Starwood 2011 Annual Report Download - page 140

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STARWOOD HOTELS & RESORTS WORLDWIDE, INC.
NOTES TO FINANCIAL STATEMENTS
In June 2009, the Company securitized approximately $181 million of VOI notes receivable (the “2009-A
Securitization”) resulting in cash proceeds of approximately $125 million. The Company retained $44 million of
interests in the QSPE, which included $43 million of notes the Company effectively owned after the transfer and
$1 million related to the interest only strip. The related loss on the 2009-A Securitization of $2 million was
included in vacation ownership and residential sales and services in the Company’s consolidated statements of
income.
In December 2009, the Company securitized approximately $200 million of VOI notes receivable (the
“2009-B Securitization”) resulting in cash proceeds of approximately $166 million. The Company retained
$31 million of interests in the QSPE, which included $22 million of notes the Company effectively owned after
the transfer and $9 million related to the interest only strip. The related gain on the 2009-B Securitization of
$19 million is included in vacation ownership and residential sales and services in the Company’s consolidated
statements of income.
In December 2009, the Company entered into an amendment with the third-party beneficial interest owner
regarding the notes issued in the 2009-A Securitization (the 2009-A Amendment). The amendment to the terms
included a reduction of the coupon rate and an increase in the effective advance rate. As the increase in the advance
rate produced additional cash proceeds of $9 million, this resulted effectively in additional loans sold to the QSPE
from the original over collateralization. The related gain on the 2009-A Amendment of $4 million was included in
vacation ownership and residential sales and services in the Company’s consolidated statements of income.
Note 10. Notes Receivable
Notes receivable (net of reserves) related to the Company’s vacation ownership loans consist of the
following (in millions):
December 31,
2011 2010
Vacation ownership loans-securitized ....................................... $510 $467
Vacation ownership loans-unsecuritized ..................................... 113 152
623 619
Less: current portion
Vacation ownership loans-securitized ..................................... (64) (59)
Vacation ownership loans-unsecuritized ................................... (20) (20)
$539 $540
The current and long-term maturities of unsecuritized VOI notes receivable are included in accounts
receivable and other assets, respectively, in the Company’s consolidated balance sheets.
The Company records interest income associated with VOI notes in its vacation ownership and residential
sale and services line item in its consolidated statements of income. Interest income related to the Company’s
VOI notes receivable was as follows (in millions):
Year Ended
December 31,
2011 2010 2009
Vacation ownership loans-securitized .................................. $64 $66 $—
Vacation ownership loans-unsecuritized ................................ 21 21 48
$85 $87 $48
F-23