Starwood 2010 Annual Report Download - page 148

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Note 17. Securitized Vacation Ownership Debt
As discussed in Note 10, the Company’s VIEs associated with the securitization of its vacation ownership
notes receivable were consolidated following the adoption of ASU Nos. 2009-16 and 2009-17. As of December 31,
2010, long-term and short-term securitized vacation ownership debt consisted of the following (in millions):
2003 securitization, interest rates ranging from 3.95% to 6.96%, maturing 2017 .......... $ 17
2005 securitization, interest rates ranging from 5.25% to 6.29%, maturing 2018 .......... 55
2006 securitization, interest rates ranging from 5.28% to 5.85%, maturing 2018 .......... 39
2009 securitization, interest rate at 5.81%, maturing 2016 ........................... 128
2010 securitization, interest rates ranging from 3.65% to 4.75%, maturing 2020 .......... 255
494
Less current maturities..................................................... (127)
Long-term debt .......................................................... $367
During the year ended December 31, 2010, interest expense associated with securitized vacation ownership
debt was $27 million.
Note 18. Other Liabilities
Other liabilities consisted of the following (in millions):
2010 2009
December 31,
Deferred gains on asset sales ....................................... $ 930 $1,009
SPG point liability
(a)
.............................................. 702 634
Deferred income including VOI and residential sales ...................... 20 33
Benefit plan liabilities............................................. 61 65
Insurance reserves ............................................... 46 46
Other . . ....................................................... 127 116
$1,886 $1,903
(a) Includes the actuarially determined liability related to the SPG program and the liability associated with the
American Express transaction discussed below.
During the year ended December 31, 2009, the Company entered into an amendment to its existing co-branded
credit card agreement (“Amendment”) with American Express and extended the term of its co-branding agreement
to June 15, 2015. In connection with the Amendment in July 2009, the Company received $250 million in cash
toward the purchase of future SPG points by American Express. In accordance with ASC 470, Debt, the Company
has recorded this transaction as a financing arrangement with an implicit interest rate of 4.5%. The Amendment
requires a fixed amount of $50 million per year to be deducted from the $250 million advance over the five year
period regardless of the total amount of points purchased. As a result, the liability associated with this financing
arrangement is being reduced ratably over a five year period beginning in October 2009. In accordance with the
terms of the Amendment, if the Company fails to comply with certain financial covenants, the Company would have
to repay the remaining balance of the liability, and, if the Company does not pay such liability, the Company is
required to pledge certain receivables as collateral for the remaining balance of the liability.
F-32
STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS — (Continued)