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VARIABLE INTEREST ENTITIES
 9 Months Ended
Sep. 30, 2022
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
VARIABLE INTEREST ENTITIES
16. VARIABLE INTEREST ENTITIES
Variable Interest Entities Related to Our Vacation Ownership Notes Receivable Securitizations
We periodically securitize, without recourse, through bankruptcy remote special purpose entities, notes receivable originated in connection with the sale of vacation ownership products. These vacation ownership notes receivable securitizations provide liquidity for general corporate purposes. In a vacation ownership notes receivable securitization, various classes of debt securities issued by a special purpose entity are generally collateralized by a single tranche of transferred assets, which consist of vacation ownership notes receivable. With each vacation ownership notes receivable securitization, we may retain a portion of the securities, subordinated tranches, interest-only strips, subordinated interests in accrued interest and fees on the securitized vacation ownership notes receivable or, in some cases, overcollateralization and cash reserve accounts.
We created these bankruptcy remote special purpose entities to serve as a mechanism for holding assets and related liabilities, and the entities have no equity investment at risk, making them VIEs. We continue to service the vacation ownership notes receivable, transfer all proceeds collected to these special purpose entities, and retain rights to receive benefits that are potentially significant to the entities. Accordingly, we concluded that we are the entities’ primary beneficiary and, therefore, consolidate them. There is no noncontrolling interest balance related to these entities and the creditors of these entities do not have general recourse to us.
The following table shows consolidated assets, which are collateral for the obligations of these VIEs, and consolidated liabilities included on our Balance Sheet at September 30, 2022:
($ in millions)Vacation Ownership
Notes Receivable
Securitizations		Warehouse
Credit Facility		Total
Consolidated Assets
Vacation ownership notes receivable, net of reserves$1,527 $135 $1,662 
Interest receivable11 1 12 
Restricted cash62 5 67 
Total$1,600 $141 $1,741 
Consolidated Liabilities
Interest payable$2 $— $2 
Securitized debt1,698 132 1,830 
Total$1,700 $132 $1,832 
The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the third quarter of 2022:
($ in millions)Vacation Ownership
Notes Receivable
Securitizations		Warehouse
Credit Facility		Total
Interest income$58 $2 $60 
Interest expense to investors$12 $1 $13 
Debt issuance cost amortization$2 $— $2 

The following table shows the interest income and expense recognized as a result of our involvement with these VIEs during the first three quarters of 2022:
($ in millions)Vacation Ownership
Notes Receivable
Securitizations		Warehouse
Credit Facility		Total
Interest income$173 $6 $179 
Interest expense to investors$33 $2 $35 
Debt issuance cost amortization$6 $1 $7 
Administrative expenses$1 $— $1 
The following table shows cash flows between us and the vacation ownership notes receivable securitization VIEs:
Nine Months Ended
($ in millions)September 30, 2022September 30, 2021
Cash Inflows
Net proceeds from vacation ownership notes receivable securitizations$371 $421 
Principal receipts413 432 
Interest receipts174 167 
Reserve release153 109 
Total1,111 1,129 
Cash Outflows
Principal to investors(446)(452)
Voluntary repurchases of defaulted vacation ownership notes receivable(69)(78)
Voluntary clean-up call(39)(72)
Interest to investors(34)(33)
Funding of restricted cash(95)(110)
Total(683)(745)
Net Cash Flows$428 $384 
Under the terms of our vacation ownership notes receivable securitizations, we have the right to substitute loans for, or repurchase, defaulted loans at our option, subject to certain limitations. Our maximum exposure to potential loss relating to the special purpose entities that purchase, sell and own these vacation ownership notes receivable is the overcollateralization amount (the difference between the loan collateral balance and the balance of the outstanding vacation ownership notes receivable), plus cash reserves and any residual interest in future cash flows from collateral.
The following table shows cash flows between us and the Warehouse Credit Facility VIE:
Nine Months Ended
($ in millions)September 30, 2022September 30, 2021
Cash Inflows
Proceeds from vacation ownership notes receivable securitizations$234 $— 
Principal receipts12 — 
Interest receipts5 — 
Reserve release1 — 
Total252 — 
Cash Outflows
Principal to investors(3)— 
Repayment of Warehouse Credit Facility(98)— 
Interest to investors(2)(1)
Funding of restricted cash(2)— 
Total(105)(1)
Net Cash Flows$147 $(1)
Other Variable Interest Entities
We have a commitment to purchase a property located in Waikiki, Hawaii. The property is held by a VIE for which we are not the primary beneficiary. We do not control the decisions that most significantly impact the economic performance of the entity during construction. Further, our purchase commitment is contingent upon the property being redeveloped to our brand standards. Accordingly, we have not consolidated the VIE. During the second quarter of 2022, we amended the terms of our prior commitment and extended a bridge loan to the VIE for $47 million. During the third quarter of 2022, we further amended the terms of our prior commitment at which time the bridge loan was fully repaid. We expect to acquire the property over time and as of September 30, 2022, we expect to make payments for the property as follows: $112 million in 2024, $81 million in 2025 and $41 million in 2026. As of September 30, 2022, our Balance Sheet reflected $1 million in Accounts Receivable, including a note receivable of approximately $1 million, $1 million in Property and Equipment, and $2 million in Accrued Liabilities. We believe that our maximum exposure to loss as a result of our involvement with this VIE is approximately $1 million as of September 30, 2022.
Deferred Compensation Plan
We consolidate the liabilities of the Marriott Vacations Worldwide Deferred Compensation Plan and the related assets, which consist of the COLI policies held in the rabbi trust. The rabbi trust is considered a VIE. We are considered the primary beneficiary of the rabbi trust because we direct the activities of the trust and are the beneficiary of the trust. At September 30, 2022, the value of the assets held in the rabbi trust was $68 million, which is included in the Other line within assets on our Balance Sheets.