Starwood has announced that it’s board of directors has approved an increase in the Company’s share repurchase program of $1 billion bringing the current authorisation to $1.3 billion.
On Tuesday the Company’s board also approved the repatriation of approximately $550 million from the Company’s Italian subsidiary (CIGA). Consistent with the American Jobs Creation Act of 2004, the Company anticipates tax on the repatriation to be 10% or approximately $50 million which will be reflected in third quarter results.
As a result of a recent United States Tax Court decision, the Board has approved a cash payment to the IRS of approximately $360 million in order to eliminate any future interest accrual associated with a pending dispute with the IRS related to the 1998 disposition of ITT World Directories. The Company had previously reserved a substantial amount of the potential liability in connection with the disposition but is expected to record a charge in the third quarter of 2005 of approximately $40 million, primarily relating to interest that would be owed to the IRS if the Company does not prevail. The Company believes that this transaction was completed on a tax deferred basis and will continue to vigorously defend its position with the IRS.