Transfer And Servicing Of Financial Assets

12 Months Ended

Dec. 31, 2012

Transfers and Servicing [Abstract]

Transfer And Servicing Of Financial Assets

Transfer and Servicing of Financial Assets

The Company pools qualifying vacation ownership contract receivables and sells them to bankruptcy-remote entities. Vacation ownership contract receivables qualify for securitization based primarily on the credit strength of the VOI purchaser to whom financing has been extended. Vacation ownership contract receivables are securitized through bankruptcy-remote SPEs that are consolidated within the Consolidated Financial Statements. As a result, the Company does not recognize gains or losses resulting from these securitizations at the time of sale to the SPEs. Interest income is recognized when earned over the contractual life of the vacation ownership contract receivables. The Company services the securitized vacation ownership contract receivables pursuant to servicing agreements negotiated on an arms-length basis based on market conditions. The activities of these SPEs are limited to (i) purchasing vacation ownership contract receivables from the Company’s vacation ownership subsidiaries, (ii) issuing debt securities and/or borrowing under a conduit facility to fund such purchases and (iii) entering into derivatives to hedge interest rate exposure. The bankruptcy-remote SPEs are legally separate from the Company. The receivables held by the bankruptcy-remote SPEs are not available to creditors of the Company and legally are not assets of the Company. Additionally, the creditors of these SPEs have no recourse to the Company for principal and interest.

The assets and liabilities of these vacation ownership SPEs are as follows:

	December 31, 2012		December 31, 2011
Securitized contract receivables, gross (a)	$	2,401	$	2,485
Securitized restricted cash (b)	121		132
Interest receivables on securitized contract receivables (c)	19		20
Other assets (d)	2		1
Total SPE assets (e)	2,543		2,638
Securitized term notes (f)	1,770		1,625
Securitized conduit facilities (f)	190		237
Other liabilities (g)	5		11
Total SPE liabilities	1,965		1,873
SPE assets in excess of SPE liabilities	$	578	$	765

^(a)  Included in current ($252 million and $262 million as of December 31, 2012 and 2011, respectively) and non-current ($2,149 million and $2,223 million as of December 31, 2012 and 2011, respectively) vacation ownership contract receivables on the Consolidated Balance Sheets.

^(b)  Included in other current assets ($65 million and $71 million as of December 31, 2012 and 2011, respectively) and other non-current assets ($56 million and $61 million as of December 31, 2012 and 2011, respectively) on the Consolidated Balance Sheets.

^(c)  Included in trade receivables, net on the Consolidated Balance Sheets.

^(d)  Includes interest rate derivative contracts and related assets; included in other non-current assets on the Consolidated Balance Sheets.

^(e)  Excludes deferred financing costs of $28 million and $26 million as of December 31, 2012 and 2011, respectively, related to securitized debt.

^(f)  Included in current ($218 million and $196 million as of December 31, 2012 and 2011, respectively) and long-term ($1,742 million and $1,666 million as of December 31, 2012 and 2011, respectively) securitized vacation ownership debt on the Consolidated Balance Sheets.

^(g)  Primarily includes interest rate derivative contracts and accrued interest on securitized debt; included in accrued expenses and other current liabilities ($2 million as of both December 31, 2012 and 2011) and other non-current liabilities ($3 million and $9 million as of December 31, 2012 and 2011, respectively) on the Consolidated Balance Sheets.

In addition, the Company has vacation ownership contract receivables that have not been securitized through bankruptcy-remote SPEs. Such gross receivables were $985 million and $757 million as of December 31, 2012 and 2011, respectively. A summary of total vacation ownership receivables and other securitized assets, net of securitized liabilities and the allowance for loan losses, is as follows:

	December 31, 2012		December 31, 2011
SPE assets in excess of SPE liabilities	$	578	$	765
Non-securitized contract receivables	985		757
Less: Allowance for loan losses	497		394
Total, net	$	1,066	$	1,128