Starwood 2011 Annual Report Download - page 150

STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
required to pledge certain receivables as collateral for the remaining balance of the liability. As of December 31,
2011, a liability of $72 million related to the Amendment is recorded in other liabilities.
Note 18. Discontinued Operations
Summary of financial information for discontinued operations is as follows (in millions):
Year Ended December 31,
2011 2010 2009
Income Statement Data
Gain (loss) on disposition, net of tax ............................... $(13) $168 $76
Income (loss) from operations, net of tax ........................... $— $ (1) $(2)
During the year ended December 31, 2011, the Company recorded a loss of $13 million, including an $18
million pretax loss from the sale of its interest in a consolidated joint venture, offset by a $10 million income tax
benefit on the sale. Additionally, the Company recorded a $5 million charge related to interest on an uncertain
tax position associated with a disposition in a prior year.
During the year ended December 31, 2010, the Company recorded a tax benefit of $134 million related to
the final settlement with the IRS regarding the World Directories disposition (see Note 14) and a pretax gain of
approximately $3 million ($36 million after tax) related to the sale of one wholly-owned hotel for $78 million.
The tax benefit 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.
Note 19. Employee Benefit Plan
During the year ended December 31, 2011, the Company recorded net actuarial losses of $20 million (net of
tax) related to various employee benefit plans. These losses were recorded in other comprehensive income. The
amortization of the net actuarial loss, a component of other comprehensive income, for the year ended
December 31, 2011 was $1 million (net of tax).
Included in accumulated other comprehensive (loss) income at December 31, 2011 are unrecognized net
actuarial losses of $85 million ($75 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 that is expected to be
recognized in net periodic pension cost during the year ended December 31, 2012 is $2 million ($2 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 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