of
$3 million and a building lease of the W Times Square hotel in New York City which has a term of 25 years (19 years
remaining under the lease) with fixed annual lease payments of $16 million. The variable components of leases of
land or building facilities are based on the operating profit or revenues of the related hotels.
In June 2004, the Company entered into an agreement to lease the W Barcelona hotel in Spain, which is in the
process of being constructed with an anticipated opening date of December 2009. The term of this lease is 15 years
with annual fixed rent payments which range from approximately 7 million euros to 9 million euros. In conjunction
with entering into this lease, the Company made a 9 million euro guarantee to the lessor that it will not terminate the
lease prior to the lease commencement date. At the lease commencement date, the Company must provide a letter of
credit to the lessor for 9 million euros as security for the first three years of rent. This letter of credit would supersede
the Company’s guarantee once the hotel opens.
F-36

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The Company’s minimum future rents at December 31, 2007 payable under non-cancelable operating leases
with third parties are as follows (in millions):
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 82
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 83
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 77
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 72
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 64
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $766
Rent expense under non-cancelable operating leases consisted of the following (in millions):
Year Ended December 31,
2007 2006 2005
Minimum rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $86 $76 $80
Contingent rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 11 19
Sublease rent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (4) (7)
$90 $83 $92
Note 19. Stockholders’ Equity
Share Repurchases. In April 2007, the Board of Directors authorized an additional $1 billion in Share
repurchases under the Company’s existing Corporation Share repurchase authorization (the “Share Repurchase
Authorization”). In November 2007, the Board of Directors of the Company further authorized the repurchase of up
to an additional $1 billion of Corporation Shares under the Share Repurchase Authorization. During the year ended
December 31, 2007, the Company repurchased 29.6 million Shares and Corporation Shares at a total cost of
$1.8 billion. As of December 31, 2007, approximately $593 million remains available under the Share Repurchase
Authorization.
Exchangeable Preferred Shares. During 1998, 6.3 million shares of Class A EPS, 5.5 million shares of
Class B EPS and approximately 800,000 limited partnership units of the SLT Realty Limited Partnership (the
“Realty Partnership”) and SLC Operating Limited Partnership (the “Operating Partnership”) were issued by the
Trust and Corporation in connection with the acquisition of Westin Hotels & Resorts Worldwide, Inc. and certain of
its affiliates.
On March 15, 2006, the Company completed the redemption of the remaining 25,000 outstanding shares of
Class B EPS for approximately $1 million in cash. On April 10, 2006, when the Company consummated the first
phase of the Host Transaction, holders of Class A EPS received from Host $0.503 in cash and 0.6122 shares of Host
common stock. Also in connection with the Host Transaction, the Company redeemed all of the Class A EPS
(approximately 562,000 shares) and Realty Partnership units (approximately 40,000 units) for approximately
$34 million in cash. The Operating Partnership units are convertible into Corporation Shares at the unit holder’s
option, provided that the Company has the option to settle conversion requests in cash or Shares. For the year ended
December 31, 2006, the Company redeemed approximately 926,000 Operating Partnership units for approximately
$56 million in cash, and there were approximately 179,000 of these units outstanding at December 31, 2007 and
2006.
Note 20. Stock-Based Compensation
In 2004, the Company adopted the 2004 Long-Term Incentive Compensation Plan (“2004 LTIP”), which
superseded the 2002 Long Term Incentive Compensation Plan (“2002 LTIP”) and provides for the purchase of
Shares by directors, officers, employees, consultants and advisors, pursuant to equity award grants. Although no
F-37

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
additional awards will be granted under the 2002 LTIP, the Company’s 1999 Long Term Incentive Compensation
Plan or the Company’s 1995 Share Option Plan, the provisions under each of the previous plans will continue to
govern awards that have been granted and remain outstanding under those plans. The aggregate award pool for non-
qualified or incentive stock options, performance shares, restricted stock or any combination of the foregoing which
are available to be granted under the 2004 LTIP at December 31, 2007 was approximately 70 million (with options
counted as one share and restricted stock and performance units counted as 2.8 shares).
Prior to January 1, 2006, the Company accounted for those plans under the recognition and measurement
principles of Accounting Principles Board Opinion No. 25, “Accounting for Stock Issued to Employees,” and
related interpretations. In general, no stock-based employee compensation cost related to stock options was
reflected in 2005, as options granted to employees under these plans had an exercise price equal to the fair value of
the underlying common stock on the date of grant. Effective January 1, 2006, the Company adopted the fair value
recognition provisions of SFAS No. 123(R). Under the modified prospective method of adoption selected by the
Company, compensation cost recognized in 2006 is the same as that which would have been recognized had the
recognition provisions of SFAS No. 123(R) been applied from its original effective date. The following table
illustrates the effect on net income and earnings per Share if the Company had applied the fair value based method to
all outstanding and unvested stock-based employee compensation awards in each period. The Company has
included the estimated impact of reimbursements from third parties.
Year Ended December 31,
2007 2006 2005
(In millions, except per Share data)
Net income, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 542 $1,043 $ 422
Add: Stock-based employee compensation expense included
in reported net income, net of related tax effects of $33,
$36 and $12 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 67 19
Deduct: SFAS No. 123 compensation cost, net of related tax
effects of $33 $36, and $37 . . . . . . . . . . . . . . . . . . . . . . . . (66) (67) (69)
Proforma net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 542 $1,043 $ 372
Earnings per Share:
Basic, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.67 $ 4.91 $1.95
Basic, proforma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.67 $ 4.91 $1.72
Diluted, as reported . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.57 $ 4.69 $1.88
Diluted, proforma . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2.57 $ 4.69 $1.65
The Company has determined that a lattice valuation model would provide a better estimate of the fair value of
options granted under its long-term incentive plans than a Black-Scholes model and therefore, for all options
granted subsequent to January 1, 2005, the Company changed its option pricing model from the Black-Scholes
model to a lattice model.
F-38

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Lattice model weighted average assumptions:
Year Ended December 31,
2007 2006 2005
Dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.40% 1.41% 1.80%
Volatility:
Near term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25% 26% 25%
Long term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37% 40% 40%
Expected life . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 yrs 6 yrs 6 yrs
Yield curve:
6 month . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.12% 4.68% 2.80%
1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.96% 4.66% 2.98%
3 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.55% 4.58% 3.45%
5 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.52% 4.53% 3.66%
10 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.56% 4.58% 4.08%
The dividend yield is estimated based on to the current annualized dividend payment and the average price of
the Shares or Corporation Shares, as the case may be, during the prior year.
The estimated volatility is based on a combination of historical share price volatility as well as implied
volatility based on market analysis. The historical share price volatility was measured over an 8-year period, which
is equal to the contractual term of the options. The weighted average volatility for 2007 grants was 30.2%.
The expected life represents the period that the Company’s stock-based awards are expected to be outstanding.
It was determined based on an actuarial calculation which was based on historical experience, giving consideration
to the contractual terms of the stock-based awards and vesting schedules.
The yield curve (risk-free interest rate) is based on the implied zero-coupon yield from the U.S. Treasury yield
curve over the expected term of the option.
The following table summarizes stock option activity for the Company:
Weighted Average
Options Exercise
Price Per Share(1)
(In millions)
Outstanding at December 31, 2004 . . . . . . . . . . . . . . . . . . . . . . . ... 33.4 $34.98
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 4.5 59.14
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (11.1) 36.63
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (1.9) 41.57
Outstanding at December 31, 2005 . . . . . . . . . . . . . . . . . . . . . . . ... 24.9 38.09
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 2.4 59.55
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (12.3) 30.74
Adjustment in connection with the Host Transaction . . . . . . . . ... 5.0 33.26
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (0.8) 40.87
Outstanding at December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . ... 19.2 35.40
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 0.5 64.64
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (5.6) 33.38
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (1.3) 44.19
Outstanding at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 12.8 $36.60
Exercisable at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 7.9 $31.38
F-39

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
(1) For option activity prior to the consummation of the first phase of the Host Transaction on April 10, 2006, the
adjustment made to the exercise price in connection with the Host Transaction is not reflected.
The weighted-average fair value per option for options granted during 2007, 2006 and 2005 was $20.54,
$16.12 and $17.23, respectively, and the service period is typically four years. The total intrinsic value of options
exercised during 2007, 2006 and 2005 was approximately $187 million, $370 million and $257 million, respec-
tively, resulting in tax benefits of approximately $56 million, $128 million and $88 million, respectively. As of
December 31, 2007, there was approximately $23 million of unrecognized compensation cost, net of estimated
forfeitures, related to nonvested options, which is expected to be recognized over a weighted-average period of
1.04 years on a straight-line basis for 2007 and future grants and using an accelerated recognition method for grants
prior to January 1, 2007.
The following table summarizes information about outstanding stock options at December 31, 2007:
Options Outstanding Options Exercisable
Weighted Average Weighted
Remaining Weighted Average
Range of Number Contractual Life in Average Exercise Number Exercise
Exercise Prices Outstanding Years Price Exercisable Price
(In millions) (In millions)
$16.62 — $20.36 ............. 2.2 2.72 $19.58 2.2 $19.58
$20.36 — $29.91 ............. 2.2 3.37 $28.31 2.1 $28.29
$29.91 — $31.71 ............. 2.9 3.99 $31.58 1.5 $31.47
$31.71 — $47.36 ............. 0.8 1.87 $41.77 0.8 $41.87
$47.36 — $48.39 ............. 2.6 5.11 $48.39 0.8 $48.39
$48.39 — $67.84 ............. 2.1 6.39 $53.21 0.5 $52.93
$16.62 — $67.84 . . . . . . . . . . . . . 12.8 4.15 $36.60 7.9 $31.38
In April 2006, as part of the Host Transaction, the Company depaired its Corporation Shares and Class B
Shares. As a result, the number of the Company’s options and their strike prices have been adjusted as discussed in
Note 3.
The aggregate intrinsic value of outstanding options as of December 31, 2007 was $124 million. The aggregate
intrinsic value of exercisable options as of December 31, 2007 was $106 million. The weighted-average contractual
life of exercisable options was 3.47 years as of December 31, 2007.
The Company recognizes compensation expense equal to the fair market value of the stock on the date of
issuance for restricted stock and restricted stock unit grants over the service period. The service period is typically
four years except in the case of restricted shares or units issued in lieu of a portion of an annual cash bonus where the
vesting period is typically in equal installments over a two year period. Compensation expense of approximately
$76 million, $56 million and $31 million, net of reimbursements from third parties, was recorded during 2007, 2006
and 2005, respectively, related to restricted stock awards.
At December 31, 2007 and 2006 there were approximately $125 million (net of estimated forfeitures) and
$103 million, respectively, in unamortized compensation cost related to restricted stock and restricted stock units.
The weighted average remaining term was 1.47 years for restricted stock grants outstanding at December 31, 2007.
The aggregate intrinsic value of restricted stock distributed during 2007 was $52 million.
F-40

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The following table summarizes the Company’s restricted stock activity during 2007:
Number of Weighted Average
Restricted Grant Date Value
Stock Units Per Share
(In millions)
Outstanding at December 31, 2006 . . . . . . . . . . . . . . . . . . . . . . . ... 4.7 $46.21
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... 2.3 $63.33
Distributed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (0.8) $38.36
Forfeited . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ... (0.5) $50.96
Outstanding at December 31, 2007 . . . . . . . . . . . . . . . . . . . . . . . . . . 5.7 $53.95
2002 Employee Stock Purchase Plan
In April 2002, the Board of Directors adopted (and in May 2002 the shareholders approved) the Company’s
2002 Employee Stock Purchase Plan (the “ESPP”) to provide employees of the Company with an opportunity to
purchase common stock through payroll deductions and reserved 10,000,000 Shares for issuance under the ESPP.
The ESPP commenced in October 2002.
All full-time regular employees who have completed 30 days of continuous service and who are employed by
the Company on U.S. payrolls are eligible to participate in the ESPP. Eligible employees may contribute up to 20%
of their total cash compensation to the ESPP. Amounts withheld are applied at the end of every three month
accumulation period to purchase Shares. The value of the Shares (determined as of the beginning of the offering
period) that may be purchased by any participant in a calendar year is limited to $25,000. Participants may withdraw
their contributions at any time before Shares are purchased.
For the purchase periods prior to June 1, 2005, the purchase price was equal to 85% of the lower of (a) the fair
market value of Shares on the day of the beginning of the offering period or (b) the fair market value of Shares on the
date of purchase. Effective June 1, 2005, the purchase price is equal to 95% of the fair market value of Shares on the
date of purchase. Approximately 119,000 Shares were issued under the ESPP during the year ended December 31,
2007 at purchase prices ranging from $51.00 to $68.47. Approximately 115,000 Shares were issued under the ESPP
during the year ended December 31, 2006 at purchase prices ranging from $50.60 to $60.96.
Note 21. Derivative Financial Instruments
The Company enters into interest rate swap agreements to manage interest expense. The Company’s objective
is to manage the impact of interest rate fluctuations on the results of operations, cash flows and the market value of
the Company’s debt. At December 31, 2007, the Company had no outstanding interest rate swap agreements under
which the Company pays a fixed rate and receives a variable rate of interest.
In March 2004, the Company terminated certain interest rate swap agreements, with a notional amount of
$1 billion under which the Company was paying floating rates and receiving fixed rates of interest (“Fair Value
Swaps”), resulting in a $33 million cash payment to the Company. The proceeds were used for general corporate
purposes and resulted in a reduction of the interest expense on the corresponding underlying debt (Sheraton Holding
Public Debt and Senior Notes) through 2007, the scheduled maturity of the terminated Fair Value Swaps. In order to
adjust its fixed versus floating rate debt position, the Company immediately entered into two new Fair Value Swaps.
The new Fair Value Swaps hedge the change in fair value of certain fixed rate debt related to fluctuations in
interest rates and mature in 2012. The aggregate notional amount of the Fair Value Swaps was $300 million at
December 31, 2007. The Fair Value Swaps modify the Company’s interest rate exposure by effectively converting
debt with a fixed rate to a floating rate. The fair value of the Fair Value Swaps was a liability of approximately
$6 million at December 31, 2007 and is included in other liabilities in the Company’s consolidated balance sheet.
F-41

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
In 2007, the Company had intercompany loans between entities with different foreign currencies. To mitigate
the risk of foreign currency exchange rate movements, the Company utilizes forward contracts as economic hedges
against rate fluctuations. These contracts do not qualify as hedges under SFAS No. 133; accordingly, the changes in
fair value are immediately recognized in the consolidated statement of income. As of December 31, 2007 and 2006,
the fair value of outstanding forward contracts was a net asset of $1 million and $0, respectively.
The counterparties to the Company’s derivative financial instruments are major financial institutions. The
Company does not expect its derivative financial instruments to significantly impact earnings in the next twelve
months.
Note 22. Commitments and Contingencies
The Company had the following contractual obligations outstanding as of December 31, 2007 (in millions):
Due in Less Due in Due in Due After
Total than 1 Year 1-3 Years 3-5 Years 5 Years
Unconditional purchase obligations(a) . . . . . . . . . . . . . $114 $43 $49 $19 $3
Other long-term obligations . . . . . . . . . . . . . . . . . . . . 4 — — 4 —
Total contractual obligations . . . . . . . . . . . . . . . . . . . . $118 $43 $49 $23 $3
(a) Included in these balances are commitments that may be satisfied by the Company’s managed and franchised
properties.
The Company had the following commercial commitments outstanding as of December 31, 2007 (in millions):
Amount of Commitment Expiration Per Period
Less Than After
Total 1 Year 1-3 Years 3-5 Years 5 Years
Standby letters of credit . . . . . . . . . . . . . . . . . . . . . . . . . . $133 $133 $— $— $—
Variable Interest Entities. Of the over 800 hotels that the Company manages or franchises for third party
owners, the Company has identified approximately 26 hotels that it has a variable interest in. For those ventures in
which the Company holds a variable interest, the Company determined that it was not the primary beneficiary and
such variable interest entities (“VIEs”) should not be consolidated in the Company’s financial statements. The
Company’s outstanding loan balances exposed to losses as a result of its involvement in VIEs totaled $7 million and
$14 million at December 31, 2007 and 2006, respectively. Equity investments and other types of investments related
to VIEs totaled $11 million and $52 million, respectively, at December 31, 2007 and $18 million and $64 million,
respectively, at December 31, 2006.
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, excluding the Westin Boston, Seaport Hotel discussed below, totaled $34 million at
December 31, 2007. The Company evaluates these loans for impairment, and at December 31, 2007, believes these
loans are collectible. Unfunded loan commitments aggregating $69 million were outstanding at December 31,
2007, of which $1 million are expected to be funded in 2008 and $51 million are expected to be funded in total.
These loans typically are secured by pledges of project ownership interests and/or mortgages on the projects. The
Company also has $100 million of equity and other potential contributions associated with managed or joint venture
properties, $28 million of which is expected to be funded in 2008.
During 2004, the Company entered into a long-term management contract to manage the Westin Boston,
Seaport Hotel in Boston, Massachusetts, which opened in June 2006. In connection with this project, the Company
agreed to provide up to $28 million in mezzanine loans and other investments (all of which has been funded) as well
as various guarantees, including a principal repayment guarantee for the term of the senior debt which was capped at
F-42

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
$40 million, a debt service guarantee during the term of the senior debt, which was limited to the interest expense on
the amounts drawn under such debt and principal amortization and a completion guarantee for this project. The fair
value of these guarantees of $3 million is reflected in other liabilities in the accompanying consolidated balance
sheets at December 31, 2006 and 2005. In January 2007 this hotel was sold and the senior debt was repaid in full. In
addition, the $28 million in mezzanine loans and other investments, together with accrued interest, was repaid in
full. In accordance with the management agreement, the sale of the hotel also resulted in the payment of a fee to the
Company of approximately $18 million, which is included in management fees, franchise fees and other income in
the consolidated statement of income for the year ended December 31, 2007. The Company continues to manage
this hotel subject to the pre-existing management agreement.
Surety bonds issued on behalf of the Company at December 31, 2007 totaled $99 million, 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 the Company to terminate the contract rather than fund shortfalls if
certain performance levels are not met. In limited cases, the Company is obliged to fund shortfalls in performance
levels through the issuance of loans. At December 31, 2007, excluding the Le Méridien management agreement
mentioned below, the Company had six management contracts with performance guarantees with possible cash
outlays of up to $74 million, $50 million of which, if required, would be funded over several years and would be
largely offset by management fees received under these contracts. Many of the performance tests are multi-year
tests, are tied to the results of a competitive set of hotels, and have exclusions for force majeure and acts of war and
terrorism. The Company does not anticipate any significant funding under these performance guarantees in 2008. In
connection with the acquisition of the Le Méridien brand in November 2005, the Company assumed the obligation
to guarantee certain performance levels at one Le Méridien managed hotel for the periods 2007 through 2013. This
guarantee is uncapped. However, the Company has estimated its exposure under this guarantee and does not
anticipate that payments made under the guarantee will be significant in any single year. The estimated fair present
value of this guarantee of $7 million and $6 million is reflected in other liabilities in the accompanying consolidated
balance sheet at December 31, 2007 and 2006, respectively. The Company does not anticipate losing a significant
number of management or franchise contracts in 2007.
In connection with the purchase of the Le Méridien brand in November 2005, the Company was indemnified
for certain of Le Méridien’s historical liabilities by the entity that bought Le Méridien’s owned and leased hotel
portfolio. The indemnity is limited to the financial resources of that entity. However, at this time, the Company
believes that it is unlikely that it will have to fund any of these liabilities.
In connection with the sale of 33 hotels to Host in 2006, the Company agreed to indemnify Host for certain
liabilities, including operations and tax liabilities. At this time, the Company believes that it will not have to make
any material payments under such indemnities.
Litigation. The Company is involved in various legal matters that have arisen in the normal course of
business, some of which include claims for substantial sums. Accruals have been recorded when the outcome is
probable and can be reasonably estimated. While the ultimate results of claims and litigation cannot be determined,
the Company does not expect that the resolution of all legal matters will have a material adverse effect on its
consolidated results of operations, financial position or cash flow. However, depending on the amount and the
timing, an unfavorable resolution of some or all of these matters could materially affect the Company’s future
results of operations or cash flows in a particular period.
Collective Bargaining Agreements. At December 31, 2007, approximately 33% of the Company’s
U.S.-based employees were covered by various collective bargaining agreements providing, generally, for basic
pay rates, working hours, other conditions of employment and orderly settlement of labor disputes. Generally, labor
F-43

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
relations have been maintained in a normal and satisfactory manner, and management believes that the Company’s
employee relations are satisfactory.
Environmental Matters. The Company is subject to certain requirements and potential liabilities under
various federal, state and local environmental laws, ordinances and regulations. Such laws often impose liability
without regard to whether the current or previous owner or operator knew of, or was responsible for, the presence of
such hazardous or toxic substances. Although the Company has incurred and expects to incur remediation and other
environmental costs during the ordinary course of operations, management anticipates that such costs will not have
a material adverse effect on the operations or financial condition of the Company.
Captive Insurance Company. Estimated insurance claims payable at December 31, 2007 and 2006 were
$88 million and $94 million, respectively. At December 31, 2007 and 2006, standby letters of credit amounting to
$101 million and $132 million, respectively, had been issued to provide collateral for the estimated claims. The
letters of credit are guaranteed by the Company.
ITT Industries. In 1995, the former ITT Corporation, renamed ITT Industries, Inc. (“ITT Industries”),
distributed to its stockholders all of the outstanding shares of common stock of ITT Corporation, then a wholly
owned subsidiary of ITT Industries (the “Distribution”). In connection with this Distribution, ITT Corporation,
which was then named ITT Destinations, Inc., changed its name to ITT Corporation. Subsequent to the acquisition
of ITT Corporation in 1998, the Company changed the name of ITT Corporation to Sheraton Holding Corporation.
For purposes of governing certain of the ongoing relationships between the Company and ITT Industries after
the Distribution and spin-off of ITT Corporation and to provide for an orderly transition, the Company and ITT
Industries have entered into various agreements including a spin-off agreement, Employee Benefits Services and
Liability Agreement, Tax Allocation Agreement and Intellectual Property Transfer and License Agreements. The
Company may be liable to or due reimbursement from ITT Industries relating to the resolution of certain pre-spin-
off matters under these agreements. As discussed in Note 1, as part of the Host Transaction, the Company sold the
shares of Sheraton Holding to Host. In connection with this transaction, the Company entered into an indemni-
fication agreement with Host for certain obligations including those associated with the Distribution. Based on
available information, management does not believe that these matters would have a material impact on the
Company’s consolidated results of operations, financial position or cash flows.
Note 23. Business Segment and Geographical 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 Company’s proprietary brand names including St. Regis», The Luxury Collection»,
Sheraton», Westin», W», Le Méridien», 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, licensing fees from branded condominiums
and residences 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 (losses) on asset
dispositions and impairments, restructuring and other special (charges) credits, and income taxes. The Company
does not allocate these items to its segments.
F-44

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
The following table presents revenues, operating income, assets and capital expenditures for the Company’s
reportable segments (in millions):
2007 2006 2005
Revenues:
Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $5,000 $4,863 $4,995
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,153 1,116 982
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,153 $5,979 $5,977
Operating income:
Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 878 $ 828 $ 792
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 253 215
Total segment operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,124 1,081 1,007
Selling, general, administrative and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (213) (222) (172)
Restructuring and other special charges, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . (53) (20) (13)
Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 858 839 822
Gain on sale of VOI notes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 25
Equity earnings and gains and losses from unconsolidated ventures, net:
Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 46 51
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 15 13
Interest expense, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (147) (215) (239)
Loss on asset dispositions and impairments, net . . . . . . . . . . . . . . . . . . . . . . . . . (44) (3) (30)
Income from continuing operations before taxes and minority interest . . . . . . . . . $ 733 $ 682 $ 642
Depreciation and amortization:
Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 242 $ 251 $ 352
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 16 13
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 39 42
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 306 $ 306 $ 407
Assets:
Hotel(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,772 $6,877
Vacation ownership and residential(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,918 1,698
Corporate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 932 705
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9,622 $9,280
(a) Includes $341 million and $340 million of investments in unconsolidated joint ventures at December 31, 2007
and 2006, respectively.
(b) Includes $42 million and $43 million of investments in unconsolidated joint ventures at December 31, 2007 and
2006, respectively.
F-45

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Capital expenditures:
Hotel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $211 $245 $318
Vacation ownership and residential . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96 78 95
Corporate. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 77 48 51
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $384 $371 $464
The following table presents revenues and long-lived assets by geographical region (in millions):
Revenues Long-Lived Assets
2007 2006 2005 2007 2006
(In millions)
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,563 $4,580 $4,656 $2,576 $2,765
Italy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 380 375 450 493 455
All other international . . . . . . . . . . . . . . . . . . . . . 1,210 1,024 871 1,204 1,049
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,153 $5,979 $5,977 $4,273 $4,269
Other than Italy, there were no individual international countries, which comprised over 10% of the total
revenues of the Company for the years ended December 31, 2007, 2006 or 2005, or 10% of the total long-lived
assets of the Company as of December 31, 2007 or 2006.
F-46

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)
Note 25. Quarterly Results (Unaudited)
Three Months Ended
March 31 June 30 September 30 December 31 Year
(In millions, except per Share data)
2007
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,431 $1,572 $1,540 $1,610 $6,153
Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . $1,250 $1,383 $1,294 $1,368 $5,295
Income from continuing operations . . . . . . . . . . . $ 123 $ 145 $ 129 $ 146 $ 543
Discontinued operations . . . . . . . . . . . . . . . . . . . $ (1) $— $— $— $ (1)
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 122 $ 145 $ 129 $ 146 $ 542
Earnings per Share:
Basic —
Income from continuing operations . . . . . . . . . $ 0.58 $ 0.69 $ 0.63 $ 0.77 $ 2.67
Discontinued operations . . . . . . . . . . . . . . . . . $— $— $— $— $—
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.58 $ 0.69 $ 0.63 $ 0.77 $ 2.67
Diluted —
Income from continuing operations . . . . . . . . . $ 0.56 $ 0.67 $ 0.61 $ 0.74 $ 2.57
Discontinued operations . . . . . . . . . . . . . . . . . $— $— $— $— $—
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.56 $ 0.67 $ 0.61 $ 0.74 $ 2.57
2006
Revenues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,441 $1,505 $1,461 $1,572 $5,979
Costs and expenses . . . . . . . . . . . . . . . . . . . . . . . $1,286 $1,300 $1,251 $1,303 $5,140
Income from continuing operations . . . . . . . . . . . $ 77 $ 680 $ 155 $ 203 $1,115
Discontinued operations . . . . . . . . . . . . . . . . . . . $— $— $— $ (2) $ (2)
Cumulative effect of accounting change, net of
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (72) $— $— $ 2 $ (70)
Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 5 $ 680 $ 155 $ 203 $1,043
Earnings per Share:
Basic —
Income from continuing operations . . . . . . . . . $ 0.35 $ 3.16 $ 0.73 $ 0.98 $ 5.25
Discontinued operations . . . . . . . . . . . . . . . . . $— $— $— $ (0.01) $ (0.01)
Cumulative effect of accounting change . . . . . . $ (0.33) $— $— $— $ (0.33)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.02 $ 3.16 $ 0.73 $ 0.97 $ 4.91
Diluted —
Income from continuing operations . . . . . . . . . $ 0.34 $ 3.01 $ 0.71 $ 0.94 $ 5.01
Discontinued operations . . . . . . . . . . . . . . . . . $— $— $— $ (0.01) $ (0.01)
Cumulative effect of accounting change . . . . . . $ (0.32) $— $— $— $ (0.31)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.02 $ 3.01 $ 0.71 $ 0.93 $ 4.69
F-47

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SCHEDULE II
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
VALUATION AND QUALIFYING ACCOUNTS
(In millions)
Additions (Deductions)
Charged
to/reversed Charged
Balance from to/from Other Payments/ Balance
Accounts(a)
January 1, Expenses Other December 31,
2007
Trade receivables — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $49 $6 $6 $(11) $50
Notes receivable — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $74 $37 $ (9) $ (8) $94
Reserves included in accrued and other
liabilities:
Restructuring and other special charges . . . $12 $ (2) $— $ (2) $8
2006
Trade receivables — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $50 $ (1) $3 $ (3) $49
Notes receivable — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $81 $26 $7 $(40) $74
Reserves included in accrued and other
liabilities:
Restructuring and other special charges . . . $30 $ (4) $— $(14) $12
2005
Trade receivables — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $58 $9 $4 $(21) $50
Notes receivable — allowance for doubtful
accounts . . . . . . . . . . . . . . . . . . . . . . . . $81 $ (3) $10 $ (7) $81
Reserves included in accrued and other
liabilities:
Restructuring and other special charges . . . $29 $13 $ (1) $(11) $30
(a) Charged to/from other accounts:
Trade and Notes
Receivable
Allowance for Restructuring
Doubtful and Other
Accounts Special Charges
2007
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2 $—
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) —
Total charged to/from other accounts . . . . . . . . . . . . . . . . . . . . . . . $ (3) $—
2006
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $9 $—
Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 —
Total charged to/from other accounts . . . . . . . . . . . . . . . . . . . . . . . $10 $—
2005
Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ (1)
Other assets. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 —
Total charged to/from other accounts . . . . . . . . . . . . . . . . . . . . . . . $14 $ (1)
S-1

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Starwood Hotels & Resorts Worldwide, Inc.
St. Regis Resort, Fort Lauderdale
The St. Regis Singapore
Castillo Hotel Son Vida
Mystique Santori, Greece
The Resort at Singer Island
Le Meridien Cambridge
Le Meridien Dahab Resort
Le Meridien Ibom Hotel & Golf Resort
The Westin Alexandria
The Westin Annapolis
The Westin Auckland, Lighter Quay
The Westin Baltimore Washington Airport
The Westin Beale Street, Memphis
The Westin Bristol Place Toronto Airport
The Westin Camporeal
The Westin Camporeal Residences
The Westin Chicago Northwest
The Westin Colonnade Coral Gables
The Westin Dhaka
The Westin Guangzhou
The Westin Lombard Yorktown Center
The Westin Minneapolis
The Westin Monache Resort, Mammoth
The Westin New Orleans Canal Place
The Westin San Diego
The Westin San Francisco Market Street
The Westin Sohna Gurgaon, Resort & Spa
The Westin Tysons Corner
The Westin Virginia Beach Town Center
The Westin Washington, DC City Center
Sheraton Aleppo Hotel
Sheraton Arlington Hotel
Sheraton Atlanta Perimeter North Hotel
Sheraton Austin Hotel
Sheraton Baltimore City Center Hotel
Sheraton Baltimore Washington Airport Hotel
Sheraton Cable Beach Resort
Sheraton Changsha Hotel
Sheraton Dameisha Resort
Sheraton Detroit Riverside Hotel
Sheraton Duluth Hotel
New in 2007
Sheraton Gambia
Sheraton Guiyang Hotel
Sheraton Hua Hin Resort & Spa
Sheraton Indianapolis City Centre Hotel
Sheraton Istanbul Maslak Hotel
Sheraton Kansas City Sports Complex Hotel
Sheraton La Jolla Hotel
Sheraton Laguna Guam
Sheraton Milford Hotel
Sheraton Miyako Osaka
Sheraton Miyako Tokyo
Sheraton New Delhi Hotel
Sheraton Shanghai Hotel & Residences, Pudong
Sheraton Shenzhen Futian Hotel
Sheraton Stockton Hotel at Regent Pointe
Sheraton Tarrytown Hotel
Sheraton Zhoushan Hotel
Four Point by Sheraton Hotel Sihlcity-Zurich
Four Points by Sheraton Downtown, Dubai
Four Points by Sheraton Historic Savannah
Four Points by Sheraton Lhasa
Four Points by Sheraton Manassas Battlefield
Four Points by Sheraton New Carrollton
Four Points by Sheraton Prince George
Four Points by Sheraton Sacramento International Airport
Four Points by Sheraton Shanghai, Daning

Starwood Hotels & Resorts Worldwide, Inc.
Corporate Information
Corporate Offices Form 10-K and Other Investor Information
Starwood Hotels & Resorts Worldwide, Inc. A copy of the Annual Report of Starwood Hotels & Resorts
1111 Westchester Avenue, White Plains, New York 10604 Worldwide, Inc. (“Starwood”) on Form 10-K filed with the
914 640 8100, www.starwoodhotels.com Securities and Exchange Commission may be obtained
online at www.starwoodhotels.com and by shareholders of
Independent Registered Public Accounting Firm record of Starwood without charge by calling 914 640 8100
or upon written request to:
Ernst & Young LLP, New York, New York
Investor Relations
Stock Registrar & Transfer Agent
Starwood Hotels & Resorts Worldwide, Inc.
Registered shareholders with questions concerning stock 1111 Westchester Avenue, White Plains, New York 10604
certificates, account information, dividend payments or
stock transfers should contact our transfer agent at:
American Stock Transfer & Trust Company
59 Maiden Lane, New York, New York 10038
800 350 6202, www.amstock.com
Note: This Annual Report contains forward-looking statements within the meaning of federal securities regulations. Forward-looking statements
are not guarantees of future performance and involve risks and uncertainties and other factors that may cause actual results to differ materially
from those anticipated at the time the forward-looking statements are made. Further results, performance and achievements may be affected
by general economic conditions including the timing and robustness of a recovery from the current global economic downturn, the impact of
war and terrorist activity, business and financing conditions, foreign exchange fluctuations, cyclicality of the real estate, including the sale of
residential units, and the hotel and vacation ownership businesses, operating risks associated with the sale of residential units, hotel and
vacation ownership businesses, relationships with associates, customers and property owners, the impact of the internet reservation channels,
our reliance on technology, domestic and international political and geopolitical conditions, competition, governmental and regulatory actions
(including the impact of changes in U.S. and foreign tax laws and their interpretation), travelers’ fears of exposure to contagious diseases,
risk associated with the level of our indebtedness, risk associated with potential acquisitions and dispositions, and other circumstances and
uncertainties. These risks and uncertainties are presented in detail in our filings with the Securities and Exchange Commission. Although we
believe the expectations reflected in such forward-looking statements are based upon reasonable assumptions, we can give no assurance that
our expectations will be attained or that results will not materially differ. We undertake no obligation to publicly update or revise any forward-
looking statement, whether as a result of new information, future events or otherwise.
© 2008 Starwood Hotels & Resorts Worldwide, Inc.
Starwood Hotels & Resorts Worldwide, Inc.

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