Starwood 2003 Annual Report Download - page 93

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
AND STARWOOD HOTELS & RESORTS
NOTES TO FINANCIAL STATEMENTS Ì (Continued)
2003 Restructuring and Other Special Charges (Credits). During the year ended December 31, 2003,
the Company received $12 million in a favorable settlement of a litigation matter. This special credit was
oÅset by an increase of $13 million in a reserve for legal defense costs associated with a separate litigation
matter. Additionally, the Company reversed through restructuring credits a $9 million liability that was
originally established in 1997 for the ITT Excess Pension Plan through restructuring charges and is no longer
required as the Company Ñnalized the settlement of its remaining obligations associated with the plan.
2002 Restructuring and Other Special Credits. During the year ended December 31, 2002, the
Company recorded reversals of restructuring charges of $1 million and reversals of other special charges of
$6 million. The reversal of the restructuring charge relates to an adjustment to the severance liability
established in connection with the cost containment eÅorts following the September 11 Attacks based on
actual costs incurred. The reversal of the other special charges primarily related to sales of investments in
certain e-business ventures previously deemed impaired and the collections of receivables which were
previously deemed uncollectible.
2001 Restructuring and Other Special Charges (Credits). Due to the September 11 Attacks and the
weakening of the U.S. economy, in the third and fourth quarter of 2001, the Company implemented a cost
reduction plan and conducted a comprehensive review of the carrying value of certain assets for potential
impairment, resulting in 2001 restructuring charges of $15 million and noncash other special charges
aggregating approximately $36 million. The restructuring charges were primarily for severance costs incurred
as part of the cost reduction plan. The other special charges consisted primarily of employee retention costs
associated with the accelerated vesting of 50% of restricted stock awards granted in February 2001
(approximately $11 million); bad debt expense associated with receivables no longer deemed collectible
(approximately $17 million); impairments of certain investments and other assets (approximately $5 million);
and abandoned pursuit projects (approximately $3 million).
In addition, in early 2001, the Company wrote down its investments in various e-business ventures by
approximately $19 million based on the market conditions for the technology sector at the time and
management's assessment that impairment of these investments was other-than-temporary. This special
charge was oÅset by the reversal of a $20 million bad debt restructuring charge taken in 1998 relating to a note
receivable, which is now fully performing.
Note 11. Plant, Property and Equipment
Plant, property and equipment consisted of the following (in millions):
December 31,
2003 2002
Land and improvements ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ $ 1,351 $ 1,256
Buildings and improvementsÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 6,193 5,849
Furniture, Ñxtures and equipment ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 1,942 1,735
Construction work in process ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ 217 159
9,703 8,999
Less accumulated depreciation and amortization ÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏÏ (2,580) (2,088)
$ 7,123 $ 6,911
F-27