Starwood 2010 Annual Report Download - page 135
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deemed to be impaired, and step two of goodwill impairment test was performed. This step resulted in an implied
goodwill fair value of $151 million compared to an actual goodwill balance of $241 million, with the difference of
$90 million representing the impairment charge. In determining fair values associated with the goodwill impair-
ment steps, the Company primarily used the income and the market approaches. Under the income approach, fair
value was determined based on the estimated future cash flows of the reporting units taking into account
assumptions such as REVPAR, operating margins and sales pace of vacation ownership units and discounting
these cash flows using a discount rate commensurate with the risk inherent in the calculations. Under the market
approach, the fair value of the reporting units were determined based on market valuation techniques such as
comparable revenue and EBITDA multiples of similar companies in the hospitality industry. The vacation
ownership goodwill had not been previously impaired.
Intangible assets consisted of the following (in millions):
2010 2009
December 31,
Trademarks and trade names ......................................... $309 $309
Management and franchise agreements .................................. 377 376
Other . . . ....................................................... 78 76
764 761
Accumulated amortization ........................................... (196) (181)
$ 568 $ 580
The intangible assets related to management and franchise agreements have finite lives, and accordingly, the
Company recorded amortization expense of $33 million, $35 million, and $32 million, respectively, during the
years ended December 31, 2010, 2009 and 2008. The other intangible assets noted above have indefinite lives.
Amortization expense relating to intangible assets with finite lives for each of the years ended December 31, is
expected to be as follows (in millions):
2011 . .................................................................. $32
2012 . .................................................................. $30
2013 . .................................................................. $30
2014 . .................................................................. $30
2015 . .................................................................. $29
Note 9. Other Assets
Other assets include the following (in millions):
2010 2009
December 31,
VOI notes receivable, net of allowance of $69 and $84 ....................... $132 $222
Prepaid taxes ...................................................... 88 103
Deposits and other .................................................. 161 113
Total ............................................................ $381 $438
See Note 11 for discussion relating to VOI notes receivable.
F-19
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)