2.2.0.7 false Notes Receivable Securitizations 10701 - Disclosure - Notes Receivable Securitizations true false false false 1 USD false false Unit12 Standard http://www.xbrl.org/2003/iso4217 USD iso4217 0 Unit14 Divide http://www.xbrl.org/2003/iso4217 USD iso4217 http://www.xbrl.org/2003/instance shares xbrli 0 Unit1 Standard http://www.xbrl.org/2003/instance shares xbrli 0 $ 5 Notes Receivable Securitizations 3 us-gaap_LoansNotesTradeAndOtherReceivablesDisclosureTextBlock us-gaap true na duration No definition available. false false false false false false false false false false false terselabel false 1 false false false false 0 0 <div> <div style="font-family: 'Times New Roman',Times,serif;"> <div style="margin-top: 12pt; font-size: 10pt;" align="left"><b>Note 7. Securitized Vacation Ownership Notes Receivable</b> </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The Company has variable interests in the QSPEs associated with its five outstanding securitization transactions. The Company applied the variable interest model and determined it is the primary beneficiary of these VIEs. In making this determination, the Company evaluated the activities that significantly impact the economics of the VIEs, including the management of the securitized notes receivable and any related non-performing loans. The Company also evaluated its retention of the residual economic interests in the related QSPEs. The Company is the servicer of the securitized mortgage receivables. The Company also has the option, subject to certain limitations, to repurchase or replace VOI notes receivable, that are in default, at their outstanding principal amounts. Such activity totaled $12 million and $20 million during the three and six months ended June 30, 2010, respectively compared to $6 million and $13 million during the three and six months ended June 30, 2009. The Company has been able to resell the VOIs underlying the VOI notes repurchased or replaced under these provisions without incurring significant losses. The Company holds the risk of potential loss (or gain) as the last to be paid out by proceeds of the VIEs under the terms of the agreements. As such, the Company holds both the power to direct the activities of the VIEs and obligation to absorb the losses (or benefits) from the VIEs. </div> <p style="font-size: 10pt;" align="center"> </p></div> <hr noshade="noshade" /> <p> </p> <p> </p> <p> </p> <div style="font-family: 'Times New Roman',Times,serif;"> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The securitization agreements are without recourse to the Company, except for breaches of representations and warranties. Based on the right of the Company to fund defaults at its option, subject to certain limitations, it intends to do so until the debt is extinguished to maintain the credit rating of the underlying notes. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Upon transfer of vacation ownership notes receivable to the VIEs, the receivables and certain cash flows derived from them become restricted for use in meeting obligations to the VIE creditors. The VIEs utilize trusts which have ownership of cash balances that also have restrictions, the amounts of which are reported in restricted cash. With the exception of the seller's interest in trust receivables, the Company's interests in trust assets are subordinate to the interests of third-party investors and, as such, may not be realized by the Company if needed to absorb deficiencies in cash flows that are allocated to the investors in the trusts' debt (see Note 10). The Company is contractually obligated to receive the excess cash flows (spread between the collections on the notes and third party obligations defined in the securitization agreements) from the QSPEs. Such activity totaled $10 million and $20 million during the three and six months ended June 30, 2010, respectively, and is classified in cash and cash equivalents when received. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The carrying values of the securitized vacation ownership notes receivable consolidated on the Company's balance sheets as of June 30, 2010 relating to securitization activities, are as follows (in millions): </div> <div align="center"> <table style="font-size: 10pt;" cellspacing="0" cellpadding="0" width="100%" border="0"> <tr valign="bottom"><td width="88%"> </td> <td width="5%"> </td> <td width="1%"> </td> <td width="5%"> </td> <td width="1%"> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Securitized vacation ownership notes receivables</div></td> <td> </td> <td align="left">$</td> <td align="right">464</td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Allowance for loan losses</div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(69</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Net notes receivable</div></td> <td> </td> <td> </td> <td align="right">395</td> <td> </td></tr> <tr valign="bottom"><td> <div style="margin-left: 15px; text-indent: -15px;">Less: current notes receivable</div></td> <td> </td> <td nowrap="nowrap" align="left"> </td> <td align="right">(49</td> <td nowrap="nowrap">)</td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 1px solid;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr> <tr style="background: #cceeff;" valign="bottom"><td> <div style="margin-left: 30px; text-indent: -15px;">Carrying value of long-term securitized vacation ownership notes receivable</div></td> <td> </td> <td align="left">$</td> <td align="right">346</td> <td> </td></tr> <tr style="font-size: 1px;"><td> <div style="margin-left: 15px; text-indent: -15px;"> </div></td> <td> </td> <td style="border-top: #000000 3px double;" nowrap="nowrap" align="right" colspan="2"> </td> <td> </td></tr></table></div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The weighted average interest rate of the securitized vacation ownership notes receivable at June 30, 2010 and December 31, 2009 was 12.77% and 12.80%, respectively. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Additionally, restricted cash of $17 million and deferred financing fees net of $7 million related to its VIEs are recorded as restricted cash and other assets, respectively, on the Company's balance sheet. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     With respect to balances outstanding at December 31, 2009 and activity for the three and six months ended June 30, 2009, prior to the adoption of ASU Nos. 2009-16 and 2009-17, the Company's Retained Interests had the following impacts on the financial statements: </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     Gross credit losses for all VOI notes receivable that have been securitized totaled $9 million and $18 million during the three and six months ended June 30, 2009, respectively. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     The Company received aggregate cash proceeds of $5 million and $11 million from the Retained Interests during the three and six months ended June 30, 2009, respectively, and aggregate servicing fees of $1 million and $2 million related to these VOI notes receivable in the three and six months ended June 30, 2009, respectively. </div> <div style="margin-top: 6pt; font-size: 10pt;" align="left">     As of December 31, 2009, the aggregate net present value and carrying value of the Retained Interests for the Company's five outstanding note securitizations was approximately $25 million, with the following key assumptions used in measuring the fair value: an average discount rate of 7.8%, an average expected annual prepayment rate including defaults of 15.8%, and an expected weighted average remaining life of prepayable notes receivable of 86 months. </div></div> </div> Note 7. Securitized Vacation Ownership Notes Receivable      The Company has variable interests in the QSPEs associated with its five false false false us-types:textBlockItemType textblock Includes disclosure of claims held for amounts due a company. Examples include trade accounts receivables, notes receivables, loans receivables. Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 08 -Paragraph k -Article 4 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 02 -Paragraph 3, 4 -Article 5 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Regulation S-X (SX) -Number 210 -Section 03 -Paragraph 7 -Article 9 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher AICPA -Name Statement of Position (SOP) -Number 01-6 -Paragraph 13 -Subparagraph d false 1 1 false UnKnown UnKnown UnKnown false true