Starwood 2007 Annual Report Download - page 146
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Note 13. Income Taxes
Income tax data from continuing operations of the Company is as follows (in millions):
2007 2006 2005
Year Ended December 31,
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)