DEBT (Tables)

9 Months Ended

Sep. 30, 2022

Debt Disclosure [Abstract]

Debt balances, net of unamortized debt issuance costs

The following table provides detail on our debt balances, net of unamortized debt discount and issuance costs.

($ in millions)		At September 30, 2022		At December 31, 2021
Senior Secured Notes
	2025 Notes	$	250	$	250
	Unamortized debt discount and issuance costs	(2)		(2)
		248		248
Senior Unsecured Notes
	2028 Notes	350		350
	Unamortized debt discount and issuance costs	(3)		(4)
		347		346
	2029 Notes	500		500
	Unamortized debt discount and issuance costs	(6)		(7)
		494		493
Corporate Credit Facility
	Term Loan	784		784
	Unamortized debt discount and issuance costs	(6)		(8)
		778		776
	Revolving Corporate Credit Facility(1)	230		—
	Unamortized debt issuance costs(2)	(5)		—
		225		—
Convertible Notes
	2022 Convertible Notes	—		230
	Unamortized debt discount and issuance costs	—		(6)
		—		224
	2026 Convertible Notes	575		575
	Unamortized debt discount and issuance costs	(11)		(114)
		564		461
Non-interest bearing note payable		10		—
Finance Leases		83		83
		$	2,749	$	2,631

_________________________

(1)Effective interest rate as of September 30, 2022 was 7.0%.

(2)Excludes $2 million of unamortized debt issuance costs as of December 31, 2021, as no cash borrowings were outstanding under the Revolving Corporate Credit Facility at that time.

Scheduled future principal payments for debt

The following table shows anticipated future principal payments for our securitized debt as of September 30, 2022.

	Vacation Ownership Notes Receivable Securitizations		Warehouse Credit Facility		Total
($ in millions)
Payments Year
2022, remaining	$	43	$	1	$	44
2023	174		6		180
2024	179		7		186
2025	179		118		297
2026	180		—		180
Thereafter	943		—		943
	$	1,698	$	132	$	1,830

The following table shows scheduled principal payments for our debt, excluding finance leases, as of September 30, 2022.

($ in millions)	2025 Notes		2028 Notes		2029 Notes		Term Loan		Revolving Corporate Credit Facility		2026 Convertible Notes		Non-Interest Bearing Note Payable		Total
Year Payments
2022, remaining	$	—	$	—	$	—	$	—	$	—	$	—	$	—	$	—
2023	—		—		—		—		—		—		6		6
2024	—		—		—		—		—		—		4		4
2025	250		—		—		784		—		—		—		1,034
2026	—		—		—		—		—		575		—		575
Thereafter	—		350		500		—		230		—		—		1,080
	$	250	$	350	$	500	$	784	$	230	$	575	$	10	$	2,699

Schedule of cash flow hedges included in accumulated other comprehensive income (loss)

The following table reflects the activity in accumulated other comprehensive income or loss related to our derivative instruments during the first three quarters of 2022 and 2021. There were no reclassifications to the Income Statement for either of the periods presented below.

($ in millions)	2022		2021
Derivative instrument adjustment balance, January 1	$	(18)	$	(39)
Other comprehensive gain before reclassifications	16		6
Derivative instrument adjustment balance, March 31	(2)		(33)
Other comprehensive gain before reclassifications	7		3
Derivative instrument adjustment balance, June 30	$	5	$	(30)
Other comprehensive gain before reclassifications	8		3
Derivative instrument adjustment balance, September 30	$	13	$	(27)

Convertible debt

The following table reflects the activity related to our 2022 Convertible Notes during the first three quarters of 2022.

($ in millions)	Principal Amount		Unamortized Debt Discount		Unamortized Debt Issuance Costs		Debt, net		Carrying Amount of Equity Component, net of Issuance Costs
At December 31, 2021	$	230	$	(5)	$	(1)	$	224	$	33
Adoption of ASU 2020-06(1)	—		5		—		5		(33)
At January 1, 2022	230		—		(1)		229		—
Amortization	—		—		1		1		—
Fair value of conversion option transferred to other liabilities(2)	—		(5)		—		(5)		—
At June 30, 2022	230		(5)		—		225		—
Amortization	—		5		—		5		—
Repayment upon maturity	(230)		—		—		(230)		—
At September 30, 2022	$	—	$	—	$	—	$	—	$	—

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(1)As a result of the adoption of ASU 2020-06 during the first quarter of 2022, we no longer accounted for the liability and equity components of the convertible notes separately, and we reclassified the conversion feature related to the 2022 Convertible Notes from equity to liabilities. Prior period amounts have not been adjusted to reflect our adoption of ASU 2020-06 under the modified retrospective method. See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” for information on our adoption of ASU 2020-06.

(2)We issued notice of our intent to settle the 2022 Convertible Notes in cash, which became irrevocable on June 15, 2022, and as a result, our previous exception to derivative accounting no longer applied and we were required to fair value the conversion feature on the 2022 Convertible Notes at that time. The fair value of the conversion feature of $5 million was recorded as a debt discount and a corresponding increase to Other liabilities on our balance sheet. Subsequent changes to the fair value of the conversion feature were recorded on our income statement.

The following table shows interest expense information related to the 2022 Convertible Notes.

	Three Months Ended				Nine Months Ended
($ in millions)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Contractual interest expense	$	1	$	1	$	3	$	3
Amortization of debt discount	5		1		5		5
Amortization of debt issuance costs	—		—		1		1
	$	6	$	2	$	9	$	9

The following table shows the net carrying value of the 2026 Convertible Notes.

($ in millions)	At September 30, 2022		At December 31, 2021
Liability component
Principal amount	$	575	$	575
Unamortized debt discount(1)	—		(104)
Unamortized debt issuance costs	(11)		(10)
Net carrying amount of the liability component	$	564	$	461
Carrying amount of equity component, net of issuance costs(1)	$	—	$	117

________________________

(1)As a result of adoption of ASU 2020-06 during the first quarter of 2022, we no longer account for the liability and equity components of the convertible notes separately, and we reclassified the conversion feature related to the 2026 Convertible Notes from equity to liabilities. Prior period amounts have not been adjusted to reflect our adoption of ASU 2020-06 under the modified retrospective method. See Footnote 2 “Significant Accounting Policies and Recent Accounting Standards” for information on our adoption of ASU 2020-06.

The following table shows interest expense information related to the 2026 Convertible Notes.

	Three Months Ended				Nine Months Ended
($ in millions)	September 30, 2022		September 30, 2021		September 30, 2022		September 30, 2021
Amortization of debt discount	$	—	$	6	$	—	$	16
Amortization of debt issuance costs	1		1		2		2
	$	1	$	7	$	2	$	18