Starwood 2007 Annual Report Download - page 152

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borrowings of 450 million euros) were used to temporarily finance the repatriation of approximately $550 million
pursuant to the Act. As of December 31, 2006, the majority of these temporary borrowings were repaid.
The Company has the ability to draw down on its Revolving Credit Facility in various currencies. Drawdowns
in currencies other than the U.S. dollar represent a natural hedge of the Company’s foreign denominated net assets
and operations. At December 31, 2007, the Company had $6 million drawn in Canadian dollars and $123 million
drawn in Euros.
The Company maintains lines of credit under which bank loans and other short-term debt are drawn. In
addition, smaller credit lines are maintained by the Company’s foreign subsidiaries. The Company had approx-
imately $1.367 billion of available borrowing capacity under its domestic and foreign lines of credit as of
December 31, 2007.
The Company is subject to certain restrictive debt covenants under its short-term borrowing and long-term debt
obligations including defined financial covenants, limitations on incurring additional debt, escrow account funding
requirements for debt service, capital expenditures, tax payments and insurance premiums, among other restric-
tions. The Company was in compliance with all of the short-term and long-term debt covenants at December 31,
2007.
The short-term borrowings at December 31, 2007 were insignificant. The weighted average interest rate for
short-term borrowings was 4.40% at December 31, 2006 and the fair value approximated carrying value given their
short-term nature. The average interest rates were composed of interest rates on both U.S. dollar and non-U.S. dollar
denominated indebtedness.
For adjustable rate debt, fair value approximates carrying value due to the variable nature of the interest rates.
For non-public fixed rate debt, fair value is determined based upon discounted cash flows for the debt at rates
deemed reasonable for the type of debt and prevailing market conditions and the length to maturity for the debt. The
estimated fair value of debt at December 31, 2007 and 2006 was $3.7 billion and $2.7 billion, respectively, and was
determined based on quoted market prices and/or discounted cash flows. See Note 21. Derivative Financial
Instruments for additional discussion regarding the Company’s interest rate swap agreements.
Note 15. Other Liabilities
Other liabilities consisted of the following (in millions):
2007 2006
December 31,
Deferred gains on asset sales ....................................... $1,133 $1,178
SPG point liability ............................................... 354 277
Deferred income including VOI and residential sales ...................... 34 161
Benefit plan liabilities............................................. 62 74
Insurance reserves ............................................... 68 73
Other ......................................................... 150 165
$1,801 $1,928
F-32
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)