Note 6.

Vacation Ownership Notes Receivable

Notes receivable (net of reserves) related to our vacation ownership loans consisted of the following (in millions):

	March 31,			December 31,
	2016			2015
Vacation ownership loans – securitized	$	158		$	173
Vacation ownership loans – unsecuritized		463			443
		621			616
Less: current portion
Vacation ownership loans – securitized		(31	)		(32	)
Vacation ownership loans – unsecuritized		(44	)		(41	)
	$	546		$	543

We include the current and long-term maturities of unsecuritized VOI notes receivable in accounts receivable and other assets, respectively, in our consolidated balance sheets.

We record interest income associated with VOI notes in our vacation ownership and residential sales and services line item in our consolidated statements of income. Interest income related to our VOI notes receivable was as follows (in millions):

	Three Months Ended
	March 31,
	2016		2015
Vacation ownership loans – securitized	$	6	$	9
Vacation ownership loans – unsecuritized		15		12
	$	21	$	21

The following table presents future maturities of gross VOI notes receivable (in millions) and interest rates:

	Securitized			Unsecuritized			Total
2016	$	25		$	40		$	65
2017		32			49			81
2018		29			48			77
2019		26			50			76
2020		23			52			75
Thereafter		36			305			341
Balance at March 31, 2016	$	171		$	544		$	715
Weighted average interest rates at March 31, 2016		13.22	%		12.94	%		13.00	%
Range of interest rates	6.0 to 17.0%			5.0 to 17.0%			5.0 to 17.0%

For the vacation ownership and residential segment, we record an estimate of expected uncollectibility on our VOI notes receivable as a reduction of revenue at the time we recognize profit on a timeshare sale. We hold large amounts of homogeneous VOI notes receivable and, therefore, assess uncollectibility based on pools of receivables. In estimating loss reserves, we use a technique referred to as static pool analysis, which tracks uncollectible notes for each year’s sales over the life of the respective notes and projects an estimated default rate that is used in the determination of our loan loss reserve requirements. As of March 31, 2016 and December 31, 2015, the average estimated default rate for our pools of receivables was approximately 9.1% and 9.1%, respectively.

The activity and balances for our loan loss reserve were as follows (in millions):

	Securitized			Unsecuritized			Total
Balance at December 31, 2015	$	15		$	77		$	92
Provisions for loan losses		—			8			8
Write-offs		—			(6	)		(6	)
Other		(2	)		2			—
Balance at March 31, 2016	$	13		$	81		$	94

Balance at December 31, 2014	$	28		$	68		$	96
Provisions for loan losses		(1	)		4			3
Write-offs		—			(6	)		(6	)
Other		(3	)		3			—
Balance at March 31, 2015	$	24		$	69		$	93

We use the origination of the notes by brand (Sheraton, Westin, and Other) and the Fair Isaac Corporation (FICO) scores of the buyers as the primary credit quality indicators to calculate the loan loss reserve for the vacation ownership notes, as we believe there is a relationship between the default behavior of borrowers and the brand associated with the vacation ownership property they have acquired, supplemented by the FICO scores of the buyers. In addition to quantitatively calculating the loan loss reserve based on our static pool analysis, we supplement the process by evaluating certain qualitative data, including the aging of the respective receivables and current default trends by brand and origination year.

Balances of our VOI notes receivable by brand and by FICO score were as follows (in millions):

	As of March 31, 2016
	700+		600-699		<600		No Score		Total
Sheraton	$	165	$	145	$	13	$	62	$	385
Westin		191		88		5		33		317
Other		7		2		—		4		13
	$	363	$	235	$	18	$	99	$	715

	As of December 31, 2015
	700+		600-699		<600		No Score		Total
Sheraton	$	165	$	145	$	14	$	60	$	384
Westin		185		89		5		32		311
Other		7		2		—		4		13
	$	357	$	236	$	19	$	96	$	708

Given the significance of our pools of VOI notes receivable, a change in the projected default rate can have a significant impact to our loan loss reserve requirements, with a 0.1% change estimated to have an impact of approximately $5 million.

We consider a VOI note receivable delinquent when it is more than 30 days outstanding. Delinquent notes receivable amounted to $45 million and $46 million as of March 31, 2016 and December 31, 2015, respectively. All delinquent loans are placed on nonaccrual status, and we do not resume interest accrual until payment is made. We consider loans to be in default upon reaching 120 days outstanding, at which point, we generally commence the repossession process. Uncollectible VOI notes receivable are charged off when title to the unit is returned to us. We generally do not modify vacation ownership notes that become delinquent or upon default.

Past due balances of VOI notes receivable were as follows (in millions):

	Total Receivables		Current		Delinquent
					30-59 Days		60-89 Days		>90 Days		Total
As of March 31, 2016	$	715	$	670	$	9	$	7	$	29	$	45
As of December 31, 2015	$	708	$	662	$	12	$	7	$	27	$	46