We define our timeshare financing receivables portfolio segments as (i) originated and (ii) acquired. The following table presents the components of each portfolio segment by class of timeshare financing receivables.


	Originated(2)						Acquired(2)
	September 30,			December 31,			September 30,			December 31,
($ in millions)	2021			2020			2021			2020
Securitized	$	629		$	805		$	605		$	—
Unsecuritized(1)		641			380			530			—
Timeshare financing receivables, gross	$	1,270		$	1,185		$	1,135		$	—
Unamortized non-credit acquisition premium(3)		—			—			62			—
Less: allowance for financing receivables losses		(238	)		(211	)		(462	)		—
Timeshare financing receivables, net	$	1,032		$	974		$	735		$	—

(1)Includes amounts used as collateral to secure a non-recourse revolving timeshare receivable credit facility ("Timeshare Facility") as well as amounts held as future collateral for securitization activities.

(2)Acquired timeshare financing receivables include all timeshare financing receivables of Legacy-Diamond as of the Acquisition Date. Originated timeshare financing receivables include all Legacy-HGV timeshare financing receivables and Legacy-Diamond timeshare financing receivables originated after the Acquisition Date.

(3)Non-credit premium of $69 million was recognized at the Acquisition Date, of which $62 million remains unamortized as of September 30, 2021.

As of September 30, 2021 and December 31, 2020, we had timeshare financing receivables with a carrying value of $97 million and $17 million, respectively, securing the Timeshare Facility and two additional conduit facilities in anticipation of future financing activities. We record an estimate of variable consideration for estimated defaults as a reduction of revenue from VOI sales at the time revenue is recognized on a VOI sale. We record the difference between the timeshare financing receivable and the variable consideration included in the transaction price for the sale of the related VOI as an allowance for financing receivables and record the receivable net of the allowance. For the nine months ended September 30, 2021, we recorded an adjustment to our estimate of variable consideration of $77 million.

We recognize interest income on our timeshare financing receivables as earned. As of September 30, 2021 and December 31, 2020, we had interest receivable outstanding of $8 million and $7 million, respectively, on our originated timeshare financing receivables, which represent all Legacy-HGV timeshare financing receivables and timeshare financing receivables originated by Legacy-Diamond subsequent to the Acquisition Date. As of September 30, 2021 we had interest receivable outstanding of $7 million on our acquired timeshare financing receivables, which represents all timeshare financing receivables of Legacy-Diamond as of the Acquisition Date. Interest receivable is included in Other Assets within our unaudited condensed consolidated balance sheets. The interest rate charged on the notes correlates to the risk profile of the customer at the time of purchase and the percentage of the purchase that is financed, among other factors. As of September 30, 2021, our originated timeshare financing receivables had interest rates ranging from less than 1 percent to 25.0 percent, average interest rate of 13.02 percent, a weighted-average remaining term of 7.7 years and maturities through 2036. Our acquired timeshare financing receivables had interest rates ranging from less than 1 percent to 25 percent, a weighted-average interest rate of 15.57 percent, a weighted-average remaining term of 8.3 years and maturities through 2036.

As part of the Diamond Acquisition, we acquired existing portfolios of timeshare financing receivables. Acquired timeshare financing receivables include all timeshare financing receivables of Legacy-Diamond as of the Acquisition Date and were deemed to be purchase credit deteriorated financial assets. These notes receivable are accounted for using the expected cash flow method of recognizing discount accretion based on the expected cash flows from the acquired timeshare financing receivables. Upon acquisition, we recorded these acquired timeshare financing receivables at a preliminary estimate of fair value, including a credit discount which is accreted as an adjustment to yield over the estimated life of the timeshare financing receivables.

The fair value of our acquired timeshare financing receivables as of the Acquisition Date was determined using a discounted cash flow method, which calculated a present value of expected future cash flows based on scheduled principal and interest payments over the term of the respective timeshare financing receivables, while considering anticipated defaults and early repayments based on historical experience. Consequently, the fair value of the acquired timeshare financing receivables recorded on our balance sheet as of the Acquisition Date included an estimate of expected credit losses which became the historical cost basis for that portfolio going forward. For acquired loans for which all or a portion of the balance was previously written off, or was required to be written off under our charge-off policy upon acquisition, the expected credit loss included in the grossed-up loan balance was immediately charged off. Subsequent changes to the allowance for credit losses are recorded as additions to or reversals of credit losses in our condensed consolidated statements of operations through provision for credit losses.

Our acquired timeshare financing receivables are remeasured at each period end based on expected future cash flows which takes into consideration an estimated measure of anticipated defaults and early repayments. We consider historical Legacy-Diamond timeshare financing receivables performance and the current economic environment in developing the expected future cash flows used in the re-measurement of our acquired timeshare financing receivables.

Our acquired timeshare financing receivables as of September 30, 2021 mature as follows:


	Acquired Timeshare Financing Receivables
($ in millions)	Securitized		Unsecuritized		Total
Year
2021 (remaining)	$	—	$	28	$	28
2022		1		2		3
2023		3		4		7
2024		7		6		13
2025		13		11		24
Thereafter		581		479		1,060
	$	605	$	530	$	1,135

Originated timeshare financing receivables represent all Legacy-HGV timeshare financing receivables and timeshare financing receivables originated by Legacy-Diamond subsequent to the Acquisition Date. Our originated timeshare financing receivables as of September 30, 2021 mature as follows:


	Originated Timeshare Financing Receivables
($ in millions)	Securitized		Unsecuritized		Total
Year
2021 (remaining)	$	21	$	15	$	36
2022		87		42		129
2023		89		46		135
2024		90		49		139
2025		87		53		140
Thereafter		255		436		691
	$	629	$	641	$	1,270

The changes in our allowances for financing receivables losses were as follows:


	September 30, 2021			September 30, 2021
($ in millions)	Originated			Acquired
Balance as of December 31, 2020	$	211		$	—
Provision for financing receivables losses(1)		77			—
Initial allowance for PCD financing receivables acquired during the period(2)		—			469
Write-offs		(50	)		(7	)
Balance as of September 30, 2021	$	238		$	462


	September 30, 2020			September 30, 2020
($ in millions)	Originated			Acquired
Balance as of December 31, 2019	$	184		$	—
Provision for financing receivables losses(1)		57			—
Write-offs		(24	)		—
Balance as of September 30, 2020	$	217		$	—

(1) Includes incremental provision for financing receivables losses, net of activity related to the repurchase of defaulted and upgraded securitized timeshare financing receivables.

(2) The initial gross allowance determined for receivables with credit deterioration was $469 million as of the Acquisition Date. Of this amount, approximately $220 million relates to net uncollectable balances such as loans that were fully written-off prior to Acquisition. Therefore, the net impact to the allowance related to acquired loans not previously written off was an increase of $249 million.

We evaluate this portfolio collectively for purposes of estimating variable consideration, since we hold a large group of homogeneous timeshare financing receivables which are individually immaterial. We monitor the collectability of our receivables on an ongoing basis. There are no significant concentrations of credit risk with any individual counterparty or groups of counterparties. We use a technique referred to as static pool analysis as the basis for estimating expected defaults and determining our allowance for financing receivables losses on our timeshare financing receivables. For static pool analysis, we use certain key dimensions to stratify our portfolio, including FICO scores, equity percentage at the time of sale and certain other factors. The adequacy of the related allowance is determined by management through analysis of several factors, such as current economic conditions and industry trends, as well as the specific risk characteristics of the portfolio including assumed default rates, aging and historical write-offs of these receivables. The allowance is maintained at a level deemed adequate by management based on a periodic analysis of the mortgage portfolio.

The following table details our Legacy-HGV timeshare financing receivables by the origination year and average FICO score as of September 30, 2021:


($ in millions)	2021		2020		2019		2018		2017		Prior		Total
FICO score
700+	$	177	$	91	$	156	$	106	$	71	$	92	$	693
600-699		59		34		58		39		25		39		254
<600		8		5		8		5		3		6		35
No score(1)		34		27		39		26		14		29		169
	$	278	$	157	$	261	$	176	$	113	$	166	$	1,151

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

We apply payments we receive for timeshare financing receivables, including those in non-accrual status, to amounts due in the following order: servicing fees; interest; principal; and late charges. Once a receivable is 91 days past due, we cease accruing interest and reverse the accrued interest recognized up to that point. We resume interest accrual for receivables for which we had previously ceased accruing interest once the receivable is less than 91 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the receivable is 121 days past due and, subsequently, we write off the uncollectible balance against the reserve once the foreclosure process is complete and we receive the deed for the foreclosed unit.

As of September 30, 2021 and December 31, 2020, we had ceased accruing interest on timeshare financing receivables with an aggregate principal balance of $103 million and $117 million, respectively. The following tables detail an aged analysis of our gross timeshare receivables balance:


	Legacy-HGV Timeshare Financing Receivables
	September 30, 2021
($ in millions)	Securitized		Unsecuritized		Total
Current	$	619	$	417	$	1,036
31 - 90 days past due		5		7		12
91 - 120 days past due		2		1		3
121 days and greater past due		2		98		100
	$	628	$	523	$	1,151


	Legacy-HGV Timeshare Financing Receivables
	December 31, 2020
($ in millions)	Securitized		Unsecuritized		Total
Current	$	783	$	265	$	1,048
31 - 90 days past due		11		9		20
91 - 120 days past due		5		3		8
121 days and greater past due		6		103		109
	$	805	$	380	$	1,185

The following tables details our Legacy-Diamond acquired and originated timeshare financing receivables by the origination year and average FICO score as of September 30, 2021:


Legacy-Diamond Acquired Timeshare Financing Receivables
($ in millions)	2021		2020		2019		2018		2017		Prior		Total
FICO score
700+	$	155	$	146	$	175	$	113	$	70	$	62	$	721
600-699		61		59		86		56		32		49		343
<600		10		11		11		5		2		14		53
No score(1)		3		3		4		2		2		4		18
	$	229	$	219	$	276	$	176	$	106	$	129	$	1,135

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.


Legacy-Diamond Originated Timeshare Financing Receivables
($ in millions)	2021		2020		2019		2018		2017		Prior		Total
FICO score
700+	$	85	$	—	$	—	$	—	$	—	$	—	$	85
600-699		25		—		—		—		—		—		25
<600		4		—		—		—		—		—		4
No score(1)		5		—		—		—		—		—		5
	$	119	$	—	$	—	$	—	$	—	$	—	$	119

(1) Timeshare financing receivables without a FICO score are primarily related to foreign borrowers.

The accrued interest on our Legacy-Diamond timeshare financing receivables is accrued based on the contractual provisions of the loan documents, which is suspended at the earlier of (i) the customer’s account becoming over 90 days delinquent, or (ii) the completion of cancellation or foreclosure proceedings. Once suspended, we reverse all prior recognized interest income as well. We resume interest accrual for receivables for which we had previously ceased accruing interest once the receivable is less than 91 days past due. We fully reserve for a timeshare financing receivable in the month following the date that the receivable is 121 days past due and, subsequently, we write off the uncollectible balance against the reserve once the foreclosure process is complete and we become owner of the deed for the foreclosed unit.

As of September 30, 2021 we had ceased accruing interest on Legacy-Diamond timeshare financing receivables with an aggregate principal balance of $345 million. The following tables detail an aged analysis of our gross timeshare receivables balance:


	Legacy-Diamond Timeshare Financing Receivables
	September 30, 2021
($ in millions)	Securitized		Unsecuritized		Total
Current	$	565	$	312	$	877
31 - 90 days past due		18		14		32
91 - 120 days past due		8		5		13
121 days and greater past due		15		317		332
	$	606	$	648	$	1,254