Starwood 2009 Annual Report Download - page 143
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Note 9. Other Assets
Other assets include the following (in millions):
2009 2008
December 31,
VOI notes receivable, net ............................................. $222 $444
Other notes receivable, net ............................................ 34 32
Prepaid taxes ...................................................... 103 130
Deposits and other .................................................. 101 76
Total ............................................................ $460 $682
Included in these balances at December 31, 2009 and 2008 are the following fixed rate notes receivable related
to the financing of VOIs (in millions):
2009 2008
December 31,
Gross VOI notes receivable ........................................... $336 $581
Allowance for uncollectible VOI notes receivable ........................... (94) (91)
Net VOI notes receivable ............................................. 242 490
Less current maturities of gross VOI notes receivable ........................ (30) (54)
Current portion of the allowance for uncollectible VOI notes receivable........... 10 8
Long-term portion of net VOI notes receivable ............................. $222 $444
The current maturities of net VOI notes receivable are included in accounts receivable in the Company’s
balance sheets.
As discussed in Note 2, as the Company holds large amounts of similar VOI notes receivable, the Company
assesses its loan loss reserves based on pools of receivables. As of December 31, 2009, the average estimated default
rate for the Company’s pool of receivables was 9.8%. Given the significance of the Company’s respective pools of
VOI notes receivable, a change in the projected default rate can have a significant impact to its loan loss reserve
requirements, with a 0.1% change estimated to have an impact of approximately $3 million. It is reasonably
possible that the carrying value of the VOI notes receivable could materially change in 2010 if the economy
continues to worsen.
The interest rates of the owned VOI notes receivable are as follows:
2009 2008
December 31,
Range of stated interest rates .................................. 0%-18% 0%-18%
Weighted average interest rate.................................. 12.1% 11.9%
F-20
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)