Starwood 2006 Annual Report Download - page 94

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status of the plan of $1 million at December 31, 2006 is recognized in other assets in the Company’s consolidated
balance sheet.
The following table reconciles the funded status to the amounts recognized in the Company’s consolidated
balance sheet at December 31, 2005 (in millions):
Pension
Benefits
Foreign Pension
Benefits
Postretirement
Benefits
Funded status ......................................... $(16) $(58) $ (14)
Unrecognized net actuarial loss (gain) ..................... 2 60 (3)
Unrecognized prior service cost .......................... — (2) —
Net amount recognized at end of year ....................... $(14) $ — $ (17)
Amounts recognized in the consolidated balance sheets consist of:
Accrued benefit cost .................................. $(18) $(39) $ (17)
Accumulated other comprehensive income .................. 4 39 N/A
Net amount recognized at end of year ....................... $(14) $ — $ (17)
Increase (decrease) in additional minimum liability
included in accumulated other comprehensive income ......... $— $11 N/A
All domestic pension plans are frozen plans, where employees do not accrue additional benefits. Therefore, at
December 31, 2006 and 2005, 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, 2006 and 2005, the accumulated benefit obligation for the foreign
pension plans was $181 million and $166 million, respectively.
The following table presents the components of net periodic benefit cost for the years ended December 31,
2006, 2005 and 2004 (in millions):
2006 2005 2004 2006 2005 2004 2006 2005 2004
Pension
Benefits
Foreign Pension
Benefits
Postretirement
Benefits
Service cost ........................ $— $— $— $ 4 $ 4 $ 4 $— $— $—
Interest cost ........................ 1 1 1 10 88112
Expected return on plan assets .......... — — — (9) (8) (8) (1) (1) (1)
Amortization of actuarial loss ........... — — — 3 3 3 — — —
SFAS No. 87 cost/SFAS No. 106 cost ..... 1 1 1 8 7 7 — — 1
SFAS No. 88 settlement and curtailment
gain ............................ — — (2) (3) —————
Net periodic benefit cost (income)........ $ 1 $ 1 $(1) $ 5 $ 7 $ 7 $— $— $ 1
For measurement purposes, a 7% annual rate of increase in the per capita cost of covered health care benefits
was assumed for 2007. The rate was assumed to decrease gradually to 5% for 2009 and remain at that level
thereafter. A one-percentage-point change in assumed health care cost trend rates would have approximately a
$0.3 million effect on the postretirement obligation and a nominal impact on the total of service and interest cost
components of net periodic benefit cost.
F-33
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)