NOTES RECEIVABLE

We show the composition of our notes receivable balances (net of reserves and unamortized discounts) in the following table:



($ in millions)	At Year-End 2011			At Year-End 2010
Loans to timeshare owners – securitized	$	—		$	1,028
Loans to timeshare owners – non-securitized	—			225
Senior, mezzanine, and other loans – non-securitized	382			191
	382			1,444
Less current portion
Loans to timeshare owners – securitized	—			(118		)
Loans to timeshare owners – non-securitized	—			(55		)
Senior, mezzanine, and other loans – non-securitized	(84		)	(7		)
	$	298		$	1,264

We classify notes receivable due within one year as current assets in the caption “Accounts and notes receivable” in our Balance Sheets. We show the composition of our long-term notes receivable balances (net of reserves and unamortized discounts) in the following table:



($ in millions)	At Year-End 2011		At Year-End 2010
Loans to timeshare owners	$	—	$	1,080
Loans to equity method investees	2		2
Other notes receivable	296		182
	$	298	$	1,264

The following tables show future principal payments (net of reserves and unamortized discounts) as well as interest rates, reserves and unamortized discounts for our securitized and non-securitized notes receivable.

Notes Receivable Principal Payments (net of reserves and unamortized discounts) and Interest Rates



($ in millions)	Amount
2012	$	84
2013	50
2014	35
2015	23
2016	44
Thereafter	146
Balance at year-end 2011	$	382
Weighted average interest rate at year-end 2011	4.3		%
Range of stated interest rates at year-end 2011	0 to 12.9%

Notes Receivable Reserves



($ in millions)	Non-Securitized Notes Receivable		Securitized Notes Receivable		Total
Balance at year-end 2010	$	203	$	89	$	292
Balance at year-end 2011	$	78	$	—	$	78

Notes Receivable Unamortized Discounts ⁽¹⁾



($ in millions)	Amount
Balance at year-end 2010	$	13
Balance at year-end 2011	$	12


⁽¹⁾	The discounts for both year-end 2011 and 2010 relate entirely to our Senior, Mezzanine, and Other Loans.

Senior, Mezzanine, and Other Loans

We reflect interest income associated with “Senior, mezzanine, and other loans” in the “Interest income” caption in our Income Statements. At year-end 2011, our recorded investment in impaired “Senior, mezzanine, and other loans” was $96 million. We had a $78 million notes receivable reserve representing an allowance for credit losses, leaving $18 million of our investment in impaired loans, for which we had no related allowance for credit losses. At year-end 2010, our recorded investment in impaired “Senior, mezzanine, and other loans” was $83 million, and we had a $74 million notes receivable reserve representing an allowance for credit losses, leaving $9 million of our investment in impaired loans, for which we had no related allowance for credit losses. During 2011 and 2010, our average investment in impaired “Senior, mezzanine, and other loans” totaled $89 million and $137 million, respectively.

The following table summarizes the activity related to our “Senior, mezzanine, and other loans” notes receivable reserve for 2009, 2010, and 2011:



($ in millions)	Notes Receivable Reserve
Balance at year-end 2008	$	113
Additions	84
Write-offs	(28		)
Transfers and other	14
Balance at year-end 2009	$	183
Additions	4
Write-offs	(120		)
Transfers and other	7
Balance at year-end 2010	$	74
Additions	2
Reversals	(7		)
Transfers and other	9
Balance at year-end 2011	$	78

As of year-end 2011, past due senior, mezzanine, and other loans totaled $8 million.

Loans to Timeshare Owners

On November 21, 2011, we transferred all balances related to loans to timeshare owners (both securitized and non-securitized) to MVW as part of the spin-off. See Footnote No. 17, "Spin-off" for additional information. Prior to the spin-off date, we reflected interest income associated with “Loans to timeshare owners” of $143 million, $187 million, and $46 million for 2011, 2010 and 2009, respectively, in our Income Statements in the “Timeshare sales and services” revenue caption. Of the $143 million of interest income we recognized in 2011, $116 million was associated with securitized loans and $27 million was associated with non-securitized loans, compared with $147 million associated with securitized loans and $40 million associated with non-securitized loans in 2010. The interest income we recognized in 2009 related solely to non-securitized loans.

The following table summarizes the activity related to our “Loans to timeshare owners” notes receivable reserve for 2009, 2010, and 2011 prior to the spin-off date:



($ in millions)	Non-Securitized Notes Receivable Reserve			Securitized Notes Receivable Reserve			Total
Balance at year-end 2008	$	35		$	—		$	35
Additions for current year securitizations	5			—			5
Write-offs	(13		)	—			(13		)
Balance at year-end 2009	$	27		$	—		$	27
Additions for current year securitizations	32			—			32
Additions for new securitizations, net of clean-up call	(18		)	18			—
Write-offs	(79		)	—			(79		)
One-time impact of the new Transfers of Financial Assets and Consolidation standards ⁽¹⁾	84			135			219
Defaulted note repurchase activity⁽²⁾	68			(68		)	—
Other	15			4			19
Balance at year-end 2010	$	129		$	89		$	218
Additions for current year contract sales	26			—			26
Additions for new securitizations, net of unwind	(12		)	12			—
Write-offs	(67		)	—			(67		)
Defaulted note repurchase activity⁽²⁾	43			(43		)	—
Other⁽³⁾	(12		)	12			—
Transfer due to spin-off	(107		)	(70		)	(177		)
Balance at year-end 2011	$	—		$	—		$	—


⁽¹⁾	The non-securitized notes receivable reserve related to the implementation of the new Transfers of Financial Assets and Consolidation standards, which required us to establish reserves for certain previously securitized and subsequently repurchased notes held at January 2, 2010.


⁽²⁾	Decrease in securitized reserve and increase in non-securitized reserve was attributable to the transfer of the reserve when we repurchased the notes.


⁽³⁾	Consisted of static pool and default rate assumption changes.

We show our recorded investment in nonaccrual “Loans to timeshare owners” loans at year-end 2010 (which were loans that were 90 days or more past due) as well as our average investment in these loans during 2010 in the following table:



($ in millions)	Non-Securitized Notes Receivable		Securitized Notes Receivable		Total
Investment in loans on nonaccrual status	$	113	$	15	$	128
Average investment in loans on nonaccrual status	$	113	$	8	$	121