Starwood 2011 Annual Report Download - page 103

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with the favorable settlement of a lawsuit and an $8 million reversal of a guarantee liability which was favorably
settled during the period (see Note 25).
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Restructuring, Goodwill Impairment and
Other Special Charges (Credits), Net ..... $(75) $379 $454 n/m
During the year ended December 31, 2010, we received cash proceeds of $75 million in connection with the
favorable settlement of a lawsuit. We recorded this settlement, net of the reimbursement of legal costs incurred in
connection with the litigation, as a credit to restructuring, goodwill impairment, and other special (credits)
charges. Additionally, we recorded an $8 million credit related to the reversal of a reserve associated with an
acquisition in 1998 as the liability is no longer deemed necessary.
During the year ended December 31, 2009, we completed a comprehensive review of our vacation
ownership business. We decided not to develop certain vacation ownership sites and future phases of certain
existing projects. As a result of these decisions, we recorded a primarily non-cash impairment charge of $255
million in the restructuring, goodwill impairment and other special charges (credits) line item. Additionally, we
recorded a $90 million non-cash charge for the impairment of goodwill in the vacation ownership reporting unit.
Throughout 2009, we also recorded restructuring and other special charges of $34 million related to our
ongoing initiative of rationalizing our cost structure. These charges related to severance charges and costs to
close vacation ownership sales galleries.
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Depreciation and Amortization ............ $285 $309 $(24) 7.8%
The decrease in depreciation expense for the year ended December 31, 2010, when compared to the
corresponding period of 2009, was due to reduced depreciation expense from sold hotels offset by additional
capital expenditures made in the last twelve months.
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Operating Income ...................... $600 $26 $574 n/m
The increase in operating income for the year ended December 31, 2010, when compared to the
corresponding period of 2009, was primarily related to the restructuring, goodwill impairments and other special
charges (credits) favorable benefit of $75 million in 2010 compared to a charge of $379 million in 2009.
Additionally, the increase in operating income was favorably impacted by improved operating results in
primarily all of our revenue streams.
Year Ended
December 31,
2010
Year Ended
December 31,
2009
Increase /
(decrease)
from prior
year
Percentage
change
from prior
year
(in millions)
Equity Earnings (Losses) and Gains and
Losses from Unconsolidated Ventures,
Net ................................ $10 $(4) $14 n/m
The increase in equity earnings and gains and losses from unconsolidated joint ventures for the year ended
December 31, 2010, when compared to the same period of 2009, was primarily due to improved operating results
at several properties owned by joint ventures in which we hold non-controlling interests. The increase also
35