Starwood 2008 Annual Report Download - page 152

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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, 2008 and 2007 (in millions):
2008 2007 2008 2007 2008 2007
Pension Benefits Foreign Pension Benefits
Postretirement
Benefits
Change in Projected Benefit Obligation
Benefit obligation at beginning of year ...... $17 $17 $206 $196 $ 20 $ 19
Service cost ........................ — — 4 5 — —
Interest cost ........................ 1 1 11 12 1 1
Actuarial loss (gain) .................. — — 20 (4) — 2
Settlements and curtailments ............ — — (7) — — —
Effect of foreign exchange rates ......... — — (27) 5 — —
Benefits paid ....................... (1) (1) (6) (8) (3) (2)
Plan amendments .................... — — (2) — — —
Benefit obligation at end of year ........... $17 $17 $199 $206 $ 18 $ 20
Change in Plan Assets
Fair value of plan assets at beginning of
year .............................. $— $— $185 $161 $ 5 $ 7
Actual return on plan assets, net of
expenses ......................... — — (35) 12 — —
Employer contribution ................ 1 1 20 16 3 2
Effect of foreign exchange rates ......... — — (26) 4 — —
Settlements and curtailments ............ — — (6) — — —
Asset transfer ....................... — — — — (3) (2)
Benefits paid ....................... (1) (1) (6) (8) (3) (2)
Fair value of plan assets at end of year ...... $— $— $132 $185 $ 2 $ 5
Funded status ......................... $(17) $(17) $ (67) $ (21) $(16) $(15)
Accumulated benefit obligation ............ $17 $17 $174 $186 n/a n/a
Plans with Accumulated Benefit Obligations
in Excess of Plan Assets
Projected benefit obligation ............. $17 $17 $132 $ 47 $18 $20
Accumulated benefit obligation .......... $17 $17 $108 $ 46 n/a n/a
Fair value of plan assets ............... $— $— $ 57 $ 41 $ 2 $ 5
The net underfunded status of the plans at December 31, 2008 was $100 million, which $99 million is in other
liabilities and $1 million is in accrued expenses in the accompanying balance sheet. The majority of participants in
the Foreign Pension Plans are employees of managed hotels, for which we are reimbursed for costs related to their
benefits. The impact of these reimbursements is not reflected above.
All domestic pension plans are frozen plans, where employees do not accrue additional benefits. Therefore, at
December 31, 2008 and 2007, 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, 2008 and 2007, the accumulated benefit obligation for the foreign
pension plans was $174 million and $186 million, respectively.
F-36
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)