Starwood 2010 Annual Report Download - page 149

Note 19. Discontinued Operations
Summary of financial information for discontinued operations is as follows (in millions):
2010 2009 2008
Year Ended December 31,
Income Statement Data
Gain on disposition, net of tax .............................. $168 $76 $75
Income (loss) from operations, net of tax ...................... $ (1) $(2) $ 5
During the year ended December 31, 2010, the Company recorded a gain of $134 million related to the final
settlement with the IRS regarding the World Directories disposition (see Note 15) and a gain of approximately
$36 million primarily related to a tax benefit in connection with the sale of one wholly-owned hotel for $78 million.
The tax benefit on this hotel sale was related to the realization of a high tax basis in this hotel that was generated
through a previous transaction.
For the year ended December 31, 2009, the $76 million (net of tax) gain on dispositions includes the gains from
the sale of the Company’s Bliss spa business, other non-core assets and three hotels. The operations from the Bliss
spa business, and the revenues and expenses from one hotel, which was in the process of being sold and was later
sold in 2010, are included in discontinued operations, resulting in a loss of $2 million, net of tax.
For the year ended December 31, 2008, the gain on dispositions includes a $124 million gain ($129 million
pretax) on sale of three hotels which were sold unencumbered by management or franchise contracts partially offset
by a $49 million tax charge as a result of a 2008 administrative tax ruling for an unrelated taxpayer that impacts the
tax liability associated with the disposition of one of the Company’s businesses several years ago. Additionally,
$5 million ($9 million pretax) of 2008 results from operations relating to Bliss and the one owned hotel that was in
the process of being sold at December 31, 2009, was reclassified to discontinued operations for the year ended
December 31, 2008.
Note 20. Employee Benefit Plan
During the year ended December 31, 2010, the Company recorded net actuarial losses of $4 million (net of tax)
related to various employee benefit plans. These losses were recorded in other comprehensive income. The
amortization of actuarial loss, a component of other comprehensive income, for the year ended December 31, 2010
was $1 million (net of tax).
Included in accumulated other comprehensive (loss) income at December 31, 2010 are unrecognized net
actuarial losses of $66 million ($56 million, net of tax) that have not yet been recognized in net periodic pension
cost. The actuarial loss included in accumulated other comprehensive (loss) income and expected to be recognized
in net periodic pension cost during the year ended December 31, 2011 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.
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
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.
F-33
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)