
	September 30, 2023						December 31, 2022
($ in millions)	Originated		Acquired		Total		Originated		Acquired		Total
Securitized	$	1,722	$	163	$	1,885	$	1,571	$	221	$	1,792
Non-securitized
Eligible for securitization(1)	59		1		60		63		—		63
Not eligible for securitization(1)	327		19		346		322		21		343
Subtotal	386		20		406		385		21		406
	$	2,108	$	183	$	2,291	$	1,956	$	242	$	2,198

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

We reflect interest income associated with vacation ownership notes receivable in our Income Statements in the Financing revenues caption. The following table summarizes interest income associated with vacation ownership notes receivable.


	Three Months Ended				Nine Months Ended
($ in millions)	September 30, 2023		September 30, 2022		September 30, 2023		September 30, 2022
Interest income associated with vacation ownership notes receivable — securitized	$	70	$	60	$	205	$	179
Interest income associated with vacation ownership notes receivable — non-securitized	9		11		26		30
Total interest income associated with vacation ownership notes receivable	$	79	$	71	$	231	$	209

We use the origination of vacation ownership notes receivable and the FICO scores of the customer by brand as the primary credit quality indicators, as historical performance indicates that there is a relationship between the default behavior of borrowers by FICO score and the brand associated with the vacation ownership interest (“VOI”) they have acquired. The estimates of the variable consideration included in the transaction price for the sale of the related vacation ownership product for originated vacation ownership notes receivable and the reserve for credit losses on the acquired vacation ownership notes receivable are based on default rates that are an output of our static pool analyses and estimates regarding future defaults.

In the third quarter of 2023, we evaluated our vacation ownership notes receivable reserve in light of trends in delinquencies and default rates. As a result, we increased our originated vacation ownership notes receivable reserve by $59 million. We primarily used a historical period of increased defaults as a basis for estimating the increase in our reserve. This additional reserve adjusts our future default rate estimate to reflect current macroeconomic conditions, including inflation outpacing wage growth, continuing high interest rates, mixed economic indicators and increased global insecurity.

In the third quarter of 2022, in connection with the combination of the reserves for Marriott-, Sheraton-, and Westin-brands, we recorded a reversal of credit loss expense for the acquired vacation ownership notes receivable of $19 million in Financing expense and an increase in the reserve for our originated vacation ownership notes receivable of $21 million, which was recorded as a reduction of sales of vacation ownership products revenues.

The weighted average FICO score of the borrowers within our consolidated vacation ownership notes receivable pool was 722 and 721, at September 30, 2023 and December 31, 2022, respectively, based on the FICO score of the borrower at the time of origination.

Acquired vacation ownership notes receivable represent vacation ownership notes receivable acquired as part of the ILG Acquisition and the Welk Acquisition. The following table shows future contractual principal payments, net of reserves, and interest rates for our acquired vacation ownership notes receivable at September 30, 2023.


	Acquired Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
2023, remaining	$	2	$	8	$	10
2024	3		33		36
2025	3		30		33
2026	3		27		30
2027	2		22		24
Thereafter	7		43		50
Balance at September 30, 2023	$	20	$	163	$	183
Weighted average stated interest rate	14.0%		14.2%		14.2%
Range of stated interest rates	0.0% to 21.9%		0.0% to 21.9%		0.0% to 21.9%


	Acquired Vacation Ownership Notes Receivable Reserve
($ in millions)	Non-Securitized		Securitized		Total
Balance at December 31, 2022	$	11	$	18	$	29
Securitizations	(2)		2		—
Clean-up call	2		(2)		—
Write-offs	(21)		—		(21)
Recoveries	13		—		13
Defaulted vacation ownership notes receivable repurchase activity(1)	14		(14)		—
(Decrease) increase in vacation ownership notes receivable reserve	(10)		7		(3)
Balance at September 30, 2023	$	7	$	11	$	18

(1)Reflects the change attributable to the transfer of the reserve from the securitized vacation ownership notes receivable reserve to the non-securitized vacation ownership notes receivable reserve when we voluntarily repurchased securitized vacation ownership notes receivable.


	Acquired Vacation Ownership Notes Receivable as of September 30, 2023
($ in millions)	700+		600 - 699		< 600		No Score		Total
Combined Marriott	$	51	$	35	$	4	$	11	$	101
Hyatt and Welk	59		39		1		1		100
	$	110	$	74	$	5	$	12	$	201


	Acquired Vacation Ownership Notes Receivable as of December 31, 2022
($ in millions)	700+		600 - 699		< 600		No Score		Total
Combined Marriott	$	67	$	47	$	6	$	16	$	136
Hyatt and Welk	80		53		1		1		135
	$	147	$	100	$	7	$	17	$	271

The following tables detail the origination year of our acquired vacation ownership notes receivable, before reserves, by brand and borrower FICO score as of September 30, 2023, and gross write-offs by brand for the first three quarters of 2023.


	Acquired Vacation Ownership Notes Receivable - Combined Marriott
($ in millions)	2021		2020		2019 & Prior		Total
700 +	$	—	$	—	$	51	$	51
600 - 699	—		—		35		35
< 600	—		—		4		4
No Score	—		—		11		11
	$	—	$	—	$	101	$	101

Gross write-offs	$	—	$	—	$	11	$	11


	Acquired Vacation Ownership Notes Receivable - Hyatt and Welk
($ in millions)	2021		2020		2019 & Prior		Total
700 +	$	4	$	13	$	42	$	59
600 - 699	2		7		30		39
< 600	—		—		1		1
No Score	—		—		1		1
	$	6	$	20	$	74	$	100

Gross write-offs	$	1	$	2	$	7	$	10

Originated vacation ownership notes receivable represent vacation ownership notes receivable originated by Legacy-ILG and Legacy-Welk subsequent to each respective acquisition date and all Legacy-MVW vacation ownership notes receivable. The following table shows future principal payments, net of reserves, and interest rates for our originated vacation ownership notes receivable at September 30, 2023.


	Originated Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
2023, remaining	$	8	$	34	$	42
2024	47		141		188
2025	34		147		181
2026	34		155		189
2027	34		163		197
Thereafter	229		1,082		1,311
Balance at September 30, 2023	$	386	$	1,722	$	2,108
Weighted average stated interest rate	12.1%		13.2%		13.0%
Range of stated interest rates	0.0% to 20.9%		0.0% to 19.9%		0.0% to 20.9%

For originated vacation ownership notes receivable, we record the difference between the vacation ownership note receivable and the variable consideration included in the transaction price for the sale of the related vacation ownership product as a reserve on our vacation ownership notes receivable. 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, 2022	$	149	$	213	$	362
Increase in vacation ownership notes receivable reserve	162		21		183
Securitizations	(126)		126		—
Clean-up call	43		(43)		—
Write-offs	(88)		—		(88)
Defaulted vacation ownership notes receivable repurchase activity(1)	76		(76)		—
Balance at September 30, 2023	$	216	$	241	$	457

(1)Reflects the change attributable to the transfer of the reserve from the securitized vacation ownership notes receivable reserve to the non-securitized vacation ownership notes receivable reserve when we voluntarily repurchased securitized vacation ownership notes receivable.


	Originated Vacation Ownership Notes Receivable as of September 30, 2023
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Combined Marriott	$	1,341	$	602	$	57	$	307	$	2,307
Hyatt and Welk	180		72		2		4		258
	$	1,521	$	674	$	59	$	311	$	2,565


	Originated Vacation Ownership Notes Receivable as of December 31, 2022
($ in millions)	700 +		600 - 699		< 600		No Score		Total
Combined Marriott	$	1,210	$	549	$	55	$	278	2,092
Hyatt and Welk	157		64		3		2		226
	$	1,367	$	613	$	58	$	280	$	2,318

The following tables detail the origination year of our originated vacation ownership notes receivable, before reserves, by brand and FICO score as of September 30, 2023, and gross write-offs by brand for the first three quarters of 2023.


	Originated Vacation Ownership Notes Receivable - Combined Marriott
($ in millions)	2023		2022		2021		2020		2019 & Prior		Total
700 +	$	377	$	413	$	228	$	78	$	245	$	1,341
600 - 699	145		174		114		42		127		602
< 600	13		16		11		5		12		57
No Score	117		74		29		19		68		307
	$	652	$	677	$	382	$	144	$	452	$	2,307

Gross write-offs	$	2	$	14	$	22	$	9	$	27	$	74


	Originated Vacation Ownership Notes Receivable - Hyatt and Welk
($ in millions)	2023		2022		2021		2020		2019 & Prior		Total
700 +	$	73	$	71	$	31	$	2	$	3	$	180
600 - 699	26		31		12		1		2		72
< 600	—		1		1		—		—		2
No Score	3		1		—		—		—		4
	$	102	$	104	$	44	$	3	$	5	$	258

Gross write-offs	$	—	$	6	$	7	$	—	$	1	$	14

For both non-securitized and securitized vacation ownership notes receivable, we estimated the average remaining default rates of 13.35% as of September 30, 2023 and 11.62% as of December 31, 2022. A 0.5 percentage point increase in the estimated default rate would have resulted in an increase in the related vacation ownership notes receivable reserve of $13 million as of September 30, 2023 and $12 million as of December 31, 2022.

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


	Vacation Ownership Notes Receivable
($ in millions)	Non-Securitized		Securitized		Total
Investment in vacation ownership notes receivable on non-accrual status at September 30, 2023	$	144	$	25	$	169
Investment in vacation ownership notes receivable on non-accrual status at December 31, 2022	$	126	$	24	$	150

The following table shows the aging of the recorded investment in principal, before reserves, in vacation ownership notes receivable as of September 30, 2023 and December 31, 2022.



	As of September 30, 2023						As of December 31, 2022
($ in millions)	Non-Securitized		Securitized		Total		Non-Securitized		Securitized		Total
31 – 90 days past due	$	20	$	57	$	77	$	25	$	56	$	81
91 – 120 days past due	6		16		22		7		16		23
Greater than 120 days past due	138		9		147		119		8		127
Total past due	164		82		246		151		80		231
Current	465		2,055		2,520		415		1,943		2,358
Total vacation ownership notes receivable	$	629	$	2,137	$	2,766	$	566	$	2,023	$	2,589