VACATION OWNERSHIP NOTES RECEIVABLE (Tables)

3 Months Ended

Mar. 31, 2020

Accounts, Notes, Loans and Financing Receivable [Line Items]

Composition of vacation ownership notes receivable balances, net of reserves

The following table shows the composition of our vacation ownership notes receivable balances, net of reserves.

	March 31, 2020						December 31, 2019
($ in millions)	Originated		Acquired		Total		Originated		Acquired		Total
Securitized	$	1,466	$	356	$	1,822	$	1,378	$	372	$	1,750
Non-securitized
Eligible for securitization(1)	70		7		77		155		10		165
Not eligible for securitization(1)	232		28		260		261		57		318
Subtotal	302		35		337		416		67		483
	$	1,768	$	391	$	2,159	$	1,794	$	439	$	2,233

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⁽¹⁾ 

Refer to Footnote 7 “Financial Instruments” for a discussion of eligibility of our vacation ownership notes receivable for securitization.

Interest income associated with vacation ownership notes receivable

The following table summarizes interest income associated with vacation ownership notes receivable.

	Three Months Ended
($ in millions)	March 31, 2020		March 31, 2019
Interest income associated with vacation ownership notes receivable — securitized	$	63	$	59
Interest income associated with vacation ownership notes receivable — non-securitized	6		6
Total interest income associated with vacation ownership notes receivable	$	69	$	65

Future principal payments, net of reserves, and interest rates of vacation ownership notes receivable

The following table shows future principal payments, net of reserves, as well as interest rates, for our originated non-securitized and securitized originated vacation ownership notes receivable at March 31, 2020.

	Originated Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
2020, remaining	$	30	$	104	$	134
2021	32		141		173
2022	28		145		173
2023	25		148		173
2024	24		149		173
Thereafter	163		779		942
Balance at March 31, 2020	$	302	$	1,466	$	1,768
Weighted average stated interest rate	12.3%		12.6%		12.6%
Range of stated interest rates	0.0% to 18.0%		0.0% to 17.5%		0.0% to 18.0%

The following table shows future contractual principal payments, as well as interest rates, for our non-securitized and securitized acquired vacation ownership notes receivable at March 31, 2020.

	Acquired Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
2020, remaining	$	3	$	34	$	37
2021	4		45		49
2022	4		45		49
2023	4		44		48
2024	4		43		47
Thereafter	16		145		161
Balance at March 31, 2020	$	35	$	356	$	391
Weighted average stated interest rate	13.4%		13.4%		13.4%
Range of stated interest rates	3.0% to 17.9%		6.0% to 16.9%		3.0% to 17.9%

Schedule of financing receivable

The following table details the origination year of our Legacy-MVW vacation ownership notes receivable as of March 31, 2020.

	Legacy-MVW Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
Year of Origination
2020	$	78	$	36	$	114
2019	70		471		541
2018	36		357		393
2017	16		202		218
2016	9		95		104
2015 and Prior	28		169		197
	$	237	$	1,330	$	1,567

The following table shows our recorded investment in non-accrual Legacy-MVW vacation ownership notes receivable, which are vacation ownership notes receivable that are 90 days or more past due.

	Legacy-MVW Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
Investment in vacation ownership notes receivable on non-accrual status at March 31, 2020	$	48	$	14	$	62
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2019	$	43	$	11	$	54

Aging of recorded investment in principal, before reserves, in vacation ownership notes receivable

The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-MVW vacation ownership notes receivable as of March 31, 2020.

	Legacy-MVW Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
31 – 90 days past due	$	9	$	36	$	45
91 – 150 days past due	4		14		18
Greater than 150 days past due	44		—		44
Total past due	57		50		107
Current	180		1,280		1,460
Total vacation ownership notes receivable	$	237	$	1,330	$	1,567

The following table shows the aging of the recorded investment in principal, before reserves, in Legacy-MVW vacation ownership notes receivable as of December 31, 2019.

	Legacy-MVW Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
31 – 90 days past due	$	7	$	33	$	40
91 – 150 days past due	4		11		15
Greater than 150 days past due	39		—		39
Total past due	50		44		94
Current	222		1,254		1,476
Total vacation ownership notes receivable	$	272	$	1,298	$	1,570

Financing receivable credit quality indicators

The following tables show the Legacy-ILG acquired vacation ownership notes receivable by brand and FICO score, before reserves. Vacation ownership notes receivable with no FICO score primarily relate to non-U.S. resident borrowers.

	Acquired Vacation Ownership Notes Receivable as of March 31, 2020
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	$	105	$	58	$	5	$	13	$	181
Sheraton	99		87		16		37		239
Hyatt	16		10		1		1		28
Other	3		1		—		2		6
	$	223	$	156	$	22	$	53	$	454

	Acquired Vacation Ownership Notes Receivable as of December 31, 2019
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	$	103	$	57	$	4	$	13	$	177
Sheraton	95		83		15		37		230
Hyatt	15		10		1		—		26
Other	3		1		—		2		6
	$	216	$	151	$	20	$	52	$	439

The following table details the origination year of our Legacy-ILG acquired vacation ownership notes receivable by brand and FICO score as of March 31, 2020. Vacation ownership notes receivable with no FICO score primarily relate to non-U.S. resident borrowers.

	Acquired Vacation Ownership Notes Receivable - Westin
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	—	$	—	$	28	$	28	$	18	$	31	$	105
600 - 699	—		—		13		15		11		19		58
< 600	—		—		3		1		—		1		5
No Score	—		—		3		3		2		5		13
	$	—	$	—	$	47	$	47	$	31	$	56	$	181

	Acquired Vacation Ownership Notes Receivable - Sheraton
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	—	$	—	$	27	$	27	$	18	$	27	$	99
600 - 699	—		—		22		22		15		28		87
< 600	—		—		9		3		1		3		16
No Score	—		—		10		10		6		11		37
	$	—	$	—	$	68	$	62	$	40	$	69	$	239

	Acquired Vacation Ownership Notes Receivable - Hyatt and Other
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	—	$	—	$	5	$	4	$	3	$	7	$	19
600 - 699	—		—		2		2		2		5		11
< 600	—		—		—		1		—		—		1
No Score	—		—		—		—		—		3		3
	$	—	$	—	$	7	$	7	$	5	$	15	$	34

The following tables show the Legacy-ILG originated vacation ownership notes receivable by brand and FICO score. Vacation ownership notes receivable with no FICO score primarily relate to non-U.S. resident borrowers.

	Originated Vacation Ownership Notes Receivable as of March 31, 2020
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	$	126	$	52	$	6	$	27	$	211
Sheraton	103		67		14		45		229
Hyatt	17		7		—		—		24
	$	246	$	126	$	20	$	72	$	464

	Originated Vacation Ownership Notes Receivable as of December 31, 2019
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Westin	$	122	$	46	$	5	$	25	$	198
Sheraton	97		61		13		37		208
Hyatt	16		6		—		—		22
	$	235	$	113	$	18	$	62	$	428

The following tables detail the origination year of our Legacy-ILG originated vacation ownership notes receivable by brand and FICO score as of March 31, 2020. Vacation ownership notes receivable with no FICO score primarily relate to non-U.S. resident borrowers.

	Originated Vacation Ownership Notes Receivable - Westin
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	26	$	83	$	17	$	—	$	—	$	—	$	126
600 - 699	8		36		8		—		—		—		52
< 600	1		4		1		—		—		—		6
No Score	11		14		2		—		—		—		27
	$	46	$	137	$	28	$	—	$	—	$	—	$	211

	Originated Vacation Ownership Notes Receivable - Sheraton
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	14	$	71	$	18	$	—	$	—	$	—	$	103
600 - 699	7		46		14		—		—		—		67
< 600	1		11		2		—		—		—		14
No Score	9		29		7		—		—		—		45
	$	31	$	157	$	41	$	—	$	—	$	—	$	229

	Originated Vacation Ownership Notes Receivable - Hyatt
($ in millions)	2020		2019		2018		2017		2016		2015 & Prior		Total
700 +	$	4	$	11	$	2	$	—	$	—	$	—	$	17
600 - 699	1		5		1		—		—		—		7
< 600	—		—		—		—		—		—		—
No Score	—		—		—		—		—		—		—
	$	5	$	16	$	3	$	—	$	—	$	—	$	24

Acquired

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes receivable reserves

The following table summarizes the activity related to our acquired vacation ownership notes receivable reserve.

	Acquired Vacation Ownership Notes Receivable Reserve
($ in millions)	Non-Securitized			Securitized		Total
Balance at December 31, 2019, as reported	$	—		$	—	$	—
Impact of adoption of ASU 2016-13	29			26		55
Opening Balance at January 1, 2020	29			26		55
Write-offs	(9		)	—		(9		)
Recoveries	4			—		4
Increase in vacation ownership notes receivable reserve(1)	5			8		13
Balance at March 31, 2020	$	29		$	34	$	63

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⁽¹⁾ 

Increase in vacation ownership notes receivable reserve includes $10 million ($2 million non-securitized and $8 million securitized) attributable to additional reserve resulting from the COVID-19 pandemic.

Originated

Accounts, Notes, Loans and Financing Receivable [Line Items]

Notes receivable reserves

The following table summarizes the activity related to our originated vacation ownership notes receivable reserve.

	Originated Vacation Ownership Notes Receivable Reserve
($ in millions)	Non-Securitized			Securitized			Total
Balance at December 31, 2019	$	90		$	114		$	204
Increase in vacation ownership notes receivable reserve(1)	36			35			71
Securitizations	(16		)	16			—
Write-offs	(12		)	—			(12		)
Defaulted vacation ownership notes receivable repurchase activity(2)	15			(15		)	—
Balance at March 31, 2020	$	113		$	150		$	263

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⁽¹⁾  Increase in vacation ownership notes receivable reserve includes $42 million ($16 million non-securitized and $26 million securitized) attributable to additional reserve resulting from the COVID-19 pandemic.

⁽²⁾ 

Decrease in securitized vacation ownership notes receivable reserve and increase in non-securitized vacation ownership notes receivable reserve was attributable to the transfer of the reserve when we voluntarily repurchased defaulted securitized vacation ownership notes receivable.